UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
INVESTMENT COMPANIES
Investment Company Act file number 811-06367
Gabelli Equity Series Funds, Inc.
(Exact name of registrant as specified in charter)
One Corporate Center
Rye, New York 10580-1422
Rye, New York 10580-1422
(Address of principal executive offices) (Zip code)
Bruce N. Alpert
Gabelli Funds, LLC
One Corporate Center
Rye, New York 10580-1422
Gabelli Funds, LLC
One Corporate Center
Rye, New York 10580-1422
(Name and address of agent for service)
registrant’s telephone number, including area code: 1-800-422-3554
Date of fiscal year end: September 30
Date of reporting period: March 31, 2009
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
Item 1. Reports to Stockholders.
The Report to Shareholders is attached herewith.
The Gabelli Small Cap Growth Fund
Semi-Annual Report(a)
March 31, 2009
March 31, 2009
To Our Shareholders,
The Gabelli Small Cap Growth Fund’s Class AAA Shares declined 10.81% for the quarter ending March 31, 2009, versus declines of 14.95% for the Russell 2000 Index and 7.68% for the Value Line Composite Index.
Comparative Results
Average Annual Returns through March 31, 2009 (a)(b)
Since | ||||||||||||||||||||||||||||
Inception | ||||||||||||||||||||||||||||
Quarter | 1 Year | 3 Year | 5 Year | 10 Year | 15 Year | (10/22/91) | ||||||||||||||||||||||
Gabelli Small Cap Growth Fund Class AAA | (10.81 | )% | (33.50 | )% | (10.63 | )% | (0.73 | )% | 6.54 | % | 8.46 | % | 10.73 | % | ||||||||||||||
Russell 2000 Index | (14.95 | ) | (37.50 | ) | (16.80 | ) | (5.24 | ) | 1.93 | 4.94 | 6.45 | |||||||||||||||||
Value Line Composite Index | (7.68 | ) | (36.76 | ) | (14.78 | ) | (4.25 | ) | 3.80 | 7.38 | 8.43 | |||||||||||||||||
Class A | (10.81 | ) | (33.47 | ) | (10.62 | ) | (0.73 | ) | 6.54 | 8.46 | 10.73 | |||||||||||||||||
(15.94 | )(c) | (37.29 | )(c) | (12.37 | )(c) | (1.90 | )(c) | 5.92 | (c) | 8.04 | (c) | 10.36 | (c) | |||||||||||||||
Class B | (10.95 | ) | (33.97 | ) | (11.28 | ) | (1.46 | ) | 6.13 | 8.18 | 10.49 | |||||||||||||||||
(15.40 | )(d) | (37.28 | )(d) | (12.18 | )(d) | (1.86 | )(d) | 6.13 | 8.18 | 10.49 | ||||||||||||||||||
Class C | (10.95 | ) | (33.95 | ) | (11.27 | ) | (1.46 | ) | 6.13 | 8.18 | 10.49 | |||||||||||||||||
(11.84 | )(e) | (34.61 | )(e) | (11.27 | ) | (1.46 | ) | 6.13 | 8.18 | 10.49 | ||||||||||||||||||
Class I | (10.78 | ) | (33.32 | ) | (10.54 | ) | (0.67 | ) | 6.57 | 8.48 | 10.75 | |||||||||||||||||
In the current prospectus, the expense ratios for Class AAA, A, B, C, and I Shares are 1.45%, 1.45%, 2.20%, 2.20%, and 1.20%, respectively. Class AAA and I Shares do not have a sales charge.The maximum sales charge for Class A, B, and C Shares is 5.75%, 5.00%, and 1.00%, respectively.
(a) | The Fund’s fiscal year ends September 30. | |
(b) | Returns represent past performance and do not guarantee future results. Total returns and average annual returns reflect changes in share price and reinvestment of distributions and are net of expenses. 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. Performance returns for periods of less than one year are not annualized. Current performance may be lower or higher than the performance data presented. Visit www.gabelli.com for performance information as of the most recent month end. Investors should carefully consider the investment objectives, risks, charges, and expenses of the Fund before investing.The prospectus contains more information about this and other matters and should be read carefully before investing. | |
The Class AAA Shares net asset values (“NAVs”) per share are used to calculate performance for the periods prior to the issuance of Class A Shares, Class B Shares, and Class C Shares on December 31, 2003 and Class I Shares on January 11, 2008. The actual performance for the Class B Shares and Class C Shares would have been lower and Class I Shares would have been higher due to the differences in expenses associated with these classes of shares. Investing in small capitalization securities involves special risks because these securities may trade less frequently and experience more abrupt price movements than large capitalization securities. The Russell 2000 Index of small U.S. companies and the Value Line Composite Index (composed of equally weighted positions in every stock covered in the Value Line Investment Survey) are unmanaged indicators of stock market performance. Dividends are considered reinvested. You cannot invest directly in an index. | ||
(c) | Includes the effect of the maximum 5.75% sales charge at the beginning of the period. | |
(d) | Performance results include the deferred sales charges for the Class B Shares upon redemption at the end of the quarter, one year, three year, and five year periods of 5%, 5%, 3%, and 2%, respectively, of the Fund’s NAV per share at the time of purchase or sale, whichever is lower. Class B Shares are not available for new purchases. | |
(e) | Performance results include the deferred sales charges for the Class C Shares upon redemption at the end of the quarter and one year periods of 1% of the Fund’s NAV per share at the time of purchase or sale, whichever is lower. |
We have separated the portfolio manager’s commentary from the financial statements and investment portfolio due to corporate governance regulations stipulated by the Sarbanes-Oxley Act of 2002. We have done this to ensure that the content of the portfolio manager’s commentary is unrestricted. The financial statements and investment portfolio are mailed separately from the commentary. Both the commentary and the financial statements, including the portfolio of investments, will be available on our website at www.gabelli.com/funds.
The Gabelli Small Cap Growth Fund
Disclosure of Fund Expenses (Unaudited)
Disclosure of Fund Expenses (Unaudited)
For the Six Month Period from October 1, 2008 through March 31, 2009 | Expense Table |
We believe it is important for you to understand the impact of fees and expenses regarding your investment. All mutual funds have operating expenses. As a shareholder of a fund, you incur ongoing costs, which include costs for portfolio management, administrative services, and shareholder reports (like this one), among others. Operating expenses, which are deducted from a fund’s gross income, directly reduce the investment return of a fund. When a fund’s expenses are expressed as a percentage of its average net assets, this figure is known as the expense ratio. The following examples are intended to help you understand the ongoing costs (in dollars) of investing in your Fund and to compare these costs with those of other mutual funds. The examples are based on an investment of $1,000 made at the beginning of the period shown and held for the entire period.
The Expense Table below illustrates your Fund’s costs in two ways:
Actual Fund Return: This section provides information about actual account values and actual expenses. You may use this section to help you to estimate the actual expenses that you paid over the period after any fee waivers and expense reimbursements. The “Ending Account Value” shown is derived from the Fund’s actual return during the past six months, and the “Expenses Paid During Period” shows the dollar amount that would have been paid by an investor who started with $1,000 in the Fund. You may use this information, together with the amount you invested, to estimate the expenses that you paid over the period.
To do so, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number given for your Fund under the heading “Expenses Paid During Period” to estimate the expenses you paid during this period.
Hypothetical 5% Return: This section provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio. It assumes a hypothetical annualized return of 5% before expenses during the period shown. In this case — because the hypothetical return used is not the Fund’s actual return — the results do not apply to your investment and you cannot use the hypothetical account value and expense to estimate the actual ending account balance or expenses you paid for the period. This example is useful in making comparisons of the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs such as sales charges (loads), redemption fees, or exchange fees, if any, which are described in the Prospectus. If these costs were applied to your account, your costs would be higher. Therefore, the 5% hypothetical return is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.
Beginning | Ending | Annualized | Expenses | |||||||||||||
Account Value | Account Value | Expense | Paid During | |||||||||||||
10/01/08 | 03/31/09 | Ratio | Period* | |||||||||||||
The Gabelli Small Cap Growth Fund | ||||||||||||||||
Actual Fund Return | ||||||||||||||||
Class AAA | $ | 1,000.00 | $ | 696.80 | 1.50 | % | $ | 6.35 | ||||||||
Class A | $ | 1,000.00 | $ | 697.70 | 1.50 | % | $ | 6.35 | ||||||||
Class B | $ | 1,000.00 | $ | 694.40 | 2.25 | % | $ | 9.50 | ||||||||
Class C | $ | 1,000.00 | $ | 694.60 | 2.25 | % | $ | 9.51 | ||||||||
Class I | $ | 1,000.00 | $ | 697.70 | 1.25 | % | $ | 5.29 | ||||||||
Hypothetical 5% Return | ||||||||||||||||
Class AAA | $ | 1,000.00 | $ | 1,017.45 | 1.50 | % | $ | 7.54 | ||||||||
Class A | $ | 1,000.00 | $ | 1,017.45 | 1.50 | % | $ | 7.54 | ||||||||
Class B | $ | 1,000.00 | $ | 1,013.71 | 2.25 | % | $ | 11.30 | ||||||||
Class C | $ | 1,000.00 | $ | 1,013.71 | 2.25 | % | $ | 11.30 | ||||||||
Class I | $ | 1,000.00 | $ | 1,018.70 | 1.25 | % | $ | 6.29 |
* | Expenses are equal to the Fund’s annualized expense ratio for the last six months multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, then divided by 365. |
2
Summary of Portfolio Holdings (Unaudited)
The following table presents portfolio holdings as a percent of total net assets as of March 31, 2009:
The Gabelli Small Cap Growth Fund
U.S. Government Obligations | 14.9 | % | ||
Equipment and Supplies | 10.4 | % | ||
Food and Beverage | 7.6 | % | ||
Health Care | 7.6 | % | ||
Diversified Industrial | 6.7 | % | ||
Energy and Utilities | 6.3 | % | ||
Financial Services | 5.1 | % | ||
Automotive: Parts and Accessories | 4.3 | % | ||
Business Services | 4.2 | % | ||
Retail | 3.7 | % | ||
Specialty Chemicals | 3.5 | % | ||
Aviation: Parts and Services | 2.5 | % | ||
Consumer Products | 2.2 | % | ||
Hotels and Gaming | 2.0 | % | ||
Electronics | 2.0 | % | ||
Telecommunications | 1.7 | % | ||
Cable | 1.6 | % | ||
Entertainment | 1.5 | % | ||
Communications Equipment | 1.2 | % | ||
Wireless Communications | 1.2 | % | ||
Consumer Services | 1.1 | % | ||
Real Estate | 1.0 | % | ||
Computer Software and Services | 0.9 | % | ||
Machinery | 0.8 | % | ||
Educational Services | 0.8 | % | ||
Environmental Services | 0.8 | % | ||
Publishing | 0.7 | % | ||
Manufactured Housing and Recreational Vehicles | 0.7 | % | ||
Metals and Mining | 0.7 | % | ||
Transportation | 0.6 | % | ||
Aerospace | 0.6 | % | ||
Broadcasting | 0.4 | % | ||
Closed-End Funds | 0.3 | % | ||
Automotive | 0.2 | % | ||
Home Furnishings | 0.1 | % | ||
Futures Contracts — Long Position | 0.1 | % | ||
Paper and Forest Products | 0.1 | % | ||
Building and Construction | 0.1 | % | ||
Mutual Funds | 0.0 | % | ||
Agriculture | 0.0 | % | ||
Other Assets and Liabilities (Net) | (0.2 | )% | ||
100.0 | % | |||
The Gabelli Small Cap Growth Fund (the “Fund”) files a complete schedule of portfolio holdings with the Securities and Exchange Commission (the “SEC”) for the first and third quarters of each fiscal year on Form N-Q, the last of which was filed for the quarter ended December 31, 2008. Shareholders may obtain this information at www.gabelli.com or by calling the Fund at 800-GABELLI (800-422-3554). The Fund’s Form N-Q is available on the SEC’s website at www.sec.gov and may also be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
Proxy Voting
The Fund files Form N-PX with its complete proxy voting record for the 12 months ended June 30th, no later than August 31st of each year. A description of the Fund’s proxy voting policies, procedures, and how the Fund voted proxies relating to portfolio securities is available without charge, upon request, by (i) calling 800-GABELLI (800-422-3554); (ii) writing to The Gabelli Funds at One Corporate Center, Rye, NY 10580-1422; or (iii) visiting the SEC’s website at www.sec.gov.
3
The Gabelli Small Cap Growth Fund
Schedule of Investments — March 31, 2009 (Unaudited)
Schedule of Investments — March 31, 2009 (Unaudited)
Market | ||||||||||||
Shares | Cost | Value | ||||||||||
COMMON STOCKS — 85.2% | ||||||||||||
Aerospace — 0.6% | ||||||||||||
228,000 | Herley Industries Inc.† | $ | 3,494,497 | $ | 2,726,880 | |||||||
4,000 | Innovative Solutions & Support Inc. | 51,817 | 16,920 | |||||||||
70,000 | Rockwell Automation Inc. | 1,715,672 | 1,528,800 | |||||||||
5,261,986 | 4,272,600 | |||||||||||
Agriculture — 0.0% | ||||||||||||
1,500 | Cadiz Inc.† | 9,904 | 11,970 | |||||||||
3,500 | The Mosaic Co. | 74,541 | 146,930 | |||||||||
84,445 | 158,900 | |||||||||||
Automotive — 0.2% | ||||||||||||
50,000 | Navistar International Corp.† | 1,171,612 | 1,673,000 | |||||||||
35,000 | Oshkosh Corp. | 455,998 | 235,900 | |||||||||
1,627,610 | 1,908,900 | |||||||||||
Automotive: Parts and Accessories — 4.3% | ||||||||||||
3,816 | ATC Technology Corp.† | 47,013 | 42,739 | |||||||||
1,000 | BERU AG | 106,336 | 101,638 | |||||||||
150,000 | BorgWarner Inc. | 1,609,839 | 3,045,000 | |||||||||
72,022 | China Automotive Systems Inc.† | 350,864 | 252,797 | |||||||||
270,000 | Dana Holding Corp.† | 807,449 | 124,200 | |||||||||
240,900 | Earl Scheib Inc.† (a) | 1,475,236 | 457,710 | |||||||||
150,000 | Lear Corp.† | 768,807 | 112,500 | |||||||||
300,000 | Midas Inc.† | 4,424,864 | 2,376,000 | |||||||||
300,000 | Modine Manufacturing Co. | 5,400,565 | 750,000 | |||||||||
11,000 | Monro Muffler Brake Inc. | 49,307 | 300,630 | |||||||||
570,000 | O’Reilly Automotive Inc.† | 15,393,341 | 19,955,700 | |||||||||
225,000 | Proliance International Inc.† | 763,514 | 38,250 | |||||||||
10,000 | Puradyn Filter Technologies Inc.† | 5,190 | 2,700 | |||||||||
130,000 | SORL Auto Parts Inc.† | 721,639 | 234,000 | |||||||||
80,375 | Spartan Motors Inc. | 388,580 | 323,108 | |||||||||
330,000 | Standard Motor Products Inc. | 3,720,734 | 907,500 | |||||||||
72,700 | Strattec Security Corp. | 1,948,207 | 606,318 | |||||||||
105,000 | Superior Industries International Inc. | 1,656,698 | 1,244,250 | |||||||||
360,000 | Tenneco Inc.† | 3,357,500 | 586,800 | |||||||||
330,000 | The Pep Boys - Manny, Moe & Jack | 3,950,049 | 1,455,300 | |||||||||
27,000 | Thor Industries Inc. | 250,194 | 421,740 | |||||||||
46,000 | Wonder Auto Technology Inc.† | 299,248 | 164,680 | |||||||||
47,495,174 | 33,503,560 | |||||||||||
Aviation: Parts and Services — 2.5% | ||||||||||||
25,000 | AAR Corp.† | 302,990 | 313,500 | |||||||||
10,000 | Astronics Corp.† | 39,192 | 110,000 | |||||||||
2,500 | Astronics Corp., Cl. B† | 9,798 | 25,625 | |||||||||
14,000 | Barnes Group Inc. | 119,438 | 149,660 | |||||||||
205,000 | Curtiss-Wright Corp. | 4,656,749 | 5,750,250 | |||||||||
7,500 | Ducommun Inc. | 80,125 | 109,050 | |||||||||
30,000 | Embraer-Empresa Brasileira de Aeronautica SA, ADR | 508,773 | 398,100 | |||||||||
22,000 | Gamesa Corp. Tecnologica SA | 134,728 | 282,355 | |||||||||
380,000 | GenCorp Inc.† | 3,338,553 | 805,600 | |||||||||
645,300 | Kaman Corp. | 9,574,155 | 8,092,062 | |||||||||
90,000 | Moog Inc., Cl. A† | 732,784 | 2,058,300 | |||||||||
10,000 | Moog Inc., Cl. B† | 299,510 | 235,000 | |||||||||
500,000 | The Fairchild Corp., Cl. A† | 1,361,101 | 5,500 | |||||||||
90,200 | Woodward Governor Co. | 1,169,762 | 1,008,436 | |||||||||
22,327,658 | 19,343,438 | |||||||||||
Broadcasting — 0.4% | ||||||||||||
220,800 | Acme Communications Inc.† | 1,025,319 | 55,200 | |||||||||
104,000 | Beasley Broadcast Group Inc., Cl. A | 718,113 | 219,440 | |||||||||
2,000 | Cogeco Inc. | 39,014 | 38,150 | |||||||||
295,000 | Crown Media Holdings Inc., Cl. A† | 1,848,397 | 601,800 | |||||||||
3,333 | CTN Media Group Inc.† (b) | 16,800 | 3 | |||||||||
2,000 | Global Traffic Network Inc.† | 11,904 | 6,060 | |||||||||
2,433 | Granite Broadcasting Corp.† | 822,771 | 243 | |||||||||
440,000 | Gray Television Inc. | 3,280,619 | 140,800 | |||||||||
36,000 | Gray Television Inc., Cl. A | 325,683 | 25,200 | |||||||||
48,000 | Hearst-Argyle Television Inc. | 425,523 | 199,680 | |||||||||
120,000 | Ideation Acquisition Corp.† | 953,800 | 904,800 | |||||||||
250 | Liberty Media Corp. - Capital, Cl. A† | 2,516 | 1,745 | |||||||||
10,000 | Nexstar Broadcasting Group Inc., Cl. A† | 33,219 | 6,800 | |||||||||
510,341 | Salem Communications Corp., Cl. A† | 2,326,408 | 285,791 | |||||||||
230,000 | Sinclair Broadcast Group Inc., Cl. A | 2,274,917 | 236,900 | |||||||||
200,000 | Sirius XM Radio Inc.† | 366,189 | 70,000 | |||||||||
20,000 | Spanish Broadcasting System Inc., Cl. A† | 179,117 | 3,000 | |||||||||
350,000 | Young Broadcasting Inc., Cl. A† | 462,493 | 3,500 | |||||||||
15,112,802 | 2,799,112 | |||||||||||
Building and Construction — 0.1% | ||||||||||||
25,000 | Huttig Building Products Inc.† | 90,165 | 9,500 | |||||||||
25,000 | Insituform Technologies Inc., Cl. A† | 464,646 | 391,000 | |||||||||
1,000 | Universal Forest Products Inc. | 12,125 | 26,610 | |||||||||
566,936 | 427,110 | |||||||||||
Business Services — 4.2% | ||||||||||||
30,000 | ACCO Brands Corp.† | 319,907 | 29,400 | |||||||||
420,000 | AMICAS Inc.† | 1,376,405 | 852,600 |
See accompanying notes to financial statements.
4
The Gabelli Small Cap Growth Fund
Schedule of Investments (Continued) — March 31, 2009 (Unaudited)
Schedule of Investments (Continued) — March 31, 2009 (Unaudited)
Shares/ | Market | |||||||||||
Units | Cost | Value | ||||||||||
COMMON STOCKS (Continued) | ||||||||||||
Business Services (Continued) | ||||||||||||
91,300 | Ascent Media Corp., Cl. A† | $ | 2,254,833 | $ | 2,282,500 | |||||||
6,000 | BB Holdings Ltd.† | 23,159 | 11,550 | |||||||||
445,000 | BPW Acquisition Corp.† | 4,399,929 | 4,165,200 | |||||||||
5,000 | BrandPartners Group Inc.† | 4,850 | 100 | |||||||||
130,000 | Clear Channel Outdoor Holdings Inc., Cl. A† | 1,084,174 | 477,100 | |||||||||
4,500 | Cockleshell Ltd.† | 0 | 3,390 | |||||||||
2,200 | comScore Inc.† | 36,300 | 26,598 | |||||||||
300,000 | Diebold Inc. | 10,796,891 | 6,405,000 | |||||||||
440,000 | Edgewater Technology Inc.† | 2,381,405 | 1,232,000 | |||||||||
330,000 | Furmanite Corp.† | 1,270,979 | 1,026,300 | |||||||||
119,931 | GP Strategies Corp.† | 992,735 | 426,954 | |||||||||
35,589 | GSE Systems Inc.† | 138,667 | 211,755 | |||||||||
500 | GSI Commerce Inc.† | 8,649 | 6,550 | |||||||||
2,400 | Impellam Group plc† | 3,303 | 1,188 | |||||||||
60,000 | Interactive Data Corp. | 534,171 | 1,491,600 | |||||||||
420,000 | Intermec Inc.† | 7,888,065 | 4,368,000 | |||||||||
25,000 | Lamar Advertising Co., Cl. A† | 176,135 | 243,750 | |||||||||
13,000 | Landauer Inc. | 234,859 | 658,840 | |||||||||
4,000 | MDC Partners Inc., Cl. A† | 12,360 | 13,160 | |||||||||
190,000 | Nashua Corp.† | 1,787,298 | 190,000 | |||||||||
130,000 | R. H. Donnelley Corp.† | 535,785 | 39,650 | |||||||||
816 | Shellproof Ltd.† | 806 | 503 | |||||||||
600 | Shellshock Ltd.† | 327 | 430 | |||||||||
65,000 | Sohgo Security Services Co. Ltd. | 829,111 | 554,882 | |||||||||
12,500 | SP Acquisition Holdings Inc.† | 125,000 | 118,125 | |||||||||
17,000 | Stamps.com Inc.† | 93,391 | 164,900 | |||||||||
6,000 | StarTek Inc.† | 82,087 | 18,600 | |||||||||
20,000 | The Brink’s Co. | 424,864 | 529,200 | |||||||||
1,400,000 | The Interpublic Group of Companies Inc.† | 10,537,393 | 5,768,000 | |||||||||
158,000 | Trans-Lux Corp.† (a) | 1,174,089 | 34,760 | |||||||||
33,050 | TransAct Technologies Inc.† | 172,690 | 85,600 | |||||||||
48,000 | United Rentals Inc.† | 312,080 | 202,080 | |||||||||
145,000 | ValueClick Inc.† | 2,688,233 | 1,233,950 | |||||||||
52,700,930 | 32,874,215 | |||||||||||
Cable — 1.6% | ||||||||||||
230,000 | Adelphia Communications Corp., Cl. A† (b) | 29,650 | 0 | |||||||||
230,000 | Adelphia Communications Corp., Cl. A, Escrow† (b) | 0 | 0 | |||||||||
230,000 | Adelphia Recovery Trust† | 0 | 23 | |||||||||
500,000 | Cablevision Systems Corp., Cl. A | 121,520 | 6,470,000 | |||||||||
9,329 | Liberty Global Inc., Cl. A† | 249,972 | 135,830 | |||||||||
9,329 | Liberty Global Inc., Cl. C† | 240,169 | 131,819 | |||||||||
520,000 | LIN TV Corp., Cl. A† | 4,478,502 | 582,400 | |||||||||
33,000 | Outdoor Channel Holdings Inc.† | 271,136 | 225,060 | |||||||||
230,000 | The DIRECTV Group Inc.† | 5,723,684 | 5,241,700 | |||||||||
11,114,633 | 12,786,832 | |||||||||||
Closed-End Funds — 0.3% | ||||||||||||
99,702 | The Central Europe and Russia Fund Inc. | 2,860,058 | 1,524,444 | |||||||||
36,700 | The European Equity Fund Inc.† | 386,832 | 161,480 | |||||||||
54,000 | The New Germany Fund Inc. | 635,491 | 343,440 | |||||||||
11,000 | The Spain Fund Inc. | 103,029 | 44,220 | |||||||||
3,985,410 | 2,073,584 | |||||||||||
Communications Equipment — 1.2% | ||||||||||||
160,000 | Communications Systems Inc. | 1,147,120 | 1,225,600 | |||||||||
525,000 | Sycamore Networks Inc.† | 1,705,330 | 1,401,750 | |||||||||
275,000 | Thomas & Betts Corp.† | 5,127,066 | 6,880,500 | |||||||||
7,979,516 | 9,507,850 | |||||||||||
Computer Software and Services — 0.9% | ||||||||||||
5,000 | Borland Software Corp.† | 35,110 | 2,300 | |||||||||
97,500 | FalconStor Software Inc.† | 696,671 | 233,025 | |||||||||
68,759 | Global Sources Ltd.† | 856,209 | 267,472 | |||||||||
60,000 | Mentor Graphics Corp.† | 800,505 | 266,400 | |||||||||
20,187 | MKS Instruments Inc.† | 367,981 | 296,143 | |||||||||
200,000 | NCR Corp.† | 2,270,014 | 1,590,000 | |||||||||
45,000 | OpenTV Corp., Cl. A† | 235,263 | 67,950 | |||||||||
6,000 | Phoenix Technologies Ltd.† | 41,368 | 9,720 | |||||||||
800,000 | StorageNetworks Inc., Escrow† (b) | 0 | 24,000 | |||||||||
295,000 | Tyler Technologies Inc.† | 1,164,997 | 4,315,850 | |||||||||
27,000 | WebMediaBrands Inc.† | 47,786 | 10,800 | |||||||||
6,515,904 | 7,083,660 | |||||||||||
Consumer Products — 2.2% | ||||||||||||
75,000 | 1-800-FLOWERS.COM Inc., Cl. A† | 701,203 | 155,250 | |||||||||
11,750 | Adams Golf Inc.† | 101,176 | 28,200 | |||||||||
46,150 | Alberto-Culver Co. | 1,101,811 | 1,043,452 | |||||||||
33,500 | Chofu Seisakusho Co. Ltd. | 484,644 | 622,721 | |||||||||
30,000 | Church & Dwight Co. Inc. | 303,670 | 1,566,900 | |||||||||
400,000 | Coachmen Industries Inc.† | 1,269,146 | 260,000 | |||||||||
220,000 | Eastman Kodak Co. | 1,848,124 | 836,000 | |||||||||
6,000 | Elizabeth Arden Inc.† | 82,125 | 34,980 | |||||||||
140,000 | Escada AG† | 2,684,981 | 353,409 | |||||||||
2,000 | Harley-Davidson Inc. | 4,713 | 26,780 | |||||||||
275,000 | Hartmarx Corp.† | 953,139 | 12,100 | |||||||||
310,000 | Marine Products Corp. | 324,288 | 1,314,400 | |||||||||
27,500 | National Presto Industries Inc. | 849,878 | 1,677,775 | |||||||||
10,000 | Revlon Inc., Cl. A† | 177,583 | 24,800 | |||||||||
250,000 | Sally Beauty Holdings Inc.† | 1,564,882 | 1,420,000 |
See accompanying notes to financial statements.
5
The Gabelli Small Cap Growth Fund
Schedule of Investments (Continued) — March 31, 2009 (Unaudited)
Schedule of Investments (Continued) — March 31, 2009 (Unaudited)
Market | ||||||||||||
Shares | Cost | Value | ||||||||||
COMMON STOCKS (Continued) | ||||||||||||
Consumer Products (Continued) | ||||||||||||
750,000 | Schiff Nutrition International Inc.† | $ | 2,148,754 | $ | 3,375,000 | |||||||
3,070 | Steven Madden Ltd.† | 37,266 | 57,655 | |||||||||
30,000 | Stewart Enterprises Inc., Cl. A | 197,988 | 97,200 | |||||||||
150,000 | Swedish Match AB | 2,969,646 | 2,171,691 | |||||||||
87,425 | Syratech Corp.† | 17,426 | 481 | |||||||||
16,000 | The Scotts Miracle-Gro Co., Cl. A | 320,814 | 555,200 | |||||||||
17,000 | WD-40 Co. | 470,278 | 410,380 | |||||||||
68,000 | Wolverine World Wide Inc. | 661,926 | 1,059,440 | |||||||||
19,275,461 | 17,103,814 | |||||||||||
Consumer Services — 1.1% | ||||||||||||
40,000 | Bowlin Travel Centers Inc.† | 39,722 | 42,000 | |||||||||
30,000 | Brink’s Home Security Holdings Inc.† | 549,842 | 678,000 | |||||||||
2,750 | Collectors Universe Inc. | 8,720 | 10,698 | |||||||||
5,000 | eLong Inc., ADR† | 59,917 | 30,400 | |||||||||
2,000 | Expedia Inc.† | 19,829 | 18,160 | |||||||||
20,000 | IAC/InterActiveCorp.† | 221,743 | 304,600 | |||||||||
180,000 | Martha Stewart Living Omnimedia Inc., Cl. A† | 1,382,828 | 448,200 | |||||||||
20,000 | Response USA Inc.† (b) | 16,500 | 40 | |||||||||
400,500 | Rollins Inc. | 2,284,661 | 6,868,575 | |||||||||
10,000 | TiVo Inc.† | 74,563 | 70,400 | |||||||||
4,658,325 | 8,471,073 | |||||||||||
Diversified Industrial — 6.7% | ||||||||||||
29,000 | Acuity Brands Inc. | 278,896 | 653,660 | |||||||||
13,000 | Albany International Corp., Cl. A | 331,436 | 117,650 | |||||||||
135,000 | Ampco-Pittsburgh Corp. | 1,852,418 | 1,790,100 | |||||||||
6,000 | Anixter International Inc.† | 57,120 | 190,080 | |||||||||
385,000 | Baldor Electric Co. | 9,739,900 | 5,578,650 | |||||||||
14,000 | Brush Engineered Materials Inc.† | 289,973 | 194,180 | |||||||||
300,000 | Crane Co. | 5,694,990 | 5,064,000 | |||||||||
100,000 | Delta plc | 212,289 | 155,681 | |||||||||
3,000 | ESCO Technologies Inc.† | 49,914 | 116,100 | |||||||||
18,640 | Foster Wheeler AG† | 36,171 | 325,641 | |||||||||
13,000 | Gardner Denver Inc.† | 129,613 | 282,620 | |||||||||
160,000 | Greif Inc., Cl. A | 1,763,054 | 5,326,400 | |||||||||
40,900 | Greif Inc., Cl. B | 1,439,456 | 1,335,794 | |||||||||
745,931 | Griffon Corp.† | 8,805,668 | 5,594,483 | |||||||||
140,000 | Hawk Corp., Cl. A† | 2,132,089 | 1,617,000 | |||||||||
10,000 | Insteel Industries Inc. | 4,250 | 69,600 | |||||||||
320,700 | Katy Industries Inc.† | 813,118 | 288,630 | |||||||||
70,000 | Lindsay Corp. | 1,477,728 | 1,890,000 | |||||||||
440,000 | Magnetek Inc.† | 1,947,127 | 792,000 | |||||||||
32,000 | Matthews International Corp., Cl. A | 748,294 | 921,920 | |||||||||
275,000 | Myers Industries Inc. | 2,507,046 | 1,688,500 | |||||||||
192,297 | National Patent Development Corp.† | 227,540 | 230,756 | |||||||||
379,703 | National Patent Development Corp.† (b)(c) | 949,258 | 433,946 | |||||||||
115,000 | Oil-Dri Corp. of America | 1,103,116 | 1,696,250 | |||||||||
15,000 | Olin Corp. | 232,292 | 214,050 | |||||||||
245,000 | Park-Ohio Holdings Corp.† | 1,485,571 | 798,700 | |||||||||
88,000 | Precision Castparts Corp. | 1,768,194 | 5,271,200 | |||||||||
32,000 | Roper Industries Inc. | 620,029 | 1,358,400 | |||||||||
33,000 | Sonoco Products Co. | 911,856 | 692,340 | |||||||||
43,000 | Stamford Industrial Group Inc.† | 156,830 | 86,000 | |||||||||
66,000 | Standex International Corp. | 1,323,405 | 607,200 | |||||||||
188,006 | Tech/Ops Sevcon Inc. | 1,217,504 | 253,808 | |||||||||
370,000 | Textron Inc. | 2,276,853 | 2,123,800 | |||||||||
195,000 | Tredegar Corp. | 2,908,161 | 3,184,350 | |||||||||
127,000 | WHX Corp.† | 2,133,793 | 850,900 | |||||||||
57,624,952 | 51,794,389 | |||||||||||
Educational Services — 0.8% | ||||||||||||
55,000 | Career Education Corp.† | 1,030,517 | 1,317,800 | |||||||||
140,000 | Corinthian Colleges Inc.† | 1,095,854 | 2,723,000 | |||||||||
200,000 | Universal Technical Institute Inc.† | 3,527,227 | 2,400,000 | |||||||||
5,653,598 | 6,440,800 | |||||||||||
Electronics — 2.0% | ||||||||||||
54,000 | Badger Meter Inc. | 1,301,304 | 1,560,060 | |||||||||
130,000 | Bel Fuse Inc., Cl. A | 3,802,035 | 1,615,900 | |||||||||
610,000 | California Micro Devices Corp.† | 2,628,286 | 1,482,300 | |||||||||
380,000 | CTS Corp. | 3,686,287 | 1,371,800 | |||||||||
73,000 | Cypress Semiconductor Corp.† | 354,472 | 494,210 | |||||||||
50,000 | Greatbatch Inc.† | 951,334 | 967,500 | |||||||||
20,000 | IMAX Corp.† | 158,565 | 86,200 | |||||||||
370,000 | KEMET Corp.† | 1,583,070 | 90,650 | |||||||||
90,000 | Methode Electronics Inc. | 768,649 | 322,200 | |||||||||
262,500 | Park Electrochemical Corp. | 6,166,445 | 4,536,000 | |||||||||
165,000 | Stoneridge Inc.† | 1,434,628 | 348,150 | |||||||||
350,000 | Trident Microsystems Inc.† | 1,469,567 | 511,000 | |||||||||
260,000 | Zoran Corp.† | 2,580,598 | 2,288,000 | |||||||||
5,200 | Zygo Corp.† | 26,735 | 23,868 | |||||||||
26,911,975 | 15,697,838 | |||||||||||
Energy and Utilities — 6.3% | ||||||||||||
3,000 | AGL Resources Inc. | 51,525 | 79,590 | |||||||||
110,000 | Callon Petroleum Co.† | 970,070 | 119,900 | |||||||||
15,000 | Central Vermont Public Service Corp. | 273,572 | 259,500 |
See accompanying notes to financial statements.
6
The Gabelli Small Cap Growth Fund
Schedule of Investments (Continued) — March 31, 2009 (Unaudited)
Schedule of Investments (Continued) — March 31, 2009 (Unaudited)
Market | ||||||||||||
Shares | Cost | Value | ||||||||||
COMMON STOCKS (Continued) | ||||||||||||
Energy and Utilities (Continued) | ||||||||||||
43,000 | CH Energy Group Inc. | $ | 1,679,997 | $ | 2,016,700 | |||||||
12,000 | Chesapeake Utilities Corp. | 236,752 | 365,760 | |||||||||
50,000 | CMS Energy Corp. | 273,275 | 592,000 | |||||||||
23,000 | Connecticut Water Service Inc. | 464,832 | 466,440 | |||||||||
6,000 | Consolidated Water Co. Ltd. | 119,247 | 65,100 | |||||||||
150,000 | Covanta Holding Corp.† | 644,530 | 1,963,500 | |||||||||
200,000 | El Paso Electric Co.† | 2,804,771 | 2,818,000 | |||||||||
4,000 | Ener1 Inc.† | 24,684 | 20,680 | |||||||||
30,000 | Environmental Power Corp.† | 130,012 | 10,800 | |||||||||
146,500 | Florida Public Utilities Co. | 1,404,426 | 1,431,305 | |||||||||
167,000 | Great Plains Energy Inc. | 3,957,333 | 2,249,490 | |||||||||
14,500 | Maine & Maritimes Corp. | 533,667 | 507,500 | |||||||||
45,000 | Middlesex Water Co. | 773,022 | 648,000 | |||||||||
10,000 | Nicor Inc. | 221,003 | 332,300 | |||||||||
33,000 | Oceaneering International Inc.† | 1,043,012 | 1,216,710 | |||||||||
152,000 | Pennichuck Corp. | 3,510,285 | 3,108,400 | |||||||||
2,000 | PetroQuest Energy Inc.† | 5,250 | 4,800 | |||||||||
1,025,000 | PNM Resources Inc. | 11,415,563 | 8,466,500 | |||||||||
90,000 | Rowan Companies Inc. | 1,939,375 | 1,077,300 | |||||||||
1,065,000 | RPC Inc. | 1,882,457 | 7,060,950 | |||||||||
85,000 | SJW Corp. | 1,385,457 | 2,161,550 | |||||||||
300,000 | Southern Union Co. | 5,117,716 | 4,566,000 | |||||||||
140,000 | Southwest Gas Corp. | 2,817,495 | 2,949,800 | |||||||||
45,000 | Tesoro Corp. | 455,817 | 606,150 | |||||||||
4,000 | Toreador Resources Corp.† | 15,250 | 10,040 | |||||||||
25,000 | Union Drilling Inc.† | 198,390 | 95,000 | |||||||||
10,000 | Vestas Wind Systems A/S† | 89,988 | 438,788 | |||||||||
200,000 | Westar Energy Inc. | 3,538,764 | 3,506,000 | |||||||||
47,977,537 | 49,214,553 | |||||||||||
Entertainment — 1.5% | ||||||||||||
175,000 | Aruze Corp.† | 3,355,387 | 857,453 | |||||||||
82,000 | Carmike Cinemas Inc. | 687,816 | 212,380 | |||||||||
6,048 | Chestnut Hill Ventures† (b) | 164,590 | 203,681 | |||||||||
52,000 | Discovery Communications Inc., Cl. A† | 826,160 | 833,040 | |||||||||
35,000 | Discovery Communications Inc., Cl. C† | 508,241 | 512,750 | |||||||||
245,900 | Dover Motorsports Inc. | 1,218,751 | 454,915 | |||||||||
140,000 | Fisher Communications Inc. | 6,789,339 | 1,366,400 | |||||||||
16,000 | International Speedway Corp., Cl. A | 515,479 | 352,960 | |||||||||
2,500 | International Speedway Corp., Cl. B | 45,000 | 53,125 | |||||||||
1,000 | Liberty Media Corp. - Entertainment, Cl. A† | 13,208 | 19,950 | |||||||||
180,000 | Macrovision Solutions Corp.† | 2,773,784 | 3,202,200 | |||||||||
20,000 | Six Flags Inc.† | 100,600 | 5,400 | |||||||||
325,000 | Take-Two Interactive Software Inc. | 6,434,568 | 2,713,750 | |||||||||
100,000 | Triple Crown Media Inc.† | 327,865 | 1,500 | |||||||||
60,000 | World Wrestling Entertainment Inc., Cl. A | 681,642 | 692,400 | |||||||||
97,057 | WPT Enterprises Inc.† | 230,331 | 55,322 | |||||||||
24,672,761 | 11,537,226 | |||||||||||
Environmental Services — 0.8% | ||||||||||||
5,000 | Renegy Holdings Inc.† | 16,929 | 7,500 | |||||||||
360,000 | Republic Services Inc. | 4,605,576 | 6,174,000 | |||||||||
4,622,505 | 6,181,500 | |||||||||||
Equipment and Supplies — 10.4% | ||||||||||||
15,000 | A.O. Smith Corp., Cl. A | 336,569 | 382,500 | |||||||||
247,000 | AMETEK Inc. | 990,231 | 7,723,690 | |||||||||
470,000 | Baldwin Technology Co. Inc., Cl. A† | 1,452,701 | 446,500 | |||||||||
26,000 | Belden Inc. | 297,690 | 325,260 | |||||||||
7,000 | C&D Technologies Inc.† | 58,645 | 12,950 | |||||||||
50,000 | Capstone Turbine Corp.† | 103,400 | 36,000 | |||||||||
280,000 | CIRCOR International Inc. | 5,997,409 | 6,305,600 | |||||||||
360,000 | CLARCOR Inc. | 2,220,613 | 9,068,400 | |||||||||
250,000 | Core Molding Technologies Inc.† | 447,721 | 350,000 | |||||||||
170,000 | Crown Holdings Inc.† | 687,034 | 3,864,100 | |||||||||
2,000 | Danaher Corp. | 34,106 | 108,440 | |||||||||
85,000 | Donaldson Co. Inc. | 1,410,444 | 2,281,400 | |||||||||
90,000 | Entegris Inc.† | 708,040 | 77,400 | |||||||||
40,000 | Fedders Corp.† (b) | 10,068 | 0 | |||||||||
191,000 | Flowserve Corp. | 6,063,564 | 10,718,920 | |||||||||
160,000 | Franklin Electric Co. Inc. | 1,496,658 | 3,540,800 | |||||||||
180,000 | Gerber Scientific Inc.† | 1,561,807 | 430,200 | |||||||||
95,000 | Graco Inc. | 1,144,339 | 1,621,650 | |||||||||
1,040,000 | GrafTech International Ltd.† | 12,801,904 | 6,406,400 | |||||||||
100,000 | IDEX Corp. | 765,938 | 2,187,000 | |||||||||
27,000 | Interpump Group SpA | 106,042 | 98,469 | |||||||||
2,000 | Itron Inc.† | 126,154 | 94,700 | |||||||||
4,000 | Jarden Corp.† | 11,351 | 50,680 | |||||||||
9,500 | K-Tron International Inc.† | 124,799 | 576,365 | |||||||||
80,000 | L.S. Starrett Co., Cl. A | 1,259,460 | 500,000 | |||||||||
34,000 | Littelfuse Inc.† | 658,694 | 373,660 | |||||||||
120,000 | Lufkin Industries Inc. | 1,638,827 | 4,545,600 | |||||||||
55,000 | Maezawa Kyuso Industries Co. Ltd. | 359,609 | 917,917 | |||||||||
75,000 | Met-Pro Corp. | 618,906 | 611,250 | |||||||||
23,000 | Mueller Industries Inc. | 719,453 | 498,870 | |||||||||
12,000 | Plantronics Inc. | 275,609 | 144,840 | |||||||||
2,000 | Regal-Beloit Corp. | 59,351 | 61,280 | |||||||||
120,000 | Robbins & Myers Inc. | 1,646,566 | 1,820,400 | |||||||||
121,000 | SL Industries Inc.† | 1,425,363 | 559,020 | |||||||||
5,000 | Teleflex Inc. | 76,167 | 195,450 |
See accompanying notes to financial statements.
7
The Gabelli Small Cap Growth Fund
Schedule of Investments (Continued) — March 31, 2009 (Unaudited)
Schedule of Investments (Continued) — March 31, 2009 (Unaudited)
Market | ||||||||||||
Shares | Cost | Value | ||||||||||
COMMON STOCKS (Continued) | ||||||||||||
Equipment and Supplies (Continued) | ||||||||||||
300,000 | Tennant Co. | $ | 6,044,139 | $ | 2,811,000 | |||||||
320,000 | The Gorman-Rupp Co. | 6,150,199 | 6,336,000 | |||||||||
95,000 | The Greenbrier Cos. Inc. | 1,175,802 | 347,700 | |||||||||
90,000 | The Manitowoc Co. Inc. | 617,155 | 294,300 | |||||||||
14,000 | The Middleby Corp.† | 348,746 | 454,020 | |||||||||
8,000 | Valmont Industries Inc. | 176,298 | 401,680 | |||||||||
70,000 | Vicor Corp. | 769,269 | 342,300 | |||||||||
7,875 | Watsco Inc., Cl. B | 23,627 | 272,239 | |||||||||
153,000 | Watts Water Technologies Inc., Cl. A | 3,377,189 | 2,992,680 | |||||||||
50,000 | Wolverine Tube Inc.† | 50,263 | 4,500 | |||||||||
66,427,919 | 81,192,130 | |||||||||||
Financial Services — 5.1% | ||||||||||||
10,404 | Alleghany Corp.† | 1,791,693 | 2,817,715 | |||||||||
25,287 | Argo Group International Holdings Ltd.† | 844,293 | 761,897 | |||||||||
100,000 | Bank of Florida Corp.† | 1,294,226 | 376,000 | |||||||||
133,000 | BKF Capital Group Inc. | 1,138,774 | 127,680 | |||||||||
444,000 | CNA Surety Corp.† | 5,206,134 | 8,187,360 | |||||||||
22,000 | Crazy Woman Creek Bancorp Inc. | 343,564 | 374,000 | |||||||||
1,781 | Deerfield Capital Corp. | 25,290 | 1,781 | |||||||||
150,000 | Discover Financial Services | 2,610,856 | 946,500 | |||||||||
10,000 | Duff & Phelps Corp., Cl. A† | 158,736 | 157,500 | |||||||||
37,000 | Epoch Holding Corp. | 63,098 | 254,190 | |||||||||
3,000 | Federal Agricultural Mortgage Corp., Cl. C | 24,000 | 8,040 | |||||||||
7,070 | Fidelity Southern Corp. | 50,197 | 17,675 | |||||||||
200,000 | Flushing Financial Corp. | 3,171,622 | 1,204,000 | |||||||||
300,000 | Janus Capital Group Inc. | 1,975,582 | 1,995,000 | |||||||||
40,000 | JPMorgan Chase & Co. | 1,075,346 | 1,063,200 | |||||||||
2,000 | KBW Inc.† | 40,585 | 40,700 | |||||||||
60,000 | LaBranche & Co. Inc.† | 557,086 | 224,400 | |||||||||
1,000 | LandAmerica Financial Group Inc. | 12,175 | 65 | |||||||||
120,000 | Legg Mason Inc. | 2,133,628 | 1,908,000 | |||||||||
3,000 | Leucadia National Corp.† | 24,354 | 44,670 | |||||||||
75,000 | MVC Capital Inc. | 861,134 | 630,750 | |||||||||
260,800 | Nara Bancorp Inc. | 3,199,133 | 766,752 | |||||||||
3,000 | NetBank Inc.† (b) | 6,056 | 15 | |||||||||
150,000 | NewAlliance Bancshares Inc. | 2,090,474 | 1,761,000 | |||||||||
155,000 | Och-Ziff Capital Management Group LLC, Cl. A | 933,420 | 940,850 | |||||||||
11,000 | PrivateBancorp Inc. | 321,408 | 159,060 | |||||||||
24,000 | Seacoast Banking Corp. of Florida | 205,927 | 72,720 | |||||||||
200,000 | Sterling Bancorp | 3,163,359 | 1,980,000 | |||||||||
145,000 | SWS Group Inc. | 2,727,216 | 2,251,850 | |||||||||
10,000 | T. Rowe Price Group Inc. | 270,786 | 288,600 | |||||||||
11,333 | Tree.com Inc.† | 79,922 | 52,358 | |||||||||
4,800 | Value Line Inc. | 194,670 | 131,232 | |||||||||
450,000 | Waddell & Reed Financial Inc., Cl. A | 9,026,154 | 8,131,500 | |||||||||
30,000 | Wells Fargo & Co. | 488,920 | 427,200 | |||||||||
137,000 | Wilmington Trust Corp. | 4,051,496 | 1,327,530 | |||||||||
50,161,314 | 39,431,790 | |||||||||||
Food and Beverage — 7.6% | ||||||||||||
40,000 | Boston Beer Co. Inc., Cl. A† | 690,674 | 834,400 | |||||||||
30,000 | Brown-Forman Corp., Cl. A | 741,180 | 1,203,000 | |||||||||
6,250 | Brown-Forman Corp., Cl. B | 174,281 | 242,688 | |||||||||
210,000 | Bull-Dog Sauce Co. Ltd. | 575,985 | 445,522 | |||||||||
100 | Compania Cervecerias Unidas SA, ADR | 2,455 | 2,810 | |||||||||
600,000 | CoolBrands International Inc.† | 448,546 | 342,640 | |||||||||
350,000 | Corn Products International Inc. | 7,896,119 | 7,420,000 | |||||||||
300,000 | Davide Campari-Milano SpA | 2,942,535 | 1,905,217 | |||||||||
150,000 | Dean Foods Co.† | 2,946,405 | 2,712,000 | |||||||||
155,000 | Del Monte Foods Co. | 1,477,477 | 1,129,950 | |||||||||
85,000 | Denny’s Corp.† | 132,580 | 141,950 | |||||||||
1,000 | Diamond Foods Inc. | 20,567 | 27,930 | |||||||||
320,000 | Dr. Pepper Snapple Group Inc.† | 6,448,709 | 5,411,200 | |||||||||
1,600,000 | Dynasty Fine Wines Group Ltd. | 458,568 | 268,366 | |||||||||
100 | Embotelladora Andina SA, Cl. A, ADR | 1,295 | 1,227 | |||||||||
25,000 | Farmer Brothers Co. | 389,323 | 445,000 | |||||||||
300,000 | Flowers Foods Inc. | 1,755,612 | 7,044,000 | |||||||||
500 | Genesee Corp., Cl. A† (b) | 0 | 0 | |||||||||
21,500 | Genesee Corp., Cl. B† (b) | 15,393 | 0 | |||||||||
660,000 | Grupo Continental SAB de CV | 996,531 | 1,066,530 | |||||||||
10,000 | Hain Celestial Group Inc.† | 184,774 | 142,400 | |||||||||
145,000 | ITO EN Ltd. | 3,112,114 | 1,765,166 | |||||||||
25,000 | ITO EN Ltd., Preference | 531,595 | 216,952 | |||||||||
25,000 | J & J Snack Foods Corp. | 577,813 | 864,750 | |||||||||
500,000 | Kikkoman Corp. | 4,914,093 | 4,152,144 | |||||||||
170,000 | Lifeway Foods Inc.† | 1,680,429 | 1,360,000 | |||||||||
20,000 | Meiji Seika Kaisha Ltd. (b) | 87,470 | 69,910 | |||||||||
70,000 | MGP Ingredients Inc.† | 331,262 | 51,800 | |||||||||
190,000 | Morinaga Milk Industry Co. Ltd. | 747,376 | 566,247 | |||||||||
80,000 | Nissin Foods Holdings Co. Ltd. | 2,778,862 | 2,343,789 | |||||||||
4,000 | Omni Nutraceuticals Inc.† (b) | 13,563 | 2 | |||||||||
140,000 | PepsiAmericas Inc. | 3,072,267 | 2,415,000 | |||||||||
50,000 | Ralcorp Holdings Inc.† | 892,806 | 2,694,000 | |||||||||
145,000 | Rock Field Co. Ltd. | 2,331,629 | 1,751,983 |
See accompanying notes to financial statements.
8
The Gabelli Small Cap Growth Fund
Schedule of Investments (Continued) — March 31, 2009 (Unaudited)
Schedule of Investments (Continued) — March 31, 2009 (Unaudited)
Market | ||||||||||||
Shares | Cost | Value | ||||||||||
COMMON STOCKS (Continued) | ||||||||||||
Food and Beverage (Continued) | ||||||||||||
70,200 | Smart Balance Inc.† | $ | 628,921 | $ | 424,008 | |||||||
66,000 | The J.M. Smucker Co. | 1,599,230 | 2,459,820 | |||||||||
217,000 | Tootsie Roll Industries Inc. | 4,850,104 | 4,713,240 | |||||||||
4,000 | Vina Concha Y Toro SA, ADR | 118,504 | 132,800 | |||||||||
1,000 | Willamette Valley Vineyards Inc.† | 3,994 | 2,365 | |||||||||
115,000 | YAKULT HONSHA Co. Ltd. | 2,946,470 | 2,037,784 | |||||||||
59,517,511 | 58,808,590 | |||||||||||
Health Care — 7.6% | ||||||||||||
80,000 | Align Technology Inc.† | 647,997 | 634,400 | |||||||||
100,000 | Allergan Inc. | 1,964,408 | 4,776,000 | |||||||||
160,000 | AngioDynamics Inc.† | 2,625,338 | 1,798,400 | |||||||||
7,000 | Anika Therapeutics Inc.† | 70,876 | 31,990 | |||||||||
325,000 | Animal Health International Inc.† | 2,903,022 | 406,250 | |||||||||
110,000 | ArthroCare Corp.† | 2,297,520 | 539,000 | |||||||||
7,500 | Bio-Rad Laboratories Inc., Cl. A† | 296,935 | 494,250 | |||||||||
60,000 | BioLase Technology Inc.† | 107,545 | 53,700 | |||||||||
20,000 | Bruker Corp.† | 174,056 | 123,200 | |||||||||
130,000 | Cepheid Inc.† | 1,491,838 | 897,000 | |||||||||
155,000 | Chemed Corp. | 3,340,846 | 6,029,500 | |||||||||
70,000 | CONMED Corp.† | 1,833,347 | 1,008,700 | |||||||||
210,000 | Crucell NV, ADR† | 4,049,385 | 4,139,100 | |||||||||
275,000 | Cutera Inc.† | 4,290,308 | 1,757,250 | |||||||||
120,000 | Del Global Technologies Corp.† | 350,477 | 63,600 | |||||||||
108,000 | DexCom Inc.† | 1,198,612 | 447,120 | |||||||||
8,000 | Edwards Lifesciences Corp.† | 275,132 | 485,040 | |||||||||
71,000 | Exactech Inc.† | 1,057,940 | 815,790 | |||||||||
42,000 | Henry Schein Inc.† | 739,631 | 1,680,420 | |||||||||
50,000 | Heska Corp.† | 53,676 | 12,005 | |||||||||
130,000 | ICU Medical Inc.† | 3,494,711 | 4,175,600 | |||||||||
30,000 | IMS Health Inc. | 628,060 | 374,100 | |||||||||
2,000 | Integra LifeSciences Holdings Corp.† | 43,600 | 49,460 | |||||||||
4,000 | Invacare Corp. | 92,551 | 64,120 | |||||||||
30,000 | Inverness Medical Innovations Inc.† | 554,733 | 798,900 | |||||||||
10,000 | K-V Pharmaceutical Co., Cl. A† | 286,714 | 16,500 | |||||||||
20,000 | Kinetic Concepts Inc.† | 489,560 | 422,400 | |||||||||
45,000 | Life Technologies Corp.† | 1,153,989 | 1,461,600 | |||||||||
100,000 | Matrixx Initiatives Inc.† | 1,652,693 | 1,640,000 | |||||||||
77,000 | Micrus Endovascular Corp.† | 1,128,301 | 459,690 | |||||||||
40,000 | MWI Veterinary Supply Inc.† | 972,736 | 1,139,200 | |||||||||
18,000 | Nabi Biopharmaceuticals† | 117,875 | 66,600 | |||||||||
10,000 | NeuroMetrix Inc.† | 67,433 | 15,400 | |||||||||
4,000 | Nobel Biocare Holding AG | 61,643 | 68,242 | |||||||||
220,000 | Odyssey HealthCare Inc.† | 2,407,381 | 2,134,000 | |||||||||
72,000 | Opko Health Inc.† | 209,334 | 70,560 | |||||||||
150,000 | Orthofix International NV† | 3,804,744 | 2,778,000 | |||||||||
2,000 | OrthoLogic Corp.† | 6,750 | 1,100 | |||||||||
30,000 | Owens & Minor Inc. | 606,216 | 993,900 | |||||||||
230,000 | Pain Therapeutics Inc.† | 2,068,215 | 966,000 | |||||||||
270,000 | Palomar Medical Technologies Inc.† | 4,679,077 | 1,960,200 | |||||||||
155,000 | Penwest Pharmaceuticals Co.† | 1,224,222 | 254,200 | |||||||||
30,000 | PSS World Medical Inc.† | 367,273 | 430,500 | |||||||||
1,779 | Qiagen NV† | 7,992 | 28,393 | |||||||||
213,000 | Quidel Corp.† | 1,838,819 | 1,963,860 | |||||||||
120,000 | RTI Biologics Inc.† | 1,178,032 | 342,000 | |||||||||
2,000 | Sirona Dental Systems Inc.† | 27,620 | 28,640 | |||||||||
145,000 | Sonic Innovations Inc.† | 651,988 | 155,150 | |||||||||
1,735,000 | Sorin SpA† | 4,824,018 | 1,176,767 | |||||||||
1,100,000 | SSL International plc | 8,745,703 | 7,086,695 | |||||||||
2,300 | Straumann Holding AG | 206,988 | 356,426 | |||||||||
4,000 | Stryker Corp. | 156,026 | 136,160 | |||||||||
31,000 | United-Guardian Inc. | 284,526 | 217,000 | |||||||||
80,000 | Vascular Solutions Inc.† | 619,673 | 489,600 | |||||||||
1,000 | Wright Medical Group Inc.† | 16,460 | 13,030 | |||||||||
10,000 | Young Innovations Inc. | 237,253 | 155,000 | |||||||||
20,000 | Zymogenetics Inc.† | 192,516 | 79,800 | |||||||||
74,874,314 | 58,761,508 | |||||||||||
Home Furnishings — 0.1% | ||||||||||||
12,000 | Bassett Furniture Industries Inc. | 192,256 | 23,280 | |||||||||
37,000 | Bed Bath & Beyond Inc.† | 886,545 | 915,750 | |||||||||
15,000 | La-Z-Boy Inc. | 126,571 | 18,750 | |||||||||
1,205,372 | 957,780 | |||||||||||
Hotels and Gaming — 2.0% | ||||||||||||
150,000 | Boyd Gaming Corp. | 849,669 | 559,500 | |||||||||
78,000 | Canterbury Park Holding Corp. | 870,958 | 518,700 | |||||||||
90,000 | Churchill Downs Inc. | 3,024,383 | 2,705,400 | |||||||||
100,000 | Dover Downs Gaming & Entertainment Inc. | 666,063 | 307,000 | |||||||||
231,800 | Gaylord Entertainment Co.† | 5,553,911 | 1,930,894 | |||||||||
42,000 | Home Inns & Hotels Management Inc., ADR† | 891,273 | 414,540 | |||||||||
8,000 | Interval Leisure Group Inc.† | 70,769 | 42,400 | |||||||||
140,000 | Lakes Entertainment Inc.† | 717,933 | 287,000 | |||||||||
225,000 | Las Vegas Sands Corp.† | 2,906,215 | 677,250 | |||||||||
300,000 | Mandarin Oriental International Ltd. | 272,300 | 238,500 | |||||||||
162,000 | Orient-Express Hotels Ltd., Cl. A | 3,115,779 | 664,200 | |||||||||
120,000 | Penn National Gaming Inc.† | 1,549,468 | �� | 2,898,000 |
See accompanying notes to financial statements.
9
The Gabelli Small Cap Growth Fund
Schedule of Investments (Continued) — March 31, 2009 (Unaudited)
Schedule of Investments (Continued) — March 31, 2009 (Unaudited)
Shares/ | Market | |||||||||||
Units | Cost | Value | ||||||||||
COMMON STOCKS (Continued) | ||||||||||||
Hotels and Gaming (Continued) | ||||||||||||
300,000 | Pinnacle Entertainment Inc.† | $ | 2,362,495 | $ | 2,112,000 | |||||||
142,000 | Sonesta International Hotels Corp., Cl. A | 3,343,151 | 1,065,000 | |||||||||
900,000 | The Hongkong & Shanghai Hotels Ltd. | 648,495 | 566,666 | |||||||||
45,000 | The Marcus Corp. | 739,945 | 382,500 | |||||||||
25,000 | Wynn Resorts Ltd.† | 312,098 | 499,250 | |||||||||
29,000 | Youbet.com Inc.† | 64,391 | 49,010 | |||||||||
27,959,296 | 15,917,810 | |||||||||||
Machinery — 0.8% | ||||||||||||
438,000 | CNH Global NV | 6,058,249 | 4,546,440 | |||||||||
2,000 | Nordson Corp. | 75,230 | 56,860 | |||||||||
100,000 | Zebra Technologies Corp., Cl. A† | 2,327,131 | 1,902,000 | |||||||||
8,460,610 | 6,505,300 | |||||||||||
Manufactured Housing and Recreational Vehicles — 0.7% | ||||||||||||
140,000 | Cavalier Homes Inc.† | 265,829 | 217,000 | |||||||||
68,700 | Cavco Industries Inc.† | 1,405,565 | 1,621,320 | |||||||||
800,000 | Champion Enterprises Inc.† | 4,869,633 | 384,000 | |||||||||
17,000 | Drew Industries Inc.† | 296,303 | 147,560 | |||||||||
125,000 | Fleetwood Enterprises Inc.† | 338,768 | 4,625 | |||||||||
140,000 | Monaco Coach Corp. | 778,178 | 21,000 | |||||||||
20,000 | Nobility Homes Inc. | 347,733 | 145,000 | |||||||||
160,000 | Skyline Corp. | 4,932,802 | 3,041,600 | |||||||||
13,234,811 | 5,582,105 | |||||||||||
Metals and Mining — 0.7% | ||||||||||||
52,003 | Barrick Gold Corp. | 1,522,648 | 1,685,937 | |||||||||
10,000 | Inmet Mining Corp. | 325,911 | 247,621 | |||||||||
22,000 | Ivanhoe Mines Ltd.† | 125,570 | 135,300 | |||||||||
142,115 | Kinross Gold Corp. | 984,488 | 2,539,595 | |||||||||
2,000 | Northwest Pipe Co.† | 55,888 | 56,940 | |||||||||
52,100 | Stillwater Mining Co.† | 477,514 | 192,770 | |||||||||
40,000 | Uranium Resources Inc.† | 216,153 | 18,800 | |||||||||
22,350 | Yamana Gold Inc., New York | 75,630 | 206,738 | |||||||||
3,783,802 | 5,083,701 | |||||||||||
Mutual Funds — 0.0% | ||||||||||||
70,000 | KKR Private Equity Investors LP† | 205,735 | 205,100 | |||||||||
Paper and Forest Products — 0.1% | ||||||||||||
20,000 | Schweitzer-Mauduit International Inc. | 459,710 | 369,200 | |||||||||
40,000 | Wausau Paper Corp. | 428,382 | 210,400 | |||||||||
888,092 | 579,600 | |||||||||||
Publishing — 0.7% | ||||||||||||
18,000 | AH Belo Corp., Cl. A | 81,389 | 17,640 | |||||||||
63,000 | Belo Corp., Cl. A | 162,820 | 38,430 | |||||||||
235,000 | Il Sole 24 Ore | 1,225,315 | 563,560 | |||||||||
307,237 | Independent News & Media plc | 431,671 | 44,902 | |||||||||
12,000 | John Wiley & Sons Inc., Cl. B | 46,500 | 357,000 | |||||||||
650,000 | Journal Communications Inc., Cl. A | 4,448,772 | 487,500 | |||||||||
90,000 | Journal Register Co.† | 40,813 | 450 | |||||||||
80,000 | Lee Enterprises Inc. | 164,313 | 22,400 | |||||||||
550,000 | Media General Inc., Cl. A | 3,364,124 | 1,056,000 | |||||||||
30,000 | Meredith Corp. | 539,417 | 499,200 | |||||||||
260,000 | News Corp., Cl. A | 765,310 | 1,721,200 | |||||||||
175,000 | PRIMEDIA Inc. | 959,813 | 432,250 | |||||||||
350,000 | The E.W. Scripps Co., Cl. A | 2,296,238 | 472,500 | |||||||||
14,526,495 | 5,713,032 | |||||||||||
Real Estate — 1.0% | ||||||||||||
15,150 | Capital Properties Inc., Cl. A | 366,997 | 139,001 | |||||||||
15,000 | Capital Properties Inc., Cl. B† (b) | 0 | 137,625 | |||||||||
177,000 | Griffin Land & Nurseries Inc. | 2,434,508 | 6,195,000 | |||||||||
9,100 | Gyrodyne Co. of America Inc.† | 137,387 | 214,442 | |||||||||
107,000 | Morguard Corp. | 1,362,690 | 1,358,717 | |||||||||
4,301,582 | 8,044,785 | |||||||||||
Retail — 3.7% | ||||||||||||
144,000 | Aaron Rents Inc., Cl. A | 521,690 | 3,340,800 | |||||||||
68,100 | AutoNation Inc.† | 368,381 | 945,228 | |||||||||
50,000 | Big 5 Sporting Goods Corp. | 834,144 | 293,500 | |||||||||
24,000 | Casey’s General Stores Inc. | 470,082 | 639,840 | |||||||||
620,000 | Coldwater Creek Inc.† | 2,850,030 | 1,556,200 | |||||||||
33,000 | Copart Inc.† | 974,940 | 978,780 | |||||||||
5,000 | Gander Mountain Co.† | 34,289 | 14,550 | |||||||||
8,000 | HSN Inc.† | 61,333 | 41,120 | |||||||||
450,000 | Ingles Markets Inc., Cl. A | 7,577,231 | 6,718,500 | |||||||||
32,000 | Movado Group Inc. | 468,326 | 241,280 | |||||||||
85,000 | Nathan’s Famous Inc.† | 1,131,127 | 1,062,500 | |||||||||
30,000 | Pier 1 Imports Inc.† | 202,215 | 16,800 | |||||||||
200,000 | Rush Enterprises Inc., Cl. B† | 2,352,018 | 1,566,000 | |||||||||
300,000 | The Bon-Ton Stores Inc. | 2,203,438 | 525,000 | |||||||||
16,000 | The Cheesecake Factory Inc.† | 133,322 | 183,200 | |||||||||
265,000 | The Great Atlantic & Pacific Tea Co. Inc.† | 3,085,577 | 1,407,150 | |||||||||
310,000 | The Steak n Shake Co.† | 3,661,041 | 2,346,700 | |||||||||
8,000 | Ticketmaster Entertainment Inc.† | 113,231 | 29,520 | |||||||||
70,000 | Tractor Supply Co.† | 2,555,661 | 2,524,200 | |||||||||
20,000 | Village Super Market Inc., Cl. A | 442,075 | 623,400 | |||||||||
45,000 | Weis Markets Inc. | 1,354,385 | 1,396,800 | |||||||||
168,000 | Wendy’s/Arby’s Group Inc., Cl. A | 1,364,690 | 845,040 | |||||||||
150,000 | Winn-Dixie Stores Inc.† | 2,236,267 | 1,434,000 | |||||||||
34,995,493 | 28,730,108 | |||||||||||
See accompanying notes to financial statements.
10
The Gabelli Small Cap Growth Fund
Schedule of Investments (Continued) — March 31, 2009 (Unaudited)
Schedule of Investments (Continued) — March 31, 2009 (Unaudited)
Shares/ | Market | |||||||||||
Units | Cost | Value | ||||||||||
COMMON STOCKS (Continued) | ||||||||||||
Specialty Chemicals — 3.5% | ||||||||||||
60,000 | A. Schulman Inc. | $ | 1,199,761 | $ | 813,000 | |||||||
19,000 | Airgas Inc. | 121,732 | 642,390 | |||||||||
82,000 | Albemarle Corp. | 1,201,827 | 1,785,140 | |||||||||
35,000 | Arch Chemicals Inc. | 766,922 | 663,600 | |||||||||
74,000 | Ashland Inc. | 1,198,871 | 764,420 | |||||||||
800,000 | Chemtura Corp. | 5,445,089 | 38,000 | |||||||||
10,000 | Cytec Industries Inc. | 278,296 | 150,200 | |||||||||
3,200 | Dionex Corp.† | 96,000 | 151,200 | |||||||||
450,000 | Ferro Corp. | 6,551,391 | 643,500 | |||||||||
260,000 | H.B. Fuller Co. | 2,584,304 | 3,380,000 | |||||||||
130,000 | Hawkins Inc. | 1,892,645 | 2,005,900 | |||||||||
950,000 | Huntsman Corp. | 5,191,927 | 2,973,500 | |||||||||
110,000 | Material Sciences Corp.† | 962,133 | 59,400 | |||||||||
387,300 | Omnova Solutions Inc.† | 1,174,104 | 673,902 | |||||||||
60,000 | Penford Corp. | 687,437 | 217,800 | |||||||||
10,000 | Quaker Chemical Corp. | 181,138 | 79,400 | |||||||||
70,000 | Rockwood Holdings Inc.† | 1,370,334 | 555,800 | |||||||||
260,000 | Sensient Technologies Corp. | 5,254,578 | 6,110,000 | |||||||||
515,000 | Zep Inc. | 6,898,707 | 5,268,450 | |||||||||
43,057,196 | 26,975,602 | |||||||||||
Telecommunications — 1.7% | ||||||||||||
20,000 | Atlantic Tele-Network Inc. | 79,850 | 383,600 | |||||||||
850,000 | Cincinnati Bell Inc.† | 2,822,491 | 1,955,000 | |||||||||
6,795 | Community Service Communications Inc.† | 0 | 9,037 | |||||||||
405 | Consolidated Communications Holdings Inc. | 4,863 | 4,155 | |||||||||
60,000 | D&E Communications Inc. | 704,450 | 322,200 | |||||||||
50,000 | Frontier Communications Corp. | 674,800 | 359,000 | |||||||||
91,000 | HickoryTech Corp. | 793,705 | 489,580 | |||||||||
71,000 | New Ulm Telecom Inc. | 829,235 | 467,180 | |||||||||
118,000 | Rogers Communications Inc., Cl. B | 569,865 | 2,693,940 | |||||||||
63,000 | Shenandoah Telecommunications Co. | 373,895 | 1,436,400 | |||||||||
1,000,000 | Sprint Nextel Corp.† | 1,889,976 | 3,570,000 | |||||||||
37,584 | Verizon Communications Inc. | 900,747 | 1,135,037 | |||||||||
24,000 | Windstream Corp. | 25,072 | 193,440 | |||||||||
53,000 | Winstar Communications Inc.† (b) | 133 | 53 | |||||||||
9,669,082 | 13,018,622 | |||||||||||
Transportation — 0.6% | ||||||||||||
200,000 | GATX Corp. | 6,000,172 | 4,046,000 | |||||||||
135,000 | Grupo TMM SA, Cl. A, ADR† | 889,274 | 114,750 | |||||||||
2,000 | Irish Continental Group plc† | 17,409 | 36,351 | |||||||||
72,800 | Providence and Worcester Railroad Co. | 1,163,357 | 782,600 | |||||||||
8,070,212 | 4,979,701 | |||||||||||
Wireless Communications — 1.2% | ||||||||||||
450,000 | Centennial Communications Corp.† | 3,296,295 | 3,717,000 | |||||||||
15,000 | Nextwave Wireless Inc.† | 68,915 | 2,400 | |||||||||
72,000 | Price Communications Corp., Escrow† (b) | 0 | 0 | |||||||||
810,000 | Vimpel-Communications, ADR | 2,246,632 | 5,297,400 | |||||||||
17 | Xanadoo Co.† | 4,148 | 3,417 | |||||||||
5,615,990 | 9,020,217 | |||||||||||
TOTAL COMMON STOCKS | 793,124,944 | 662,688,435 | ||||||||||
PREFERRED STOCKS — 0.0% | ||||||||||||
Broadcasting — 0.0% | ||||||||||||
1,103 | PTV Inc., 10.000% Pfd., Ser. A | 0 | 143 | |||||||||
Business Services — 0.0% | ||||||||||||
24,317 | Interep National Radio Sales Inc., 4.000% Cv. Pfd., Ser. A† (b)(c)(d) | 2,163,146 | 0 | |||||||||
TOTAL PREFERRED STOCKS | 2,163,146 | 143 | ||||||||||
RIGHTS — 0.0% | ||||||||||||
Automotive: Parts and Accessories — 0.0% | ||||||||||||
800,000 | Exide Technologies, expire 05/15/11 Escrow Rights† (b) | 0 | 0 | |||||||||
WARRANTS — 0.0% | ||||||||||||
Automotive: Parts and Accessories — 0.0% | ||||||||||||
1,213 | Exide Technologies, expire 05/05/11† | 2,247 | 224 | |||||||||
4,531 | Federal-Mogul Corp., expire 12/27/14† | 87,687 | 498 | |||||||||
89,934 | 722 | |||||||||||
Broadcasting — 0.0% | ||||||||||||
6,082 | Granite Broadcasting Corp., Ser. A, expire 06/04/12† | 0 | 61 | |||||||||
3,430 | Granite Broadcasting Corp., Ser. B, expire 06/04/12† | 0 | 34 | |||||||||
0 | 95 | |||||||||||
Business Services — 0.0% | ||||||||||||
445,000 | BPW Acquisition Corp., expire 02/26/14† | 44,444 | 71,200 | |||||||||
Telecommunications — 0.0% | ||||||||||||
86 | Virgin Media Inc., expire 01/10/11† | 124 | 3 | |||||||||
TOTAL WARRANTS | 134,502 | 72,020 | ||||||||||
See accompanying notes to financial statements.
11
The Gabelli Small Cap Growth Fund
Schedule of Investments (Continued) — March 31, 2009 (Unaudited)
Schedule of Investments (Continued) — March 31, 2009 (Unaudited)
Principal | Market | |||||||||||
Amount | Cost | Value | ||||||||||
CORPORATE BONDS — 0.0% | ||||||||||||
Computer Software and Services — 0.0% | ||||||||||||
$ | 300,000 | Exodus Communications Inc., Sub. Deb., 5.250%, 02/15/10† (b) | $ | 1,185 | $ | 1,185 | ||||||
Telecommunications — 0.0% | ||||||||||||
400,000 | Williams Communications Group Inc., Escrow, 10.875%, 10/01/09† (b) | 0 | 0 | |||||||||
TOTAL CORPORATE BONDS | 1,185 | 1,185 | ||||||||||
U.S. GOVERNMENT OBLIGATIONS — 14.9% | ||||||||||||
U.S. Treasury Bills — 8.8% | ||||||||||||
68,704,000 | U.S. Treasury Bills, 0.081% to 0.452%††, 04/02/09 to 10/01/09 (e) | 68,679,400 | 68,680,760 | |||||||||
U.S. Treasury Cash Management Bills — 4.5% | ||||||||||||
34,659,000 | U.S. Treasury Cash Management Bills, 0.030% to 0.137%††, 04/29/09 to 06/24/09 | 34,653,337 | 34,652,108 | |||||||||
U.S. Treasury Notes — 1.6% | ||||||||||||
12,340,000 | 4.500%, 04/30/09 | 12,372,607 | 12,372,607 | |||||||||
TOTAL U.S. GOVERNMENT OBLIGATIONS | 115,705,344 | 115,705,475 | ||||||||||
TOTAL INVESTMENTS — 100.1% | $ | 911,129,121 | 778,467,258 | |||||||||
FUTURES CONTRACTS — LONG POSITION — 0.1% | ||||||||||||
(Unrealized appreciation) | $ | 585,375 | ||||||||||
Other Assets and Liabilities (Net) — (0.2)% | (1,392,130 | ) | ||||||||||
NET ASSETS — 100.0% | $ | 777,660,503 | ||||||||||
Number of | Unrealized | |||||||||
Contracts | Expiration Date | Appreciation | ||||||||
FUTURES CONTRACTS — LONG POSITION — 0.1% | ||||||||||
100 | The Russell 2000 | |||||||||
Mini Index Futures | 06/19/09 | $ | 585,375 | |||||||
(a) | Security considered an affiliated holding because the Fund owns at least 5% of its outstanding shares. | |
(b) | Security fair valued under procedures established by the Board of Directors. The procedures may include reviewing available financial information about the company and reviewing valuation of comparable securities and other factors on a regular basis. At March 31, 2009, the market value of fair valued securities amounted to $870,460 or 0.11% of net assets. | |
(c) | Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At March 31, 2009, the market value of Rule 144A securities amounted to $433,946 or 0.06% of net assets. | |
(d) | Illiquid security. | |
(e) | At March 31, 2009, $2,750,000 of the principal amount was pledged as collateral for futures contracts. | |
† | Non-income producing security. | |
†† | Represents annualized yield at date of purchase. | |
ADR | American Depositary Receipt |
See accompanying notes to financial statements.
12
The Gabelli Small Cap Growth Fund
Statement of Assets and Liabilities
March 31, 2009 (Unaudited)
March 31, 2009 (Unaudited)
Assets: | ||||
Investments, at value (cost $908,479,796) | $ | 777,974,788 | ||
Investments in affiliates, at value (cost $2,649,325) | 492,470 | |||
Cash | 1,270 | |||
Receivable for investments sold | 558,770 | |||
Receivable for Fund shares sold | 3,302,935 | |||
Dividends and interest receivable | 1,174,116 | |||
Variation margin receivable | 65,750 | |||
Prepaid expenses | 64,352 | |||
Total Assets | 783,634,451 | |||
Liabilities: | ||||
Foreign currency, at value (cost $4,976) | 4,919 | |||
Payable for investments purchased | 3,965,692 | |||
Payable for Fund shares redeemed | 749,565 | |||
Payable for investment advisory fees | 612,815 | |||
Payable for distribution fees | 156,859 | |||
Payable for accounting fees | 3,750 | |||
Other accrued expenses | 480,348 | |||
Total Liabilities | 5,973,948 | |||
Net Assets applicable to 42,510,986 shares outstanding | $ | 777,660,503 | ||
Net Assets Consist of: | ||||
Paid-in capital, each class at $0.001 par value | $ | 920,650,201 | ||
Accumulated net investment income | 393,230 | |||
Accumulated distributions in excess of net realized gain on investments, futures contracts, and foreign currency transactions | (11,306,087 | ) | ||
Net unrealized depreciation on investments | (132,661,863 | ) | ||
Net unrealized appreciation on futures contracts | 585,375 | |||
Net unrealized depreciation on foreign currency translations | (353 | ) | ||
Net Assets | $ | 777,660,503 | ||
Shares of Capital Stock: | ||||
Class AAA: | ||||
Net Asset Value, offering, and redemption price per share ($691,605,265 ÷ 37,767,955 shares outstanding; 150,000,000 shares authorized) | $ | 18.31 | ||
Class A: | ||||
Net Asset Value and redemption price per share ($21,923,222 ÷ 1,196,927 shares outstanding; 50,000,000 shares authorized) | $ | 18.32 | ||
Maximum offering price per share (NAV ÷ .9425, based on maximum sales charge of 5.75% of the offering price) | $ | 19.44 | ||
Class B: | ||||
Net Asset Value and offering price per share ($42,267 ÷ 2,418 shares outstanding; 50,000,000 shares authorized) | $ | 17.48 | (a) | |
Class C: | ||||
Net Asset Value and offering price per share ($19,991,706 ÷ 1,143,747 shares outstanding; 50,000,000 shares authorized) | $ | 17.48 | (a) | |
Class I: | ||||
Net Asset Value, offering, and redemption price per share ($44,098,043 ÷ 2,399,939 shares outstanding; 50,000,000 shares authorized) | $ | 18.37 | ||
(a) | Redemption price varies based on the length of time held. |
Statement of Operations
For the Six Months Ended March 31, 2009 (Unaudited)
For the Six Months Ended March 31, 2009 (Unaudited)
Investment income: | ||||
Dividends (net of foreign taxes of $27,760) | $ | 6,069,513 | ||
Interest | 280,788 | |||
Total Investment Income | 6,350,301 | |||
Expenses: | ||||
Investment advisory fees | 3,949,280 | |||
Distribution fees — Class AAA | 908,448 | |||
Distribution fees — Class A | 25,616 | |||
Distribution fees — Class B | 225 | |||
Distribution fees — Class C | 92,440 | |||
Shareholder services fees | 586,162 | |||
Shareholder communications expenses | 139,913 | |||
Custodian fees | 93,499 | |||
Registration expenses | 50,013 | |||
Legal and audit fees | 38,774 | |||
Accounting fees | 22,500 | |||
Directors’ fees | 17,581 | |||
Miscellaneous expenses | 42,819 | |||
Total Expenses | 5,967,270 | |||
Less: | ||||
Advisory fee reduction on unsupervised assets | (16,376 | ) | ||
Custodian fee credits | (1,026 | ) | ||
Net Expenses | 5,949,868 | |||
Net Investment Income | 400,433 | |||
Net Realized and Unrealized Gain/(Loss) on Investments, Futures Contracts, and Foreign Currency: | ||||
Net realized loss on investments | (9,041,686 | ) | ||
Capital gain distributions from investment companies | 14,790 | |||
Net realized loss on futures contracts | (247,605 | ) | ||
Net realized gain on foreign currency transactions | 8,106 | |||
Net realized loss on investments, futures contracts, and foreign currency transactions | (9,266,395 | ) | ||
Net change in unrealized appreciation/ (depreciation) on investments | (313,190,910 | ) | ||
Net change in unrealized appreciation/ (depreciation) on futures contracts | 585,375 | |||
Net change in unrealized appreciation/ (depreciation) on foreign currency translations | (310 | ) | ||
Net change in unrealized appreciation/ (depreciation) on investments, futures contracts, and foreign currency translations | (312,605,845 | ) | ||
Net Realized and Unrealized Gain/(Loss) on Investments, Futures Contracts, and Foreign Currency | (321,872,240 | ) | ||
Net Decrease in Net Assets Resulting from Operations | $ | (321,471,807 | ) | |
See accompanying notes to financial statements.
13
The Gabelli Small Cap Growth Fund
Statement of Changes in Net Assets
Six Months Ended | ||||||||
March 31, 2009 | Year Ended | |||||||
(Unaudited) | September 30, 2008 | |||||||
Operations: | ||||||||
Net investment income/(loss) | $ | 400,433 | $ | (203,598 | ) | |||
Net realized gain/(loss) on investments, futures contracts, and foreign currency transactions | (9,266,395 | ) | 55,964,780 | |||||
Net change in unrealized appreciation/(depreciation) on investments, futures contracts, and foreign currency translations | (312,605,845 | ) | (214,885,884 | ) | ||||
Net Decrease in Net Assets Resulting from Operations | (321,471,807 | ) | (159,124,702 | ) | ||||
Distributions to Shareholders: | ||||||||
Net realized gain | ||||||||
Class AAA | (50,145,349 | ) | (46,323,563 | ) | ||||
Class A | (1,343,253 | ) | (797,001 | ) | ||||
Class B | (3,217 | ) | (5,830 | ) | ||||
Class C | (1,279,635 | ) | (551,222 | ) | ||||
Class I | (447,239 | ) | — | |||||
Total Distributions to Shareholders | (53,218,693 | ) | (47,677,616 | ) | ||||
Capital Share Transactions: | ||||||||
Class AAA | 48,116,654 | 192,040,034 | ||||||
Class A | 4,888,101 | 15,316,709 | ||||||
Class B | 3,205 | (43,504 | ) | |||||
Class C | 5,367,262 | 16,624,141 | ||||||
Class I | 45,048,067 | 3,853,655 | ||||||
Net Increase in Net Assets from Capital Share Transactions | 103,423,289 | 227,791,035 | ||||||
Redemption Fees | 9,393 | 6,835 | ||||||
Net Increase/(Decrease) in Net Assets | (271,257,818 | ) | 20,995,552 | |||||
Net Assets: | ||||||||
Beginning of period | 1,048,918,321 | 1,027,922,769 | ||||||
End of period (including undistributed net investment income of $393,230 and $0, respectively) | $ | 777,660,503 | $ | 1,048,918,321 | ||||
See accompanying notes to financial statements.
14
The Gabelli Small Cap Growth Fund
Financial Highlights
Financial Highlights
Selected data for a share of capital stock outstanding throughout each period:
Income | Ratios to Average Net Assets/ | |||||||||||||||||||||||||||||||||||||||||||||||||||
from Investment Operations | Distributions | Supplemental Data | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Asset | Net | Realized and | Total | Net | Net Asset | Net Assets | Net | |||||||||||||||||||||||||||||||||||||||||||||
Period | Value, | Investment | Unrealized | from | Realized | Value, | End of | Investment | Portfolio | |||||||||||||||||||||||||||||||||||||||||||
Ended | Beginning | Income | Gain (Loss) on | Investment | Gain on | Total | Redemption | End of | Total | Period | Income | Operating | Turnover | |||||||||||||||||||||||||||||||||||||||
September 30 | of Period | (Loss)(a)(b) | Investments | Operations | Investments | Distributions | Fees(a) | Period | Return† | (in 000’s) | (Loss)(b) | Expenses | Rate†† | |||||||||||||||||||||||||||||||||||||||
Class AAA | ||||||||||||||||||||||||||||||||||||||||||||||||||||
2009(c) | $ | 28.20 | $ | 0.01 | $ | (8.47 | ) | $ | (8.46 | ) | $ | (1.43 | ) | $ | (1.43 | ) | $ | 0.00 | (d) | $ | 18.31 | (30.32 | )% | $ | 691,605 | 0.11 | %(e) | 1.50 | %(e) | 21 | % | |||||||||||||||||||||
2008 | 34.37 | (0.00 | )(d) | (4.62 | ) | (4.62 | ) | (1.55 | ) | (1.55 | ) | 0.00 | (d) | 28.20 | (13.98 | ) | 995,613 | (0.01 | ) | 1.43 | 26 | |||||||||||||||||||||||||||||||
2007 | 30.41 | (0.01 | ) | 6.42 | 6.41 | (2.45 | ) | (2.45 | ) | 0.00 | (d) | 34.37 | 21.95 | 1,002,577 | (0.04 | ) | 1.42 | 15 | ||||||||||||||||||||||||||||||||||
2006 | 29.97 | (0.03 | ) | 2.53 | 2.50 | (2.06 | ) | (2.06 | ) | 0.00 | (d) | 30.41 | 8.88 | 727,521 | (0.09 | ) | 1.44 | 6 | ||||||||||||||||||||||||||||||||||
2005 | 25.88 | (0.01 | ) | 5.25 | 5.24 | (1.15 | ) | (1.15 | ) | 0.00 | (d) | 29.97 | 20.58 | 732,965 | (0.03 | ) | 1.44 | 6 | ||||||||||||||||||||||||||||||||||
2004 | 21.48 | (0.04 | ) | 4.61 | 4.57 | (0.17 | ) | (0.17 | ) | — | 25.88 | 21.34 | 620,334 | (0.15 | ) | 1.42 | 10 | |||||||||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||||||||||||||||
2009(c) | $ | 28.18 | $ | 0.01 | $ | (8.44 | ) | $ | (8.43 | ) | $ | (1.43 | ) | $ | (1.43 | ) | $ | 0.00 | (d) | $ | 18.32 | (30.23 | )% | $ | 21,923 | 0.12 | %(e) | 1.50 | %(e) | 21 | % | |||||||||||||||||||||
2008 | 34.37 | (0.01 | ) | (4.63 | ) | (4.64 | ) | (1.55 | ) | (1.55 | ) | 0.00 | (d) | 28.18 | (14.04 | ) | 26,604 | (0.02 | ) | 1.43 | 26 | |||||||||||||||||||||||||||||||
2007 | 30.41 | 0.06 | 6.35 | 6.41 | (2.45 | ) | (2.45 | ) | 0.00 | (d) | 34.37 | 21.95 | 15,485 | 0.19 | 1.42 | 15 | ||||||||||||||||||||||||||||||||||||
2006 | 29.98 | (0.02 | ) | 2.51 | 2.49 | (2.06 | ) | (2.06 | ) | 0.00 | (d) | 30.41 | 8.84 | 2,199 | (0.08 | ) | 1.44 | 6 | ||||||||||||||||||||||||||||||||||
2005 | 25.89 | (0.01 | ) | 5.25 | 5.24 | (1.15 | ) | (1.15 | ) | 0.00 | (d) | 29.98 | 20.57 | 1,515 | (0.03 | ) | 1.48 | 6 | ||||||||||||||||||||||||||||||||||
2004(f) | 24.49 | (0.06 | ) | 1.46 | 1.40 | — | — | — | 25.89 | 5.72 | 58 | (0.32 | )(e) | 1.42 | (e) | 10 | ||||||||||||||||||||||||||||||||||||
Class B | ||||||||||||||||||||||||||||||||||||||||||||||||||||
2009(c) | $ | 27.10 | $ | (0.06 | ) | $ | (8.13 | ) | $ | (8.19 | ) | $ | (1.43 | ) | $ | (1.43 | ) | $ | 0.00 | (d) | $ | 17.48 | (30.56 | )% | $ | 43 | (0.64) | %(e) | 2.25 | %(e) | 21 | % | ||||||||||||||||||||
2008 | 33.32 | (0.23 | ) | (4.44 | ) | (4.67 | ) | (1.55 | ) | (1.55 | ) | 0.00 | (d) | 27.10 | (14.60 | ) | 61 | (0.77 | ) | 2.18 | 26 | |||||||||||||||||||||||||||||||
2007 | 29.77 | (0.26 | ) | 6.26 | 6.00 | (2.45 | ) | (2.45 | ) | 0.00 | (d) | 33.32 | 20.99 | 126 | (0.81 | ) | 2.17 | 15 | ||||||||||||||||||||||||||||||||||
2006 | 29.58 | (0.25 | ) | 2.50 | 2.25 | (2.06 | ) | (2.06 | ) | 0.00 | (d) | 29.77 | 8.11 | 113 | (0.85 | ) | 2.19 | 6 | ||||||||||||||||||||||||||||||||||
2005 | 25.74 | (0.22 | ) | 5.21 | 4.99 | (1.15 | ) | (1.15 | ) | 0.00 | (d) | 29.58 | 19.69 | 138 | (0.79 | ) | 2.20 | 6 | ||||||||||||||||||||||||||||||||||
2004(f) | 24.49 | (0.19 | ) | 1.44 | 1.25 | — | — | — | 25.74 | 5.10 | 55 | (1.02 | )(e) | 2.17 | (e) | 10 | ||||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||
2009(c) | $ | 27.09 | $ | (0.06 | ) | $ | (8.12 | ) | $ | (8.18 | ) | $ | (1.43 | ) | $ | (1.43 | ) | $ | 0.00 | (d) | $ | 17.48 | (30.54 | )% | $ | 19,992 | (0.62) | %(e) | 2.25 | %(e) | 21 | % | ||||||||||||||||||||
2008 | 33.32 | (0.22 | ) | (4.46 | ) | (4.68 | ) | (1.55 | ) | (1.55 | ) | 0.00 | (d) | 27.09 | (14.63 | ) | 23,062 | (0.75 | ) | 2.18 | 26 | |||||||||||||||||||||||||||||||
2007 | 29.76 | (0.22 | ) | 6.23 | 6.01 | (2.45 | ) | (2.45 | ) | 0.00 | (d) | 33.32 | 21.03 | 9,735 | (0.69 | ) | 2.17 | 15 | ||||||||||||||||||||||||||||||||||
2006 | 29.58 | (0.24 | ) | 2.48 | 2.24 | (2.06 | ) | (2.06 | ) | 0.00 | (d) | 29.76 | 8.08 | 2,650 | (0.83 | ) | 2.19 | 6 | ||||||||||||||||||||||||||||||||||
2005 | 25.74 | (0.23 | ) | 5.22 | 4.99 | (1.15 | ) | (1.15 | ) | 0.00 | (d) | 29.58 | 19.69 | 1,499 | (0.80 | ) | 2.23 | 6 | ||||||||||||||||||||||||||||||||||
2004(f) | 24.49 | (0.20 | ) | 1.45 | 1.25 | — | — | — | 25.74 | 5.10 | 24 | (1.07 | )(e) | 2.17 | (e) | 10 | ||||||||||||||||||||||||||||||||||||
Class I | ||||||||||||||||||||||||||||||||||||||||||||||||||||
2009(c) | $ | 28.25 | $ | 0.04 | $ | (8.49 | ) | $ | (8.45 | ) | $ | (1.43 | ) | $ | (1.43 | ) | $ | 0.00 | (d) | $ | 18.37 | (30.23 | )% | $ | 44,098 | 0.45 | %(e) | 1.25 | %(e) | 21 | % | |||||||||||||||||||||
2008(g) | 30.06 | 0.05 | (1.86 | ) | (1.81 | ) | — | — | 0.00 | (d) | 28.25 | (6.02 | ) | 3,578 | 0.22 | (e) | 1.18 | (e) | 26 |
† | 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 distributions and does not reflect applicable sales charges. Total return for a period of less than one year is not annualized. | |
†† | Effective in 2008, a change in accounting policy was adopted with regard to the calculation of the portfolio turnover rate to include cash proceeds due to mergers. Had this policy been adopted retroactively, the portfolio turnover rate for the year ended September 30, 2007 would have been 21%. The portfolio turnover rate for the years ended September 2006, 2005, and 2004 would have been as shown. | |
(a) | Per share amounts have been calculated using the average shares outstanding method. | |
(b) | Due to capital share activity throughout the period, net investment income per share and the ratio to average net assets are not necessarily correlated among the different classes of shares. | |
(c) | For the six months ended March 31, 2009, unaudited. | |
(d) | Amount represents less than $0.005 per share. | |
(e) | Annualized. | |
(f) | From the commencement of offering Class A, Class B, and Class C Shares on December 31, 2003. | |
(g) | From the commencement of offering Class I Shares on January 11, 2008 through September 30, 2008. |
See accompanying notes to financial statements.
15
The Gabelli Small Cap Growth Fund
Notes to Financial Statements (Unaudited)
Notes to Financial Statements (Unaudited)
1. Organization. The Gabelli Small Cap Growth Fund (the “Fund”) is a series of Gabelli Equity Series Funds, Inc. (the “Corporation”), which was organized on July 25, 1991 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”), and one of three separately managed portfolios (collectively, the “Portfolios”) of the Corporation. The Fund’s primary objective is capital appreciation. The Fund commenced investment operations on October 22, 1991.
2. Significant Accounting Policies. The preparation of financial statements in accordance with United States (“U.S.”) 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 or traded in the U.S. over-the-counter market for which market quotations are readily available are valued at the last quoted sale price or a market’s official closing price 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. If no bid or asked prices are quoted on such day, the security is valued at the most recently available price or, if the Board of Directors (the “Board”) so determines, by such other method as the Board shall determine in good faith to reflect its fair market value. 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”).
Portfolio securities primarily traded on a foreign market are generally valued at the preceding closing values of such securities on the relevant market, but may be fair valued pursuant to procedures established by the Board if market conditions change significantly after the close of the foreign market but prior to the close of business on the day the securities are being valued. Debt instruments with remaining maturities of 60 days or less that are not credit impaired are valued at amortized cost, unless the Board determines such amount does not reflect the securities’ fair value, in which case these securities will be fair valued as determined by the Board. Debt instruments having a maturity greater than 60 days for which market quotations are readily available are valued at the average of the latest bid and asked prices. If there were no asked prices quoted on such day, the security is valued using the closing bid price. Futures contracts are valued at the closing settlement price of the exchange or board of trade on which the applicable contract is traded.
Securities and assets for which market quotations are not readily available are fair valued as determined by the Board. Fair valuation methodologies and procedures may include, but are not limited to: analysis and review of available financial and non-financial information about the company; comparisons with the valuation and changes in valuation of similar securities, including a comparison of foreign securities with the equivalent U.S. dollar value ADR securities at the close of the U.S. exchange; and evaluation of any other information that could be indicative of the value of the security.
16
The Gabelli Small Cap Growth Fund
Notes to Financial Statements (Continued) (Unaudited)
Notes to Financial Statements (Continued) (Unaudited)
Statement of Financial Accounting Standard No. 157, “Fair Value Measurements” (“SFAS 157”) clarifies the definition of fair value for financial reporting, establishes a framework for measuring fair value, and requires additional disclosures about the use of fair value measurements. The three levels of the fair value hierarchy under SFAS 157 are described below:
• | Level 1 — quoted prices in active markets for identical securities; | ||
• | Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.); and | ||
• | Level 3 — significant unobservable inputs (including the Fund’s determinations as to the fair value of investments). |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of the Fund’s investments and other financial instruments by inputs used to value the Fund’s investments as of March 31, 2009 is as follows:
Other Financial | ||||||||
Investments in | Instruments | |||||||
Securities | (Unrealized | |||||||
(Market Value) | Appreciation)* | |||||||
Valuation Inputs | Assets | Assets | ||||||
Level 1 — Quoted Prices | $ | 661,891,379 | $ | 585,375 | ||||
Level 2 — Other Significant Observable Inputs | 116,278,230 | — | ||||||
Level 3 — Significant Unobservable Inputs | 297,649 | — | ||||||
Total | $ | 778,467,258 | $ | 585,375 | ||||
* | Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards, and swaps which are valued at the unrealized appreciation/depreciation on the investment. |
The following is a reconciliation of Level 3 investments for which significant unobservable inputs were used to determine fair value:
Investments in | ||||
Securities | ||||
(Market Value) | ||||
Balance as of 09/30/08 | $ | 194,685 | ||
Accrued discounts/(premiums) | — | |||
Realized gain/(loss) | (53,129 | ) | ||
Change in unrealized appreciation/(depreciation)† | 86,581 | |||
Net purchases/(sales) | (400 | ) | ||
Transfers in and/or out of Level 3 | 69,912 | |||
Balance as of 03/31/09 | $ | 297,649 | ||
Net change in unrealized appreciation/(depreciation) during the period on Level 3 investments held at 03/31/09† | $ | 2,321 | ||
† | Net change in unrealized appreciation/(depreciation) is included in the related amounts on investments in the Statements of Operations. |
17
The Gabelli Small Cap Growth Fund
Notes to Financial Statements (Continued) (Unaudited)
Notes to Financial Statements (Continued) (Unaudited)
In March 2008, the Financial Accounting Standards Board (the “FASB”) issued Statement of Financial Accounting Standard No. 161, “Disclosures about Derivative Instruments and Hedging Activities” (“SFAS 161”) that is effective for fiscal years beginning after November 15, 2008. SFAS 161 is intended to improve financial reporting for derivative instruments by requiring enhanced disclosure that enables investors to understand how and why an entity uses derivatives, how derivatives are accounted for, and how derivative instruments affect an entity’s results of operations and financial position. Management is currently evaluating the implications of SFAS 161 on the Fund’s financial statement disclosures.
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 Adviser and reviewed by the Board. 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. It is the policy of the Fund to always receive and maintain securities as collateral whose market value, including accrued interest, is at least equal to 102% 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. At March 31, 2009, there were no open repurchase agreements.
Swap Agreements. The Fund may enter into equity and contract for difference swap transactions. The use of swaps is a highly specialized activity that involves investment techniques and risks different from those associated with ordinary portfolio security transactions. In a swap, a set of future cash flows are exchanged between two counterparties. One of these cash flow streams will typically be based on a reference interest rate combined with the performance of a notional value of shares of a stock. The other will be based on the performance of the shares of a stock. There is no assurance that the swap contract counterparties will be able to meet their obligations pursuant to the swap contracts, or that, in the event of default, the Fund will succeed in pursuing contractual remedies. The Fund thus assumes the risk that it may be delayed in or prevented from obtaining payments owed to it pursuant to the swap contracts. The creditworthiness of the swap contract counterparties is closely monitored in order to minimize the risk. Depending on the general state of short-term interest rates and the returns of the Fund’s portfolio securities at that point in time, such a default could negatively affect the Fund’s ability to make dividend payments. In addition, at the time a swap transaction reaches its scheduled termination date, there is a risk that the Fund will not be able to obtain a replacement transaction or that the terms of the replacement will not be as favorable as on the expiring transaction. If this occurs, it could have a negative impact on the Fund’s ability to make dividend payments.
18
The Gabelli Small Cap Growth Fund
Notes to Financial Statements (Continued) (Unaudited)
Notes to Financial Statements (Continued) (Unaudited)
The use of derivative instruments involves, to varying degrees, elements of market and counterparty risk in excess of the amount recognized below.
Unrealized gains related to swaps are reported as an asset and unrealized losses are reported as a liability in the Statement of Assets and Liabilities. The change in value of swaps, including the accrual of periodic amounts of interest to be paid or received on swaps, is reported as unrealized gain or loss in the Statement of Operations. A realized gain or loss is recorded upon payment or receipt of a periodic payment or termination of swap agreements. At March 31, 2009, there were no open swap agreements.
Futures Contracts. The Fund may engage in futures contracts for the purpose of hedging against changes in the value of its portfolio securities and in the value of securities it intends to purchase. Upon entering into a futures contract, the Fund is required to deposit with the broker an amount of cash or cash equivalents equal to a certain percentage of the contract amount. This is known as the “initial margin.” Subsequent payments (“variation margin”) are made or received by the Fund each day, depending on the daily fluctuations in the value of the contract, which are included in unrealized appreciation/depreciation on futures contracts. The Fund recognizes a realized gain or loss when the contract is closed.
There are several risks in connection with the use of futures contracts as a hedging instrument. The change in value of futures contracts primarily corresponds with the value of their underlying instruments, which may not correlate with the change in value of the hedged investments. In addition, there is the risk that the Fund may not be able to enter into a closing transaction because of an illiquid secondary market. Open futures contracts at March 31, 2009 are reflected within the Schedule of Investments.
Forward Foreign Exchange Contracts. The Fund may engage in forward foreign exchange contracts for hedging a specific transaction with respect to either the currency in which the transaction is denominated or another currency as deemed appropriate by the Adviser. Forward foreign exchange contracts are valued at the forward rate and are marked-to-market daily. The change in market value is included in unrealized appreciation/depreciation on foreign currency translations. 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 that might result should the value of the currency increase. In addition, the Fund could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts. At March 31, 2009, there were no open forward foreign exchange contracts.
19
The Gabelli Small Cap Growth Fund
Notes to Financial Statements (Continued) (Unaudited)
Notes to Financial Statements (Continued) (Unaudited)
Foreign Currency Translations. The books and records of the Fund are maintained in U.S. dollars. Foreign currencies, investments, and other assets and liabilities are translated into U.S. dollars at the current exchange rates. 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 that 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 translations. 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.
Foreign Securities. The Fund may directly purchase securities of foreign issuers. Investing in securities of foreign issuers involves special risks not typically associated with investing in securities of U.S. issuers. The risks include possible revaluation of currencies, the ability to repatriate funds, less complete financial information about companies, and possible future adverse political and economic developments. Moreover, securities of many foreign issuers and their markets may be less liquid and their prices more volatile than those of securities of comparable U.S. issuers.
Foreign Taxes. The Fund may be subject to foreign taxes on income, gains on investments, or currency repatriation, a portion of which may be recoverable. The Fund will accrue such taxes and recoveries as applicable, based upon its current interpretation of tax rules and regulations that exist in the markets in which it invests.
Restricted and Illiquid Securities. The Fund may invest up to 15% of its net assets in securities for which the markets are illiquid. Illiquid securities include securities the disposition of which is subject to substantial legal or contractual restrictions. The sale of illiquid securities often requires more time and results in higher brokerage charges or dealer discounts and other selling expenses than does the sale of securities eligible for trading on national securities exchanges or in the over-the-counter markets. Restricted securities may sell at a price lower than similar securities that are not subject to restrictions on resale. Securities freely saleable among qualified institutional investors under special rules adopted by the SEC may be treated as liquid if they satisfy liquidity standards established by the Board. The continued liquidity of such securities is not as well assured as that of publicly traded securities, and accordingly the Board will monitor their liquidity.
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 on the accrual basis. Premiums and discounts on debt securities are amortized using the effective yield to maturity method. Dividend income is recorded on the ex-dividend date except for certain dividends which are recorded as soon as the Fund is informed of the dividend.
Determination of Net Asset Value and Calculation of Expenses. Certain administrative expenses are common to, and allocated among, various affiliated funds. Such allocations are made on the basis of each Fund’s average net assets or other criteria directly affecting the expenses as determined by the Adviser pursuant to procedures established by the Board.
20
The Gabelli Small Cap Growth Fund
Notes to Financial Statements (Continued) (Unaudited)
Notes to Financial Statements (Continued) (Unaudited)
In calculating the NAV per share of each class, investment income, realized and unrealized gains and losses, redemption fees, and expenses other than class specific expenses are allocated daily to each class of shares based upon the proportion of net assets of each class at the beginning of each day. Distribution expenses are borne solely by the class incurring the expense.
Custodian Fee Credits and Interest Expense. When cash balances are maintained in the custody account, the Fund receives credits which are used to offset custodian fees. The gross expenses paid under the custody arrangement are included in custodian fees in the Statement of Operations with the corresponding expense offset, if any, shown as “custodian fee credits.” When cash balances are overdrawn, the Fund is charged an overdraft fee equal to 2.00% above the federal funds rate on outstanding balances. This amount, if any, would be included in “interest expense” in the Statement of Operations.
Distributions to Shareholders. Distributions to shareholders are recorded on the ex-dividend date. Distributions to shareholders are based on income and capital gains as determined in accordance with federal income tax regulations, which may differ from income and capital gains as determined under U.S. generally accepted accounting principles. These differences are primarily due to differing treatments of income and gains on various investment securities and foreign currency transactions held by the Fund, timing differences, and differing characterizations of distributions made by the Fund. Distributions from net investment income include net realized gains on foreign currency transactions. These book/tax differences are either temporary or permanent in nature. To the extent these differences are permanent, adjustments are made to the appropriate capital accounts in the period when the differences arise. These reclassifications have no impact on the NAV of the Fund.
The tax character of distributions paid during the year ended September 30, 2008 was as follows:
Distributions paid from: | ||||
Ordinary income (inclusive of short-term capital gains) | $ | 2,004,512 | ||
Net long-term capital gains | 45,673,104 | |||
Total distributions paid | $ | 47,677,616 | ||
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 (the “Code”). It is the policy of the Fund to comply with the requirements of the Code applicable to regulated investment companies and to distribute substantially all of its net investment company taxable income and net capital gains. Therefore, no provision for federal income taxes is required.
Under the current tax law, capital losses related to securities and foreign currency realized after October 31 and prior to the Fund’s fiscal year end may be treated as occurring on the first day of the following year. For the year ended September 30, 2008, the Fund deferred currency losses of $7,204.
21
The Gabelli Small Cap Growth Fund
Notes to Financial Statements (Continued) (Unaudited)
Notes to Financial Statements (Continued) (Unaudited)
The following summarizes the tax cost of investments and the related unrealized appreciation/depreciation at March 31, 2009:
Gross | Gross | Net Unrealized | ||||||||||||||
Unrealized | Unrealized | Appreciation/ | ||||||||||||||
Cost | Appreciation | Depreciation | (Depreciation) | |||||||||||||
Investments | $ | 913,998,729 | $ | 135,437,952 | $ | (271,461,893 | ) | $ | (136,023,941 | ) | ||||||
Investments in affiliates | 2,649,325 | — | (2,156,855 | ) | (2,156,855 | ) | ||||||||||
Futures contracts | — | 585,375 | — | 585,375 | ||||||||||||
$ | 916,648,054 | $ | 136,023,327 | $ | (273,618,748 | ) | $ | (137,595,421 | ) | |||||||
FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”) provides guidance for how uncertain tax positions should be recognized, measured, presented, and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Fund’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the “more-likely-than-not” threshold are recorded as a tax benefit or expense in the current year. In accordance with FIN 48, management has analyzed the Fund’s tax positions taken on the federal and state income tax returns for all open tax years (the current and prior three tax years) and has concluded that no provision for income tax is required in the Fund’s financial statements. Management’s determination regarding FIN 48 may be subject to review and adjustment at a later date based on factors including, but not limited to, an on-going analysis of tax laws, regulations, and interpretations thereof.
3. Investment Advisory Agreement and Other Transactions. The Fund has 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 its 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 affiliated persons of the Adviser.
The Corporation pays each Director who is not considered to be an affiliated person an annual retainer of $9,000 plus $1,000 for each Board meeting attended and they are reimbursed for any out of pocket expenses incurred in attending meetings. All Board committee members receive $500 per meeting attended and the Chairman of the Audit Committee and the Lead Director each receive an annual fee of $1,000. Directors who are directors or employees of the Adviser or an affiliated company receive no compensation or expense reimbursement from the Fund.
4. Distribution Plan. The Fund’s Board has adopted a distribution plan (the “Plan”) for each class of shares, except for Class I Shares, pursuant to Rule 12b-1 under the 1940 Act. Gabelli & Company, Inc. (“Gabelli & Company”), an affiliate of the Adviser, serves as distributor of the Fund. Under the Class AAA, Class A, Class B, and Class C Share Plans, payments are authorized to Gabelli & Company at annual rates of 0.25%, 0.25%, 1.00%, and 1.00%, respectively, of the average daily net assets of those classes, the annual limitations under each Plan. Such payments are accrued daily and paid monthly.
5. Portfolio Securities. Purchases and proceeds from the sales of securities for the six months ended March 31, 2009, other than short-term securities and U.S. Government obligations, aggregated $167,547,757 and $125,285,606, respectively.
22
The Gabelli Small Cap Growth Fund
Notes to Financial Statements (Continued) (Unaudited)
Notes to Financial Statements (Continued) (Unaudited)
Proceeds from the sales of U.S. Government obligations for the six months ended March 31, 2009, other than short-term obligations, aggregated $30,268,883.
6. Transactions with Affiliates. During the six months ended March 31, 2009, the Fund paid brokerage commissions on security trades of $412,780 to Gabelli & Company. Additionally, Gabelli & Company informed the Fund that it retained $22,082 from investors representing commissions (sales charges and underwriting fees) on sales and redemptions of Fund shares.
The cost of calculating the Fund’s NAV per share is a Fund expense pursuant to the Advisory Agreement between the Fund and the Adviser. During the six months ended March 31, 2009, the Fund paid or accrued $22,500 to the Adviser in connection with the cost of computing the Fund’s NAV.
7. Line of Credit. The Fund participates in an unsecured line of credit of up to $75,000,000 under which it may borrow up to 10% of its net assets from the custodian for temporary borrowing purposes. Borrowings under this arrangement bear interest at 0.75% above the federal funds rate on outstanding balances. This amount, if any, would be included in “interest expense” in the Statement of Operations. During the six months ended March 31, 2009, there were no borrowings under the line of credit.
8. Capital Stock. The Fund offers five classes of shares – Class AAA Shares, Class A Shares, Class B Shares, Class C Shares, and Class I Shares. Class AAA Shares are offered without a sales charge only to investors who acquire them directly from Gabelli & Company, or through selected broker/dealers, or the transfer agent. Class I Shares are offered to foundations, endowments, institutions, and employee benefit plans without a sales charge. Class A Shares are subject to a maximum front-end sales charge of 5.75%. Class B Shares are subject to a contingent deferred sales charge (“CDSC”) upon redemption within six years of purchase and automatically convert to Class A Shares approximately eight years after the original purchase. The applicable CDSC is equal to a declining percentage of the lesser of the NAV per share at the date of the original purchase or at the date of redemption, based on the length of time held. Class C Shares are subject to a 1.00% CDSC for one year after purchase. Class B Shares are available only through exchange of Class B Shares of other funds distributed by Gabelli & Company. Class I Shares were first issued on January 11, 2008.
The Fund imposes a redemption fee of 2.00% on all classes of shares that are redeemed or exchanged on or before the seventh day after the date of a purchase. The redemption fee is deducted from the proceeds otherwise payable to the redeeming shareholders and is retained by the Fund. The redemption fees during the six months ended March 31, 2009 and the year ended September 30, 2008 amounted to $9,393 and $6,835, respectively.
The redemption fee does not apply to redemptions of shares where (i) the shares were purchased through automatic reinvestment of distributions, (ii) the redemption was initiated by the Fund, (iii) the shares were purchased through programs that collect the redemption fee at the program level and remit them to the Fund, or (iv) the shares were purchased through programs that the Adviser determines to have appropriate anti-short-term trading policies in place or as to which the Adviser has received assurances that look-through redemption fee procedures or effective anti-short-term trading policies and procedures are in place.
23
The Gabelli Small Cap Growth Fund
Notes to Financial Statements (Continued) (Unaudited)
Notes to Financial Statements (Continued) (Unaudited)
Transactions in shares of capital stock were as follows:
Six Months Ended | ||||||||||||||||
March 31, 2009 | Year Ended | |||||||||||||||
(Unaudited) | September 30, 2008 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Class AAA | Class AAA | |||||||||||||||
Shares sold | 7,938,089 | $ | 157,576,280 | 11,404,075 | $ | 352,403,697 | ||||||||||
Shares issued upon reinvestment of distributions | 2,428,206 | 47,519,946 | 1,383,508 | 44,189,239 | ||||||||||||
Shares redeemed | (7,902,346 | ) | (156,979,572 | ) | (6,655,573 | ) | (204,552,902 | ) | ||||||||
Net increase | 2,463,949 | $ | 48,116,654 | 6,132,010 | $ | 192,040,034 | ||||||||||
Class A | Class A | |||||||||||||||
Shares sold | 436,664 | $ | 8,559,748 | 653,236 | $ | 20,020,323 | ||||||||||
Shares issued upon reinvestment of distributions | 64,051 | 1,253,475 | 23,669 | 756,001 | ||||||||||||
Shares redeemed | (247,900 | ) | (4,925,122 | ) | (183,365 | ) | (5,459,615 | ) | ||||||||
Net increase | 252,815 | $ | 4,888,101 | 493,540 | $ | 15,316,709 | ||||||||||
Class B | Class B | |||||||||||||||
Shares issued upon reinvestment of distributions | 171 | $ | 3,205 | 189 | $ | 5,832 | ||||||||||
Shares redeemed | — | — | (1,716 | ) | (49,336 | ) | ||||||||||
Net increase/(decrease) | 171 | $ | 3,205 | (1,527 | ) | $ | (43,504 | ) | ||||||||
Class C | Class C | |||||||||||||||
Shares sold | 358,311 | $ | 6,590,795 | 616,058 | $ | 18,243,833 | ||||||||||
Shares issued upon reinvestment of distributions | 65,897 | 1,233,605 | 17,152 | 529,496 | ||||||||||||
Shares redeemed | (131,695 | ) | (2,457,138 | ) | (74,196 | ) | (2,149,188 | ) | ||||||||
Net increase | 292,513 | $ | 5,367,262 | 559,014 | $ | 16,624,141 | ||||||||||
Class I | Class I* | |||||||||||||||
Shares sold | 2,411,076 | $ | 47,535,251 | 142,672 | $ | 4,323,018 | ||||||||||
Shares issued upon reinvestment of distributions | 9,106 | 178,658 | — | — | ||||||||||||
Shares redeemed | (146,902 | ) | (2,665,842 | ) | (16,013 | ) | (469,363 | ) | ||||||||
Net increase | 2,273,280 | $ | 45,048,067 | 126,659 | $ | 3,853,655 | ||||||||||
* | From the commencement of offering Class I Shares on January 11, 2008. |
9. Transactions in Securities of Affiliated Issuers. The 1940 Act defines affiliated issuers as those in which the Fund’s holdings of an issuer represent 5% or more of the outstanding voting securities of the issuer. A summary of the Fund’s transactions in the securities of these issuers during the six months ended March 31, 2009 is set forth below.
Net Change | Percent | |||||||||||||||||||||||||||||
in Unrealized | Value at | Owned | ||||||||||||||||||||||||||||
Beginning | Shares/Par | Shares/Par | Ending | Appreciation | Realized | March 31, | of Shares | |||||||||||||||||||||||
Shares/Par | Purchased | Sold | Shares/Par | (Depreciation) | Loss | 2009 | Outstanding | |||||||||||||||||||||||
Earl Scheib Inc. | 240,900 | — | — | 240,900 | $ | (73,475 | ) | — | $ | 457,710 | 6.01 | % | ||||||||||||||||||
Trans-Lux Corp. | 165,000 | — | (7,000 | ) | 158,000 | (356,659 | ) | $ | (54,413 | ) | 34,760 | 7.82 |
10. Indemnifications. The Fund enters into contracts that contain a variety of indemnifications. The Fund’s maximum exposure under these arrangements is unknown. However, the Fund has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
24
The Gabelli Small Cap Growth Fund
Notes to Financial Statements (Continued) (Unaudited)
Notes to Financial Statements (Continued) (Unaudited)
11. Other Matters. On April 24, 2008, the Adviser entered into an administrative settlement with the SEC to resolve the SEC’s inquiry regarding prior frequent trading activity in shares of the GAMCO Global Growth Fund (the “Global Growth Fund”) by one investor who was banned from the Global Growth Fund in August 2002. In the settlement, the SEC found that the Adviser had violated Section 206(2) of the Investment Advisers Act, Section 17(d) of the 1940 Act and Rule 17d-1 thereunder, and had aided and abetted and caused violations of Section 12(d)(1)(B)(i) of the 1940 Act. Under the terms of the settlement, the Adviser, while neither admitting nor denying the SEC’s findings and allegations, agreed, among other things, to pay the previously reserved total of $16 million (including a $5 million penalty), of which at least $11 million will be distributed to shareholders of the Global Growth Fund in accordance with a plan to be developed by an independent distribution consultant and approved by the independent directors of the Global Growth Fund and the staff of the SEC, and to cease and desist from future violations of the above referenced federal securities laws. The settlement will not have a material adverse impact on the Adviser or its ability to fulfill its obligations under the Advisory Agreement. On the same day, the SEC filed a civil action against the Executive Vice President and Chief Operating Officer of the Adviser, alleging violations of certain federal securities laws arising from the same matter. The officer is also an officer of the Global Growth Fund and other funds in the Gabelli/GAMCO fund complex. The officer denies the allegations and is continuing in his positions with the Adviser and the funds. The Adviser currently expects that any resolution of the action against the officer will not have a material adverse impact on the Adviser or its ability to fulfill its obligations under the Advisory Agreement.
25
The Gabelli Small Cap Growth Fund
Board Consideration and Re-Approval of Advisory Agreement (Unaudited)
During the six months ended March 31, 2009, the Board of Directors of the Corporation approved the continuation of the investment advisory agreement with the Adviser for the Fund on the basis of the recommendation by the directors (the “Independent Board Members”) who are not “interested persons” of the Fund. The following paragraphs summarize the material information and factors considered by the Independent Board Members as well as their conclusions relative to such factors.
Nature, Extent and Quality of Services. The Independent Board Members considered information regarding the portfolio manager, the depth of the analyst pool available to the Adviser and the portfolio manager, the scope of administrative, shareholder, and other services supervised or provided by the Adviser and the absence of significant service problems reported to the Board. The Independent Board Members noted the experience, length of service, and reputation of the portfolio manager.
Investment Performance. The Independent Board Members reviewed the short, medium, and long-term performance of the Fund against a peer group of small cap core and small cap value funds chosen by Lipper as being comparable. The Independent Board Members noted that the Fund’s performance was in the top third for the one, three, and five year periods.
Profitability. The Independent Board Members reviewed summary data regarding the profitability of the Fund to the Adviser both with an administrative overhead charge and without such a charge. The Independent Board Members also noted that a substantial portion of the Fund’s portfolio transactions were executed by an affiliated broker and that the affiliated broker received distribution fees and minor amounts of sales commissions.
Economies of Scale. The Independent Board Members discussed the major elements of the Adviser’s cost structure and the relationship of those elements to potential economies of scale.
Sharing of Economies of Scale. The Independent Board Members noted that the investment management fee schedule for the Fund does not take into account any potential economies of scale that may develop.
Service and Cost Comparisons. The Independent Board Members compared the expense ratios of the investment management fee, other expenses and total expenses of the Fund with similar expense ratios of the peer group of small cap value and small cap core funds and noted that the Adviser’s management fee includes substantially all administrative services of the Fund as well as investment advisory services. The Independent Board Members noted that the Fund’s expense ratios were at, and the Fund’s size was above, average within this group. The Independent Board Members also noted that the management fee structure was the same as that in effect for most of the Gabelli funds. The Independent Board Members did not compare the management fee with the fee for other types of accounts managed by the Adviser.
Conclusions. The Independent Board Members concluded that the Fund enjoyed highly experienced portfolio management services, good ancillary services, and a good performance record. The Independent Board Members also concluded that the Fund’s expense ratios and the profitability to the Adviser of managing the Fund were reasonable in light of the Fund’s performance and that economies of scale were not a significant factor in their thinking at this time. The Independent Board Members did not view the potential profitability of ancillary services as material to their decision. On the basis of the foregoing and without assigning particular weight to any single conclusion, the Independent Board Members determined to recommend continuation of the investment management agreement to the full Board.
26
Gabelli/GAMCO Funds and Your Personal Privacy
Who are we?
The Gabelli/GAMCO Funds are investment companies registered with the Securities and Exchange Commission under the Investment Company Act of 1940. We are managed by Gabelli Funds, LLC or Teton Advisors, Inc., which are affiliated with GAMCO Investors, Inc. GAMCO Investors, Inc. is a publicly held company that has subsidiaries that provide investment advisory or brokerage services for a variety of clients. Teton Advisors, Inc. is a publicly held company that provides investment advisory services to the GAMCO Westwood Funds.
What kind of non-public information do we collect about you if you become a shareholder?
If you apply to open an account directly with us, you will be giving us some non-public information about yourself. The non-public information we collect about you is:
• | Information you give us on your application form. This could include your name, address, telephone number, social security number, bank account number, and other information. | |
• | Information about your transactions with us, any transactions with our affiliates, and transactions with the entities we hire to provide services to you. This would include information about the shares that you buy or redeem. If we hire someone else to provide services—like a transfer agent—we will also have information about the transactions that you conduct through them. |
What information do we disclose and to whom do we disclose it?
We do not disclose any non-public personal information about our customers or former customers to anyone other than our affiliates, our service providers who need to know such information, and as otherwise permitted by law. If you want to find out what the law permits, you can read the privacy rules adopted by the Securities and Exchange Commission. They are in volume 17 of the Code of Federal Regulations, Part 248. The Commission often posts information about its regulations on its website, www.sec.gov.
What do we do to protect your personal information?
We restrict access to non-public personal information about you to the people who need to know that information in order to provide services to you or the Fund and to ensure that we are complying with the laws governing the securities business. We maintain physical, electronic, and procedural safeguards to keep your personal information confidential.
Gabelli Equity Series Funds, Inc.
The Gabelli Small Cap Growth Fund
One Corporate Center
Rye, New York 10580-1422
800-GABELLI
800-422-3554
fax: 914-921-5118
website: www.gabelli.com
e-mail: info@gabelli.com
Net Asset Value per share available daily by calling
800-GABELLI after 6:00 P.M.
The Gabelli Small Cap Growth Fund
One Corporate Center
Rye, New York 10580-1422
800-GABELLI
800-422-3554
fax: 914-921-5118
website: www.gabelli.com
e-mail: info@gabelli.com
Net Asset Value per share available daily by calling
800-GABELLI after 6:00 P.M.
Board of Directors
Mario J. Gabelli, CFA | Robert J. Morrissey | |
Chairman and Chief | Attorney-at-Law | |
Executive Officer | Morrissey, Hawkins & Lynch | |
GAMCO Investors, Inc. | ||
Anthony J. Colavita | Anthony R. Pustorino | |
Attorney-at-Law | Certified Public Accountant, | |
Anthony J. Colavita, P.C. | Professor Emeritus | |
Pace University | ||
Vincent D. Enright | Anthonie C. van Ekris | |
Former Senior Vice President | Chairman | |
and Chief Financial Officer | BALMAC International, Inc. | |
KeySpan Corp. | ||
John D. Gabelli | Salvatore J. Zizza | |
Senior Vice President | Chairman | |
Gabelli & Company, Inc. | Zizza & Co., Ltd. |
Officers
Bruce N. Alpert | Agnes Mullady | |
President and Secretary | Treasurer | |
Peter D. Goldstein | ||
Chief Compliance Officer |
Distributor
Gabelli & Company, Inc.
Gabelli & Company, Inc.
Custodian, Transfer Agent, and Dividend Agent
State Street Bank and Trust Company
State Street Bank and Trust Company
Legal Counsel
Skadden, Arps, Slate, Meagher & Flom LLP
Skadden, Arps, Slate, Meagher & Flom LLP
This report is submitted for the general information of the shareholders of The Gabelli Small Cap Growth Fund. It is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus.
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The
Gabelli
Small Cap
Growth
Fund
Gabelli
Small Cap
Growth
Fund
SEMI ANNUAL REPORT
MARCH 31, 2009
MARCH 31, 2009
GAB443Q109SR
The Gabelli Equity Income Fund
Semi-Annual Report(a)
March 31, 2009
March 31, 2009
To Our Shareholders,
For the quarter ended March 31, 2009, The Gabelli Equity Income Fund’s Class AAA Shares surrendered 10.47% versus the Standard & Poor’s (“S&P”) 500 Index decline of 10.98%, the Nasdaq Composite Index decline of 3.07%, and the Lipper Equity Income Fund Average slide of 12.31%.
Comparative Results
Average Annual Returns through March 31, 2009 (a)(b)
Since | ||||||||||||||||||||||||||||
Inception | ||||||||||||||||||||||||||||
Quarter | 1 Year | 3 Year | 5 Year | 10 Year | 15 Year | (1/2/92) | ||||||||||||||||||||||
Gabelli Equity Income Fund Class AAA | (10.47 | )% | (36.56 | )% | (10.52 | )% | (2.44 | )% | 2.80 | % | 7.41 | % | 7.88 | % | ||||||||||||||
S&P 500 Index | (10.98 | ) | (38.06 | ) | (13.05 | ) | (4.76 | ) | (3.00 | ) | 5.91 | 5.92 | ||||||||||||||||
Nasdaq Composite Index | (3.07 | ) | (32.93 | ) | (13.23 | ) | (5.18 | ) | (4.65 | ) | 4.92 | 5.71 | ||||||||||||||||
Lipper Equity Income Fund Average | (12.31 | ) | (37.14 | ) | (12.08 | ) | (3.71 | ) | (0.17 | ) | 5.46 | 5.96 | ||||||||||||||||
Class A | (10.43 | ) | (36.52 | ) | (10.49 | ) | (2.43 | ) | 2.79 | 7.40 | 7.88 | |||||||||||||||||
(15.58 | )(c) | (40.17 | )(c) | (12.24 | )(c) | (3.58 | )(c) | 2.19 | (c) | 6.98 | (c) | 7.51 | (c) | |||||||||||||||
Class B | (10.60 | ) | (37.03 | ) | (11.17 | ) | (3.15 | ) | 2.39 | 7.13 | 7.63 | |||||||||||||||||
(15.07 | )(d) | (40.18 | )(d) | (12.06 | )(d) | (3.54 | )(d) | 2.39 | 7.13 | 7.63 | ||||||||||||||||||
Class C | (10.61 | ) | (37.05 | ) | (11.19 | ) | (3.15 | ) | 2.40 | 7.13 | 7.64 | |||||||||||||||||
(11.50 | )(e) | (37.68 | )(e) | (11.19 | ) | (3.15 | ) | 2.40 | 7.13 | 7.64 | ||||||||||||||||||
Class I | (11.23 | ) | (36.32 | ) | (10.38 | ) | (2.35 | ) | 2.84 | 7.44 | 7.91 |
In the current prospectus, the expense ratios for Class AAA, A, B, C, and I Shares are 1.43%, 1.43%, 2.18%, 2.18%, and 1.18%, respectively. Class AAA and I Shares do not have a sales charge. The maximum sales charge for Class A, B, and C Shares is 5.75%, 5.00%, and 1.00%, respectively.
(a) | The Fund’s fiscal year ends September 30. | |
(b) | Returns represent past performance and do not guarantee future results. Total returns and average annual returns reflect changes in share price and reinvestment of distributions and are net of expenses. 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. Performance returns for periods of less than one year are not annualized. Current performance may be lower or higher than the performance data presented. Visit www.gabelli.com for performance information as of the most recent month end. Investors should carefully consider the investment objectives, risks, charges, and expenses of the Fund before investing. The prospectus contains more information about this and other matters and should be read carefully before investing. | |
The Class AAA Shares net asset values (“NAVs”) per share are used to calculate performance for the periods prior to the issuance of Class A Shares, Class B Shares, and Class C Shares on December 31, 2003 and Class I Shares on January 11, 2008. The actual performance for the Class B Shares and Class C Shares would have been lower and Class I Shares would have been higher due to the differences in expenses associated with these classes of shares.The S&P 500 Index of the largest U.S. companies and the Nasdaq Composite Index (measures all Nasdaq domestic and international common type stocks under an unmanaged market capitalization weighted methodology) are unmanaged indicators of stock market performance, while the Lipper Equity Income Fund Average reflects the average performance of mutual funds classified in this particular category. Dividends are considered reinvested (except for the Nasdaq Composite Index). You cannot invest directly in an index. | ||
(c) | Performance results include the effect of the maximum 5.75% sales charge at the beginning of the period. | |
(d) | Performance results include the deferred sales charges for the Class B Shares upon redemption at the end of the quarter, one year, three year, and five year periods of 5%, 5%, 3%, and 2%, respectively, of the Fund’s NAV per share at the time of purchase or sale, whichever is lower. Class B Shares are not available for new purchases. | |
(e) | Performance results include the deferred sales charges for the Class C Shares upon redemption at the end of the quarter and one year periods of 1% of the Fund’s NAV per share at the time of purchase or sale, whichever is lower. |
We have separated the portfolio manager’s commentary from the financial statements and investment portfolio due to corporate governance regulations stipulated by the Sarbanes-Oxley Act of 2002. We have done this to ensure that the content of the portfolio manager’s commentary is unrestricted. The financial statements and investment portfolio are mailed separately from the commentary. Both the commentary and the financial statements, including the portfolio of investments, will be available on our website at www.gabelli.com/funds.
The Gabelli Equity Income Fund
Disclosure of Fund Expenses (Unaudited)
Disclosure of Fund Expenses (Unaudited)
For the Six Month Period from October 1, 2008 through March 31, 2009 | Expense Table |
We believe it is important for you to understand the impact of fees and expenses regarding your investment. All mutual funds have operating expenses. As a shareholder of a fund, you incur ongoing costs, which include costs for portfolio management, administrative services, and shareholder reports (like this one), among others. Operating expenses, which are deducted from a fund’s gross income, directly reduce the investment return of a fund. When a fund’s expenses are expressed as a percentage of its average net assets, this figure is known as the expense ratio. The following examples are intended to help you understand the ongoing costs (in dollars) of investing in your Fund and to compare these costs with those of other mutual funds. The examples are based on an investment of $1,000 made at the beginning of the period shown and held for the entire period.
The Expense Table below illustrates your Fund’s costs in two ways:
Actual Fund Return: This section provides information about actual account values and actual expenses. You may use this section to help you to estimate the actual expenses that you paid over the period after any fee waivers and expense reimbursements.The “Ending Account Value” shown is derived from the Fund’s actual return during the past six months, and the “Expenses Paid During Period” shows the dollar amount that would have been paid by an investor who started with $1,000 in the Fund. You may use this information, together with the amount you invested, to estimate the expenses that you paid over the period.
To do so, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number given for your Fund under the heading “Expenses Paid During Period” to estimate the expenses you paid during this period.
Hypothetical 5% Return: This section provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio. It assumes a hypothetical annualized return of 5% before expenses during the period shown. In this case — because the hypothetical return used is not the Fund’s actual return — the results do not apply to your investment and you cannot use the hypothetical account value and expense to estimate the actual ending account balance or expenses you paid for the period. This example is useful in making comparisons of the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs such as sales charges (loads), redemption fees, or exchange fees, if any, which are described in the Prospectus. If these costs were applied to your account, your costs would be higher. Therefore, the 5% hypothetical return is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.
Beginning | Ending | Annualized | Expenses | |||||||||||||
Account Value | Account Value | Expense | Paid During | |||||||||||||
10/01/08 | 03/31/09 | Ratio | Period* | |||||||||||||
The Gabelli Equity Income Fund | ||||||||||||||||
Actual Fund Return | ||||||||||||||||
Class AAA | $ | 1,000.00 | $ | 708.40 | 1.53 | % | $ | 6.52 | ||||||||
Class A | $ | 1,000.00 | $ | 708.70 | 1.53 | % | $ | 6.52 | ||||||||
Class B | $ | 1,000.00 | $ | 705.90 | 2.28 | % | $ | 9.70 | ||||||||
Class C | $ | 1,000.00 | $ | 705.80 | 2.28 | % | $ | 9.70 | ||||||||
Class I | $ | 1,000.00 | $ | 710.20 | 1.28 | % | $ | 5.46 | ||||||||
Hypothetical 5% Return | ||||||||||||||||
Class AAA | $ | 1,000.00 | $ | 1,017.30 | 1.53 | % | $ | 7.70 | ||||||||
Class A | $ | 1,000.00 | $ | 1,017.30 | 1.53 | % | $ | 7.70 | ||||||||
Class B | $ | 1,000.00 | $ | 1,013.56 | 2.28 | % | $ | 11.45 | ||||||||
Class C | $ | 1,000.00 | $ | 1,013.56 | 2.28 | % | $ | 11.45 | ||||||||
Class I | $ | 1,000.00 | $ | 1,018.55 | 1.28 | % | $ | 6.44 |
* | Expenses are equal to the Fund’s annualized expense ratio for the last six months multiplied by the average account value over the period, multiplied by the number of days in the most recent period, then divided by 365. |
2
Summary of Portfolio Holdings (Unaudited)
The following table presents portfolio holdings as a percent of total net assets as of March 31, 2009:
The Gabelli Equity Income Fund
Food and Beverage | 12.5 | % | ||
Financial Services | 11.3 | % | ||
Health Care | 10.7 | % | ||
Energy and Utilities: Oil | 7.7 | % | ||
Consumer Products | 7.4 | % | ||
Retail | 6.9 | % | ||
Telecommunications | 5.6 | % | ||
Energy and Utilities: Integrated | 3.8 | % | ||
Diversified Industrial | 3.0 | % | ||
Aerospace | 2.5 | % | ||
Computer Hardware | 2.4 | % | ||
Metals and Mining | 2.2 | % | ||
Electronics | 1.9 | % | ||
Agriculture | 1.9 | % | ||
Automotive: Parts and Accessories | 1.9 | % | ||
Energy and Utilities: Electric | 1.6 | % | ||
Entertainment | 1.6 | % | ||
Equipment and Supplies | 1.6 | % | ||
Energy and Utilities: Services | 1.6 | % | ||
Communications Equipment | 1.5 | % | ||
Energy and Utilities: Natural Gas | 1.5 | % | ||
Specialty Chemicals | 1.5 | % | ||
Machinery | 1.4 | % | ||
Computer Software and Services | 1.1 | % | ||
Cable and Satellite | 0.9 | % | ||
Hotels and Gaming | 0.7 | % | ||
Business Services | 0.6 | % | ||
Environmental Services | 0.5 | % | ||
Wireless Communications | 0.4 | % | ||
Transportation | 0.3 | % | ||
Aviation: Parts and Services | 0.3 | % | ||
Automotive | 0.3 | % | ||
Publishing | 0.3 | % | ||
Broadcasting | 0.2 | % | ||
Consumer Services | 0.1 | % | ||
Exchange Traded Funds | 0.1 | % | ||
Energy and Utilities: Water | 0.1 | % | ||
Real Estate | 0.0 | % | ||
Building and Construction | 0.0 | % | ||
Manufactured Housing | 0.0 | % | ||
Other Assets and Liabilities (Net) | 0.1 | % | ||
100.0 | % | |||
The Gabelli Equity Income Fund (the “Fund”) files a complete schedule of portfolio holdings with the Securities and Exchange Commission (the “SEC”) for the first and third quarters of each fiscal year on Form N-Q, the last of which was filed for the quarter ended December 31, 2008. Shareholders may obtain this information at www.gabelli.com or by calling the Fund at 800-GABELLI (800-422-3554). The Fund’s Form N-Q is available on the SEC’s website at www.sec.gov and may also be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
Proxy Voting
The Fund files Form N-PX with its complete proxy voting record for the 12 months ended June 30th, no later than August 31st of each year. A description of the Fund’s proxy voting policies, procedures, and how the Fund voted proxies relating to portfolio securities is available without charge, upon request, by (i) calling 800-GABELLI (800-422-3554); (ii) writing to The Gabelli Funds at One Corporate Center, Rye, NY 10580-1422; or (iii) visiting the SEC’s website at www.sec.gov.
3
The Gabelli Equity Income Fund
Schedule of Investments — March 31, 2009 (Unaudited)
Schedule of Investments — March 31, 2009 (Unaudited)
Market | ||||||||||||
Shares | Cost | Value | ||||||||||
COMMON STOCKS — 98.6% | ||||||||||||
Aerospace — 2.5% | ||||||||||||
168,000 | Boeing Co. | $ | 10,493,775 | $ | 5,977,440 | |||||||
2,000 | Lockheed Martin Corp. | 47,350 | 138,060 | |||||||||
3,500 | Northrop Grumman Corp. | 125,556 | 152,740 | |||||||||
10,000 | Raytheon Co. | 279,250 | 389,400 | |||||||||
360,000 | Rockwell Automation Inc. | 18,544,824 | 7,862,400 | |||||||||
2,000 | Rockwell Collins Inc. | 15,843 | 65,280 | |||||||||
1,300,000 | Rolls-Royce Group plc† | 9,162,334 | 5,483,974 | |||||||||
38,668,932 | 20,069,294 | |||||||||||
Agriculture — 1.9% | ||||||||||||
100,000 | Archer-Daniels-Midland Co. | 2,873,352 | 2,778,000 | |||||||||
138,000 | Monsanto Co. | 1,827,430 | 11,467,800 | |||||||||
12,000 | The Mosaic Co. | 186,246 | 503,760 | |||||||||
4,887,028 | 14,749,560 | |||||||||||
Automotive — 0.3% | ||||||||||||
720,000 | General Motors Corp. | 15,289,384 | 1,396,800 | |||||||||
20,000 | Navistar International Corp.† | 583,430 | 669,200 | |||||||||
15,872,814 | 2,066,000 | |||||||||||
Automotive: Parts and Accessories — 1.8% | ||||||||||||
4,000 | ArvinMeritor Inc. | 14,853 | 3,160 | |||||||||
3,000 | BERU AG | 319,888 | 304,915 | |||||||||
250,000 | Genuine Parts Co. | 8,986,399 | 7,465,000 | |||||||||
6,000 | Johnson Controls Inc. | 50,425 | 72,000 | |||||||||
60,000 | Modine Manufacturing Co. | 784,520 | 150,000 | |||||||||
150,000 | O’Reilly Automotive Inc.† | 4,267,970 | 5,251,500 | |||||||||
140,000 | The Pep Boys - Manny, Moe & Jack | 1,619,073 | 617,400 | |||||||||
16,043,128 | 13,863,975 | |||||||||||
Aviation: Parts and Services — 0.3% | ||||||||||||
5,000 | Barnes Group Inc. | 47,698 | 53,450 | |||||||||
51,192 | Curtiss-Wright Corp. | 514,452 | 1,435,936 | |||||||||
35,000 | GenCorp Inc.† | 299,658 | 74,200 | |||||||||
21,000 | United Technologies Corp. | 609,942 | 902,580 | |||||||||
1,471,750 | 2,466,166 | |||||||||||
Broadcasting — 0.1% | ||||||||||||
190,000 | CBS Corp., Cl. A, Voting | 4,301,439 | 744,800 | |||||||||
45,000 | CBS Corp., Cl. B, Non-Voting | 628,985 | 172,800 | |||||||||
132 | Granite Broadcasting Corp.† | 10,795 | 13 | |||||||||
5,000 | Societe Television Francaise 1 | 100,991 | 39,200 | |||||||||
5,042,210 | 956,813 | |||||||||||
Building and Construction — 0.0% | ||||||||||||
918 | Colas SA | 318,206 | 182,815 | |||||||||
Business Services — 0.6% | ||||||||||||
5,000 | Automatic Data Processing Inc. | 151,707 | 175,800 | |||||||||
150,000 | Diebold Inc. | 5,659,698 | 3,202,500 | |||||||||
4,000 | Landauer Inc. | 134,546 | 202,720 | |||||||||
7,500 | MasterCard Inc., Cl. A | 292,500 | 1,256,100 | |||||||||
10,000 | R. H. Donnelley Corp.† | 58,057 | 3,050 | |||||||||
6,296,508 | 4,840,170 | |||||||||||
Cable and Satellite — 0.9% | ||||||||||||
190,000 | Cablevision Systems Corp., Cl. A | 2,919,442 | 2,458,600 | |||||||||
110,000 | DISH Network Corp., Cl. A† | 2,509,896 | 1,222,100 | |||||||||
16,000 | EchoStar Corp., Cl. A† | 478,840 | 237,280 | |||||||||
55,000 | Scripps Networks Interactive Inc., Cl. A | 2,303,601 | 1,238,050 | |||||||||
50,000 | The DIRECTV Group Inc.† | 1,130,314 | 1,139,500 | |||||||||
25,101 | Time Warner Cable Inc. | 1,092,523 | 622,505 | |||||||||
10,434,616 | 6,918,035 | |||||||||||
Communications Equipment — 0.9% | ||||||||||||
300,000 | Corning Inc. | 4,319,319 | 3,981,000 | |||||||||
100,000 | Motorola Inc. | 830,109 | 423,000 | |||||||||
120,000 | Thomas & Betts Corp.† | 3,448,817 | 3,002,400 | |||||||||
8,598,245 | 7,406,400 | |||||||||||
Computer Hardware — 2.4% | ||||||||||||
174,500 | International Business Machines Corp. | 14,082,385 | 16,907,305 | |||||||||
380,000 | Xerox Corp. | 5,031,864 | 1,729,000 | |||||||||
19,114,249 | 18,636,305 | |||||||||||
Computer Software and Services — 1.1% | ||||||||||||
2,000 | EMC Corp.† | 19,360 | 22,800 | |||||||||
115,000 | Metavante Technologies Inc.† | 2,593,203 | 2,295,400 | |||||||||
220,000 | Microsoft Corp. | 6,333,405 | 4,041,400 | |||||||||
154 | Telecom Italia Media SpA† | 205 | 16 | |||||||||
170,000 | Yahoo! Inc.† | 5,202,473 | 2,177,700 | |||||||||
14,148,646 | 8,537,316 | |||||||||||
Consumer Products — 7.4% | ||||||||||||
50,000 | Altria Group Inc. | 643,359 | 801,000 | |||||||||
180,000 | Avon Products Inc. | 5,350,496 | 3,461,400 | |||||||||
3,800 | British American Tobacco plc | 95,149 | 87,947 | |||||||||
15,000 | Clorox Co. | 823,581 | 772,200 | |||||||||
5,000 | Colgate-Palmolive Co. | 294,807 | 294,900 | |||||||||
10,000 | Compagnie Financiere Richemont SA, Cl. A | 268,687 | 156,198 | |||||||||
750,000 | Eastman Kodak Co. | 9,637,957 | 2,850,000 | |||||||||
63,000 | Energizer Holdings Inc.† | 2,834,133 | 3,130,470 | |||||||||
120,000 | Fortune Brands Inc. | 6,208,201 | 2,946,000 | |||||||||
5,000 | Hanesbrands Inc.† | 108,950 | 47,850 | |||||||||
35,000 | Harman International Industries Inc. | 1,209,221 | 473,550 | |||||||||
155,000 | Kimberly-Clark Corp. | 10,295,892 | 7,147,050 | |||||||||
7,000 | National Presto Industries Inc. | 206,562 | 427,070 | |||||||||
10,000 | Pactiv Corp.† | 161,895 | 145,900 | |||||||||
50,000 | Philip Morris International Inc. | 1,501,172 | 1,779,000 | |||||||||
100,000 | Reckitt Benckiser Group plc | 3,154,703 | 3,757,856 | |||||||||
1,300,000 | Swedish Match AB | 17,012,653 | 18,821,325 | |||||||||
200,000 | The Procter & Gamble Co. | 11,513,349 | 9,418,000 | |||||||||
78,000 | Unilever NV — NY Shares, ADR | 1,542,066 | 1,528,800 | |||||||||
72,862,833 | 58,046,516 | |||||||||||
See accompanying notes to financial statements.
4
The Gabelli Equity Income Fund
Schedule of Investments (Continued) — March 31, 2009 (Unaudited)
Schedule of Investments (Continued) — March 31, 2009 (Unaudited)
Market | ||||||||||||
Shares | Cost | Value | ||||||||||
COMMON STOCKS (Continued) | ||||||||||||
Consumer Services — 0.1% | ||||||||||||
67,500 | Rollins Inc. | $ | 386,886 | $ | 1,157,625 | |||||||
Diversified Industrial — 3.0% | ||||||||||||
5,000 | 3M Co. | 213,645 | 248,600 | |||||||||
5,000 | Acuity Brands Inc. | 54,182 | 112,700 | |||||||||
3,500 | Alstom SA | 326,542 | 181,285 | |||||||||
60,000 | Baldor Electric Co. | 1,932,901 | 869,400 | |||||||||
110,000 | Cooper Industries Ltd., Cl. A | 3,148,666 | 2,844,600 | |||||||||
100,000 | Crane Co. | 3,582,943 | 1,688,000 | |||||||||
550,000 | General Electric Co. | 14,830,312 | 5,560,500 | |||||||||
200,000 | Honeywell International Inc. | 5,938,206 | 5,572,000 | |||||||||
25,100 | ITT Corp. | 1,246,573 | 965,597 | |||||||||
45,300 | National Patent Development Corp.† | 98,301 | 54,360 | |||||||||
379,703 | National Patent Development Corp.† (a)(b) | 949,257 | 433,946 | |||||||||
100,000 | Textron Inc. | 634,490 | 574,000 | |||||||||
6,000 | Trinity Industries Inc. | 82,100 | 54,840 | |||||||||
185,650 | Tyco International Ltd. | 7,320,564 | 3,631,314 | |||||||||
1,500 | Walter Industries Inc. | 33,844 | 34,305 | |||||||||
103,710 | WHX Corp.† | 1,988,580 | 694,857 | |||||||||
42,381,106 | 23,520,304 | |||||||||||
Electronics — 1.9% | ||||||||||||
600,000 | Intel Corp. | 12,298,251 | 9,030,000 | |||||||||
340,000 | LSI Corp.† | 3,105,578 | 1,033,600 | |||||||||
190,000 | Texas Instruments Inc. | 4,127,219 | 3,136,900 | |||||||||
5,000 | Thermo Fisher Scientific Inc.† | 127,325 | 178,350 | |||||||||
130,750 | Tyco Electronics Ltd. | 4,363,702 | 1,443,480 | |||||||||
24,022,075 | 14,822,330 | |||||||||||
Energy and Utilities: Electric — 1.6% | ||||||||||||
30,000 | American Electric Power Co. Inc. | 932,060 | 757,800 | |||||||||
14,000 | DTE Energy Co. | 606,560 | 387,800 | |||||||||
85,000 | El Paso Electric Co.† | 670,852 | 1,197,650 | |||||||||
80,000 | FPL Group Inc. | 3,608,192 | 4,058,400 | |||||||||
99,784 | Great Plains Energy Inc. | 2,475,161 | 1,344,091 | |||||||||
60,000 | Korea Electric Power Corp., ADR† | 977,409 | 549,000 | |||||||||
56,087 | Mirant Corp.† | 936,815 | 639,392 | |||||||||
1,200,000 | Mirant Corp., Escrow† (a) | 0 | 0 | |||||||||
150,000 | Northeast Utilities | 3,148,300 | 3,238,500 | |||||||||
80,000 | The AES Corp.† | 268,400 | 464,800 | |||||||||
13,333 | UIL Holdings Corp. | 293,785 | 297,593 | |||||||||
13,917,534 | 12,935,026 | |||||||||||
Energy and Utilities: Integrated — 3.8% | ||||||||||||
42,000 | Allegheny Energy Inc. | 404,378 | 973,140 | |||||||||
44,000 | BP plc, ADR | 1,030,211 | 1,764,400 | |||||||||
46,000 | CH Energy Group Inc. | 1,881,549 | 2,157,400 | |||||||||
75,000 | Constellation Energy Group Inc. | 2,283,609 | 1,549,500 | |||||||||
52,000 | Dominion Resources Inc. | 2,219,444 | 1,611,480 | |||||||||
120,000 | DPL Inc. | 3,161,330 | 2,704,800 | |||||||||
200,000 | Duke Energy Corp. | 2,462,844 | 2,864,000 | |||||||||
400,000 | El Paso Corp. | 4,614,299 | 2,500,000 | |||||||||
29,000 | ENI SpA | 304,221 | 563,301 | |||||||||
6,269 | Iberdrola SA, ADR | 312,667 | 175,845 | |||||||||
25,000 | Integrys Energy Group Inc. | 1,192,522 | 651,000 | |||||||||
80,000 | NSTAR | 1,282,183 | 2,550,400 | |||||||||
75,000 | OGE Energy Corp. | 2,043,450 | 1,786,500 | |||||||||
100,000 | PNM Resources Inc. | 1,042,460 | 826,000 | |||||||||
75,000 | Progress Energy Inc. | 3,196,534 | 2,719,500 | |||||||||
15,000 | Progress Energy Inc., CVO† (a) | 7,800 | 4,950 | |||||||||
7,200 | Public Service Enterprise Group Inc. | 156,820 | 212,184 | |||||||||
38,000 | Suncor Energy Inc., New York | 992,342 | 843,980 | |||||||||
21,000 | Suncor Energy Inc., Toronto | 947,001 | 468,702 | |||||||||
55,000 | TECO Energy Inc. | 740,886 | 613,250 | |||||||||
140,000 | Westar Energy Inc. | 2,333,669 | 2,454,200 | |||||||||
32,610,219 | 29,994,532 | |||||||||||
Energy and Utilities: Natural Gas — 1.5% | ||||||||||||
17,000 | AGL Resources Inc. | 328,041 | 451,010 | |||||||||
38,000 | Atmos Energy Corp. | 969,019 | 878,560 | |||||||||
70,000 | National Fuel Gas Co. | 2,559,613 | 2,146,900 | |||||||||
70,000 | ONEOK Inc. | 1,559,551 | 1,584,100 | |||||||||
24,000 | Piedmont Natural Gas Co. Inc. | 394,017 | 621,360 | |||||||||
110,000 | Southern Union Co. | 2,047,400 | 1,674,200 | |||||||||
65,000 | Southwest Gas Corp. | 1,365,198 | 1,369,550 | |||||||||
200,000 | Spectra Energy Corp. | 4,249,072 | 2,828,000 | |||||||||
13,471,911 | 11,553,680 | |||||||||||
Energy and Utilities: Oil — 7.7% | ||||||||||||
155,000 | Anadarko Petroleum Corp. | 8,110,358 | 6,027,950 | |||||||||
38,000 | Canadian Oil Sands Trust | 1,117,252 | 730,885 | |||||||||
192,000 | Chevron Corp. | 8,828,069 | 12,910,080 | |||||||||
187,000 | ConocoPhillips | 5,471,173 | 7,322,920 | |||||||||
20,000 | Denbury Resources Inc.† | 340,653 | 297,200 | |||||||||
49,000 | Devon Energy Corp. | 2,021,181 | 2,189,810 | |||||||||
149,000 | Exxon Mobil Corp. | 4,735,083 | 10,146,900 | |||||||||
35,000 | Marathon Oil Corp. | 1,477,598 | 920,150 | |||||||||
30,000 | Nexen Inc. | 924,468 | 508,725 | |||||||||
2,000 | Niko Resources Ltd. | 114,911 | 93,084 | |||||||||
94,000 | Occidental Petroleum Corp. | 3,654,851 | 5,231,100 | |||||||||
45,000 | OPTI Canada Inc.† | 963,570 | 35,335 | |||||||||
12,000 | PetroChina Co. Ltd., ADR | 856,611 | 956,400 | |||||||||
130,000 | Petroleo Brasileiro SA, ADR | 5,454,520 | 3,961,100 | |||||||||
33,000 | Repsol YPF SA, ADR | 689,095 | 563,970 | |||||||||
120,000 | Royal Dutch Shell plc, Cl. A, ADR | 5,536,435 | 5,316,000 | |||||||||
25,000 | StatoilHydro ASA, ADR | 327,939 | 436,000 | |||||||||
17,518 | Total SA, ADR | 290,564 | 859,433 | |||||||||
35,000 | Transocean Ltd.† | 2,742,048 | 2,059,400 | |||||||||
200,000 | UTS Energy Corp.† | 1,038,859 | 269,670 |
See accompanying notes to financial statements.
5
The Gabelli Equity Income Fund
Schedule of Investments (Continued) — March 31, 2009 (Unaudited)
Schedule of Investments (Continued) — March 31, 2009 (Unaudited)
Market | ||||||||||||
Shares | Cost | Value | ||||||||||
COMMON STOCKS (Continued) | ||||||||||||
Energy and Utilities: Oil (Continued) | ||||||||||||
40,000 | WesternZagros Resources Ltd.† | $ | 147,109 | $ | 18,401 | |||||||
54,842,347 | 60,854,513 | |||||||||||
Energy and Utilities: Services — 1.6% | ||||||||||||
30,000 | ABB Ltd., ADR | 351,824 | 418,200 | |||||||||
52,000 | Cameron International Corp.† | 746,014 | 1,140,360 | |||||||||
38,182 | GDF Suez, Strips | 0 | 51 | |||||||||
375,000 | Halliburton Co. | 11,177,922 | 5,801,250 | |||||||||
40,000 | Oceaneering International Inc.† | 1,762,700 | 1,474,800 | |||||||||
40,000 | Schlumberger Ltd. | 1,275,020 | 1,624,800 | |||||||||
175,000 | Weatherford International Ltd.† | 3,803,877 | 1,937,250 | |||||||||
19,117,357 | 12,396,711 | |||||||||||
Energy and Utilities: Water — 0.1% | ||||||||||||
26,000 | Aqua America Inc. | 261,350 | 520,000 | |||||||||
Entertainment — 1.6% | ||||||||||||
60,000 | Grupo Televisa SA, ADR | 1,493,782 | 818,400 | |||||||||
98,000 | Rank Group plc† | 304,571 | 103,000 | |||||||||
2,000 | The Walt Disney Co. | 48,366 | 36,320 | |||||||||
100,000 | Time Warner Inc. | 3,316,367 | 1,930,000 | |||||||||
270,000 | Viacom Inc., Cl. A† | 11,092,934 | 5,040,900 | |||||||||
185,000 | Vivendi | 6,813,381 | 4,897,399 | |||||||||
23,069,401 | 12,826,019 | |||||||||||
Environmental Services — 0.5% | ||||||||||||
145,000 | Waste Management Inc. | 4,749,875 | 3,712,000 | |||||||||
Equipment and Supplies — 1.6% | ||||||||||||
12,000 | A.O. Smith Corp. | 253,184 | 302,160 | |||||||||
11,000 | Danaher Corp. | 791,231 | 596,420 | |||||||||
115,000 | Flowserve Corp. | 5,141,384 | 6,453,800 | |||||||||
6,000 | Ingersoll-Rand Co. Ltd., Cl. A | 120,853 | 82,800 | |||||||||
1,500 | Minerals Technologies Inc. | 37,938 | 48,075 | |||||||||
40,000 | Mueller Industries Inc. | 1,650,585 | 867,600 | |||||||||
12,000 | Parker Hannifin Corp. | 459,607 | 407,760 | |||||||||
115,000 | Tenaris SA, ADR | 4,820,468 | 2,319,550 | |||||||||
970,000 | Tomkins plc | 4,715,456 | 1,687,556 | |||||||||
17,990,706 | 12,765,721 | |||||||||||
Exchange Traded Funds — 0.1% | ||||||||||||
400,000 | ProShares Ultra Financials | 3,639,782 | 1,044,000 | |||||||||
Financial Services — 11.3% | ||||||||||||
6,324 | Alleghany Corp.† | 1,015,192 | 1,712,729 | |||||||||
220,000 | American Express Co. | 9,953,228 | 2,998,600 | |||||||||
20,000 | Ameriprise Financial Inc. | 620,397 | 409,800 | |||||||||
23,990 | Argo Group International Holdings Ltd.† | 741,793 | 722,819 | |||||||||
25,000 | Banco Popular Espanol SA | 185,939 | 158,436 | |||||||||
2,000 | Banco Santander Chile, ADR | 29,250 | 68,700 | |||||||||
168,682 | Banco Santander SA, ADR | 1,264,392 | 1,163,906 | |||||||||
545,000 | Bank of America Corp. | �� | 10,524,495 | 3,716,900 | ||||||||
11,025 | BNP Paribas | 439,576 | 455,841 | |||||||||
950,000 | Citigroup Inc. | 25,869,718 | 2,403,500 | |||||||||
50,000 | Commerzbank AG, ADR | 896,273 | 267,500 | |||||||||
50,000 | Deutsche Bank AG | 2,453,861 | 2,032,500 | |||||||||
100,000 | Discover Financial Services | 1,855,454 | 631,000 | |||||||||
200,300 | Federal National Mortgage Association | 192,571 | 140,210 | |||||||||
29,290 | Fidelity Southern Corp. | 284,955 | 73,225 | |||||||||
40,000 | Freddie Mac | 32,375 | 30,400 | |||||||||
190,000 | H&R Block Inc. | 4,287,693 | 3,456,100 | |||||||||
30,000 | Huntington Bancshares Inc. | 391,484 | 49,800 | |||||||||
93,000 | Janus Capital Group Inc. | 1,618,549 | 618,450 | |||||||||
235,199 | JPMorgan Chase & Co. | 8,153,900 | 6,251,589 | |||||||||
12,000 | KeyCorp | 206,662 | 94,440 | |||||||||
360,000 | Legg Mason Inc. | 10,464,955 | 5,724,000 | |||||||||
31,000 | Leucadia National Corp.† | 381,995 | 461,590 | |||||||||
102,000 | Loews Corp. | 4,869,207 | 2,254,200 | |||||||||
110,000 | M&T Bank Corp. | 7,963,804 | 4,976,400 | |||||||||
2,000 | Manulife Financial Corp. | 24,694 | 22,400 | |||||||||
424,000 | Marsh & McLennan Companies Inc. | 12,903,452 | 8,586,000 | |||||||||
10,000 | Moody’s Corp. | 171,766 | 229,200 | |||||||||
120,000 | Morgan Stanley | 3,927,787 | 2,732,400 | |||||||||
6,000 | Northern Trust Corp. | 60,300 | 358,920 | |||||||||
40,000 | NYSE Euronext | 804,695 | 716,000 | |||||||||
10,000 | Och-Ziff Capital Management Group LLC, Cl. A | 54,850 | 60,700 | |||||||||
45,000 | PNC Financial Services Group Inc. | 1,905,739 | 1,318,050 | |||||||||
40,000 | Popular Inc. | 738,913 | 87,200 | |||||||||
500 | Raiffeisen International Bank Holding AG | 28,874 | 14,090 | |||||||||
958 | Reinet Investments SCA† | 188,972 | 8,846 | |||||||||
180,000 | SLM Corp.† | 3,763,656 | 891,000 | |||||||||
200,000 | Sterling Bancorp | 3,013,936 | 1,980,000 | |||||||||
12,000 | SunTrust Banks Inc. | 251,737 | 140,880 | |||||||||
50,000 | T. Rowe Price Group Inc. | 1,388,039 | 1,443,000 | |||||||||
80,000 | TD Ameritrade Holding Corp.† | 1,479,382 | 1,104,800 | |||||||||
2,000 | The Allstate Corp. | 61,340 | 38,300 | |||||||||
460,509 | The Bank of New York Mellon Corp. | 13,484,291 | 13,009,379 | |||||||||
5,000 | The Charles Schwab Corp. | 77,500 | 77,500 | |||||||||
2,000 | The Dun & Bradstreet Corp. | 20,476 | 154,000 | |||||||||
10,000 | The Goldman Sachs Group Inc. | 1,378,248 | 1,060,200 | |||||||||
50,000 | The Phoenix Companies Inc. | 650,511 | 58,500 | |||||||||
5,000 | The Student Loan Corp. | 324,691 | 217,200 | |||||||||
36,000 | The Travelers Companies Inc. | 1,428,424 | 1,463,040 | |||||||||
40,000 | Unitrin Inc. | 1,156,156 | 559,200 | |||||||||
2,500 | Virtus Investment Partners Inc.† | 22,500 | 16,275 | |||||||||
180,000 | Waddell & Reed Financial Inc., Cl. A | 4,042,072 | 3,252,600 |
See accompanying notes to financial statements.
6
The Gabelli Equity Income Fund
Schedule of Investments (Continued) — March 31, 2009 (Unaudited)
Schedule of Investments (Continued) — March 31, 2009 (Unaudited)
Market | ||||||||||||
Shares | Cost | Value | ||||||||||
COMMON STOCKS (Continued) | ||||||||||||
Financial Services (Continued) | ||||||||||||
490,000 | Wells Fargo & Co. | $ | 14,916,449 | $ | 6,977,600 | |||||||
110,000 | Wilmington Trust Corp. | 3,191,330 | 1,065,900 | |||||||||
166,158,498 | 88,515,815 | |||||||||||
Food and Beverage — 12.5% | ||||||||||||
30,000 | Anheuser-Busch InBev NV | 496,266 | 826,856 | |||||||||
61,200 | Brown-Forman Corp., Cl. A | 2,777,123 | 2,454,120 | |||||||||
13,000 | Brown-Forman Corp., Cl. B | 803,398 | 504,790 | |||||||||
150,000 | Cadbury plc, ADR | 5,841,938 | �� | 4,545,000 | ||||||||
95,000 | Campbell Soup Co. | 2,800,194 | 2,599,200 | |||||||||
40,000 | Coca-Cola Amatil Ltd., ADR | 246,845 | 487,200 | |||||||||
10,000 | Coca-Cola Femsa SAB de CV, ADR | 263,508 | 340,600 | |||||||||
20,000 | Constellation Brands Inc., Cl. A† | 367,491 | 238,000 | |||||||||
16,000 | Corn Products International Inc. | 197,588 | 339,200 | |||||||||
300,000 | Dean Foods Co.† | 5,867,852 | 5,424,000 | |||||||||
75,000 | Del Monte Foods Co. | 754,461 | 546,750 | |||||||||
60,000 | Diageo plc, ADR | 2,617,330 | 2,685,000 | |||||||||
120,000 | Dr. Pepper Snapple Group Inc.† | 2,462,770 | 2,029,200 | |||||||||
132,000 | Fomento Economico Mexicano SAB de CV, ADR | 2,840,258 | 3,327,720 | |||||||||
120,000 | General Mills Inc. | 5,982,513 | 5,985,600 | |||||||||
110,000 | Groupe Danone | 6,016,236 | 5,357,726 | |||||||||
880,000 | Grupo Bimbo SAB de CV, Cl. A | 2,786,276 | 3,292,623 | |||||||||
100,000 | H.J. Heinz Co. | 3,517,498 | 3,306,000 | |||||||||
110,000 | Heineken NV | 4,917,149 | 3,127,533 | |||||||||
200,000 | ITO EN Ltd. | 4,311,208 | 2,434,712 | |||||||||
30,000 | ITO EN Ltd., Preference | 697,890 | 260,342 | |||||||||
3,000 | Kellogg Co. | 92,580 | 109,890 | |||||||||
430,000 | Kraft Foods Inc., Cl. A | 13,130,351 | 9,584,700 | |||||||||
15,000 | Metro Inc., Cl. A | 422,865 | 450,904 | |||||||||
100,000 | Nestlé SA | 2,083,075 | 3,380,480 | |||||||||
115,000 | Nissin Foods Holdings Co. Ltd. | 3,788,332 | 3,369,197 | |||||||||
140,000 | PepsiAmericas Inc. | 3,179,070 | 2,415,000 | |||||||||
12,000 | PepsiCo Inc. | 754,328 | 617,760 | |||||||||
28,008 | Pernod-Ricard SA | 2,388,124 | 1,561,954 | |||||||||
35,000 | Remy Cointreau SA | 2,060,746 | 830,045 | |||||||||
50,000 | Sapporo Holdings Ltd. | 510,013 | 188,412 | |||||||||
350,000 | The Coca-Cola Co. | 16,011,885 | 15,382,500 | |||||||||
75,000 | The Hershey Co. | 3,190,083 | 2,606,250 | |||||||||
57,268 | Tootsie Roll Industries Inc. | 1,398,580 | 1,243,861 | |||||||||
380,000 | Tyson Foods Inc., Cl. A | 5,785,335 | 3,568,200 | |||||||||
7,000 | Wimm-Bill-Dann Foods OJSC, ADR† | 249,970 | 222,670 | |||||||||
135,000 | YAKULT HONSHA Co. Ltd. | 3,659,573 | 2,392,181 | |||||||||
115,270,702 | 98,036,176 | |||||||||||
Health Care — 10.7% | ||||||||||||
15,000 | Abbott Laboratories | 584,062 | 715,500 | |||||||||
25,000 | Aetna Inc. | 890,584 | 608,250 | |||||||||
114,000 | Baxter International Inc. | 4,305,228 | 5,839,080 | |||||||||
100,000 | Becton, Dickinson and Co. | 6,601,932 | 6,724,000 | |||||||||
300,000 | Boston Scientific Corp.† | 4,052,888 | 2,385,000 | |||||||||
72,000 | Bristol-Myers Squibb Co. | 1,764,132 | 1,578,240 | |||||||||
57,000 | Covidien Ltd. | 2,284,331 | 1,894,680 | |||||||||
140,000 | Eli Lilly & Co. | 7,861,239 | 4,677,400 | |||||||||
11,276 | GlaxoSmithKline plc, ADR | 515,984 | 350,345 | |||||||||
22,000 | Henry Schein Inc.† | 566,365 | 880,220 | |||||||||
105,000 | Hospira Inc.† | 3,804,994 | 3,240,300 | |||||||||
290,000 | Johnson & Johnson | 18,363,252 | 15,254,000 | |||||||||
7,000 | Laboratory Corp. of America Holdings† | 494,285 | 409,430 | |||||||||
5,000 | Mead Johnson Nutrition Co., Cl. A† | 120,000 | 144,350 | |||||||||
32,000 | Medco Health Solutions Inc.† | 814,565 | 1,322,880 | |||||||||
110,000 | Merck & Co. Inc. | 3,523,449 | 2,942,500 | |||||||||
5,000 | Nobel Biocare Holding AG | 139,480 | 85,303 | |||||||||
140,000 | Novartis AG, ADR | 7,727,317 | 5,296,200 | |||||||||
30,000 | Patterson Companies Inc.† | 1,080,112 | 565,800 | |||||||||
750,000 | Pfizer Inc. | 18,810,648 | 10,215,000 | |||||||||
150,000 | Schering-Plough Corp. | 2,759,763 | 3,532,500 | |||||||||
62,000 | St. Jude Medical Inc.† | 2,723,236 | 2,252,460 | |||||||||
760,000 | Tenet Healthcare Corp.† | 5,275,489 | �� | 881,600 | ||||||||
270,000 | UnitedHealth Group Inc. | 11,810,711 | 5,651,100 | |||||||||
18,000 | William Demant Holding A/S† | 880,509 | 724,000 | |||||||||
100,000 | Wyeth | 4,029,238 | 4,304,000 | |||||||||
40,000 | Zimmer Holdings Inc.† | 2,544,804 | 1,460,000 | |||||||||
114,328,597 | 83,934,138 | |||||||||||
Hotels and Gaming — 0.7% | ||||||||||||
115,000 | International Game Technology | 2,798,679 | 1,060,300 | |||||||||
529,411 | Ladbrokes plc | 7,677,932 | 1,392,008 | |||||||||
400,000 | Las Vegas Sands Corp.† | 8,012,290 | 1,204,000 | |||||||||
340,000 | MGM Mirage† | 16,350,127 | 792,200 | |||||||||
60,000 | Starwood Hotels & Resorts Worldwide Inc. | 1,389,038 | 762,000 | |||||||||
12,000 | Wynn Resorts Ltd.† | 474,534 | 239,640 | |||||||||
36,702,600 | 5,450,148 | |||||||||||
Machinery — 1.4% | ||||||||||||
6,000 | Caterpillar Inc. | 35,181 | 167,760 | |||||||||
320,400 | Deere & Co. | 15,974,668 | 10,531,548 | |||||||||
7,609 | Mueller Water Products Inc., Cl. A | 111,552 | 25,110 | |||||||||
16,121,401 | 10,724,418 | |||||||||||
Manufactured Housing — 0.0% | ||||||||||||
265,000 | Champion Enterprises Inc.† | 1,837,109 | 127,200 | |||||||||
See accompanying notes to financial statements.
7
The Gabelli Equity Income Fund
Schedule of Investments (Continued) — March 31, 2009 (Unaudited)
Schedule of Investments (Continued) — March 31, 2009 (Unaudited)
Market | ||||||||||||
Shares/Units | Cost | Value | ||||||||||
COMMON STOCKS (Continued) | ||||||||||||
Metals and Mining — 2.2% | ||||||||||||
340,000 | Alcoa Inc. | $ | 8,056,136 | $ | 2,495,600 | |||||||
9,000 | Carpenter Technology Corp. | 332,535 | 127,080 | |||||||||
130,000 | Freeport-McMoRan Copper & Gold Inc. | 3,350,503 | 4,954,300 | |||||||||
195,000 | Newmont Mining Corp. | 7,983,095 | 8,728,200 | |||||||||
45,000 | Peabody Energy Corp. | 1,713,246 | 1,126,800 | |||||||||
6,615 | Teck Cominco Ltd., Cl. B | 533,053 | 36,989 | |||||||||
21,968,568 | 17,468,969 | |||||||||||
Publishing — 0.3% | ||||||||||||
5,000 | Idearc Inc.† | 23,800 | 180 | |||||||||
44,000 | Lee Enterprises Inc. | 321,432 | 12,320 | |||||||||
6,016 | News Corp., Cl. B | 70,881 | 46,323 | |||||||||
60,000 | PagesJaunes Groupe SA | 1,664,637 | 507,553 | |||||||||
2 | Seat Pagine Gialle SpA† | 120 | 2 | |||||||||
30,633 | The E.W. Scripps Co., Cl. A | 293,839 | 41,355 | |||||||||
35,000 | The McGraw-Hill Companies Inc. | 1,280,632 | 800,450 | |||||||||
22,000 | The New York Times Co., Cl. A | 573,269 | 99,440 | |||||||||
1,200 | The Washington Post Co., Cl. B | 700,030 | 428,520 | |||||||||
2,000 | Value Line Inc. | 84,436 | 54,680 | |||||||||
5,013,076 | 1,990,823 | |||||||||||
Real Estate — 0.0% | ||||||||||||
7,000 | Griffin Land & Nurseries Inc. | 137,444 | 245,000 | |||||||||
Retail — 6.6% | ||||||||||||
18,000 | Copart Inc.† | 535,865 | 533,880 | |||||||||
220,000 | Costco Wholesale Corp. | 11,379,094 | 10,190,400 | |||||||||
345,000 | CVS Caremark Corp. | 12,746,861 | 9,484,050 | |||||||||
50,000 | Ingles Markets Inc., Cl. A | 1,068,440 | 746,500 | |||||||||
350,000 | Macy’s Inc. | 6,084,621 | 3,115,000 | |||||||||
170,000 | Safeway Inc. | 3,593,397 | 3,432,300 | |||||||||
500 | Sears Holdings Corp.† | 40,732 | 22,855 | |||||||||
100,000 | SUPERVALU Inc. | 2,935,535 | 1,428,000 | |||||||||
210,000 | The Great Atlantic & Pacific Tea Co. Inc.† | 4,453,294 | 1,115,100 | |||||||||
80,000 | The Home Depot Inc. | 2,333,336 | 1,884,800 | |||||||||
60,000 | Tractor Supply Co.† | 2,160,405 | 2,163,600 | |||||||||
234,000 | Wal-Mart Stores Inc. | 11,089,209 | 12,191,400 | |||||||||
130,000 | Walgreen Co. | 4,641,323 | 3,374,800 | |||||||||
10,000 | Weis Markets Inc. | 300,480 | 310,400 | |||||||||
105,000 | Whole Foods Market Inc. | 3,618,490 | 1,764,000 | |||||||||
66,981,082 | 51,757,085 | |||||||||||
Specialty Chemicals — 1.4% | ||||||||||||
44,000 | Albemarle Corp. | 576,219 | 957,880 | |||||||||
437 | Arkema, ADR | 8,969 | 6,905 | |||||||||
40,000 | Ashland Inc. | 1,537,678 | 413,200 | |||||||||
210,000 | Chemtura Corp. | 1,499,113 | 9,975 | |||||||||
75,000 | E. I. du Pont de Nemours and Co. | 3,506,768 | 1,674,750 | |||||||||
140,000 | Ferro Corp. | 2,409,046 | 200,200 | |||||||||
2,000 | FMC Corp. | 64,790 | 86,280 | |||||||||
20,000 | H. B. Fuller Co. | 413,172 | 260,000 | |||||||||
74,000 | International Flavors & Fragrances Inc. | 3,489,906 | 2,254,040 | |||||||||
3,500 | NewMarket Corp. | 13,508 | 155,050 | |||||||||
100,000 | Omnova Solutions Inc.† | 667,863 | 174,000 | |||||||||
4,000 | Quaker Chemical Corp. | 79,615 | 31,760 | |||||||||
32,000 | Rohm and Haas Co. | 1,550,717 | 2,522,880 | |||||||||
50,000 | Sensient Technologies Corp. | 1,035,110 | 1,175,000 | |||||||||
85,000 | The Dow Chemical Co. | 3,720,650 | 716,550 | |||||||||
4,000 | Zep Inc. | 17,026 | 40,920 | |||||||||
20,590,150 | 10,679,390 | |||||||||||
Telecommunications — 5.5% | ||||||||||||
365,000 | AT&T Inc. | 9,749,736 | 9,198,000 | |||||||||
450,000 | BCE Inc. | 10,050,801 | 8,955,000 | |||||||||
4,495 | Bell Aliant Regional Communications Income Fund (a)(b) | 117,429 | 85,921 | |||||||||
200,000 | BT Group plc | 825,179 | 224,410 | |||||||||
30,000 | BT Group plc, ADR | 1,006,938 | 335,100 | |||||||||
140,000 | Cable & Wireless plc | 273,765 | 280,225 | |||||||||
30,000 | CenturyTel Inc. | 961,032 | 843,600 | |||||||||
350,000 | Cincinnati Bell Inc.† | 1,886,496 | 805,000 | |||||||||
330,000 | Deutsche Telekom AG, ADR | 5,830,728 | 4,075,500 | |||||||||
5,360 | FairPoint Communications Inc. | 49,106 | 4,181 | |||||||||
15,000 | France Telecom SA, ADR | 436,434 | 339,900 | |||||||||
140,000 | Qwest Communications International Inc. | 571,000 | 478,800 | |||||||||
1,500,000 | Sprint Nextel Corp.† | 7,568,438 | 5,355,000 | |||||||||
3,300 | Telecom Italia SpA, ADR | 31,072 | 42,207 | |||||||||
8,195 | Telefonica SA, ADR | 80,699 | 488,586 | |||||||||
144,500 | Telephone & Data Systems Inc. | 5,307,372 | 3,830,695 | |||||||||
12,000 | TELUS Corp. | 185,454 | 330,076 | |||||||||
18,000 | TELUS Corp., Non-Voting | 874,021 | 474,480 | |||||||||
225,000 | Verizon Communications Inc. | 8,241,287 | 6,795,000 | |||||||||
5,000 | Windstream Corp. | 43,990 | 40,300 | |||||||||
54,090,977 | 42,981,981 | |||||||||||
Transportation — 0.3% | ||||||||||||
7,000 | Burlington Northern Santa Fe Corp. | 571,133 | 421,050 | |||||||||
115,000 | GATX Corp. | 4,379,544 | 2,326,450 | |||||||||
4,950,677 | 2,747,500 | |||||||||||
Wireless Communications — 0.4% | ||||||||||||
2,600 | NTT DoCoMo Inc. | 3,779,517 | 3,511,845 | |||||||||
TOTAL COMMON STOCKS | 1,092,150,112 | 775,012,314 | ||||||||||
CONVERTIBLE PREFERRED STOCKS — 0.2% | ||||||||||||
Communications Equipment — 0.1% | ||||||||||||
1,100 | Lucent Technologies Capital Trust I, 7.750% Cv. Pfd. | 759,000 | 311,300 | |||||||||
See accompanying notes to financial statements.
8
The Gabelli Equity Income Fund
Schedule of Investments (Continued) — March 31, 2009 (Unaudited)
Schedule of Investments (Continued) — March 31, 2009 (Unaudited)
Market | ||||||||||||
Shares | Cost | Value | ||||||||||
CONVERTIBLE PREFERRED STOCKS (Continued) | ||||||||||||
Energy and Utilities: Integrated — 0.0% | ||||||||||||
300 | El Paso Corp., 4.990% Cv. Pfd. (b) | $ | 293,192 | $ | 173,193 | |||||||
Entertainment — 0.0% | ||||||||||||
3,000 | Metromedia International Group Inc., 7.250% Cv. Pfd.† | 5,310 | 15,000 | |||||||||
Telecommunications — 0.1% | ||||||||||||
33,000 | Cincinnati Bell Inc., 6.750% Cv. Pfd., Ser. B | 918,894 | 886,710 | |||||||||
TOTAL CONVERTIBLE PREFERRED STOCKS | 1,976,396 | 1,386,203 | ||||||||||
RIGHTS — 0.0% | ||||||||||||
Publishing — 0.0% | ||||||||||||
2 | Seat Pagine Gialle SpA, expire 04/17/09 | 1,210 | 12 | |||||||||
WARRANTS — 0.0% | ||||||||||||
Broadcasting — 0.0% | ||||||||||||
330 | Granite Broadcasting Corp., Ser. A, expire 06/04/12† | 0 | 3 | |||||||||
330 | Granite Broadcasting Corp., Ser. B, expire 06/04/12† | 0 | 3 | |||||||||
TOTAL WARRANTS | 0 | 6 | ||||||||||
Principal | ||||||||||||
Amount | ||||||||||||
CORPORATE BONDS — 1.1% | ||||||||||||
Automotive: Parts and Accessories — 0.1% | ||||||||||||
$ | 800,000 | Standard Motor Products Inc., Sub. Deb. Cv., 6.750%, 07/15/09 | 788,437 | 582,000 | ||||||||
Broadcasting — 0.1% | ||||||||||||
2,200,000 | Sinclair Broadcast Group Inc., Sub. Deb. Cv., 6.000%, 09/15/12 | 1,934,135 | 717,750 | |||||||||
350,000 | Sinclair Broadcast Group Inc., Sub. Deb. Cv. (STEP), 4.875%, 07/15/18 | 334,393 | 148,750 | |||||||||
200,000 | Young Broadcasting Inc., Sub. Deb., 10.000%, 03/01/11† | 163,251 | 22 | |||||||||
2,431,779 | 866,522 | |||||||||||
Business Services — 0.0% | ||||||||||||
100,000 | BBN Corp., Sub. Deb. Cv., 6.000%, 04/01/12† (a) | 97,499 | 0 | |||||||||
Communications Equipment — 0.5% | ||||||||||||
4,000,000 | Agere Systems Inc., Sub. Deb. Cv., 6.500%, 12/15/09 | 3,980,286 | 4,035,000 | |||||||||
Computer Hardware — 0.0% | ||||||||||||
500,000 | SanDisk Corp., Cv., 1.000%, 05/15/13 | 234,805 | 302,500 | |||||||||
Energy and Utilities — 0.0% | ||||||||||||
100,000 | Texas Competitive Electric Holdings Co. LLC, Ser. B (STEP), 10.250%, 11/01/15 | 62,820 | 50,500 | |||||||||
Financial Services — 0.0% | ||||||||||||
300,000 | M-Systems Finance NV, Cv., 1.000%, 03/15/35 | 254,658 | 282,375 | |||||||||
Retail — 0.3% | ||||||||||||
4,400,000 | The Great Atlantic & Pacific Tea Co. Inc., Cv., 5.125%, 06/15/11 | 4,269,729 | 2,486,000 | |||||||||
Specialty Chemicals — 0.1% | ||||||||||||
950,000 | Ferro Corp., Cv., 6.500%, 08/15/13 | 462,177 | 320,625 | |||||||||
Telecommunications — 0.0% | ||||||||||||
200,000 | Williams Communications Group Inc., Escrow, 10.875%, 10/01/09† (a) | 0 | 0 | |||||||||
TOTAL CORPORATE BONDS | 12,582,190 | 8,925,522 | ||||||||||
TOTAL INVESTMENTS — 99.9% | $ | 1,106,709,908 | 785,324,057 | |||||||||
Other Assets and Liabilities (Net) — 0.1% | 1,064,543 | |||||||||||
NET ASSETS — 100.0% | $ | 786,388,600 | ||||||||||
(a) | Securities fair valued under procedures established by the Board of Directors. The procedures may include reviewing available financial information about the company and reviewing valuation of comparable securities and other factors on a regular basis. At March 31, 2009, the market value of fair valued securities amounted to $524,817 or 0.07% of net assets. | |
(b) | Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At March 31, 2009, the market value of Rule 144A securities amounted to $693,060 or 0.09% of net assets. | |
† | Non-income producing security. | |
ADR | American Depositary Receipt | |
CVO | Contingent Value Obligation | |
STEP | Step coupon bond. The rate disclosed is that in effect at March 31, 2009. |
See accompanying notes to financial statements.
9
The Gabelli Equity Income Fund
Statement of Assets and Liabilities
March 31, 2009 (Unaudited)
March 31, 2009 (Unaudited)
Assets: | ||||
Investments, at value (cost $1,106,709,908) | $ | 785,324,057 | ||
Foreign currency, at value (cost $3,087) | 3,015 | |||
Receivable for investments sold | 339,908 | |||
Receivable for Fund shares sold | 2,265,721 | |||
Dividends and interest receivable | 2,500,285 | |||
Unrealized appreciation on swap contracts | 29,263 | |||
Prepaid expenses | 70,797 | |||
Total Assets | 790,533,046 | |||
Liabilities: | ||||
Payable to custodian | 552,415 | |||
Payable for investments purchased | 739,171 | |||
Payable for Fund shares redeemed | 1,439,077 | |||
Payable for investment advisory fees | 636,656 | |||
Payable for distribution fees | 167,100 | |||
Payable for accounting fees | 3,750 | |||
Payable for shareholder services fees | 302,332 | |||
Other accrued expenses | 303,945 | |||
Total Liabilities | 4,144,446 | |||
Net Assets applicable to 62,542,918 shares outstanding | $ | 786,388,600 | ||
Net Assets Consist of: | ||||
Paid-in capital, each class at $0.001 par value | $ | 1,133,302,361 | ||
Accumulated distributions in excess of net investment income | (4,528,920 | ) | ||
Accumulated net realized loss on investments, swap contracts, and foreign currency transactions | (21,025,751 | ) | ||
Net unrealized depreciation on investments | (321,385,851 | ) | ||
Net unrealized appreciation on swap contracts | 29,263 | |||
Net unrealized depreciation on foreign currency translations | (2,502 | ) | ||
Net Assets | $ | 786,388,600 | ||
Shares of Capital Stock: | ||||
Class AAA: | ||||
Net Asset Value, offering, and redemption price per share ($745,684,476 ÷ 59,253,657 shares outstanding; 150,000,000 shares authorized) | $ | 12.58 | ||
Class A: | ||||
Net Asset Value and redemption price per share ($19,555,536 ÷ 1,558,377 shares outstanding; 50,000,000 shares authorized) | $ | 12.55 | ||
Maximum offering price per share (NAV ÷ .9425, based on maximum sales charge of 5.75% of the offering price) | $ | 13.32 | ||
Class B: | ||||
Net Asset Value and offering price per share ($154,200 ÷ 12,779 shares outstanding; 50,000,000 shares authorized) | $ | 12.07 | (a) | |
Class C: | ||||
Net Asset Value and offering price per share ($15,123,133 ÷ 1,253,496 shares outstanding; 50,000,000 shares authorized) | $ | 12.06 | (a) | |
Class I: | ||||
Net Asset Value, offering, and redemption price per share ($5,871,255 ÷ 464,609 shares outstanding; 50,000,000 shares authorized) | $ | 12.64 | ||
(a) | Redemption price varies based on the length of time held. |
Statement of Operations
For the Six Months Ended March 31, 2009 (Unaudited)
For the Six Months Ended March 31, 2009 (Unaudited)
Investment income: | ||||
Dividends (net of foreign taxes of $501,941) | $ | 12,992,679 | ||
Interest | 507,436 | |||
Total Investment Income | 13,500,115 | |||
Expenses: | ||||
Investment advisory fees | 4,309,385 | |||
Distribution fees – Class AAA | 1,027,809 | |||
Distribution fees – Class A | 24,514 | |||
Distribution fees – Class B | 904 | |||
Distribution fees – Class C | 75,977 | |||
Shareholder services fees | 692,880 | |||
Shareholder communications expenses | 213,687 | |||
Custodian fees | 99,283 | |||
Registration expenses | 48,052 | |||
Legal and audit fees | 40,608 | |||
Accounting fees | 22,500 | |||
Directors’ fees | 19,907 | |||
Interest expense | 4,209 | |||
Miscellaneous expenses | 49,538 | |||
Total Expenses | 6,629,253 | |||
Less: | ||||
Advisory fee reduction on unsupervised assets | (2,672 | ) | ||
Custodian fee credits | (1,082 | ) | ||
Net Expenses | 6,625,499 | |||
Net Investment Income | 6,874,616 | |||
Net Realized and Unrealized Gain/(Loss) on Investments, Swap Contracts, and Foreign Currency: | ||||
Net realized loss on investments | (3,062,383 | ) | ||
Net realized loss on swap contracts | (123,387 | ) | ||
Net realized loss on foreign currency transactions | (70,750 | ) | ||
Net realized loss on investments, swap contacts, and foreign currency transactions | (3,256,520 | ) | ||
Net change in unrealized appreciation/ (depreciation) on investments | (347,343,896 | ) | ||
Net change in unrealized appreciation/ (depreciation) on swap contracts | 60,140 | |||
Net change in unrealized appreciation/ (depreciation) on foreign currency translations | 3,362 | |||
Net change in unrealized appreciation/ (depreciation) on investments, swap contracts, and foreign currency translations | (347,280,394 | ) | ||
Net Realized and Unrealized Gain/(Loss) on Investments, Swap Contracts, and Foreign Currency | (350,536,914 | ) | ||
Net Decrease in Net Assets Resulting from Operations | $ | (343,662,298 | ) | |
See accompanying notes to financial statements.
10
The Gabelli Equity Income Fund
Statement of Changes in Net Assets
Six Months Ended | ||||||||
March 31, 2009 | Year Ended | |||||||
(Unaudited) | September 30, 2008 | |||||||
Operations: | ||||||||
Net investment income | $ | 6,874,616 | $ | 10,824,552 | ||||
Net realized loss on investments, swap contracts, and foreign currency transactions | (3,256,520 | ) | (9,197,201 | ) | ||||
Net change in unrealized appreciation/(depreciation) on investments, swap contracts, and foreign currency translations | (347,280,394 | ) | (265,173,842 | ) | ||||
Net Decrease in Net Assets Resulting from Operations | (343,662,298 | ) | (263,546,491 | ) | ||||
Distributions to Shareholders: | ||||||||
Net investment income | ||||||||
Class AAA | (10,912,756 | ) | (10,546,445 | ) | ||||
Class A | (267,011 | ) | (176,682 | ) | ||||
Class B | (2,474 | ) | (2,809 | ) | ||||
Class C | (214,830 | ) | (173,060 | ) | ||||
Class I | (75,122 | ) | (5,950 | ) | ||||
(11,472,193 | ) | (10,904,946 | ) | |||||
Net realized gain | ||||||||
Class AAA | — | (21,351,419 | ) | |||||
Class A | — | (316,681 | ) | |||||
Class B | — | (6,167 | ) | |||||
Class C | — | (328,750 | ) | |||||
— | (22,003,017 | ) | ||||||
Return of capital | ||||||||
Class AAA | — | (9,231,544 | ) | |||||
Class A | — | (154,376 | ) | |||||
Class B | — | (2,462 | ) | |||||
Class C | — | (151,338 | ) | |||||
Class I | — | (5,126 | ) | |||||
— | (9,544,846 | ) | ||||||
Total Distributions to Shareholders | (11,472,193 | ) | (42,452,809 | ) | ||||
Capital Share Transactions: | ||||||||
Class AAA | (48,704,217 | ) | 239,884,656 | |||||
Class A | 3,992,731 | 12,798,114 | ||||||
Class B | (21,970 | ) | (12,254 | ) | ||||
Class C | 2,359,764 | 6,182,277 | ||||||
Class I | 5,613,801 | 1,135,297 | ||||||
Net Increase/(Decrease) in Net Assets from Capital Share Transactions | (36,759,891 | ) | 259,988,090 | |||||
Redemption Fees | 119 | 7,092 | ||||||
Net Decrease in Net Assets | (391,894,263 | ) | (46,004,118 | ) | ||||
Net Assets: | ||||||||
Beginning of period | 1,178,282,863 | 1,224,286,981 | ||||||
End of period (including undistributed net investment income of $0 and $68,657, respectively) | $ | 786,388,600 | $ | 1,178,282,863 | ||||
See accompanying notes to financial statements.
11
The Gabelli Equity Income Fund
Financial Highlights
Financial Highlights
Selected data for a share of capital stock outstanding throughout each period:
Income from Investment Operations | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net | Distributions | Ratios to Average Net Assets/ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Asset | Realized and | Total | Net | Net Asset | Net Assets | Supplemental Data | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Period | Value, | Net | Unrealized | from | Net | Realized | Return | Value, | End of | Net | Portfolio | |||||||||||||||||||||||||||||||||||||||||||||||||
Ended | Beginning | Investment | Gain (Loss) on | Investment | Investment | Gain on | of | Total | Redemption | End of | Total | Period | Investment | Operating | Turnover | |||||||||||||||||||||||||||||||||||||||||||||
September 30 | of Period | Income(a) | Investments | Operations | Income | Investments | Capital | Distributions | Fees(a) | Period | Return† | (in 000’s) | Income | Expenses | Rate†† | |||||||||||||||||||||||||||||||||||||||||||||
Class AAA | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2009(b) | $ | 18.00 | $ | 0.11 | $ | (5.35 | ) | $ | (5.24 | ) | $ | (0.18 | ) | — | — | $ | (0.18 | ) | $ | 0.00 | (c) | $ | 12.58 | (29.16 | )% | $ | 745,685 | 1.61 | %(d) | 1.53% | (d)(e) | 10 | % | |||||||||||||||||||||||||||
2008 | 22.98 | 0.18 | (4.43 | ) | (4.25 | ) | (0.17 | ) | $ | (0.40 | ) | $ | (0.16 | ) | (0.73 | ) | 0.00 | (c) | 18.00 | (18.95 | ) | 1,135,543 | 0.87 | 1.43 | (e) | 22 | ||||||||||||||||||||||||||||||||||
2007 | 20.23 | 0.22 | 3.37 | 3.59 | (0.39 | ) | (0.45 | ) | — | (0.84 | ) | 0.00 | (c) | 22.98 | 18.19 | 1,191,351 | 1.01 | 1.43 | (e) | 12 | ||||||||||||||||||||||||||||||||||||||||
2006 | 18.72 | 0.38 | 1.68 | 2.06 | (0.36 | ) | (0.19 | ) | — | (0.55 | ) | 0.00 | (c) | 20.23 | 11.25 | 794,375 | 1.98 | 1.46 | (e) | 14 | ||||||||||||||||||||||||||||||||||||||||
2005 | 16.73 | 0.24 | 2.41 | 2.65 | (0.24 | ) | (0.42 | ) | — | (0.66 | ) | 0.00 | (c) | 18.72 | 16.09 | 580,081 | 1.33 | 1.46 | 11 | |||||||||||||||||||||||||||||||||||||||||
2004 | 14.60 | 0.23 | 2.26 | 2.49 | (0.27 | ) | (0.09 | ) | — | (0.36 | ) | — | 16.73 | 17.13 | 355,321 | 1.42 | 1.49 | 12 | ||||||||||||||||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2009(b) | $ | 17.95 | $ | 0.11 | $ | (5.33 | ) | $ | (5.22 | ) | $ | (0.18 | ) | — | — | $ | (0.18 | ) | $ | 0.00 | (c) | $ | 12.55 | (29.13 | )% | $ | 19,556 | 1.63 | %(d) | 1.53% | (d)(e) | 10 | % | |||||||||||||||||||||||||||
2008 | 22.91 | 0.18 | (4.41 | ) | (4.23 | ) | (0.17 | ) | $ | (0.40 | ) | $ | (0.16 | ) | (0.73 | ) | 0.00 | (c) | 17.95 | (18.92 | ) | 22,979 | 0.88 | 1.43 | (e) | 22 | ||||||||||||||||||||||||||||||||||
2007 | 20.17 | 0.22 | 3.36 | 3.58 | (0.39 | ) | (0.45 | ) | — | (0.84 | ) | 0.00 | (c) | 22.91 | 18.20 | 15,313 | 1.00 | 1.43 | (e) | 12 | ||||||||||||||||||||||||||||||||||||||||
2006 | 18.66 | 0.39 | 1.67 | 2.06 | (0.36 | ) | (0.19 | ) | — | (0.55 | ) | 0.00 | (c) | 20.17 | 11.29 | 8,379 | 2.02 | 1.46 | (e) | 14 | ||||||||||||||||||||||||||||||||||||||||
2005 | 16.72 | 0.20 | 2.43 | 2.63 | (0.27 | ) | (0.42 | ) | — | (0.69 | ) | 0.00 | (c) | 18.66 | 15.99 | 3,644 | 1.08 | 1.50 | 11 | |||||||||||||||||||||||||||||||||||||||||
2004(f) | 16.40 | 0.16 | 0.43 | 0.59 | (0.20 | ) | (0.07 | ) | — | (0.27 | ) | — | 16.72 | 3.62 | 124 | 1.33 | (d) | 1.49 | (d) | 12 | ||||||||||||||||||||||||||||||||||||||||
Class B | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2009(b) | $ | 17.34 | $ | 0.05 | $ | (5.14 | ) | $ | (5.09 | ) | $ | (0.18 | ) | — | — | $ | (0.18 | ) | $ | 0.00 | (c) | $ | 12.07 | (29.41 | )% | $ | 154 | 0.82 | %(d) | 2.28% | (d)(e) | 10 | % | |||||||||||||||||||||||||||
2008 | 22.32 | 0.02 | (4.27 | ) | (4.25 | ) | (0.17 | ) | $ | (0.40 | ) | $ | (0.16 | ) | (0.73 | ) | 0.00 | (c) | 17.34 | (19.54 | ) | 252 | 0.12 | 2.18 | (e) | 22 | ||||||||||||||||||||||||||||||||||
2007 | 19.82 | 0.06 | 3.28 | 3.34 | (0.39 | ) | (0.45 | ) | — | (0.84 | ) | 0.00 | (c) | 22.32 | 17.28 | 344 | 0.29 | 2.18 | (e) | 12 | ||||||||||||||||||||||||||||||||||||||||
2006 | 18.48 | 0.36 | 1.53 | 1.89 | (0.36 | ) | (0.19 | ) | — | (0.55 | ) | 0.00 | (c) | 19.82 | 10.46 | 352 | 1.91 | 2.21 | (e) | 14 | ||||||||||||||||||||||||||||||||||||||||
2005 | 16.62 | 0.04 | 2.46 | 2.50 | (0.22 | ) | (0.42 | ) | — | (0.64 | ) | 0.00 | (c) | 18.48 | 15.28 | 32 | 0.20 | 2.22 | 11 | |||||||||||||||||||||||||||||||||||||||||
2004(f) | 16.40 | 0.07 | 0.42 | 0.49 | (0.20 | ) | (0.07 | ) | — | (0.27 | ) | — | 16.62 | 3.00 | 1 | 0.56 | (d) | 2.24 | (d) | 12 | ||||||||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2009(b) | $ | 17.33 | $ | 0.06 | $ | (5.15 | ) | $ | (5.09 | ) | $ | (0.18 | ) | — | — | $ | (0.18 | ) | $ | 0.00 | (c) | $ | 12.06 | (29.42 | )% | $ | 15,123 | 0.86 | %(d) | 2.28% | (d)(e) | 10 | % | |||||||||||||||||||||||||||
2008 | 22.31 | 0.03 | (4.28 | ) | (4.25 | ) | (0.17 | ) | $ | (0.40 | ) | $ | (0.16 | ) | (0.73 | ) | 0.00 | (c) | 17.33 | (19.55 | ) | 18,547 | 0.13 | 2.18 | (e) | 22 | ||||||||||||||||||||||||||||||||||
2007 | 19.81 | 0.05 | 3.29 | 3.34 | (0.39 | ) | (0.45 | ) | — | (0.84 | ) | 0.00 | (c) | 22.31 | 17.29 | 17,279 | 0.24 | 2.18 | (e) | 12 | ||||||||||||||||||||||||||||||||||||||||
2006 | 18.47 | 0.24 | 1.65 | 1.89 | (0.36 | ) | (0.19 | ) | — | (0.55 | ) | 0.00 | (c) | 19.81 | 10.46 | 8,044 | 1.26 | 2.21 | (e) | 14 | ||||||||||||||||||||||||||||||||||||||||
2005 | 16.64 | 0.07 | 2.43 | 2.50 | (0.25 | ) | (0.42 | ) | — | (0.67 | ) | 0.00 | (c) | 18.47 | 15.24 | 3,374 | 0.37 | 2.24 | 11 | |||||||||||||||||||||||||||||||||||||||||
2004(f) | 16.40 | 0.08 | 0.43 | 0.51 | (0.20 | ) | (0.07 | ) | — | (0.27 | ) | — | 16.64 | 3.13 | 79 | 0.62 | (d) | 2.24 | (d) | 12 | ||||||||||||||||||||||||||||||||||||||||
Class I | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2009(b) | $ | 18.04 | $ | 0.13 | $ | (5.35 | ) | $ | (5.22 | ) | $ | (0.18 | ) | — | — | $ | (0.18 | ) | $ | 0.00 | (c) | $ | 12.64 | (28.98 | )% | $ | 5,871 | 1.94 | %(d) | 1.28% | (d)(e) | 10 | % | |||||||||||||||||||||||||||
2008(g) | 21.42 | 0.19 | (3.30 | ) | (3.11 | ) | (0.14 | ) | — | $ | (0.13 | ) | (0.27 | ) | 0.00 | (c) | 18.04 | (14.65 | ) | 962 | 1.31 | (d) | 1.18 | (d)(e) | 22 |
† | 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 distributions and does not reflect applicable sales charges.Total return for a period of less than one year is not annualized. | |
†† | Effective in 2008, a change in accounting policy was adopted with regard to the calculation of the portfolio turnover rate to include cash proceeds due to mergers. Had this policy been adopted retroactively, the portfolio turnover rate for the years ended September 30, 2007, 2006, 2005, and 2004 would have been 20%, 34%, 26%, and 15%, respectively. | |
(a) | Per share amounts have been calculated using the average shares outstanding method. | |
(b) | For the six months ended March 31, 2009, unaudited. | |
(c) | Amount represents less than $0.005 per share. | |
(d) | Annualized. | |
(e) | The ratios do not include a reduction of expenses for custodian fee credits on cash balances maintained with the custodian. Including such custodian fee credits, the expense ratios for the year ended September 30, 2006 would have been 1.45%, 1.45%, 2.20%, and 2.20% for Class AAA, Class A, Class B, and Class C, respectively. For the six months ended March 31, 2009, and the years ended September 30, 2008 and 2007, the effect of the custodian fee credits was minimal. | |
(f) | From the commencement of offering Class A, Class B, and Class C Shares on December 31, 2003. | |
(g) | From the commencement of offering Class I Shares on January 11, 2008 through September 30, 2008. |
See accompanying notes to financial statements.
12
The Gabelli Equity Income Fund
Notes to Financial Statements (Unaudited)
Notes to Financial Statements (Unaudited)
1. Organization. The Gabelli Equity Income Fund (the “Fund”) is a series of Gabelli Equity Series Funds, Inc. (the “Corporation”), which was organized on July 25, 1991 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”), and one of three separately managed portfolios (collectively, the “Portfolios”) of the Corporation. The Fund’s primary objective is to seek a high level of total return with an emphasis on income. The Fund commenced investment operations on January 2, 1992.
2. Significant Accounting Policies. The preparation of financial statements in accordance with United States (“U.S.”) 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 or traded in the U.S. over-the-counter market for which market quotations are readily available are valued at the last quoted sale price or a market’s official closing price 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. If no bid or asked prices are quoted on such day, the security is valued at the most recently available price or, if the Board of Directors (the “Board”) so determines, by such other method as the Board shall determine in good faith to reflect its fair market value. 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”).
Portfolio securities primarily traded on a foreign market are generally valued at the preceding closing values of such securities on the relevant market, but may be fair valued pursuant to procedures established by the Board if market conditions change significantly after the close of the foreign market but prior to the close of business on the day the securities are being valued. Debt instruments with remaining maturities of 60 days or less that are not credit impaired are valued at amortized cost, unless the Board determines such amount does not reflect the securities’ fair value, in which case these securities will be fair valued as determined by the Board. Debt instruments having a maturity greater than 60 days for which market quotations are readily available are valued at the average of the latest bid and asked prices. If there were no asked prices quoted on such day, the security is valued using the closing bid price. Futures contracts are valued at the closing settlement price of the exchange or board of trade on which the applicable contract is traded.
Securities and assets for which market quotations are not readily available are fair valued as determined by the Board. Fair valuation methodologies and procedures may include, but are not limited to: analysis and review of available financial and non-financial information about the company; comparisons with the valuation and changes in valuation of similar securities, including a comparison of foreign securities with the equivalent U.S. dollar value ADR securities at the close of the U.S. exchange; and evaluation of any other information that could be indicative of the value of the security.
13
The Gabelli Equity Income Fund
Notes to Financial Statements (Continued) (Unaudited)
Notes to Financial Statements (Continued) (Unaudited)
Statement of Financial Accounting Standard No. 157, “Fair Value Measurements” (“SFAS 157”) clarifies the definition of fair value for financial reporting, establishes a framework for measuring fair value, and requires additional disclosures about the use of fair value measurements.The three levels of the fair value hierarchy under SFAS 157 are described below:
• | Level 1 — quoted prices in active markets for identical securities; | ||
• | Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.); and | ||
• | Level 3 — significant unobservable inputs (including the Fund’s determinations as to the fair value of investments). |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of the Fund’s investments and other financial instruments by inputs used to value the Fund’s investments as of March 31, 2009 is as follows:
Other Financial | ||||||||
Investments in | Instruments | |||||||
Securities | (Unrealized | |||||||
(Market Value) | Appreciation)* | |||||||
Valuation Inputs | Assets | Assets | ||||||
Level 1 — Quoted Prices | $ | 776,455,717 | — | |||||
Level 2 — Other Significant Observable Inputs | 8,863,390 | $ | 29,263 | |||||
Level 3 — Significant Unobservable Inputs | 4,950 | — | ||||||
Total | $ | 785,324,057 | $ | 29,263 | ||||
* | Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards, and swaps which are valued at the unrealized appreciation/depreciation on the investment. |
The following is a reconciliation of Level 3 investments for which significant unobservable inputs were used to determine fair value:
Investments in | ||||
Securities | ||||
(Market Value) | ||||
Balance as of 09/30/08 | $ | 4,950 | ||
Accrued discounts/(premiums) | — | |||
Realized gain/(loss) | — | |||
Change in unrealized appreciation/(depreciation) | — | |||
Net purchases/(sales) | — | |||
Transfers in and/or out of Level 3 | — | |||
Balance as of 03/31/09 | $ | 4,950 | ||
14
The Gabelli Equity Income Fund
Notes to Financial Statements (Continued) (Unaudited)
Notes to Financial Statements (Continued) (Unaudited)
In March 2008, the Financial Accounting Standards Board (the “FASB”) issued Statement of Financial Accounting Standard No. 161, “Disclosures about Derivative Instruments and Hedging Activities” (“SFAS 161”) that is effective for fiscal years beginning after November 15, 2008. SFAS 161 is intended to improve financial reporting for derivative instruments by requiring enhanced disclosure that enables investors to understand how and why an entity uses derivatives, how derivatives are accounted for, and how derivative instruments affect an entity’s results of operations and financial position. Management is currently evaluating the implications of SFAS 161 on the Fund’s financial statement disclosures.
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 Adviser and reviewed by the Board. 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. It is the policy of the Fund to always receive and maintain securities as collateral whose market value, including accrued interest, is at least equal to 102% 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. At March 31, 2009, there were no open repurchase agreements.
Swap Agreements. The Fund may enter into equity and contract for difference swap transactions. The use of swaps is a highly specialized activity that involves investment techniques and risks different from those associated with ordinary portfolio security transactions. In a swap, a set of future cash flows are exchanged between two counterparties. One of these cash flow streams will typically be based on a reference interest rate combined with the performance of a notional value of shares of a stock. The other will be based on the performance of the shares of a stock. There is no assurance that the swap contract counterparties will be able to meet their obligations pursuant to the swap contracts, or that, in the event of default, the Fund will succeed in pursuing contractual remedies. The Fund thus assumes the risk that it may be delayed in or prevented from obtaining payments owed to it pursuant to the swap contracts. The creditworthiness of the swap contract counterparties is closely monitored in order to minimize the risk. Depending on the general state of short-term interest rates and the returns of the Fund’s portfolio securities at that point in time, such a default could negatively affect the Fund’s ability to make dividend payments. In addition, at the time a swap transaction reaches its scheduled termination date, there is a risk that the Fund will not be able to obtain a replacement transaction or that the terms of the replacement will not be as favorable as on the expiring transaction. If this occurs, it could have a negative impact on the Fund’s ability to make dividend payments.
15
The Gabelli Equity Income Fund
Notes to Financial Statements (Continued) (Unaudited)
Notes to Financial Statements (Continued) (Unaudited)
The use of derivative instruments involves, to varying degrees, elements of market and counterparty risk in excess of the amount recognized below.
Unrealized gains related to swaps are reported as an asset and unrealized losses are reported as a liability in the Statement of Assets and Liabilities. The change in value of swaps, including the accrual of periodic amounts of interest to be paid or received on swaps, is reported as unrealized gain or loss in the Statement of Operations. A realized gain or loss is recorded upon payment or receipt of a periodic payment or termination of swap agreements.
Effective March 16, 2008, Bear, Stearns International Limited entered into a Guaranty Agreement with JPMorgan Chase & Co., whereby JPMorgan Chase & Co. unconditionally guaranteed the due and punctual payment of certain liabilities of Bear, Stearns International Limited, including the current liabilities of Bear, Stearns International Limited to the Fund. As of March 31, 2009, the Fund held contract for difference swaps with Bear, Stearns International Limited which are covered by the JPMorgan Chase & Co. Guaranty Agreement as of the date of the report. Details of the swaps at March 31, 2009 are as follows:
Notional | Equity Security | Interest Rate/ | Termination | Net Unrealized | ||||||||
Amount | Received | Equity Security Paid | Date | Appreciation | ||||||||
Market Value | Overnight LIBOR plus 75 bps plus | |||||||||||
Appreciation on: | Market Value Depreciation on: | |||||||||||
$123,902 (140,000 Shares) | Rank Group plc | Rank Group plc | 03/11/10 | $ | 23,138 | |||||||
78,170 (20,000 Shares) | Rolls-Royce Group plc | Rolls-Royce Group plc | 03/11/10 | 6,125 | ||||||||
$ | 29,263 | |||||||||||
Futures Contracts. The Fund may engage in futures contracts for the purpose of hedging against changes in the value of its portfolio securities and in the value of securities it intends to purchase. Upon entering into a futures contract, the Fund is required to deposit with the broker an amount of cash or cash equivalents equal to a certain percentage of the contract amount. This is known as the “initial margin.” Subsequent payments (“variation margin”) are made or received by the Fund each day, depending on the daily fluctuations in the value of the contract, which are included in unrealized appreciation/depreciation on futures contracts. The Fund recognizes a realized gain or loss when the contract is closed.
There are several risks in connection with the use of futures contracts as a hedging instrument. The change in value of futures contracts primarily corresponds with the value of their underlying instruments, which may not correlate with the change in value of the hedged investments. In addition, there is the risk that the Fund may not be able to enter into a closing transaction because of an illiquid secondary market. At March 31, 2009, there were no open futures contracts.
Securities Sold Short. The Fund may enter into short sale transactions. Short selling involves selling securities that may or may not be owned and, at times, borrowing the same securities for delivery to the purchaser, with an obligation to replace such borrowed securities at a later date. The proceeds received from short sales are recorded as liabilities and the Fund records an unrealized gain or loss to the extent of the difference between the proceeds received and the value of an open short position on the day of determination. The Fund records a realized gain or loss when the short position is closed out. By entering into a short sale, the Fund bears the market risk of an unfavorable change in the price of the security sold short. Dividends on short sales are recorded as an expense by the Fund on the ex-dividend date and interest expense is recorded on the accrual basis. The Fund did not hold any short positions as of March 31, 2009.
16
The Gabelli Equity Income Fund
Notes to Financial Statements (Continued) (Unaudited)
Notes to Financial Statements (Continued) (Unaudited)
Forward Foreign Exchange Contracts. The Fund may engage in forward foreign exchange contracts for hedging a specific transaction with respect to either the currency in which the transaction is denominated or another currency as deemed appropriate by the Adviser. Forward foreign exchange contracts are valued at the forward rate and are marked-to-market daily. The change in market value is included in unrealized appreciation/depreciation on foreign currency translations. 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 that might result should the value of the currency increase. In addition, the Fund could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts. At March 31, 2009, there were no open forward foreign exchange contracts.
Foreign Currency Translations. The books and records of the Fund are maintained in U.S. dollars. Foreign currencies, investments, and other assets and liabilities are translated into U.S. dollars at the current exchange rates. 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 that 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 translations. 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.
Foreign Securities. The Fund may directly purchase securities of foreign issuers. Investing in securities of foreign issuers involves special risks not typically associated with investing in securities of U.S. issuers. The risks include possible revaluation of currencies, the ability to repatriate funds, less complete financial information about companies, and possible future adverse political and economic developments. Moreover, securities of many foreign issuers and their markets may be less liquid and their prices more volatile than those of securities of comparable U.S. issuers.
Foreign Taxes. The Fund may be subject to foreign taxes on income, gains on investments, or currency repatriation, a portion of which may be recoverable.The Fund will accrue such taxes and recoveries as applicable, based upon its current interpretation of tax rules and regulations that exist in the markets in which it invests.
Restricted and Illiquid Securities. The Fund may invest up to 15% of its net assets in securities for which the markets are illiquid. Illiquid securities include securities the disposition of which is subject to substantial legal or contractual restrictions. The sale of illiquid securities often requires more time and results in higher brokerage charges or dealer discounts and other selling expenses than does the sale of securities eligible for trading on national securities exchanges or in the over-the-counter markets. Restricted securities may sell at a price lower than similar securities that are not subject to restrictions on resale. Securities freely saleable among qualified
17
The Gabelli Equity Income Fund
Notes to Financial Statements (Continued) (Unaudited)
Notes to Financial Statements (Continued) (Unaudited)
institutional investors under special rules adopted by the SEC may be treated as liquid if they satisfy liquidity standards established by the Board. The continued liquidity of such securities is not as well assured as that of publicly traded securities, and accordingly the Board will monitor their liquidity.
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 on the accrual basis. Premiums and discounts on debt securities are amortized using the effective yield to maturity method. Dividend income is recorded on the ex-dividend date except for certain dividends which are recorded as soon as the Fund is informed of the dividend.
Determination of Net Asset Value and Calculation of Expenses. Certain administrative expenses are common to, and allocated among, various affiliated funds. Such allocations are made on the basis of each Fund’s average net assets or other criteria directly affecting the expenses as determined by the Adviser pursuant to procedures established by the Board.
In calculating the NAV per share of each class, investment income, realized and unrealized gains and losses, redemption fees, and expenses other than class specific expenses are allocated daily to each class of shares based upon the proportion of net assets of each class at the beginning of each day. Distribution expenses are borne solely by the class incurring the expense.
Custodian Fee Credits and Interest Expense. When cash balances are maintained in the custody account, the Fund receives credits which are used to offset custodian fees. The gross expenses paid under the custody arrangement are included in custodian fees in the Statement of Operations with the corresponding expense offset, if any, shown as “custodian fee credits.” When cash balances are overdrawn, the Fund is charged an overdraft fee equal to 2.00% above the federal funds rate on outstanding balances. This amount, if any, would be included in “interest expense” in the Statement of Operations.
Distributions to Shareholders. Distributions to shareholders are recorded on the ex-dividend date. Distributions to shareholders are based on income and capital gains as determined in accordance with federal income tax regulations, which may differ from income and capital gains as determined under U.S. generally accepted accounting principles. These differences are primarily due to differing treatments of income and gains on various investment securities and foreign currency transactions held by the Fund, timing differences, and differing characterizations of distributions made by the Fund. Distributions from net investment income include net realized gains on foreign currency transactions. These book/tax differences are either temporary or permanent in nature. To the extent these differences are permanent, adjustments are made to the appropriate capital accounts in the period when the differences arise. These reclassifications have no impact on the NAV of the Fund.
The tax character of distributions paid during the year ended September 30, 2008 was as follows:
Distributions paid from: | ||||
Ordinary income (inclusive of short-term capital gains) | $ | 11,894,382 | ||
Net long-term capital gains | 21,013,581 | |||
Return of capital | 9,544,846 | |||
Total distributions paid | $ | 42,452,809 | ||
18
The Gabelli Equity Income Fund
Notes to Financial Statements (Continued) (Unaudited)
Notes to Financial Statements (Continued) (Unaudited)
The Fund has a fixed distribution policy. Under the policy, the Fund declares and pays monthly distributions from net investment income and capital gains. The actual source of the distribution is determined after the end of the calendar year. To the extent such distributions are made from current earnings and profits, they are considered ordinary income or long-term capital gains. The Fund’s current distribution policy may restrict the Fund’s ability to pay out all of its net realized long-term capital gains as a Capital Gain Dividend. The Fund continues to evaluate its distribution policy in light of ongoing economic and market conditions and may change the amount of the monthly distributions in the future. The Fund currently intends to pay $0.03 per share on a monthly basis.
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 (the “Code”). It is the policy of the Fund to comply with the requirements of the Code applicable to regulated investment companies and to distribute substantially all of its net investment company taxable income and net capital gains. Therefore, no provision for federal income taxes is required.
Under the current tax law, capital losses related to securities and foreign currency realized after October 31 and prior to the Fund’s year end may be treated as occurring on the first day of the following year. For the year ended September 30, 2008, the Fund deferred capital losses of $5,378,169.
The following summarizes the tax cost of investments and the related unrealized appreciation/depreciation at March 31, 2009:
Gross | Gross | Net Unrealized | ||||||||||||||
Unrealized | Unrealized | Appreciation | ||||||||||||||
Cost | Appreciation | Depreciation | (Depreciation) | |||||||||||||
Investments | $ | 1,123,493,472 | $ | 56,768,248 | $ | (394,937,663 | ) | $ | (338,169,415 | ) | ||||||
Swap contracts | — | 29,263 | — | 29,263 | ||||||||||||
$ | 1,123,493,472 | $ | 56,797,511 | $ | (394,937,663 | ) | $ | (338,140,152 | ) | |||||||
FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”) provides guidance for how uncertain tax positions should be recognized, measured, presented, and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Fund’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the “more-likely-than-not” threshold are recorded as a tax benefit or expense in the current year. In accordance with FIN 48, management has analyzed the Fund’s tax positions taken on the federal and state income tax returns for all open tax years (the current and prior three tax years) and has concluded that no provision for income tax is required in the Fund’s financial statements. Management’s determination regarding FIN 48 may be subject to review and adjustment at a later date based on factors including, but not limited to, an on-going analysis of tax laws, regulations, and interpretations thereof.
3. Investment Advisory Agreement and Other Transactions. The Fund has 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 its 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 affiliated persons of the Adviser.
The Corporation pays each Director who is not considered to be an affiliated person an annual retainer of $9,000 plus $1,000 for each Board meeting attended and they are reimbursed for any out of pocket expenses incurred in attending meetings. All Board committee members receive $500 per meeting attended and the Chairman of the Audit Committee and the Lead Director each receive an annual fee of $1,000. Directors who are directors or employees of the Adviser or an affiliated company receive no compensation or expense reimbursement from the Fund.
19
The Gabelli Equity Income Fund
Notes to Financial Statements (Continued) (Unaudited)
Notes to Financial Statements (Continued) (Unaudited)
4. Distribution Plan. The Fund’s Board has adopted a distribution plan (the “Plan”) for each class of shares, except for Class I Shares, pursuant to Rule 12b-1 under the 1940 Act. Gabelli & Company, Inc. (“Gabelli & Company”), an affiliate of the Adviser, serves as distributor of the Fund. Under the Class AAA, Class A, Class B, and Class C Share Plans, payments are authorized to Gabelli & Company at annual rates of 0.25%, 0.25%, 1.00%, and 1.00%, respectively, of the average daily net assets of those classes, the annual limitations under each Plan. Such payments are accrued daily and paid monthly.
5. Portfolio Securities. Purchases and proceeds from the sales of securities for the six months ended March 31, 2009, other than short-term securities and U.S. Government obligations, aggregated $90,274,829 and $128,942,868, respectively.
Purchases and proceeds from the sales of U.S. Government obligations for the six months ended March 31, 2009, other than short-term obligations, aggregated $1,167,750 and $6,242,883, respectively.
6. Transactions with Affiliates. During the six months ended March 31, 2009, the Fund paid brokerage commissions on security trades of $228,781 to Gabelli & Company. Additionally, Gabelli & Company informed the Fund that it retained $11,016 from investors representing commissions (sales charges and underwriting fees) on sales and redemptions of Fund shares.
The cost of calculating the Fund’s NAV per share is a Fund expense pursuant to the Advisory Agreement between the Fund and the Adviser. During the six months ended March 31, 2009, the Fund paid or accrued $22,500 to the Adviser in connection with the cost of computing the Fund’s NAV.
7. Line of Credit. The Fund participates in an unsecured line of credit of up to $75,000,000 under which it may borrow up to 10% of its net assets from the custodian for temporary borrowing purposes. Borrowings under this arrangement bear interest at 0.75% above the federal funds rate on outstanding balances. This amount, if any, would be included in “interest expense” in the Statement of Operations. At March 31, 2009, borrowings outstanding under the line of credit amounted to $558,000.
The average daily amount of borrowings outstanding under the line of credit during the six months ended March 31, 2009 was $3,131,236 with a weighted average interest rate of 1.05%. The maximum amount borrowed at any time during the six months ended March 31, 2009 was $16,544,000.
8. Capital Stock. The Fund offers five classes of shares – Class AAA Shares, Class A Shares, Class B Shares, Class C Shares, and Class I Shares. Class AAA Shares are offered without a sales charge only to investors who acquire them directly from Gabelli & Company, or through selected broker/dealers, or the transfer agent. Class I Shares are offered to foundations, endowments, institutions, and employee benefit plans without a sales charge. Class A Shares are subject to a maximum front-end sales charge of 5.75%. Class B Shares are subject to a contingent deferred sales charge (“CDSC”) upon redemption within six years of purchase and automatically convert to Class A Shares approximately eight years after the original purchase. The applicable CDSC is equal to a declining percentage of the lesser of the NAV per share at the date of the original purchase or at the date of redemption, based on the length of time held. Class C Shares are subject to a 1.00% CDSC for one year after purchase. Class B Shares are available only through exchange of Class B Shares of other funds distributed by Gabelli & Company. Class I Shares were first issued on January 11, 2008.
20
The Gabelli Equity Income Fund
Notes to Financial Statements (Continued) (Unaudited)
Notes to Financial Statements (Continued) (Unaudited)
The Fund imposes a redemption fee of 2.00% on all classes of shares that are redeemed or exchanged on or before the seventh day after the date of a purchase.The redemption fee is deducted from the proceeds otherwise payable to the redeeming shareholders and is retained by the Fund. The redemption fees during the six months ended March 31, 2009 and the year ended September 30, 2008 amounted to $119 and $7,092, respectively.
The redemption fee does not apply to redemptions of shares where (i) the shares were purchased through automatic reinvestment of distributions, (ii) the redemption was initiated by the Fund, (iii) the shares were purchased through programs that collect the redemption fee at the program level and remit them to the Fund, or (iv) the shares were purchased through programs that the Adviser determines to have appropriate anti-short-term trading policies in place or as to which the Adviser has received assurances that look-through redemption fee procedures or effective anti-short-term trading policies and procedures are in place.
Transactions in shares of capital stock were as follows:
Six Months Ended | ||||||||||||||||
March 31, 2009 | Year Ended | |||||||||||||||
(Unaudited) | September 30, 2008 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Class AAA | Class AAA | |||||||||||||||
Shares sold | 10,045,324 | $ | 137,169,229 | 24,093,784 | $ | 504,580,779 | ||||||||||
Shares issued upon reinvestment of distributions | 756,453 | 10,078,082 | 1,797,042 | 38,520,431 | ||||||||||||
Shares redeemed | (14,634,351 | ) | (195,951,528 | ) | (14,644,330 | ) | (303,216,554 | ) | ||||||||
Net increase/(decrease) | (3,832,574 | ) | $ | (48,704,217 | ) | 11,246,496 | $ | 239,884,656 | ||||||||
Class A | Class A | |||||||||||||||
Shares sold | 560,060 | $ | 7,649,457 | 798,290 | $ | 16,578,039 | ||||||||||
Shares issued upon reinvestment of distributions | 18,170 | 240,493 | 25,861 | 548,965 | ||||||||||||
Shares redeemed | (300,199 | ) | (3,897,219 | ) | (212,203 | ) | (4,328,890 | ) | ||||||||
Net increase | 278,031 | $ | 3,992,731 | 611,948 | $ | 12,798,114 | ||||||||||
Class B | Class B | |||||||||||||||
Shares sold | 820 | $ | 9,886 | 9,738 | $ | 196,093 | ||||||||||
Shares issued upon reinvestment of distributions | 183 | 2,350 | 543 | 11,320 | ||||||||||||
Shares redeemed | (2,772 | ) | (34,206 | ) | (11,132 | ) | (219,667 | ) | ||||||||
Net decrease | (1,769 | ) | $ | (21,970 | ) | (851 | ) | $ | (12,254 | ) | ||||||
Class C | Class C | |||||||||||||||
Shares sold | 471,224 | $ | 6,040,764 | 472,038 | $ | 9,589,680 | ||||||||||
Shares issued upon reinvestment of distributions | 15,303 | 195,321 | 29,534 | 611,310 | ||||||||||||
Shares redeemed | (303,096 | ) | (3,876,321 | ) | (205,866 | ) | (4,018,713 | ) | ||||||||
Net increase | 183,431 | $ | 2,359,764 | 295,706 | $ | 6,182,277 | ||||||||||
Class I | Class I* | |||||||||||||||
Shares sold | 522,591 | $ | 7,037,621 | 54,128 | $ | 1,152,550 | ||||||||||
Shares issued upon reinvestment of distributions | 733 | 9,782 | 550 | 11,076 | ||||||||||||
Shares redeemed | (112,044 | ) | (1,433,602 | ) | (1,349 | ) | (28,329 | ) | ||||||||
Net increase | 411,280 | $ | 5,613,801 | 53,329 | $ | 1,135,297 | ||||||||||
* | From the commencement of offering Class I Shares on January 11, 2008. |
21
The Gabelli Equity Income Fund
Notes to Financial Statements (Continued) (Unaudited)
Notes to Financial Statements (Continued) (Unaudited)
9. Indemnifications. The Fund enters into contracts that contain a variety of indemnifications. The Fund’s maximum exposure under these arrangements is unknown. However, the Fund has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
10. Other Matters. On April 24, 2008, the Adviser entered into an administrative settlement with the SEC to resolve the SEC’s inquiry regarding prior frequent trading activity in shares of the GAMCO Global Growth Fund (the “Global Growth Fund”) by one investor who was banned from the Global Growth Fund in August 2002. In the settlement, the SEC found that the Adviser had violated Section 206(2) of the Investment Advisers Act, Section 17(d) of the 1940 Act and Rule 17d-1 thereunder, and had aided and abetted and caused violations of Section 12(d)(1)(B)(i) of the 1940 Act. Under the terms of the settlement, the Adviser, while neither admitting nor denying the SEC’s findings and allegations, agreed, among other things, to pay the previously reserved total of $16 million (including a $5 million penalty), of which at least $11 million will be distributed to shareholders of the Global Growth Fund in accordance with a plan to be developed by an independent distribution consultant and approved by the independent directors of the Global Growth Fund and the staff of the SEC, and to cease and desist from future violations of the above referenced federal securities laws. The settlement will not have a material adverse impact on the Adviser or its ability to fulfill its obligations under the Advisory Agreement. On the same day, the SEC filed a civil action against the Executive Vice President and Chief Operating Officer of the Adviser, alleging violations of certain federal securities laws arising from the same matter. The officer is also an officer of the Global Growth Fund and other funds in the Gabelli/GAMCO fund complex. The officer denies the allegations and is continuing in his positions with the Adviser and the funds. The Adviser currently expects that any resolution of the action against the officer will not have a material adverse impact on the Adviser or its ability to fulfill its obligations under the Advisory Agreement.
22
The Gabelli Equity Income Fund
Board Consideration and Re-Approval of Advisory Agreement (Unaudited)
During the six months ended March 31, 2009, the Board of Directors of the Corporation approved the continuation of the investment advisory agreement with the Adviser for the Fund on the basis of the recommendation by the directors (the “Independent Board Members”) who are not “interested persons” of the Fund. The following paragraphs summarize the material information and factors considered by the Independent Board Members as well as their conclusions relative to such factors.
Nature, Extent and Quality of Services. The Independent Board Members considered information regarding the portfolio manager, the depth of the analyst pool available to the Adviser and the portfolio manager, the scope of administrative, shareholder, and other services supervised or provided by the Adviser and the absence of significant service problems reported to the Board. The Independent Board Members noted the experience, length of service, and reputation of the portfolio manager.
Investment Performance. The Independent Board Members reviewed the short, medium, and long-term performance of the Fund against a peer group of equity income funds. The Independent Board Members noted that the Fund’s performance was below average for the one year and five year periods, and in the second quartile for the three year period.
Profitability. The Independent Board Members reviewed summary data regarding the profitability of the Fund to the Adviser both with an administrative overhead charge and without such a charge. The Independent Board Members also noted that a substantial portion of the Fund’s portfolio transactions were executed by an affiliated broker, that the affiliated broker received distribution fees and minor amounts of sales commissions, and that the Adviser received a moderate level of soft dollar research benefits through the Fund’s portfolio brokerage.
Economies of Scale. The Independent Board Members discussed the major elements of the Adviser’s cost structure and the relationship of those elements to potential economies of scale.
Sharing of Economies of Scale. The Independent Board Members noted that the investment management fee schedule for the Fund does not take into account any potential economies of scale that may develop.
Service and Cost Comparisons. The Independent Board Members compared the expense ratios of the investment management fee, other expenses, and total expenses of the Fund to similar expense ratios of the peer group of equity income funds and noted that the Adviser’s management fee includes substantially all administrative services of the Fund as well as investment advisory services. The Independent Board Members noted that the Fund’s expense ratios and the Fund’s size were above average within this group. The Independent Board Members also noted that the management fee structure was the same as that in effect for most of the Gabelli funds. The Independent Board Members did not compare the management fee with the fee for other types of accounts managed by the Adviser.
Conclusions. The Independent Board Members concluded that the Fund enjoyed highly experienced portfolio management services, good ancillary services, and reasonable performance record. The Independent Board Members also concluded that the Fund’s expense ratios and the profitability to the Adviser of managing the Fund were reasonable, particularly in light of the Fund’s performance, and that economies of scale were not a significant factor in their thinking at this time. The Independent Board Members did not view the potential profitability of ancillary services as material to their decision. On the basis of the foregoing and without assigning particular weight to any single conclusion, the Independent Board Members determined to recommend continuation of the investment management agreement to the full Board.
23
Gabelli Equity Series Funds, Inc.
The Gabelli Equity Income Fund
One Corporate Center
Rye, New York 10580-1422
800-GABELLI
800-422-3554
fax: 914-921-5118
website: www.gabelli.com
e-mail: info@gabelli.com
Net Asset Value per share available daily by calling
800-GABELLI after 6:00 P.M.
The Gabelli Equity Income Fund
One Corporate Center
Rye, New York 10580-1422
800-GABELLI
800-422-3554
fax: 914-921-5118
website: www.gabelli.com
e-mail: info@gabelli.com
Net Asset Value per share available daily by calling
800-GABELLI after 6:00 P.M.
Board of Directors
Mario J. Gabelli, CFA | Robert J. Morrissey | |
Chairman and Chief | Attorney-at-Law | |
Executive Officer | Morrissey, Hawkins & Lynch | |
GAMCO Investors, Inc. | ||
Anthony J. Colavita | Anthony R. Pustorino | |
Attorney-at-Law | Certified Public Accountant, | |
Anthony J. Colavita, P.C. | Professor Emeritus | |
Pace University | ||
Vincent D. Enright | Anthonie C. van Ekris | |
Former Senior Vice President | Chairman | |
and Chief Financial Officer | BALMAC International, Inc. | |
KeySpan Corp. | ||
John D. Gabelli | Salvatore J. Zizza | |
Senior Vice President | Chairman | |
Gabelli & Company, Inc. | Zizza & Co., Ltd. |
Officers
Bruce N. Alpert | Agnes Mullady | |
President and Secretary | Treasurer | |
Peter D. Goldstein | ||
Chief Compliance Officer |
Distributor
Gabelli & Company, Inc.
Gabelli & Company, Inc.
Custodian, Transfer Agent, and Dividend Agent
State Street Bank and Trust Company
State Street Bank and Trust Company
Legal Counsel
Skadden, Arps, Slate, Meagher & Flom LLP
Skadden, Arps, Slate, Meagher & Flom LLP
This report is submitted for the general information of the shareholders of The Gabelli Equity Income Fund. It is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus.
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The
Gabelli
Equity
Income
Fund
Gabelli
Equity
Income
Fund
SEMI ANNUAL REPORT
MARCH 31, 2009
MARCH 31, 2009
GAB444Q109SR
The Gabelli Woodland Small Cap Value Fund
Semi-Annual Report(a)
March 31, 2009
March 31, 2009
To Our Shareholders,
The Gabelli Woodland Small Cap Value Fund’s Class AAA Shares declined 14.35% for the quarter ending March 31, 2009, versus declines of 14.95% for the Russell 2000 Index, 10.98% for the Standard & Poor’s (“S&P”) 500 Index, and 7.68% for the Value Line Composite Index.
Comparative Results
Average Annual Returns through March 31, 2009 (a)(b)
Since | ||||||||||||||||||||
Inception | ||||||||||||||||||||
Quarter | 1 Year | 3 Year | 5 Year | (12/31/02) | ||||||||||||||||
Gabelli Woodland Small Cap Value Fund Class AAA | (14.35 | )% | (37.87 | )% | (15.63 | )% | (4.67 | )% | (0.01 | )% | ||||||||||
Russell 2000 Index | (14.95 | ) | (37.50 | ) | (16.80 | ) | (5.24 | ) | 2.90 | |||||||||||
S&P 500 Index | (10.98 | ) | (38.06 | ) | (13.05 | ) | (4.76 | ) | 0.40 | |||||||||||
Value Line Composite Index | (7.68 | ) | (36.76 | ) | (14.78 | ) | (4.25 | ) | 3.70 | |||||||||||
Class A | (14.24 | ) | (37.80 | ) | (15.56 | ) | (4.58 | ) | 0.06 | |||||||||||
(19.17 | )(c) | (41.47 | )(c) | (17.26 | )(c) | (5.73 | )(c) | (0.91 | )(c) | |||||||||||
Class B | (14.38 | ) | (38.30 | ) | (16.33 | ) | (5.15 | ) | (0.32 | ) | ||||||||||
(18.66 | )(d) | (41.38 | )(d) | (17.17 | )(d) | (5.53 | )(d) | (0.49 | ) | |||||||||||
Class C | (14.50 | ) | (38.32 | ) | (16.25 | ) | (5.33 | ) | (0.67 | ) | ||||||||||
(15.36 | )(e) | (38.94 | )(e) | (16.25 | ) | (5.33 | ) | (0.67 | ) | |||||||||||
Class I | (14.17 | ) | (37.65 | ) | (15.53 | ) | (4.60 | ) | 0.05 |
In the current prospectus, the gross expense ratios for Class AAA, A, B, C, and I Shares are 2.52%, 2.52%, 3.27%, 3.27%, and 2.27%, respectively.The net expense ratios after contractual reimbursements by the Adviser in place through September 30, 2009 are 2.00%, 2.00%, 2.75%, 2.75%, and 1.75% respectively. Class AAA and I Shares do not have a sales charge.The maximum sales charge for Class A, B, and C Shares is 5.75%, 5.00%, and 1.00%, respectively.
(a) | The Fund’s fiscal year ends September 30. | |
(b) | Returns represent past performance and do not guarantee future results. Total returns and average annual returns reflect changes in share price and reinvestment of distributions and are net of expenses. 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. Performance returns for periods of less than one year are not annualized. Current performance may be lower or higher than the performance data presented. Visit www.gabelli.com for performance information as of the most recent month end. Investors should carefully consider the investment objectives, risks, charges, and expenses of the Fund before investing.The prospectus contains more information about this and other matters and should be read carefully before investing. The Class AAA Shares net asset values (“NAVs”) per share are used to calculate performance for the periods prior to the issuance of Class I Shares on January 11, 2008. The actual performance of Class I Shares would have been higher due to lower expenses associated with this class of shares. Investing in small capitalization securities involves special challenges because these securities may trade less frequently and experience more abrupt price movements than large capitalization securities. The Russell 2000 Index of small U.S. companies, the S&P 500 Index of the largest U.S. companies, and the Value Line Composite Index (comprised of equally weighted positions in every stock covered in the Value Line Investment Survey) are unmanaged indicators of stock market performance. Dividends are considered reinvested. You cannot invest directly in an index. | |
(c) | Includes the effect of the maximum 5.75% sales charge at the beginning of the period. | |
(d) | Performance results include the deferred sales charges for the Class B Shares upon redemption at the end of the quarter, one year, three year, five year and since inception periods of 5%, 5%, 3%, 2%, and 1%, respectively, of the Fund’s NAV per share at the time of purchase or sale, whichever is lower. Class B Shares are not available for new purchases. | |
(e) | Performance results include the deferred sales charges for the Class C Shares upon redemption at the end of the quarter and one year periods of 1% of the Fund’s NAV per share at the time of purchase or sale, whichever is lower. |
We have separated the portfolio manager’s commentary from the financial statements and investment portfolio due to corporate governance regulations stipulated by the Sarbanes-Oxley Act of 2002. We have done this to ensure that the content of the portfolio manager’s commentary is unrestricted. The financial statements and investment portfolio are mailed separately from the commentary. Both the commentary and the financial statements, including the portfolio of investments, will be available on our website at www.gabelli.com/funds.
The Gabelli Woodland Small Cap Value Fund
Disclosure of Fund Expenses (Unaudited)
Disclosure of Fund Expenses (Unaudited)
For the Six Month Period from October 1, 2008 through March 31, 2009 | Expense Table |
We believe it is important for you to understand the impact of fees and expenses regarding your investment. All mutual funds have operating expenses. As a shareholder of a fund, you incur ongoing costs, which include costs for portfolio management, administrative services, and shareholder reports (like this one), among others. Operating expenses, which are deducted from a fund’s gross income, directly reduce the investment return of a fund. When a fund’s expenses are expressed as a percentage of its average net assets, this figure is known as the expense ratio. The following examples are intended to help you understand the ongoing costs (in dollars) of investing in your Fund and to compare these costs with those of other mutual funds. The examples are based on an investment of $1,000 made at the beginning of the period shown and held for the entire period.
The Expense Table below illustrates your Fund’s costs in two ways:
Actual Fund Return: This section provides information about actual account values and actual expenses. You may use this section to help you to estimate the actual expenses that you paid over the period after any fee waivers and expense reimbursements. The “Ending Account Value” shown is derived from the Fund’s actual return during the past six months, and the “Expenses Paid During Period” shows the dollar amount that would have been paid by an investor who started with $1,000 in the Fund. You may use this information, together with the amount you invested, to estimate the expenses that you paid over the period.
To do so, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number given for your Fund under the heading “Expenses Paid During Period” to estimate the expenses you paid during this period.
Hypothetical 5% Return: This section provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio. It assumes a hypothetical annualized return of 5% before expenses during the period shown. In this case — because the hypothetical return used is not the Fund’s actual return — the results do not apply to your investment and you cannot use the hypothetical account value and expense to estimate the actual ending account balance or expenses you paid for the period. This example is useful in making comparisons of the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs such as sales charges (loads), redemption fees, or exchange fees, if any, which are described in the Prospectus. If these costs were applied to your account, your costs would be higher. Therefore, the 5% hypothetical return is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.
Beginning | Ending | Annualized | Expenses | |||||||||||||
Account Value | Account Value | Expense | Paid During | |||||||||||||
10/01/08 | 03/31/09 | Ratio | Period* | |||||||||||||
The Gabelli Woodland Small Cap Value Fund | ||||||||||||||||
Actual Fund Return | ||||||||||||||||
Class AAA | $ | 1,000.00 | $ | 618.60 | 2.02 | % | $ | 8.15 | ||||||||
Class A | $ | 1,000.00 | $ | 619.30 | 2.02 | % | $ | 8.16 | ||||||||
Class B | $ | 1,000.00 | $ | 617.70 | 2.77 | % | $ | 11.17 | ||||||||
Class C | $ | 1,000.00 | $ | 616.80 | 2.77 | % | $ | 11.17 | ||||||||
Class I | $ | 1,000.00 | $ | 620.20 | 1.77 | % | $ | 7.15 | ||||||||
Hypothetical 5% Return | ||||||||||||||||
Class AAA | $ | 1,000.00 | $ | 1,014.86 | 2.02 | % | $ | 10.15 | ||||||||
Class A | $ | 1,000.00 | $ | 1,014.86 | 2.02 | % | $ | 10.15 | ||||||||
Class B | $ | 1,000.00 | $ | 1,011.12 | 2.77 | % | $ | 13.89 | ||||||||
Class C | $ | 1,000.00 | $ | 1,011.12 | 2.77 | % | $ | 13.89 | ||||||||
Class I | $ | 1,000.00 | $ | 1,016.11 | 1.77 | % | $ | 8.90 |
* | Expenses are equal to the Fund’s annualized expense ratio for the last six months multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, then divided by 365. |
2
Summary of Portfolio Holdings (Unaudited)
The following table presents portfolio holdings as a percent of total net assets as of March 31, 2009:
The Gabelli Woodland Small Cap Value Fund
Computer Software and Services | 14.6 | % | ||
Health Care | 11.5 | % | ||
Diversified Industrial | 10.5 | % | ||
Equipment and Supplies | 8.8 | % | ||
Business Services | 8.2 | % | ||
Machinery | 5.9 | % | ||
Consumer Products | 4.9 | % | ||
Entertainment | 4.8 | % | ||
Energy and Utilities | 4.6 | % | ||
Retail | 4.4 | % | ||
Aerospace | 4.4 | % | ||
Financial Services | 3.8 | % | ||
Specialty Chemicals | 2.4 | % | ||
Automotive: Parts and Accessories | 2.3 | % | ||
Consumer Services | 2.3 | % | ||
Telecommunications | 2.2 | % | ||
Hotels and Gaming | 2.1 | % | ||
Transportation | 1.8 | % | ||
Food and Beverage | 1.8 | % | ||
Publishing | 1.6 | % | ||
Other Assets and Liabilities (Net) | (2.9 | )% | ||
100.0 | % | |||
The Gabelli Woodland Small Cap Value Fund (the “Fund”) files a complete schedule of portfolio holdings with the Securities and Exchange Commission (the “SEC”) for the first and third quarters of each fiscal year on Form N-Q, the last of which was filed for the quarter ended December 31, 2008. Shareholders may obtain this information at www.gabelli.com or by calling the Fund at 800-GABELLI (800-422-3554). The Fund’s Form N-Q is available on the SEC’s website at www.sec.gov and may also be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
Proxy Voting
The Fund files Form N-PX with its complete proxy voting record for the 12 months ended June 30th, no later than August 31st of each year. A description of the Fund’s proxy voting policies, procedures, and how the Fund voted proxies relating to portfolio securities is available without charge, upon request, by (i) calling 800-GABELLI (800-422-3554); (ii) writing to The Gabelli Funds at One Corporate Center, Rye, NY 10580-1422; or (iii) visiting the SEC’s website at www.sec.gov.
3
The Gabelli Woodland Small Cap Value Fund
Schedule of Investments — March 31, 2009 (Unaudited)
Schedule of Investments — March 31, 2009 (Unaudited)
Market | ||||||||||||
Shares | Cost | Value | ||||||||||
COMMON STOCKS — 102.9% | ||||||||||||
Aerospace — 4.4% | ||||||||||||
8,600 | Herley Industries Inc.† | $ | 126,722 | $ | 102,856 | |||||||
5,020 | Kaman Corp. | 132,222 | 62,951 | |||||||||
258,944 | 165,807 | |||||||||||
Automotive: Parts and Accessories — 2.3% | ||||||||||||
6,490 | Midas Inc.† | 122,392 | 51,401 | |||||||||
9,000 | Spartan Motors Inc. | 24,320 | 36,180 | |||||||||
146,712 | 87,581 | |||||||||||
Business Services — 8.2% | ||||||||||||
1,358 | Ascent Media Corp., Cl. A† | 35,464 | 33,950 | |||||||||
4,890 | Deluxe Corp. | 77,745 | 47,091 | |||||||||
8,150 | Edgewater Technology Inc.† | 58,198 | 22,820 | |||||||||
7,350 | Intermec Inc.† | 178,882 | 76,440 | |||||||||
4,000 | Liquidity Services Inc.† | 24,777 | 27,960 | |||||||||
3,820 | The Brink’s Co. | 81,437 | 101,077 | |||||||||
456,503 | 309,338 | |||||||||||
Computer Software and Services — 14.6% | ||||||||||||
7,000 | Dynamics Research Corp.† | 48,786 | 50,680 | |||||||||
1,600 | Fair Isaac Corp. | 23,331 | 22,512 | |||||||||
17,500 | Furmanite Corp.† | 116,444 | 54,425 | |||||||||
18,410 | Lawson Software Inc.† | 138,033 | 78,242 | |||||||||
4,340 | MTS Systems Corp. | 152,438 | 98,735 | |||||||||
5,500 | Stratasys Inc.† | 62,999 | 45,485 | |||||||||
25,000 | Tier Technologies Inc., Cl. B† | 236,604 | 115,750 | |||||||||
14,800 | TransAct Technologies Inc.† | 67,877 | 38,332 | |||||||||
2,700 | Versant Corp.† | 41,580 | 46,413 | |||||||||
888,092 | 550,574 | |||||||||||
Consumer Products — 4.9% | ||||||||||||
4,270 | Alberto-Culver Co. | 92,836 | 96,545 | |||||||||
1,085 | Church & Dwight Co. Inc. | 32,590 | 56,669 | |||||||||
600 | Deckers Outdoor Corp.† | 26,427 | 31,824 | |||||||||
151,853 | 185,038 | |||||||||||
Consumer Services — 2.3% | ||||||||||||
3,820 | Brink’s Home Security Holdings Inc.† | 66,630 | 86,332 | |||||||||
Diversified Industrial — 10.5% | ||||||||||||
2,050 | Columbus McKinnon Corp.† | 38,449 | 17,876 | |||||||||
3,000 | Graham Corp. | 24,388 | 26,910 | |||||||||
2,457 | Griffon Corp.† | 17,241 | 18,428 | |||||||||
3,800 | L.B. Foster Co., Cl. A† | 116,739 | 94,354 | |||||||||
9,920 | LeCroy Corp.† | 93,529 | 31,149 | |||||||||
4,800 | OSI Systems Inc.† | 76,114 | 73,248 | |||||||||
2,000 | Raven Industries Inc. | 39,770 | 41,560 | |||||||||
3,790 | Texas Industries Inc. | 154,741 | 94,750 | |||||||||
560,971 | 398,275 | |||||||||||
Energy and Utilities — 4.6% | ||||||||||||
6,240 | Mariner Energy Inc.† | 99,318 | 48,360 | |||||||||
4,170 | PICO Holdings Inc.† | 141,937 | 125,392 | |||||||||
241,255 | 173,752 | |||||||||||
Entertainment — 4.8% | ||||||||||||
3,585 | Discovery Communications Inc., Cl. A† | 57,543 | 57,432 | |||||||||
3,585 | Discovery Communications Inc., Cl. C† | 40,172 | 52,520 | |||||||||
9,900 | Pinnacle Entertainment Inc.† | 56,495 | 69,696 | |||||||||
154,210 | 179,648 | |||||||||||
Equipment and Supplies — 8.8% | ||||||||||||
13,600 | C&D Technologies Inc.† | 72,670 | 25,160 | |||||||||
22,000 | Gerber Scientific Inc.† | 135,965 | 52,580 | |||||||||
5,030 | Powell Industries Inc.† | 157,845 | 177,609 | |||||||||
3,150 | The Toro Co. | 86,818 | 76,167 | |||||||||
453,298 | 331,516 | |||||||||||
Financial Services — 3.8% | ||||||||||||
1,430 | HMN Financial Inc. | 50,067 | 4,433 | |||||||||
9,700 | NewAlliance Bancshares Inc. | 142,484 | 113,878 | |||||||||
1,204 | Willis Group Holdings Ltd. | 34,764 | 26,488 | |||||||||
227,315 | 144,799 | |||||||||||
Food and Beverage — 1.8% | ||||||||||||
3,900 | PepsiAmericas Inc. | 70,438 | 67,275 | |||||||||
Health Care — 11.5% | ||||||||||||
900 | Chemed Corp. | 35,214 | 35,010 | |||||||||
17,500 | Home Diagnostics Inc.† | 130,331 | 99,225 | |||||||||
4,000 | Matrixx Initiatives Inc.† | 71,693 | 65,600 | |||||||||
9,940 | Rochester Medical Corp.† | 118,098 | 109,539 | |||||||||
4,116 | SurModics Inc.† | 122,478 | 75,117 | |||||||||
1,480 | West Pharmaceutical Services Inc. | 60,856 | 48,559 | |||||||||
538,670 | 433,050 | |||||||||||
Hotels and Gaming — 2.1% | ||||||||||||
9,370 | Gaylord Entertainment Co.† | 147,056 | 78,052 | |||||||||
Machinery — 5.9% | ||||||||||||
6,764 | Key Technology Inc.† | 80,211 | 59,523 | |||||||||
3,500 | Robbins & Myers Inc. | 69,482 | 53,095 | |||||||||
2,200 | Valmont Industries Inc. | 125,192 | 110,462 | |||||||||
274,885 | 223,080 | |||||||||||
Publishing — 1.6% | ||||||||||||
4,000 | Scholastic Corp. | 47,550 | 60,280 | |||||||||
Retail — 4.4% | ||||||||||||
5,000 | J. Crew Group Inc.† | 63,929 | 65,900 | |||||||||
6,500 | Shutterfly Inc.† | 64,364 | 60,905 | |||||||||
7,600 | The Great Atlantic & Pacific Tea Co. Inc.† | 54,481 | 40,356 | |||||||||
182,774 | 167,161 | |||||||||||
Specialty Chemicals — 2.4% | ||||||||||||
2,000 | Arch Chemicals Inc. | 63,429 | 37,920 | |||||||||
1,260 | FMC Corp. | 48,289 | 54,356 | |||||||||
111,718 | 92,276 | |||||||||||
Telecommunications — 2.2% | ||||||||||||
15,400 | HickoryTech Corp. | 133,250 | 82,852 | |||||||||
Transportation — 1.8% | ||||||||||||
3,200 | Bristow Group Inc.† | 81,393 | 68,576 | |||||||||
TOTAL COMMON STOCKS | 5,193,517 | 3,885,262 | ||||||||||
TOTAL INVESTMENTS — 102.9% $ | 5,193,517 | 3,885,262 | ||||||||||
Other Assets and Liabilities (Net) — (2.9)% | (109,161 | ) | ||||||||||
NET ASSETS — 100.0% | $ | 3,776,101 | ||||||||||
† | Non-income producing security. |
See accompanying notes to financial statements.
4
The Gabelli Woodland Small Cap Value Fund
Statement of Assets and Liabilities
March 31, 2009 (Unaudited)
March 31, 2009 (Unaudited)
Assets: | ||||
Investments, at value (cost $5,193,517) | $ | 3,885,262 | ||
Receivable for Fund shares sold | 755 | |||
Receivable from Adviser | 6,655 | |||
Dividends receivable | 3,449 | |||
Prepaid expenses | 22,209 | |||
Total Assets | 3,918,330 | |||
Liabilities: | ||||
Payable to custodian | 32,720 | |||
Payable for investments purchased | 23,824 | |||
Payable for Fund shares redeemed | 50,377 | |||
Payable for distribution fees | 832 | |||
Payable for legal and audit fees | 21,334 | |||
Payable for shareholder communications expenses | 10,928 | |||
Other accrued expenses | 2,214 | |||
Total Liabilities | 142,229 | |||
Net Assets applicable to 703,623 shares outstanding | $ | 3,776,101 | ||
Net Assets Consist of: | ||||
Paid-in capital, each class at $0.001 par value | $ | 6,546,641 | ||
Accumulated net investment loss | (16,313 | ) | ||
Accumulated net realized loss on investments | (1,445,972 | ) | ||
Net unrealized depreciation on investments | (1,308,255 | ) | ||
Net Assets | $ | 3,776,101 | ||
Shares of Capital Stock: | ||||
Class AAA: | ||||
Net Asset Value, offering, and redemption price per share ($3,598,993 ÷ 669,734 shares outstanding; 100,000,000 shares authorized) | $ | 5.37 | ||
Class A: | ||||
Net Asset Value and redemption price per share ($31,639 ÷ 5,841 shares outstanding; 50,000,000 shares authorized) | $ | 5.42 | ||
Maximum offering price per share (NAV ÷ .9425, based on maximum sales charge of 5.75% of the offering price) | $ | 5.75 | ||
Class B: | ||||
Net Asset Value and offering price per share ($97.93 ÷ 18.49 shares outstanding; 50,000,000 shares authorized) | $ | 5.30 | (a) | |
Class C: | ||||
Net Asset Value and offering price per share ($91,982 ÷ 18,128 shares outstanding; 50,000,000 shares authorized) | $ | 5.07 | (a) | |
Class I: | ||||
Net Asset Value, offering, and redemption price per share ($53,389 ÷ 9,902 shares outstanding; 50,000,000 shares authorized) | $ | 5.39 | ||
(a) | Redemption price varies based on the length of time held. |
Statement of Operations
For the Six Months Ended March 31, 2009 (Unaudited)
For the Six Months Ended March 31, 2009 (Unaudited)
Investment income: | ||||
Dividends | $ | 29,825 | ||
Interest | 238 | |||
Total Investment Income | 30,063 | |||
Expenses: | ||||
Investment advisory fees | 22,834 | |||
Distribution fees — Class AAA | 5,460 | |||
Distribution fees — Class A | 43 | |||
Distribution fees — Class B | 1 | |||
Distribution fees — Class C | 558 | |||
Registration expenses | 15,972 | |||
Legal and audit fees | 12,325 | |||
Shareholder communications expenses | 11,980 | |||
Shareholder services fees | 5,622 | |||
Custodian fees | 5,107 | |||
Interest expense | 339 | |||
Directors’ fees | 131 | |||
Miscellaneous expenses | 2,393 | |||
Total Expenses Before Fees Waived and Expenses Reimbursed by Adviser | 82,765 | |||
Less: | ||||
Fees waived and expenses reimbursed by Adviser | (36,389 | ) | ||
Net Expenses | 46,376 | |||
Net Investment Loss | (16,313 | ) | ||
Net Realized and Unrealized Loss on Investments: | ||||
Net realized loss on investments | (1,432,899 | ) | ||
Net change in unrealized appreciation/ (depreciation) on investments | (1,377,660 | ) | ||
Net Realized and Unrealized Loss on Investments | (2,810,559 | ) | ||
Net Decrease in Net Assets Resulting from Operations | $ | (2,826,872 | ) | |
See accompanying notes to financial statements.
5
The Gabelli Woodland Small Cap Value Fund
Statement of Changes in Net Assets
Six Months Ended | ||||||||
March 31, 2009 | Year Ended | |||||||
(Unaudited) | September 30, 2008 | |||||||
Operations: | ||||||||
Net investment loss | $ | (16,313 | ) | $ | (65,989 | ) | ||
Net realized gain/(loss) on investments | (1,432,899 | ) | 369,935 | |||||
Net change in unrealized appreciation/(depreciation) on investments | (1,377,660 | ) | (1,505,525 | ) | ||||
Net Decrease in Net Assets Resulting from Operations | (2,826,872 | ) | (1,201,579 | ) | ||||
Distributions to Shareholders: | ||||||||
Net realized gain | ||||||||
Class AAA | (301,983 | ) | (1,262,098 | ) | ||||
Class A | (2,225 | ) | (9,144 | ) | ||||
Class B | (7 | ) | (26 | ) | ||||
Class C | (6,124 | ) | (43,337 | ) | ||||
Class I | (3,246 | ) | — | |||||
Total Distributions to Shareholders | (313,585 | ) | (1,314,605 | ) | ||||
Capital Share Transactions: | ||||||||
Class AAA | (702,237 | ) | 703,505 | |||||
Class A | 2,226 | 3,296 | ||||||
Class B | 7 | 27 | ||||||
Class C | 7,566 | (69,071 | ) | |||||
Class I | 13,378 | 73,953 | ||||||
Net Increase/(Decrease) in Net Assets from Capital Share Transactions | (679,060 | ) | 711,710 | |||||
Redemption Fees | — | 1 | ||||||
Net Decrease in Net Assets | (3,819,517 | ) | (1,804,473 | ) | ||||
Net Assets: | ||||||||
Beginning of period | 7,595,618 | 9,400,091 | ||||||
End of period (including undistributed net investment income of $0 and $0, respectively) | $ | 3,776,101 | $ | 7,595,618 | ||||
See accompanying notes to financial statements.
6
The Gabelli Woodland Small Cap Value Fund
Financial Highlights
Financial Highlights
Selected data for a share of capital stock outstanding throughout each period:
Income | Ratios to Average Net Assets/ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
from Investment Operations | Distributions | Supplemental Data | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net | Expenses | Expenses | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Asset | Net | Realized and | Total | Net | Net Asset | Net Assets | Net | Net of | Before | |||||||||||||||||||||||||||||||||||||||||||||||||||
Period | Value, | Investment | Unrealized | from | Net | Realized | Value, | End of | Investment | Waivers/ | Waivers/ | Portfolio | ||||||||||||||||||||||||||||||||||||||||||||||||
Ended | Beginning | Income | Gain (Loss) on | Investment | Investment | Gain on | Total | Redemption | End of | Total | Period | Income | Reimburse- | Reimburse- | Turnover | |||||||||||||||||||||||||||||||||||||||||||||
September 30 | of Period | (Loss)(a)(b) | Investments | Operations | Income | Investments | Distributions | Fees(a) | Period | Return† | (in 000’s) | (Loss)(b) | ments(c) | ments(d) | Rate†† | |||||||||||||||||||||||||||||||||||||||||||||
Class AAA | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2009(e) | $ | 9.30 | $ | (0.02 | ) | $ | (3.50 | ) | $ | (3.52 | ) | — | $ | (0.41 | ) | $ | (0.41 | ) | — | $ | 5.37 | (38.14 | )% | $ | 3,599 | (0.70 | )%(f) | 2.02 | %(f)(g) | 3.61 | %(f) | 33 | % | |||||||||||||||||||||||||||
2008 | 12.61 | (0.08 | ) | (1.43 | ) | (1.51 | ) | — | (1.80 | ) | (1.80 | ) | $ | 0.00 | (h) | 9.30 | (13.20 | ) | 7,327 | (0.80 | ) | 2.01 | (g) | 2.52 | 58 | |||||||||||||||||||||||||||||||||||
2007 | 13.35 | 0.05 | 2.44 | 2.49 | ($0.06 | ) | (3.17 | ) | (3.23 | ) | 0.00 | (h) | 12.61 | 20.71 | 9,040 | 0.38 | 2.01 | (g) | 2.33 | 51 | ||||||||||||||||||||||||||||||||||||||||
2006 | 14.64 | (0.12 | ) | 0.07 | (0.05 | ) | — | (1.24 | ) | (1.24 | ) | 0.00 | (h) | 13.35 | (0.35 | ) | 9,137 | (0.84 | ) | 2.01 | (g) | 2.31 | 59 | |||||||||||||||||||||||||||||||||||||
2005 | 12.79 | (0.11 | ) | 2.69 | 2.58 | — | (0.73 | ) | (0.73 | ) | 0.00 | (h) | 14.64 | 20.67 | 11,839 | (0.78 | ) | 2.01 | 2.99 | 35 | ||||||||||||||||||||||||||||||||||||||||
2004 | 10.58 | (0.14 | ) | 2.38 | 2.24 | — | (0.03 | ) | (0.03 | ) | — | 12.79 | 21.22 | 3,388 | (1.14 | ) | 2.00 | 5.94 | 45 | |||||||||||||||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2009(e) | $ | 9.37 | $ | (0.02 | ) | $ | (3.52 | ) | $ | (3.54 | ) | — | $ | (0.41 | ) | $ | (0.41 | ) | — | $ | 5.42 | (38.07 | )% | $ | 32 | (0.71 | )%(f) | 2.02 | %(f)(g) | 3.61 | %(f) | 33 | % | |||||||||||||||||||||||||||
2008 | 12.69 | (0.08 | ) | (1.44 | ) | (1.52 | ) | — | (1.80 | ) | (1.80 | ) | $ | 0.00 | (h) | 9.37 | (13.19 | ) | 51 | (0.80 | ) | 2.01 | (g) | 2.52 | 58 | |||||||||||||||||||||||||||||||||||
2007 | 13.36 | 0.13 | 2.39 | 2.52 | ($0.02 | ) | (3.17 | ) | (3.19 | ) | 0.00 | (h) | 12.69 | 20.94 | 65 | 1.00 | 2.01 | (g) | 2.33 | 51 | ||||||||||||||||||||||||||||||||||||||||
2006 | 14.65 | (0.12 | ) | 0.07 | (0.05 | ) | — | (1.24 | ) | (1.24 | ) | 0.00 | (h) | 13.36 | (0.36 | ) | 100 | (0.83 | ) | 2.01 | (g) | 2.31 | 59 | |||||||||||||||||||||||||||||||||||||
2005 | 12.79 | (0.09 | ) | 2.68 | 2.59 | — | (0.73 | ) | (0.73 | ) | 0.00 | (h) | 14.65 | 20.76 | 108 | (0.68 | ) | 2.01 | 3.17 | 35 | ||||||||||||||||||||||||||||||||||||||||
2004 | 10.57 | (0.14 | ) | 2.39 | 2.25 | — | (0.03 | ) | (0.03 | ) | — | 12.79 | 21.34 | 47 | (1.16 | ) | 2.00 | 5.94 | 45 | |||||||||||||||||||||||||||||||||||||||||
Class B | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2009(e) | $ | 9.20 | $ | (0.04 | ) | $ | (3.45 | ) | $ | (3.49 | ) | — | $ | (0.41 | ) | $ | (0.41 | ) | — | $ | 5.30 | (38.23 | )% | $ | 0.1 | (1.47 | )%(f) | 2.77 | %(f)(g) | 4.36 | %(f) | 33 | % | |||||||||||||||||||||||||||
2008 | 12.60 | (0.16 | ) | (1.44 | ) | (1.60 | ) | — | (1.80 | ) | (1.80 | ) | — | 9.20 | (14.04 | ) | 0.1 | (1.68 | ) | 2.76 | (g) | 3.27 | 58 | |||||||||||||||||||||||||||||||||||||
2007 | 13.37 | (0.09 | ) | 2.49 | 2.40 | — | (3.17 | ) | (3.17 | ) | $ | 0.00 | (h) | 12.60 | 19.73 | 0.1 | (0.68 | ) | 2.76 | (g) | 3.07 | 51 | ||||||||||||||||||||||||||||||||||||||
2006 | 14.77 | (0.25 | ) | 0.09 | (0.16 | ) | — | (1.24 | ) | (1.24 | ) | 0.00 | (h) | 13.37 | (1.19 | ) | 0.1 | (1.77 | ) | 2.76 | (g) | 3.06 | 59 | |||||||||||||||||||||||||||||||||||||
2005 | 12.98 | (0.21 | ) | 2.73 | 2.52 | — | (0.73 | ) | (0.73 | ) | 0.00 | (h) | 14.77 | 19.86 | 0.1 | (1.50 | ) | 2.75 | 3.87 | 35 | ||||||||||||||||||||||||||||||||||||||||
2004 | 10.59 | 0.02 | 2.40 | 2.42 | — | (0.03 | ) | (0.03 | ) | — | 12.98 | 22.91 | 0.1 | 0.18 | 2.75 | 6.69 | 45 | |||||||||||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2009(e) | $ | 8.84 | $ | (0.04 | ) | $ | (3.32 | ) | $ | (3.36 | ) | — | $ | (0.41 | ) | $ | (0.41 | ) | — | $ | 5.07 | (38.32 | )% | $ | 92 | (1.47 | )%(f) | 2.77 | %(f)(g) | 4.36 | %(f) | 33 | % | |||||||||||||||||||||||||||
2008 | 12.16 | (0.15 | ) | (1.37 | ) | (1.52 | ) | — | (1.80 | ) | (1.80 | ) | $ | 0.00 | (h) | 8.84 | (13.86 | ) | 146 | (1.58 | ) | 2.76 | (g) | 3.27 | 58 | |||||||||||||||||||||||||||||||||||
2007 | 13.00 | (0.03 | ) | 2.36 | 2.33 | — | (3.17 | ) | (3.17 | ) | 0.00 | (h) | 12.16 | 19.84 | 295 | (0.26 | ) | 2.76 | (g) | 3.08 | 51 | |||||||||||||||||||||||||||||||||||||||
2006 | 14.39 | (0.21 | ) | 0.06 | (0.15 | ) | — | (1.24 | ) | (1.24 | ) | 0.00 | (h) | 13.00 | (1.11 | ) | 425 | (1.58 | ) | 2.76 | (g) | 3.06 | 59 | |||||||||||||||||||||||||||||||||||||
2005 | 12.66 | (0.20 | ) | 2.66 | 2.46 | — | (0.73 | ) | (0.73 | ) | 0.00 | (h) | 14.39 | 19.91 | 189 | (1.46 | ) | 2.76 | 3.87 | 35 | ||||||||||||||||||||||||||||||||||||||||
2004 | 10.55 | (0.23 | ) | 2.37 | 2.14 | — | (0.03 | ) | (0.03 | ) | — | 12.66 | 20.33 | 41 | (1.88 | ) | 2.75 | 6.69 | 45 | |||||||||||||||||||||||||||||||||||||||||
Class I | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2009(e) | $ | 9.31 | $ | (0.01 | ) | $ | (3.50 | ) | $ | (3.51 | ) | — | $ | (0.41 | ) | $ | (0.41 | ) | — | $ | 5.39 | (37.98 | )% | $ | 53 | (0.45 | )%(f) | 1.77 | %(f)(g) | 3.36 | %(f) | 33 | % | |||||||||||||||||||||||||||
2008(i) | 9.41 | (0.03 | ) | (0.07 | ) | (0.10 | ) | — | — | — | $ | 0.00 | (h) | 9.31 | (1.06 | ) | 72 | (0.44 | )(f) | 1.76 | (f)(g) | 2.27 | (f) | 58 |
† | 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 distributions and does not reflect applicable sales charges. Total return for a period of less than one year is not annualized. | |
†† | Effective in 2008, a change in accounting policy was adopted with regard to the calculation of the portfolio turnover rate to include cash proceeds due to mergers. Had this policy been adopted retroactively, the portfolio turnover rate for the years ended September 30, 2007, 2006, 2005 and 2004 would have been as shown. | |
(a) | Per share amounts have been calculated using the average shares outstanding method. | |
(b) | Due to capital share activity throughout the year, net investment income per share and the ratio to average net assets are not necessarily correlated among the different classes of shares. | |
(c) | The ratios do not include a reduction of expenses for custodian fee credits on cash balances maintained with the custodian. Including such custodian fee credits, the expense ratios for the year ended September 30, 2005 would have been 2.00% (Class AAA), 2.00% (Class A), 2.75% (Class B), and 2.75% (Class C), respectively. For the years ended September 30, 2008, 2007, 2006, and 2004 the effect of the custodian fee credits was minimal. | |
(d) | During the period, expenses were voluntarily reduced and/or reimbursed. If such fee reductions and/or reimbursements had not occurred, the ratio would have been as shown. | |
(e) | For the six months ended March 31, 2009, unaudited. | |
(f) | Annualized. | |
(g) | The Fund incurred interest expense during the six months ended March 31, 2009 and the years ended September 30, 2008, 2007, and 2006. If interest expense had not been incurred, the ratios of operating expenses to average net assets would have been 2.00%, 2.00%, 2.00%, and 2.00% (Class AAA and Class A), 2.75%, 2.75%, 2.75%, and 2.75% (Class B and Class C), 1.75% and 1.75% (Class I), respectively. | |
(h) | Amount represents less than $0.005 per share. | |
(i) | From the commencement of offering Class I Shares on January 11, 2008 through September 30, 2008. |
See accompanying notes to financial statements.
7
The Gabelli Woodland Small Cap Value Fund
Notes to Financial Statements (Unaudited)
Notes to Financial Statements (Unaudited)
1. Organization. The Gabelli Woodland Small Cap Value Fund (the “Fund”) is a series of Gabelli Equity Series Funds, Inc. (the “Corporation”), which was organized on July 25, 1991 as a Maryland corporation. The Fund is a non-diversified open-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”), and one of three separately managed portfolios (collectively, the “Portfolios”) of the Corporation. The Fund’s primary objective is capital appreciation. The Fund’s Adviser currently characterizes small capitalization companies for the Fund as those with a total market value at the time of investment not greater than that of the largest company in the Russell 2000 Index or $3.0 billion, whichever is greater. The Fund commenced investment operations on December 31, 2002.
2. Significant Accounting Policies. The preparation of financial statements in accordance with United States (“U.S.”) 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 or traded in the U.S. over-the-counter market for which market quotations are readily available are valued at the last quoted sale price or a market’s official closing price 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. If no bid or asked prices are quoted on such day, the security is valued at the most recently available price or, if the Board of Directors (the “Board”) so determines, by such other method as the Board shall determine in good faith to reflect its fair market value. 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”).
Portfolio securities primarily traded on a foreign market are generally valued at the preceding closing values of such securities on the relevant market, but may be fair valued pursuant to procedures established by the Board if market conditions change significantly after the close of the foreign market but prior to the close of business on the day the securities are being valued. Debt instruments with remaining maturities of 60 days or less that are not credit impaired are valued at amortized cost, unless the Board determines such amount does not reflect the securities’ fair value, in which case these securities will be fair valued as determined by the Board. Debt instruments having a maturity greater than 60 days for which market quotations are readily available are valued at the average of the latest bid and asked prices. If there were no asked prices quoted on such day, the security is valued using the closing bid price. Futures contracts are valued at the closing settlement price of the exchange or board of trade on which the applicable contract is traded.
Securities and assets for which market quotations are not readily available are fair valued as determined by the Board. Fair valuation methodologies and procedures may include, but are not limited to: analysis and review of available financial and non-financial information about the company; comparisons with the valuation and changes in valuation of similar securities, including a comparison of foreign securities with the equivalent U.S. dollar value American Depositary Receipts securities at the close of the U.S. exchange; and evaluation of any other information that could be indicative of the value of the security.
8
The Gabelli Woodland Small Cap Value Fund
Notes to Financial Statements (Continued) (Unaudited)
Notes to Financial Statements (Continued) (Unaudited)
Statement of Financial Accounting Standard No. 157, “Fair Value Measurements” (“SFAS 157”) clarifies the definition of fair value for financial reporting, establishes a framework for measuring fair value, and requires additional disclosures about the use of fair value measurements. The three levels of the fair value hierarchy under SFAS 157 are described below:
• | Level 1 — quoted prices in active markets for identical securities; | ||
• | Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.); and | ||
• | Level 3 — significant unobservable inputs (including the Fund’s determinations as to the fair value of investments). |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of the Fund’s investments by inputs used to value the Fund’s investments as of March 31, 2009 is as follows:
Investments in | ||||
Securities | ||||
(Market Value) | ||||
Valuation Inputs | Assets | |||
Level 1 — Quoted Prices | $ | 3,885,262 |
There were no Level 3 investments held at September 30, 2008 or March 31, 2009.
In March 2008, the Financial Accounting Standards Board (the “FASB”) issued Statement of Financial Accounting Standard No. 161, “Disclosures about Derivative Instruments and Hedging Activities” (“SFAS 161”) that is effective for fiscal years beginning after November 15, 2008. SFAS 161 is intended to improve financial reporting for derivative instruments by requiring enhanced disclosure that enables investors to understand how and why an entity uses derivatives, how derivatives are accounted for, and how derivative instruments affect an entity’s results of operations and financial position. Management is currently evaluating the implications of SFAS 161 on the Fund’s disclosures.
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 Adviser and reviewed by the Board. 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. It is the policy of the Fund to always receive and maintain securities as collateral whose market value, including accrued interest, is at least equal to 102% 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. At March 31, 2009, there were no open repurchase agreements.
9
The Gabelli Woodland Small Cap Value Fund
Notes to Financial Statements (Continued) (Unaudited)
Notes to Financial Statements (Continued) (Unaudited)
Foreign Securities. The Fund may directly purchase securities of foreign issuers. Investing in securities of foreign issuers involves special risks not typically associated with investing in securities of U.S. issuers. The risks include possible revaluation of currencies, the ability to repatriate funds, less complete financial information about companies, and possible future adverse political and economic developments. Moreover, securities of many foreign issuers and their markets may be less liquid and their prices more volatile than those of securities of comparable U.S. issuers.
Foreign Taxes. The Fund may be subject to foreign taxes on income, gains on investments, or currency repatriation, a portion of which may be recoverable. The Fund will accrue such taxes and recoveries as applicable, based upon its current interpretation of tax rules and regulations that exist in the markets in which it invests.
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 on the accrual basis. Premiums and discounts on debt securities are amortized using the effective yield to maturity method. Dividend income is recorded on the ex-dividend date except for certain dividends which are recorded as soon as the Fund is informed of the dividend.
Determination of Net Asset Value and Calculation of Expenses. Certain administrative expenses are common to, and allocated among, various affiliated funds. Such allocations are made on the basis of each Fund’s average net assets or other criteria directly affecting the expenses as determined by the Adviser pursuant to procedures established by the Board.
In calculating the NAV per share of each class, investment income, realized and unrealized gains and losses, redemption fees, and expenses other than class specific expenses are allocated daily to each class of shares based upon the proportion of net assets of each class at the beginning of each day. Distribution expenses are borne solely by the class incurring the expense.
Custodian Fee Credits and Interest Expense. When cash balances are maintained in the custody account, the Fund receives credits which are used to offset custodian fees. The gross expenses paid under the custody arrangement are included in custodian fees in the Statement of Operations with the corresponding expense offset, if any, shown as “custodian fee credits.” When cash balances are overdrawn, the Fund is charged an overdraft fee equal to 2.00% above the federal funds rate on outstanding balances. This amount, if any, would be included in “interest expense” in the Statement of Operations.
Distributions to Shareholders. Distributions to shareholders are recorded on the ex-dividend date. Distributions to shareholders are based on income and capital gains as determined in accordance with federal income tax regulations, which may differ from income and capital gains as determined under U.S. 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 characterizations of distributions made by the Fund. These book/tax differences are either temporary or permanent in nature. To the extent these differences are permanent, adjustments are made to the appropriate capital accounts in the period when the differences arise. These reclassifications have no impact on the NAV of the Fund.
10
The Gabelli Woodland Small Cap Value Fund
Notes to Financial Statements (Continued) (Unaudited)
Notes to Financial Statements (Continued) (Unaudited)
The tax character of distributions paid during the year ended September 30, 2008 was as follows:
Distributions paid from: | ||||
Ordinary income (inclusive of short-term capital gains) | $ | 28,446 | ||
Net long-term capital gains | 1,286,159 | |||
Total distributions paid | $ | 1,314,605 | ||
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 (the “Code”). It is the policy of the Fund to comply with the requirements of the Code applicable to regulated investment companies and to distribute substantially all of its net investment company taxable income and net capital gains. Therefore, no provision for federal income taxes is required.
The following summarizes the tax cost of investments and the related unrealized appreciation/depreciation at March 31, 2009:
Gross | Gross | Net | ||||||||||||||
Unrealized | Unrealized | Unrealized | ||||||||||||||
Cost | Appreciation | Depreciation | Depreciation | |||||||||||||
Investments | $ | 5,199,629 | $ | 165,880 | $ | (1,480,247 | ) | $ | (1,314,367 | ) |
FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”) provides guidance for how uncertain tax positions should be recognized, measured, presented, and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Fund’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the “more-likely-than-not” threshold are recorded as a tax benefit or expense in the current year. In accordance with FIN 48, management has analyzed the Fund’s tax positions taken on the federal and state income tax returns for all open tax years (the current and prior three tax years) and has concluded that no provision for income tax is required in the Fund’s financial statements. Management’s determination regarding FIN 48 may be subject to review and adjustment at a later date based on factors including, but not limited to, an on-going analysis of tax laws, regulations, and interpretations thereof.
3. Investment Advisory Agreement and Other Transactions. The Fund has 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 its 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 affiliated persons of the Adviser.
The Adviser has contractually agreed to waive its fees and reimburse expenses of the Fund to the extent necessary to maintain the annualized total operating expenses (exclusive of brokerage fees, interest, taxes, and extraordinary expenses) at 2.00%, 2.00%, 2.75%, 2.75%, and 1.75% of the value of the Fund’s average daily net assets for Class AAA, Class A, Class B, Class C, and Class I Shares, respectively, through September 30, 2009. For the six months ended March 31, 2009, the Adviser reimbursed the Fund in the amount of $36,389. The Fund is obliged to repay the Adviser for a period of two years following the year in which the Adviser reimbursed the Fund only to the extent that the operating expenses of the Fund fall below the applicable expense limitations. At March 31, 2009, the cumulative amount which the Fund may repay the Adviser is $108,127.
11
The Gabelli Woodland Small Cap Value Fund
Notes to Financial Statements (Continued) (Unaudited)
Notes to Financial Statements (Continued) (Unaudited)
The Corporation pays each Director who is not considered to be an affiliated person an annual retainer of $9,000 plus $1,000 for each Board meeting attended and they are reimbursed for any out of pocket expenses incurred in attending meetings. All Board committee members receive $500 per meeting attended and the Chairman of the Audit Committee and the Lead Director each receive an annual fee of $1,000. Directors who are directors or employees of the Adviser or an affiliated company receive no compensation or expense reimbursement from the Fund.
4. Distribution Plan. The Fund’s Board has adopted a distribution plan (the “Plan”) for each class of shares, except for Class I Shares, pursuant to Rule 12b-1 under the 1940 Act. Gabelli & Company, Inc. (“Gabelli & Company”), an affiliate of the Adviser, serves as distributor of the Fund. Under the Class AAA, Class A, Class B, and Class C Share Plans, payments are authorized to Gabelli & Company at annual rates of 0.25%, 0.25%, 1.00%, and 1.00%, respectively, of the average daily net assets of those classes, the annual limitations under each Plan. Such payments are accrued daily and paid monthly.
5. Portfolio Securities. Purchases and proceeds from the sales of securities for the six months ended March 31, 2009, other than short-term securities and U.S. Government obligations, aggregated $1,582,833 and $2,307,179, respectively.
6. Line of Credit. The Fund participates in an unsecured line of credit of up to $75,000,000 under which it may borrow up to 10% of its net assets from the custodian for temporary borrowing purposes. Borrowings under this arrangement bear interest at 0.75% above the federal funds rate on outstanding balances. This amount, if any, would be included in “interest expense” in the Statement of Operations. At March 31, 2009, there were no borrowings outstanding under the line of credit.
The average daily amount of borrowings outstanding under the line of credit during the six months ended March 31, 2009 was $8,374 with a weighted average interest rate of 0.85%. The maximum amount borrowed at any time during the six months ended March 31, 2009 was $247,000.
7. Capital Stock. The Fund offers five classes of shares — Class AAA Shares, Class A Shares, Class B Shares, Class C Shares, and Class I Shares. Class AAA Shares are offered without a sales charge only to investors who acquire them directly from Gabelli & Company, or through selected broker/dealers, or the transfer agent. Class I Shares are offered to foundations, endowments, institutions, and employee benefit plans without a sales charge. Class A Shares are subject to a maximum front-end sales charge of 5.75%. Class B Shares are subject to a contingent deferred sales charge (“CDSC”) upon redemption within six years of purchase and automatically convert to Class A Shares approximately eight years after the original purchase. The applicable CDSC is equal to a declining percentage of the lesser of the NAV per share at the date of the original purchase or at the date of redemption, based on the length of time held. Class C Shares are subject to a 1.00% CDSC for one year after purchase. Class B Shares are available only through exchange of Class B Shares of other funds distributed by Gabelli & Company. Class I Shares were first issued on January 11, 2008.
The Fund imposes a redemption fee of 2.00% on all classes of shares that are redeemed or exchanged on or before the seventh day after the date of a purchase. The redemption fee is deducted from the proceeds otherwise payable to the redeeming shareholders and is retained by the Fund. The redemption fees during the six months ended March 31, 2009 and the year ended September 30, 2008 amounted to $0 and $1, respectively.
12
The Gabelli Woodland Small Cap Value Fund
Notes to Financial Statements (Continued) (Unaudited)
Notes to Financial Statements (Continued) (Unaudited)
The redemption fee does not apply to redemptions of shares where (i) the shares were purchased through automatic reinvestment of distributions, (ii) the redemption was initiated by the Fund, (iii) the shares were purchased through programs that collect the redemption fee at the program level and remit them to the Fund, or (iv) the shares were purchased through programs that the Adviser determines to have appropriate anti-short-term trading policies in place or as to which the Adviser has received assurances that look-through redemption fee procedures or effective anti-short-term trading policies and procedures are in place.
Transactions in shares of capital stock were as follows:
Six Months Ended | ||||||||||||||||
March 31, 2009 | Year Ended | |||||||||||||||
(Unaudited) | September 30, 2008 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Class AAA | Class AAA | |||||||||||||||
Shares sold | 104,387 | $ | 600,239 | 66,401 | $ | 658,099 | ||||||||||
Shares issued upon reinvestment of distributions | 50,701 | 290,012 | 124,080 | 1,259,410 | ||||||||||||
Shares redeemed . | (273,299 | ) | (1,592,488 | ) | (119,232 | ) | (1,214,004 | ) | ||||||||
Net increase/(decrease) | (118,211 | ) | $ | (702,237 | ) | 71,249 | $ | 703,505 | ||||||||
Class A | Class A | |||||||||||||||
Shares sold | — | — | 343 | $ | 3,299 | |||||||||||
Shares issued upon reinvestment of distributions | 386 | $ | 2,226 | 895 | 9,144 | |||||||||||
Shares redeemed | — | — | (874 | ) | (9,147 | ) | ||||||||||
Net increase | 386 | $ | 2,226 | 364 | $ | 3,296 | ||||||||||
Class B | Class B | |||||||||||||||
Shares issued upon reinvestment of distributions | 1 | $ | 7 | 2 | $ | 27 | ||||||||||
Net increase | 1 | $ | 7 | 2 | $ | 27 | ||||||||||
Class C | Class C | |||||||||||||||
Shares sold | 9,282 | $ | 49,565 | 282 | $ | 3,502 | ||||||||||
Shares issued upon reinvestment of distributions | 1,132 | 6,124 | 4,463 | 43,337 | ||||||||||||
Shares redeemed | (8,770 | ) | (48,123 | ) | (12,531 | ) | (115,910 | ) | ||||||||
Net increase/(decrease) | 1,644 | $ | 7,566 | (7,786 | ) | $ | (69,071 | ) | ||||||||
Class I | Class I* | |||||||||||||||
Shares sold | 2,529 | $ | 15,120 | 8,531 | $ | 81,394 | ||||||||||
Shares issued upon reinvestment of distributions | 566 | 3,246 | — | — | ||||||||||||
Shares redeemed | (933 | ) | (4,988 | ) | (791 | ) | (7,441 | ) | ||||||||
Net increase | 2,162 | $ | 13,378 | 7,740 | $ | 73,953 | ||||||||||
* | From the commencement of offering Class I Shares on January 11, 2008. |
8. Indemnifications. The Fund enters into contracts that contain a variety of indemnifications. The Fund’s maximum exposure under these arrangements is unknown. However, the Fund has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
13
The Gabelli Woodland Small Cap Value Fund
Notes to Financial Statements (Continued) (Unaudited)
Notes to Financial Statements (Continued) (Unaudited)
9. Other Matters. On April 24, 2008, the Adviser entered into an administrative settlement with the SEC to resolve the SEC’s inquiry regarding prior frequent trading activity in shares of the GAMCO Global Growth Fund (the “Global Growth Fund”) by one investor who was banned from the Global Growth Fund in August 2002. In the settlement, the SEC found that the Adviser had violated Section 206(2) of the Investment Advisers Act, Section 17(d) of the 1940 Act and Rule 17d-1 thereunder, and had aided and abetted and caused violations of Section 12(d)(1)(B)(i) of the 1940 Act. Under the terms of the settlement, the Adviser, while neither admitting nor denying the SEC’s findings and allegations, agreed, among other things, to pay the previously reserved total of $16 million (including a $5 million penalty), of which at least $11 million will be distributed to shareholders of the Global Growth Fund in accordance with a plan to be developed by an independent distribution consultant and approved by the independent directors of the Global Growth Fund and the staff of the SEC, and to cease and desist from future violations of the above referenced federal securities laws. The settlement will not have a material adverse impact on the Adviser or its ability to fulfill its obligations under the Advisory Agreement. On the same day, the SEC filed a civil action against the Executive Vice President and Chief Operating Officer of the Adviser, alleging violations of certain federal securities laws arising from the same matter. The officer is also an officer of the Global Growth Fund and other funds in the Gabelli/GAMCO fund complex. The officer denies the allegations and is continuing in his positions with the Adviser and the funds. The Adviser currently expects that any resolution of the action against the officer will not have a material adverse impact on the Adviser or its ability to fulfill its obligations under the Advisory Agreement.
14
The Gabelli Woodland Small Cap Value Fund
Board Consideration and Re-Approval of Advisory Agreement (Unaudited)
Board Consideration and Re-Approval of Advisory Agreement (Unaudited)
During the six months ended March 31, 2009, the Board of Directors of the Corporation approved the continuation of the investment advisory agreement with the Adviser for the Fund on the basis of the recommendation by the directors (the “Independent Board Members”) who are not “interested persons” of the Fund. The following paragraphs summarize the material information and factors considered by the Independent Board Members as well as their conclusions relative to such factors.
Nature, Extent and Quality of Services. The Independent Board Members considered information regarding the portfolio manager, the depth of the analyst pool available to the Adviser and the portfolio manager, the scope of administrative, shareholder, and other services supervised or provided by the Adviser and the absence of significant service problems reported to the Board. The Independent Board Members noted the experience, length of service, and reputation of the portfolio manager.
Investment Performance. The Independent Board Members reviewed the performance of the Fund over various periods against a peer group of small cap value and core funds. The Independent Board Members noted that the Fund’s performance was in the top half for the one year period and at or near the top one-third for the three and five year periods. The Independent Board Members also noted that the Fund’s performance had improved relative to its peers over time.
Profitability. The Independent Board Members reviewed summary data regarding the lack of profitability of the Fund to the Adviser both with an administrative overhead charge and without such a charge. The Independent Board Members also noted that an affiliated broker of the Adviser received distribution fees and minor amounts of sales commissions and that the Adviser received a moderate level of soft dollar research benefits through the Fund’s portfolio brokerage.
Economies of Scale. The Independent Board Members discussed the major elements of the Adviser’s cost structure and the relationship of those elements to potential economies of scale. The Independent Board Members agreed that economies of scale were not an issue for this small and slow growing Fund that has been unprofitable to the Adviser.
Sharing of Economies of Scale. The Independent Board Members noted that the investment management fee schedule for the Fund does not take into account any potential economies of scale that may develop or any losses or diminished profitability to the Adviser in prior years.
Service and Cost Comparisons. The Independent Board Members compared the expense ratios of the investment management fee, other expenses, and total expenses of the Fund with similar expense ratios of the peer group of small cap value and core funds and noted that the Adviser’s management fee includes substantially all administrative services of the Fund as well as investment advisory services. The Independent Board Members noted that the Fund’s expense ratios after waivers were above and the Fund’s size was far below average within this group and that the Adviser had been waiving substantial portions of its fees in order to make the Fund a more attractive investment. The Independent Board Members also noted that the management fee structure before waivers was the same as that in effect for most of the Gabelli funds. The Independent Board Members did not compare the management fee to the fee for other types of accounts managed by the Adviser.
Conclusions. The Independent Board Members concluded that the Fund enjoyed highly experienced portfolio management services, good ancillary services, and an improving performance record during its limited life. The Independent Board Members also concluded that the Fund’s expense ratios were reasonable in light of the lack of profitability to the Adviser of managing the Fund, and that economies of scale were not a factor in their thinking at this time. The Independent Board Members did not view the potential profitability of ancillary services as material to their decision. On the basis of the foregoing and without assigning particular weight to any single conclusion, the Independent Board Members determined to recommend continuation of the investment management agreement to the full Board.
15
Gabelli Equity Series Funds, Inc.
The Gabelli Woodland Small Cap Value Fund
One Corporate Center
Rye, New York 10580-1422
800-GABELLI
800-422-3554
fax: 914-921-5118
website: www.gabelli.com
e-mail: info@gabelli.com
Net Asset Value per share available daily by calling
800-GABELLI after 6:00 P.M.
The Gabelli Woodland Small Cap Value Fund
One Corporate Center
Rye, New York 10580-1422
800-GABELLI
800-422-3554
fax: 914-921-5118
website: www.gabelli.com
e-mail: info@gabelli.com
Net Asset Value per share available daily by calling
800-GABELLI after 6:00 P.M.
Board of Directors
Mario J. Gabelli, CFA | Robert J. Morrissey | |
Chairman and Chief | Attorney-at-Law | |
Executive Officer | Morrissey, Hawkins & Lynch | |
GAMCO Investors, Inc. | ||
Anthony J. Colavita | Anthony R. Pustorino | |
Attorney-at-Law | Certified Public Accountant, | |
Anthony J. Colavita, P.C. | Professor Emeritus | |
Pace University | ||
Vincent D. Enright | Anthonie C. van Ekris | |
Former Senior Vice President | Chairman | |
and Chief Financial Officer | BALMAC International, Inc. | |
KeySpan Corp. | ||
John D. Gabelli | Salvatore J. Zizza | |
Senior Vice President | Chairman | |
Gabelli & Company, Inc. | Zizza & Co., Ltd. |
Officers and Portfolio Manager
Elizabeth M. Lilly, CFA | Bruce N. Alpert | |
Portfolio Manager | President and Secretary | |
Peter D. Goldstein | Agnes Mullady | |
Chief Compliance Officer | Treasurer |
Distributor
Gabelli & Company, Inc.
Gabelli & Company, Inc.
Custodian, Transfer Agent, and Dividend Agent
State Street Bank and Trust Company
State Street Bank and Trust Company
Legal Counsel
Skadden, Arps, Slate, Meagher & Flom LLP
Skadden, Arps, Slate, Meagher & Flom LLP
This report is submitted for the general information of the shareholders of The Gabelli Woodland Small Cap Value Fund. It is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus.
![(LOGO)](https://capedge.com/proxy/N-CSRS/0000950123-09-011738/p15061p1506101.gif)
The
Gabelli
Woodland
Small Cap
Value
Fund
Gabelli
Woodland
Small Cap
Value
Fund
SEMI ANNUAL REPORT
MARCH 31, 2009
MARCH 31, 2009
GAB840Q109SR
Item 2. Code of Ethics.
Not applicable.
Item 3. Audit Committee Financial Expert.
Not applicable.
Item 4. Principal Accountant Fees and Services.
Not applicable.
Item 5. Audit Committee of Listed registrants.
Not applicable.
Item 6. Investments.
(a) | Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period is included as part of the report to shareholders filed under Item 1 of this form. |
(b) | Not applicable. |
Item 7. | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. |
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. |
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the procedures by which the shareholders may recommend nominees to the registrant’s board of directors, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)), or this Item.
Item 11. Controls and Procedures.
(a) | The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)). | ||
(b) | There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the registrant’s second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
Item 12. Exhibits.
(a)(1) | Not applicable. | ||
(a)(2) | Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto. | ||
(a)(3) | Not applicable. | ||
(b) | Certifications pursuant to Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes- Oxley Act of 2002 are attached hereto. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(registrant) | Gabelli Equity Series Funds, Inc. | |||
By (Signature and Title)* | �� | /s/ Bruce N. Alpert | ||
Bruce N. Alpert, Principal Executive Officer | ||||
Date 5/29/09 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By (Signature and Title)* | /s/ Bruce N. Alpert | |||
Bruce N. Alpert, Principal Executive Officer | ||||
Date 5/29/09 | ||||
By (Signature and Title)* | /s/ Agnes Mullady | |||
Agnes Mullady, Principal Financial Officer and Treasurer | ||||
Date 5/29/09 |
* | Print the name and title of each signing officer under his or her signature. |