[Graphics of flags omitted]
GABELLI INTERNATIONAL GROWTH FUND, INC.
ANNUAL REPORT - DECEMBER 31, 1999
[Graphic of 4 stars omitted]
MORNINGSTAR RATED(TM) GABELLI INTERNATIONAL GROWTH
FUND 4 STARS OVERALL AND FOR THE THREE-YEAR PERIOD ENDED
12/31/99 AMONG 1104 INTERNATIONAL EQUITY FUNDS.
[Photo of Caesar Bryan omitted]
Caesar Bryan
TO OUR SHAREHOLDERS,
The fourth quarter of 1999 was an economically spectacular period, and the
majority of the world's equity markets joined the party. Japan's TOPIX index
rose by 18.9% while the French and German markets rose 22.2% and 27.2%,
respectively. There were also some truly stunning moves. The Finnish market,
powered by Nokia, rose 77.7%, while Hong Kong was up 33.3% and Sweden rose
34.8%. Rising commodities prices combined with low interest rates to power
emerging markets. Brazil rose 53.6% and Turkey gained an amazing 124.9%. As
usual, the United States provided the lead and global investors wisely followed
the example of the Nasdaq Composite Index that soared to a gain of 48.2% in the
last three months of the year. All of this took place against a backdrop of
rising interest rates. Bond market returns were negative for the quarter.
INVESTMENT PERFORMANCE
For the fourth quarter ended December 31, 1999, The Gabelli International
Growth Fund's (the "Fund") total return was 36.92%. The Lipper International
Fund Average and Morgan Stanley Capital International EAFE Index of
international markets had returns of 25.62% and 17.05% respectively, over the
same period. The Morgan Stanley EAFE 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 52.42% for
1999. The Lipper International Fund Average and Morgan Stanley EAFE Index rose
40.86% and 27.30%, respectively, over the same twelve-month period.
For the three-year period ended December 31, 1999, the Fund's total return
averaged 24.28% annually versus average annual total returns of 18.30% and
16.06% for the Lipper International Fund Average and Morgan Stanley EAFE Index,
respectively. Since inception on June 30, 1995 through December 31, 1999, the
Fund had a cumulative total return of 157.61%, which equates to an average
annual total return of 23.35%.
- --------------------------------------------------------------------------------
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. Morningstar proprietary
ratings reflect historical risk adjusted performance as of December 31, 1999 and
are subject to change every month. Morningstar ratings are calculated from a
Fund's three, five and ten-year average annual returns in excess of 90-day
T-Bill returns with appropriate fee adjustments and a risk factor that reflects
fund performance below 90-day T-Bill returns. The top 10% of the funds in a
broad asset class receive five stars, the next 22.5% receive four stars, the
next 35% receive three stars, the next 22.5% receive two stars and the bottom
10% receive one star.
<PAGE>
INVESTMENT RESULTS (a)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Quarter
------------------------------------------
1st 2nd 3rd 4th Year
--- --- --- --- ----
<S> <C> <C> <C> <C> <C>
1999: Net Asset Value ...................... $15.94 $16.38 $17.40 $22.82 $22.82
Total Return ......................... 2.0% 2.8% 6.2% 36.9% 52.4%
- -------------------------------------------------------------------------------------------------------------
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)
- -------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------------------------------------------
Average Annual Returns - December 31, 1999 (a)
- ----------------------------------------------
1 Year ............................ 52.42%
3 Year ............................ 24.28%
Life of Fund (b) .................. 23.35%
- ----------------------------------------------
Dividend History
- -------------------------------------------------------
Payment (ex) Date Rate Per Share Reinvestment Price
- ----------------- -------------- ------------------
December 27, 1999 $0.970 $22.06
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.
OUR APPROACH
We purchase attractively valued companies that 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.
2
<PAGE>
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE GABELLI
INTERNATIONAL GROWTH FUND, THE LIPPER INTERNATIONAL FUND AVERAGE
AND THE MORGAN STANLEY EAFE INDEX
[Line graph omitted--plot points as follows]
Gabelli International Lipper International Morgan Stanley
Growth Fund Fund Average EAFE Index
6/30/95 $10,000 $10,000 $10,000
12/95 10,990 10,605 10,837
12/96 13,429 12,132 11,314
12/97 14,409 12,799 11,552
12/98 16,912 14,465 13,000
12/99 25,777 20,375 16,549
*Past performance is not predictive of future performance.
INTERNATIONAL 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]
Japan 31.4%
Other Europe 27.4%
United Kingdom 16.2%
Switzerland 9.9%
France 8.0%
Canada 2.4%
Australia 2.3%
United States 1.4%
South Africa 1.0%
COMMENTARY
Certainly the last quarter of 1999, and the year as a whole, is going to
be a hard act to repeat but we do retain a positive outlook towards
international markets in 2000.
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.
3
<PAGE>
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 to the dollar to
just over 1.00 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 to 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 cannot 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 prepared to believe this
reflects more 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 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 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.
4
<PAGE>
WINNERS AND LOSERS
During the fourth quarter of 1999, the Fund's telecommunications and
technology stocks performed best. The big winners were Jafco (a Japanese
financial services company) and NRJ (a French radio broadcaster), who rose 371%
and 324%, respectively. Other tremendous gainers included Nokia (+113%), Asatsu
(+106%), Sony (+98%) and STMicroelectronics (+96%). Some stocks continued to
post negative returns, including pharmaceutical company Novartis (-1.5%) and
consumer non-durable companies like Nestle (-2.4%). Overall, however, the Fund
finished the quarter and year with winners far outweighing losers.
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 December 31, 1999.
COMPAGNIE FINANCIERE RICHEMONT AG (RIFZ.S - $2,386.48 - ZURICH STOCK EXCHANGE)
is one of the world's leading luxury goods companies with such brand names as
Cartier, Piaget, Montblanc, Karl Lagerfeld and Alfred Dunhill. The company also
has a major investment in tobacco. Richemont recently swapped its tobacco
business, Rothmans International, in exchange for a 25% stake in B.A.T., the
world's second largest tobacco company. Adjusted for its stake in B.A.T. and
Vivendi, the French utility and media conglomerate, the market values its wholly
owned luxury goods business at a significant discount to other luxury goods
producers.
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.
OBIC CO. LTD. (4684.T - $708.62 - TOKYO STOCK EXCHANGE) provides computer system
integration, office automation, consultation, and system support services for
small and medium size companies. The company also trades, sells, leases and
maintains computer, peripheral and related systems in addition to developing
customized software and network systems. Obic has sales ties with Fujitsu,
Mitsubishi Electric, Hewlett-Packard, and IBM, and is also well positioned to
benefit from proprietary software systems.
PEARSON PLC (PSON.L - $32.37 - LONDON STOCK EXCHANGE) is a leading global
publisher with many strong brands. The company 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
5
<PAGE>
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.
SONY CORP. (6758.T - $296.56 - TOKYO STOCK EXCHANGE) develops and manufactures
consumer and industrial electronic equipment. The company's products include
audio and video equipment, televisions, displays, semiconductors, electronic
components, computers and computer peripherals, and telecommunication equipment.
Sony will focus on evolving digital network technology in its electronics
business. In July, the Columbia House record and video club subsidiary announced
plans to merge with CDNow. After the merger, Sony will have a 37% stake in the
new company.
THK CO. LTD. (6481.T - $40.42 - TOKYO STOCK EXCHANGE) is a manufacturer of
linear motion (rolling linear motion guide) systems for various industrial
machines, including machine tools. In addition, the company also manufactures
feed screws, special bearings and mechanical tools. THK controls 70% of the
domestic market within Japan and 50% of the worldwide market.
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.
VODAFONE AIRTOUCH PLC (VOD - $49.50 - NYSE) has created a dominant global mobile
communications service provider through the completion of its recent acquisition
of AirTouch in the United States. The company has grown its customer base by
over two million subscribers over the past year to command upwards of 37% of the
wireless market, with nearly half of those subscribers outside of the United
Kingdom. Vodafone continues to engage in agreements and joint ventures on a
global basis, including the announcement of the formation of a cellular operator
in the United States with Bell Atlantic and GTE and a $550 million investment in
nine of Japan's regional cellular operators. Vodafone AirTouch will also
continue to position itself to benefit from the growth of data traffic over its
network.
6
<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 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 containsinformation 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].
IN CONCLUSION
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/ signature
CAESAR BRYAN
President and Portfolio Manager
January 31, 2000
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS
DECEMBER 31, 1999
-----------------
Jafco Co. Ltd. Sony Corp.
Vivendi NRJSA
Compagnie Financiere Richemont AG OBICCo. Ltd.
Telecom Italia Mobile SpA Vodafone AirTouch plc
Invik & Co. AB Fujitsu Ltd.
- --------------------------------------------------------------------------------
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.
7
<PAGE>
GABELLI INTERNATIONAL GROWTH FUND, INC.
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1999
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
- ---------- -------- --------
COMMON STOCKS -- 97.9%
BROADCASTING -- 8.1%
6,500 Audiofina ............................. $ 283,543 $491,034
77,000 Granada Group plc ..................... 581,757 780,473
2,000 Nippon Broadcasting
System Inc. ........................... 161,709 174,219
1,650 NRJ SA ................................ 241,087 1,135,952
70,000 Publishing & Broadcasting Ltd. 383,396 534,457
25,000 Tokyo Broadcasting
System Inc. ........................... 286,515 846,628
--------- ----------
1,938,007 3,962,763
--------- ----------
BUILDING AND CONSTRUCTION -- 2.0%
45,000 CRH plc ............................... 581,567 969,075
--------- ----------
BUSINESS SERVICES -- 7.4%
10,000 Asatsu-DK Inc. ........................ 329,296 675,345
2,200 Benesse Corp. ......................... 477,407 529,705
5,833 Reuters Group plc, ADR ................ 434,245 471,379
6,000 Secom Co. Ltd. ........................ 354,484 660,664
14,100 Vivendi ............................... 912,796 1,273,230
--------- ----------
2,508,228 3,610,323
--------- ----------
CABLE -- 2.3%
5,375 NTL Inc.+ ............................ 372,583 670,531
81,818 TeleWest Communications plc+249,296 ... 436,461
--------- ----------
621,879 1,106,992
--------- ----------
COMMUNICATIONS EQUIPMENT -- 4.2%
3,500 Mannesmann AG ......................... 541,973 853,141
3,500 Nokia Corp., Cl. A, ADR ............... 450,600 665,000
10,000 Telelogic AB+ ......................... 381,961 531,265
--------- ----------
1,374,534 2,049,406
--------- ----------
COMPUTER SOFTWARE AND SERVICES -- 7.5%
4,000 Aspiro Information AB ................. 114,771 166,902
6,000 Capcom Co. Ltd. ....................... 323,174 320,055
5,000 Cresco Ltd. .......................... 416,892 577,469
3,000 Comptel Oyj+ .......................... 57,148 211,039
20,000 Frontec AB, Cl. B+ .................... 165,538 265,632
6,000 NetCom ASA+ ........................... 244,565 299,420
1,600 Obic Co. Ltd. ......................... 207,263 1,133,797
5,000 Square Co. Ltd. ....................... 308,124 342,566
5,000 Sumisho Computer
Systems Corp. ......................... 283,623 344,524
--------- ----------
2,121,098 3,661,404
--------- ----------
CONSUMER PRODUCTS -- 6.8%
2,500 Christian Dior SA ..................... 375,174 619,459
520 Compagnie Financiere
Richemont AG, Cl. A ................... 729,379 1,240,972
MARKET
SHARES COST VALUE
- ---------- -------- --------
5,000 Nintendo Co. Ltd. .....................$ 462,905 $ 830,968
550 Swatch Group AG ....................... 334,134 633,486
--------- ----------
1,901,592 3,324,885
--------- ----------
ELECTRONICS -- 6.1%
23,000 Fujitsu Ltd. .......................... 716,830 1,049,036
4,000 Sony Corp. ............................ 654,791 1,186,258
5,000 STMicroelectronics NV ................. 427,636 769,539
--------- ----------
1,799,257 3,004,833
--------- ----------
ENERGY AND UTILITIES -- 1.5%
46,000 BP Amoco plc .......................... 337,165 462,541
1,944 TotalFina SA, Cl. B ................... 245,070 259,448
--------- ----------
582,235 721,989
--------- ----------
ENTERTAINMENT -- 0.5%
1,000 Avex Inc. ............................. 154,349 249,584
--------- ----------
EQUIPMENT AND SUPPLIES -- 1.7%
21,000 THK Co. Ltd. .......................... 511,843 848,879
--------- ----------
FINANCIAL SERVICES -- 13.2%
1,500 Allianz AG ............................ 508,573 503,877
22,005 Bank of Ireland ....................... 165,882 175,101
25,000 Bank of Scotland ...................... 269,806 290,350
35,000 Canada Life Financial Corp.+ .......... 415,988 541,912
10,000 Invik & Co. AB, Cl. B ................. 502,346 1,187,118
4,000 Jafco Co. Ltd. ........................ 266,599 1,428,991
60,000 Nikko Securities Co. Ltd. ............. 614,611 759,323
23,000 Prudential Corp. plc .................. 350,953 453,253
15,000 Schroders plc ......................... 438,989 301,900
350 Shohkoh Fund & Co. Ltd. ............... 215,401 138,568
23,000 Skandia Forsakrings AB ................ 174,411 694,758
--------- ----------
3,923,559 6,475,151
--------- ----------
FOOD AND BEVERAGE -- 1.3%
7,000 Nestle SA, ADR ........................ 491,469 641,179
--------- ----------
HEALTH CARE -- 8.1%
14,126 AstraZeneca plc, London ............... 544,796 597,715
2,500 AstraZeneca plc, Stockholm ............ 112,545 103,702
23,000 Glaxo Wellcome plc .................... 495,769 650,158
525 Novartis AG ........................... 665,135 770,866
60 Roche Holding AG ...................... 605,517 712,177
8,000 Sanofi-Synthelabo SA .................. 390,237 333,118
30,000 SmithKline Beecham plc ................ 436,957 382,826
8,000 Takeda Chemical
Industries Ltd. ...................... 462,407 395,419
--------- ----------
3,713,363 3,945,981
--------- ----------
See accompanying notes to financial statements.
8
<PAGE>
GABELLI INTERNATIONAL GROWTH FUND, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED) -- DECEMBER 31, 1999
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
- ---------- -------- --------
COMMON STOCKS (CONTINUED)
METALS AND MINING -- 1.5%
1,500 Anglogold Ltd. ........................ $ 72,282 $ 77,157
5,000 Anglogold Ltd., ADR ................... 113,375 128,438
31,081 Antofagasta Holding plc ............... 179,741 217,639
37,500 Harmony Gold
Mining Co. Ltd. ..................... 181,434 240,658
7,500 Harmony Gold
Mining Co. Ltd., ADR ................ 46,406 47,109
---------- ----------
593,238 711,001
---------- ----------
PUBLISHING -- 7.3%
30,000 Arnoldo Mondadori
Editore SpA ......................... 305,467 951,851
91,573 Independent News &
Media plc ........................... 497,518 600,462
60,037 News Corp. Ltd. ....................... 352,016 582,937
30,000 Pearson plc ........................... 416,954 971,118
24,000 Schibsted ASA ......................... 417,771 446,136
---------- ----------
1,989,726 3,552,504
---------- ----------
TELECOMMUNICATIONS -- 11.1%
5,000 Alcatel SA, ADR ....................... 217,584 225,000
42,000 Cable & Wireless plc .................. 509,850 711,669
15 DDI Corp. ............................. 210,186 205,540
5,000 Helsingin Puhelin Oyj ................. 341,825 416,498
16 Japan Telecom Co. Ltd. ................ 242,626 642,067
1,500 KDD Corp. ............................. 204,836 207,889
9,000 KPN NV ................................. 479,285 878,423
38 Nippon Telegraph &
Telephone Corp. ..................... 338,897 650,876
25,000 Panafon Hellenic
Telecom SA, GDR ..................... 286,500 320,625
15,000 Rogers Communications
Inc., Cl. B+ ........................ 271,211 366,817
10,000 Rogers Communications
Inc., Cl. B, ADR+ .................... 194,125 247,500
22,205 Telefonica SA ......................... 343,462 554,677
---------- ----------
3,640,387 5,427,581
---------- ----------
TRANSPORTATION -- 0.3%
15,637 MIF Ltd.+ ............................. 188,903 156,068
---------- ----------
WIRELESS COMMUNICATIONS -- 7.0%
23 NTT Mobile Communication
Network Inc. ......................... 468,783 884,702
10,000 Partner Communications
Co. Ltd., ADR+ ....................... 135,000 258,750
110,000 Telecom Italia Mobile SpA ............. 575,478 1,228,745
21,675 Vodafone AirTouch plc, ADR ............ 249,422 1,072,913
---------- ----------
1,428,683 3,445,110
---------- ----------
TOTAL COMMON STOCKS .................. 30,063,917 47,864,708
---------- ----------
MARKET
SHARES COST VALUE
- ---------- -------- --------
PREFERRED STOCK -- 0.6%
BROADCASTING -- 0.6%
5,000 Prosieben Media AG, Pfd. .............. $ 284,787 $ 290,592
----------- -----------
TOTAL
INVESTMENTS -- 98.5% .................. $30,348,704 48,155,300
===========
OTHER ASSETS AND
LIABILITIES (NET) -- 1.5% ......................... 728,150
-----------
NET ASSETS -- 100.0%
(2,142,181 shares outstanding) .................... $48,883,450
===========
NET ASSET VALUE,
OFFERING AND REDEMPTION
PRICE PER SHARE ................................... $22.82
======
For Federal tax purposes:
Aggregate cost .................................... $30,371,021
===========
Gross unrealized appreciation ..................... $18,230,578
Gross unrealized depreciation ..................... (446,299)
-----------
Net unrealized appreciation ....................... $17,784,279
===========
------------------------
+ Non-income producing security.
ADR - American Depositary Receipt.
GDR - Global Depositary Receipt.
% OF
MARKET MARKET
GEOGRAPHIC DIVERSIFICATION VALUE VALUE
-------------------------- -------- ------------
Europe 61.5% $29,624,848
Japan 31.4% 15,092,936
North America 3.8% 1,826,760
Asia/Pacific Rim 2.3% 1,117,394
South Africa 1.0% 493,362
------- -----------
100.0% $48,155,300
======= ===========
See accompanying notes to financial statements.
9
<PAGE>
GABELLI INTERNATIONAL GROWTH FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
ASSETS:
Investments, at value (Cost $30,348,704) .. $ 48,155,300
Dividends, interest and reclaims receivable 12,565
Receivable for investments sold ........... 1,230,542
Receivable for Fund shares sold ........... 550,712
Deferred organizational expenses .......... 9,605
------------
TOTAL ASSETS .............................. 49,958,724
------------
LIABILITIES:
Payable for investments purchased ......... 205,322
Payable for Fund shares redeemed .......... 237,285
Payable for investment advisory fees ...... 37,849
Payable for distribution fees ............. 9,462
Payable to custodian (includes $500,000
from line of credit) .................... 524,986
Other accrued expenses .................... 60,370
------------
TOTAL LIABILITIES ......................... 1,075,274
------------
NET ASSETS applicable to 2,142,181
shares outstanding ...................... $ 48,883,450
============
NET ASSETS CONSIST OF:
Capital stock, at par value ............... $2,142
Additional paid-in capital ................ 31,101,110
Distributions in excess of net realized
gain on investments and foreign
currency transactions ................... (22,317)
Net unrealized appreciation on investments
and foreign currency transactions ....... 17,802,515
------------
TOTAL NET ASSETS .......................... $ 48,883,450
============
NET ASSET VALUE, offering and redemption
price per share ($48,883,450 / 2,142,181
shares outstanding; 1,000,000,000 shares
authorized of $0.001 par value) ......... $22.82
======
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends (net of foreign taxes of $42,484) $ 404,566
Interest .................................. 4,119
------------
TOTAL INVESTMENT INCOME ................... 408,685
------------
EXPENSES:
Investment advisory fees .................. 318,448
Distribution fees ......................... 79,635
Custodian fees ............................ 45,172
Legal and audit fees ...................... 42,550
Shareholder services fees ................. 37,401
Registration fees ......................... 24,699
Shareholder communications expenses ....... 21,971
Organizational expenses ................... 19,699
Directors' fees ........................... 5,491
Interest expense .......................... 7,750
Miscellaneous expenses .................... 2,304
------------
TOTAL EXPENSES ............................ 605,120
------------
NET INVESTMENT LOSS ....................... (196,435)
------------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on investments and
foreign currency transactions ........... 2,185,222
Net change in unrealized appreciation
on investments and foreign currency
transactions ............................ 14,084,470
------------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS AND FOREIGN
CURRENCY TRANSACTIONS ................... 16,269,692
------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ......................... $ 16,073,257
============
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1999 DECEMBER 31, 1998
----------------- -----------------
<S> <C> <C>
OPERATIONS:
Net investment loss ................................................ $ (196,435) $ (39,965)
Net realized gain on investments and foreign currency transactions . 2,185,222 2,058,312
Net change in unrealized appreciation on investments and
foreign currency transactions .................................... 14,084,470 749,979
------------ ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............... 16,073,257 2,768,326
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
In excess of net investment income ................................. (205,615) (54,801)
Net realized gain on investments ................................... (1,788,353) (1,976,054)
------------ ------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS ................................ (1,993,968) (2,030,855)
------------ ------------
CAPITAL SHARE TRANSACTIONS:
Net increase in net assets from capital share transactions ......... 8,013,353 7,920,259
------------ ------------
NET INCREASE IN NET ASSETS ......................................... 22,092,642 8,657,730
NET ASSETS:
Beginning of period ................................................ 26,790,808 18,133,078
------------ ------------
End of period ...................................................... $ 48,883,450 $ 26,790,808
============ ============
</TABLE>
See accompanying notes to financial statements.
10
<PAGE>
GABELLI INTERNATIONAL GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. ORGANIZATION. The Gabelli International Growth Fund, Inc. (the "Fund") was
organized on May 25, 1994 as a Maryland corporation. The Fund is a diversified,
open-end management investment company registered under the Investment Company
Act of 1940, as amended (the "1940 Act"). The Fund's primary objective is long
term capital appreciation. The Fund commenced investment operations on June
30,1995.
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.
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
11
<PAGE>
GABELLI INTERNATIONAL GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
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 counter parties 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
distributions in excess of net investment income for $401,743 and decrease
accumulated net realized gain on investments and foreign currency transactions
for $394,198 with an offsetting adjustment to additional paid-in capital.
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.
12
<PAGE>
GABELLI INTERNATIONAL GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
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.
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 $79,635, 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 $29,028,705 and
$23,740,981, respectively.
7. TRANSACTIONS WITH AFFILIATES. During the year ended December 31, 1999, the
Fund paid brokerage commissions of $170 to Gabelli & Company, Inc. and its
affiliates.
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 $500,000 of borrowings outstanding at December
31, 1999.
The average daily amount of borrowings outstanding within the year ended
December 31, 1999, was $144,521, with a related weighted average interest rate
of 5.73%. The maximum amount borrowed at any time during the year ended December
31, 1999 was $1,700,000.
9. CAPITAL STOCK TRANSACTIONS. Transactions in shares of capital stock were as
follows:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1999 DECEMBER 31, 1998
------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ --------- -----------
<S> <C> <C> <C> <C>
Shares sold ....................................... 2,150,702 $ 37,651,819 2,674,592 $45,153,618
Shares issued upon reinvestment of dividends ...... 87,158 1,922,544 126,101 1,953,306
Shares redeemed ................................... (1,809,612) (31,561,010) (2,345,920) (39,186,665)
---------- ------------ --------- -----------
Net increase ................................... 428,248 $ 8,013,353 454,773 $ 7,920,259
========== ============ ========= ===========
</TABLE>
10. NEW SHARE CLASSES. On March 9, 1999, the Board of Directors of the Fund
approved a Rule 18f-3 Multi-Class Plan relating to the creation of three
additional classes of shares of the Fund -- Class A Shares, Class B Shares and
Class C Shares (the "New Share Classes"). The existing class of shares was
redesignated as Class AAA Shares. In addition, the Board has also approved an
Amended and Restated Distribution Agreement, Rule 12b-1 plans for each of the
New Share Classes and an Amended and Restated Plan of Distribution for the
existing class of shares (Class AAA Shares) to be effective upon the
commencement of the offering of the New Share Classes. The New Share Classes are
currently not being offered to the public.
13
<PAGE>
GABELLI INTERNATIONAL GROWTH FUND, INC.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected data for a share of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------------------
1999 1998 1997 1996 1995+
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
OPERATING PERFORMANCE:
Net asset value, beginning of period ... $15.63 $ 14.40 $ 13.42 $ 10.98 $10.00
---------- ---------- ---------- ---------- ----------
Net investment loss .................... (0.09) (0.02) (0.13) (0.15)(a) (0.03)(a)
Net realized and unrealized gain
on investments ....................... 8.25 2.51 1.11 2.59 1.01
---------- ---------- ---------- ---------- ----------
Total from investment operations ....... 8.16 2.49 0.98 2.44 0.98
---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income .................. (0.10) (0.03) -- -- --
Net realized gain on investments ....... (0.87) (1.23) -- -- --
---------- ---------- ---------- ---------- ----------
Total distributions .................... (0.97) (1.26) -- -- --
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD ......... $22.82 $ 15.63 $ 14.40 $ 13.42 $10.98
========== ========== ========== ========== ==========
Total return++ ......................... 52.4% 17.4% 7.3% 22.2% 9.8%
========== ========== ========== ========== ==========
RATIOS TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $48,883 $26,791 $18,133 $12,815 $2,096
Ratio of net investment loss
to average net assets (c) (0.62)% (0.14)% (0.82)% (1.21)% (1.19)%(b)
Ratio of operating expenses
to average net assets (c) 1.90% 1.98% 2.46% 2.72% 2.75%(b)
Portfolio turnover rate 74% 52% 63% 55% 30%
</TABLE>
- --------------------------------
+ From commencement of investment operations on June 30, 1995.
++ 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) Based on average month-end shares outstanding.
(b) Annualized.
(c) The Fund incurred interest expense for the years ended December 31, 1999,
1998and 1997. If interest expense had not been incurred, the ratios of
operating expenses to average net assets would have been 1.88%, 1.96% and
2.44%, respectively. During the periods ended December 31, 1996 and 1995,
the Adviser voluntarily reimbursed certain expenses. Before reimbursement,
the ratios of operating expenses and net investment loss to average net
assets would have been 3.62% and (2.12)% for 1996 and 8.10% and (6.54)% for
1995 (annualized), respectively.
See accompanying notes to financial statements.
14
<PAGE>
GABELLI INTERNATIONAL GROWTH FUND, INC.
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
To the Shareholders and Board of Directors of
Gabelli International Growth Fund, Inc.
We have audited the accompanying statement of assets and liabilities of the
Gabelli International Growth Fund, Inc. (the "Fund"), including the portfolio of
investments, as of December 31, 1999, and the related statement of operations
for the year then ended, the statement of changes in net assets for each of the
two years in the period then ended, and the financial highlights for each of the
periods indicated therein. 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 and financial highlights. Our procedures included
confirmation of securities owned as of December 31, 1999, by correspondence with
the custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Gabelli International Growth Fund, Inc. as of December 31, 1999, and the results
of its operations for the year then ended, the changes in its net assets for
each of the two years in the period then ended, and the financial highlights for
each of the periods indicated therein, in conformity with accounting principles
generally accepted in the United States.
/s/ Signature
Ernst & Young, LLP
New York, New York
February 11, 2000
- --------------------------------------------------------------------------------
1999 TAX NOTICE TO SHAREHOLDERS (Unaudited)
For the fiscal year ended December 31, 1999, the Fund paid to shareholders, on
December 27, 1999, an ordinary income dividend (comprised of net investment
income and short term capital gains) totaling $0.50 per share and long term
capital gains totaling $0.47 per share. For the fiscal year ended December 31,
1999, none 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 0.49%. 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 International Growth 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.
- --------------------------------------------------------------------------------
15
<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 MEDICAL DIRECTOR
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.
- --------------------------------------------------------------------------------
GAB009Q499SR
[photo of Mario Gabelli omitted]
GABELLI
INTERNATIONAL
GROWTH
FUND,
INC.
ANNUAL REPORT
DECEMBER 31, 1999
