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, 2011
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 — March 31, 2011
Semi-Annual Report — March 31, 2011
![(IMAGE)](https://capedge.com/proxy/N-CSRS/0000950123-11-056763/y90383y9037703.gif)
![(PHOTO OF MARIO J. GABELLI)](https://capedge.com/proxy/N-CSRS/0000950123-11-056763/y90383y9037701.jpg)
Mario J. Gabelli, CFA
Morningstar® rated The Gabelli Small Cap Growth Fund Class AAA Shares 5 stars overall
and 5 stars for the five and ten year periods and 4 stars for the three year period ended
March 31, 2011 among 577, 487, 285, and 577 Small Blend funds, respectively.
and 5 stars for the five and ten year periods and 4 stars for the three year period ended
March 31, 2011 among 577, 487, 285, and 577 Small Blend funds, respectively.
To Our Shareholders,
For the six months ended March 31, 2011, the net asset value (“NAV”) per Class AAA Share of The Gabelli Small Cap Growth Fund (the “Fund”) rose 20.4% compared with 25.5% for the Russell 2000 Index.
Comparative Results
Average Annual Returns through March 31, 2011 (a)(b) (Unaudited)
Since | ||||||||||||||||||||||||||||
Six | Inception | |||||||||||||||||||||||||||
Quarter | Months | 1 Year | 3 Year | 5 Year | 10 Year | (10/22/91) | ||||||||||||||||||||||
Gabelli Small Cap Growth Fund Class AAA | 6.37 | % | 20.39 | % | 25.98 | % | 9.46 | % | 7.08 | % | 10.70 | % | 13.47 | % | ||||||||||||||
Russell 2000 Index | 7.94 | 25.48 | 25.79 | 8.57 | 3.35 | 7.87 | 6.86 | (f) | ||||||||||||||||||||
Class A | 6.34 | 20.39 | 25.99 | 9.45 | 7.07 | 10.70 | 13.47 | |||||||||||||||||||||
With sales charge (c) | 0.22 | 13.47 | 18.74 | 7.31 | 5.81 | 10.04 | 13.13 | |||||||||||||||||||||
Class B | 6.17 | 19.96 | 25.05 | 8.62 | 6.27 | 10.10 | 13.15 | |||||||||||||||||||||
With contingent deferred sales charge (d) | 1.17 | 14.96 | 20.05 | 7.77 | 5.95 | 10.10 | 13.15 | |||||||||||||||||||||
Class C | 6.13 | 19.94 | 25.03 | 8.66 | 6.29 | 10.11 | 13.16 | |||||||||||||||||||||
With contingent deferred sales charge (e) | 5.13 | 18.94 | 24.03 | 8.66 | 6.29 | 10.11 | 13.16 | |||||||||||||||||||||
Class I | 6.41 | 20.54 | 26.32 | 9.74 | 7.25 | 10.79 | 13.52 |
In the current prospectus dated January 28, 2011, the expense ratios for Class AAA, A, B, C and I Shares are 1.44%, 1.44%, 2.19%, 2.19% and 1.19%, respectively. Class AAA and Class I Shares have no sales charge. See page 15 for the expense ratios for the six months ended March 31, 2011. The maximum sales charge for Class A, B, and C Shares is 5.75%, 5.00%, and 1.00%, respectively.
(a) | Returns represent past performance and do not guarantee future results. Total returns and average annual returns reflect changes in share prices, 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. Current performance may be lower or higher than the performance data presented. Performance returns for periods of less than one year are not annualized. 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 information about this and other matters and should be read carefully before investing. | |
The Class AAA Shares’ 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 the Class I Shares on January 11, 2008. The actual performance for the Class A Shares, Class B Shares and Class C Shares would have been lower and for 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 is an unmanaged indicator of stock market performance. Dividends are considered reinvested. You cannot invest directly in an index. | ||
(b) | The Fund’s fiscal year ends September 30. | |
(c) | Performance results include the effect of the maximum 5.75% sales charge at the beginning of the period. | |
(d) | Assuming payment of the maximum contingent deferred sales charge (CDSC). The maximum CDSC for Class B Shares is 5% and is reduced to 0% after six years. | |
(e) | Assuming payment of the maximum 1% CDSC imposed on redemptions made within one year of purchase. | |
(f) | Russell 2000 Index since inception performance is as of October 31, 1991. |
The Gabelli Small Cap Growth Fund
Disclosure of Fund Expenses (Unaudited)
Disclosure of Fund Expenses (Unaudited)
For the Six Month Period from October 1, 2010 through March 31, 2011 | 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 | |||||||||||||
10/01/10 | 03/31/11 | Ratio | Period* | |||||||||||||
The Gabelli Small Cap Growth Fund | ||||||||||||||||
Actual Fund Return | ||||||||||||||||
Class AAA | $ | 1,000.00 | $ | 1,203.90 | 1.40 | % | $ | 7.69 | ||||||||
Class A | $ | 1,000.00 | $ | 1,203.90 | 1.40 | % | $ | 7.69 | ||||||||
Class B | $ | 1,000.00 | $ | 1,199.60 | 2.15 | % | $ | 11.79 | ||||||||
Class C | $ | 1,000.00 | $ | 1,199.40 | 2.15 | % | $ | 11.79 | ||||||||
Class I | $ | 1,000.00 | $ | 1,205.40 | 1.15 | % | $ | 6.32 | ||||||||
Hypothetical 5% Return | ||||||||||||||||
Class AAA | $ | 1,000.00 | $ | 1,017.95 | 1.40 | % | $ | 7.04 | ||||||||
Class A | $ | 1,000.00 | $ | 1,017.95 | 1.40 | % | $ | 7.04 | ||||||||
Class B | $ | 1,000.00 | $ | 1,014.21 | 2.15 | % | $ | 10.80 | ||||||||
Class C | $ | 1,000.00 | $ | 1,014.21 | 2.15 | % | $ | 10.80 | ||||||||
Class I | $ | 1,000.00 | $ | 1,019.20 | 1.15 | % | $ | 5.79 |
* | 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 (182 days), 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, 2011:
The Gabelli Small Cap Growth Fund
Equipment and Supplies | 9.0 | % | ||
Health Care | 6.6 | % | ||
Energy and Utilities | 6.5 | % | ||
Food and Beverage | 6.2 | % | ||
Diversified Industrial | 6.2 | % | ||
Automotive: Parts and Accessories | 5.5 | % | ||
Financial Services | 5.3 | % | ||
Specialty Chemicals | 4.7 | % | ||
Retail | 4.5 | % | ||
Business Services | 4.5 | % | ||
Aviation: Parts and Services | 3.0 | % | ||
Hotels and Gaming | 2.2 | % | ||
Consumer Products | 2.1 | % | ||
Electronics | 1.7 | % | ||
Computer Software and Services | 1.6 | % | ||
Cable | 1.5 | % | ||
Entertainment | 1.4 | % | ||
Machinery | 1.4 | % | ||
Telecommunications | 1.4 | % | ||
Publishing | 1.2 | % | ||
Metals and Mining | 1.1 | % | ||
Real Estate | 1.0 | % | ||
Consumer Services | 1.0 | % | ||
Communications Equipment | 0.9 | % | ||
Transportation | 0.9 | % | ||
Broadcasting | 0.7 | % | ||
Building and Construction | 0.6 | % | ||
Environmental Services | 0.5 | % | ||
Educational Services | 0.5 | % | ||
Commercial Services | 0.4 | % | ||
Automotive | 0.4 | % | ||
Manufactured Housing and Recreational Vehicles | 0.3 | % | ||
Closed-End Funds | 0.2 | % | ||
Home Furnishings | 0.1 | % | ||
Wireless Communications | 0.1 | % | ||
Paper and Forest Products | 0.1 | % | ||
Closed-End Business Development Company | 0.1 | % | ||
Aerospace | 0.0 | % | ||
Agriculture | 0.0 | % | ||
U.S. Government Obligations | 16.6 | % | ||
Other Assets and Liabilities (Net) | (2.0 | )% | ||
100.0 | % | |||
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, 2010. 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 800-SEC-0330.
Proxy Voting
The Fund files Form N-PX with its complete proxy voting record for the twelve 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, 2011 (Unaudited)
Schedule of Investments — March 31, 2011 (Unaudited)
Market | ||||||||||||
Shares | Cost | Value | ||||||||||
COMMON STOCKS — 85.3% | ||||||||||||
Aerospace — 0.0% | ||||||||||||
25,000 | Embraer SA, ADR | $ | 430,623 | $ | 842,500 | |||||||
Agriculture — 0.0% | ||||||||||||
12,000 | Cadiz Inc.† | 93,950 | 146,280 | |||||||||
3,500 | The Mosaic Co. | 74,541 | 275,625 | |||||||||
168,491 | 421,905 | |||||||||||
Automotive — 0.4% | ||||||||||||
87,000 | Navistar International Corp.† | 2,626,616 | 6,031,710 | |||||||||
10,000 | PACCAR Inc. | 373,100 | 523,500 | |||||||||
100,000 | Penske Automotive Group Inc.† | 1,476,842 | 2,002,000 | |||||||||
30,000 | Winnebago Industries Inc.† | 381,664 | 401,100 | |||||||||
4,858,222 | 8,958,310 | |||||||||||
Automotive: Parts and Accessories — 5.4% | ||||||||||||
155,000 | BorgWarner Inc.† | 1,761,849 | 12,351,950 | |||||||||
74,022 | China Automotive Systems Inc.† | 378,521 | 656,575 | |||||||||
926,015 | Dana Holding Corp.† | 6,032,884 | 16,103,401 | |||||||||
425,800 | Federal-Mogul Corp.† | 6,606,866 | 10,602,420 | |||||||||
365,000 | Midas Inc.† | 5,006,568 | 2,799,550 | |||||||||
588,997 | Modine Manufacturing Co.† | 8,401,910 | 9,506,412 | |||||||||
22,500 | Monro Muffler Brake Inc. | 152,114 | 742,050 | |||||||||
513,000 | O’Reilly Automotive Inc.† | 13,540,286 | 29,476,980 | |||||||||
33,000 | Puradyn Filter Technologies Inc.† | 9,902 | 10,395 | |||||||||
180,000 | SORL Auto Parts Inc.† | 1,131,008 | 1,090,800 | |||||||||
80,375 | Spartan Motors Inc. | 388,580 | 551,373 | |||||||||
365,000 | Standard Motor Products Inc. | 4,043,414 | 5,047,950 | |||||||||
198,000 | Strattec Security Corp. (a) | 4,157,683 | 6,634,980 | |||||||||
283,300 | Superior Industries International Inc. | 4,552,950 | 7,263,812 | |||||||||
520,500 | Tenneco Inc.† | 5,193,310 | 22,095,225 | |||||||||
320,000 | The Pep Boys — Manny, Moe & Jack | 3,758,524 | 4,067,200 | |||||||||
27,000 | Thor Industries Inc. | 250,194 | 900,990 | |||||||||
55,000 | Wonder Auto Technology Inc.† | 366,006 | 298,100 | |||||||||
65,732,569 | 130,200,163 | |||||||||||
Aviation: Parts and Services — 3.0% | ||||||||||||
25,000 | AAR Corp.† | 302,990 | 693,000 | |||||||||
10,000 | Astronics Corp.† | 39,192 | 251,700 | |||||||||
2,500 | Astronics Corp., Cl. B† | 9,798 | 62,775 | |||||||||
7,000 | Barnes Group Inc. | 59,255 | 146,160 | |||||||||
5,000,000 | BBA Aviation plc | 13,331,465 | 16,298,763 | |||||||||
510,000 | Curtiss-Wright Corp. | 14,512,635 | 17,921,400 | |||||||||
30,000 | Ducommun Inc. | 585,815 | 717,000 | |||||||||
1,095,042 | GenCorp Inc.† | 7,016,413 | 6,548,351 | |||||||||
665,800 | Kaman Corp. | 9,825,703 | 23,436,160 | |||||||||
89,000 | Moog Inc., Cl. A† | 726,840 | 4,085,990 | |||||||||
16,100 | Moog Inc., Cl. B† | 464,818 | 732,550 | |||||||||
65,000 | Woodward Inc. | 959,980 | 2,246,400 | |||||||||
47,834,904 | 73,140,249 | |||||||||||
Broadcasting — 0.7% | ||||||||||||
365,000 | Acme Communications Inc.† | 935,691 | 456,250 | |||||||||
182,000 | Beasley Broadcast Group Inc., Cl. A† | 1,089,178 | 1,335,880 | |||||||||
23,300 | Cogeco Inc. | 592,837 | 997,129 | |||||||||
297,000 | Crown Media Holdings Inc., Cl. A† | 1,737,892 | 689,040 | |||||||||
2,433 | Granite Broadcasting Corp.† (b) | 822,771 | 0 | |||||||||
330,000 | Gray Television Inc.† | 1,077,816 | 683,100 | |||||||||
44,000 | Gray Television Inc., Cl. A† | 94,427 | 85,360 | |||||||||
100,000 | Liberty Media Corp. — Capital, Cl. A† | 2,042,651 | 7,367,000 | |||||||||
551,600 | Salem Communications Corp., Cl. A | 2,279,577 | 2,068,500 | |||||||||
190,000 | Sinclair Broadcast Group Inc., Cl. A | 1,563,471 | 2,382,600 | |||||||||
450,000 | Sirius XM Radio Inc.† | 230,879 | 747,000 | |||||||||
12,467,190 | 16,811,859 | |||||||||||
Building and Construction — 0.6% | ||||||||||||
33,000 | Insituform Technologies Inc., Cl. A† | 622,647 | 882,750 | |||||||||
334,000 | Layne Christensen Co.† | 8,991,997 | 11,523,000 | |||||||||
2,000 | Nortek Inc.† | 89,915 | 86,250 | |||||||||
68,000 | Texas Industries Inc. | 2,304,603 | 3,075,640 | |||||||||
12,009,162 | 15,567,640 | |||||||||||
Business Services — 4.5% | ||||||||||||
71,000 | AboveNet Inc. | 3,290,498 | 4,605,060 | |||||||||
40,000 | ACCO Brands Corp.† | 383,433 | 381,600 | |||||||||
95,033 | Arbitron Inc. | 2,620,456 | 3,804,171 | |||||||||
110,000 | Ascent Media Corp., Cl. A† | 2,727,937 | 5,373,500 | |||||||||
417,570 | Clear Channel Outdoor Holdings Inc., Cl. A† | 3,893,963 | 6,075,644 | |||||||||
435,000 | Diebold Inc. | 14,703,403 | 15,425,100 | |||||||||
545,000 | Edgewater Technology Inc.† | 2,694,544 | 1,738,550 | |||||||||
380,000 | Furmanite Corp.† | 1,479,692 | 3,040,000 | |||||||||
118,000 | GP Strategies Corp.† | 976,751 | 1,604,800 | |||||||||
35,589 | GSE Systems Inc.† | 138,667 | 80,431 | |||||||||
100,000 | GSI Commerce Inc.† | 2,925,800 | 2,927,000 | |||||||||
525,000 | Intermec Inc.† | 9,104,306 | 5,664,750 |
See accompanying notes to financial statements.
4
The Gabelli Small Cap Growth Fund
Schedule of Investments (Continued) — March 31, 2011 (Unaudited)
Schedule of Investments (Continued) — March 31, 2011 (Unaudited)
Market | ||||||||||||
Shares | Cost | Value | ||||||||||
COMMON STOCKS (Continued) | ||||||||||||
Business Services (Continued) | ||||||||||||
109,700 | Internap Network Services Corp.† | $ | 681,628 | $ | 720,729 | |||||||
22,000 | Lamar Advertising Co., Cl. A† | 157,238 | 812,680 | |||||||||
14,500 | Landauer Inc. | 322,415 | 892,040 | |||||||||
750,000 | Live Nation Entertainment Inc.† | 8,277,688 | 7,500,000 | |||||||||
197,000 | Macquarie Infrastructure Co. LLC† | 2,978,508 | 4,700,420 | |||||||||
4,000 | MDC Partners Inc., Cl. A | 12,360 | 67,080 | |||||||||
120,000 | Sohgo Security Services Co. Ltd. | 1,459,559 | 1,305,602 | |||||||||
170,000 | Stamps.com Inc. | 1,301,239 | 2,269,500 | |||||||||
340,307 | The Brink’s Co. | 8,096,900 | 11,267,565 | |||||||||
1,940,000 | The Interpublic Group of Companies Inc. | 13,568,760 | 24,385,800 | |||||||||
153,000 | Trans-Lux Corp.† (a) | 918,569 | 22,950 | |||||||||
36,050 | TransAct Technologies Inc.† | 181,017 | 430,798 | |||||||||
60,000 | United Rentals Inc.† | 380,572 | 1,996,800 | |||||||||
110,000 | ValueClick Inc.† | 1,588,417 | 1,590,600 | |||||||||
84,864,320 | 108,683,170 | |||||||||||
Cable — 1.5% | ||||||||||||
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 | 3,450 | |||||||||
500,000 | Cablevision Systems Corp., Cl. A | 157,656 | 17,305,000 | |||||||||
10,000 | Cogeco Cable Inc. | 340,851 | 464,260 | |||||||||
235,000 | DIRECTV, Cl. A† | 5,837,622 | 10,998,000 | |||||||||
50,000 | DISH Network Corp., Cl. A† | 968,420 | 1,218,000 | |||||||||
40,000 | EchoStar Corp., Cl. A† | 780,129 | 1,514,000 | |||||||||
9,329 | Liberty Global Inc., Cl. A† | 249,972 | 386,314 | |||||||||
9,329 | Liberty Global Inc., Cl. C† | 240,169 | 373,067 | |||||||||
480,000 | LIN TV Corp., Cl. A† | 3,352,165 | 2,846,400 | |||||||||
300,000 | Mediacom Communications Corp., Cl. A† (b) | 0 | 27,000 | |||||||||
36,000 | Outdoor Channel Holdings Inc.† | 287,493 | 268,560 | |||||||||
12,244,127 | 35,404,051 | |||||||||||
Closed-End Business Development Company — 0.1% | ||||||||||||
110,000 | MVC Capital Inc. | 1,238,662 | 1,509,200 | |||||||||
Closed-End Funds — 0.2% | ||||||||||||
98,000 | The Central Europe and Russia Fund Inc. | 2,838,336 | 4,440,380 | |||||||||
38,225 | The European Equity Fund Inc. | 395,416 | 308,858 | |||||||||
11,000 | The Ibero-America Fund Inc. | 103,029 | 77,000 | |||||||||
54,738 | The New Germany Fund Inc. | 644,127 | 949,157 | |||||||||
3,980,908 | 5,775,395 | |||||||||||
Commercial Services — 0.4% | ||||||||||||
120,000 | Garda World Security Corp., Cl A† | 1,079,478 | 1,236,514 | |||||||||
275,000 | Loomis AB, Cl. B | 2,925,762 | 4,356,850 | |||||||||
800,000 | Swisher Hygiene Inc.† | 593,828 | 4,893,244 | |||||||||
4,599,068 | 10,486,608 | |||||||||||
Communications Equipment — 0.9% | ||||||||||||
160,300 | Communications Systems Inc. | 1,150,610 | 2,475,032 | |||||||||
97,000 | Sycamore Networks Inc. | 1,624,558 | 2,369,710 | |||||||||
280,912 | Thomas & Betts Corp.† | 5,414,640 | 16,705,837 | |||||||||
8,189,808 | 21,550,579 | |||||||||||
Computer Software and Services — 1.6% | ||||||||||||
150,000 | Activision Blizzard Inc. | 1,775,079 | 1,645,500 | |||||||||
400,000 | ADPT Corp.† | 1,199,233 | 1,176,000 | |||||||||
50,000 | AOL Inc.† | 1,148,390 | 976,500 | |||||||||
124,000 | Emulex Corp.† | 1,259,345 | 1,323,080 | |||||||||
180,000 | FalconStor Software Inc.† | 1,018,324 | 819,000 | |||||||||
295,000 | Global Sources Ltd.† | 2,021,681 | 3,430,850 | |||||||||
6,000 | KIT Digital Inc.† | 68,146 | 72,240 | |||||||||
60,000 | Mentor Graphics Corp.† | 720,436 | 877,800 | |||||||||
20,000 | Mercury Computer Systems Inc.† | 386,953 | 423,200 | |||||||||
20,187 | MKS Instruments Inc. | 367,981 | 672,227 | |||||||||
455,000 | NCR Corp.† | 5,164,296 | 8,572,200 | |||||||||
75,000 | Quantum Corp.† | 243,845 | 189,000 | |||||||||
104,000 | Rockwell Automation Inc. | 2,921,662 | 9,843,600 | |||||||||
16,000 | Stratasys Inc.† | 724,316 | 752,000 | |||||||||
303,000 | Tyler Technologies Inc.† | 1,331,184 | 7,184,130 | |||||||||
20,350,871 | 37,957,327 | |||||||||||
Consumer Products — 2.1% | ||||||||||||
250,000 | 1-800-FLOWERS.COM Inc., Cl. A† | 1,169,119 | 825,000 | |||||||||
14,750 | Adams Golf Inc.† | 110,074 | 80,388 | |||||||||
300,000 | Alberto-Culver Co. | 10,211,861 | 11,181,000 | |||||||||
30,000 | Brunswick Corp. | 432,673 | 762,900 | |||||||||
33,500 | Chofu Seisakusho Co. Ltd. | 484,644 | 839,715 | |||||||||
30,000 | Church & Dwight Co. Inc. | 303,670 | 2,380,200 | |||||||||
800,000 | Eastman Kodak Co.† | 4,364,637 | 2,584,000 | |||||||||
2,000 | Harley-Davidson Inc. | 4,713 | 84,980 | |||||||||
360,638 | Marine Products Corp.† | 560,494 | 2,859,859 |
See accompanying notes to financial statements.
5
The Gabelli Small Cap Growth Fund
Schedule of Investments (Continued) — March 31, 2011 (Unaudited)
Schedule of Investments (Continued) — March 31, 2011 (Unaudited)
Market | ||||||||||||
Shares | Cost | Value | ||||||||||
COMMON STOCKS (Continued) | ||||||||||||
Consumer Products (Continued) | ||||||||||||
22,000 | National Presto Industries Inc. | $ | 675,355 | $ | 2,478,960 | |||||||
25,000 | RC2 Corp.† | 704,878 | 702,500 | |||||||||
450,000 | Sally Beauty Holdings Inc.† | 2,994,212 | 6,304,500 | |||||||||
800,000 | Schiff Nutrition International Inc. | 2,190,155 | 7,288,000 | |||||||||
4,605 | Steven Madden Ltd.† | 37,266 | 216,113 | |||||||||
230,000 | Stewart Enterprises Inc., Cl. A | 1,281,284 | 1,757,200 | |||||||||
150,000 | Swedish Match AB | 2,992,162 | 4,988,197 | |||||||||
87,425 | Syratech Corp.† | 17,426 | 2,216 | |||||||||
20,000 | The Scotts Miracle-Gro Co., Cl. A | 504,262 | 1,157,000 | |||||||||
22,000 | WD-40 Co. | 606,916 | 931,480 | |||||||||
70,000 | Wolverine World Wide Inc. | 713,205 | 2,609,600 | |||||||||
30,359,006 | 50,033,808 | |||||||||||
Consumer Services — 1.0% | ||||||||||||
52,000 | Bowlin Travel Centers Inc.† | 52,442 | 85,800 | |||||||||
2,750 | Collectors Universe Inc. | 8,720 | 38,968 | |||||||||
20,000 | IAC/InterActiveCorp.† | 221,743 | 617,800 | |||||||||
225,023 | KAR Auction Services Inc.† | 3,025,024 | 3,451,853 | |||||||||
175,000 | Martha Stewart Living Omnimedia Inc., Cl. A† | 1,247,716 | 649,250 | |||||||||
600,000 | Rollins Inc. | 2,281,581 | 12,180,000 | |||||||||
110,000 | SearchMedia Holdings Ltd.† | 642,759 | 211,200 | |||||||||
650,000 | TiVo Inc.† | 7,050,033 | 5,694,000 | |||||||||
14,530,018 | 22,928,871 | |||||||||||
Diversified Industrial — 6.2% | ||||||||||||
27,000 | Acuity Brands Inc. | 260,021 | 1,579,230 | |||||||||
70,000 | Albany International Corp., Cl. A | 1,486,445 | 1,743,000 | |||||||||
200,000 | Ampco-Pittsburgh Corp. | 3,454,230 | 5,516,000 | |||||||||
6,000 | Anixter International Inc. | 57,120 | 419,340 | |||||||||
420,000 | Crane Co. | 10,010,200 | 20,340,600 | |||||||||
3,000 | ESCO Technologies Inc. | 49,914 | 114,450 | |||||||||
18,000 | Foster Wheeler AG† | 34,930 | 677,160 | |||||||||
14,000 | Gardner Denver Inc. | 157,253 | 1,092,420 | |||||||||
115,000 | Greif Inc., Cl. A | 1,286,284 | 7,522,150 | |||||||||
83,000 | Greif Inc., Cl. B | 3,593,874 | 5,112,800 | |||||||||
1,185,000 | Griffon Corp.† | 13,452,660 | 15,559,050 | |||||||||
361,200 | Handy & Harman Ltd.† | 2,859,500 | 4,341,624 | |||||||||
190,000 | Jardine Strategic Holdings Ltd. | 3,487,637 | 5,073,000 | |||||||||
417,000 | Katy Industries Inc.† (a) | 915,518 | 237,690 | |||||||||
49,000 | Lincoln Electric Holdings Inc. | 2,642,298 | 3,720,080 | |||||||||
71,000 | Lindsay Corp. | 1,508,357 | 5,610,420 | |||||||||
605,000 | Magnetek Inc.† | 2,180,341 | 1,331,000 | |||||||||
32,000 | Matthews International Corp., Cl. A | 748,294 | 1,233,600 | |||||||||
410,000 | Myers Industries Inc. | 3,814,189 | 4,071,300 | |||||||||
572,000 | National Patent Development Corp.† | 1,176,798 | 869,440 | |||||||||
135,000 | Oil-Dri Corp. of America | 1,426,144 | 2,875,500 | |||||||||
130,000 | Olin Corp. | 2,496,080 | 2,979,600 | |||||||||
260,000 | Park-Ohio Holdings Corp.† | 1,787,806 | 5,371,600 | |||||||||
88,000 | Precision Castparts Corp. | 1,768,194 | 12,951,840 | |||||||||
32,000 | Roper Industries Inc. | 620,029 | 2,766,720 | |||||||||
82,000 | Sonoco Products Co. | 2,464,475 | 2,970,860 | |||||||||
120,070 | Standex International Corp. | 2,864,356 | 4,549,452 | |||||||||
242,000 | Tech/Ops Sevcon Inc.† (a) | 1,442,391 | 1,366,090 | |||||||||
50,000 | Terex Corp.† | 1,054,495 | 1,852,000 | |||||||||
387,000 | Textron Inc. | 2,408,058 | 10,599,930 | |||||||||
330,073 | Tredegar Corp. | 5,522,389 | 7,122,975 | |||||||||
148,000 | Tyco International Ltd. | 5,527,286 | 6,625,960 | |||||||||
82,557,566 | 148,196,881 | |||||||||||
Educational Services — 0.5% | ||||||||||||
60,000 | Career Education Corp.† | 1,117,698 | 1,363,200 | |||||||||
490,000 | Corinthian Colleges Inc.† | 3,124,412 | 2,165,800 | |||||||||
406,403 | Universal Technical Institute Inc. | 7,357,854 | 7,904,538 | |||||||||
11,599,964 | 11,433,538 | |||||||||||
Electronics — 1.7% | ||||||||||||
50,000 | Badger Meter Inc. | 1,202,451 | 2,060,500 | |||||||||
221,400 | Bel Fuse Inc., Cl. A (a) | 5,360,634 | 5,311,386 | |||||||||
488,908 | CTS Corp. | 4,670,224 | 5,280,206 | |||||||||
73,000 | Cypress Semiconductor Corp.† | 354,472 | 1,414,740 | |||||||||
49,772 | Greatbatch Inc.† | 1,211,894 | 1,316,967 | |||||||||
20,000 | IMAX Corp.† | 158,565 | 639,600 | |||||||||
8,000 | International Rectifier Corp.† | 175,247 | 264,480 | |||||||||
120,000 | KEMET Corp.† | 1,412,225 | 1,779,600 | |||||||||
110,000 | Methode Electronics Inc. | 953,550 | 1,328,800 | |||||||||
315,000 | Park Electrochemical Corp. | 7,506,180 | 10,158,750 | |||||||||
100,000 | Pulse Electronics Corp. | 546,132 | 605,000 | |||||||||
180,000 | Stoneridge Inc.† | 1,475,725 | 2,631,600 | |||||||||
350,000 | Trident Microsystems Inc.† | 1,448,903 | 402,500 | |||||||||
10,000 | Universal Display Corp.† | 277,033 | 550,400 | |||||||||
100,000 | Verigy Ltd.† | 1,420,805 | 1,409,000 | |||||||||
305,000 | Zoran Corp.† | 2,919,688 | 3,168,950 | |||||||||
120,000 | Zygo Corp.† | 1,071,063 | 1,754,400 | |||||||||
32,164,791 | 40,076,879 | |||||||||||
See accompanying notes to financial statements.
6
The Gabelli Small Cap Growth Fund
Schedule of Investments (Continued) — March 31, 2011 (Unaudited)
Schedule of Investments (Continued) — March 31, 2011 (Unaudited)
Market | ||||||||||||
Shares | Cost | Value | ||||||||||
COMMON STOCKS (Continued) | ||||||||||||
Energy and Utilities — 6.5% | ||||||||||||
20,000 | A123 Systems Inc.† | $ | 270,000 | $ | 127,000 | |||||||
380,000 | Black Hills Corp. | 9,703,620 | 12,707,200 | |||||||||
110,000 | Callon Petroleum Co.† | 743,793 | 854,700 | |||||||||
50,000 | Central Vermont Public Service Corp. | 966,855 | 1,164,500 | |||||||||
110,000 | CH Energy Group Inc. | 4,519,660 | 5,559,400 | |||||||||
36,000 | Chesapeake Utilities Corp. | 953,501 | 1,498,320 | |||||||||
45,000 | CMS Energy Corp. | 240,795 | 883,800 | |||||||||
23,000 | Connecticut Water Service Inc. | 464,832 | 606,050 | |||||||||
8,000 | Consolidated Water Co. Ltd. | 140,714 | 87,200 | |||||||||
155,000 | Covanta Holding Corp. | 596,181 | 2,647,400 | |||||||||
3,000 | Dawson Geophysical Co.† | 101,595 | 131,640 | |||||||||
413,400 | El Paso Electric Co.† | 6,002,295 | 12,567,360 | |||||||||
20,000 | Ener1 Inc.† | 139,473 | 59,200 | |||||||||
30,000 | Energy Recovery Inc.† | 181,420 | 95,400 | |||||||||
22,333 | Gamesa Corporacion Tecnologica SA† | 134,727 | 232,091 | |||||||||
220,000 | Great Plains Energy Inc. | 4,699,894 | 4,404,400 | |||||||||
70,000 | Key Energy Services Inc.† | 597,194 | 1,088,500 | |||||||||
45,000 | Middlesex Water Co. | 773,022 | 818,550 | |||||||||
40,000 | National Fuel Gas Co. | 2,289,676 | 2,960,000 | |||||||||
65,000 | NorthWestern Corp. | 1,773,405 | 1,969,500 | |||||||||
40,000 | Oceaneering International Inc.† | 1,366,984 | 3,578,000 | |||||||||
215,000 | Otter Tail Corp. | 4,784,557 | 4,886,950 | |||||||||
10,000 | Patterson-UTI Energy Inc. | 211,721 | 293,900 | |||||||||
160,000 | Pennichuck Corp. | 3,697,727 | 4,558,400 | |||||||||
1,200,372 | PNM Resources Inc. | 13,068,524 | 17,909,550 | |||||||||
132,000 | Rowan Companies Inc.† | 2,795,259 | 5,831,760 | |||||||||
1,665,000 | RPC Inc. | 2,429,514 | 42,157,800 | |||||||||
145,000 | SJW Corp. | 2,774,885 | 3,356,750 | |||||||||
300,000 | Southern Union Co. | 5,117,716 | 8,586,000 | |||||||||
168,096 | Southwest Gas Corp. | 3,557,555 | 6,550,701 | |||||||||
45,000 | Tesoro Corp.† | 455,817 | 1,207,350 | |||||||||
1,000 | The Laclede Group Inc. | 37,685 | 38,100 | |||||||||
45,000 | The York Water Co. | 629,880 | 783,450 | |||||||||
25,000 | Union Drilling Inc.† | 198,390 | 256,250 | |||||||||
10,000 | Vestas Wind Systems A/S† | 89,988 | 433,741 | |||||||||
70,000 | Voyager Oil & Gas Inc.† | 31,840 | 308,000 | |||||||||
210,000 | Westar Energy Inc. | 3,773,305 | 5,548,200 | |||||||||
80,313,999 | 156,747,113 | |||||||||||
Entertainment — 1.4% | ||||||||||||
100,000 | Carmike Cinemas Inc.† | 771,699 | 715,000 | |||||||||
6,048 | Chestnut Hill Ventures† (b) | 164,590 | 275,466 | |||||||||
32,000 | Discovery Communications Inc., Cl. A† | 439,528 | 1,276,800 | |||||||||
32,000 | Discovery Communications Inc., Cl. C† | 454,438 | 1,126,720 | |||||||||
325,000 | Dover Motorsports Inc.† | 1,353,511 | 650,000 | |||||||||
242,000 | Fisher Communications Inc.† | 8,449,624 | 7,521,360 | |||||||||
25,000 | International Speedway Corp., Cl. A | 765,825 | 745,000 | |||||||||
3,500 | International Speedway Corp., Cl. B | 70,020 | 103,950 | |||||||||
270,000 | Madison Square Garden Inc., Cl. A† | 3,020,077 | 7,287,300 | |||||||||
10,000 | Rovi Corp.† | 142,372 | 536,500 | |||||||||
450,000 | Take-Two Interactive Software Inc.† | 7,572,812 | 6,916,500 | |||||||||
215,000 | Universal Entertainment Corp.† | 3,336,232 | 6,309,389 | |||||||||
50,000 | World Wrestling Entertainment Inc., Cl. A | 544,220 | 628,500 | |||||||||
27,084,948 | 34,092,485 | |||||||||||
Environmental Services — 0.5% | ||||||||||||
1,500 | Renegy Holdings Inc.† | 539 | 450 | |||||||||
400,000 | Republic Services Inc. | 5,798,456 | 12,016,000 | |||||||||
5,798,995 | 12,016,450 | |||||||||||
Equipment and Supplies — 9.0% | ||||||||||||
22,500 | A.O. Smith Corp. | 336,569 | 997,650 | |||||||||
372,000 | AMETEK Inc. | 1,033,701 | 16,319,640 | |||||||||
5,000 | AZZ Inc. | 154,353 | 228,000 | |||||||||
495,000 | Baldwin Technology Co. Inc., Cl. A† | 1,485,592 | 796,950 | |||||||||
25,000 | Belden Inc. | 286,590 | 938,750 | |||||||||
55,000 | Capstone Turbine Corp.† | 108,350 | 99,550 | |||||||||
515,371 | CIRCOR International Inc. | 13,881,216 | 24,232,744 | |||||||||
339,000 | CLARCOR Inc. | 2,024,731 | 15,231,270 | |||||||||
330,000 | Core Molding Technologies Inc.† | 654,777 | 2,508,000 | |||||||||
168,000 | Crown Holdings Inc.† | 678,985 | 6,481,440 | |||||||||
4,000 | Danaher Corp. | 34,106 | 207,600 | |||||||||
90,000 | Donaldson Co. Inc. | 1,558,860 | 5,516,100 | |||||||||
222,000 | Entegris Inc.† | 1,280,053 | 1,946,940 | |||||||||
250,000 | Federal Signal Corp. | 1,767,555 | 1,627,500 | |||||||||
103,000 | Flowserve Corp. | 2,703,426 | 13,266,400 | |||||||||
160,000 | Franklin Electric Co. Inc. | 1,496,658 | 7,392,000 | |||||||||
222,000 | Gerber Scientific Inc.† | 1,761,736 | 2,077,920 | |||||||||
155,000 | Graco Inc. | 2,718,503 | 7,050,950 | |||||||||
1,040,000 | GrafTech International Ltd.† | 12,563,346 | 21,455,200 | |||||||||
100,000 | IDEX Corp. | 765,938 | 4,365,000 | |||||||||
425,000 | Interpump Group SpA† | 2,313,541 | 3,604,809 | |||||||||
4,200 | Itron Inc.† | 264,019 | 237,048 | |||||||||
7,000 | Jarden Corp. | 115,037 | 248,990 |
See accompanying notes to financial statements.
7
The Gabelli Small Cap Growth Fund
Schedule of Investments (Continued) — March 31, 2011 (Unaudited)
Schedule of Investments (Continued) — March 31, 2011 (Unaudited)
Market | ||||||||||||
Shares | Cost | Value | ||||||||||
COMMON STOCKS (Continued) | ||||||||||||
Equipment and Supplies (Continued) | ||||||||||||
206,049 | L.S. Starrett Co., Cl. A | $ | 2,560,939 | $ | 2,892,928 | |||||||
40,000 | Littelfuse Inc. | 758,367 | 2,284,000 | |||||||||
230,000 | Lufkin Industries Inc. | 1,483,227 | 21,498,100 | |||||||||
55,000 | Maezawa Kyuso Industries Co. Ltd. | 359,609 | 768,334 | |||||||||
82,000 | Met-Pro Corp. | 692,039 | 975,800 | |||||||||
4,000 | Mine Safety Appliances Co. | 107,558 | 146,680 | |||||||||
48,313 | Mueller Industries Inc. | 1,537,951 | 1,769,222 | |||||||||
12,000 | Plantronics Inc. | 275,609 | 439,440 | |||||||||
2,000 | Regal-Beloit Corp. | 59,351 | 147,660 | |||||||||
130,000 | Robbins & Myers Inc. | 1,826,625 | 5,978,700 | |||||||||
83,000 | SL Industries Inc.† | 1,105,422 | 1,519,730 | |||||||||
5,000 | Teleflex Inc. | 76,167 | 289,900 | |||||||||
293,000 | Tennant Co. | 5,920,322 | 12,317,720 | |||||||||
370,000 | The Gorman-Rupp Co. | 7,452,044 | 14,574,300 | |||||||||
85,000 | The Greenbrier Cos. Inc.† | 833,816 | 2,412,300 | |||||||||
100,000 | The Manitowoc Co. Inc. | 666,995 | 2,188,000 | |||||||||
22,000 | The Middleby Corp.† | 767,256 | 2,050,840 | |||||||||
8,000 | Valmont Industries Inc. | 176,298 | 834,960 | |||||||||
95,000 | Vicor Corp. | 1,019,132 | 1,566,550 | |||||||||
7,875 | Watsco Inc., Cl. B | 23,627 | 547,549 | |||||||||
153,000 | Watts Water Technologies Inc., Cl. A | 3,377,189 | 5,843,070 | |||||||||
81,067,185 | 217,876,234 | |||||||||||
Financial Services — 5.3% | ||||||||||||
10,616 | Alleghany Corp.† | 1,758,117 | 3,513,737 | |||||||||
25,287 | Argo Group International Holdings Ltd. | 844,293 | 835,482 | |||||||||
458,577 | Artio Global Investors Inc. | 11,096,177 | 7,410,604 | |||||||||
10,121 | BCB Holdings Ltd.† | 23,159 | 12,421 | |||||||||
115,000 | BKF Capital Group Inc.† | 558,738 | 124,200 | |||||||||
12,500 | Capitol Federal Financial Inc. | 125,000 | 140,875 | |||||||||
714,410 | CNA Surety Corp.† | 9,292,650 | 18,045,997 | |||||||||
22,000 | Crazy Woman Creek Bancorp Inc.† | 343,564 | 236,500 | |||||||||
150,000 | Discover Financial Services | 2,578,605 | 3,618,000 | |||||||||
40,000 | Duff & Phelps Corp., Cl. A | 587,050 | 639,200 | |||||||||
100,000 | Epoch Holding Corp. | 818,447 | 1,578,000 | |||||||||
8,389 | Fidelity Southern Corp.† | 53,123 | 67,112 | |||||||||
190,000 | Flushing Financial Corp. | 3,048,480 | 2,831,000 | |||||||||
880,000 | GAM Holding AG† | 11,387,322 | 16,718,563 | |||||||||
45,000 | Hudson Valley Holding Corp. | 943,612 | 990,000 | |||||||||
805,000 | Janus Capital Group Inc. | 8,164,370 | 10,038,350 | |||||||||
85,000 | KBW Inc. | 2,317,670 | 2,226,150 | |||||||||
745,072 | KKR & Co. LP | 5,376,793 | 12,226,632 | |||||||||
135,000 | Legg Mason Inc. | 2,597,097 | 4,872,150 | |||||||||
3,000 | Leucadia National Corp. | 24,354 | 112,620 | |||||||||
54,624 | Medallion Financial Corp. | 415,809 | 480,145 | |||||||||
330,000 | Nara Bancorp Inc.† | 3,767,131 | 3,174,600 | |||||||||
300,000 | NewAlliance Bancshares Inc. | 4,316,427 | 4,452,000 | |||||||||
250,000 | Och-Ziff Capital Management Group LLC, Cl. A | 1,997,164 | 4,080,000 | |||||||||
30,000 | optionsXpress Holdings Inc. | 531,099 | 549,300 | |||||||||
165,000 | Oritani Financial Corp. | 1,685,540 | 2,092,200 | |||||||||
31,000 | PrivateBancorp Inc. | 527,319 | 473,990 | |||||||||
240,000 | Sterling Bancorp | 3,569,825 | 2,402,400 | |||||||||
320,000 | SWS Group Inc. | 4,791,830 | 1,942,400 | |||||||||
10,000 | T. Rowe Price Group Inc. | 270,786 | 664,200 | |||||||||
11,033 | Tree.com Inc.† | 78,880 | 65,095 | |||||||||
10,000 | Universal American Corp. | 201,993 | 229,100 | |||||||||
5,500 | Value Line Inc. | 186,904 | 81,400 | |||||||||
460,000 | Waddell & Reed Financial Inc., Cl. A | 9,248,071 | 18,680,600 | |||||||||
600,000 | Wilmington Trust Corp. | 6,231,793 | 2,712,000 | |||||||||
99,759,192 | 128,317,023 | |||||||||||
Food and Beverage — 6.2% | ||||||||||||
47,000 | Boston Beer Co. Inc., Cl. A† | 883,432 | 4,353,140 | |||||||||
38,100 | Brown-Forman Corp., Cl. A | 1,115,861 | 2,585,466 | |||||||||
5,000 | Brown-Forman Corp., Cl. B | 144,052 | 341,500 | |||||||||
200,000 | Bull-Dog Sauce Co. Ltd. | 444,295 | 408,752 | |||||||||
3,200,000 | China Tontine Wines Group Ltd. | 778,804 | 674,676 | |||||||||
280,000 | Corn Products International Inc. | 6,240,917 | 14,509,600 | |||||||||
890,000 | Davide Campari — Milano SpA | 4,450,784 | 6,021,456 | |||||||||
240,000 | Dean Foods Co.† | 4,286,457 | 2,400,000 | |||||||||
380,000 | Denny’s Corp.† | 1,106,889 | 1,542,800 | |||||||||
1,000 | Diamond Foods Inc. | 20,567 | 55,800 | |||||||||
326,000 | Dr Pepper Snapple Group Inc. | 6,664,752 | 12,114,160 | |||||||||
2,900,000 | Dynasty Fine Wines Group Ltd. | 1,098,176 | 1,081,178 | |||||||||
27,000 | Farmer Brothers Co. | 424,408 | 327,240 | |||||||||
290,000 | Feihe International Inc.† | 6,069,385 | 2,496,900 | |||||||||
250,000 | Flowers Foods Inc. | 1,386,407 | 6,807,500 | |||||||||
25,000 | Green Mountain Coffee Roasters Inc.† | 749,976 | 1,615,250 | |||||||||
700,000 | Grupo Continental SAB de CV | 1,156,476 | 2,365,809 | |||||||||
160,000 | ITO EN Ltd. | 3,301,726 | 2,787,208 | |||||||||
25,000 | J & J Snack Foods Corp. | 577,813 | 1,176,750 | |||||||||
1,250,000 | Kikkoman Corp. | 13,329,919 | 11,781,678 |
See accompanying notes to financial statements.
8
The Gabelli Small Cap Growth Fund
Schedule of Investments (Continued) — March 31, 2011 (Unaudited)
Schedule of Investments (Continued) — March 31, 2011 (Unaudited)
Market | ||||||||||||
Shares | Cost | Value | ||||||||||
COMMON STOCKS (Continued) | ||||||||||||
Food and Beverage (Continued) | ||||||||||||
250,000 | Lifeway Foods Inc.† | $ | 2,511,599 | $ | 2,605,000 | |||||||
3,000 | MEIJI Holdings Co. Ltd. | 117,526 | 120,642 | |||||||||
70,000 | MGP Ingredients Inc. | 331,262 | 610,400 | |||||||||
450,000 | Morinaga Milk Industry Co. Ltd. | 1,808,850 | 1,606,756 | |||||||||
85,000 | NISSIN FOODS HOLDINGS CO. LTD. | 2,907,986 | 2,996,153 | |||||||||
3,800,000 | Parmalat SpA | 10,676,896 | 12,730,932 | |||||||||
55,600 | Peet’s Coffee & Tea Inc.† | 2,143,318 | 2,673,804 | |||||||||
50,000 | Ralcorp Holdings Inc.† | 892,806 | 3,421,500 | |||||||||
162,000 | Rock Field Co. Ltd. | 2,539,700 | 2,664,294 | |||||||||
125,000 | Smart Balance Inc.† | 849,741 | 573,750 | |||||||||
431,013 | Snyders-Lance Inc. | 9,078,546 | 8,555,608 | |||||||||
410,000 | The Hain Celestial Group Inc.† | 7,537,748 | 13,234,800 | |||||||||
66,000 | The J.M. Smucker Co. | 1,599,230 | 4,711,740 | |||||||||
700,000 | Tingyi (Cayman Islands) Holding Corp. | 1,792,917 | 1,711,630 | |||||||||
242,946 | Tootsie Roll Industries Inc. | 5,142,186 | 6,889,951 | |||||||||
90,000 | United Natural Foods Inc.† | 2,545,822 | 4,033,800 | |||||||||
4,500 | Vina Concha Y Toro SA, ADR | 142,964 | 211,410 | |||||||||
1,200,000 | Vitasoy International Holdings Ltd. | 739,370 | 979,617 | |||||||||
15,000 | Willamette Valley Vineyards Inc.† | 56,042 | 47,250 | |||||||||
160,000 | YAKULT HONSHA Co. Ltd. | 4,046,939 | 4,089,445 | |||||||||
28,000 | Zhongpin Inc.† | 379,280 | 425,040 | |||||||||
112,071,824 | 150,340,385 | |||||||||||
Health Care — 6.6% | ||||||||||||
30,000 | Alere Inc.† | 554,732 | 1,174,200 | |||||||||
50,000 | Align Technology Inc.† | 408,280 | 1,024,000 | |||||||||
100,000 | Allergan Inc. | 1,964,407 | 7,102,000 | |||||||||
135,000 | AngioDynamics Inc.† | 2,074,518 | 2,041,200 | |||||||||
8,000 | Anika Therapeutics Inc.† | 76,123 | 71,680 | |||||||||
324,000 | Animal Health International Inc.† | 2,511,922 | 1,360,800 | |||||||||
148,000 | ArthroCare Corp.† | 2,893,079 | 4,934,320 | |||||||||
50,000 | Beckman Coulter Inc. | 3,995,399 | 4,153,500 | |||||||||
6,500 | Bio-Rad Laboratories Inc., Cl. A† | 258,088 | 780,910 | |||||||||
42,000 | Bio-Reference Laboratories Inc.† | 942,183 | 942,480 | |||||||||
50,500 | BioLase Technology Inc.† | 74,915 | 245,935 | |||||||||
20,000 | Bruker Corp.† | 174,056 | 417,000 | |||||||||
12,000 | Cantel Medical Corp. | 266,901 | 309,000 | |||||||||
232,000 | Cepheid Inc.† | 3,161,747 | 6,500,640 | |||||||||
158,000 | Chemed Corp. | 3,497,479 | 10,524,380 | |||||||||
66,000 | CONMED Corp.† | 1,714,345 | 1,734,480 | |||||||||
75,000 | Continucare Corp.† | 228,285 | 401,250 | |||||||||
379,200 | Cutera Inc.† | 5,127,118 | 3,249,744 | |||||||||
12,000 | Cynosure Inc., Cl. A† | 93,211 | 166,680 | |||||||||
96,000 | DexCom Inc.† | 962,427 | 1,489,920 | |||||||||
29,237 | DGT Holdings Corp.† | 488,484 | 280,675 | |||||||||
187,024 | Exactech Inc.† | 2,898,144 | 3,282,271 | |||||||||
30,000 | Gentiva Health Services Inc.† | 772,067 | 840,900 | |||||||||
691,000 | Genzyme Corp.† | 52,427,369 | 52,619,650 | |||||||||
44,000 | Henry Schein Inc.† | 861,550 | 3,087,480 | |||||||||
4,000 | Heska Corp.† | 35,706 | 26,000 | |||||||||
23,000 | ICU Medical Inc.† | 573,768 | 1,006,940 | |||||||||
290,000 | IRIS International Inc.† | 3,079,773 | 2,615,800 | |||||||||
36,000 | Kinetic Concepts Inc.† | 918,852 | 1,959,120 | |||||||||
42,000 | Life Technologies Corp.† | 1,070,187 | 2,201,640 | |||||||||
7,500 | MAKO Surgical Corp.† | 177,709 | 181,500 | |||||||||
40,000 | MWI Veterinary Supply Inc.† | 972,736 | 3,227,200 | |||||||||
8,000 | Neogen Corp.† | 195,096 | 331,040 | |||||||||
4,000 | Nobel Biocare Holding AG† | 61,643 | 82,918 | |||||||||
50,000 | Nordion Inc. | 369,385 | 591,000 | |||||||||
7,500 | NuVasive Inc.† | 200,477 | 189,900 | |||||||||
105,000 | Opko Health Inc.† | 284,862 | 391,650 | |||||||||
72,000 | Orthofix International NV† | 1,189,183 | 2,337,120 | |||||||||
45,000 | Owens & Minor Inc. | 606,216 | 1,461,600 | |||||||||
260,000 | Pain Therapeutics Inc.† | 1,658,892 | 2,485,600 | |||||||||
360,000 | Palomar Medical Technologies Inc.† | 5,753,953 | 5,346,000 | |||||||||
30,000 | PSS World Medical Inc.† | 367,273 | 814,500 | |||||||||
575,000 | Quidel Corp.† | 6,254,820 | 6,877,000 | |||||||||
225,002 | Rochester Medical Corp.† | 2,624,005 | 2,583,023 | |||||||||
235,000 | RTI Biologics Inc.† | 1,302,133 | 672,100 | |||||||||
960,000 | Sorin SpA† | 2,442,470 | 2,680,196 | |||||||||
2,300 | Straumann Holding AG | 206,988 | 591,464 | |||||||||
2,000 | Stryker Corp. | 88,300 | 121,600 | |||||||||
50,000 | SurModics Inc.† | 634,243 | 625,000 | |||||||||
14,000 | Syneron Medical Ltd.† | 116,750 | 182,560 | |||||||||
6,000 | Techne Corp. | 409,768 | 429,600 | |||||||||
75,000 | The Cooper Cos. Inc. | 2,911,668 | 5,208,750 | |||||||||
48,000 | United-Guardian Inc. | 435,056 | 715,680 | |||||||||
80,000 | Vascular Solutions Inc.† | 619,673 | 872,800 | |||||||||
113,200 | Wright Medical Group Inc.† | 1,931,391 | 1,925,532 | |||||||||
18,800 | Young Innovations Inc. | 492,409 | 590,320 | |||||||||
126,412,214 | 158,060,248 | |||||||||||
Home Furnishings — 0.1% | ||||||||||||
20,000 | Bassett Furniture Industries Inc.† | 167,652 | 157,000 | |||||||||
48,000 | Bed Bath & Beyond Inc.† | 1,226,616 | 2,316,960 | |||||||||
1,394,268 | 2,473,960 | |||||||||||
See accompanying notes to financial statements.
9
The Gabelli Small Cap Growth Fund
Schedule of Investments (Continued) — March 31, 2011 (Unaudited)
Schedule of Investments (Continued) — March 31, 2011 (Unaudited)
Market | ||||||||||||
Shares | Cost | Value | ||||||||||
COMMON STOCKS (Continued) | ||||||||||||
Hotels and Gaming — 2.2% | ||||||||||||
70,000 | Ante5 Inc.† | $ | 0 | $ | 89,600 | |||||||
160,000 | Boyd Gaming Corp.† | 934,718 | 1,499,200 | |||||||||
110,000 | Canterbury Park Holding Corp.† | 1,120,504 | 1,333,200 | |||||||||
110,092 | Churchill Downs Inc. | 3,754,858 | 4,568,818 | |||||||||
125,000 | Dover Downs Gaming & Entertainment Inc. | 786,541 | 448,750 | |||||||||
275,000 | Gaylord Entertainment Co.† | 6,256,463 | 9,537,000 | |||||||||
400,000 | Genting Singapore plc† | 408,768 | 650,536 | |||||||||
18,000 | Home Inns & Hotels Management Inc., ADR† | 343,247 | 712,260 | |||||||||
110,000 | Lakes Entertainment Inc.† | 502,595 | 297,000 | |||||||||
200,000 | Las Vegas Sands Corp.† | 1,395,678 | 8,444,000 | |||||||||
1,400,000 | Mandarin Oriental International Ltd. | 1,825,418 | 2,926,000 | |||||||||
11,800 | Morgans Hotel Group Co.† | 126,690 | 115,640 | |||||||||
165,000 | Orient-Express Hotels Ltd., Cl. A† | 2,872,992 | 2,041,050 | |||||||||
100,000 | Penn National Gaming Inc.† | 1,509,186 | 3,706,000 | |||||||||
300,000 | Pinnacle Entertainment Inc.† | 2,008,997 | 4,086,000 | |||||||||
180,000 | Sonesta International Hotels Corp., Cl. A | 3,750,193 | 3,453,300 | |||||||||
2,000,000 | The Hongkong & Shanghai Hotels Ltd. | 1,786,952 | 3,666,493 | |||||||||
200,000 | The Marcus Corp. | 2,690,011 | 2,180,000 | |||||||||
24,000 | Wynn Resorts Ltd. | 308,808 | 3,054,000 | |||||||||
32,382,619 | 52,808,847 | |||||||||||
Machinery — 1.4% | ||||||||||||
57,000 | Astec Industries Inc.† | 1,840,989 | 2,125,530 | |||||||||
453,000 | CNH Global NV† | 6,037,085 | 21,993,150 | |||||||||
15,000 | Global Power Equipment Group Inc.† | 352,192 | 412,500 | |||||||||
44,500 | Kennametal Inc. | 1,204,590 | 1,735,500 | |||||||||
3,000 | Nordson Corp. | 107,171 | 345,180 | |||||||||
66,000 | Twin Disc Inc. | 778,170 | 2,126,520 | |||||||||
135,000 | Zebra Technologies Corp., Cl. A† | 2,984,425 | 5,297,400 | |||||||||
13,304,622 | 34,035,780 | |||||||||||
Manufactured Housing and Recreational Vehicles — 0.3% | ||||||||||||
600,000 | All American Group Inc.† | 1,330,196 | 136,800 | |||||||||
75,000 | Cavco Industries Inc.† | 1,561,191 | 3,387,000 | |||||||||
15,000 | Drew Industries Inc. | 255,948 | 334,950 | |||||||||
30,000 | Nobility Homes Inc.† | 446,262 | 276,000 | |||||||||
179,000 | Skyline Corp. | 5,284,754 | 3,588,950 | |||||||||
8,878,351 | 7,723,700 | |||||||||||
Metals and Mining — 1.1% | ||||||||||||
52,003 | Barrick Gold Corp. | 1,522,648 | 2,699,476 | |||||||||
10,000 | Inmet Mining Corp. | 325,911 | 702,940 | |||||||||
109,250 | Ivanhoe Mines Ltd.† | 1,540,339 | 3,000,005 | |||||||||
140,000 | Kinross Gold Corp. | 962,642 | 2,205,000 | |||||||||
250,000 | Lynas Corp Ltd.† | 230,655 | 581,822 | |||||||||
260,000 | Materion Corp.† | 5,341,877 | 10,608,000 | |||||||||
101,500 | Molycorp Inc.† | 1,899,888 | 6,092,030 | |||||||||
2,000 | Northwest Pipe Co.† | 55,888 | 45,860 | |||||||||
52,100 | Stillwater Mining Co.† | 477,514 | 1,194,653 | |||||||||
15,000 | Yamana Gold Inc. | 50,671 | 184,650 | |||||||||
12,408,033 | 27,314,436 | |||||||||||
Paper and Forest Products — 0.1% | ||||||||||||
25,000 | Schweitzer-Mauduit International Inc. | 949,097 | 1,265,250 | |||||||||
73,000 | Wausau Paper Corp. | 739,852 | 557,720 | |||||||||
1,688,949 | 1,822,970 | |||||||||||
Publishing — 1.2% | ||||||||||||
65,000 | Belo Corp., Cl. A† | 157,232 | 572,650 | |||||||||
60,000 | Cambium Learning Group Inc.† | 212,981 | 204,000 | |||||||||
1,520,000 | Il Sole 24 Ore SpA† | 3,636,464 | 2,843,457 | |||||||||
12,000 | John Wiley & Sons Inc., Cl. B | 46,500 | 610,920 | |||||||||
1,080,000 | Journal Communications Inc., Cl. A† | 5,715,463 | 6,480,000 | |||||||||
913,233 | Media General Inc., Cl. A† | 5,593,603 | 6,283,043 | |||||||||
30,000 | Meredith Corp. | 539,417 | 1,017,600 | |||||||||
260,000 | News Corp., Cl. A | 765,310 | 4,565,600 | |||||||||
200,000 | PRIMEDIA Inc. | 955,766 | 974,000 | |||||||||
415,000 | The E.W. Scripps Co., Cl. A† | 2,734,026 | 4,108,500 | |||||||||
20,356,762 | 27,659,770 | |||||||||||
Real Estate — 1.0% | ||||||||||||
20,150 | Capital Properties Inc., Cl. A | 408,087 | 261,749 | |||||||||
15,000 | Capital Properties Inc., Cl. B (b) | 0 | 194,850 | |||||||||
115,046 | Cohen & Steers Inc. | 2,572,785 | 3,414,565 | |||||||||
200,000 | Griffin Land & Nurseries Inc. | 3,062,169 | 6,436,000 | |||||||||
10,000 | Gyrodyne Co. of America Inc.† | 172,069 | 735,000 | |||||||||
107,000 | Morguard Corp. | 1,362,690 | 6,655,080 | |||||||||
255,000 | The St. Joe Co.† | 6,424,817 | 6,392,850 | |||||||||
14,002,617 | 24,090,094 | |||||||||||
Retail — 4.5% | ||||||||||||
96,010 | 99 Cents Only Stores† | 1,463,280 | 1,881,796 | |||||||||
256,000 | Aaron’s Inc.† | 1,238,287 | 6,492,160 | |||||||||
260,000 | AutoNation Inc.† | 3,938,974 | 9,196,200 | |||||||||
42,000 | Barnes & Noble Inc. | 598,563 | 385,980 | |||||||||
13,500 | Best Buy Co. Inc. | 559,196 | 387,720 |
See accompanying notes to financial statements.
10
The Gabelli Small Cap Growth Fund
Schedule of Investments (Continued) — March 31, 2011 (Unaudited)
Schedule of Investments (Continued) — March 31, 2011 (Unaudited)
Market | ||||||||||||
Shares | Cost | Value | ||||||||||
COMMON STOCKS (Continued) | ||||||||||||
Retail (Continued) | ||||||||||||
115,000 | Big 5 Sporting Goods Corp. | $ | 1,751,510 | $ | 1,370,800 | |||||||
22,000 | Biglari Holdings Inc.† | 5,548,040 | 9,318,100 | |||||||||
365,721 | Casey’s General Stores Inc. | 13,368,059 | 14,263,119 | |||||||||
740,000 | Coldwater Creek Inc.† | 3,411,095 | 1,953,600 | |||||||||
25,000 | Collective Brands Inc.† | 539,562 | 539,500 | |||||||||
42,792 | Copart Inc.† | 1,466,246 | 1,854,177 | |||||||||
100,000 | HSN Inc.† | 2,905,633 | 3,203,000 | |||||||||
641,551 | Ingles Markets Inc., Cl. A | 10,590,499 | 12,709,125 | |||||||||
105,600 | Krispy Kreme Doughnuts Inc.† | 692,547 | 743,424 | |||||||||
170,000 | Macy’s Inc. | 2,290,516 | 4,124,200 | |||||||||
46,000 | Movado Group Inc.† | 612,363 | 675,280 | |||||||||
147,000 | Nathan’s Famous Inc.† | 2,047,231 | 2,540,160 | |||||||||
85,000 | Pier 1 Imports Inc.† | 736,452 | 862,750 | |||||||||
60,074 | Regis Corp. | 1,202,781 | 1,065,713 | |||||||||
300,000 | Rush Enterprises Inc., Cl. B† | 3,438,009 | 5,217,000 | |||||||||
320,000 | The Bon-Ton Stores Inc.† | 2,392,653 | 4,960,000 | |||||||||
280,000 | The Cheesecake Factory Inc.† | 7,332,374 | 8,425,200 | |||||||||
100,000 | The Great Atlantic & Pacific Tea Co. Inc.† | 17,250 | 23,000 | |||||||||
200,000 | Tractor Supply Co. | 3,695,464 | 11,972,000 | |||||||||
33,000 | Village Super Market Inc., Cl. A | 815,643 | 960,300 | |||||||||
53,000 | Weis Markets Inc. | 1,633,642 | 2,144,380 | |||||||||
168,000 | Wendy’s/Arby’s Group Inc., Cl. A | 1,364,690 | 845,040 | |||||||||
186,073 | Winn-Dixie Stores Inc.† | 2,467,297 | 1,328,561 | |||||||||
78,117,856 | 109,442,285 | |||||||||||
Specialty Chemicals — 4.7% | ||||||||||||
55,000 | A. Schulman Inc. | 1,139,761 | 1,359,600 | |||||||||
27,500 | Airgas Inc. | 665,148 | 1,826,550 | |||||||||
83,000 | Albemarle Corp. | 1,309,551 | 4,960,910 | |||||||||
35,000 | Arch Chemicals Inc. | 766,922 | 1,455,650 | |||||||||
76,000 | Ashland Inc. | 1,338,551 | 4,389,760 | |||||||||
40,000 | Chemtura Corp.† | 639,640 | 688,000 | |||||||||
11,000 | Cytec Industries Inc. | 296,699 | 598,070 | |||||||||
2,155,000 | Ferro Corp.† | 15,115,820 | 35,751,450 | |||||||||
340,000 | H.B. Fuller Co. | 4,380,983 | 7,303,200 | |||||||||
93,000 | Hawkins Inc. | 1,379,557 | 3,820,440 | |||||||||
950,000 | Huntsman Corp. | 5,135,124 | 16,511,000 | |||||||||
85,000 | Material Sciences Corp.† | 503,549 | 612,850 | |||||||||
38,000 | NewMarket Corp. | 3,987,095 | 6,012,360 | |||||||||
355,000 | Omnova Solutions Inc.† | 943,978 | 2,793,850 | |||||||||
67,000 | Penford Corp.† | 734,778 | 417,410 | |||||||||
13,000 | Quaker Chemical Corp. | 214,482 | 522,210 | |||||||||
100,000 | Rockwood Holdings Inc.† | 1,966,878 | 4,922,000 | |||||||||
265,000 | Sensient Technologies Corp. | 5,398,394 | 9,497,600 | |||||||||
600,000 | Zep Inc. | 8,295,733 | 10,446,000 | |||||||||
54,212,643 | 113,888,910 | |||||||||||
Telecommunications — 1.4% | ||||||||||||
30,000 | Atlantic Tele-Network Inc. | 461,782 | 1,115,700 | |||||||||
1,765,000 | Cincinnati Bell Inc.† | 5,322,665 | 4,730,200 | |||||||||
6,795 | Community Service Communications Inc. | 0 | 6,455 | |||||||||
110,000 | HickoryTech Corp. | 949,514 | 999,900 | |||||||||
3,000 | IDT Corp., Cl. B | 78,263 | 80,850 | |||||||||
128,000 | New Ulm Telecom Inc. | 1,205,079 | 716,800 | |||||||||
10,000 | PAETEC Holding Corp.† | 37,020 | 33,400 | |||||||||
116,000 | Rogers Communications Inc., Cl. B | 560,168 | 4,222,400 | |||||||||
63,000 | Shenandoah Telecommunications Co. | 373,895 | 1,137,780 | |||||||||
1,600,000 | Sprint Nextel Corp.† | 4,496,476 | 7,424,000 | |||||||||
37,584 | Verizon Communications Inc. | 846,702 | 1,448,487 | |||||||||
815,000 | VimpelCom Ltd., ADR | 2,480,014 | 11,507,800 | |||||||||
53,000 | Winstar Communications Inc.† (b) | 133 | 53 | |||||||||
16,811,711 | 33,423,825 | |||||||||||
Transportation — 0.9% | ||||||||||||
473,000 | GATX Corp. | 14,367,004 | 18,286,180 | |||||||||
2,000 | Grupo TMM SA, Cl. A, ADR† | 13,813 | 4,860 | |||||||||
2,000 | Irish Continental Group plc | 14,688 | 50,254 | |||||||||
130,000 | Providence and Worcester Railroad Co. | 1,845,698 | 2,174,250 | |||||||||
16,241,203 | 20,515,544 | |||||||||||
Wireless Communications — 0.1% | ||||||||||||
25,000 | Millicom International Cellular SA | 1,924,303 | 2,404,250 | |||||||||
TOTAL COMMON STOCKS | 1,254,412,564 | 2,055,033,242 | ||||||||||
PREFERRED STOCKS — 0.1% | ||||||||||||
Automotive: Parts and Accessories — 0.1% | ||||||||||||
50,000 | Jungheinrich AG Pfd. | 1,031,755 | 2,008,872 | |||||||||
WARRANTS — 0.0% | ||||||||||||
Automotive: Parts and Accessories — 0.0% | ||||||||||||
1,213 | Exide Technologies, expire 05/05/11† (b) | 2,247 | 12 | |||||||||
4,531 | Federal-Mogul Corp., expire 12/27/14† | 87,687 | 1,812 | |||||||||
89,934 | 1,824 | |||||||||||
See accompanying notes to financial statements.
11
The Gabelli Small Cap Growth Fund
Schedule of Investments (Continued) — March 31, 2011 (Unaudited)
Schedule of Investments (Continued) — March 31, 2011 (Unaudited)
Market | ||||||||||||
Shares | Cost | Value | ||||||||||
WARRANTS (Continued) | ||||||||||||
Broadcasting — 0.0% | ||||||||||||
6,082 | Granite Broadcasting Corp., Ser. A, expire 06/04/12† (b) | $ | 0 | $ | 1 | |||||||
3,430 | Granite Broadcasting Corp., Ser. B, expire 06/04/12† (b) | 0 | 0 | |||||||||
0 | 1 | |||||||||||
Consumer Services — 0.0% | ||||||||||||
120,000 | SearchMedia Holdings Ltd., expire 11/19/11† | 247,589 | 14,412 | |||||||||
Retail — 0.0% | ||||||||||||
250,189 | Talbots Inc., expire 04/06/15† | 750,567 | 150,113 | |||||||||
TOTAL WARRANTS | 1,088,090 | 166,350 | ||||||||||
Principal | ||||||||||||
Amount | ||||||||||||
CONVERTIBLE CORPORATE BONDS — 0.0% | ||||||||||||
Hotels and Gaming — 0.0% | ||||||||||||
$ | 400,000 | Gaylord Entertainment Co., Cv., 3.750%, 10/01/14 (c) | 379,722 | 571,500 | ||||||||
CORPORATE BONDS — 0.0% | ||||||||||||
Computer Software and Services — 0.0% | ||||||||||||
300,000 | Exodus Communications Inc., Sub. Deb., 5.250%, 02/15/12†(b) | 1,185 | 0 | |||||||||
U.S. GOVERNMENT OBLIGATIONS — 16.6% | ||||||||||||
398,959,000 | U.S. Treasury Bills, 0.095% to 0.210%††, 04/07/11 to 09/22/11 | 398,776,033 | 398,809,832 | |||||||||
TOTAL INVESTMENTS — 102.0% | $ | 1,655,689,349 | 2,456,589,796 | |||||||||
Other Assets and Liabilities (Net) — (2.0)% | (47,913,677 | ) | ||||||||||
NET ASSETS — 100.0% | 2,408,676,119 | |||||||||||
(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, 2011, the market value of fair valued securities amounted to $497,382 or 0.02% of net assets. | |
(c) | Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. This security may be resold in transactions exempt from registration, normally to qualified institutional buyers. At March 31, 2011, the market value of the Rule 144A security amounted to $571,500 or 0.02% of net assets. | |
† | 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, 2011 (Unaudited)
March 31, 2011 (Unaudited)
Assets: | ||||
Investments, at value (cost $1,642,894,554) | $ | 2,443,016,700 | ||
Investments in affiliates, at value (cost $12,794,795) | 13,573,096 | |||
Foreign currency, at value (cost $7) | 7 | |||
Cash | 3,795 | |||
Receivable for Fund shares issued | 3,513,684 | |||
Receivable for investments sold | 100,948 | |||
Dividends and interest receivable | 1,542,230 | |||
Prepaid expenses | 97,554 | |||
Total Assets | 2,461,848,014 | |||
Liabilities: | ||||
Payable for investments purchased | 48,512,120 | |||
Payable for Fund shares redeemed | 1,380,264 | |||
Payable for investment advisory fees | 1,958,282 | |||
Payable for distribution fees | 509,324 | |||
Payable for accounting fees | 7,500 | |||
Other accrued expenses | 804,405 | |||
Total Liabilities | 53,171,895 | |||
Net Assets (applicable to 66,889,868 shares outstanding) | $ | 2,408,676,119 | ||
Net Assets Consist of: | ||||
Paid-in capital | $ | 1,583,089,119 | ||
Accumulated net investment loss | (6,131,490 | ) | ||
Accumulated net realized gain on investments and foreign currency transactions | 30,819,857 | |||
Net unrealized appreciation on investments | 800,900,447 | |||
Net unrealized depreciation on foreign currency translations | (1,814 | ) | ||
Net Assets | $ | 2,408,676,119 | ||
Shares of Capital Stock each at $0.001 par value: | ||||
Class AAA: | ||||
Net Asset Value, offering, and redemption price per share ($1,926,626,109 ÷ 53,403,588 shares outstanding; 150,000,000 shares authorized) | $ | 36.08 | ||
Class A: | ||||
Net Asset Value and redemption price per share ($178,434,879 ÷ 4,946,650 shares outstanding; 50,000,000 shares authorized) | $ | 36.07 | ||
Maximum offering price per share (NAV÷ 0.9425, based on maximum sales charge of 5.75% of the offering price) | $ | 38.27 | ||
Class B: | ||||
Net Asset Value and offering price per share ($20,925 ÷ 617.3 shares outstanding, 50,000,000 shares authorized) | $ | 33.90 | (a) | |
Class C: | ||||
Net Asset Value and offering price per share ($97,108,980 ÷ 2,862,812 shares outstanding, 50,000,000 shares authorized) | $ | 33.92 | (a) | |
Class I: | ||||
Net Asset Value, offering, and redemption price per share ($206,485,226 ÷ 5,676,201 shares outstanding, 50,000,000 shares authorized) | $ | 36.38 | ||
(a) | Redemption price varies based on the length of time held. |
Statement of Operations
For the Six Months Ended March 31, 2011 (Unaudited)
For the Six Months Ended March 31, 2011 (Unaudited)
Investment Income: | ||||
Dividends — Unaffiliated (net of foreign withholding taxes of $140,341) | $ | 11,428,976 | ||
Dividends — Affiliated | 248,100 | |||
Interest | 245,162 | |||
Total Investment Income | 11,922,238 | |||
Expenses: | ||||
Investment advisory fees | 10,579,298 | |||
Distribution fees — Class AAA | 2,147,344 | |||
Distribution fees — Class A | 179,635 | |||
Distribution fees — Class B | 97 | |||
Distribution fees — Class C | 401,693 | |||
Shareholder services fees | 1,027,993 | |||
Shareholder communications expenses | 248,372 | |||
Custodian fees | 115,178 | |||
Registration expenses | 62,024 | |||
Legal and audit fees | 62,021 | |||
Directors’ fees | 26,035 | |||
Accounting fees | 22,500 | |||
Miscellaneous expenses | 65,585 | |||
Total Expenses | 14,937,775 | |||
Less: | ||||
Advisory fee reduction on unsupervised assets (See Note 3) | (39,479 | ) | ||
Custodian fee credits | (469 | ) | ||
Total Reductions and Credits | (39,948 | ) | ||
Net Expenses | 14,897,827 | |||
Net Investment Loss | (2,975,589 | ) | ||
Net Realized and Unrealized Gain/(Loss) on Investments and Foreign Currency: | ||||
Net realized gain on investments | 49,725,466 | |||
Net realized loss on investments — affiliated | (87,206 | ) | ||
Net realized gain on foreign currency transactions | 113,920 | |||
Net realized gain on investments and foreign currency transactions | 49,752,180 | |||
Net change in unrealized appreciation: | ||||
on investments | 336,858,851 | |||
on foreign currency translations | (6,626 | ) | ||
Net change in unrealized appreciation on investments and foreign currency translations | 336,852,225 | |||
Net Realized and Unrealized Gain/(Loss) on Investments, Futures Contracts, and Foreign Currency | 386,604,405 | |||
Net Increase in Net Assets Resulting from Operations | $ | 383,628,816 | ||
See accompanying notes to financial statements.
13
The Gabelli Small Cap Growth Fund
Statement of Changes in Net Assets
Six Months Ended | ||||||||
March 31, 2011 | Year Ended | |||||||
(Unaudited) | September 30, 2010 | |||||||
Operations: | ||||||||
Net investment loss | $ | (2,975,589 | ) | $ | (3,707,850 | ) | ||
Net realized gain on investments and foreign currency transactions | 49,752,180 | 20,234,554 | ||||||
Net change in unrealized appreciation on investments and foreign currency translations | 336,852,225 | 218,757,896 | ||||||
Net Increase in Net Assets Resulting from Operations | 383,628,816 | 235,284,600 | ||||||
Capital Share Transactions: | ||||||||
Class AAA | 178,638,954 | 73,317,937 | ||||||
Class A | 37,189,297 | 38,695,770 | ||||||
Class B | — | (44,743 | ) | |||||
Class C | 18,115,184 | 13,950,146 | ||||||
Class I | 40,097,219 | 17,685,892 | ||||||
Net Increase in Net Assets from Capital Share Transactions | 274,040,654 | 143,605,002 | ||||||
Redemption Fees | 2,279 | 9,548 | ||||||
Net Increase in Net Assets | 657,671,749 | 378,899,150 | ||||||
Net Assets: | ||||||||
Beginning of period | 1,751,004,370 | 1,372,105,220 | ||||||
End of period (including undistributed net investment income of $0 and $0, respectively) | $ | 2,408,676,119 | $ | 1,751,004,370 | ||||
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 (Loss) | 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)(c) | Period | Return† | (in 000’s) | (Loss)(b) | Expenses | Rate†† | |||||||||||||||||||||||||||||||||||||||
Class AAA | ||||||||||||||||||||||||||||||||||||||||||||||||||||
2011(d) | $ | 29.97 | $ | (0.05 | ) | $ | 6.16 | $ | 6.11 | — | — | $ | 0.00 | $ | 36.08 | 20.39 | % | $ | 1,926,626 | (0.27 | )%(e) | 1.40 | %(e)(f) | 3 | % | |||||||||||||||||||||||||||
2010 | 25.81 | (0.06 | ) | 4.22 | 4.16 | — | — | 0.00 | 29.97 | 16.12 | 1,435,780 | (0.23 | ) | 1.44 | (f) | 14 | ||||||||||||||||||||||||||||||||||||
2009 | 28.20 | (0.02 | ) | (0.92 | ) | (0.94 | ) | $ | (1.45 | ) | $ | (1.45 | ) | 0.00 | 25.81 | (1.70 | ) | 1,167,114 | (0.09 | ) | 1.48 | (f) | 25 | |||||||||||||||||||||||||||||
2008 | 34.37 | (0.00 | )(c) | (4.62 | ) | (4.62 | ) | (1.55 | ) | (1.55 | ) | 0.00 | 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 | 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 | 30.41 | 8.88 | 727,521 | (0.09 | ) | 1.44 | 6 | |||||||||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||||||||||||||||
2011(d) | $ | 29.96 | $ | (0.05 | ) | $ | 6.16 | $ | 6.11 | — | — | $ | 0.00 | $ | 36.07 | 20.39 | % | $ | 178,435 | (0.28 | )%(e) | 1.40 | %(e)(f) | 3 | % | |||||||||||||||||||||||||||
2010 | 25.81 | (0.06 | ) | 4.21 | 4.15 | — | — | 0.00 | 29.96 | 16.08 | 115,265 | (0.22 | ) | 1.44 | (f) | 14 | ||||||||||||||||||||||||||||||||||||
2009 | 28.18 | (0.03 | ) | (0.89 | ) | (0.92 | ) | $ | (1.45 | ) | $ | (1.45 | ) | 0.00 | 25.81 | (1.63 | ) | 62,548 | (0.12 | ) | 1.48 | (f) | 25 | |||||||||||||||||||||||||||||
2008 | 34.37 | (0.01 | ) | (4.63 | ) | (4.64 | ) | (1.55 | ) | (1.55 | ) | 0.00 | 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 | 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 | 30.41 | 8.84 | 2,199 | (0.08 | ) | 1.44 | 6 | |||||||||||||||||||||||||||||||||||
Class B | ||||||||||||||||||||||||||||||||||||||||||||||||||||
2011(d) | $ | 28.26 | $ | (0.16 | ) | $ | 5.80 | $ | 5.64 | — | — | $ | 0.00 | $ | 33.90 | 19.96 | % | $ | 21 | (1.02 | )%(e) | 2.15 | %(e)(f) | 3 | % | |||||||||||||||||||||||||||
2010 | 24.54 | (0.25 | ) | 3.97 | 3.72 | — | — | 0.00 | 28.26 | 15.16 | 17 | (0.99 | ) | 2.19 | (f) | 14 | ||||||||||||||||||||||||||||||||||||
2009 | 27.10 | (0.17 | ) | (0.94 | ) | (1.11 | ) | $ | (1.45 | ) | $ | (1.45 | ) | 0.00 | 24.54 | (2.43 | ) | 56 | (0.83 | ) | 2.23 | (f) | 25 | |||||||||||||||||||||||||||||
2008 | 33.32 | (0.23 | ) | (4.44 | ) | (4.67 | ) | (1.55 | ) | (1.55 | ) | 0.00 | 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 | 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 | 29.77 | 8.11 | 113 | (0.85 | ) | 2.19 | 6 | |||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||
2011(d) | $ | 28.28 | $ | (0.16 | ) | $ | 5.80 | $ | 5.64 | — | — | $ | 0.00 | $ | 33.92 | 19.94 | % | $ | 97,109 | (1.03 | )%(e) | 2.15 | %(e)(f) | 3 | % | |||||||||||||||||||||||||||
2010 | 24.54 | (0.25 | ) | 3.99 | 3.74 | — | — | 0.00 | 28.28 | 15.24 | 64,830 | (0.98 | ) | 2.19 | (f) | 14 | ||||||||||||||||||||||||||||||||||||
2009 | 27.09 | (0.18 | ) | (0.92 | ) | (1.10 | ) | $ | (1.45 | ) | $ | (1.45 | ) | 0.00 | 24.54 | (2.40 | ) | 42,974 | (0.85 | ) | 2.23 | (f) | 25 | |||||||||||||||||||||||||||||
2008 | 33.32 | (0.22 | ) | (4.46 | ) | (4.68 | ) | (1.55 | ) | (1.55 | ) | 0.00 | 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 | 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 | 29.76 | 8.08 | 2,650 | (0.83 | ) | 2.19 | 6 | |||||||||||||||||||||||||||||||||||
Class I | ||||||||||||||||||||||||||||||||||||||||||||||||||||
2011(d) | $ | 30.18 | $ | (0.00 | )(c) | $ | 6.20 | $ | 6.20 | — | — | $ | 0.00 | $ | 36.38 | 20.54 | % | $ | 206,485 | (0.03 | )%(e) | 1.15 | %(e)(f) | 3 | % | |||||||||||||||||||||||||||
2010 | 25.93 | 0.01 | 4.24 | 4.25 | — | — | 0.00 | 30.18 | 16.39 | 135,112 | 0.02 | 1.19 | (f) | 14 | ||||||||||||||||||||||||||||||||||||||
2009 | 28.25 | 0.02 | (0.89 | ) | (0.87 | ) | $ | (1.45 | ) | $ | (1.45 | ) | 0.00 | 25.93 | (1.43 | ) | 99,413 | 0.11 | 1.23 | (f) | 25 | |||||||||||||||||||||||||||||||
2008(g) | 30.06 | 0.05 | (1.86 | ) | (1.81 | ) | — | — | 0.00 | 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 year ended September 30, 2006 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) | Amount represents less than $0.005 per share. | |
(d) | For the six months ended March 31, 2011, unaudited. | |
(e) | Annualized. | |
(f) | The ratios do not include a reduction of advisory fee on unsupervised assets for the years ended September 30, 2010 and 2009. Including such advisory fee reduction on unsupervised assets, the ratios of operating expenses to average net assets would have been 1.42% and 1.47% (Class AAA and Class A), 2.17% and 2.22% (Class B and Class C), and 1.17% and 1.22% (Class I), respectively. For the six months ended March 31, 2011, the effect of such reduction of advisory fee on unsupervised assets was minimal. | |
(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)
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’s Adviser currently characterizes small capitalization companies for the Fund as those with total common stock market values of $2 billion or less at the time of investment. The Fund commenced investment operations on October 22, 1991.
2. Significant Accounting Policies. The Fund’s financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), which may require the use of management estimates and assumptions. 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 sixty 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 sixty 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. U.S. government obligations with maturities greater than sixty days are normally valued using a model that incorporates market observable data such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued principally using dealer quotations. 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)
The inputs and valuation techniques used to measure fair value of the Fund’s investments are summarized into three levels as described in the hierarchy 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). |
A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input both individually and in aggregate that is significant to the fair value measurement. 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 in securities by inputs used to value the Fund’s investments as of March 31, 2011 is as follows:
Valuation Inputs | ||||||||||||||||
Level 1 | Level 2 Other Significant | Level 3 Significant | Total Market Value | |||||||||||||
Quoted Prices | Observable Inputs | Unobservable Inputs | at 3/31/11 | |||||||||||||
INVESTMENTS IN SECURITIES: | ||||||||||||||||
ASSETS (Market Value): | ||||||||||||||||
Common Stocks: | ||||||||||||||||
Broadcasting | $ | 16,811,859 | — | $ | 0 | $ | 16,811,859 | |||||||||
Cable | 35,404,051 | — | 0 | 35,404,051 | ||||||||||||
Consumer Products | 50,031,592 | $ | 2,216 | — | 50,033,808 | |||||||||||
Entertainment | 33,817,019 | — | 275,466 | 34,092,485 | ||||||||||||
Real Estate | 23,895,244 | 194,850 | 24,090,094 | |||||||||||||
Telecommunications | 33,423,772 | — | 53 | 33,423,825 | ||||||||||||
Other Industries (a) | 1,861,177,120 | — | — | 1,861,177,120 | ||||||||||||
Total Common Stocks | 2,054,560,657 | 197,066 | 275,519 | 2,055,033,242 | ||||||||||||
Preferred Stocks (a) | 2,008,872 | — | — | 2,008,872 | ||||||||||||
Warrants: | ||||||||||||||||
Broadcasting | — | — | 1 | 1 | ||||||||||||
Other Industries (a) | 166,349 | — | — | 166,349 | ||||||||||||
Total Warrants | 166,349 | — | 1 | 166,350 | ||||||||||||
Convertible Corporate Bonds | — | 571,500 | — | 571,500 | ||||||||||||
Corporate Bonds | — | — | 0 | 0 | ||||||||||||
U.S. Government Obligations | — | 398,809,832 | — | 398,809,832 | ||||||||||||
TOTAL INVESTMENTS IN SECURITIES — ASSETS | $ | 2,056,735,878 | $ | 399,578,398 | $ | 275,520 | $ | 2,456,589,796 | ||||||||
(a) | Please refer to the Schedule of Investments for the industry classifications of these portfolio holdings. |
The Fund did not have significant transfers between Level 1 and Level 2 during the six months ended March 31, 2011.
17
The Gabelli Small Cap Growth Fund
Notes to Financial Statements (Continued) (Unaudited)
Notes to Financial Statements (Continued) (Unaudited)
The following table reconciles Level 3 investments for which significant unobservable inputs were used to determine fair value:
Net change | ||||||||||||||||||||||||||||||||||||||||
in unrealized | ||||||||||||||||||||||||||||||||||||||||
appreciation/ | ||||||||||||||||||||||||||||||||||||||||
depreciation | ||||||||||||||||||||||||||||||||||||||||
during the | ||||||||||||||||||||||||||||||||||||||||
Change in | Transfers | Transfers | period on | |||||||||||||||||||||||||||||||||||||
Balance | Accrued | Realized | unrealized | into | out of | Balance | Level 3 | |||||||||||||||||||||||||||||||||
as of | discounts/ | gain/ | appreciation/ | Level 3 | Level 3 | as of | investments | |||||||||||||||||||||||||||||||||
9/30/10 | (premiums) | (loss) | depreciation† | Purchases | Sales | †† | †† | 3/31/11 | held at 3/31/11† | |||||||||||||||||||||||||||||||
INVESTMENTS IN SECURITIES: | ||||||||||||||||||||||||||||||||||||||||
ASSETS (Market Value): | ||||||||||||||||||||||||||||||||||||||||
Common Stocks: | ||||||||||||||||||||||||||||||||||||||||
Broadcasting | $ | 2 | $ | — | $ | — | $ | (2 | ) | $ | — | $ | — | $ | — | $ | — | $ | 0 | $ | (2 | ) | ||||||||||||||||||
Cable | 0 | — | — | — | — | — | — | — | 0 | — | ||||||||||||||||||||||||||||||
Entertainment | 275,466 | — | — | — | — | — | — | — | 275,466 | — | ||||||||||||||||||||||||||||||
Telecommunications | 53 | — | — | — | — | — | — | — | 53 | — | ||||||||||||||||||||||||||||||
Total Common Stocks | 275,521 | — | — | (2 | ) | — | — | — | — | 275,519 | (2 | ) | ||||||||||||||||||||||||||||
Preferred Stocks: | ||||||||||||||||||||||||||||||||||||||||
Broadcasting | 88 | — | 121 | (88 | ) | — | (121 | ) | — | — | — | — | ||||||||||||||||||||||||||||
Total Preferred Stocks | 88 | — | 121 | (88 | ) | — | (121 | ) | — | — | — | — | ||||||||||||||||||||||||||||
Warrants: | ||||||||||||||||||||||||||||||||||||||||
Broadcasting | — | — | — | (5 | ) | — | — | 6 | — | 1 | (5 | ) | ||||||||||||||||||||||||||||
Total Warrants | — | — | — | (5 | ) | — | — | 6 | — | 1 | (5 | ) | ||||||||||||||||||||||||||||
Corporate Bonds | — | — | — | (1,185 | ) | — | — | 1,185 | — | 0 | (1,185 | ) | ||||||||||||||||||||||||||||
TOTAL INVESTMENTS IN SECURITIES | $ | 275,609 | $ | — | $ | 121 | $ | (1,280 | ) | $ | — | $ | (121 | ) | $ | 1,191 | $ | — | $ | 275,520 | $ | (1,192 | ) | |||||||||||||||||
† | Net change in unrealized appreciation/depreciation on investments is included in the related amounts in the Statement of Operations. | |
†† | The Fund’s policy is to recognize transfers into and transfer out of Level 3 as of the beginning of the reporting period. |
In January 2010, the Financial Accounting Standards Board (“FASB”) issued amended guidance to improve disclosure about fair value measurements which requires additional disclosures about transfers between Levels 1 and 2 and separate disclosures about purchases, sales, issuances, and settlements in the reconciliation of fair value measurements using significant unobservable inputs (Level 3). FASB also clarified existing disclosure requirements relating to the levels of disaggregation of fair value measurement and inputs and valuation techniques used to measure fair value. The amended guidance is effective for financial statements for fiscal years beginning after December 15, 2009 and interim periods within those fiscal years. Management has adopted the amended guidance and determined that there was no material impact to the Fund’s financial statements except for additional disclosures made in the notes. Disclosures about purchases, sales, issuances, and settlements in the rollforward of activity in Level 3 fair value measurements are effective for fiscal years beginning after December 15, 2010 and for interim periods within those fiscal years. Management is currently evaluating the impact of the additional disclosure requirements on the Fund’s financial statements.
18
The Gabelli Small Cap Growth Fund
Notes to Financial Statements (Continued) (Unaudited)
Derivative Financial Instruments. The Fund may engage in various portfolio investment strategies by investing in a number of derivative financial instruments for the purposes of increasing the income of the Fund, hedging against changes in the value of its portfolio securities and in the value of securities it intends to purchase, or hedging against a specific transaction with respect to either the currency in which the transaction is denominated or another currency. Investing in certain derivative financial instruments, including participation in the options, futures, or swap markets, entails certain execution, liquidity, hedging, tax, and securities, interest, credit, or currency market risks. Losses may arise if the Adviser’s prediction of movements in the direction of the securities, foreign currency, and interest rate markets is inaccurate. Losses may also arise if the counterparty does not perform its duties under a contract, or that, in the event of default, the Fund may be delayed in or prevented from obtaining payments or other contractual remedies owed to it under derivative contracts. The creditworthiness of the counterparties is closely monitored in order to minimize these risks. Participation in derivative transactions involves investment risks, transaction costs, and potential losses to which the Fund would not be subject absent the use of these strategies. The consequences of these risks, transaction costs, and losses may have a negative impact on the Fund’s ability to pay distributions.
The Fund’s derivative contracts held at March 31, 2011, if any, are not accounted for as hedging instruments under GAAP.
Swap Agreements. The Fund may enter into equity contract for difference swap transactions for the purpose of increasing the income of the Fund. 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 an equity contract for difference swap, a set of future cash flows is 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. Depending on the general state of short-term interest rates and the returns on the Fund’s portfolio securities 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.
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. During the six months ended March 31, 2011, the Fund held no investments in equity contract for difference 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, and are included in unrealized appreciation/depreciation on futures contracts. The Fund recognizes a realized gain or loss when the contract is closed.
19
The Gabelli Small Cap Growth Fund
Notes to Financial Statements (Continued) (Unaudited)
Notes to Financial Statements (Continued) (Unaudited)
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. During the six months ended March 31, 2011, the Fund held no investments in futures contracts.
Forward Foreign Exchange Contracts. The Fund may engage in forward foreign exchange contracts for the purpose of hedging a specific transaction with respect to either the currency in which the transaction is denominated or another currency as deemed appropriate by the Adviser. Forward foreign exchange contracts are valued at the forward rate and are marked-to-market daily. The change in market value is included in unrealized appreciation/depreciation on investments and foreign currency 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. During the six months ended March 31, 2011, the Fund held no investments in forward foreign exchange contracts.
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 receive and maintain securities as collateral whose market value is not less than their repurchase price. 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, 2011, the Fund held no investments in repurchase agreements.
20
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 purchase 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 inability 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 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. For the restricted and illiquid securities the Fund held as of March 31, 2011, refer to the Schedule of Investments.
Securities Transactions and Investment Income. Securities transactions are accounted for on the trade date with realized gain or loss on investments determined by using the identified cost method. Interest income (including amortization of premium and accretion of discount) is recorded 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 from foreign securities that are recorded as soon after the ex-dividend date as the Fund becomes aware of such dividends.
21
The Gabelli Small Cap Growth Fund
Notes to Financial Statements (Continued) (Unaudited)
Notes to Financial Statements (Continued) (Unaudited)
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 net asset value (“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 GAAP. 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 for federal income tax purposes 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.
No distributions were made during the year ended September 30, 2010.
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.
At September 30, 2010, the Fund had net capital loss carryforwards for federal income tax purposes of $13,676,652, which are available to reduce future required distributions of net capital gains to shareholders. $1,435,829 of the loss carryforward is available through 2017; $12,240,823 is available through 2018.
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, 2010, the Fund deferred currency losses of $25,535.
22
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 net unrealized appreciation/depreciation at March 31, 2011:
Gross | Gross | Net | ||||||||||||||
Unrealized | Unrealized | Unrealized | ||||||||||||||
Cost | Appreciation | Depreciation | Appreciation | |||||||||||||
Investments | $ | 1,661,794,531 | $ | 865,970,688 | $ | (71,175,423 | ) | $ | 794,795,265 |
The Fund is required to evaluate 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. Income tax and related interest and penalties would be recognized by the Fund as tax expense in the Statement of Operations if the tax positions were deemed not to meet the more-likely-than-not threshold. For the six months ended March 31, 2011, the Fund did not incur any income tax, interest, or penalties. As of March 31, 2011, the Adviser has reviewed all open tax years and concluded that there was no impact to the Fund’s net assets or results of operations. Tax years ended September 30, 2007 through September 30, 2010 remain subject to examination by the Internal Revenue Service and state taxing authorities. On an ongoing basis, the Adviser will monitor the Fund’s tax positions to determine if adjustments to this conclusion are necessary.
3. Investment Advisory Agreement and Other Transactions. The Fund has entered into an investment advisory agreement (the “Advisory Agreement”) with the Adviser which provides that the Fund will pay the Adviser a fee, computed daily and paid monthly, at the annual rate of 1.00% of the value of 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.
There was a reduction in the advisory fee paid to the Adviser relating to certain portfolio holdings, i.e., unsupervised assets, of the Fund with respect to which the Adviser transferred dispositive and voting control to the Fund’s Proxy Voting Committee. During the six months ended March 31, 2011, the Fund’s Proxy Voting Committee exercised control and discretion over all rights to vote or consent with respect to such securities, and the Adviser reduced its fee with respect to such securities by $39,479.
The Corporation pays each Director who is not considered 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. A Director may receive a single meeting fee, allocated among the participating funds, for participation in certain meetings held on behalf of multiple funds. Directors who are directors or employees of the Adviser or an affiliated company receive no compensation or expense reimbursement from the Corporation.
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 & Co.”), 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 & Co. 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.
23
The Gabelli Small Cap Growth Fund
Notes to Financial Statements (Continued) (Unaudited)
Notes to Financial Statements (Continued) (Unaudited)
5. Portfolio Securities. Purchases and sales of securities for the six months ended March 31, 2011, other than short-term securities and U.S. Government obligations, aggregated $237,575,321 and $115,337,849, respectively.
6. Transactions with Affiliates. During the six months ended March 31, 2011, the Fund paid brokerage commissions on security trades of $225,841 to Gabelli & Co. Additionally, Gabelli & Co. informed the Fund that it retained $81,057 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, 2011, 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 the higher of the sum of the overnight LIBOR plus 125 basis points or the sum of the federal funds rate plus 125 basis points at the time of borrowing. This amount, if any, would be included in “interest expense” in the Statement of Operations. During the six months ended March 31, 2011, 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 & Co., through selected broker/dealers, or the transfer agent. Class I Shares are offered through Gabelli & Co. and selected broker/dealers 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 Class B CDSC is equal to a percentage declining from 5% 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 & Co.
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 as an increase in paid-in capital. The redemption fees retained by the Fund during the six months ended March 31, 2011 and September 30, 2010 amounted to $2,279 and $9,548, 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.
24
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, 2011 | Year Ended | |||||||||||||||
(Unaudited) | September 30, 2010 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Class AAA | ||||||||||||||||
Shares sold | 10,688,974 | $ | 353,980,097 | 13,235,071 | $ | 362,667,581 | ||||||||||
Shares issued upon reinvestment of distributions | 3 | 108 | — | — | ||||||||||||
Shares redeemed | (5,196,295 | ) | (175,341,251 | ) | (10,544,607 | ) | (289,349,644 | ) | ||||||||
Net increase | 5,492,682 | $ | 178,638,954 | 2,690,464 | $ | 73,317,937 | ||||||||||
Class A | ||||||||||||||||
Shares sold | 1,520,566 | $ | 51,321,667 | 2,230,301 | $ | 60,847,542 | ||||||||||
Shares redeemed | (420,771 | ) | (14,132,370 | ) | (806,720 | ) | (22,151,772 | ) | ||||||||
Net increase | 1,099,795 | $ | 37,189,297 | 1,423,581 | $ | 38,695,770 | ||||||||||
Class B | ||||||||||||||||
Shares redeemed | — | — | (1,691 | ) | $ | (44,743 | ) | |||||||||
Net decrease | — | — | (1,691 | ) | $ | (44,743 | ) | |||||||||
Class C | ||||||||||||||||
Shares sold | 796,204 | $ | 25,244,980 | 902,333 | $ | 23,349,977 | ||||||||||
Shares redeemed | (225,598 | ) | (7,129,796 | ) | (361,272 | ) | (9,399,831 | ) | ||||||||
Net increase | 570,606 | $ | 18,115,184 | 541,061 | $ | 13,950,146 | ||||||||||
Class I | ||||||||||||||||
Shares sold | 1,587,788 | $ | 53,330,858 | 1,654,093 | $ | 45,615,294 | ||||||||||
Shares redeemed | (388,432 | ) | (13,233,639 | ) | (1,011,555 | ) | (27,929,402 | ) | ||||||||
Net increase | 1,199,356 | $ | 40,097,219 | 642,538 | $ | 17,685,892 | ||||||||||
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, 2011 is set forth below:
Net Change | Percent | |||||||||||||||||||||||||||||||||||
in Unrealized | Value at | Owned | ||||||||||||||||||||||||||||||||||
Beginning | Shares | Shares | Ending | Appreciation/ | Realized | March 31, | of Shares | |||||||||||||||||||||||||||||
Shares | Purchased | Sold | Shares | Dividends | (Depreciation) | Loss | 2011 | Outstanding | ||||||||||||||||||||||||||||
Bel Fuse Inc., Cl. A | 214,400 | 7,000 | — | 221,400 | $ | 26,100 | $ | (661,011 | ) | — | $ | 5,311,386 | 10.18 | % | ||||||||||||||||||||||
Katy Industries Inc. | 417,000 | — | — | 417,000 | — | 95,910 | — | 237,690 | 5.24 | % | ||||||||||||||||||||||||||
Strattec Security Corp. | 185,000 | 13,000 | — | 198,000 | 222,000 | (1,598,565 | ) | — | 6,634,980 | 6.03 | % | |||||||||||||||||||||||||
Tech/Ops Sevcon Inc. | 240,000 | 2,000 | — | 242,000 | — | (140,440 | ) | — | 1,366,090 | 7.20 | % | |||||||||||||||||||||||||
Trans-Lux Corp. | 163,000 | — | (10,000 | ) | 153,000 | — | (34,163 | ) | $ | (87,206 | ) | 22,950 | 6.29 | % | ||||||||||||||||||||||
Total | $ | 248,100 | $ | (2,338,269 | ) | $ | (87,206 | ) | $ | 13,573,096 | ||||||||||||||||||||||||||
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. Management has reviewed the Fund’s existing contracts and expects the risk of loss to be remote.
25
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 a settlement with the SEC to resolve an 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 administrative settlement order, the SEC found that the Adviser had willfully violated Section 206(2) of the 1940 Act, Section 17(d) of the 1940 Act and Rule 17d-1 thereunder, and had willfully 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, paid $16 million (which included a $5 million civil monetary penalty), approximately $12.8 million of which is in the process of being paid to shareholders of the Global Growth Fund in accordance with a plan developed by an independent distribution consultant and approved by the independent directors of the Global Growth Fund and acceptable to the staff of the SEC, and agreed to cease and desist from future violations of the above referenced federal securities laws and rule. The SEC order also noted the cooperation that the Adviser had given the staff of the SEC during its inquiry. The settlement did 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 Fund, the Global Growth Fund, and other funds in the Gabelli/GAMCO fund complex. The officer denied the allegations and is continuing in his positions with the Adviser and the funds. The court dismissed certain claims and found that the SEC was not entitled to pursue various remedies against the officer while leaving one remedy in the event the SEC were able to prove violations of law. The court subsequently dismissed without prejudice the remaining remedy against the officer, which allowed the SEC to appeal the court’s rulings. On October 29, 2010 the SEC filed its appeal with the U.S. Court of Appeals for the Second Circuit regarding the lower court’s orders. The Adviser currently expects that any resolution of the action against the officer will not have a material adverse impact on the Fund or the Adviser or its ability to fulfill its obligations under the Advisory Agreement.
12. Subsequent Events. Management has evaluated the impact on the Fund of all subsequent events occurring through the date the financial statements were issued and has determined that there were no subsequent events requiring recognition or disclosure in the financial statements.
Morningstar Rating™ is based on risk-adjusted returns. The Overall Morningstar Rating is derived from a weighted average of the performance figures associated with a fund’s three, five, and ten year (if applicable) Morningstar Rating metrics. For funds with at least a three year history, a Morningstar Rating is based on a risk-adjusted return measure (including the effects of sales charges, loads, and redemption fees) placing more emphasis on downward variations and rewarding consistent performance. That accounts for variations in a fund’s monthly performance. The top 10% of funds in each category receive 5 stars, the next 22.5% 4 stars, the next 35% 3 stars, the next 22.5% 2 stars, and the bottom 10% 1 star. (Each share class is counted as a fraction of one fund within this scale and rated separately, which may cause slight variations in the distribution percentages.) Morningstar Rating is for the AAA Share class only; other classes may have different performance characteristics. Ratings reflect relative performance. Results for certain periods were negative. ©2010 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.
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.
26
The Gabelli Small Cap Growth Fund
Board Consideration and Re-Approval of Advisory Agreement (Unaudited)
During the six months ended March 31, 2011, 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 third quartile for the one year and in the second quartile for the 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 for 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 were presented with, but did not consider to be material to their decision, various information comparing the advisory fees with the fees for other types of accounts managed by affiliates of the Adviser.
27
The Gabelli Small Cap Growth Fund
Board Consideration and Re-Approval of Advisory Agreement (Continued) (Unaudited)
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.
Based on a consideration of all these factors in their totality, the Board Members, including all of the Independent Board Members, determined that the Fund’s advisory fee was fair and reasonable with respect to the quality of services provided and in light of the other factors described above that the Board deemed relevant. Accordingly, the Board Members determined to approve the continuation of the Fund’s Advisory Agreement. The Board Members based its decision on evaluations of all these factors as a whole and did not consider any one factor as all important or controlling.
28
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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, which is 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.
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 FAMILY OF FUNDS
VALUE
Gabelli Asset Fund
Seeks to invest primarily in a diversified portfolio of common stocks selling at significant discounts to their private market value. The Fund’s primary objective is growth of capital. (Multiclass)
Team Managed
Gabelli Blue Chip Value Fund
Seeks long term growth of capital through investment primarily in the common stocks of established companies which are temporarily out of favor. The fund’s objective is to identify a catalyst or sequence of events that will return the company to a higher value. (Multiclass)
Portfolio Manager: Barbara G. Marcin, CFA
GAMCO Westwood Equity Fund
Seeks to invest primarily in the common stock of well seasoned companies that have recently reported positive earnings surprises and are trading below Westwood’s proprietary growth rate estimates. The Fund’s primary objective is capital appreciation. (Multiclass)
Portfolio Manager: Susan M. Byrne
FOCUSED VALUE
Gabelli Value Fund
Seeks to invest in securities of companies believed to be undervalued. The Fund’s primary objective is long-term capital appreciation. (Multiclass)
Team Managed
SMALL CAP VALUE
Gabelli Small Cap Fund
Seeks to invest primarily in common stock of smaller companies (market capitalizations at the time of investment of $2 billion or less) believed to have rapid revenue and earnings growth potential. The Fund’s primary objective is capital appreciation. (Multiclass)
Portfolio Manager: Mario J. Gabelli, CFA
GAMCO Westwood SmallCap Equity Fund
Seeks to invest primarily in smaller capitalization equity securities — market caps of $2.5 billion or less. The Fund’s primary objective is long-term capital appreciation. (Multiclass)
Portfolio Manager: Nicholas F. Galluccio
Gabelli Woodland Small Cap Value Fund
Seeks to invest primarily in the common stocks of smaller companies (market capitalizations generally less than $3.0 billion) believed to be undervalued with shareholder oriented management teams that are employing strategies to grow the company’s value. The Fund’s primary objective is capital appreciation. (Multiclass)
Portfolio Manager: Elizabeth M. Lilly, CFA
GROWTH
GAMCO Growth Fund
Seeks to invest primarily in large cap stocks believed to have favorable, yet undervalued, prospects for earnings growth. The Fund’s primary objective is capital appreciation. (Multiclass)
Portfolio Manager: Howard F. Ward, CFA
GAMCO International Growth Fund
Seeks to invest in the equity securities of foreign issuers with long-term capital appreciation potential. The Fund offers investors global diversification. (Multiclass)
Portfolio Manager: Caesar Bryan
AGGRESSIVE GROWTH
GAMCO Global Growth Fund
Seeks capital appreciation through a disciplined investment program focusing on the globalization and interactivity of the world’s marketplace. The Fund invests in companies at the forefront of accelerated growth. The Fund’s primary objective is capital appreciation. (Multiclass)
Team Managed
MICRO-CAP
GAMCO Westwood Mighty MitesSM Fund
Seeks to invest in micro-cap companies that have market capitalizations of $300 million or less. The Fund’s primary objective is long-term capital appreciation. (Multiclass)
Team Managed
EQUITY INCOME
Gabelli Equity Income Fund
Seeks to invest primarily in equity securities with above average market yields. The Fund pays monthly dividends and seeks a high level of total return with an emphasis on income. (Multiclass)
Portfolio Manager: Mario J. Gabelli, CFA
GAMCO Westwood Balanced Fund
Seeks to invest in a balanced and diversified portfolio of stocks and bonds. The Fund’s primary objective is both capital appreciation and current income. (Multiclass)
Co-Portfolio Managers: Susan M. Byrne
Mark R. Freeman, CFA
Mark R. Freeman, CFA
GAMCO Westwood Income Fund
Seeks to provide a high level of current income as well as long-term capital appreciation by investing in income producing equity and fixed income securities. (Multiclass)
Portfolio Manager: Barbara G. Marcin, CFA
SPECIALTY EQUITY
GAMCO Vertumnus Fund (formerly GAMCO Global Convertible Securities Fund)
Seeks to invest principally in bonds and preferred stocks which are convertible into common stock of foreign and domestic companies. The Fund’s primary objective is total return through a combination of current income and capital appreciation. (Multiclass)
Portfolio Manager: Mario J. Gabelli, CFA
GAMCO Global Opportunity Fund
Seeks to invest in common stock of companies which have rapid growth in revenues and earnings and potential for above average capital appreciation or are undervalued. The Fund’s primary objective is capital appreciation. (Multiclass)
Team Managed
Gabelli SRI Green Fund
Seeks to invest in common and preferred stocks meeting guidelines for social responsibility (avoiding defense contractors and manufacturers of alcohol, abortifacients, gaming, and tobacco products) and sustainability (companies engaged in climate change, energy security and independence, natural resource shortages, organic living, and urbanization). The Fund’s primary objective is capital appreciation. (Multiclass)
Co-Portfolio Managers: Christopher C. Desmarais
John M. Segrich, CFA
John M. Segrich, CFA
SECTOR
GAMCO Global Telecommunications Fund
Seeks to invest in telecommunications companies throughout the world — targeting undervalued companies with strong earnings and cash flow dynamics. The Fund’s primary objective is capital appreciation. (Multiclass)
Team Managed
GAMCO Gold Fund
Seeks to invest in a global portfolio of equity securities of gold mining and related companies. The Fund’s objective is long-term capital appreciation. Investment in gold stocks is considered speculative and is affected by a variety of worldwide economic, financial, and political factors. (Multiclass)
Portfolio Manager: Caesar Bryan
Gabelli Utilities Fund
Seeks to provide a high level of total return through a combination of capital appreciation and current income. (Multiclass)
Portfolio Manager: Mario J. Gabelli, CFA
MERGER AND ARBITRAGE
Gabelli ABC Fund
Seeks to invest in securities with attractive opportunities for appreciation or investment income. The Fund’s primary objective is total return in various market conditions without excessive risk of capital loss. (No-load)
Portfolio Manager: Mario J. Gabelli, CFA
Gabelli Enterprise Mergers and Acquisitions Fund
Seeks to invest in securities believed to be likely acquisition targets within 12—18 months or in arbitrage transactions of publicly announced mergers or other corporate reorganizations. The Fund’s primary objective is capital appreciation. (Multiclass)
Portfolio Manager: Mario J. Gabelli, CFA
CONTRARIAN
GAMCO Mathers Fund
Seeks long-term capital appreciation in various market conditions without excessive risk of capital loss. (No-load)
Portfolio Manager: Henry Van der Eb, CFA
Comstock Capital Value Fund
Seeks capital appreciation and current income. The Fund may use either long or short positions to achieve its objective. (Multiclass)
Portfolio Managers: Charles L. Minter
Martin Weiner, CFA
Martin Weiner, CFA
FIXED INCOME
GAMCO Westwood Intermediate Bond Fund
Seeks to invest in a diversified portfolio of bonds with various maturities. The Fund’s primary objective is total return. (Multiclass)
Portfolio Manager: Mark R. Freeman, CFA
CASH MANAGEMENT-MONEY MARKET
Gabelli U.S. Treasury Money Market Fund
Seeks to invest exclusively in short-term U.S. Treasury securities. The Fund’s primary objective is to provide high current income consistent with the preservation of principal and liquidity. (No-load)
Co-Portfolio Managers: Judith A. Raneri
Ronald S. Eaker
Ronald S. Eaker
An investment in the above Money Market Fund is neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund.
The Funds may invest in foreign securities which involve risks not ordinarily associated with investments in domestic issues, including currency fluctuation, economic, and political risks.
To receive a prospectus, call 800-GABELLI (800-422-3554). Investors should carefully consider the investment objectives, risks, charges, and expenses of a fund before investing. The prospectus contains more information about this and other matters and should be read carefully before investing.
Distributed by Gabelli & Company, Inc., One Corporate Center, Rye, NY 10580.
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 7:00 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 7:00 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. | ||
Kuni Nakamura | ||
Anthony J. Colavita | President | |
President | Advanced Polymer, Inc. | |
Anthony J. Colavita, P.C. | ||
Anthony R. Pustorino | ||
Vincent D. Enright | Certified Public Accountant, | |
Former Senior Vice President | Professor Emeritus | |
and Chief Financial Officer | Pace University | |
KeySpan Corp. | ||
Anthonie C. van Ekris | ||
John D. Gabelli | Chairman | |
Senior Vice President | BALMAC International, Inc. | |
Gabelli & Company, Inc. | ||
Salvatore J. Zizza | ||
Chairman | ||
Zizza & Co., Ltd. | ||
Officers | ||
Bruce N. Alpert | Agnes Mullady | |
President and Secretary | Treasurer | |
Peter D. Goldstein | ||
Chief Compliance Officer |
Distributor
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.
GAB443Q111SR
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The Gabelli Small Cap Growth Fund
Morningstar® rated The Gabelli Small Cap Growth
Fund Class AAA Shares 5 stars overall and
5 stars for the five and ten year periods and
4 stars for the three year period ended
March 31, 2011 among 577, 487, 285, and 577
Small Blend funds, respectively.
Fund Class AAA Shares 5 stars overall and
5 stars for the five and ten year periods and
4 stars for the three year period ended
March 31, 2011 among 577, 487, 285, and 577
Small Blend funds, respectively.
SEMI ANNUAL REPORT
MARCH 31, 2011
MARCH 31, 2011
The Gabelli Equity Income Fund
Semi-Annual Report — March 31, 2011
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Morningstar® rated The Gabelli Equity Income Fund Class AAA Shares 5 stars
overall and 5 stars for the five and ten year periods and 4 stars for the three year period ended
March 31, 2011 among 1,120, 945, 522, and 1,120 Large Value funds, respectively.
overall and 5 stars for the five and ten year periods and 4 stars for the three year period ended
March 31, 2011 among 1,120, 945, 522, and 1,120 Large Value funds, respectively.
![(PHOTO OF MARIO J. GABELLI)](https://capedge.com/proxy/N-CSRS/0000950123-11-056763/y90383y9037901.jpg)
Mario J. Gabelli, CFA
To Our Shareholders,
For the six months ended March 31, 2011, the net asset value (“NAV”) per Class AAA Share of The Gabelli Equity Income Fund (the “Fund”) rose 16.7% versus the Standard & Poor’s (“S&P”) 500 Index of 17.3%, and the Lipper Equity Income Fund Average of 16.0%.
Comparative Results
Average Annual Returns through March 31, 2011 (a)(b) (Unaudited)
Since | ||||||||||||||||||||||||||||
Six | Inception | |||||||||||||||||||||||||||
Quarter | Months | 1 Year | 3 Year | 5 Year | 10 Year | (1/2/92) | ||||||||||||||||||||||
Gabelli Equity Income Fund Class AAA | 5.92 | % | 16.74 | % | 17.29 | % | 4.27 | % | 5.06 | % | 6.91 | % | 10.31 | % | ||||||||||||||
S&P 500 Index | 5.92 | 17.31 | 15.65 | 2.35 | 2.62 | 3.29 | 8.33 | (f) | ||||||||||||||||||||
NASDAQ Composite Index | 5.05 | 18.02 | 17.19 | 7.92 | 4.44 | 4.96 | 8.14 | |||||||||||||||||||||
Lipper Equity Income Fund Average | 5.85 | 16.04 | 14.93 | 1.84 | 2.34 | 4.10 | 7.84 | |||||||||||||||||||||
Class A | 5.94 | 16.73 | 17.28 | 4.28 | 5.08 | 6.91 | 10.31 | |||||||||||||||||||||
With sales charge (c) | (0.15 | ) | 10.02 | 10.54 | 2.24 | 3.84 | 6.27 | 9.97 | ||||||||||||||||||||
Class B | 5.76 | 16.33 | 16.38 | 3.47 | 4.28 | 6.33 | 10.00 | |||||||||||||||||||||
With contingent deferred sales charge (d) | 0.76 | 11.33 | 11.38 | 2.53 | 3.94 | 6.33 | 10.00 | |||||||||||||||||||||
Class C | 5.76 | 16.32 | 16.38 | 3.49 | 4.28 | 6.34 | 10.01 | |||||||||||||||||||||
With contingent deferred sales charge (e) | 4.76 | 15.32 | 15.38 | 3.49 | 4.28 | 6.34 | 10.01 | |||||||||||||||||||||
Class I | 5.97 | 16.87 | 17.55 | 4.55 | 5.25 | 7.01 | 10.36 |
In the current prospectus dated January 28, 2011, the expense ratios for Class AAA, A, B, C, and I Shares are 1.44%, 1.44%, 2.19%, 2.19%, and 1.19%, respectively. Class AAA and Class I Shares do not have a sales charge. See page 13 for the expense ratios for the six months ended March 31, 2011. The maximum sales charge for Class A, B, and C Shares is 5.75%, 5.00%, and 1.00%, respectively.
(a) | Returns represent past performance and do not guarantee future results. Total returns and average annual returns reflect changes in share price, 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. Current performance may be lower or higher than the performance data presented. Performance returns for periods of less than one year are not annualized. 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 information about this and other matters and should be read carefully before investing. | |
The Class AAA 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 A Shares, Class B Shares, and Class C Shares would have been lower and Class I Shares would have been higher due to differences in expenses associated with these classes of shares. The S&P 500 and NASDAQ Composite Index are unmanaged indicators of stock market performance. The Lipper Equity Income Fund Average includes the 30 largest equity funds tracked by Lipper, Inc. Dividends are considered reinvested except for the NASDAQ Composite Index. You cannot invest directly in an index. | ||
(b) | The Fund’s fiscal year ends September 30. | |
(c) | Performance results include the effect of the maximum 5.75% sales charge at the beginning of the period. | |
(d) | Assuming payment of the maximum contingent deferred sales charge (CDSC). The maximum CDSC for Class B Shares is 5% and is reduced to 0% after six years. | |
(e) | Assuming payment of the 1% maximum CDSC imposed on redemptions made within one year of purchase. | |
(f) | S&P 500 Index since inception performance is as of December 31, 1991. |
The Gabelli Equity Income Fund
Disclosure of Fund Expenses (Unaudited)
Disclosure of Fund Expenses (Unaudited)
For the Six Month Period from October 1, 2010 through March 31, 2011 | 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 | |||||||||||||
10/01/10 | 03/31/11 | Ratio | Period* | |||||||||||||
The Gabelli Equity Income Fund | ||||||||||||||||
Actual Fund Return | ||||||||||||||||
Class AAA | $ | 1,000.00 | $ | 1,167.40 | 1.40 | % | $ | 7.57 | ||||||||
Class A | $ | 1,000.00 | $ | 1,167.30 | 1.40 | % | $ | 7.56 | ||||||||
Class B | $ | 1,000.00 | $ | 1,163.30 | 2.15 | % | $ | 11.60 | ||||||||
Class C | $ | 1,000.00 | $ | 1,163.20 | 2.15 | % | $ | 11.60 | ||||||||
Class I | $ | 1,000.00 | $ | 1,168.70 | 1.15 | % | $ | 6.22 | ||||||||
Hypothetical 5% Return | ||||||||||||||||
Class AAA | $ | 1,000.00 | $ | 1,017.95 | 1.40 | % | $ | 7.04 | ||||||||
Class A | $ | 1,000.00 | $ | 1,017.95 | 1.40 | % | $ | 7.04 | ||||||||
Class B | $ | 1,000.00 | $ | 1,014.21 | 2.15 | % | $ | 10.80 | ||||||||
Class C | $ | 1,000.00 | $ | 1,014.21 | 2.15 | % | $ | 10.80 | ||||||||
Class I | $ | 1,000.00 | $ | 1,019.20 | 1.15 | % | $ | 5.79 |
* | 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 (182 days), then divided by 365. |
2
Summary of Portfolio Holdings (Unaudited)
The following table presents portfolio holdings as a percent of net assets as of March 31, 2011:
The Gabelli Equity Income Fund | ||||
Health Care | 12.0 | % | ||
Financial Services | 11.4 | % | ||
Food and Beverage | 11.1 | % | ||
Consumer Products | 6.3 | % | ||
Retail | 5.9 | % | ||
Energy and Utilities: Oil | 5.6 | % | ||
Diversified Industrial | 4.1 | % | ||
Telecommunications | 4.1 | % | ||
Aerospace | 3.8 | % | ||
Energy and Utilities: Integrated | 3.7 | % | ||
Specialty Chemicals | 2.9 | % | ||
Machinery | 2.6 | % | ||
U.S. Government Obligations | 2.4 | % | ||
Energy and Utilities: Services | 2.2 | % | ||
Metals and Mining | 2.2 | % | ||
Automotive: Parts and Accessories | 1.8 | % | ||
Computer Hardware | 1.7 | % | ||
Energy and Utilities: Natural Gas | 1.7 | % | ||
Entertainment | 1.6 | % | ||
Electronics | 1.6 | % | ||
Hotels and Gaming | 1.4 | % | ||
Automotive | 1.4 | % | ||
Computer Software and Services | 1.1 | % | ||
Equipment and Supplies | 1.1 | % | ||
Communications Equipment | 0.8 | % | ||
Wireless Communications | 0.8 | % | ||
Agriculture | 0.8 | % | ||
Energy and Utilities: Electric | 0.8 | % | ||
Cable and Satellite | 0.7 | % | ||
Business Services | 0.6 | % | ||
Paper and Forest Products | 0.5 | % | ||
Broadcasting | 0.4 | % | ||
Transportation | 0.3 | % | ||
Environmental Services | 0.3 | % | ||
Aviation: Parts and Services | 0.3 | % | ||
Consumer Services | 0.1 | % | ||
Publishing | 0.1 | % | ||
Energy and Utilities: Water | 0.0 | % | ||
Real Estate Investment Trusts | 0.0 | % | ||
Real Estate | 0.0 | % | ||
Other Assets and Liabilities (Net) | (0.2 | )% | ||
100.0 | % | |||
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, 2010. 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 800-SEC-0330.
Proxy Voting
The Fund files Form N-PX with its complete proxy voting record for the twelve 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.
Morningstar Rating™ is based on risk-adjusted returns. The Overall Morningstar Rating is derived from a weighted average of the performance figures associated with a fund’s three, five, and ten year (if applicable) Morningstar Rating metrics. For funds with at least a three year history, a Morningstar Rating is based on a risk-adjusted return measure (including the effects of sales charges, loads, and redemption fees) placing more emphasis on downward variations and rewarding consistent performance. That accounts for variations in a fund’s monthly performance. The top 10% of funds in each category receive 5 stars, the next 22.5% 4 stars, the next 35% 3 stars, the next 22.5% 2 stars, and the bottom 10% 1 star. (Each share class is counted as a fraction of one fund within this scale and rated separately, which may cause slight variations in the distribution percentages.) Morningstar Rating is for the AAA Share class only; other classes may have different performance characteristics. Ratings reflect relative performance. Results for certain periods were negative. ©2009 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.
3
The Gabelli Equity Income Fund
Schedule of Investments — March 31, 2011 (Unaudited)
Market | ||||||||||||
Shares | Cost | Value | ||||||||||
COMMON STOCKS — 97.1% | ||||||||||||
Aerospace — 3.8% | ||||||||||||
2,000 | Lockheed Martin Corp. | $ | 47,350 | $ | 160,800 | |||||||
10,000 | Raytheon Co. | 279,200 | 508,700 | |||||||||
337,000 | Rockwell Automation Inc. | 16,077,118 | 31,897,050 | |||||||||
2,000 | Rockwell Collins Inc. | 15,844 | 129,660 | |||||||||
1,400,000 | Rolls-Royce Group plc† | 9,952,358 | 13,902,075 | |||||||||
370,000 | The Boeing Co. | 22,895,642 | 27,354,100 | |||||||||
49,267,512 | 73,952,385 | |||||||||||
Agriculture — 0.8% | ||||||||||||
99,000 | Archer-Daniels-Midland Co. | 2,838,337 | 3,564,990 | |||||||||
150,000 | Monsanto Co. | 2,423,783 | 10,839,000 | |||||||||
12,000 | The Mosaic Co. | 186,246 | 945,000 | |||||||||
5,448,366 | 15,348,990 | |||||||||||
Automotive — 1.4% | ||||||||||||
1,075,000 | Ford Motor Co.† | 14,853,503 | 16,028,250 | |||||||||
129,000 | Navistar International Corp.† | 4,588,321 | 8,943,570 | |||||||||
20,000 | PACCAR Inc. | 959,800 | 1,047,000 | |||||||||
20,401,624 | 26,018,820 | |||||||||||
Automotive: Parts and Accessories — 1.8% | ||||||||||||
415,000 | Genuine Parts Co. | 17,076,729 | 22,260,600 | |||||||||
6,000 | Johnson Controls Inc. | 50,425 | 249,420 | |||||||||
52,000 | Modine Manufacturing Co.† | 522,033 | 839,280 | |||||||||
140,000 | O’Reilly Automotive Inc.† | 4,059,601 | 8,044,400 | |||||||||
55,100 | Tenneco Inc.† | 840,371 | 2,338,995 | |||||||||
140,000 | The Pep Boys — Manny, Moe & Jack | 1,583,944 | 1,779,400 | |||||||||
24,133,103 | 35,512,095 | |||||||||||
Aviation: Parts and Services — 0.3% | ||||||||||||
65,000 | Curtiss-Wright Corp. | 944,125 | 2,284,100 | |||||||||
76,700 | GenCorp Inc.† | 497,445 | 458,666 | |||||||||
4,500 | Precision Castparts Corp. | 421,715 | 662,310 | |||||||||
21,000 | United Technologies Corp. | 609,942 | 1,777,650 | |||||||||
2,473,227 | 5,182,726 | |||||||||||
Broadcasting — 0.4% | ||||||||||||
290,000 | CBS Corp., Cl. A, Voting | 5,448,229 | 7,284,800 | |||||||||
132 | Granite Broadcasting Corp.† (a) | 10,795 | 0 | |||||||||
5,459,024 | 7,284,800 | |||||||||||
Business Services — 0.6% | ||||||||||||
30,000 | Automatic Data Processing Inc. | 1,174,016 | 1,539,300 | |||||||||
185,000 | Diebold Inc. | 6,514,528 | 6,560,100 | |||||||||
4,000 | Landauer Inc. | 134,546 | 246,080 | |||||||||
10,000 | MasterCard Inc., Cl. A | 743,059 | 2,517,200 | |||||||||
8,566,149 | 10,862,680 | |||||||||||
Cable and Satellite — 0.7% | ||||||||||||
135,000 | Cablevision Systems Corp., Cl. A | 1,864,112 | 4,672,350 | |||||||||
10,000 | DIRECTV, Cl. A† | 331,857 | 468,000 | |||||||||
190,000 | DISH Network Corp., Cl. A† | 3,832,521 | 4,628,400 | |||||||||
16,000 | EchoStar Corp., Cl. A† | 478,839 | 605,600 | |||||||||
500 | Jupiter Telecommunications Co. Ltd. | 492,514 | 491,104 | |||||||||
55,000 | Scripps Networks Interactive Inc., Cl. A | 2,303,601 | 2,754,950 | |||||||||
9,303,444 | 13,620,404 | |||||||||||
Communications Equipment — 0.8% | ||||||||||||
250,000 | Corning Inc. | 3,735,647 | 5,157,500 | |||||||||
182,000 | Thomas & Betts Corp.† | 6,559,883 | 10,823,540 | |||||||||
10,295,530 | 15,981,040 | |||||||||||
Computer Hardware — 1.6% | ||||||||||||
192,000 | International Business Machines Corp. | 16,476,397 | 31,309,440 | |||||||||
Computer Software and Services — 1.1% | ||||||||||||
6,000 | eBay Inc.† | 200,290 | 186,240 | |||||||||
135,000 | Fidelity National Information Services Inc. | 2,392,326 | 4,413,150 | |||||||||
450,000 | Microsoft Corp. | 12,688,431 | 11,412,000 | |||||||||
365,000 | Yahoo! Inc.† | 7,575,342 | 6,077,250 | |||||||||
22,856,389 | 22,088,640 | |||||||||||
Consumer Products — 6.3% | ||||||||||||
45,000 | Altria Group Inc. | 538,092 | 1,171,350 | |||||||||
185,000 | Avon Products Inc. | 5,394,525 | 5,002,400 | |||||||||
15,000 | Clorox Co. | 823,581 | 1,051,050 | |||||||||
15,000 | Compagnie Financiere Richemont SA, Cl. A | 478,768 | 866,358 | |||||||||
880,000 | Eastman Kodak Co.† | 6,800,851 | 2,842,400 | |||||||||
86,000 | Energizer Holdings Inc.† | 4,415,164 | 6,119,760 | |||||||||
200,000 | Fortune Brands Inc. | 9,508,607 | 12,378,000 | |||||||||
5,000 | Hanesbrands Inc.† | 108,950 | 135,200 | |||||||||
173,000 | Harman International Industries Inc. | 6,738,252 | 8,099,860 | |||||||||
250,000 | Kimberly-Clark Corp. | 15,970,978 | 16,317,500 | |||||||||
5,000 | National Presto Industries Inc. | 146,756 | 563,400 | |||||||||
50,000 | Philip Morris International Inc. | 1,501,172 | 3,281,500 | |||||||||
100,000 | Reckitt Benckiser Group plc | 3,154,703 | 5,136,677 | |||||||||
1,250,000 | Swedish Match AB | 16,783,406 | 41,568,307 | |||||||||
225,000 | The Procter & Gamble Co. | 13,187,964 | 13,860,000 |
See accompanying notes to financial statements.
4
The Gabelli Equity Income Fund
Schedule of Investments (Continued) — March 31, 2011 (Unaudited)
Market | ||||||||||||
Shares | Cost | Value | ||||||||||
COMMON STOCKS (Continued) | ||||||||||||
Consumer Products (Continued) | ||||||||||||
78,000 | Unilever NV — NY Shares, ADR | $ | 1,542,066 | $ | 2,446,080 | |||||||
87,093,835 | 120,839,842 | |||||||||||
Consumer Services — 0.1% | ||||||||||||
100,000 | Rollins Inc. | 381,843 | 2,030,000 | |||||||||
Diversified Industrial — 3.7% | ||||||||||||
5,000 | 3M Co. | 213,645 | 467,500 | |||||||||
4,000 | Acuity Brands Inc. | 42,447 | 233,960 | |||||||||
6,000 | Alstom SA | 432,684 | 354,794 | |||||||||
100,000 | Cooper Industries plc | 2,757,977 | 6,490,000 | |||||||||
96,000 | Crane Co. | 3,275,285 | 4,649,280 | |||||||||
1,250,000 | General Electric Co. | 25,812,643 | 25,062,500 | |||||||||
215,000 | Honeywell International Inc. | 6,599,180 | 12,837,650 | |||||||||
55,000 | ITT Corp. | 2,944,520 | 3,302,750 | |||||||||
12,000 | Jardine Matheson Holdings Ltd. | 427,596 | 534,480 | |||||||||
155,000 | Jardine Strategic Holdings Ltd. | 3,478,961 | 4,138,500 | |||||||||
413,003 | National Patent Development Corp.† | 1,017,559 | 627,765 | |||||||||
120,000 | Textron Inc. | 763,372 | 3,286,800 | |||||||||
12,000 | Trinity Industries Inc. | 214,160 | 440,040 | |||||||||
210,000 | Tyco International Ltd. | 8,305,569 | 9,401,700 | |||||||||
56,285,598 | 71,827,719 | |||||||||||
Electronics — 1.6% | ||||||||||||
500,000 | Intel Corp. | 9,940,781 | 10,085,000 | |||||||||
100,000 | L-1 Identity Solutions Inc.† | 1,169,000 | 1,178,000 | |||||||||
310,000 | LSI Corp.† | 2,828,090 | 2,108,000 | |||||||||
130,000 | TE Connectivity Ltd. | 4,330,657 | 4,526,600 | |||||||||
315,000 | Texas Instruments Inc. | 7,598,308 | 10,886,400 | |||||||||
30,000 | Thermo Fisher Scientific Inc.† | 1,407,828 | 1,666,500 | |||||||||
27,274,664 | 30,450,500 | |||||||||||
Energy and Utilities: Electric — 0.8% | ||||||||||||
33,000 | American Electric Power Co. Inc. | 1,042,775 | 1,159,620 | |||||||||
12,000 | DTE Energy Co. | 517,320 | 587,520 | |||||||||
85,000 | El Paso Electric Co.† | 670,852 | 2,584,000 | |||||||||
159,006 | GenOn Energy Inc.† | 936,815 | 605,813 | |||||||||
1,200,000 | GenOn Energy Inc., Escrow† (a) | 0 | 0 | |||||||||
110,000 | Great Plains Energy Inc. | 2,663,694 | 2,202,200 | |||||||||
75,000 | Korea Electric Power Corp., ADR† | 1,177,587 | 918,000 | |||||||||
150,000 | Northeast Utilities | 3,148,300 | 5,190,000 | |||||||||
80,000 | The AES Corp.† | 268,400 | 1,040,000 | |||||||||
13,333 | UIL Holdings Corp. | 293,785 | 406,923 | |||||||||
10,719,528 | 14,694,076 | |||||||||||
Energy and Utilities: Integrated — 3.7% | ||||||||||||
170,000 | BP plc, ADR | 6,645,840 | 7,503,800 | |||||||||
50,100 | CH Energy Group Inc. | 2,054,118 | 2,532,054 | |||||||||
118,000 | CONSOL Energy Inc. | 4,790,336 | 6,328,340 | |||||||||
90,000 | Constellation Energy Group Inc. | 2,772,144 | 2,801,700 | |||||||||
110,000 | Dominion Resources Inc. | 4,509,912 | 4,917,000 | |||||||||
100,000 | DPL Inc. | 2,637,051 | 2,741,000 | |||||||||
195,000 | Duke Energy Corp. | 2,406,814 | 3,539,250 | |||||||||
463,168 | El Paso Corp. | 5,303,214 | 8,337,024 | |||||||||
29,000 | ENI SpA | 304,221 | 712,239 | |||||||||
50,350 | FirstEnergy Corp. | 1,229,350 | 1,867,482 | |||||||||
30,000 | Hess Corp. | 2,213,981 | 2,556,300 | |||||||||
12,269 | Iberdrola SA, ADR | 510,847 | 425,489 | |||||||||
25,000 | Integrys Energy Group Inc. | 1,192,522 | 1,262,750 | |||||||||
100,000 | NextEra Energy Inc. | 4,697,195 | 5,512,000 | |||||||||
80,000 | NSTAR | 1,282,183 | 3,701,600 | |||||||||
72,000 | OGE Energy Corp. | 1,955,611 | 3,640,320 | |||||||||
100,000 | PNM Resources Inc. | 1,042,460 | 1,492,000 | |||||||||
90,000 | Progress Energy Inc. | 3,857,884 | 4,152,600 | |||||||||
15,000 | Progress Energy Inc., CVO† | 7,800 | 2,175 | |||||||||
7,200 | Public Service Enterprise Group Inc. | 156,820 | 226,872 | |||||||||
30,000 | Suncor Energy Inc., New York | 785,965 | 1,345,200 | |||||||||
21,000 | Suncor Energy Inc., Toronto | 908,497 | 941,805 | |||||||||
50,000 | TECO Energy Inc. | 652,639 | 938,000 | |||||||||
140,000 | Westar Energy Inc. | 2,333,669 | 3,698,800 | |||||||||
54,251,073 | 71,175,800 | |||||||||||
Energy and Utilities: Natural Gas — 1.7% | ||||||||||||
13,000 | AGL Resources Inc. | 242,114 | 517,920 | |||||||||
16,000 | Atmos Energy Corp. | 420,845 | 545,600 | |||||||||
195,000 | National Fuel Gas Co. | 8,712,021 | 14,430,000 | |||||||||
73,000 | ONEOK Inc. | 1,642,426 | 4,882,240 | |||||||||
24,000 | Piedmont Natural Gas Co. Inc. | 394,017 | 728,400 | |||||||||
110,000 | Southern Union Co. | 2,047,400 | 3,148,200 | |||||||||
65,000 | Southwest Gas Corp. | 1,365,198 | 2,533,050 | |||||||||
200,000 | Spectra Energy Corp. | 4,249,072 | 5,436,000 | |||||||||
19,073,093 | 32,221,410 | |||||||||||
Energy and Utilities: Oil — 5.6% | ||||||||||||
185,000 | Anadarko Petroleum Corp. | 9,335,801 | 15,155,200 | |||||||||
45,000 | Canadian Oil Sands Ltd. | 1,290,650 | 1,516,400 | |||||||||
190,000 | Chevron Corp. | 8,702,369 | 20,411,700 | |||||||||
185,000 | ConocoPhillips | 5,343,273 | 14,774,100 |
See accompanying notes to financial statements.
5
The Gabelli Equity Income Fund
Schedule of Investments (Continued) — March 31, 2011 (Unaudited)
Market | ||||||||||||
Shares | Cost | Value | ||||||||||
COMMON STOCKS (Continued) | ||||||||||||
Energy and Utilities: Oil (Continued) | ||||||||||||
22,000 | Denbury Resources Inc.† | $ | 369,472 | $ | 536,800 | |||||||
49,000 | Devon Energy Corp. | 2,021,181 | 4,496,730 | |||||||||
149,000 | Exxon Mobil Corp. | 4,735,083 | 12,535,370 | |||||||||
40,000 | Marathon Oil Corp. | 1,639,448 | 2,132,400 | |||||||||
24,000 | Nexen Inc. | 739,574 | 598,329 | |||||||||
2,000 | Niko Resources Ltd. | 114,911 | 191,851 | |||||||||
100,000 | Occidental Petroleum Corp. | 4,145,051 | 10,449,000 | |||||||||
7,500 | PetroChina Co. Ltd., ADR | 544,578 | 1,141,875 | |||||||||
110,000 | Petroleo Brasileiro SA, ADR | 4,218,356 | 4,447,300 | |||||||||
33,000 | Repsol YPF SA, ADR | 689,095 | 1,136,850 | |||||||||
120,000 | Royal Dutch Shell plc, Cl. A, ADR | 5,525,081 | 8,743,200 | |||||||||
16,000 | SilverBirch Energy Corp.† | 93,825 | 147,705 | |||||||||
25,000 | Statoil ASA, ADR | 327,939 | 691,000 | |||||||||
200,000 | Talisman Energy Inc. | 4,444,646 | 4,940,000 | |||||||||
17,518 | Total SA, ADR | 290,564 | 1,068,072 | |||||||||
44,000 | Transocean Ltd.† | 3,256,838 | 3,429,800 | |||||||||
40,000 | WesternZagros Resources Ltd.† | 147,109 | 22,692 | |||||||||
57,974,844 | 108,566,374 | |||||||||||
Energy and Utilities: Services — 2.2% | ||||||||||||
30,000 | ABB Ltd., ADR† | 351,824 | 725,700 | |||||||||
52,000 | Cameron International Corp.† | 746,014 | 2,969,200 | |||||||||
38,178 | GDF Suez, Strips | 0 | 54 | |||||||||
350,000 | Halliburton Co. | 10,342,941 | 17,444,000 | |||||||||
47,000 | Oceaneering International Inc.† | 2,032,090 | 4,204,150 | |||||||||
40,000 | Schlumberger Ltd. | 1,275,020 | 3,730,400 | |||||||||
620,000 | Weatherford International Ltd.† | 11,423,429 | 14,012,000 | |||||||||
26,171,318 | 43,085,504 | |||||||||||
Energy and Utilities: Water — 0.0% | ||||||||||||
30,000 | Aqua America Inc. | 329,549 | 686,700 | |||||||||
Entertainment — 1.6% | ||||||||||||
120,000 | Grupo Televisa SA, ADR† | 2,737,649 | 2,943,600 | |||||||||
38,750 | Madison Square Garden Inc., Cl. A† | 480,606 | 1,045,863 | |||||||||
120,000 | Time Warner Inc. | 3,494,326 | 4,284,000 | |||||||||
305,300 | Viacom Inc., Cl. A | 12,029,180 | 16,269,437 | |||||||||
225,000 | Vivendi | 7,625,595 | 6,425,201 | |||||||||
26,367,356 | 30,968,101 | |||||||||||
Environmental Services — 0.3% | ||||||||||||
145,000 | Waste Management Inc. | 4,749,875 | 5,414,300 | |||||||||
�� | ||||||||||||
Equipment and Supplies — 1.1% | ||||||||||||
18,000 | A.O. Smith Corp. | 253,184 | 798,120 | |||||||||
24,000 | Danaher Corp. | 876,851 | 1,245,600 | |||||||||
88,000 | Flowserve Corp. | 3,345,009 | 11,334,400 | |||||||||
6,000 | Ingersoll-Rand plc | 116,173 | 289,860 | |||||||||
1,500 | Minerals Technologies Inc. | 37,938 | 102,780 | |||||||||
66,000 | Mueller Industries Inc. | 2,509,510 | 2,416,920 | |||||||||
12,000 | Parker Hannifin Corp. | 459,607 | 1,136,160 | |||||||||
90,000 | Tenaris SA, ADR | 3,561,978 | 4,451,400 | |||||||||
11,160,250 | 21,775,240 | |||||||||||
Financial Services — 11.4% | ||||||||||||
6,579 | Alleghany Corp.† | 1,015,113 | 2,177,518 | |||||||||
245,000 | AllianceBernstein Holding LP | 6,477,777 | 5,341,000 | |||||||||
360,000 | American Express Co. | 14,688,640 | 16,272,000 | |||||||||
23,990 | Argo Group International Holdings Ltd. | 741,793 | 792,630 | |||||||||
25,864 | Banco Popular Espanol SA | 185,938 | 152,042 | |||||||||
2,000 | Banco Santander Chile, ADR | 29,250 | 173,500 | |||||||||
160,000 | Banco Santander SA, ADR | 1,233,058 | 1,875,200 | |||||||||
390,000 | Bank of America Corp. | 4,518,427 | 5,198,700 | |||||||||
12,156 | BNP Paribas | 506,339 | 889,106 | |||||||||
1,300,000 | Citigroup Inc.† | 5,913,260 | 5,746,000 | |||||||||
36,000 | Commerzbank AG, ADR† | 531,523 | 281,520 | |||||||||
117,000 | Deutsche Bank AG | 6,291,728 | 6,911,190 | |||||||||
105,000 | Discover Financial Services | 1,820,893 | 2,532,600 | |||||||||
90,000 | Federal National Mortgage Association† | 64,427 | 35,460 | |||||||||
102,147 | Federated Investors Inc., Cl. B | 2,573,445 | 2,732,433 | |||||||||
27,680 | Fidelity Southern Corp.† | 257,631 | 221,440 | |||||||||
270,000 | H&R Block Inc. | 5,330,519 | 4,519,800 | |||||||||
10,000 | Interactive Brokers Group Inc., Cl. A | 169,390 | 158,900 | |||||||||
160,000 | Janus Capital Group Inc. | 2,244,555 | 1,995,200 | |||||||||
280,199 | JPMorgan Chase & Co. | 10,031,500 | 12,917,174 | |||||||||
75,000 | Julius Baer Group Ltd. | 2,537,524 | 3,254,763 | |||||||||
61,100 | Kinnevik Investment AB, Cl. A | 977,600 | 1,422,979 | |||||||||
18,000 | Kinnevik Investment AB, Cl. B | 252,511 | 419,493 | |||||||||
315,000 | Legg Mason Inc. | 6,129,360 | 11,368,350 | |||||||||
35,000 | Leucadia National Corp. | 467,433 | 1,313,900 | |||||||||
140,000 | Loews Corp. | 6,155,434 | 6,032,600 | |||||||||
125,000 | M&T Bank Corp. | 8,810,945 | 11,058,750 |
See accompanying notes to financial statements.
6
The Gabelli Equity Income Fund
Schedule of Investments (Continued) — March 31, 2011 (Unaudited)
Market | ||||||||||||
Shares | Cost | Value | ||||||||||
COMMON STOCKS(Continued) | ||||||||||||
Financial Services (Continued) | ||||||||||||
365,000 | Marsh & McLennan Companies Inc. | $ | 11,002,192 | $ | 10,880,650 | |||||||
300,000 | Morgan Stanley | 8,946,766 | 8,196,000 | |||||||||
156,000 | Northern Trust Corp. | 8,015,233 | 7,917,000 | |||||||||
80,000 | NYSE Euronext | 1,891,784 | 2,813,600 | |||||||||
21,000 | Och-Ziff Capital Management Group LLC, Cl. A | 205,343 | 342,720 | |||||||||
40,000 | Oritani Financial Corp. | 400,000 | 507,200 | |||||||||
85,000 | PNC Financial Services Group Inc. | 4,220,150 | 5,354,150 | |||||||||
900,000 | Popular Inc.† | 2,650,073 | 2,619,000 | |||||||||
500 | Raiffeisen International Bank Holding AG | 28,874 | 27,749 | |||||||||
958 | Reinet Investments SCA† | 188,972 | 16,910 | |||||||||
40,000 | Royal Bank of Canada | 2,105,956 | 2,478,800 | |||||||||
195,000 | SLM Corp.† | 3,451,586 | 2,983,500 | |||||||||
160,000 | State Street Corp. | 7,324,890 | 7,190,400 | |||||||||
180,000 | Sterling Bancorp | 2,861,683 | 1,801,800 | |||||||||
12,000 | SunTrust Banks Inc. | 251,737 | 346,080 | |||||||||
50,000 | T. Rowe Price Group Inc. | 1,388,039 | 3,321,000 | |||||||||
190,000 | TD Ameritrade Holding Corp. | 3,311,518 | 3,965,300 | |||||||||
2,000 | The Allstate Corp. | 61,340 | 63,560 | |||||||||
780,000 | The Bank of New York Mellon Corp. | 23,243,035 | 23,298,600 | |||||||||
15,000 | The Charles Schwab Corp. | 262,820 | 270,450 | |||||||||
2,000 | The Dun & Bradstreet Corp. | 20,476 | 160,480 | |||||||||
11,000 | The Goldman Sachs Group Inc. | 1,476,161 | 1,743,170 | |||||||||
38,000 | The Student Loan Corp., Escrow (a) | 0 | 95,000 | |||||||||
35,000 | The Travelers Companies Inc. | 1,385,281 | 2,081,800 | |||||||||
40,000 | Unitrin Inc. | 1,156,156 | 1,235,200 | |||||||||
155,000 | Waddell & Reed Financial Inc., Cl. A | 3,408,831 | 6,294,550 | |||||||||
480,000 | Wells Fargo & Co. | 14,589,727 | 15,216,000 | |||||||||
700,000 | Wilmington Trust Corp. | 5,648,392 | 3,164,000 | |||||||||
199,453,028 | 220,178,917 | |||||||||||
Food and Beverage — 11.1% | ||||||||||||
30,000 | Anheuser-Busch InBev NV | 496,266 | 1,708,923 | |||||||||
64,500 | Brown-Forman Corp., Cl. A | 2,934,638 | 4,376,970 | |||||||||
13,500 | Brown-Forman Corp., Cl. B | 825,918 | 922,050 | |||||||||
145,000 | Campbell Soup Co. | 4,305,546 | 4,800,950 | |||||||||
40,000 | Coca-Cola Amatil Ltd., ADR | 246,845 | 964,800 | |||||||||
20,000 | Coca-Cola Enterprises Inc. | 450,000 | 546,000 | |||||||||
15,000 | Coca-Cola Femsa SAB de CV, ADR | 539,060 | 1,154,850 | |||||||||
200,000 | Constellation Brands Inc., Cl. A† | 2,611,207 | 4,056,000 | |||||||||
136,389 | Danone | 6,897,164 | 8,909,684 | |||||||||
10,000 | Davide Campari — Milano SpA | 65,299 | 67,657 | |||||||||
345,102 | Dean Foods Co.† | 6,115,845 | 3,451,020 | |||||||||
80,000 | Diageo plc, ADR | 4,048,834 | 6,097,600 | |||||||||
100,000 | Dr Pepper Snapple Group Inc. | 2,159,483 | 3,716,000 | |||||||||
50,000 | Feihe International Inc.† | 891,758 | 430,500 | |||||||||
140,000 | Fomento Economico Mexicano SAB de CV, ADR | 3,316,409 | 8,218,000 | |||||||||
220,000 | General Mills Inc. | 5,457,146 | 8,041,000 | |||||||||
800,000 | Grupo Bimbo SAB de CV, Cl. A | 2,557,333 | 6,782,995 | |||||||||
118,000 | H.J. Heinz Co. | 4,171,689 | 5,760,760 | |||||||||
125,000 | Heineken NV | 5,566,367 | 6,829,986 | |||||||||
230,000 | ITO EN Ltd. | 4,833,964 | 4,006,612 | |||||||||
3,000 | Kellogg Co. | 92,580 | 161,940 | |||||||||
1,025,000 | Kraft Foods Inc., Cl. A | 30,269,487 | 32,144,000 | |||||||||
18,000 | McCormick & Co. Inc., Non-Voting | 711,698 | 860,940 | |||||||||
102,000 | Nestlé SA | 2,185,232 | 5,846,815 | |||||||||
44,000 | Nestlé SA, ADR | 2,403,932 | 2,529,120 | |||||||||
105,000 | NISSIN FOODS HOLDINGS CO. LTD. | 3,438,629 | 3,701,130 | |||||||||
4,000,000 | Parmalat SpA | 11,113,923 | 13,400,981 | |||||||||
38,053 | PepsiCo Inc. | 2,412,127 | 2,450,994 | |||||||||
40,507 | Pernod-Ricard SA | 3,199,895 | 3,783,072 | |||||||||
50,841 | Remy Cointreau SA | 2,897,375 | 3,828,818 | |||||||||
150,000 | Sapporo Holdings Ltd. | 1,005,195 | 559,029 | |||||||||
1,050,021 | Sara Lee Corp. | 16,694,595 | 18,553,872 | |||||||||
523,000 | The Coca-Cola Co. | 25,482,714 | 34,701,050 | |||||||||
55,000 | The Hershey Co. | 2,163,089 | 2,989,250 | |||||||||
72,178 | Tootsie Roll Industries Inc. | 1,672,255 | 2,046,976 | |||||||||
110,000 | Tyson Foods Inc., Cl. A | 1,278,200 | 2,110,900 | |||||||||
32,000 | Wimm-Bill-Dann Foods OJSC, ADR† | 379,105 | 1,071,040 | |||||||||
135,000 | YAKULT HONSHA Co. Ltd. | 3,659,573 | 3,450,469 | |||||||||
169,550,375 | 215,032,753 | |||||||||||
Health Care — 12.0% | ||||||||||||
110,000 | Abbott Laboratories | 5,104,557 | 5,395,500 |
See accompanying notes to financial statements.
7
The Gabelli Equity Income Fund
Schedule of Investments (Continued) — March 31, 2011 (Unaudited)
Market | ||||||||||||
Shares | Cost | Value | ||||||||||
COMMON STOCKS(Continued) | ||||||||||||
Health Care (Continued) | ||||||||||||
25,000 | Aetna Inc. | $ | 817,636 | $ | 935,750 | |||||||
43,000 | Alcon Inc. | 6,684,703 | 7,116,930 | |||||||||
155,000 | Baxter International Inc. | 6,195,428 | 8,334,350 | |||||||||
85,000 | Beckman Coulter Inc. | 6,482,290 | 7,060,950 | |||||||||
150,000 | Becton, Dickinson and Co. | 10,659,079 | 11,943,000 | |||||||||
300 | Bio-Rad Laboratories Inc., Cl. A† | 33,951 | 36,042 | |||||||||
600,000 | Boston Scientific Corp.† | 5,655,585 | 4,314,000 | |||||||||
530,000 | Bristol-Myers Squibb Co. | 13,254,291 | 14,007,900 | |||||||||
15,000 | Cephalon Inc.† | 1,131,210 | 1,136,700 | |||||||||
325,000 | Covidien plc | 12,213,108 | 16,880,500 | |||||||||
438,000 | Eli Lilly & Co. | 17,944,527 | 15,404,460 | |||||||||
300,000 | Genzyme Corp.† | 22,710,660 | 22,845,000 | |||||||||
11,276 | GlaxoSmithKline plc, ADR | 515,984 | 433,111 | |||||||||
22,000 | Henry Schein Inc.† | 566,365 | 1,543,740 | |||||||||
100,000 | Hospira Inc.† | 3,605,739 | 5,520,000 | |||||||||
325,000 | Johnson & Johnson | 20,546,408 | 19,256,250 | |||||||||
17,000 | Laboratory Corp. of America Holdings† | 1,207,808 | 1,566,210 | |||||||||
122,152 | Mead Johnson Nutrition Co. | 5,600,591 | 7,076,265 | |||||||||
24,000 | Medco Health Solutions Inc.† | 613,992 | 1,347,840 | |||||||||
18,000 | Medtronic Inc. | 587,868 | 708,300 | |||||||||
450,000 | Merck & Co. Inc. | 13,633,210 | 14,854,500 | |||||||||
5,000 | Nobel Biocare Holding AG† | 139,480 | 103,647 | |||||||||
163,000 | Novartis AG, ADR | 8,889,047 | 8,859,050 | |||||||||
41,000 | Patterson Companies Inc. | 1,392,875 | 1,319,790 | |||||||||
1,245,000 | Pfizer Inc. | 25,158,688 | 25,285,950 | |||||||||
15,000 | Roche Holding AG, ADR | 540,149 | 539,250 | |||||||||
13,000 | Roche Holding AG, Genusschein | 1,873,357 | 1,856,941 | |||||||||
70,000 | St. Jude Medical Inc. | 2,868,961 | 3,588,200 | |||||||||
913,400 | Tenet Healthcare Corp.† | 6,290,081 | 6,804,830 | |||||||||
230,000 | UnitedHealth Group Inc. | 9,173,997 | 10,396,000 | |||||||||
5,000 | Watson Pharmaceuticals Inc.† | 258,718 | 280,050 | |||||||||
18,000 | William Demant Holding A/S† | 880,509 | 1,558,732 | |||||||||
56,000 | Zimmer Holdings Inc.† | 3,315,672 | 3,389,680 | |||||||||
216,546,524 | 231,699,418 | |||||||||||
Hotels and Gaming — 1.4% | ||||||||||||
125,000 | International Game Technology | 2,451,771 | 2,028,750 | |||||||||
2,004,352 | Ladbrokes plc | 10,531,607 | 4,260,404 | |||||||||
285,000 | Las Vegas Sands Corp.† | 3,382,570 | 12,032,700 | |||||||||
90,000 | MGM Resorts International† | 630,000 | 1,183,500 | |||||||||
80,000 | Starwood Hotels & Resorts Worldwide Inc. | 1,673,543 | 4,649,600 | |||||||||
15,000 | Wynn Resorts Ltd. | 579,316 | 1,908,750 | |||||||||
19,248,807 | 26,063,704 | |||||||||||
Machinery — 2.6% | ||||||||||||
200,000 | Bucyrus International Inc. | 18,094,964 | 18,290,000 | |||||||||
6,000 | Caterpillar Inc. | 35,181 | 668,100 | |||||||||
319,000 | Deere & Co. | 15,880,141 | 30,907,910 | |||||||||
20,009 | Mueller Water Products Inc., Cl. A | 160,285 | 89,641 | |||||||||
34,170,571 | 49,955,651 | |||||||||||
Metals and Mining — 2.2% | ||||||||||||
570,000 | Alcoa Inc. | 10,194,351 | 10,060,500 | |||||||||
10,000 | Carpenter Technology Corp. | 327,255 | 427,100 | |||||||||
248,000 | Freeport-McMoRan Copper & Gold Inc. | 3,061,631 | 13,776,400 | |||||||||
255,000 | Newmont Mining Corp. | 11,333,530 | 13,917,900 | |||||||||
45,000 | Peabody Energy Corp. | 1,713,246 | 3,238,200 | |||||||||
2,000 | Royal Gold Inc. | 88,166 | 104,800 | |||||||||
6,615 | Teck Resources Ltd., Cl. B | 533,053 | 350,639 | |||||||||
27,251,232 | 41,875,539 | |||||||||||
Paper and Forest Products — 0.5% | ||||||||||||
395,000 | Weyerhaeuser Co. | 9,865,519 | 9,717,000 | |||||||||
Publishing — 0.1% | ||||||||||||
6,016 | News Corp., Cl. B | 70,881 | 112,018 | |||||||||
30,000 | The McGraw-Hill Companies Inc. | 1,225,693 | 1,182,000 | |||||||||
800 | The Washington Post Co., Cl. B | 465,710 | 350,048 | |||||||||
3,000 | Value Line Inc. | 42,802 | 44,400 | |||||||||
1,805,086 | 1,688,466 | |||||||||||
Real Estate — 0.0% | ||||||||||||
10,000 | Griffin Land & Nurseries Inc. | 224,290 | 321,800 | |||||||||
Real Estate Investment Trusts — 0.0% | ||||||||||||
6,000 | Rayonier Inc. | 264,580 | 373,860 | |||||||||
Retail — 5.8% | ||||||||||||
7,500 | AutoZone Inc.† | 1,120,476 | 2,051,700 | |||||||||
20,133 | Copart Inc.† | 696,640 | 872,363 | |||||||||
225,000 | Costco Wholesale Corp. | 11,676,234 | 16,497,000 | |||||||||
530,059 | CVS Caremark Corp. | 18,822,655 | 18,191,625 | |||||||||
80,000 | Ingles Markets Inc., Cl. A | 1,547,485 | 1,584,800 | |||||||||
510,000 | Macy’s Inc. | 8,225,055 | 12,372,600 | |||||||||
200,000 | Safeway Inc. | 4,259,793 | 4,708,000 | |||||||||
500 | Sears Holdings Corp.† | 40,733 | 41,325 | |||||||||
205,000 | SUPERVALU Inc. | 2,782,840 | 1,830,650 |
See accompanying notes to financial statements.
8
The Gabelli Equity Income Fund
Schedule of Investments (Continued) — March 31, 2011 (Unaudited)
Market | ||||||||||||
Shares | Cost | Value | ||||||||||
COMMON STOCKS (Continued) | ||||||||||||
Retail (Continued) | ||||||||||||
570,000 | The Home Depot Inc. | $ | 16,258,364 | $ | 21,124,200 | |||||||
110,000 | Tractor Supply Co. | 1,936,339 | 6,584,600 | |||||||||
234,000 | Wal-Mart Stores Inc. | 11,089,210 | 12,179,700 | |||||||||
145,000 | Walgreen Co. | 4,799,942 | 5,820,300 | |||||||||
10,000 | Weis Markets Inc. | 300,480 | 404,600 | |||||||||
100,000 | Whole Foods Market Inc. | 3,392,986 | 6,590,000 | |||||||||
86,949,232 | 110,853,463 | |||||||||||
Specialty Chemicals — 2.9% | ||||||||||||
18,000 | Airgas Inc. | 1,132,691 | 1,195,560 | |||||||||
44,000 | Albemarle Corp. | 576,219 | 2,629,880 | |||||||||
50,000 | Ashland Inc. | 1,969,030 | 2,888,000 | |||||||||
90,000 | Dionex Corp.† | 10,622,250 | 10,624,500 | |||||||||
90,000 | E. I. du Pont de Nemours and Co. | 3,883,609 | 4,947,300 | |||||||||
260,000 | Ferro Corp.† | 2,722,418 | 4,313,400 | |||||||||
4,000 | FMC Corp. | 186,076 | 339,720 | |||||||||
52,500 | H.B. Fuller Co. | 1,084,497 | 1,127,700 | |||||||||
230,000 | International Flavors & Fragrances Inc. | 10,761,205 | 14,329,000 | |||||||||
3,500 | NewMarket Corp. | 13,508 | 553,770 | |||||||||
75,000 | Omnova Solutions Inc.† | 485,875 | 590,250 | |||||||||
5,000 | Quaker Chemical Corp. | 90,412 | 200,850 | |||||||||
40,000 | Sensient Technologies Corp. | 822,757 | 1,433,600 | |||||||||
120,000 | The Dow Chemical Co. | 4,456,634 | 4,530,000 | |||||||||
50,000 | The Lubrizol Corp. | 6,687,500 | 6,698,000 | |||||||||
4,000 | Zep Inc. | 17,026 | 69,640 | |||||||||
45,511,707 | 56,471,170 | |||||||||||
Telecommunications — 4.0% | ||||||||||||
380,000 | AT&T Inc. | 10,147,034 | 11,628,000 | |||||||||
525,000 | BCE Inc. | 12,011,920 | 19,078,500 | |||||||||
46,000 | Belgacom SA | 1,592,123 | 1,781,993 | |||||||||
4,495 | (b) | Bell Aliant Inc. (c) | 117,429 | 124,441 | ||||||||
50,000 | BT Group plc | 204,914 | 148,871 | |||||||||
16,000 | BT Group plc, ADR | 469,025 | 481,280 | |||||||||
9,000 | CenturyLink Inc. | 325,449 | 373,950 | |||||||||
500,000 | Cincinnati Bell Inc.† | 1,922,791 | 1,340,000 | |||||||||
460,000 | Deutsche Telekom AG, ADR | 7,455,388 | 7,093,200 | |||||||||
20,000 | France Telecom SA, ADR | 546,384 | 450,200 | |||||||||
20,000 | Loral Space & Communications Inc.† | 1,488,159 | 1,551,000 | |||||||||
2,000,000 | Sprint Nextel Corp.† | 9,611,438 | 9,280,000 | |||||||||
27,585 | Telefonica SA, ADR | 161,475 | 695,694 | |||||||||
350,000 | Telekom Austria AG | 5,307,460 | 5,118,903 | |||||||||
144,500 | Telephone & Data Systems Inc. | 5,307,372 | 4,869,650 | |||||||||
12,000 | TELUS Corp. | 185,454 | 613,553 | |||||||||
20,000 | TELUS Corp., Non-Voting | 937,513 | 969,800 | |||||||||
285,000 | Verizon Communications Inc. | 9,518,189 | 10,983,900 | |||||||||
67,309,517 | 76,582,935 | |||||||||||
Transportation — 0.3% | ||||||||||||
165,000 | GATX Corp. | 5,878,986 | 6,378,900 | |||||||||
Wireless Communications — 0.8% | ||||||||||||
140,000 | Cable & Wireless Communications plc | 106,768 | 102,323 | |||||||||
140,000 | Cable & Wireless Worldwide plc | 166,997 | 117,797 | |||||||||
36,000 | Millicom International Cellular SA | 2,802,201 | 3,462,120 | |||||||||
2,400 | NTT DoCoMo Inc. | 3,485,733 | 4,218,322 | |||||||||
70,000 | Turkcell Iletisim Hizmetleri A/S, ADR | 1,147,786 | 1,052,100 | |||||||||
225,000 | Vodafone Group plc, ADR | 5,770,688 | 6,468,750 | |||||||||
13,480,173 | 15,421,412 | |||||||||||
TOTAL COMMON STOCKS | 1,454,023,218 | 1,873,512,574 | ||||||||||
PREFERRED STOCKS — 0.1% | ||||||||||||
Communications Equipment — 0.0% | ||||||||||||
1,100 | Lucent Technologies Capital Trust I, 7.750% Cv. Pfd. | 759,000 | 1,078,000 | |||||||||
Entertainment — 0.0% | ||||||||||||
3,000 | Metromedia International Group Inc., 7.250% Pfd.† (a) | 5,310 | 7,650 | |||||||||
Telecommunications — 0.1% | ||||||||||||
33,000 | Cincinnati Bell Inc., 6.750% Cv. Pfd., Ser. B | 807,519 | 1,300,200 | |||||||||
TOTAL PREFERRED STOCKS | 1,571,829 | 2,385,850 | ||||||||||
WARRANTS — 0.0% | ||||||||||||
Broadcasting — 0.0% | ||||||||||||
330 | Granite Broadcasting Corp., Ser. A, expire 06/04/12† (a) | 0 | 0 | |||||||||
330 | Granite Broadcasting Corp., Ser. B, expire 06/04/12† (a) | 0 | 0 | |||||||||
TOTAL WARRANTS | 0 | 0 | ||||||||||
See accompanying notes to financial statements.
9
The Gabelli Equity Income Fund
Schedule of Investments (Continued) — March 31, 2011 (Unaudited)
Principal | Market | |||||||||||
Amount | Cost | Value | ||||||||||
CORPORATE BONDS — 0.6% | ||||||||||||
Automotive: Parts and Accessories — 0.0% | ||||||||||||
$ | 800,000 | Standard Motor Products Inc., Sub. Deb. Cv., 15.000%, 04/15/11 (a) | $ | 799,157 | $ | 817,200 | ||||||
Broadcasting — 0.0% | ||||||||||||
200,000 | Young Broadcasting Inc., Sub. Deb., 10.000%, 03/01/12† (a) | 154,752 | 0 | |||||||||
Computer Hardware — 0.1% | ||||||||||||
2,000,000 | SanDisk Corp., Cv., 1.000%, 05/15/13 | 1,663,830 | 1,972,500 | |||||||||
Diversified Industrial — 0.4% | ||||||||||||
6,000,000 | Griffon Corp., Sub. Deb. Cv., 4.000%, 01/15/17 (c) | 6,000,000 | 6,757,500 | |||||||||
Energy and Utilities: Electric — 0.0% | ||||||||||||
100,000 | Texas Competitive Electric Holdings Co. LLC, Ser. B (STEP), 10.250%, 11/01/15 | 69,558 | 58,750 | |||||||||
Retail — 0.1% | ||||||||||||
4,400,000 | The Great Atlantic & Pacific Tea Co. Inc., Cv., 5.125%, 06/15/11† | 4,363,148 | 1,496,000 | |||||||||
TOTAL CORPORATE BONDS | 13,050,445 | 11,101,950 | ||||||||||
U.S. GOVERNMENT OBLIGATIONS — 2.4% | ||||||||||||
45,581,000 | U.S. Treasury Bills, 0.100% to 0.248%††, 04/28/11 to 09/22/11 | 45,557,786 | 45,558,100 | |||||||||
TOTAL INVESTMENTS — 100.2% | $ | 1,514,203,278 | 1,932,558,474 | |||||||||
Notional | Termination | Unrealized | ||||||||||
Amount | Date | Appreciation | ||||||||||
EQUITY CONTRACT FOR DIFFERENCE SWAP AGREEMENTS — 0.0% | ||||||||||||
$ | 293,999 | |||||||||||
(140,000 Shares) Rank Group plc | 06/27/11 | $ | 41,404 | |||||||||
185,861 | ||||||||||||
(20,000 Shares) Rolls-Royce Group plc | 06/27/11 | 12,652 | ||||||||||
TOTAL EQUITY CONTRACT FOR DIFFERENCE SWAP AGREEMENTS | 54,056 | |||||||||||
Market | ||||||
Value | ||||||
Other Assets and Liabilities (Net) — (0.2)% | (3,332,267 | ) | ||||
NET ASSETS — 100.0% | $ | 1,929,280,263 | ||||
(a) | Security fair valued under procedures established by the Board of Directors. The procedures may include reviewing available financial information about the company and reviewing the valuation of comparable securities and other factors on a regular basis. At March 31, 2011, the market value of fair valued securities amounted to $ 919,850 or 0.05% of net assets. | |
(b) | Denoted in units. | |
(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, 2011, the market value of Rule 144A securities amounted to $6,881,941 or 0.36% of net assets. | |
† | Non-income producing security. | |
†† | Represents annualized yield at date of purchase. | |
ADR | American Depositary Receipt | |
Cv. | Convertible | |
CVO | Contingent Value Obligation | |
OJSC | Open Joint Stock Company | |
STEP | Step coupon bond. The rate disclosed is that in effect at March 31, 2011. | |
Strips | Regular income payment portion of security traded separately from the principal portion of the security. |
See accompanying notes to financial statements.
10
The Gabelli Equity Income Fund
Statement of Assets and Liabilities
March 31, 2011 (Unaudited)
March 31, 2011 (Unaudited)
Assets: | ||||
Investments, at value (cost $1,514,203,278) | $ | 1,932,558,474 | ||
Foreign currency, at value (cost $67) | 69 | |||
Receivable for Fund shares issued | 5,540,473 | |||
Unrealized appreciation on swap contracts | 54,056 | |||
Dividends and interest receivable | 3,966,088 | |||
Prepaid expenses | 91,684 | |||
Total Assets | 1,942,210,844 | |||
Liabilities: | ||||
Payable to custodian | 1,529 | |||
Payable for investments purchased | 8,957,862 | |||
Payable for Fund shares redeemed | 1,315,533 | |||
Payable for investment advisory fees | 1,583,211 | |||
Payable for distribution fees | 430,953 | |||
Payable for accounting fees | 7,500 | |||
Other accrued expenses | 633,993 | |||
Total Liabilities | 12,930,581 | |||
Net Assets (applicable to 89,609,628 shares outstanding) | $ | 1,929,280,263 | ||
Net Assets Consist of: | ||||
Paid-in capital | $ | 1,614,062,579 | ||
Accumulated distributions in excess of net investment income | (10,279,769 | ) | ||
Accumulated net realized loss on investments, swap contracts, and foreign currency transactions | (92,918,424 | ) | ||
Net unrealized appreciation on investments | 418,355,196 | |||
Net unrealized appreciation on swap contracts | 54,056 | |||
Net unrealized appreciation on foreign currency translations | 6,625 | |||
Net Assets | $ | 1,929,280,263 | ||
Shares of Capital Stock each at $0.001 par value: | ||||
Class AAA: | ||||
Net Asset Value, offering, and redemption price per share ($1,655,272,737 ÷ 76,694,120 shares outstanding; 150,000,000 shares authorized) | $ | 21.58 | ||
Class A: | ||||
Net Asset Value and redemption price per share ($123,656,016 ÷ 5,746,117 shares outstanding; 50,000,000 shares authorized) | $ | 21.52 | ||
Maximum offering price per share (NAV÷ 0.9425, based on maximum sales charge of 5.75% of the offering price) | $ | 22.83 | ||
Class B: | ||||
Net Asset Value and offering price per share ($161,476 ÷ 7,940 shares outstanding, 50,000,000 shares authorized) | $ | 20.34 | (a) | |
Class C: | ||||
Net Asset Value and offering price per share ($82,191,255 ÷ 4,039,895 shares outstanding, 50,000,000 shares authorized) | $ | 20.34 | (a) | |
Class I: | ||||
Net Asset Value, offering, and redemption price per share ($67,998,779 ÷ 3,121,556 shares outstanding, 50,000,000 shares authorized) | $ | 21.78 | ||
(a) | Redemption price varies based on the length of time held. |
Statement of Operations
For the Six Months Ended March 31, 2011 (Unaudited)
For the Six Months Ended March 31, 2011 (Unaudited)
Investment Income: | ||||
Dividends (net of foreign withholding taxes of $182,286) | $ | 16,390,070 | ||
Interest | 261,008 | |||
Total Investment Income | 16,651,078 | |||
Expenses: | ||||
Investment advisory fees | 8,466,842 | |||
Distribution fees — Class AAA | 1,860,173 | |||
Distribution fees — Class A | 115,226 | |||
Distribution fees — Class B | 759 | |||
Distribution fees — Class C | 299,776 | |||
Shareholder services fees | 740,850 | |||
Shareholder communications expenses | 188,527 | |||
Custodian fees | 103,179 | |||
Legal and audit fees | 60,496 | |||
Registration expenses | 53,790 | |||
Accounting fees | 22,500 | |||
Directors’ fees | 21,639 | |||
Interest expense | 88 | |||
Miscellaneous expenses | 55,415 | |||
Total Expenses | 11,989,260 | |||
Less: | ||||
Custodian fee credits | (125 | ) | ||
Net Expenses | 11,989,135 | |||
Net Investment Income | 4,661,943 | |||
Net Realized and Unrealized Gain on Investments, Swap Contracts, and Foreign Currency: | ||||
Net realized gain on investments | 8,513,031 | |||
Net realized gain on swap contracts | 34,764 | |||
Net realized gain on foreign currency transactions | 12,063 | |||
Net realized gain on investments, swap contracts, and foreign currency transactions | 8,559,858 | |||
Net change in unrealized appreciation: | ||||
on investments | 245,243,349 | |||
on swap contracts | 51,245 | |||
on foreign currency translations | 12,352 | |||
Net change in unrealized appreciation on investments, swap contracts, and foreign currency translations | 245,306,946 | |||
Net Realized and Unrealized Gain on Investments, Swap Contracts, and Foreign Currency | 253,866,804 | |||
Net Increase in Net Assets Resulting from Operations | $ | 258,528,747 | ||
See accompanying notes to financial statements.
11
The Gabelli Equity Income Fund
Statement of Changes in Net Assets
Six Months Ended | ||||||||
March 31, 2011 | Year Ended | |||||||
(Unaudited) | September 30, 2010 | |||||||
Operations: | ||||||||
Net investment income | $ | 4,661,943 | $ | 17,109,258 | ||||
Net realized gain/(loss) on investments, swap contracts, and foreign currency transactions | 8,559,858 | (10,021,544 | ) | |||||
Net change in unrealized appreciation on investments, swap contracts, and foreign currency translations | 245,306,946 | 127,675,821 | ||||||
Net Increase in Net Assets Resulting from Operations | 258,528,747 | 134,763,535 | ||||||
Distributions to Shareholders: | ||||||||
Net investment income | ||||||||
Class AAA | (13,286,702 | ) | (15,582,602 | ) | ||||
Class A | (844,431 | ) | (604,809 | ) | ||||
Class B | (1,436 | ) | (1,755 | ) | ||||
Class C | (582,749 | ) | (416,801 | ) | ||||
Class I | (469,791 | ) | (280,529 | ) | ||||
(15,185,109 | ) | (16,886,496 | ) | |||||
Return of capital | ||||||||
Class AAA | — | (9,276,624 | ) | |||||
Class A | — | (360,055 | ) | |||||
Class B | — | (1,045 | ) | |||||
Class C | — | (248,130 | ) | |||||
Class I | — | (167,004 | ) | |||||
— | (10,052,858 | ) | ||||||
Total Distributions to Shareholders | (15,185,109 | ) | (26,939,354 | ) | ||||
Capital Share Transactions | ||||||||
Class AAA | 109,600,114 | 141,667,526 | ||||||
Class A | 43,432,082 | 32,355,446 | ||||||
Class B | (1,000 | ) | 21,771 | |||||
Class C | 30,638,555 | 18,243,484 | ||||||
Class I | 19,193,909 | 31,329,729 | ||||||
Net Increase in Net Assets from Capital Share Transactions | 202,863,660 | 223,617,956 | ||||||
Redemption Fees | 14,760 | 5,058 | ||||||
Net Increase in Net Assets | 446,222,058 | 331,447,195 | ||||||
Net Assets: | ||||||||
Beginning of period | 1,483,058,205 | 1,151,611,010 | ||||||
End of period (including undistributed net investment income of $0 and $243,397, respectively) | $ | 1,929,280,263 | $ | 1,483,058,205 | ||||
See accompanying notes to financial statements.
12
The Gabelli Equity Income Fund
Financial Highlights
Financial Highlights
Selected data for a share of capital stock outstanding throughout each period:
Income (Loss) | Ratio to Average Net Assets/ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
from Investment Operations | Distributions | Supplemental Data | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Asset | Realized and | Total | Net | Net Asset | Net Assets | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
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)(b) | Period | Return† | (in 000’s) | Income | Expenses†† | Rate††† | |||||||||||||||||||||||||||||||||||||||||||||
Class AAA | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2011(c) | $ | 18.65 | $ | 0.06 | $ | 3.05 | $ | 3.11 | $ | (0.18 | ) | — | — | $ | (0.18 | ) | $ | 0.00 | $ | 21.58 | 16.74 | % | $ | 1,655,273 | 0.57 | %(d) | 1.40 | %(d) | 4 | % | ||||||||||||||||||||||||||||||
2010 | 17.14 | 0.23 | 1.64 | 1.87 | (0.23 | ) | — | $ | (0.13 | ) | (0.36 | ) | 0.00 | 18.65 | 11.03 | 1,330,970 | 1.29 | 1.44 | 14 | |||||||||||||||||||||||||||||||||||||||||
2009 | 18.00 | 0.21 | (0.71 | ) | (0.50 | ) | (0.21 | ) | — | (0.15 | ) | (0.36 | ) | 0.00 | 17.14 | (2.34 | ) | 1,088,655 | 1.46 | 1.50 | 17 | |||||||||||||||||||||||||||||||||||||||
2008 | 22.98 | 0.18 | (4.43 | ) | (4.25 | ) | (0.17 | ) | $ | (0.40 | ) | (0.16 | ) | (0.73 | ) | 0.00 | 18.00 | (18.95 | ) | 1,135,543 | 0.87 | 1.43 | 22 | |||||||||||||||||||||||||||||||||||||
2007 | 20.23 | 0.22 | 3.37 | 3.59 | (0.39 | ) | (0.45 | ) | — | (0.84 | ) | 0.00 | 22.98 | 18.19 | 1,191,351 | 1.01 | 1.43 | 12 | ||||||||||||||||||||||||||||||||||||||||||
2006 | 18.72 | 0.38 | 1.68 | 2.06 | (0.36 | ) | (0.19 | ) | — | (0.55 | ) | 0.00 | 20.23 | 11.25 | 794,375 | 1.98 | 1.46 | 14 | ||||||||||||||||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2011(c) | $ | 18.60 | $ | 0.06 | $ | 3.04 | $ | 3.10 | $ | (0.18 | ) | — | — | $ | (0.18 | ) | $ | 0.00 | $ | 21.52 | 16.73 | % | $ | 123,656 | 0.59 | %(d) | 1.40 | %(d) | 4 | % | ||||||||||||||||||||||||||||||
2010 | 17.09 | 0.24 | 1.63 | 1.87 | (0.23 | ) | — | $ | (0.13 | ) | (0.36 | ) | 0.00 | 18.60 | 11.06 | 67,314 | 1.35 | 1.44 | 14 | |||||||||||||||||||||||||||||||||||||||||
2009 | 17.95 | 0.21 | (0.71 | ) | (0.50 | ) | (0.21 | ) | — | (0.15 | ) | (0.36 | ) | 0.00 | 17.09 | (2.34 | ) | 31,104 | 1.46 | 1.50 | 17 | |||||||||||||||||||||||||||||||||||||||
2008 | 22.91 | 0.18 | (4.41 | ) | (4.23 | ) | (0.17 | ) | $ | (0.40 | ) | (0.16 | ) | (0.73 | ) | 0.00 | 17.95 | (18.92 | ) | 22,979 | 0.88 | 1.43 | 22 | |||||||||||||||||||||||||||||||||||||
2007 | 20.17 | 0.22 | 3.36 | 3.58 | (0.39 | ) | (0.45 | ) | — | (0.84 | ) | 0.00 | 22.91 | 18.20 | 15,313 | 1.00 | 1.43 | 12 | ||||||||||||||||||||||||||||||||||||||||||
2006 | 18.66 | 0.39 | 1.67 | 2.06 | (0.36 | ) | (0.19 | ) | — | (0.55 | ) | 0.00 | 20.17 | 11.29 | 8,379 | 2.02 | 1.46 | 14 | ||||||||||||||||||||||||||||||||||||||||||
Class B | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2011(c) | $ | 17.65 | $ | (0.02 | ) | $ | 2.89 | $ | 2.87 | $ | (0.18 | ) | — | — | $ | (0.18 | ) | $ | 0.00 | $ | 20.34 | 16.33 | % | $ | 161 | (0.19) | %(d) | 2.15 | %(d) | 4 | % | |||||||||||||||||||||||||||||
2010 | 16.37 | 0.10 | 1.54 | 1.64 | (0.23 | ) | — | $ | (0.13 | ) | (0.36 | ) | 0.00 | 17.65 | 10.13 | 141 | 0.56 | 2.19 | 14 | |||||||||||||||||||||||||||||||||||||||||
2009 | 17.34 | 0.10 | (0.71 | ) | (0.61 | ) | (0.21 | ) | — | (0.15 | ) | (0.36 | ) | 0.00 | 16.37 | (3.07 | ) | 114 | 0.73 | 2.25 | 17 | |||||||||||||||||||||||||||||||||||||||
2008 | 22.32 | 0.02 | (4.27 | ) | (4.25 | ) | (0.17 | ) | $ | (0.40 | ) | (0.16 | ) | (0.73 | ) | 0.00 | 17.34 | (19.54 | ) | 252 | 0.12 | 2.18 | 22 | |||||||||||||||||||||||||||||||||||||
2007 | 19.82 | 0.06 | 3.28 | 3.34 | (0.39 | ) | (0.45 | ) | — | (0.84 | ) | 0.00 | 22.32 | 17.28 | 344 | 0.29 | 2.18 | 12 | ||||||||||||||||||||||||||||||||||||||||||
2006 | 18.48 | 0.36 | 1.53 | 1.89 | (0.36 | ) | (0.19 | ) | — | (0.55 | ) | 0.00 | 19.82 | 10.46 | 352 | 1.91 | 2.21 | 14 | ||||||||||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2011(c) | $ | 17.65 | $ | (0.01 | ) | $ | 2.88 | $ | 2.87 | $ | (0.18 | ) | — | — | $ | (0.18 | ) | $ | 0.00 | $ | 20.34 | 16.32 | % | $ | 82,191 | (0.15) | %(d) | 2.15 | %(d) | 4 | % | |||||||||||||||||||||||||||||
2010 | 16.36 | 0.10 | 1.55 | 1.65 | (0.23 | ) | — | $ | (0.13 | ) | (0.36 | ) | 0.00 | 17.65 | 10.20 | 43,429 | 0.61 | 2.19 | 14 | |||||||||||||||||||||||||||||||||||||||||
2009 | 17.33 | 0.10 | (0.71 | ) | (0.61 | ) | (0.21 | ) | — | (0.15 | ) | (0.36 | ) | 0.00 | 16.36 | (3.07 | ) | 22,919 | 0.70 | 2.25 | 17 | |||||||||||||||||||||||||||||||||||||||
2008 | 22.31 | 0.03 | (4.28 | ) | (4.25 | ) | (0.17 | ) | $ | (0.40 | ) | (0.16 | ) | (0.73 | ) | 0.00 | 17.33 | (19.55 | ) | 18,547 | 0.13 | 2.18 | 22 | |||||||||||||||||||||||||||||||||||||
2007 | 19.81 | 0.05 | 3.29 | 3.34 | (0.39 | ) | (0.45 | ) | — | (0.84 | ) | 0.00 | 22.31 | 17.29 | 17,279 | 0.24 | 2.18 | 12 | ||||||||||||||||||||||||||||||||||||||||||
2006 | 18.47 | 0.24 | 1.65 | 1.89 | (0.36 | ) | (0.19 | ) | — | (0.55 | ) | 0.00 | 19.81 | 10.46 | 8,044 | 1.26 | 2.21 | 14 | ||||||||||||||||||||||||||||||||||||||||||
Class I | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2011(c) | $ | 18.80 | $ | 0.09 | $ | 3.07 | $ | 3.16 | $ | (0.18 | ) | — | — | $ | (0.18 | ) | $ | 0.00 | $ | 21.78 | 16.87 | % | $ | 67,999 | 0.83 | %(d) | 1.15 | %(d) | 4 | % | ||||||||||||||||||||||||||||||
2010 | 17.23 | 0.35 | 1.58 | 1.93 | (0.23 | ) | �� | $ | (0.13 | ) | (0.36 | ) | 0.00 | 18.80 | 11.32 | 41,204 | 1.92 | 1.19 | 14 | |||||||||||||||||||||||||||||||||||||||||
2009 | 18.04 | 0.25 | (0.70 | ) | (0.45 | ) | (0.21 | ) | — | (0.15 | ) | (0.36 | ) | 0.00 | 17.23 | (2.05 | ) | 8,819 | 1.71 | 1.25 | 17 | |||||||||||||||||||||||||||||||||||||||
2008(e) | 21.42 | 0.19 | (3.30 | ) | (3.11 | ) | (0.14 | ) | — | (0.13 | ) | (0.27 | ) | 0.00 | 18.04 | (14.65 | ) | 962 | 1.31 | (d) | 1.18 | (d) | 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. | |
†† | The ratios do not include a reduction for custodian fee credits on cash balances maintained with the custodian (“Custodian Fee Credits”). Including such Custodian Fee Credits, the 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, 2011 and the years ended September 30, 2010, 2009, 2008, and 2007, the effect of Custodian Fee Credits was minimal. | |
††† | 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, and 2006 would have been 20%, and 34%, respectively. | |
(a) | Per share amounts have been calculated using the average shares outstanding method. | |
(b) | Amount represents less than $0.005 per share. | |
(c) | For the six months ended March 31, 2011, unaudited. | |
(d) | Annualized. | |
(e) | From the commencement of offering Class I Shares on January 11, 2008 through September 30, 2008. |
See accompanying notes to financial statements.
13
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 Fund’s financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), which may require the use of management estimates and assumptions. 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 sixty 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 sixty 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. U.S. government obligations with maturities greater than sixty days are normally valued using a model that incorporates market observable data such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued principally using dealer quotations. 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.
14
The Gabelli Equity Income Fund
Notes to Financial Statements (Continued) (Unaudited)
Notes to Financial Statements (Continued) (Unaudited)
The inputs and valuation techniques used to measure fair value of the Fund’s investments are summarized into three levels as described in the hierarchy 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). |
A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input both individually and in aggregate that is significant to the fair value measurement. 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 in securities and other financial instruments by inputs used to value the Fund’s investments as of March 31, 2011 is as follows:
Valuation Inputs | ||||||||||||||||
Level 1 | Level 2 Other Significant | Level 3 Significant | Total Market Value | |||||||||||||
Quoted Prices | Observable Inputs | Unobservable Inputs | at 3/31/11 | |||||||||||||
INVESTMENTS IN SECURITIES: | ||||||||||||||||
ASSETS (Market Value): | ||||||||||||||||
Common Stocks: | ||||||||||||||||
Broadcasting | $ | 7,284,800 | — | $ | 0 | $ | 7,284,800 | |||||||||
Energy and Utilities: Electric | 14,694,076 | — | 0 | 14,694,076 | ||||||||||||
Financial Services | 220,083,917 | — | 95,000 | 220,178,917 | ||||||||||||
Other Industries (a) | 1,631,354,781 | — | — | 1,631,354,781 | ||||||||||||
Total Common Stocks | 1,873,417,574 | — | 95,000 | 1,873,512,574 | ||||||||||||
Preferred Stocks: | ||||||||||||||||
Entertainment | — | — | 7,650 | 7,650 | ||||||||||||
Other Industries (a) | 2,378,200 | — | — | 2,378,200 | ||||||||||||
Total Preferred Stocks | 2,378,200 | — | 7,650 | 2,385,850 | ||||||||||||
Warrants (a) | — | — | 0 | 0 | ||||||||||||
Corporate Bonds | 1,496,000 | $ | 9,605,950 | 0 | 11,101,950 | |||||||||||
U.S. Government Obligations | — | 45,558,100 | — | 45,558,100 | ||||||||||||
TOTAL INVESTMENTS IN SECURITIES — ASSETS | $ | 1,877,291,774 | $ | 55,164,050 | $ | 102,650 | $ | 1,932,558,474 | ||||||||
OTHER FINANCIAL INSTRUMENTS: | ||||||||||||||||
ASSETS (Unrealized Appreciation):* | ||||||||||||||||
EQUITY CONTRACTS: | ||||||||||||||||
Contract for Difference Swap Agreements | $ | — | $ | 54,056 | $ | — | $ | 54,056 | ||||||||
(a) | Please refer to the Schedule of Investments (“SOI”) for the industry classifications of these portfolio holdings. | |
* | Other financial instruments are derivatives reflected in the SOI, such as futures, forwards, and swaps, which are valued at the unrealized appreciation/depreciation of the instrument. |
The Fund did not have significant transfers between Level 1 and Level 2 during the six months ended March 31, 2011.
15
The Gabelli Equity Income Fund
Notes to Financial Statements (Continued) (Unaudited)
Notes to Financial Statements (Continued) (Unaudited)
The following table reconciles Level 3 investments for which significant unobservable inputs were used to determine fair value:
Net change | ||||||||||||||||||||||||||||||||||||||||
in unrealized | ||||||||||||||||||||||||||||||||||||||||
appreciation/ | ||||||||||||||||||||||||||||||||||||||||
depreciation | ||||||||||||||||||||||||||||||||||||||||
Change in | during the | |||||||||||||||||||||||||||||||||||||||
Balance | Accrued | Realized | unrealized | Transfers | Transfers | Balance | period on Level 3 | |||||||||||||||||||||||||||||||||
as of | discounts/ | gain/ | appreciation/ | into | out of | as of | investments held | |||||||||||||||||||||||||||||||||
9/30/10 | (premiums) | (loss) | depreciation† | Purchases | Sales | Level 3†† | Level 3†† | 3/31/11 | at 3/31/11† | |||||||||||||||||||||||||||||||
INVESTMENTS IN SECURITIES: | ||||||||||||||||||||||||||||||||||||||||
ASSETS (Market Value): | ||||||||||||||||||||||||||||||||||||||||
Common Stocks: | ||||||||||||||||||||||||||||||||||||||||
Broadcasting | $ | 0 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 0 | $ | — | ||||||||||||||||||||
Energy and Utilities: Electric | 0 | — | — | — | — | — | — | — | 0 | — | ||||||||||||||||||||||||||||||
Financial Services | — | — | — | 95,000 | 0 | — | — | — | 95,000 | 95,000 | ||||||||||||||||||||||||||||||
Publishing | 17 | — | (268 | ) | 251 | — | (0 | ) | — | — | — | — | ||||||||||||||||||||||||||||
Total Common Stocks | 17 | — | (268 | ) | 95,251 | 0 | (0 | ) | — | — | 95,000 | 95,000 | ||||||||||||||||||||||||||||
Preferred Stock: | ||||||||||||||||||||||||||||||||||||||||
Entertainment | — | — | — | (52,350 | ) | — | — | 60,000 | — | 7,650 | (52,350 | ) | ||||||||||||||||||||||||||||
Warrants: | ||||||||||||||||||||||||||||||||||||||||
Broadcasting | — | — | — | — | — | — | 0 | — | 0 | — | ||||||||||||||||||||||||||||||
Corporate Bonds | 2 | — | — | (2 | ) | — | — | — | — | 0 | (2 | ) | ||||||||||||||||||||||||||||
TOTAL INVESTMENTS IN SECURITIES | $ | 19 | $ | — | $ | (268 | ) | $ | 42,899 | $ | 0 | $ | (0 | ) | $ | 60,000 | $ | — | $ | 102,650 | $ | 42,648 | ||||||||||||||||||
† | Net change in unrealized appreciation/depreciation on investments is included in the related amounts in the Statement of Operations. | |
†† | The Fund’s policy is to recognize transfers into and transfers out of Level 3 as of the beginning of the reporting period. |
In January 2010, the Financial Accounting Standards Board (“FASB”) issued amended guidance to improve disclosure about fair value measurements which requires additional disclosures about transfers between Levels 1 and 2 and separate disclosures about purchases, sales, issuances, and settlements in the reconciliation of fair value measurements using significant unobservable inputs (Level 3). FASB also clarified existing disclosure requirements relating to the levels of disaggregation of fair value measurement and inputs and valuation techniques used to measure fair value. The amended guidance is effective for financial statements for fiscal years beginning after December 15, 2009 and interim periods within those fiscal years. Management has adopted the amended guidance and determined that there was no material impact to the Fund’s financial statements except for additional disclosures made in the notes. Disclosures about purchases, sales, issuances, and settlements in the rollforward of activity in Level 3 fair value measurements are effective for fiscal years beginning after December 15, 2010 and for interim periods within those fiscal years. Management is currently evaluating the impact of the additional disclosure requirements on the Fund’s financial statements.
16
The Gabelli Equity Income Fund
Notes to Financial Statements (Continued) (Unaudited)
Notes to Financial Statements (Continued) (Unaudited)
Derivative Financial Instruments. The Fund may engage in various portfolio investment strategies by investing in a number of derivative financial instruments for the purposes of increasing the income of the Fund, hedging against changes in the value of its portfolio securities and in the value of securities it intends to purchase, or hedging against a specific transaction with respect to either the currency in which the transaction is denominated or another currency. Investing in certain derivative financial instruments, including participation in the options, futures, or swap markets, entails certain execution, liquidity, hedging, tax, and securities, interest, credit, or currency market risks. Losses may arise if the Adviser’s prediction of movements in the direction of the securities, foreign currency, and interest rate markets is inaccurate. Losses may also arise if the counterparty does not perform its duties under a contract, or that, in the event of default, the Fund may be delayed in or prevented from obtaining payments or other contractual remedies owed to it under derivative contracts. The creditworthiness of the counterparties is closely monitored in order to minimize these risks. Participation in derivative transactions involves investment risks, transaction costs, and potential losses to which the Fund would not be subject absent the use of these strategies. The consequences of these risks, transaction costs, and losses may have a negative impact on the Fund’s ability to pay distributions.
The Fund’s derivative contracts held at March 31, 2011, if any, are not accounted for as hedging instruments under GAAP.
Swap Agreements. The Fund may enter into equity contract for difference swap transactions for the purpose of increasing the income of the Fund. 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 an equity contract for difference swap, a set of future cash flows is 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. Depending on the general state of short-term interest rates and the returns on the Fund’s portfolio securities 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.
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.
The Fund has entered into equity contract for difference swap agreements with The Goldman Sachs Group, Inc. Details of the swaps at March 31, 2011 are reflected within the Schedule of Investments and further details are as follows:
Notional | Equity Security | Interest Rate/ | Termination | Net Unrealized | ||||||
Amount | Received | Equity Security Paid | Date | Appreciation | ||||||
Market Value | One month LIBOR plus 90 bps plus | |||||||||
Appreciation on: | Market Value Depreciation on: | |||||||||
$293,999 (140,000 Shares) | Rank Group plc | Rank Group plc | 6/27/11 | $ | 41,404 | |||||
185,861 (20,000 Shares) | Rolls-Royce Group plc | Rolls-Royce Group plc | 6/27/11 | 12,652 | ||||||
$ | 54,056 | |||||||||
17
The Gabelli Equity Income Fund
Notes to Financial Statements (Continued) (Unaudited)
Notes to Financial Statements (Continued) (Unaudited)
The Fund’s volume of activity in equity contract for difference swap agreements during the six months ended March 31, 2011 had an average monthly notional amount of approximately $485,580.
As of March 31, 2011, the value of equity contract for difference swap agreements can be found in the Statement of Assets and Liabilities under Assets, Unrealized appreciation on swap contracts. For the six months ended March 31, 2011, the effect of equity contract for difference swap agreements can be found in the Statement of Operations, under Net Realized and Unrealized Gain on Investments, Swap Contracts, and Foreign Currency, Net realized gain on swap contracts and Net change in unrealized appreciation on swap contracts.
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, and 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. During the six months ended March 31, 2011, the Fund held no investments in futures contracts.
Forward Foreign Exchange Contracts. The Fund may engage in forward foreign exchange contracts for the purpose of 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. During the six months ended March 31, 2011, the Fund held no investments in forward foreign exchange contracts.
18
The Gabelli Equity Income Fund
Notes to Financial Statements (Continued) (Unaudited)
Notes to Financial Statements (Continued) (Unaudited)
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 broker retains collateral for the value of the open positions, which is adjusted periodically as the value of the position fluctuates. At March 31, 2011, there were no short sales outstanding.
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 receive and maintain securities as collateral whose market value is not less than their repurchase price. 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, 2011, the Fund held no investments in repurchase agreements.
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 purchase 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 inability 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 securities of comparable U.S. issuers.
19
The Gabelli Equity Income Fund
Notes to Financial Statements (Continued) (Unaudited)
Notes to Financial Statements (Continued) (Unaudited)
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. The Fund held no illiquid securities at March 31, 2011. For the restricted securities the Fund held as of March 31, 2011, refer to the Schedule of Investments.
Securities Transactions and Investment Income. Securities transactions are accounted for on the trade date with realized gain or loss on investments determined by using the identified cost method. Interest income (including amortization of premium and accretion of discount) is recorded 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 from foreign securities that are recorded as soon after the ex-dividend date as the Fund becomes aware of such dividends.
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 net asset value (“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.
20
The Gabelli Equity Income Fund
Notes to Financial Statements (Continued) (Unaudited)
Notes to Financial Statements (Continued) (Unaudited)
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 GAAP. 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 for federal income tax purposes 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, 2010 was as follows:
Distributions paid from: | ||||
Ordinary income | $ | 16,886,496 | ||
Return of capital | 10,052,858 | |||
Total distributions paid | $ | 26,939,354 | ||
The Fund has a fixed distribution policy. Under the policy, the Fund declares and pays monthly distributions from net investment income, capital gains, and paid-in capital. The actual source of the distribution is determined after the end of the calendar year. Pursuant to this policy, distributions during the calendar year are made in excess of required distributions. 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 pass through to shareholders all of its net realized long-term capital gains as a Capital Gain Dividend, subject to the maximum federal income tax rate of 15%, and may cause such gains to be treated as ordinary income subject to a maximum federal income tax rate of 35%. The Board 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 current annualized rate is $0.36 per share. Any paid-in capital that is a component of a distribution is not sourced from net investment income or realized gains of the Fund and that portion should not be considered as yield or total return from the Fund.
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.
At September 30, 2010, the Fund had net capital loss carryforwards for federal income tax purposes of $74,164,504, which are available to reduce future required distributions of net capital gains to shareholders. $1,899,612 of the loss carryforward is available through 2017; $72,264,892 is available through 2018.
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, 2010, the Fund deferred capital losses of $14,442,132 and currency losses of $70,087.
21
The Gabelli Equity Income Fund
Notes to Financial Statements (Continued) (Unaudited)
Notes to Financial Statements (Continued) (Unaudited)
The following summarizes the tax cost of investments and the related net unrealized appreciation/depreciation at March 31, 2011:
Gross | Gross | Net | ||||||||||||||
Unrealized | Unrealized | Unrealized | ||||||||||||||
Cost | Appreciation | Depreciation | Appreciation | |||||||||||||
Investments | $ | 1,524,656,849 | $ | 462,583,638 | $ | (54,682,013 | ) | $ | 407,901,625 |
The Fund is required to evaluate 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. Income tax and related interest and penalties would be recognized by the Fund as tax expense in the Statement of Operations if the tax positions were deemed not to meet the more-likely-than-not threshold. For the six months ended March 31, 2011, the Fund did not incur any income tax, interest, or penalties. As of March 31, 2011, the Adviser has reviewed all open tax years and concluded that there was no impact to the Fund’s net assets or results of operations. Tax years ended September 30, 2007 through September 30, 2010 remain subject to examination by the Internal Revenue Service and state taxing authorities. On an ongoing basis, the Adviser will monitor the Fund’s tax positions to determine if adjustments to this conclusion are necessary.
3. Investment Advisory Agreement and Other Transactions. The Fund has entered into an investment advisory agreement (the “Advisory Agreement”) with the Adviser which provides that the Fund will pay the Adviser a fee, computed daily and paid monthly, at the annual rate of 1.00% of the value of 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 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. A Director may receive a single meeting fee, allocated among the participating funds, for participation in certain meetings held on behalf of multiple funds. Directors who are directors or employees of the Adviser or an affiliated company receive no compensation or expense reimbursement from the Corporation.
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 & Co.”), 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 & Co. 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 sales of securities for the six months ended March 31, 2011, other than short-term securities and U.S. Government obligations, aggregated $257,465,138 and $74,120,425, respectively.
6. Transactions with Affiliates. During the six months ended March 31, 2011, the Fund paid brokerage commissions on security trades of $252,229 to Gabelli & Co. Additionally, Gabelli & Co. informed the Fund that it retained $70,519 from investors representing commissions (sales charges and underwriting fees) on sales and redemptions of Fund shares.
22
The Gabelli Equity Income Fund
Notes to Financial Statements (Continued) (Unaudited)
Notes to Financial Statements (Continued) (Unaudited)
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, 2011, 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 the higher of the sum of the overnight LIBOR plus 125 basis points or the sum of the federal funds rate plus 125 basis points at the time of borrowing. This amount, if any, would be included in “interest expense” in the Statement of Operations. During the six months ended March 31, 2011, 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 & Co., through selected broker/dealers, or the transfer agent. Class I Shares are offered through Gabelli & Co. and selected broker/dealers 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 Class B CDSC is equal to a percentage declining from 5% 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 & Co.
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 as an increase in paid-in capital. The redemption fees retained by the Fund during the six months ended March 31, 2011 and the year ended September 30, 2010 amounted to $14,760 and $5,058, 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 Equity Income 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, 2011 | Year Ended | |||||||||||||||
(Unaudited) | September 30, 2010 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Class AAA | ||||||||||||||||
Shares sold | 12,901,297 | $ | 264,469,584 | 21,637,827 | $ | 387,763,650 | ||||||||||
Shares issued upon reinvestment of distributions | 619,211 | 12,607,498 | 1,300,877 | 23,212,884 | ||||||||||||
Shares redeemed | (8,192,770 | ) | (167,476,968 | ) | (15,099,132 | ) | (269,309,008 | ) | ||||||||
Net increase | 5,327,738 | $ | 109,600,114 | 7,839,572 | $ | 141,667,526 | ||||||||||
Class A | ||||||||||||||||
Shares sold | 2,796,623 | $ | 57,024,162 | 2,491,071 | $ | 44,560,597 | ||||||||||
Shares issued upon reinvestment of distributions | 34,885 | 711,446 | 46,493 | 828,020 | ||||||||||||
Shares redeemed | (705,374 | ) | (14,303,526 | ) | (737,882 | ) | (13,033,171 | ) | ||||||||
Net increase | 2,126,134 | $ | 43,432,082 | 1,799,682 | $ | 32,355,446 | ||||||||||
Class B | ||||||||||||||||
Shares sold | 531 | $ | 10,753 | 3,220 | $ | 57,672 | ||||||||||
Shares issued upon reinvestment of distributions | 71 | 1,362 | 157 | 2,655 | ||||||||||||
Shares redeemed | (673 | ) | (13,115 | ) | (2,353 | ) | (38,556 | ) | ||||||||
Net increase/(decrease) | (71 | ) | $ | (1,000 | ) | 1,024 | $ | 21,771 | ||||||||
Class C | ||||||||||||||||
Shares sold | 1,779,639 | $ | 34,449,304 | 1,389,534 | $ | 23,812,111 | ||||||||||
Shares issued upon reinvestment of distributions | 20,458 | 395,124 | 30,202 | 512,405 | ||||||||||||
Shares redeemed | (220,189 | ) | (4,205,873 | ) | (360,684 | ) | (6,081,032 | ) | ||||||||
Net increase | 1,579,908 | $ | 30,638,555 | 1,059,052 | $ | 18,243,484 | ||||||||||
Class I | ||||||||||||||||
Shares sold | 1,378,715 | $ | 28,396,179 | 2,679,750 | $ | 49,306,287 | ||||||||||
Shares issued upon reinvestment of distributions | 21,018 | 433,547 | 24,314 | 438,095 | ||||||||||||
Shares redeemed | (469,982 | ) | (9,635,817 | ) | (1,024,097 | ) | (18,414,653 | ) | ||||||||
Net increase | 929,751 | $ | 19,193,909 | 1,679,967 | $ | 31,329,729 | ||||||||||
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. Management has reviewed the Fund’s existing contracts and expects the risk of loss to be remote.
24
The Gabelli Equity Income Fund
Notes to Financial Statements (Continued) (Unaudited)
Notes to Financial Statements (Continued) (Unaudited)
10. Other Matters. On April 24, 2008, the Adviser entered into a settlement with the SEC to resolve an 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 administrative settlement order, the SEC found that the Adviser had willfully violated Section 206(2) of the 1940 Act, Section 17(d) of the 1940 Act and Rule 17d-1 thereunder, and had willfully 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, paid $16 million (which included a $5 million civil monetary penalty), approximately $12.8 million of which is in the process of being paid to shareholders of the Global Growth Fund in accordance with a plan developed by an independent distribution consultant and approved by the independent directors of the Global Growth Fund and acceptable to the staff of the SEC, and agreed to cease and desist from future violations of the above referenced federal securities laws and rule. The SEC order also noted the cooperation that the Adviser had given the staff of the SEC during its inquiry. The settlement did 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 Fund, the Global Growth Fund, and other funds in the Gabelli/GAMCO fund complex. The officer denied the allegations and is continuing in his positions with the Adviser and the funds. The court dismissed certain claims and found that the SEC was not entitled to pursue various remedies against the officer while leaving one remedy in the event the SEC were able to prove violations of law. The court subsequently dismissed without prejudice the remaining remedy against the officer, which allowed the SEC to appeal the court’s rulings. On October 29, 2010 the SEC filed its appeal with the U.S. Court of Appeals for the Second Circuit regarding the lower court’s orders. The Adviser currently expects that any resolution of the action against the officer will not have a material adverse impact on the Fund or the Adviser or its ability to fulfill its obligations under the Advisory Agreement.
11. Subsequent Events. Management has evaluated the impact on the Fund of all subsequent events occurring through the date the financial statements were issued and has determined that there were no subsequent events requiring recognition or disclosure in the financial statements.
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.
25
The Gabelli Equity Income Fund
Board Consideration and Re-Approval of Advisory Agreement (Unaudited)
During the six months ended March 31, 2011, 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 in the top one-third of the funds in its category 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, 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 with similar expense ratios of the peer group of equity income funds and noted that the Adviser’s management fee includes substantially all administrative services for the Fund as well as investment advisory services. The Independent Board Members noted that the Fund’s expense ratios were above average within this group. The Independent Board Members also noted that the Fund’s size was 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 fees 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, 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.
26
The Gabelli Equity Income Fund
Board Consideration and Re-Approval of Advisory Agreement (Continued) (Unaudited)
Based on a consideration of all these factors in their totality, the Board Members, including all of the Independent Board Members, determined that the Fund’s advisory fee was fair and reasonable with respect to the quality of services provided and in light of the other factors described above that the Board deemed relevant. Accordingly, the Board Members determined to approve the continuation of the Fund’s Advisory Agreement. The Board Members based its decision on evaluations of all these factors as a whole and did not consider any one factor as all important or controlling.
27
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 7:00 P.M.
Board of Directors
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 7:00 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. | ||
Kuni Nakamura | ||
Anthony J. Colavita | President | |
President | Advanced Polymer, Inc. | |
Anthony J. Colavita, P.C. | ||
Anthony R. Pustorino | ||
Vincent D. Enright | Certified Public Accountant, | |
Former Senior Vice President | Professor Emeritus | |
and Chief Financial Officer | Pace University | |
KeySpan Corp. | ||
Anthonie C. van Ekris | ||
John D. Gabelli | Chairman | |
Senior Vice President | BALMAC International, Inc. | |
Gabelli & Company, Inc. | ||
Salvatore J. Zizza | ||
Chairman | ||
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.
GAB444Q111SR
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The Gabelli Equity Income Fund
Morningstar® rated The Gabelli Equity Income Fund
Class AAA Shares 5 stars overall and 5 stars for the
five and ten year periods and 4 stars for the three year
period ended March 31, 2011 among 1,120, 945, 522,
and 1,120 Large Value funds, respectively.
Class AAA Shares 5 stars overall and 5 stars for the
five and ten year periods and 4 stars for the three year
period ended March 31, 2011 among 1,120, 945, 522,
and 1,120 Large Value funds, respectively.
SEMI ANNUAL REPORT
MARCH 31, 2011
MARCH 31, 2011
The Gabelli Woodland Small Cap Value Fund
Semi-Annual Report — March 31, 2011
![(PHOTO OF ELIZABETH M. LILLY)](https://capedge.com/proxy/N-CSRS/0000950123-11-056763/y90383y9038101.jpg)
Elizabeth M. Lilly, CFA
To Our Shareholders,
For the six months ended March 31, 2011, the net asset value (“NAV”) per Class AAA Share of The Gabelli Woodland Small Cap Value Fund (the “Fund”) rose 26.1% compared with 25.5% for the Russell 2000 Index.
Comparative Results
Average Annual Returns through March 31, 2011 (a)(b) (Unaudited)
Since | ||||||||||||||||||||||||
Six | Inception | |||||||||||||||||||||||
Quarter | Months | 1 Year | 3 Year | 5 Year | (12/31/02) | |||||||||||||||||||
Gabelli Woodland Small Cap Value Fund Class AAA | 9.12 | % | 26.12 | % | 26.69 | % | 9.18 | % | 4.70 | % | 9.38 | % | ||||||||||||
Russell 2000 Index | 7.94 | 25.48 | 25.79 | 8.57 | 3.35 | 11.46 | ||||||||||||||||||
Class A | 9.04 | 26.14 | 26.70 | 9.18 | 4.72 | 9.41 | ||||||||||||||||||
With sales charge (c) | 2.77 | 18.89 | 19.42 | 6.99 | 3.46 | 8.61 | ||||||||||||||||||
Class C | 8.84 | 25.57 | 25.72 | 8.36 | 3.92 | 8.62 | ||||||||||||||||||
With contingent deferred sales charge (d) | 7.84 | 24.57 | 24.72 | 8.36 | 3.92 | 8.62 | ||||||||||||||||||
Class I | 9.14 | 26.28 | 26.99 | 9.47 | 4.86 | 9.48 |
In the current prospectus dated January 28, 2011, the gross expense ratios for Class AAA, A, C, and I Shares are 3.09%, 3.09%, 3.84%, and 2.84%, respectively. The net expense ratios after contractual reimbursements by Gabelli Funds, LLC (the “Adviser”) in place through January 31, 2012 are 2.01%, 2.01%, 2.76%, and 1.76%, respectively. See page 8 for the expense ratios for the six months ended March 31, 2011. The maximum sales charge for Class A and C Shares is 5.75% and 1.00%, respectively. Class AAA and Class I Shares do not have a sales charge.
(a) | Returns represent past performance and do not guarantee future results. Total returns and average annual returns reflect changes in share price, 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 information about this and other matters and should be read carefully before investing. | |
The Class AAA Shares 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 is an unmanaged indicator of stock market performance. Dividends are considered reinvested. You cannot directly invest in an index. | ||
(b) | The Fund’s fiscal year ends September 30. | |
(c) | Performance results include the effect of the maximum 5.75% sales charge at the beginning of the period. | |
(d) | Assuming payment of the maximum 1% CDSC imposed on redemptions made within one year of purchase. |
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, 2010 through March 31, 2011 | 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 | |||||||||||||
10/01/10 | 03/31/11 | Ratio | Period* | |||||||||||||
The Gabelli Woodland Small Cap Value Fund | ||||||||||||||||
Actual Fund Return | ||||||||||||||||
Class AAA | $ | 1,000.00 | $ | 1,261.20 | 2.01 | % | $ | 11.33 | ||||||||
Class A | $ | 1,000.00 | $ | 1,261.40 | 2.01 | % | $ | 11.33 | ||||||||
Class C | $ | 1,000.00 | $ | 1,255.70 | 2.76 | % | $ | 15.52 | ||||||||
Class I | $ | 1,000.00 | $ | 1,262.80 | 1.76 | % | $ | 9.93 | ||||||||
Hypothetical 5% Return | ||||||||||||||||
Class AAA | $ | 1,000.00 | $ | 1,014.91 | 2.01 | % | $ | 10.10 | ||||||||
Class A | $ | 1,000.00 | $ | 1,014.91 | 2.01 | % | $ | 10.10 | ||||||||
Class C | $ | 1,000.00 | $ | 1,011.17 | 2.76 | % | $ | 13.84 | ||||||||
Class I | $ | 1,000.00 | $ | 1,016.16 | 1.76 | % | $ | 8.85 |
* | 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 (182 days), 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, 2011:
The Gabelli Woodland Small Cap Value Fund
Diversified Industrial | 13.5 | % | ||
Business Services | 11.5 | % | ||
Computer Software and Services | 11.3 | % | ||
Health Care | 7.5 | % | ||
Equipment and Supplies | 6.1 | % | ||
Specialty Chemicals | 5.2 | % | ||
Machinery | 4.3 | % | ||
Financial Services | 4.2 | % | ||
Consumer Products | 3.8 | % | ||
Electronics | 3.6 | % | ||
Telecommunications | 3.5 | % | ||
Retail | 3.1 | % | ||
Energy and Utilities | 3.0 | % | ||
Aerospace | 2.2 | % | ||
Publishing | 2.1 | % | ||
Hotels and Gaming | 1.9 | % | ||
Consumer Services | 1.9 | % | ||
Restaurants | 1.5 | % | ||
Entertainment | 1.3 | % | ||
Transportation | 1.2 | % | ||
Food and Beverage | 1.0 | % | ||
Communications Equipment | 1.0 | % | ||
Commercial Services | 0.9 | % | ||
Automotive: Parts and Accessories | 0.6 | % | ||
U.S. Government Obligations | 3.0 | % | ||
Other Assets and Liabilities (Net) | 0.8 | % | ||
100.0 | % | |||
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 on Form N-Q, the last of which was filed for the quarter ended December 31, 2010. 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 800-SEC-0330.
Proxy Voting
The Fund files Form N-PX with its complete proxy voting record for the twelve 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 are 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, 2011 (Unaudited)
Schedule of Investments — March 31, 2011 (Unaudited)
Market | ||||||||||||
Shares | Cost | Value | ||||||||||
COMMON STOCKS — 96.2% | ||||||||||||
Aerospace — 2.2% | ||||||||||||
2,420 | Kaman Corp. | $ | 62,697 | $ | 85,184 | |||||||
3,200 | Spirit Aerosystems Holdings Inc., Cl. A† | 48,500 | 82,144 | |||||||||
111,197 | 167,328 | |||||||||||
Automotive: Parts and Accessories — 0.6% | ||||||||||||
1,800 | Federal-Mogul Corp.† | 23,085 | 44,820 | |||||||||
Business Services — 11.5% | ||||||||||||
8,500 | ACCO Brands Corp.† | 70,812 | 81,090 | |||||||||
1,758 | Ascent Media Corp., Cl. A† | 48,653 | 85,878 | |||||||||
3,390 | Deluxe Corp. | 53,735 | 89,970 | |||||||||
8,150 | Edgewater Technology Inc.† | 58,199 | 25,999 | |||||||||
2,700 | G & K Services Inc., Cl. A | 77,933 | 89,775 | |||||||||
4,000 | Intermec Inc.† | 98,702 | 43,160 | |||||||||
3,000 | Liquidity Services Inc.† | 24,634 | 53,580 | |||||||||
3,300 | Macquarie Infrastructure Co. LLC† | 51,956 | 78,738 | |||||||||
12,800 | PRGX Global Inc.† | 59,917 | 77,696 | |||||||||
10,000 | S1 Corp.† | 62,888 | 66,800 | |||||||||
3,333 | Safeguard Scientifics Inc.† | 30,380 | 67,827 | |||||||||
3,520 | The Brink’s Co. | 105,002 | 116,547 | |||||||||
742,811 | 877,060 | |||||||||||
Commercial Services — 0.9% | ||||||||||||
23,000 | Odyssey Marine Exploration Inc.† | 51,451 | 70,840 | |||||||||
Communications Equipment — 1.0% | ||||||||||||
9,000 | Tekelec† | 74,808 | 73,080 | |||||||||
Computer Software and Services — 11.3% | ||||||||||||
5,500 | Dynamics Research Corp.† | 49,049 | 89,925 | |||||||||
3,100 | Fair Isaac Corp. | 50,761 | 97,991 | |||||||||
8,410 | Lawson Software Inc.† | 60,860 | 101,761 | |||||||||
5,600 | Mercury Computer Systems Inc.† | 74,345 | 118,496 | |||||||||
1,740 | MTS Systems Corp. | 63,274 | 79,257 | |||||||||
6,000 | Rimage Corp. | 99,938 | 96,900 | |||||||||
3,800 | Schawk Inc. | 58,264 | 73,872 | |||||||||
17,700 | Tier Technologies Inc.† | 156,502 | 97,350 | |||||||||
8,800 | TransAct Technologies Inc.† | 26,149 | 105,160 | |||||||||
639,142 | 860,712 | |||||||||||
Consumer Products — 3.8% | ||||||||||||
5,500 | Arctic Cat Inc.† | 75,487 | 85,525 | |||||||||
1,085 | Church & Dwight Co. Inc. | 32,590 | 86,084 | |||||||||
8,600 | Kid Brands Inc.† | 43,283 | 63,210 | |||||||||
3,900 | The Jones Group Inc. | 52,376 | 53,625 | |||||||||
203,736 | 288,444 | |||||||||||
Consumer Services — 1.9% | ||||||||||||
3,100 | CPI Corp. | 70,815 | 69,781 | |||||||||
1,600 | Steiner Leisure Ltd.† | 74,445 | 74,016 | |||||||||
145,260 | 143,797 | |||||||||||
Diversified Industrial — 13.5% | ||||||||||||
2,400 | AEP Industries Inc.† | 86,725 | 71,328 | |||||||||
4,000 | Albany International Corp., Cl. A | 89,332 | 99,600 | |||||||||
1,450 | Crane Co. | 63,484 | 70,223 | |||||||||
1,850 | EnPro Industries Inc.† | 66,036 | 67,192 | |||||||||
20,000 | Graphic Packaging Holding Co.† | 71,355 | 108,400 | |||||||||
5,957 | Griffon Corp.† | 51,420 | 78,215 | |||||||||
2,175 | Harsco Corp. | 52,227 | 76,756 | |||||||||
2,200 | L.B. Foster Co., Cl. A | 60,598 | 94,842 | |||||||||
1,300 | OSI Systems Inc.† | 15,728 | 48,789 | |||||||||
1,000 | Raven Industries Inc. | 19,885 | 61,420 | |||||||||
2,000 | Texas Industries Inc. | 57,124 | 90,460 | |||||||||
4,500 | Vishay Intertechnology Inc.† | 28,152 | 79,830 | |||||||||
5,171 | Vishay Precision Group Inc.† | 86,701 | 81,030 | |||||||||
748,767 | 1,028,085 | |||||||||||
Electronics — 3.6% | ||||||||||||
1,100 | Analogic Corp. | 60,360 | 62,205 | |||||||||
16,040 | Pulse Electronics Corp. | 78,808 | 97,042 | |||||||||
2,100 | Universal Display Corp.† | 67,891 | 115,584 | |||||||||
207,059 | 274,831 | |||||||||||
Energy and Utilities — 3.0% | ||||||||||||
2,700 | GeoResources Inc.† | 72,790 | 84,429 | |||||||||
2,800 | Insituform Technologies Inc., Cl. A† | 73,380 | 74,900 | |||||||||
2,170 | PICO Holdings Inc.† | 70,399 | 65,230 | |||||||||
216,569 | 224,559 | |||||||||||
Entertainment — 1.3% | ||||||||||||
6,500 | Take-Two Interactive Software Inc.† | 63,637 | 99,905 | |||||||||
Equipment and Supplies — 6.1% | ||||||||||||
3,200 | Actuant Corp., Cl. A | 50,801 | 92,800 | |||||||||
6,200 | Gerber Scientific Inc.† | 25,224 | 58,032 | |||||||||
3,350 | GrafTech International Ltd.† | 55,207 | 69,111 | |||||||||
1,950 | Mine Safety Appliances Co. | 48,264 | 71,507 | |||||||||
1,930 | Powell Industries Inc.† | 38,791 | 76,119 | |||||||||
1,450 | The Toro Co. | 55,539 | 96,019 | |||||||||
273,826 | 463,588 | |||||||||||
See accompanying notes to financial statements.
4
The Gabelli Woodland Small Cap Value Fund
Schedule of Investments (Continued) — March 31, 2011 (Unaudited)
Schedule of Investments (Continued) — March 31, 2011 (Unaudited)
Market | ||||||||||||
Shares | Cost | Value | ||||||||||
COMMON STOCKS (Continued) | ||||||||||||
Financial Services — 4.2% | ||||||||||||
1,400 | Cash America International Inc. | $ | 50,543 | $ | 64,470 | |||||||
4,500 | Investment Technology Group Inc.† | 69,459 | 81,855 | |||||||||
6,700 | NewAlliance Bancshares Inc. | 97,054 | 99,428 | |||||||||
4,600 | TCF Financial Corp. | 65,435 | 72,956 | |||||||||
282,491 | 318,709 | |||||||||||
Food and Beverage — 1.0% | ||||||||||||
1,100 | The J.M. Smucker Co. | 52,808 | 78,529 | |||||||||
Health Care — 7.5% | ||||||||||||
6,200 | AtriCure Inc.† | 30,842 | 70,556 | |||||||||
1,050 | Beckman Coulter Inc. | 76,126 | 87,223 | |||||||||
1,300 | Chemed Corp. | 54,426 | 86,593 | |||||||||
60,300 | Hooper Holmes Inc.† | 61,785 | 44,622 | |||||||||
3,000 | IRIS International Inc.† | 31,000 | 27,060 | |||||||||
8,740 | Rochester Medical Corp.† | 104,725 | 100,335 | |||||||||
1,000 | Techne Corp. | 58,834 | 71,600 | |||||||||
3,500 | Transcend Services Inc.† | 45,829 | 84,000 | |||||||||
463,567 | 571,989 | |||||||||||
Hotels and Gaming — 1.9% | ||||||||||||
2,520 | Gaylord Entertainment Co.† | 20,724 | 87,394 | |||||||||
4,400 | Pinnacle Entertainment Inc.† | 34,849 | 59,928 | |||||||||
55,573 | 147,322 | |||||||||||
Machinery — 4.3% | ||||||||||||
4,664 | Key Technology Inc.† | 50,344 | 94,259 | |||||||||
17,000 | Mueller Water Products Inc., Cl. A | 70,085 | 76,160 | |||||||||
1,670 | Robbins & Myers Inc. | 32,656 | 76,803 | |||||||||
3,750 | TriMas Corp.† | 37,420 | 80,625 | |||||||||
190,505 | 327,847 | |||||||||||
Publishing — 2.1% | ||||||||||||
14,000 | Journal Communications Inc., Cl. A† | 72,210 | 84,000 | |||||||||
2,700 | Scholastic Corp. | 43,899 | 73,008 | |||||||||
116,109 | 157,008 | |||||||||||
Restaurants — 1.5% | ||||||||||||
640 | DineEquity Inc.† | 23,247 | 35,187 | |||||||||
8,000 | Famous Dave’s of America Inc.† | 49,700 | 78,240 | |||||||||
72,947 | 113,427 | |||||||||||
Retail — 3.1% | ||||||||||||
3,200 | Collective Brands Inc.† | 69,393 | 69,056 | |||||||||
2,000 | J. Crew Group Inc., Escrow† (a) | 0 | 0 | |||||||||
3,900 | Penske Automotive Group Inc.† | 64,036 | 78,078 | |||||||||
5,200 | Regis Corp. | 95,512 | 92,248 | |||||||||
228,941 | 239,382 | |||||||||||
Specialty Chemicals — 5.2% | ||||||||||||
4,700 | A. Schulman Inc. | 91,499 | 116,184 | |||||||||
660 | FMC Corp. | 26,045 | 56,054 | |||||||||
2,850 | H.B. Fuller Co. | 63,386 | 61,218 | |||||||||
6,000 | PolyOne Corp. | 43,626 | 85,260 | |||||||||
1,900 | Quaker Chemical Corp. | 62,181 | 76,323 | |||||||||
286,737 | 395,039 | |||||||||||
Telecommunications — 3.5% | ||||||||||||
1,400 | Atlantic Tele-Network Inc. | 69,565 | 52,066 | |||||||||
7,400 | HickoryTech Corp. | 56,094 | 67,266 | |||||||||
2,400 | j2 Global Communications Inc.† | 50,715 | 70,824 | |||||||||
5,000 | Neutral Tandem Inc.† | 64,094 | 73,750 | |||||||||
240,468 | 263,906 | |||||||||||
Transportation — 1.2% | ||||||||||||
11,000 | Air Transport Services Group Inc.† | 69,845 | 92,950 | |||||||||
TOTAL COMMON STOCKS | 5,561,339 | 7,323,157 | ||||||||||
Principal | ||||||||||||
Amount | ||||||||||||
U.S. GOVERNMENT OBLIGATIONS — 3.0% | ||||||||||||
$ | 230,000 | U.S. Treasury Bills, 0.095% to 0.145%††, 04/21/11 to 05/05/11 | 229,977 | 229,977 | ||||||||
TOTAL INVESTMENTS — 99.2% | $ | 5,791,316 | 7,553,134 | |||||||||
Other Assets and Liabilities (Net) — 0.8% | 60,547 | |||||||||||
NET ASSETS — 100.0% | $ | 7,613,681 | ||||||||||
(a) | Security fair valued under procedures established by the Board of Directors. The procedures may include reviewing available financial information about the company and reviewing the valuation of comparable securities and other factors on a regular basis. At March 31, 2011, the fair valued security had no market value. | |
† | Non-income producing security. | |
†† | Represents annualized yield at date of purchase. |
See accompanying notes to financial statements.
5
The Gabelli Woodland Small Cap Value Fund
Statement of Assets and Liabilities
March 31, 2011 (Unaudited)
March 31, 2011 (Unaudited)
Assets: | ||||
Investments, at value (cost $5,791,316) | $ | 7,553,134 | ||
Cash | 58,271 | |||
Receivable for investments sold | 25,528 | |||
Receivable for Fund shares issued | 1,069 | |||
Dividends receivable | 2,939 | |||
Prepaid expenses | 26,532 | |||
Total Assets | 7,667,473 | |||
Liabilities: | ||||
Payable for investments purchased | 13,650 | |||
Payable for Fund shares redeemed | 1,185 | |||
Payable for distribution fees | 1,628 | |||
Payable for investment advisory fees | 682 | |||
Payable for legal and audit fees | 18,549 | |||
Payable for shareholder communications expenses | 15,322 | |||
Other accrued expenses | 2,776 | |||
Total Liabilities | 53,792 | |||
Net Assets (applicable to 677,543 shares outstanding) | $ | 7,613,681 | ||
Net Assets Consist of: | ||||
Paid-in capital | $ | 6,177,169 | ||
Accumulated net investment loss | (43,772 | ) | ||
Accumulated net realized loss on investments | (281,534 | ) | ||
Net unrealized appreciation on investments | 1,761,818 | |||
Net Assets | $ | 7,613,681 | ||
Shares of Capital Stock each at $0.001 par value: | ||||
Class AAA: | ||||
Net Asset Value, offering, and redemption price per share ($7,213,492 ÷ 641,152 shares outstanding; 100,000,000 shares authorized) | $ | 11.25 | ||
Class A: | ||||
Net Asset Value and redemption price per share ($142,635 ÷ 12,576 shares outstanding; 50,000,000 shares authorized) | $ | 11.34 | ||
Maximum offering price per share (NAV÷ 0.9425, based on maximum sales charge of 5.75% of the offering price) | $ | 12.03 | ||
Class C: | ||||
Net Asset Value and offering price per share ($149,938 ÷ 14,329 shares outstanding, 50,000,000 shares authorized) | $ | 10.46 | (a) | |
Class I: | ||||
Net Asset Value, offering, and redemption price per share ($107,616 ÷ 9,486 shares outstanding, 50,000,000 shares authorized) | $ | 11.34 | ||
(a) | Redemption price varies based on the length of time held. |
Statement of Operations
For the Six Months Ended March 31, 2011 (Unaudited)
For the Six Months Ended March 31, 2011 (Unaudited)
Investment Income: | ||||
Dividends | $ | 25,440 | ||
Interest | 51 | |||
Total Investment Income | 25,491 | |||
Expenses: | ||||
Investment advisory fees | 34,303 | |||
Distribution fees — Class AAA | 8,143 | |||
Distribution fees — Class A | 161 | |||
Distribution fees — Class C | 676 | |||
Registration expenses | 16,665 | |||
Legal and audit fees | 11,146 | |||
Shareholder communications expenses | 10,731 | |||
Shareholder services fees | 8,167 | |||
Custodian fees | 5,101 | |||
Interest expense | 251 | |||
Directors’ fees | 88 | |||
Miscellaneous expenses | 4,460 | |||
Total Expenses | 99,892 | |||
Less: | ||||
Fees waived and expenses reimbursed by the Adviser (See Note 3) | (30,629 | ) | ||
Net Expenses | 69,263 | |||
Net Investment Loss | (43,772 | ) | ||
Net Realized and Unrealized Gain on Investments: | ||||
Net realized gain on investments | 609,583 | |||
Net change in unrealized appreciation on investments | 1,006,249 | |||
Net Realized and Unrealized Gain on Investments | 1,615,832 | |||
Net Increase in Net Assets Resulting from Operations | $ | 1,572,060 | ||
See accompanying notes to financial statements.
6
The Gabelli Woodland Small Cap Value Fund
Statement of Changes in Net Assets
Six Months Ended | ||||||||
March 31, 2011 | Year Ended | |||||||
(Unaudited) | September 30, 2010 | |||||||
Operations: | ||||||||
Net investment loss | $ | (43,772 | ) | $ | (79,973 | ) | ||
Net realized gain on investments | 609,583 | 613,259 | ||||||
Net change in unrealized appreciation on investments | 1,006,249 | 177,018 | ||||||
Net Increase in Net Assets Resulting from Operations | 1,572,060 | 710,304 | ||||||
Capital Share Transactions: | ||||||||
Class AAA | (18,405 | ) | (406,637 | ) | ||||
Class A | (3,337 | ) | 59,906 | |||||
Class B | — | (154 | )* | |||||
Class C | — | (14,730 | ) | |||||
Class I | 22,321 | (998 | ) | |||||
Net Increase/(Decrease) in Net Assets from Capital Share Transactions | 579 | (362,613 | ) | |||||
Net Increase in Net Assets | 1,572,639 | 347,691 | ||||||
Net Assets: | ||||||||
Beginning of period | 6,041,042 | 5,693,351 | ||||||
End of period (including undistributed net investment income of $0 and $0, respectively) | $ | 7,613,681 | $ | 6,041,042 | ||||
* | Class B Shares were fully redeemed and closed on February 2, 2010. |
See accompanying notes to financial statements.
7
The Gabelli Woodland Small Cap Value Fund
Financial Highlights
Financial Highlights
Selected data for a share of capital stock outstanding throughout each period:
Income (Loss) from | Ratios to Average Net Assets/ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Operations | Supplemental Data | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net | Distributions | 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) | Investments | Operations | Income | Investments | Distributions | Fees(a) | Period | Return† | (in 000’s) | (Loss)(b) | ments(c) | ments(d) | Rate | |||||||||||||||||||||||||||||||||||||||||||||
Class AAA | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2011(e) | $ | 8.92 | $ | (0.06 | ) | $ | 2.39 | $ | 2.33 | — | — | — | — | $ | 11.25 | 26.12 | % | $ | 7,213 | (1.26 | )%(f) | 2.01 | %(f) | 2.90 | %(f) | 24 | % | |||||||||||||||||||||||||||||||||
2010 | 7.90 | (0.11 | ) | 1.13 | 1.02 | — | — | — | — | 8.92 | 12.91 | 5,739 | (1.33 | ) | 2.01 | 3.09 | 61 | |||||||||||||||||||||||||||||||||||||||||||
2009 | 9.30 | (0.07 | ) | (0.92 | ) | (0.99 | ) | — | $ | (0.41 | ) | $ | (0.41 | ) | $ | 0.00 | (g) | 7.90 | (8.99 | ) | 5,462 | (1.04 | ) | 2.01 | 3.34 | 62 | ||||||||||||||||||||||||||||||||||
2008 | 12.61 | (0.08 | ) | (1.43 | ) | (1.51 | ) | — | (1.80 | ) | (1.80 | ) | 0.00 | (g) | 9.30 | (13.20 | ) | 7,327 | (0.80 | ) | 2.01 | 2.52 | 58 | |||||||||||||||||||||||||||||||||||||
2007 | 13.35 | 0.05 | 2.44 | 2.49 | $ | (0.06 | ) | (3.17 | ) | (3.23 | ) | 0.00 | (g) | 12.61 | 20.71 | 9,040 | 0.38 | 2.01 | 2.33 | 51 | ||||||||||||||||||||||||||||||||||||||||
2006 | 14.64 | (0.12 | ) | 0.07 | (0.05 | ) | — | (1.24 | ) | (1.24 | ) | 0.00 | (g) | 13.35 | (0.35 | ) | 9,137 | (0.84 | ) | 2.01 | 2.31 | 59 | ||||||||||||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2011(e) | $ | 8.99 | $ | (0.06 | ) | $ | 2.41 | $ | 2.35 | — | — | — | — | $ | 11.34 | 26.14 | % | $ | 143 | (1.27 | )%(f) | 2.01 | %(f) | 2.90 | %(f) | 24 | % | |||||||||||||||||||||||||||||||||
2010 | 7.96 | (0.11 | ) | 1.14 | 1.03 | — | — | — | — | 8.99 | 12.94 | 116 | (1.27 | ) | 2.01 | 3.09 | 61 | |||||||||||||||||||||||||||||||||||||||||||
2009 | 9.37 | (0.07 | ) | (0.93 | ) | (1.00 | ) | — | $ | (0.41 | ) | $ | (0.41 | ) | $ | 0.00 | (g) | 7.96 | (9.04 | ) | 50 | (1.06 | ) | 2.01 | 3.34 | 62 | ||||||||||||||||||||||||||||||||||
2008 | 12.69 | (0.08 | ) | (1.44 | ) | (1.52 | ) | — | (1.80 | ) | (1.80 | ) | 0.00 | (g) | 9.37 | (13.19 | ) | 51 | (0.80 | ) | 2.01 | 2.52 | 58 | |||||||||||||||||||||||||||||||||||||
2007 | 13.36 | 0.13 | 2.39 | 2.52 | $ | (0.02 | ) | (3.17 | ) | (3.19 | ) | 0.00 | (g) | 12.69 | 20.94 | 65 | 1.00 | 2.01 | 2.33 | 51 | ||||||||||||||||||||||||||||||||||||||||
2006 | 14.65 | (0.12 | ) | 0.07 | (0.05 | ) | — | (1.24 | ) | (1.24 | ) | 0.00 | (g) | 13.36 | (0.36 | ) | 100 | (0.83 | ) | 2.01 | 2.31 | 59 | ||||||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2011(e) | $ | 8.33 | $ | (0.10 | ) | $ | 2.23 | $ | 2.13 | — | — | — | — | $ | 10.46 | 25.57 | % | $ | 150 | (2.02 | )%(f) | 2.76 | %(f) | 3.65 | %(f) | 24 | % | |||||||||||||||||||||||||||||||||
2010 | 7.43 | (0.16 | ) | 1.06 | 0.90 | — | — | — | — | 8.33 | 12.11 | 119 | (2.09 | ) | 2.76 | 3.84 | 61 | |||||||||||||||||||||||||||||||||||||||||||
2009 | 8.84 | (0.11 | ) | (0.89 | ) | (1.00 | ) | — | $ | (0.41 | ) | $ | (0.41 | ) | $ | 0.00 | (g) | 7.43 | (9.61 | ) | 122 | (1.78 | ) | 2.76 | 4.09 | 62 | ||||||||||||||||||||||||||||||||||
2008 | 12.16 | (0.15 | ) | (1.37 | ) | (1.52 | ) | — | (1.80 | ) | (1.80 | ) | 0.00 | (g) | 8.84 | (13.86 | ) | 146 | (1.58 | ) | 2.76 | 3.27 | 58 | |||||||||||||||||||||||||||||||||||||
2007 | 13.00 | (0.03 | ) | 2.36 | 2.33 | — | (3.17 | ) | (3.17 | ) | 0.00 | (g) | 12.16 | 19.84 | 295 | (0.26 | ) | 2.76 | 3.08 | 51 | ||||||||||||||||||||||||||||||||||||||||
2006 | 14.39 | (0.21 | ) | 0.06 | (0.15 | ) | — | (1.24 | ) | (1.24 | ) | 0.00 | (g) | 13.00 | (1.11 | ) | 425 | (1.58 | ) | 2.76 | 3.06 | 59 | ||||||||||||||||||||||||||||||||||||||
Class I | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2011(e) | $ | 8.98 | $ | (0.05 | ) | $ | 2.41 | $ | 2.36 | — | — | — | — | $ | 11.34 | 26.28 | % | $ | 108 | (1.01 | )%(f) | 1.76 | %(f) | 2.65 | %(f) | 24 | % | |||||||||||||||||||||||||||||||||
2010 | 7.93 | (0.09 | ) | 1.14 | 1.05 | — | — | — | — | 8.98 | 13.24 | 67 | (1.09 | ) | 1.76 | 2.84 | 61 | |||||||||||||||||||||||||||||||||||||||||||
2009 | 9.31 | (0.05 | ) | (0.92 | ) | (0.97 | ) | — | $ | (0.41 | ) | $ | (0.41 | ) | $ | 0.00 | (g) | 7.93 | (8.76 | ) | 59 | (0.79 | ) | 1.76 | 3.09 | 62 | ||||||||||||||||||||||||||||||||||
2008(h) | 9.41 | (0.03 | ) | (0.07 | ) | (0.10 | ) | — | — | — | 0.00 | (g) | 9.31 | (1.06 | ) | 72 | (0.44 | )(f) | 1.76 | (f) | 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. | |
(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 Fund incurred interest expense during the six months ended March 31, 2011 and the years ended September 30, 2010, 2009, 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%, 2.00%, 2.00%, and 2.00% (Class AAA and Class A), 2.75%, 2.75%, 2.75%, 2.75%, 2.75%, and 2.75% (Class C), 1.75%, 1.75%, 1.75%, and 1.75% (Class I), respectively. | |
(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, 2011, unaudited. | |
(f) | Annualized. | |
(g) | Amount represents less than $0.005 per share. | |
(h) | From the commencement of offering Class I shares on January 11, 2008 through September 30, 2008. |
See accompanying notes to financial statements.
8
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 less. The Fund commenced investment operations on December 31, 2002.
2. Significant Accounting Policies. The Fund’s financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), which may require the use of management estimates and assumptions. 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 sixty 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 sixty 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. U.S. government obligations with maturities greater than sixty days are normally valued using a model that incorporates market observable data such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued principally using dealer quotations.
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 Receipt 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.
9
The Gabelli Woodland Small Cap Value Fund
Notes to Financial Statements (Continued) (Unaudited)
Notes to Financial Statements (Continued) (Unaudited)
The inputs and valuation techniques used to measure fair value of the Fund’s investments are summarized into three levels as described in the hierarchy 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). |
A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input both individually and in aggregate that is significant to the fair value measurement. 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 in securities by inputs used to value the Fund’s investments as of March 31, 2011 is as follows:
Valuation Inputs | ||||||||||||||||
Level 1 | Level 2 Other Significant | Level 3 Significant | Total Market Value | |||||||||||||
Quoted Prices | Observable Inputs | Unobservable Inputs | at 3/31/11 | |||||||||||||
INVESTMENTS IN SECURITIES: | ||||||||||||||||
ASSETS (Market Value): | ||||||||||||||||
Common Stocks: | ||||||||||||||||
Retail | $ | 239,382 | — | $ | 0 | $ | 239,382 | |||||||||
Other Industries (a) | 7,083,775 | — | — | 7,083,775 | ||||||||||||
Total Common Stocks | 7,323,157 | — | 0 | 7,323,157 | ||||||||||||
U.S. Government Obligations | — | $ | 229,977 | — | 229,977 | |||||||||||
TOTAL INVESTMENTS IN SECURITIES — ASSETS | $ | 7,323,157 | $ | 229,977 | $ | 0 | $ | 7,553,134 | ||||||||
(a) | Please refer to the Schedule of Investments for the industry classifications of these portfolio holdings. |
The Fund did not have significant transfers between Level 1 and Level 2 during the six months ended March 31, 2011.
10
The Gabelli Woodland Small Cap Value Fund
Notes to Financial Statements (Continued) (Unaudited)
Notes to Financial Statements (Continued) (Unaudited)
The following table reconciles Level 3 investments for which significant unobservable inputs were used to determine fair value:
Net change | ||||||||||||||||||||||||||||||||||||||||
in unrealized | ||||||||||||||||||||||||||||||||||||||||
appreciation/ | ||||||||||||||||||||||||||||||||||||||||
depreciation | ||||||||||||||||||||||||||||||||||||||||
during the | ||||||||||||||||||||||||||||||||||||||||
Change in | period on | |||||||||||||||||||||||||||||||||||||||
Balance | Accrued | Realized | unrealized | Transfers | Transfers | Balance | Level 3 | |||||||||||||||||||||||||||||||||
as of | discounts/ | gain/ | appreciation/ | into | out of | as of | investments | |||||||||||||||||||||||||||||||||
9/30/10 | (premiums) | (loss) | depreciation† | Purchases | Sales | Level 3†† | Level 3†† | 3/31/11 | held at 3/31/11† | |||||||||||||||||||||||||||||||
INVESTMENTS IN SECURITIES: | ||||||||||||||||||||||||||||||||||||||||
ASSETS (Market Value): | ||||||||||||||||||||||||||||||||||||||||
Common Stocks: | ||||||||||||||||||||||||||||||||||||||||
Retail | $ | — | $ | — | $ | — | $ | — | $ | 0 | $ | — | $ | — | $ | — | $ | 0 | $ | — | ||||||||||||||||||||
Total Common Stocks | — | — | — | — | 0 | — | — | — | 0 | — | ||||||||||||||||||||||||||||||
TOTAL INVESTMENTS IN SECURITIES | $ | — | $ | — | $ | — | $ | — | $ | 0 | $ | — | $ | — | $ | — | $ | 0 | $ | — | ||||||||||||||||||||
† | Net change in unrealized appreciation/depreciation on investments is included in the related amounts in the Statement of Operations. | |
†† | The Fund’s policy is to recognize transfers into and transfers out of Level 3 as of the beginning of the reporting period. |
In January 2010, the Financial Accounting Standards Board (“FASB”) issued amended guidance to improve disclosure about fair value measurements which requires additional disclosures about transfers between Levels 1 and 2 and separate disclosures about purchases, sales, issuances, and settlements in the reconciliation of fair value measurements using significant unobservable inputs (Level 3). FASB also clarified existing disclosure requirements relating to the levels of disaggregation of fair value measurement and inputs and valuation techniques used to measure fair value. The amended guidance is effective for financial statements for fiscal years beginning after December 15, 2009 and interim periods within those fiscal years. Management has adopted the amended guidance and determined that there was no material impact to the Fund’s financial statements except for additional disclosures made in the notes. Disclosures about purchases, sales, issuances, and settlements in the rollforward of activity in Level 3 fair value measurements are effective for fiscal years beginning after December 15, 2010 and for interim periods within those fiscal years. Management is currently evaluating the impact of the additional disclosure requirements on the Fund’s financial statements.
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 receive and maintain securities as collateral whose market value is not less than their repurchase price. 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, 2011, the Fund held no investments in repurchase agreements.
11
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 inability 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 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 from foreign securities that are recorded as soon after the ex-dividend date as the Fund becomes aware of such dividends.
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 net asset value (“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. There were no custodian fee credits earned during the six months ended March 31, 2011.
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 GAAP. 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.
No distributions were made during the year ended September 30, 2010.
12
The Gabelli Woodland Small Cap Value Fund
Notes to Financial Statements (Continued) (Unaudited)
Notes to Financial Statements (Continued) (Unaudited)
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.
At September 30, 2010, the Fund had net capital loss carryforwards for federal income tax purposes of $874,666, which are available to reduce future required distributions of net capital gains to shareholders. $279,714 of the loss carryforward is available through 2017; $594,952 is available through 2018.
The following summarizes the tax cost of investments and the related net unrealized appreciation/depreciation at March 31, 2011:
Gross | Gross | Net | ||||||||||||||
Unrealized | Unrealized | Unrealized | ||||||||||||||
Cost | Appreciation | Depreciation | Appreciation | |||||||||||||
Investments | $ | 5,800,189 | $ | 1,989,940 | $ | (236,995 | ) | $ | 1,752,945 |
The Fund is required to evaluate 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. Income tax and related interest and penalties would be recognized by the Fund as tax expense in the Statement of Operations if the tax positions were deemed not to meet the more-likely-than-not threshold. For the six months ended March 31, 2011, the Fund did not incur any income tax, interest, or penalties. As of March 31, 2011, the Adviser has reviewed all open tax years and concluded that there was no impact to the Fund’s net assets or results of operations. Tax years ended September 30, 2007 through September 30, 2010 remain subject to examination by the Internal Revenue Service and state taxing authorities. On an ongoing basis, the Adviser will monitor the Fund’s tax positions to determine if adjustments to this conclusion are necessary.
3. Investment Advisory Agreement and Other Transactions. The Fund has entered into an investment advisory agreement (the “Advisory Agreement”) with the Adviser which provides that the Fund will pay the Adviser a fee, computed daily and paid monthly, at the annual rate of 1.00% of the value of 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 of the Fund (exclusive of brokerage fees, interest, taxes, and extraordinary expenses) at 2.00%, 2.00%, 2.75%, and 1.75%, respectively, of Class AAA, Class A, Class C, and Class I Shares’ average daily net assets through January 31, 2011. For the six months ended March 31, 2011, the Adviser reimbursed the Fund in the amount of $30,629. 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 fell below those percentages of average daily net assets for those respective share classes. At March 31, 2011, the cumulative amount which the Fund may repay the Adviser is $158,542.
13
The Gabelli Woodland Small Cap Value Fund
Notes to Financial Statements (Continued) (Unaudited)
Notes to Financial Statements (Continued) (Unaudited)
For the year ended September 30, 2009, expiring September 30, 2011 | $ | 63,496 | ||
For the year ended September 30, 2010, expiring September 30, 2012 | 64,417 | |||
For the year ended September 30, 2011, expiring September 30, 2013 | 30,629 | |||
$ | 158,542 | |||
The Corporation pays each Director who is not considered 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. A Director may receive a single meeting fee, allocated among the participating funds, for participation in certain meetings held on behalf of multiple funds. Directors who are directors or employees of the Adviser or an affiliated company receive no compensation or expense reimbursement from the Corporation.
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 & Co.”), an affiliate of the Adviser, serves as Distributor of the Fund. Under the Class AAA, Class A, and Class C Share Plans, payments are authorized to Gabelli & Co. at annual rates of 0.25%, 0.25%, 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 sales of securities for the six months ended March 31, 2011, other than short-term securities and U.S. Government obligations, aggregated $1,634,301 and $2,041,303, respectively.
6. Transactions with Affiliates. During the six months ended March 31, 2011, Gabelli & Co. informed the Fund that there were no sales charges and underwriting fees retained from investors on sales and redemptions of Fund shares.
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 the higher of the sum of the overnight LIBOR plus 125 basis points or the sum of the federal funds rate plus 125 basis points at the time of borrowing. This amount, if any, would be included in “interest expense” in the Statement of Operations. During the six months ended March 31, 2011, there were no borrowings under the line of credit.
8. Capital Stock. The Fund offers four classes of shares — Class AAA Shares, Class A 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 & Co., through selected broker/dealers, or the transfer agent. Class I Shares are offered through Gabelli & Co. and selected broker/dealers 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 were fully redeemed on February 2, 2010. Class C Shares are subject to a 1.00% contingent deferred sales charge based on the lesser of the NAV per share at the date of original purchase or at the date of redemption for one year after purchase.
14
The Gabelli Woodland Small Cap Value 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 as an increase in paid-in capital. The Fund did not retain any redemption fees during the six months ended March 31, 2011 or the year ended September 30, 2010. 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, 2011 | Year Ended | |||||||||||||||
(Unaudited) | September 30, 2010 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Class AAA | ||||||||||||||||
Shares sold | 50,461 | $ | 505,468 | 68,072 | $ | 578,213 | ||||||||||
Shares redeemed | (52,702 | ) | (523,873 | ) | (116,302 | ) | (984,850 | ) | ||||||||
Net decrease | (2,241 | ) | $ | (18,405 | ) | (48,230 | ) | $ | (406,637 | ) | ||||||
Class A | ||||||||||||||||
Shares sold | — | — | 6,735 | $ | 60,906 | |||||||||||
Shares redeemed | (359 | ) | $ | (3,337 | ) | (104 | ) | (1,000 | ) | |||||||
Net increase/(decrease) | (359 | ) | $ | (3,337 | ) | 6,631 | $ | 59,906 | ||||||||
Class B* | ||||||||||||||||
Shares redeemed | — | — | (19 | ) | $ | (154 | ) | |||||||||
Net decrease | — | — | (19 | ) | $ | (154 | ) | |||||||||
Class C | ||||||||||||||||
Shares redeemed | — | — | (2,051 | ) | $ | (14,730 | ) | |||||||||
Net decrease | — | — | (2,051 | ) | $ | (14,730 | ) | |||||||||
Class I | ||||||||||||||||
Shares sold | 2,308 | $ | 24,590 | 3,772 | $ | 31,966 | ||||||||||
Shares redeemed | (212 | ) | (2,269 | ) | (3,862 | ) | (32,964 | ) | ||||||||
Net increase/(decrease) | 2,096 | $ | 22,321 | (90 | ) | $ | (998 | ) | ||||||||
* | Class B Shares were fully redeemed on February 2, 2010. |
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. Management has reviewed the Fund’s existing contracts and expects the risk of loss to be remote.
15
The Gabelli Woodland Small Cap Value Fund
Notes to Financial Statements (Continued) (Unaudited)
Notes to Financial Statements (Continued) (Unaudited)
10. Other Matters. On April 24, 2008, the Adviser entered into a settlement with the SEC to resolve an 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 administrative settlement order, the SEC found that the Adviser had willfully violated Section 206(2) of the 1940 Act, Section 17(d) of the 1940 Act and Rule 17d-1 thereunder, and had willfully 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, paid $16 million (which included a $5 million civil monetary penalty), approximately $12.8 million of which is in the process of being paid to shareholders of the Global Growth Fund in accordance with a plan developed by an independent distribution consultant and approved by the independent directors of the Global Growth Fund and acceptable to the staff of the SEC, and agreed to cease and desist from future violations of the above referenced federal securities laws and rule. The SEC order also noted the cooperation that the Adviser had given the staff of the SEC during its inquiry. The settlement did 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 Fund, the Global Growth Fund, and other funds in the Gabelli/GAMCO fund complex. The officer denied the allegations and is continuing in his positions with the Adviser and the funds. The court dismissed certain claims and found that the SEC was not entitled to pursue various remedies against the officer while leaving one remedy in the event the SEC were able to prove violations of law. The court subsequently dismissed without prejudice the remaining remedy against the officer, which allowed the SEC to appeal the court’s rulings. On October 29, 2010 the SEC filed its appeal with the U.S. Court of Appeals for the Second Circuit regarding the lower court’s orders. The Adviser currently expects that any resolution of the action against the officer will not have a material adverse impact on the Fund or the Adviser or its ability to fulfill its obligations under the Advisory Agreement.
11. Subsequent Events. Management has evaluated the impact on the Fund of all subsequent events occurring through the date the financial statements were issued and has determined that there were no subsequent events requiring recognition or disclosure in the financial statements.
16
The Gabelli Woodland Small Cap Value Fund
Board Consideration and Re-Approval of Advisory Agreement (Unaudited)
During the six months ended March 31, 2011, 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, 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 for 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 with the fees for other types of accounts managed by the Adviser.
17
The Gabelli Woodland Small Cap Value Fund
Board Consideration and Re-Approval of Advisory Agreement (Continued) (Unaudited)
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 Advisory Agreements to the full Board.
Based on a consideration of all these factors in their totality, the Board Members, including all of the Independent Board Members, determined that the Fund’s advisory fee was fair and reasonable with respect to the quality of services provided and in light of the other factors described above that the Board deemed relevant. Accordingly, the Board Members determined to approve the continuation of the Fund’s Advisory Agreement. The Board Members based its decision on evaluations of all these factors as a whole and did not consider any one factor as all important or controlling.
18
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, which is 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.
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 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 7:00 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 7:00 P.M.
Board of Directors
Mario J. Gabelli, CFA
Chairman and Chief
Executive Officer
GAMCO Investors, Inc.
Chairman and Chief
Executive Officer
GAMCO Investors, Inc.
Anthony J. Colavita
President
Anthony J. Colavita, P.C.
President
Anthony J. Colavita, P.C.
Vincent D. Enright
Former Senior Vice President
and Chief Financial Officer
KeySpan Corp.
Former Senior Vice President
and Chief Financial Officer
KeySpan Corp.
John D. Gabelli
Senior Vice President
Gabelli & Company, Inc.
Senior Vice President
Gabelli & Company, Inc.
Robert J. Morrissey
Attorney-at-Law
Morrissey, Hawkins & Lynch
Attorney-at-Law
Morrissey, Hawkins & Lynch
Kuni Nakamura
President
Advanced Polymer, Inc.
President
Advanced Polymer, Inc.
Anthony R. Pustorino
Certified Public Accountant,
Professor Emeritus
Pace University
Certified Public Accountant,
Professor Emeritus
Pace University
Anthonie C. van Ekris
Chairman
BALMAC International, Inc.
Chairman
BALMAC International, Inc.
Salvatore J. Zizza
Chairman
Zizza & Co., Ltd.
Chairman
Zizza & Co., Ltd.
Officers
Bruce N. Alpert
President and Secretary
President and Secretary
Peter D. Goldstein
Chief Compliance Officer
Chief Compliance Officer
Agnes Mullady
Treasurer
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.
GAB840Q111SR
![(IMAGE)](https://capedge.com/proxy/N-CSRS/0000950123-11-056763/y90383y9038102.gif)
The Gabelli Woodland Small Cap Value Fund
SEMI ANNUAL REPORT
MARCH 31, 2011
MARCH 31, 2011
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 | ||
Date 6/6/11 |
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 | ||
Date 6/6/11 | |||
By (Signature and Title)* | /s/ Agnes Mullady | ||
Date 6/6/11 |
* | Print the name and title of each signing officer under his or her signature. |