UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
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
(Address of principal executive offices) (Zip code)
Bruce N. Alpert
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, 2012
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
Semiannual Report — March 31, 2012
Morningstar® rated The Gabelli Small Cap Growth Fund Class AAA Shares 5 stars overall and 5 stars for the five and ten year periods ended March 31, 2012 among 585, 493, and 304 Small Blend funds, respectively. Morningstar RatingTM is based on risk-adjusted returns.
Mario J. Gabelli, CFA
To Our Shareholders
For the six months ended March 31, 2012, the net asset value (“NAV”) per Class AAA Share of The Gabelli Small Cap Growth Fund increased 23.6% compared with a 29.8% increase in the Russell 2000 Index. See below for additional performance information.
Enclosed are the schedule of investments and financial statements as of March 31, 2012.
Comparative Results
Average Annual Returns through March 31, 2012 (a)(b) (Unaudited) | ||||||||||||||||||||
Six Months | 1 Year | 5 Year | 10 Year | Since | ||||||||||||||||
Class AAA (GABSX) | 23.55 | % | (0.15 | )% | 4.53 | % | 9.09 | % | 12.76 | % | ||||||||||
Russell 2000 Index. | 29.83 | (0.18 | ) | 2.13 | 6.45 | 9.12 | (f) | |||||||||||||
Class A (GCASX) | 23.56 | (0.15 | ) | 4.53 | 9.09 | 12.76 | ||||||||||||||
With sales charge (c) | 16.45 | (5.89 | ) | 3.30 | 8.45 | 12.44 | ||||||||||||||
Class B (GCBSX) | 23.07 | (0.93 | ) | 3.73 | 8.42 | 12.42 | ||||||||||||||
With contingent deferred sales charge (d) | 18.07 | (5.88 | ) | 3.38 | 8.42 | 12.42 | ||||||||||||||
Class C (GCCSX) | 23.09 | (0.90 | ) | 3.76 | 8.43 | 12.43 | ||||||||||||||
With contingent deferred sales charge (e) | 22.09 | (1.89 | ) | 3.76 | 8.43 | 12.43 | ||||||||||||||
Class I (GACIX) | 23.70 | 0.10 | 4.75 | 9.21 | 12.82 |
In the current prospectus, dated January 27, 2012, the expense ratios for Class AAA, A, B, C, and I Shares are 1.42%, 1.42%, 2.17%, 2.17%, and 1.17%, respectively. See page 15 for the expense ratios for the six months ended March 31, 2012. Class AAA and Class I Shares do not have a sales charge. The maximum sales charge for Class A, B, and C Shares is 5.75%, 5.00%, and 1.00%, respectively.
(a) 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. The Fund imposes a 2% redemption fee on shares sold or exchanged within seven days after the date of purchase. 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 these and other matters and should be read carefully before investing. The Class AAA Share NAVs 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 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 which measures the performance of the small-cap segment of the U.S. equity market. 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 gradually reduced to 0% after six years. (e) Assuming payment of the 1% maximum 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)
For the Six Month Period from October 1, 2011 through March 31, 2012
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 Account Value 10/01/11 | Ending Account Value 03/31/12 | Annualized Expense Ratio | Expenses Paid During Period* | |||||||||||||
The Gabelli Small Cap Growth Fund |
| |||||||||||||||
Actual Fund Return |
| |||||||||||||||
Class AAA | $ | 1,000.00 | $ | 1,235.50 | 1.42 | % | $ | 7.98 | ||||||||
Class A | $ | 1,000.00 | $ | 1,235.60 | 1.42 | % | $ | 7.98 | ||||||||
Class B | $ | 1,000.00 | $ | 1,230.70 | 2.17 | % | $ | 12.17 | ||||||||
Class C | $ | 1,000.00 | $ | 1,230.90 | 2.17 | % | $ | 12.17 | ||||||||
Class I | $ | 1,000.00 | $ | 1,237.00 | 1.17 | % | $ | 6.58 | ||||||||
Hypothetical 5% Return |
| |||||||||||||||
Class AAA | $ | 1,000.00 | $ | 1,018.00 | 1.42 | % | $ | 7.20 | ||||||||
Class A | $ | 1,000.00 | $ | 1,018.00 | 1.42 | % | $ | 7.20 | ||||||||
Class B | $ | 1,000.00 | $ | 1,014.23 | 2.17 | % | $ | 10.99 | ||||||||
Class C | $ | 1,000.00 | $ | 1,014.23 | 2.17 | % | $ | 10.99 | ||||||||
Class I | $ | 1,000.00 | $ | 1,019.25 | 1.17 | % | $ | 5.94 |
* | 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 (184 days), then divided by 366. |
2
Summary of Portfolio Holdings (Unaudited)
The following table presents portfolio holdings as a percent of net assets as of March 31, 2012:
The Gabelli Small Cap Growth Fund
Equipment and Supplies | 9.3% | |||
Food and Beverage | 7.8% | |||
Diversified Industrial | 7.3% | |||
Automotive: Parts and Accessories | 6.4% | |||
Energy and Utilities | 6.2% | |||
Retail | 5.9% | |||
Health Care | 5.8% | |||
Financial Services | 5.4% | |||
Business Services | 5.1% | |||
U.S. Government Obligations | 4.9% | |||
Specialty Chemicals | 4.2% | |||
Aviation: Parts and Services | 3.6% | |||
Building and Construction | 3.1% | |||
Hotels and Gaming | 2.8% | |||
Computer Software and Services | 2.0% | |||
Consumer Products | 2.0% | |||
Electronics | 1.7% | |||
Telecommunications | 1.6% | |||
Entertainment | 1.6% | |||
Machinery | 1.5% | |||
Cable | 1.5% | |||
Real Estate | 1.4% | |||
Communications Equipment | 1.3% |
Consumer Services | 1.2% | |||
Publishing | 1.1% | |||
Metals and Mining | 1.0% | |||
Transportation | 1.0% | |||
Broadcasting | 0.8% | |||
Environmental Services | 0.5% | |||
Commercial Services | 0.4% | |||
Educational Services | 0.4% | |||
Manufactured Housing and Recreational Vehicles | 0.3% | |||
Automotive | 0.2% | |||
Closed-End Funds | 0.2% | |||
Home Furnishings | 0.2% | |||
Agriculture | 0.2% | |||
Wireless Communications | 0.1% | |||
Paper and Forest Products | 0.1% | |||
Closed-End Business Development Company | 0.1% | |||
Aerospace | 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. 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, 2012 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS —94.9% |
| |||||||||||
Aerospace — 0.0% | ||||||||||||
25,000 | Embraer SA, ADR | $ | 430,623 | $ | 799,500 | |||||||
15,000 | Exelis Inc. | 135,825 | 187,800 | |||||||||
|
|
|
| |||||||||
566,448 | 987,300 | |||||||||||
|
|
|
| |||||||||
Agriculture — 0.2% | ||||||||||||
160,000 | Black Earth Farming Ltd., SDR† | 492,870 | 314,399 | |||||||||
12,000 | Cadiz Inc.† | 93,950 | 110,400 | |||||||||
198,000 | Ceres Inc.† | 2,574,000 | 3,166,020 | |||||||||
3,500 | The Mosaic Co. | 74,541 | 193,515 | |||||||||
|
|
|
| |||||||||
3,235,361 | 3,784,334 | |||||||||||
|
|
|
| |||||||||
Automotive — 0.2% | ||||||||||||
120,000 | Navistar International Corp.† | 4,061,658 | 4,854,000 | |||||||||
12,000 | PACCAR Inc. | 471,506 | 561,960 | |||||||||
|
|
|
| |||||||||
4,533,164 | 5,415,960 | |||||||||||
|
|
|
| |||||||||
Automotive: Parts and Accessories — 6.3% |
| |||||||||||
155,000 | BorgWarner Inc.† | 1,761,849 | 13,072,700 | |||||||||
880,000 | Brembo SpA | 10,272,682 | 10,081,756 | |||||||||
90,022 | China Automotive Systems Inc.† | 463,870 | 615,750 | |||||||||
1,000,015 | Dana Holding Corp. | 7,045,474 | 15,500,233 | |||||||||
515,000 | Federal-Mogul Corp.† | 8,386,505 | 8,863,150 | |||||||||
372,303 | Midas Inc.† | 5,069,930 | 4,274,038 | |||||||||
699,887 | Modine Manufacturing Co.† | 9,808,999 | 6,180,002 | |||||||||
22,500 | Monro Muffler Brake Inc. | 152,114 | 933,525 | |||||||||
457,000 | O’Reilly Automotive Inc.† | 12,479,644 | 41,746,950 | |||||||||
33,000 | Puradyn Filter Technologies Inc.† | 9,902 | 4,620 | |||||||||
202,000 | SORL Auto Parts Inc.† | 1,201,136 | 656,500 | |||||||||
80,375 | Spartan Motors Inc. | 388,580 | 425,184 | |||||||||
320,000 | Standard Motor Products Inc. | 3,133,025 | 5,676,800 | |||||||||
201,000 | Strattec Security Corp.(a) | 4,224,538 | 4,703,400 | |||||||||
330,000 | Superior Industries International Inc. | 5,403,807 | 6,448,200 | |||||||||
520,500 | Tenneco Inc.† | 5,193,310 | 19,336,575 | |||||||||
340,061 | The Pep Boys - Manny, Moe & Jack | 3,983,107 | 5,073,710 | |||||||||
27,000 | Thor Industries Inc. | 250,194 | 852,120 | |||||||||
70,000 | Wonder Auto Technology Inc.† | 381,513 | 59,500 | |||||||||
|
|
|
| |||||||||
79,610,179 | 144,504,713 | |||||||||||
|
|
|
| |||||||||
Aviation: Parts and Services — 3.6% |
| |||||||||||
25,000 | AAR Corp. | 302,990 | 456,250 | |||||||||
10,000 | Astronics Corp.† | 35,665 | 349,600 | |||||||||
3,750 | Astronics Corp., Cl. B† | 13,325 | 142,331 | |||||||||
5,000 | Barnes Group Inc. | 43,000 | 131,550 | |||||||||
5,000,000 | BBA Aviation plc | 13,331,465 | 17,114,522 | |||||||||
520,000 | Curtiss-Wright Corp. | 14,888,024 | 19,245,200 |
Shares | Cost | Market Value | ||||||||||
46,020 | Ducommun Inc.† | $ | 890,448 | $ | 547,638 | |||||||
1,225,095 | GenCorp Inc.† | 7,763,715 | 8,698,175 | |||||||||
828,000 | Kaman Corp. | 14,844,013 | 28,110,600 | |||||||||
89,000 | Moog Inc., Cl. A† | 726,840 | 3,817,210 | |||||||||
16,100 | Moog Inc., Cl. B† | 464,818 | 692,300 | |||||||||
68,000 | Woodward Inc. | 1,052,020 | 2,912,440 | |||||||||
|
|
|
| |||||||||
54,356,323 | 82,217,816 | |||||||||||
|
|
|
| |||||||||
Broadcasting — 0.8% | ||||||||||||
520,836 | Acme Communications Inc. | 976,405 | 432,294 | |||||||||
200,000 | Beasley Broadcast Group Inc., Cl. A† | 1,170,560 | 860,000 | |||||||||
23,300 | Cogeco Inc. | 592,837 | 1,267,023 | |||||||||
267,000 | Crown Media Holdings Inc., Cl. A† | 1,395,156 | 424,530 | |||||||||
2,433 | Granite Broadcasting Corp.†(b) | 822,771 | 0 | |||||||||
320,000 | Gray Television Inc.† | 1,006,416 | 604,800 | |||||||||
43,000 | Gray Television Inc., Cl. A† | 89,142 | 70,950 | |||||||||
99,000 | Liberty Media Corp. - Liberty Capital, Cl. A† | 2,023,423 | 8,726,850 | |||||||||
14,000 | Pandora Media Inc.† | 208,144 | 142,940 | |||||||||
551,600 | Salem Communications Corp., Cl. A | 2,279,577 | 2,598,036 | |||||||||
175,000 | Sinclair Broadcast Group Inc., Cl. A | 1,392,064 | 1,935,500 | |||||||||
450,000 | Sirius XM Radio Inc.† | 230,879 | 1,039,500 | |||||||||
|
|
|
| |||||||||
12,187,374 | 18,102,423 | |||||||||||
|
|
|
| |||||||||
Building and Construction — 3.1% |
| |||||||||||
270,000 | Beazer Homes USA Inc.† | 1,042,623 | 877,500 | |||||||||
295,000 | D.R. Horton Inc. | 3,487,620 | 4,475,150 | |||||||||
450,000 | Hovnanian Enterprises Inc., Cl. A† | 1,229,366 | 1,102,500 | |||||||||
200,000 | KB Home | 2,123,861 | 1,780,000 | |||||||||
380,000 | Layne Christensen Co.† | 10,138,193 | 8,455,000 | |||||||||
485,000 | Lennar Corp., Cl. A | 8,344,277 | 13,182,300 | |||||||||
40,000 | Lennar Corp., Cl. B | 727,847 | 894,000 | |||||||||
530,000 | Louisiana-Pacific Corp.† | 4,466,376 | 4,955,500 | |||||||||
170,000 | MDC Holdings Inc. | 4,403,790 | 4,384,300 | |||||||||
170,000 | Meritage Homes Corp.† | 3,841,958 | 4,600,200 | |||||||||
11,500 | Nortek Inc.† | 418,573 | 505,885 | |||||||||
2,800 | NVR Inc.† | 1,980,556 | 2,033,724 | |||||||||
345,000 | Pulte Group Inc.† | 2,447,273 | 3,053,250 | |||||||||
200,000 | Standard Pacific Corp.† | 771,232 | 892,000 | |||||||||
143,015 | Texas Industries Inc. | 4,697,629 | 5,006,955 | |||||||||
255,000 | The Ryland Group Inc. | 4,167,256 | 4,916,400 | |||||||||
385,000 | Toll Brothers Inc.† | 7,559,816 | 9,236,150 | |||||||||
|
|
|
| |||||||||
61,848,246 | 70,350,814 | |||||||||||
|
|
|
| |||||||||
Business Services — 4.9% | ||||||||||||
78,500 | AboveNet Inc.† | 3,792,439 | 6,499,800 | |||||||||
40,000 | ACCO Brands Corp.† | 383,433 | 496,400 |
See accompanying notes to financial statements.
4
The Gabelli Small Cap Growth Fund
Schedule of Investments (Continued) — March 31, 2012 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS (Continued) | ||||||||||||
Business Services (Continued) | ||||||||||||
100,033 | Arbitron Inc. | $ | 2,786,256 | $ | 3,699,220 | |||||||
115,000 | Ascent Capital Group Inc., Cl. A† | 2,922,487 | 5,438,350 | |||||||||
453,006 | Clear Channel Outdoor Holdings Inc., | 1,766,714 | 3,614,988 | |||||||||
432,000 | Diebold Inc. | 14,586,954 | 16,640,640 | |||||||||
550,000 | Edgewater Technology Inc.† | 2,709,394 | 2,156,000 | |||||||||
380,000 | Furmanite Corp.† | 1,479,692 | 2,439,600 | |||||||||
119,000 | GP Strategies Corp.† | 989,841 | 2,082,500 | |||||||||
35,589 | GSE Systems Inc.† | 138,667 | 85,058 | |||||||||
560,000 | Intermec Inc.† | 9,068,414 | 4,328,800 | |||||||||
290,005 | Internap Network Services Corp.† | 1,952,339 | 2,128,637 | |||||||||
25,000 | Lamar Advertising Co., Cl. A† | 215,753 | 810,250 | |||||||||
16,500 | Landauer Inc. | 425,722 | 874,830 | |||||||||
1,135,000 | Live Nation Entertainment Inc.† | 11,640,533 | 10,669,000 | |||||||||
200,000 | Macquarie Infrastructure Co. LLC | 3,051,288 | 6,598,000 | |||||||||
4,000 | MDC Partners Inc., Cl. A | 12,360 | 44,480 | |||||||||
120,000 | Sohgo Security Services Co. Ltd. | 1,459,559 | 1,423,704 | |||||||||
160,000 | Stamps.com Inc.† | 1,255,182 | 4,460,800 | |||||||||
390,007 | The Brink’s Co. | 9,632,565 | 9,309,467 | |||||||||
1,940,000 | The Interpublic Group of Companies Inc. | 13,568,760 | 22,135,400 | |||||||||
33,050 | TransAct Technologies Inc.† | 168,459 | 259,442 | |||||||||
80,000 | Trans-Lux Corp.† | 190,635 | 49,600 | |||||||||
60,000 | United Rentals Inc.† | 380,572 | 2,573,400 | |||||||||
100,000 | ValueClick Inc.† | 1,397,867 | 1,974,000 | |||||||||
|
|
|
| |||||||||
85,975,885 | 110,792,366 | |||||||||||
|
|
|
| |||||||||
Cable — 1.5% |
| |||||||||||
230,000 | Adelphia Communications Corp., | 29,650 | 0 | |||||||||
230,000 | Adelphia Communications Corp., Cl. A, Escrow†(b) | 0 | 0 | |||||||||
230,000 | Adelphia Recovery Trust† | 0 | 161 | |||||||||
183,000 | AMC Networks Inc., Cl. A† | 2,124,059 | 8,167,290 | |||||||||
500,000 | Cablevision Systems Corp., Cl. A | 115,089 | 7,340,000 | |||||||||
10,000 | Cogeco Cable Inc. | 340,851 | 524,738 | |||||||||
235,000 | DIRECTV, Cl. A† | 5,837,622 | 11,594,900 | |||||||||
50,000 | DISH Network Corp., Cl. A | 968,420 | 1,646,500 | |||||||||
40,000 | EchoStar Corp., Cl. A† | 780,129 | 1,125,600 | |||||||||
9,329 | Liberty Global Inc., Cl. A† | 249,972 | 467,196 | |||||||||
9,329 | Liberty Global Inc., Cl. C† | 240,169 | 446,766 | |||||||||
470,324 | LIN TV Corp., Cl. A† | 2,887,422 | 1,904,812 |
Shares | Cost | Market | ||||||||||
40,000 | Outdoor Channel Holdings Inc. | $ | 312,013 | $ | 292,400 | |||||||
|
|
|
| |||||||||
13,885,396 | 33,510,363 | |||||||||||
|
|
|
| |||||||||
Closed-End Business Development Company — 0.1% |
| |||||||||||
115,000 | MVC Capital Inc. | 1,305,912 | 1,509,950 | |||||||||
|
|
|
| |||||||||
Closed-End Funds — 0.2% |
| |||||||||||
102,318 | The Central Europe and Russia Fund Inc. | 3,038,699 | 3,583,176 | |||||||||
38,000 | The European Equity Fund Inc. | 392,789 | 257,640 | |||||||||
56,126 | The New Germany Fund Inc. | 665,815 | 846,380 | |||||||||
|
|
|
| |||||||||
4,097,303 | 4,687,196 | |||||||||||
|
|
|
| |||||||||
Commercial Services — 0.4% |
| |||||||||||
140,000 | Garda World Security Corp., Cl. A† | 1,302,058 | 1,271,643 | |||||||||
275,000 | Loomis AB, Cl. B | 2,925,762 | 3,928,096 | |||||||||
102,000 | McGrath Rentcorp. | 2,744,764 | 3,275,220 | |||||||||
744,300 | Swisher Hygiene Inc.† | 541,999 | 1,820,735 | |||||||||
|
|
|
| |||||||||
7,514,583 | 10,295,694 | |||||||||||
|
|
|
| |||||||||
Communications Equipment — 1.3% |
| |||||||||||
140,000 | Communications Systems Inc. | 1,011,205 | 1,838,200 | |||||||||
90,000 | Sycamore Networks Inc.† | 1,575,877 | 1,596,600 | |||||||||
350,012 | Thomas & Betts Corp.† | 9,042,980 | 25,169,363 | |||||||||
|
|
|
| |||||||||
11,630,062 | 28,604,163 | |||||||||||
|
|
|
| |||||||||
Computer Software and Services — 2.0% |
| |||||||||||
160,000 | Activision Blizzard Inc. | 1,920,637 | 2,051,200 | |||||||||
35,000 | AOL Inc.† | 746,309 | 663,950 | |||||||||
285,000 | EarthLink Inc. | 2,272,932 | 2,277,150 | |||||||||
94,000 | Electronic Arts Inc.† | 2,142,462 | 1,549,120 | |||||||||
130,000 | Emulex Corp.† | 1,288,542 | 1,349,400 | |||||||||
290,000 | FalconStor Software Inc.† | 1,420,907 | 1,084,600 | |||||||||
420,000 | Global Sources Ltd.† | 3,192,165 | 2,587,200 | |||||||||
21,068 | Guidance Software Inc.† | 143,132 | 232,801 | |||||||||
40,030 | InterXion Holding NV† | 564,837 | 718,538 | |||||||||
6,000 | KIT Digital Inc.† | 68,146 | 43,200 | |||||||||
60,000 | Mentor Graphics Corp.† | 720,436 | 891,600 | |||||||||
32,000 | Mercury Computer Systems Inc.† | 603,533 | 424,000 | |||||||||
20,187 | MKS Instruments Inc. | 367,981 | 596,122 | |||||||||
475,000 | NCR Corp.† | 5,495,096 | 10,312,250 | |||||||||
75,000 | Quantum Corp.† | 243,845 | 196,500 | |||||||||
100,000 | Rockwell Automation Inc. | 2,731,906 | 7,970,000 | |||||||||
41,000 | Stratasys Inc.† | 1,537,008 | 1,497,320 | |||||||||
300,000 | Tyler Technologies Inc.† | 1,318,766 | 11,523,000 | |||||||||
|
|
|
| |||||||||
26,778,640 | 45,967,951 | |||||||||||
|
|
|
|
See accompanying notes to financial statements.
5
The Gabelli Small Cap Growth Fund
Schedule of Investments (Continued) — March 31, 2012 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS (Continued) | ||||||||||||
Consumer Products — 2.0% | ||||||||||||
270,000 | 1-800-FLOWERS.COM Inc., Cl. A† | $ | 1,228,113 | $ | 818,100 | |||||||
16,000 | Adams Golf Inc.† | 100,601 | 171,680 | |||||||||
50,000 | Brunswick Corp. | 838,458 | 1,287,500 | |||||||||
33,500 | Chofu Seisakusho Co. Ltd. | 484,644 | 779,926 | |||||||||
60,000 | Church & Dwight Co. Inc. | 303,669 | 2,951,400 | |||||||||
12,000 | Elizabeth Arden Inc.† | 419,418 | 419,760 | |||||||||
2,000 | Harley-Davidson Inc. | 4,712 | 98,160 | |||||||||
25,012 | Harman International Industries Inc. | 1,083,712 | 1,170,812 | |||||||||
382,704 | Marine Products Corp. | 684,802 | 2,277,089 | |||||||||
14,000 | National Presto Industries Inc. | 431,294 | 1,062,040 | |||||||||
450,000 | Sally Beauty Holdings Inc.† | 2,994,212 | 11,160,000 | |||||||||
830,994 | Schiff Nutrition International Inc.† | 2,491,160 | 10,212,916 | |||||||||
4,000 | SodaStream International Ltd.† | 151,521 | 134,720 | |||||||||
6,907 | Steven Madden Ltd.† | 37,265 | 295,274 | |||||||||
235,000 | Stewart Enterprises Inc., Cl. A | 1,311,459 | 1,426,450 | |||||||||
150,000 | Swedish Match AB | 2,992,162 | 5,972,067 | |||||||||
87,425 | Syratech Corp.† | 17,426 | 61 | |||||||||
24,000 | The Scotts Miracle-Gro Co., Cl. A | 710,286 | 1,299,840 | |||||||||
22,000 | WD-40 Co. | 606,916 | 997,700 | |||||||||
60,000 | Wolverine World Wide Inc. | 615,863 | 2,230,800 | |||||||||
|
|
|
| |||||||||
17,507,693 | 44,766,295 | |||||||||||
|
|
|
| |||||||||
Consumer Services — 1.2% |
| |||||||||||
52,000 | Bowlin Travel Centers Inc.† | 52,442 | 72,800 | |||||||||
2,750 | Collectors Universe Inc. | 6,527 | 47,410 | |||||||||
20,000 | IAC/InterActiveCorp. | 221,743 | 981,800 | |||||||||
270,017 | KAR Auction Services Inc.† | 3,655,137 | 4,376,976 | |||||||||
100,000 | Liberty Interactive Corp., Cl. A† | 1,944,290 | 1,909,000 | |||||||||
238,000 | Martha Stewart Living Omnimedia Inc., Cl. A | 1,404,026 | 906,780 | |||||||||
600,000 | Rollins Inc. | 2,281,581 | 12,768,000 | |||||||||
45,000 | SearchMedia Holdings Ltd.† | 240,649 | 78,750 | |||||||||
480,000 | TiVo Inc.† | 5,098,108 | 5,755,200 | |||||||||
|
|
|
| |||||||||
14,904,503 | 26,896,716 | |||||||||||
|
|
|
| |||||||||
Diversified Industrial — 7.3% |
| |||||||||||
29,000 | Acuity Brands Inc. | 363,546 | 1,822,070 | |||||||||
33,000 | Aegion Corp.† | 622,647 | 588,390 | |||||||||
115,000 | Albany International Corp., Cl. A | 2,456,639 | 2,639,250 | |||||||||
4,000 | American Railcar Industries Inc.† | 78,761 | 94,040 | |||||||||
205,000 | Ampco-Pittsburgh Corp. | 3,540,182 | 4,126,650 |
Shares | Cost | Market Value | ||||||||||
6,000 | Anixter International Inc.† | $ | 57,120 | $ | 435,180 | |||||||
3,000 | Columbus McKinnon Corp.† | 40,570 | 48,870 | |||||||||
420,000 | Crane Co. | 10,010,199 | 20,370,000 | |||||||||
3,000 | ESCO Technologies Inc. | 49,914 | 110,310 | |||||||||
18,000 | Foster Wheeler AG† | 34,930 | 409,680 | |||||||||
14,000 | Gardner Denver Inc. | 157,253 | 882,280 | |||||||||
76,000 | Greif Inc., Cl. A | 777,314 | 4,249,920 | |||||||||
119,000 | Greif Inc., Cl. B | 5,784,921 | 6,755,630 | |||||||||
1,232,000 | Griffon Corp. | 13,929,255 | 13,182,400 | |||||||||
373,000 | Handy & Harman Ltd.† | 2,648,697 | 5,386,120 | |||||||||
190,000 | Jardine Strategic Holdings Ltd. | 3,487,637 | 5,796,900 | |||||||||
416,000 | Katy Industries Inc.†(a) | 802,593 | 249,600 | |||||||||
60,073 | Kaydon Corp. | 2,307,288 | 1,532,462 | |||||||||
25,000 | Key Technology Inc.† | 422,902 | 330,500 | |||||||||
1,000 | L.B. Foster Co., Cl. A | 17,608 | 28,510 | |||||||||
24,600 | Lawson Products Inc. | 378,248 | 371,706 | |||||||||
98,000 | Lincoln Electric Holdings Inc. | 2,642,298 | 4,441,360 | |||||||||
72,000 | Lindsay Corp. | 1,569,242 | 4,771,440 | |||||||||
21,183 | Lydall Inc.† | 199,565 | 215,855 | |||||||||
83,000 | Magnetek Inc.† | 2,173,879 | 1,596,920 | |||||||||
32,000 | Matthews International Corp., Cl. A | 748,294 | 1,012,480 | |||||||||
450,123 | Myers Industries Inc. | 4,270,596 | 6,639,314 | |||||||||
572,600 | National Patent Development Corp.† | 1,177,668 | 1,706,348 | |||||||||
140,000 | Oil-Dri Corp. of America | 1,532,164 | 2,980,600 | |||||||||
132,000 | Olin Corp. | 2,532,148 | 2,871,000 | |||||||||
303,000 | Park-Ohio Holdings Corp.† | 2,641,987 | 6,075,150 | |||||||||
10,000 | Pentair Inc. | 424,538 | 476,100 | |||||||||
87,000 | Precision Castparts Corp. | 1,759,715 | 15,042,300 | |||||||||
32,000 | Raven Industries Inc. | 1,676,499 | 1,952,320 | |||||||||
32,000 | Roper Industries Inc. | 620,029 | 3,173,120 | |||||||||
254,833 | Sevcon Inc.†(a) | 1,528,598 | 1,715,026 | |||||||||
96,000 | Sonoco Products Co. | 2,940,089 | 3,187,200 | |||||||||
125,070 | Standex International Corp. | 3,038,945 | 5,151,633 | |||||||||
160,000 | Terex Corp.† | 3,164,260 | 3,600,000 | |||||||||
387,000 | Textron Inc. | 2,408,058 | 10,770,210 | |||||||||
376,773 | Tredegar Corp. | 6,266,653 | 7,380,983 | |||||||||
93,000 | Trinity Industries Inc. | 2,866,029 | 3,064,350 | |||||||||
147,000 | Tyco International Ltd. | 5,487,786 | 8,258,460 | |||||||||
|
|
|
| |||||||||
99,637,264 | 165,492,637 | |||||||||||
|
|
|
| |||||||||
Educational Services — 0.4% |
| |||||||||||
73,000 | Career Education Corp.† | 1,223,611 | 588,380 | |||||||||
500,000 | Corinthian Colleges Inc.† | 3,071,570 | 2,070,000 | |||||||||
445,082 | Universal Technical Institute Inc. | 7,999,160 | 5,870,632 | |||||||||
|
|
|
| |||||||||
12,294,341 | 8,529,012 | |||||||||||
|
|
|
| |||||||||
Electronics — 1.7% |
| |||||||||||
100,000 | Badger Meter Inc. | 2,846,826 | 3,399,000 | |||||||||
250,000 | Bel Fuse Inc., Cl. A(a) | 5,991,925 | 4,867,500 |
See accompanying notes to financial statements.
6
The Gabelli Small Cap Growth Fund
Schedule of Investments (Continued) — March 31, 2012 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS (Continued) |
| |||||||||||
Electronics (Continued) |
| |||||||||||
41,810 | CSR plc, ADR† | $ | 613,771 | $ | 613,771 | |||||||
566,008 | CTS Corp. | 5,414,268 | 5,954,404 | |||||||||
73,000 | Cypress Semiconductor Corp. | 333,302 | 1,140,990 | |||||||||
20,000 | Daktronics Inc. | 190,119 | 177,800 | |||||||||
58,000 | Gentex Corp. | 1,631,525 | 1,421,000 | |||||||||
110,055 | Greatbatch Inc.† | 2,765,963 | 2,698,549 | |||||||||
20,000 | IMAX Corp.† | 158,565 | 488,800 | |||||||||
8,000 | International Rectifier Corp.† | 175,247 | 184,560 | |||||||||
112,000 | KEMET Corp.† | 1,237,691 | 1,048,320 | |||||||||
300,000 | MEMC Electronic Materials Inc.† | 1,288,458 | 1,083,000 | |||||||||
110,000 | Methode Electronics Inc. | 953,550 | 1,020,800 | |||||||||
6,900 | MOCON Inc. | 104,315 | 112,194 | |||||||||
310,000 | Park Electrochemical Corp. | 7,382,546 | 9,371,300 | |||||||||
185,000 | Pulse Electronics Corp. | 954,851 | 464,350 | |||||||||
29,120 | Rofin-Sinar Technologies Inc.† | 756,297 | 767,894 | |||||||||
180,000 | Stoneridge Inc.† | 1,475,725 | 1,780,200 | |||||||||
160,000 | Trident Microsystems Inc.† | 466,577 | 52,800 | |||||||||
112,000 | Zygo Corp.† | 1,029,516 | 2,191,840 | |||||||||
|
|
|
| |||||||||
35,771,037 | 38,839,072 | |||||||||||
|
|
|
| |||||||||
Energy and Utilities — 6.2% | ||||||||||||
380,000 | Black Hills Corp. | 9,703,620 | 12,741,400 | |||||||||
110,000 | Callon Petroleum Co.† | 743,793 | 691,900 | |||||||||
55,000 | Central Vermont Public Service Corp. | 1,081,981 | 1,936,000 | |||||||||
110,000 | CH Energy Group Inc. | 4,519,660 | 7,340,300 | |||||||||
36,000 | Chesapeake Utilities Corp. | 953,501 | 1,480,320 | |||||||||
45,000 | CMS Energy Corp. | 240,795 | 990,000 | |||||||||
23,000 | Connecticut Water Service Inc. | 464,832 | 650,670 | |||||||||
6,000 | Consolidated Water Co. Ltd. | 93,090 | 47,460 | |||||||||
155,000 | Covanta Holding Corp. | 596,181 | 2,515,650 | |||||||||
8,000 | Dawson Geophysical Co.† | 253,005 | 274,800 | |||||||||
410,000 | El Paso Electric Co. | 5,988,231 | 13,320,900 | |||||||||
48,000 | Energy Recovery Inc.† | 234,605 | 110,400 | |||||||||
22,520 | Gamesa Corporacion Tecnologica SA | 134,724 | 71,514 | |||||||||
10,000 | Genie Energy Ltd. | 107,063 | 96,700 | |||||||||
220,000 | Great Plains Energy Inc. | 4,699,894 | 4,459,400 | |||||||||
103,000 | Hawaiian Electric Industries Inc. | 2,623,339 | 2,611,050 | |||||||||
70,000 | Key Energy Services Inc.† | 597,194 | 1,081,500 | |||||||||
45,000 | Middlesex Water Co. | 773,022 | 850,050 | |||||||||
50,000 | National Fuel Gas Co. | 2,799,328 | 2,406,000 | |||||||||
1,000,000 | North Atlantic Drilling Ltd. | 1,937,412 | 1,931,604 | |||||||||
100,000 | NorthWestern Corp. | 2,966,899 | 3,546,000 | |||||||||
80,000 | Oceaneering International Inc. | 1,366,984 | 4,311,200 |
Shares | Cost | Market Value | ||||||||||
230,000 | Otter Tail Corp. | $ | 5,119,477 | $ | 4,991,000 | |||||||
10,000 | Patterson-UTI Energy Inc. | 211,721 | 172,900 | |||||||||
1,220,372 | PNM Resources Inc. | 13,406,898 | 22,332,808 | |||||||||
132,000 | Rowan Companies Inc.† | 2,795,259 | 4,346,760 | |||||||||
2,265,000 | RPC Inc. | 2,226,149 | 24,031,650 | |||||||||
146,000 | SJW Corp. | 2,799,413 | 3,521,520 | |||||||||
190,096 | Southwest Gas Corp. | 4,393,160 | 8,124,703 | |||||||||
45,000 | Tesoro Corp.† | 455,817 | 1,207,800 | |||||||||
13,000 | The Laclede Group Inc. | 474,291 | 507,260 | |||||||||
46,000 | The York Water Co. | 647,831 | 795,800 | |||||||||
25,000 | Union Drilling Inc.† | 198,390 | 139,000 | |||||||||
15,000 | Vestas Wind Systems A/S† | 142,183 | 152,164 | |||||||||
70,000 | Voyager Oil & Gas Inc.† | 31,840 | 170,100 | |||||||||
220,000 | Westar Energy Inc. | 4,036,837 | 6,144,600 | |||||||||
|
|
|
| |||||||||
79,818,419 | 140,102,883 | |||||||||||
|
|
|
| |||||||||
Entertainment — 1.6% |
| |||||||||||
100,000 | Carmike Cinemas Inc.† | 771,700 | 1,395,000 | |||||||||
6,048 | Chestnut Hill Ventures†(b) | 164,590 | 517,292 | |||||||||
32,000 | Discovery Communications Inc., Cl. A† | 439,527 | 1,619,200 | |||||||||
32,000 | Discovery Communications Inc., Cl. C† | 454,438 | 1,500,160 | |||||||||
345,350 | Dover Motorsports Inc.† | 1,381,239 | 511,118 | |||||||||
250,000 | Fisher Communications Inc.† | 8,671,093 | 7,680,000 | |||||||||
30,000 | International Speedway Corp., Cl. A | 911,863 | 832,500 | |||||||||
6,000 | International Speedway Corp., Cl. B | 143,201 | 183,030 | |||||||||
7,000 | Rovi Corp.† | 99,660 | 227,850 | |||||||||
410,000 | Take-Two Interactive Software Inc.† | 6,537,288 | 6,307,850 | |||||||||
296,000 | The Madison Square Garden Co., Cl. A† | 3,734,672 | 10,123,200 | |||||||||
200,000 | Universal Entertainment Corp. | 3,020,074 | 4,484,717 | |||||||||
39,000 | World Wrestling Entertainment Inc., Cl. A | 413,282 | 345,930 | |||||||||
|
|
|
| |||||||||
26,742,627 | 35,727,847 | |||||||||||
|
|
|
| |||||||||
Environmental Services — 0.5% |
| |||||||||||
400,000 | Republic Services Inc. | 5,798,456 | 12,224,000 | |||||||||
|
|
|
| |||||||||
Equipment and Supplies — 9.3% |
| |||||||||||
22,500 | A.O. Smith Corp. | 336,569 | 1,011,375 | |||||||||
370,000 | AMETEK Inc. | 1,110,497 | 17,948,700 | |||||||||
5,000 | AZZ Inc. | 154,353 | 258,200 | |||||||||
25,000 | Belden Inc. | 286,590 | 947,750 | |||||||||
55,000 | Capstone Turbine Corp.† | 108,350 | 56,100 | |||||||||
540,071 | CIRCOR International Inc. | 14,859,335 | 17,968,162 | |||||||||
339,000 | CLARCOR Inc. | 2,180,794 | 16,641,510 | |||||||||
330,000 | Core Molding Technologies Inc.† | 654,777 | 3,036,000 |
See accompanying notes to financial statements.
7
The Gabelli Small Cap Growth Fund
Schedule of Investments (Continued) — March 31, 2012 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS (Continued) |
| |||||||||||
Equipment and Supplies (Continued) |
| |||||||||||
168,000 | Crown Holdings Inc.† | $ | 678,985 | �� | $ | 6,187,440 | ||||||
4,000 | Danaher Corp. | 34,106 | 224,000 | |||||||||
180,000 | Donaldson Co. Inc. | 1,558,860 | 6,431,400 | |||||||||
222,000 | Entegris Inc.† | 1,280,053 | 2,073,480 | |||||||||
325,000 | Federal Signal Corp.† | 2,181,726 | 1,807,000 | |||||||||
103,000 | Flowserve Corp. | 2,682,057 | 11,897,530 | |||||||||
160,000 | Franklin Electric Co. Inc. | 1,496,658 | 7,851,200 | |||||||||
222,000 | Gerber Scientific Inc., Escrow†(b) | 0 | 2,220 | |||||||||
165,000 | Graco Inc. | 3,245,339 | 8,754,900 | |||||||||
1,110,000 | GrafTech International Ltd.† | 13,553,723 | 13,253,400 | |||||||||
101,000 | IDEX Corp. | 810,208 | 4,255,130 | |||||||||
550,000 | Interpump Group SpA | 3,223,467 | 4,690,980 | |||||||||
13,500 | Itron Inc.† | 640,016 | 613,035 | |||||||||
7,000 | Jarden Corp. | 115,037 | 281,610 | |||||||||
25,000 | Kensey Nash Corp. | 538,314 | 731,500 | |||||||||
40,000 | Littelfuse Inc. | 758,367 | 2,508,000 | |||||||||
229,000 | Lufkin Industries Inc. | 1,616,944 | 18,468,850 | |||||||||
55,000 | Maezawa Kyuso Industries Co. Ltd. | 359,609 | 810,016 | |||||||||
82,000 | Met-Pro Corp. | 692,039 | 865,920 | |||||||||
6,000 | Mine Safety Appliances Co. | 179,592 | 246,480 | |||||||||
1,000 | Minerals Technologies Inc. | 65,116 | 65,410 | |||||||||
70,013 | Mueller Industries Inc. | 2,373,742 | 3,182,091 | |||||||||
12,000 | Plantronics Inc. | 275,609 | 483,120 | |||||||||
2,000 | Regal-Beloit Corp. | 59,351 | 131,100 | |||||||||
135,000 | Robbins & Myers Inc. | 2,069,225 | 7,026,750 | |||||||||
110,032 | SL Industries Inc.† | 1,603,323 | 2,153,326 | |||||||||
5,000 | Teleflex Inc. | 76,167 | 305,750 | |||||||||
300,000 | Tennant Co. | 6,160,189 | 13,200,000 | |||||||||
647,188 | The Gorman-Rupp Co. | 13,167,539 | 18,884,946 | |||||||||
85,000 | The Greenbrier Companies Inc.† | 833,816 | 1,682,150 | |||||||||
260,052 | The L.S. Starrett Co., Cl. A | 3,242,971 | 3,367,673 | |||||||||
100,000 | The Manitowoc Co. Inc. | 666,995 | 1,386,000 | |||||||||
23,400 | The Middleby Corp.† | 868,562 | 2,367,612 | |||||||||
1,400 | The Toro Co. | 100,341 | 99,554 | |||||||||
8,000 | Valmont Industries Inc. | 176,298 | 939,280 | |||||||||
94,000 | Vicor Corp. | 1,008,949 | 752,000 | |||||||||
7,875 | Watsco Inc., Cl. B | 23,627 | 580,781 | |||||||||
148,500 | Watts Water Technologies Inc., Cl. A | 3,291,689 | 6,051,375 | |||||||||
|
|
|
| |||||||||
91,399,874 | 212,480,806 | |||||||||||
|
|
|
| |||||||||
Financial Services — 5.4% | ||||||||||||
10,616 | Alleghany Corp.† | 1,758,092 | 3,493,726 | |||||||||
25,287 | Argo Group International Holdings Ltd. | 844,293 | 755,323 | |||||||||
480,000 | Artio Global Investors Inc. | 9,907,972 | 2,289,600 | |||||||||
335,000 | BBCN Bancorp Inc.† | 3,814,082 | 3,728,550 | |||||||||
10,121 | BCB Holdings Ltd.† | 21,770 | 3,319 |
Shares | Cost | Market Value | ||||||||||
122,000 | BKF Capital Group Inc.† | $ | 568,018 | $ | 147,620 | |||||||
12,500 | Capitol Federal Financial Inc. | 125,000 | 148,250 | |||||||||
22,000 | Crazy Woman Creek Bancorp Inc.† | 343,564 | 185,900 | |||||||||
146,000 | Discover Financial Services | 2,501,179 | 4,867,640 | |||||||||
48,000 | Duff & Phelps Corp., Cl. A | 715,281 | 745,920 | |||||||||
300,000 | Energy Transfer Equity LP | 5,117,716 | 12,090,000 | |||||||||
120,000 | Epoch Holding Corp. | 1,243,254 | 2,865,600 | |||||||||
8,570 | Fidelity Southern Corp. | 53,112 | 57,762 | |||||||||
330,000 | First Niagara Financial Group Inc. | 4,316,427 | 3,247,200 | |||||||||
190,000 | Flushing Financial Corp. | 3,048,480 | 2,557,400 | |||||||||
125,000 | Fortress Investment Group LLC, Cl. A | 647,143 | 445,000 | |||||||||
1,110,000 | GAM Holding AG† | 14,730,146 | 16,169,824 | |||||||||
53,000 | Hudson Valley Holding Corp. | 1,022,300 | 854,890 | |||||||||
1,100,000 | Janus Capital Group Inc. | 11,056,137 | 9,801,000 | |||||||||
275,000 | KBW Inc. | 5,124,916 | 5,087,500 | |||||||||
750,072 | KKR & Co. LP | 5,438,228 | 11,123,568 | |||||||||
180,000 | Legg Mason Inc. | 4,080,240 | 5,027,400 | |||||||||
3,105 | Leucadia National Corp. | 24,354 | 81,041 | |||||||||
25,000 | M&T Bank Corp. | 2,158,349 | 2,172,000 | |||||||||
1,000 | Manning & Napier Inc.† | 12,591 | 14,700 | |||||||||
60,024 | Medallion Financial Corp. | 463,920 | 669,868 | |||||||||
250,000 | Och-Ziff Capital Management Group LLC, Cl. A | 1,997,164 | 2,320,000 | |||||||||
165,000 | Oritani Financial Corp. | 1,685,540 | 2,422,200 | |||||||||
32,000 | PrivateBancorp Inc. | 541,949 | 485,440 | |||||||||
180,000 | Steel Excel Inc.† | 4,798,033 | 5,040,000 | |||||||||
235,000 | Sterling Bancorp | 3,490,455 | 2,253,650 | |||||||||
400,081 | SWS Group Inc. | 4,795,486 | 2,288,463 | |||||||||
10,000 | T. Rowe Price Group Inc. | 270,786 | 653,000 | |||||||||
183,600 | The Charles Schwab Corp. | 3,010,310 | 2,638,332 | |||||||||
10,000 | Universal American Corp. | 91,700 | 107,800 | |||||||||
5,000 | Value Line Inc. | 166,217 | 61,400 | |||||||||
478,000 | Waddell & Reed Financial Inc., Cl. A | 9,691,784 | 15,491,980 | |||||||||
10,121 | Waterloo Investment Holdings Ltd.†(b) | 1,390 | 648 | |||||||||
|
|
|
| |||||||||
109,677,378 | 122,393,514 | |||||||||||
|
|
|
| |||||||||
Food and Beverage — 7.8% | ||||||||||||
400 | Annie’s Inc.† | 7,600 | 13,936 | |||||||||
590,040 | Arca Continental SAB de CV | 1,174,352 | 2,820,190 | |||||||||
38,100 | Brown-Forman Corp., Cl. A | 1,115,861 | 3,103,626 | |||||||||
5,000 | Brown-Forman Corp., Cl. B | 144,052 | 416,950 | |||||||||
200,000 | Bull-Dog Sauce Co. Ltd. | 444,295 | 405,944 | |||||||||
5,300,000 | China Tontine Wines Group Ltd. | 1,038,145 | 593,776 | |||||||||
280,000 | Corn Products International Inc. | 6,240,918 | 16,142,000 | |||||||||
910,000 | Davide Campari - Milano SpA | 4,584,306 | 6,195,801 |
See accompanying notes to financial statements.
8
The Gabelli Small Cap Growth Fund
Schedule of Investments (Continued) — March 31, 2012 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS (Continued) |
| |||||||||||
Food and Beverage (Continued) |
| |||||||||||
200,000 | Dean Foods Co.† | $ | 3,419,213 | $ | 2,422,000 | |||||||
365,400 | Denny’s Corp.† | 1,008,852 | 1,476,216 | |||||||||
127,000 | Diamond Foods Inc. | 3,192,509 | 2,898,140 | |||||||||
326,000 | Dr Pepper Snapple Group Inc. | 6,664,752 | 13,108,460 | |||||||||
3,300,000 | Dynasty Fine Wines Group Ltd. | 1,207,047 | 654,429 | |||||||||
40,000 | Farmer Brothers Co.† | 503,571 | 435,600 | |||||||||
115,000 | Feihe International Inc.† | 1,703,852 | 363,400 | |||||||||
370,000 | Flowers Foods Inc. | 1,368,580 | 7,536,900 | |||||||||
26,000 | Green Mountain Coffee Roasters Inc.† | 857,793 | 1,217,840 | |||||||||
160,000 | ITO EN Ltd. | 3,301,726 | 2,870,605 | |||||||||
25,000 | J & J Snack Foods Corp. | 577,813 | 1,311,500 | |||||||||
1,325,000 | Kikkoman Corp. | 14,057,979 | 15,319,862 | |||||||||
250,000 | Lifeway Foods Inc.† | 2,511,599 | 2,312,500 | |||||||||
3,000 | MEIJI Holdings Co. Ltd. | 117,526 | 131,026 | |||||||||
70,000 | MGP Ingredients Inc. | 331,262 | 376,600 | |||||||||
450,000 | Morinaga Milk Industry Co. Ltd. | 1,808,850 | 1,766,945 | |||||||||
85,000 | NISSIN FOODS HOLDINGS CO. LTD. | 2,907,986 | 3,178,386 | |||||||||
24,000 | Nutrisystem Inc. | 345,122 | 269,520 | |||||||||
4,000,000 | Parmalat SpA | 11,428,716 | 9,992,131 | |||||||||
72,000 | Peet’s Coffee & Tea Inc.† | 2,922,436 | 5,306,400 | |||||||||
30,000 | Post Holdings Inc.† | 280,450 | 987,900 | |||||||||
50,000 | Ralcorp Holdings Inc.† | 758,885 | 3,704,500 | |||||||||
162,000 | Rock Field Co. Ltd. | 2,539,700 | 3,135,484 | |||||||||
359,700 | Smart Balance Inc.† | 2,233,340 | 2,377,617 | |||||||||
580,036 | Snyders-Lance Inc. | 12,070,502 | 14,993,931 | |||||||||
47,000 | The Boston Beer Co. Inc., Cl. A† | 883,432 | 5,019,130 | |||||||||
410,000 | The Hain Celestial Group Inc.† | 7,537,748 | 17,962,100 | |||||||||
66,000 | The J.M. Smucker Co. | 1,599,230 | 5,369,760 | |||||||||
700,000 | Tingyi (Cayman Islands) Holding Corp. | 1,792,917 | 2,023,682 | |||||||||
270,027 | Tootsie Roll Industries Inc. | 5,598,254 | 6,186,327 | |||||||||
90,000 | United Natural Foods Inc.† | 2,545,822 | 4,199,400 | |||||||||
5,000 | Vina Concha Y Toro SA, ADR | 160,837 | 229,800 | |||||||||
1,200,000 | Vitasoy International Holdings Ltd. | 739,370 | 928,717 | |||||||||
20,000 | Willamette Valley Vineyards Inc.† | 73,225 | 62,600 | |||||||||
175,000 | Yakult Honsha Co. Ltd. | 4,454,268 | 6,015,162 | |||||||||
66,000 | Zhongpin Inc.† | 857,528 | 742,500 | |||||||||
|
|
|
| |||||||||
119,112,221 | 176,579,293 | |||||||||||
|
|
|
| |||||||||
Health Care — 5.7% | ||||||||||||
30,000 | Alere Inc.† | 554,733 | 780,300 | |||||||||
45,000 | Align Technology Inc.† | 370,827 | 1,239,750 |
Shares | Cost | Market Value | ||||||||||
100,000 | Allergan Inc. | $ | 1,964,408 | $ | 9,543,000 | |||||||
116,300 | AngioDynamics Inc.† | 1,589,722 | 1,424,675 | |||||||||
8,000 | Anika Therapeutics Inc.† | 76,123 | 100,320 | |||||||||
147,000 | ArthroCare Corp.† | 2,872,758 | 3,946,950 | |||||||||
52,290 | BioLase Technology Inc.† | 74,915 | 141,707 | |||||||||
9,000 | Bio-Rad Laboratories Inc., Cl. A† | 514,189 | 933,210 | |||||||||
85,000 | Bio-Reference Laboratories Inc.† | 1,860,590 | 1,998,350 | |||||||||
18,000 | Bruker Corp.† | 164,974 | 275,580 | |||||||||
145,004 | Cantel Medical Corp. | 2,514,999 | 3,638,150 | |||||||||
225,000 | Cepheid Inc.† | 3,044,548 | 9,411,750 | |||||||||
169,000 | Chemed Corp. | 4,054,533 | 10,592,920 | |||||||||
66,000 | CONMED Corp. | 1,714,345 | 1,971,420 | |||||||||
425,000 | Cutera Inc.† | 5,511,734 | 3,633,750 | |||||||||
15,000 | Cynosure Inc., Cl. A† | 133,924 | 267,900 | |||||||||
96,000 | DexCom Inc.† | 962,427 | 1,001,280 | |||||||||
29,000 | DGT Holdings Corp.† | 445,065 | 287,970 | |||||||||
187,024 | Exactech Inc.† | 2,898,144 | 2,964,330 | |||||||||
430,000 | Gentiva Health Services Inc.† | 6,436,591 | 3,758,200 | |||||||||
44,000 | Henry Schein Inc.† | 861,550 | 3,329,920 | |||||||||
4,000 | Heska Corp. | 35,706 | 45,520 | |||||||||
26,000 | ICU Medical Inc.† | 709,668 | 1,278,160 | |||||||||
330,000 | IRIS International Inc.† | 3,504,255 | 4,458,300 | |||||||||
42,000 | Life Technologies Corp.† | 1,070,187 | 2,050,440 | |||||||||
155,500 | MAKO Surgical Corp.† | 4,170,448 | 6,554,325 | |||||||||
20,000 | Meridian Bioscience Inc. | 375,127 | 387,600 | |||||||||
1,800 | Metropolitan Health Networks Inc.† | 8,170 | 16,866 | |||||||||
40,000 | MWI Veterinary Supply Inc.† | 972,736 | 3,520,000 | |||||||||
8,000 | Neogen Corp.† | 195,096 | 312,560 | |||||||||
5,000 | Nobel Biocare Holding AG† | 74,620 | 62,535 | |||||||||
50,000 | Nordion Inc. | 369,385 | 486,000 | |||||||||
10,000 | NuVasive Inc.† | 237,915 | 168,400 | |||||||||
105,000 | Opko Health Inc.† | 284,862 | 496,650 | |||||||||
71,000 | Orthofix International NV† | 1,165,278 | 2,668,180 | |||||||||
45,000 | Owens & Minor Inc. | 606,216 | 1,368,450 | |||||||||
375,000 | Pain Therapeutics Inc.† | 2,160,565 | 1,346,250 | |||||||||
385,000 | Palomar Medical Technologies Inc.† | 5,980,996 | 3,595,900 | |||||||||
66,000 | Par Pharmaceutical Companies Inc.† | 2,183,234 | 2,556,180 | |||||||||
30,000 | PSS World Medical Inc.† | 367,273 | 760,200 | |||||||||
628,500 | Quidel Corp.† | 6,971,750 | 11,545,545 | |||||||||
240,002 | Rochester Medical Corp.† | 2,779,690 | 2,354,420 | |||||||||
225,000 | RTI Biologics Inc.† | 1,204,387 | 832,500 | |||||||||
965,000 | Sorin SpA† | 2,451,162 | 1,808,273 | |||||||||
45,084 | STERIS Corp. | 1,425,889 | 1,425,556 | |||||||||
2,300 | Straumann Holding AG† | 206,988 | 391,359 | |||||||||
3,000 | Stryker Corp. | 142,188 | 166,440 | |||||||||
75,000 | SurModics Inc.† | 936,003 | 1,152,750 | |||||||||
14,000 | Syneron Medical Ltd.† | 116,750 | 150,080 |
See accompanying notes to financial statements.
9
The Gabelli Small Cap Growth Fund
Schedule of Investments (Continued) — March 31, 2012 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS (Continued) |
| |||||||||||
Health Care (Continued) |
| |||||||||||
7,000 | Techne Corp. | $ | 479,206 | $ | 490,700 | |||||||
65,000 | The Cooper Companies Inc. | 2,517,146 | 5,311,150 | |||||||||
48,000 | United-Guardian Inc. | 435,056 | 880,800 | |||||||||
77,000 | Vascular Solutions Inc.† | 591,923 | 830,830 | |||||||||
390,000 | Wright Medical Group Inc.† | 6,239,716 | 7,534,800 | |||||||||
19,800 | Young Innovations Inc. | 520,519 | 612,216 | |||||||||
|
|
|
| |||||||||
90,111,209 | 128,861,367 | |||||||||||
|
|
|
| |||||||||
Home Furnishings — 0.2% |
| |||||||||||
120,000 | Bassett Furniture Industries Inc. | 959,475 | 1,104,000 | |||||||||
47,000 | Bed Bath & Beyond Inc.† | 1,223,835 | 3,091,190 | |||||||||
|
|
|
| |||||||||
2,183,310 | 4,195,190 | |||||||||||
|
|
|
| |||||||||
Hotels and Gaming — 2.8% |
| |||||||||||
70,000 | Ante5 Inc.† | 0 | 49,000 | |||||||||
225,000 | Boyd Gaming Corp.† | 1,546,347 | 1,764,000 | |||||||||
110,000 | Canterbury Park Holding Corp.† | 1,120,504 | 1,118,700 | |||||||||
195,392 | Churchill Downs Inc. | 7,384,254 | 10,922,413 | |||||||||
137,500 | Dover Downs Gaming & Entertainment Inc. | 818,585 | 346,500 | |||||||||
395,002 | Gaylord Entertainment Co.† | 9,514,453 | 12,166,062 | |||||||||
400,000 | Genting Singapore plc† | 408,768 | 542,540 | |||||||||
18,000 | Home Inns & Hotels Management Inc., ADR† | 343,247 | 459,180 | |||||||||
100,000 | Lakes Entertainment Inc.† | 453,645 | 180,000 | |||||||||
198,000 | Las Vegas Sands Corp. | 1,371,661 | 11,398,860 | |||||||||
2,000,000 | Mandarin Oriental International Ltd. | 2,854,177 | 3,230,000 | |||||||||
73,000 | Morgans Hotel Group Co.† | 565,513 | 361,350 | |||||||||
165,000 | Orient-Express Hotels Ltd., Cl. A† | 2,872,992 | 1,683,000 | |||||||||
100,000 | Penn National Gaming Inc.† | 1,509,186 | 4,298,000 | |||||||||
400,040 | Pinnacle Entertainment Inc.† | 3,166,169 | 4,604,460 | |||||||||
2,400,000 | The Hongkong & Shanghai Hotels Ltd. | 2,354,694 | 3,263,645 | |||||||||
272,059 | The Marcus Corp. | 3,426,439 | 3,414,340 | |||||||||
24,000 | Wynn Resorts Ltd. | 308,808 | 2,997,120 | |||||||||
|
|
|
| |||||||||
40,019,442 | 62,799,170 | |||||||||||
|
|
|
| |||||||||
Machinery — 1.5% |
| |||||||||||
120,000 | Astec Industries Inc.† | 4,116,129 | 4,377,600 | |||||||||
453,000 | CNH Global NV† | 6,037,085 | 17,984,100 | |||||||||
14,000 | Global Power Equipment Group Inc.† | 328,622 | 387,800 | |||||||||
69,000 | Kennametal Inc. | 2,010,829 | 3,072,570 | |||||||||
6,000 | Nordson Corp. | 107,171 | 327,060 | |||||||||
128,000 | Twin Disc Inc. | 2,930,953 | 3,339,520 |
Shares | Cost | Market Value | ||||||||||
127,000 | Zebra Technologies Corp., Cl. A† | $ | 2,726,287 | $ | 5,229,860 | |||||||
|
|
|
| |||||||||
18,257,076 | 34,718,510 | |||||||||||
|
|
|
| |||||||||
Manufactured Housing and Recreational Vehicles — 0.3% |
| |||||||||||
75,000 | Cavco Industries Inc.† | 1,561,191 | 3,493,500 | |||||||||
15,000 | Drew Industries Inc.† | 255,948 | 409,650 | |||||||||
35,000 | Nobility Homes Inc.† | 476,300 | 271,250 | |||||||||
19,000 | Polaris Industries Inc. | 1,028,788 | 1,370,850 | |||||||||
217,447 | Skyline Corp. | 5,314,437 | 1,663,470 | |||||||||
48,000 | Winnebago Industries Inc.† | 548,642 | 470,400 | |||||||||
|
|
|
| |||||||||
9,185,306 | 7,679,120 | |||||||||||
|
|
|
| |||||||||
Metals and Mining — 1.0% |
| |||||||||||
52,003 | Barrick Gold Corp. | 1,522,648 | 2,261,090 | |||||||||
280,000 | Century Aluminum Co.† | 3,825,656 | 2,486,400 | |||||||||
10,000 | Inmet Mining Corp. | 325,911 | 565,442 | |||||||||
106,000 | Ivanhoe Mines Ltd.† | 1,482,217 | 1,668,440 | |||||||||
140,000 | Kinross Gold Corp. | 962,642 | 1,370,600 | |||||||||
200,000 | Lynas Corp Ltd.† | 184,524 | 226,851 | |||||||||
346,900 | Materion Corp.† | 7,885,240 | 9,966,437 | |||||||||
108,000 | Molycorp Inc.† | 2,109,859 | 3,653,640 | |||||||||
2,000 | Northwest Pipe Co.† | 55,888 | 42,480 | |||||||||
52,100 | Stillwater Mining Co.† | 477,514 | 658,544 | |||||||||
15,000 | Yamana Gold Inc. | 50,671 | 234,300 | |||||||||
|
|
|
| |||||||||
18,882,770 | 23,134,224 | |||||||||||
|
|
|
| |||||||||
Paper and Forest Products — 0.1% |
| |||||||||||
17,000 | Schweitzer-Mauduit International Inc. | 580,905 | 1,174,020 | |||||||||
115,000 | Wausau Paper Corp. | 1,041,828 | 1,078,700 | |||||||||
|
|
|
| |||||||||
1,622,733 | 2,252,720 | |||||||||||
|
|
|
| |||||||||
Publishing — 1.1% |
| |||||||||||
65,000 | Belo Corp., Cl. A | 157,232 | 466,050 | |||||||||
80,000 | Cambium Learning Group Inc.† | 281,464 | 212,000 | |||||||||
1,610,000 | Il Sole 24 Ore SpA† | 3,410,623 | 1,635,144 | |||||||||
12,000 | John Wiley & Sons Inc., Cl. B | 46,500 | 572,400 | |||||||||
1,066,000 | Journal Communications Inc., Cl. A† | 5,404,071 | 6,001,580 | |||||||||
1,060,553 | Media General Inc., Cl. A† | 6,173,701 | 5,451,242 | |||||||||
30,000 | Meredith Corp. | 539,417 | 973,800 | |||||||||
260,000 | News Corp., Cl. A | 765,310 | 5,119,400 | |||||||||
415,000 | The E.W. Scripps Co., Cl. A† | 2,734,026 | 4,096,050 | |||||||||
|
|
|
| |||||||||
19,512,344 | 24,527,666 | |||||||||||
|
|
|
| |||||||||
Real Estate — 1.4% |
| |||||||||||
20,150 | Capital Properties Inc., Cl. A | 408,087 | 188,403 | |||||||||
15,000 | Capital Properties Inc., Cl. B(b) | 0 | 140,250 | |||||||||
130,000 | Cohen & Steers Inc. | 2,894,580 | 4,147,000 | |||||||||
200,000 | Griffin Land & Nurseries Inc. | 3,062,169 | 5,282,000 |
See accompanying notes to financial statements.
10
The Gabelli Small Cap Growth Fund
Schedule of Investments (Continued) — March 31, 2012 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS (Continued) |
| |||||||||||
Real Estate (Continued) |
| |||||||||||
10,400 | Gyrodyne Co. of America Inc.† | $ | 215,089 | $ | 1,039,584 | |||||||
107,000 | Morguard Corp. | 1,362,690 | 10,030,077 | |||||||||
20,000 | Tejon Ranch Co.† | 591,890 | 572,800 | |||||||||
580,060 | The St. Joe Co.† | 11,276,518 | 11,026,941 | |||||||||
|
|
|
| |||||||||
19,811,023 | 32,427,055 | |||||||||||
|
|
|
| |||||||||
Retail — 5.9% | ||||||||||||
270,000 | Aaron’s Inc.† | 1,631,612 | 6,993,000 | |||||||||
230,000 | AutoNation Inc.† | 3,712,036 | 7,891,300 | |||||||||
19,000 | Barnes & Noble Inc.† | 243,447 | 251,750 | |||||||||
17,000 | Best Buy Co. Inc. | 570,904 | 402,560 | |||||||||
134,000 | Big 5 Sporting Goods Corp. | 1,870,302 | 1,050,560 | |||||||||
22,150 | Biglari Holdings Inc.† | 5,605,238 | 8,923,128 | |||||||||
363,000 | Casey’s General Stores Inc. | 13,269,307 | 20,131,980 | |||||||||
565,000 | Coldwater Creek Inc.† | 2,088,166 | 655,400 | |||||||||
36,000 | Collective Brands Inc.† | 736,690 | 707,760 | |||||||||
82,000 | Copart Inc.† | 1,407,742 | 2,137,740 | |||||||||
2,500 | Dunkin’ Brands Group Inc. | 47,500 | 75,275 | |||||||||
110,000 | HSN Inc. | 3,248,632 | 4,183,300 | |||||||||
662,051 | Ingles Markets Inc., Cl. A(a) | 10,915,188 | 11,678,580 | |||||||||
22,000 | J.C. Penney Co. Inc. | 658,925 | 779,460 | |||||||||
390,000 | Krispy Kreme Doughnuts Inc.† | 2,492,216 | 2,847,000 | |||||||||
180,000 | Macy’s Inc. | 2,590,692 | 7,151,400 | |||||||||
60,000 | Movado Group Inc. | 782,108 | 1,473,000 | |||||||||
149,000 | Nathan’s Famous Inc.† | 2,083,677 | 3,158,800 | |||||||||
100,000 | Penske Automotive Group Inc. | 1,476,842 | 2,463,000 | |||||||||
500,000 | Pier 1 Imports Inc.† | 5,471,047 | 9,090,000 | |||||||||
59,000 | Regis Corp. | 1,181,055 | 1,087,370 | |||||||||
300,000 | Rush Enterprises Inc., Cl. B† | 3,438,009 | 5,217,000 | |||||||||
5,000 | Teavana Holdings Inc.† | 85,000 | 98,600 | |||||||||
340,100 | The Bon-Ton Stores Inc. | 2,587,720 | 3,142,524 | |||||||||
380,000 | The Cheesecake Factory Inc.† | 10,341,163 | 11,168,200 | |||||||||
100,000 | The Great Atlantic & Pacific Tea Co. Inc.†(b) | 17,250 | 650 | |||||||||
170,000 | The Wendy’s Co. | 1,375,250 | 851,700 | |||||||||
188,000 | Tractor Supply Co. | 3,446,573 | 17,025,280 | |||||||||
36,000 | Village Super Market Inc., Cl. A | 899,231 | 1,137,240 | |||||||||
53,000 | Weis Markets Inc. | 1,633,642 | 2,310,800 | |||||||||
|
|
|
| |||||||||
85,907,164 | 134,084,357 | |||||||||||
|
|
|
| |||||||||
Specialty Chemicals — 4.2% | ||||||||||||
55,000 | A. Schulman Inc. | 1,139,761 | 1,486,100 | |||||||||
26,000 | Airgas Inc. | 655,520 | 2,313,220 | |||||||||
82,000 | Albemarle Corp. | 1,336,460 | 5,241,440 | |||||||||
72,000 | Ashland Inc. | 1,165,391 | 4,396,320 | |||||||||
330,000 | Chemtura Corp.† | 4,936,264 | 5,603,400 |
Shares | Cost | Market Value | ||||||||||
11,200 | Cytec Industries Inc. | $ | 307,967 | $ | 680,848 | |||||||
2,220,290 | Ferro Corp.† | 15,699,076 | 13,188,523 | |||||||||
345,000 | H.B. Fuller Co. | 4,473,233 | 11,326,350 | |||||||||
56,700 | Hawkins Inc. | 866,719 | 2,109,240 | |||||||||
1,100,000 | Huntsman Corp. | 7,268,486 | 15,411,000 | |||||||||
85,000 | Material Sciences Corp.† | 503,549 | 701,250 | |||||||||
35,300 | NewMarket Corp. | 3,685,736 | 6,615,220 | |||||||||
355,000 | Omnova Solutions Inc.† | 933,471 | 2,396,250 | |||||||||
64,000 | Penford Corp.† | 709,812 | 432,640 | |||||||||
13,000 | Quaker Chemical Corp. | 214,482 | 512,850 | |||||||||
100,000 | Rockwood Holdings Inc.† | 1,972,175 | 5,215,000 | |||||||||
255,000 | Sensient Technologies Corp. | 5,194,615 | 9,690,000 | |||||||||
603,000 | Zep Inc. | 8,340,882 | 8,683,200 | |||||||||
|
|
|
| |||||||||
59,403,599 | 96,002,851 | |||||||||||
|
|
|
| |||||||||
Telecommunications — 1.6% |
| |||||||||||
55,000 | Atlantic Tele-Network Inc. | 1,399,970 | 1,999,800 | |||||||||
1,850,000 | Cincinnati Bell Inc.† | 5,602,336 | 7,437,000 | |||||||||
6,795 | Community Service Communications Inc.† | 0 | 12,944 | |||||||||
110,000 | HickoryTech Corp. | 949,514 | 1,137,400 | |||||||||
6,000 | IDT Corp., Cl. B | 71,679 | 56,040 | |||||||||
40,000 | Ixia† | 425,663 | 499,600 | |||||||||
40,000 | Loral Space & Communications Inc.† | 2,617,874 | 3,184,000 | |||||||||
129,000 | New ULM Telecom Inc. | 1,212,089 | 999,750 | |||||||||
116,000 | Rogers Communications Inc., Cl. B | 560,168 | 4,605,200 | |||||||||
70,000 | Shenandoah Telecommunications Co. | 451,960 | 780,500 | |||||||||
1,600,000 | Sprint Nextel Corp.†. | 4,496,476 | 4,560,000 | |||||||||
37,584 | Verizon Communications Inc. | 846,702 | 1,436,836 | |||||||||
815,000 | VimpelCom Ltd., ADR | 2,480,014 | 9,095,400 | |||||||||
55,000 | Windstream Corp. | 476,717 | 644,050 | |||||||||
53,000 | Winstar Communications Inc.†(b) | 133 | 53 | |||||||||
|
|
|
| |||||||||
21,591,295 | 36,448,573 | |||||||||||
|
|
|
| |||||||||
Transportation — 1.0% | ||||||||||||
474,000 | GATX Corp. | 14,405,014 | 19,102,200 | |||||||||
2,000(c) | Irish Continental Group plc | 14,688 | 41,745 | |||||||||
9,004 | Kirby Corp.† | 504,128 | 592,373 | |||||||||
133,000 | Providence and Worcester Railroad Co. | 1,888,133 | 1,964,410 | |||||||||
60,000 | RailAmerica Inc.† | 950,146 | 1,287,600 | |||||||||
|
|
|
| |||||||||
17,762,109 | 22,988,328 | |||||||||||
|
|
|
| |||||||||
Wireless Communications — 0.1% |
| |||||||||||
25,000 | Millicom International Cellular SA, SDR | 1,924,303 | 2,834,124 | |||||||||
|
|
|
| |||||||||
TOTAL COMMON STOCKS | 1,386,362,372 | 2,157,716,373 | ||||||||||
|
|
|
|
See accompanying notes to financial statements.
11
The Gabelli Small Cap Growth Fund
Schedule of Investments (Continued) — March 31, 2012 (Unaudited)
Shares | Cost | Market Value | ||||||||||
PREFERRED STOCKS — 0.3% |
| |||||||||||
Automotive: Parts and Accessories — 0.1% |
| |||||||||||
50,000 | Jungheinrich AG Pfd., | $ | 1,031,755 | $ | 1,637,458 | |||||||
Business Services — 0.2% | ||||||||||||
200,000 | Trans-Lux Pfd., Ser. A, 11/14/12†(b)(d)(e) | 3,917,179 | 4,950,000 | |||||||||
|
|
|
| |||||||||
TOTAL PREFERRED STOCKS | 4,948,934 | 6,587,458 | ||||||||||
|
|
|
| |||||||||
RIGHTS — 0.1% | ||||||||||||
Health Care — 0.1% | ||||||||||||
950,000 | Sanofi, CVR, expire 12/31/20† | 1,959,346 | 1,282,500 | |||||||||
|
|
|
| |||||||||
WARRANTS — 0.0% | ||||||||||||
Automotive: Parts and Accessories — 0.0% |
| |||||||||||
4,531 | Federal-Mogul Corp., expire 12/27/14† | 87,687 | 499 | |||||||||
|
|
|
| |||||||||
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 | |||||||||||
|
|
|
| |||||||||
Business Services — 0.0% | ||||||||||||
2,000,000 | Trans-Lux, Ser. A, expire | 82,821 | 158,434 | |||||||||
|
|
|
| |||||||||
Consumer Services — 0.0% | ||||||||||||
120,000 | SearchMedia Holdings Ltd., expire 11/19/12† | 247,589 | 13,248 | |||||||||
|
|
|
| |||||||||
Retail — 0.0% | ||||||||||||
230,189 | Talbots Inc., expire 04/06/15† | 690,567 | 6,906 | |||||||||
|
|
|
| |||||||||
TOTAL WARRANTS | 1,108,664 | 179,088 | ||||||||||
|
|
|
| |||||||||
| Principal Amount | | ||||||||||
CONVERTIBLE CORPORATE BONDS — 0.0% |
| |||||||||||
Hotels and Gaming — 0.0% | ||||||||||||
$400,000 | Gaylord Entertainment Co., Cv., 3.750%, 10/01/14(d) | 385,131 | 515,000 | |||||||||
|
|
|
|
Principal | Cost | Market Value | ||||||||||
CORPORATE BONDS — 0.0% |
| |||||||||||
Computer Software and Services — 0.0% |
| |||||||||||
$ 300,000 | Exodus Communications | $ | 1,185 | $ | 0 | |||||||
|
|
|
| |||||||||
U.S. GOVERNMENT OBLIGATIONS — 4.9% |
| |||||||||||
112,542,000 | U.S. Treasury Bills, | 112,522,310 | 112,523,189 | |||||||||
|
|
|
| |||||||||
TOTAL INVESTMENTS — 100.2% | $ | 1,507,287,942 | 2,278,803,608 | |||||||||
|
| |||||||||||
Other Assets and Liabilities |
| (4,107,735 | ) | |||||||||
|
| |||||||||||
NET ASSETS — 100.0% |
| $ | 2,274,695,873 | |||||||||
|
|
(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 the valuation of comparable securities and other factors on a regular basis. At March 31, 2012, the market value of fair valued securities amounted to $5,769,548 or 0.25% of net assets. |
(c) | Denoted in units. |
(d) | 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, 2012, the market value of Rule 144A securities amounted to $5,623,434 or 0.25% of net assets. |
(e) | Illiquid security. |
† | Non-income producing security. |
†† | Represents annualized yield at date of purchase. |
ADR | American Depositary Receipt |
CVR | Contingent Value Right |
SDR | Swedish Depositary Receipt |
See accompanying notes to financial statements.
12
The Gabelli Small Cap Growth Fund
Statement of Assets and Liabilities
March 31, 2012 (Unaudited)
Assets: | ||||
Investments, at value (cost $1,483,825,100) | $ | 2,255,589,502 | ||
Investments in affiliates, at value | ||||
(cost $23,462,842) | 23,214,106 | |||
Foreign currency, at value (cost $8) | 8 | |||
Cash | 218 | |||
Receivable for Fund shares sold | 2,844,258 | |||
Receivable for investments sold | 198,404 | |||
Dividends and interest receivable | 2,134,981 | |||
Prepaid expenses | 80,927 | |||
|
| |||
Total Assets | 2,284,062,404 | |||
|
| |||
Liabilities: | ||||
Payable for investments purchased | 2,566,155 | |||
Payable for Fund shares redeemed | 3,394,853 | |||
Payable for investment advisory fees | 1,953,462 | |||
Payable for distribution fees | 475,628 | |||
Payable for accounting fees | 7,500 | |||
Payable for shareholder services fees | 664,837 | |||
Other accrued expenses | 304,096 | |||
|
| |||
Total Liabilities | 9,366,531 | |||
|
| |||
Net Assets (applicable to 64,807,927 shares outstanding) | $ | 2,274,695,873 | ||
|
| |||
Net Assets Consist of: | ||||
Paid-in capital | $ | 1,514,742,092 | ||
Accumulated net investment loss | (5,132,619 | ) | ||
Accumulated distributions in excess of net realized gain on investments, futures contracts, and foreign currency transactions. | (6,432,124 | ) | ||
Net unrealized appreciation on investments | 771,515,666 | |||
Net unrealized appreciation on foreign currency translations | 2,858 | |||
|
| |||
Net Assets | $ | 2,274,695,873 | ||
|
| |||
Shares of Capital Stock, each at $0.001 par value: |
| |||
Class AAA: | ||||
Net Asset Value, offering, and redemption price per share ($1,622,618,161 ÷ 46,166,151 shares outstanding; 150,000,000 shares authorized) | $ | 35.15 | ||
|
| |||
Class A: | ||||
Net Asset Value and redemption price per share ($172,021,802 ÷ 4,894,992 shares outstanding; 50,000,000 shares authorized) | $ | 35.14 | ||
|
| |||
Maximum offering price per share (NAV ÷ 0.9425, based on maximum sales charge of 5.75% of the offering price) | $ | 37.28 | ||
|
| |||
Class B: | ||||
Net Asset Value and offering price per share ($8,090 ÷ 247.3 shares outstanding; 50,000,000 shares authorized) | $ | 32.71 | (a) | |
|
| |||
Class C: | ||||
Net Asset Value and offering price per share ($99,910,405 ÷ 3,051,218 shares outstanding; 50,000,000 shares authorized) | $ | 32.74 | (a) | |
|
| |||
Class I: | ||||
Net Asset Value, offering, and redemption price per share ($380,137,415 ÷ 10,695,319 shares outstanding; 50,000,000 shares authorized) | $ | 35.54 | ||
|
|
(a) | Redemption price varies based on the length of time held. |
Statement of Operations
For the Six Months Ended March 31, 2012 (Unaudited)
Investment Income: | ||||
Dividends - Unaffiliated (net of foreign withholding taxes of $133,066) | $ | 13,067,276 | ||
Dividends - Affiliated | 287,619 | |||
Interest | 51,541 | |||
|
| |||
Total Investment Income | 13,406,436 | |||
|
| |||
Expenses: | ||||
Investment advisory fees | 10,799,561 | |||
Distribution fees - Class AAA | 2,106,289 | |||
Distribution fees - Class A | 205,962 | |||
Distribution fees - Class B | 84 | |||
Distribution fees - Class C | 466,556 | |||
Shareholder services fees | 1,296,209 | |||
Shareholder communication expenses | 309,747 | |||
Custodian fees | 126,619 | |||
Registration expenses. | 53,432 | |||
Directors’ fees. | 51,145 | |||
Legal and audit fees | 26,715 | |||
Accounting fees | 22,500 | |||
Miscellaneous expenses. | 78,106 | |||
|
| |||
Total Expenses | 15,542,925 | |||
|
| |||
Less: | ||||
Advisory fee reduction on unsupervised assets (Note 3) | (128,631 | ) | ||
|
| |||
Net Expenses | 15,414,294 | |||
|
| |||
Net Investment Loss | (2,007,858 | ) | ||
|
| |||
Net Realized and Unrealized Gain/(Loss) on Investments, Futures Contracts, and Foreign Currency: | ||||
Net realized gain on investments | 1,583,408 | |||
Capital gain distributions from investment companies | 228,679 | |||
Net realized gain on futures contracts | 314,816 | |||
Net realized loss on foreign currency transactions | (15,015 | ) | ||
|
| |||
Net realized gain on investments, futures contracts, and foreign currency transactions | 2,111,888 | |||
|
| |||
Net change in unrealized appreciation/ depreciation: | ||||
on investments | 445,417,257 | |||
on foreign currency translations | 15,989 | |||
|
| |||
Net change in unrealized appreciation/ depreciation on investments and foreign currency translations | 445,433,246 | |||
|
| |||
Net Realized and Unrealized Gain/(Loss) on Investments, Futures Contracts, and Foreign Currency | 447,545,134 | |||
|
| |||
Net Increase in Net Assets Resulting from Operations | $ | 445,537,276 | ||
|
|
See accompanying notes to financial statements.
13
The Gabelli Small Cap Growth Fund
Statement of Changes in Net Assets
Six Months Ended March 31, 2012 (Unaudited) | Year Ended September 30, 2011 | |||||||
Operations: | ||||||||
Net investment loss | $ | (2,007,858 | ) | $ | (6,858,360 | ) | ||
Net realized gain on investments, futures contracts, and foreign currency transactions | 2,111,888 | 59,799,584 | ||||||
Net change in unrealized appreciation/depreciation on investments and foreign currency translations | 445,433,246 | (137,961,130 | ) | |||||
|
|
|
| |||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 445,537,276 | (85,019,906 | ) | |||||
|
|
|
| |||||
Distributions to Shareholders: | ||||||||
Net realized gain | ||||||||
Class AAA | (39,324,962 | ) | — | |||||
Class A | (3,747,019 | ) | — | |||||
Class B | (466 | ) | — | |||||
Class C | (2,264,720 | ) | — | |||||
Class I | (3,844,897 | ) | — | |||||
|
|
|
| |||||
Total Distributions to Shareholders | (49,182,064 | ) | — | |||||
|
|
|
| |||||
Capital Share Transactions: | ||||||||
Class AAA | (232,213,647 | ) | 164,983,523 | |||||
Class A | (3,331,712 | ) | 38,704,968 | |||||
Class B | (11,850 | ) | — | |||||
Class C | 2,087,304 | 22,111,657 | ||||||
Class I | 181,860,700 | 38,155,623 | ||||||
|
|
|
| |||||
Net Increase/(Decrease) in Net Assets from Capital Share Transactions | (51,609,205 | ) | 263,955,771 | |||||
|
|
|
| |||||
Redemption Fees | 619 | 9,012 | ||||||
|
|
|
| |||||
Net Increase in Net Assets | 344,746,626 | 178,944,877 | ||||||
Net Assets: | ||||||||
Beginning of period | 1,929,949,247 | 1,751,004,370 | ||||||
|
|
|
| |||||
End of period (including undistributed net investment income of $0 and $0, respectively) | $ | 2,274,695,873 | $ | 1,929,949,247 | ||||
|
|
|
|
See accompanying notes to financial statements.
14
The Gabelli Small Cap Growth Fund
Financial Highlights
Selected data for a share of capital stock outstanding throughout each period:
Income (Loss) from Investment Operations | Distributions | Ratio to Average Net Assets/ Supplemental Data | ||||||||||||||||||||||||||||||||||||||||||||||||||
Period Ended September 30 | Net Asset Value, Beginning of Period | Net Investment Income (Loss) (a)(b) | Net Realized and Unrealized Gain (Loss) on Investments | Total from Investment Operations | Net Realized Gain on Investments | Total Distributions | Redemption Fees (b)(c) | Net Asset Value, End of Period | Total Return† | Net Assets End of Period (in 000’s) | Net Investment Income (Loss) (a) | Operating Expenses | Portfolio Turnover Rate†† | |||||||||||||||||||||||||||||||||||||||
Class AAA |
| |||||||||||||||||||||||||||||||||||||||||||||||||||
2012(d) | $ | 29.16 | $ | (0.03 | ) | $ | 6.77 | $ | 6.74 | $ | (0.75 | ) | $ | (0.75 | ) | $ | 0.00 | $ | 35.15 | 23.55 | % | $ | 1,622,618 | (0.19 | )%(e) | 1.43 | %(e)(f) | 3 | % | |||||||||||||||||||||||
2011 | 29.97 | (0.10 | ) | (0.71 | ) | (0.81 | ) | — | — | 0.00 | 29.16 | (2.70 | ) | 1,539,100 | (0.30 | ) | 1.42 | (f) | 14 | |||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||
Class A |
| |||||||||||||||||||||||||||||||||||||||||||||||||||
2012(d) | $ | 29.15 | $ | (0.03 | ) | $ | 6.77 | $ | 6.74 | $ | (0.75 | ) | $ | (0.75 | ) | $ | 0.00 | $ | 35.14 | 23.56 | % | $ | 172,022 | (0.18 | )%(e) | 1.43 | %(e)(f) | 3 | % | |||||||||||||||||||||||
2011 | 29.96 | (0.10 | ) | (0.71 | ) | (0.81 | ) | — | — | 0.00 | 29.15 | (2.70 | ) | 145,049 | (0.31 | ) | 1.42 | (f) | 14 | |||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||
Class B |
| |||||||||||||||||||||||||||||||||||||||||||||||||||
2012(d) | $ | 27.29 | $ | (0.15 | ) | $ | 6.32 | $ | 6.17 | $ | (0.75 | ) | $ | (0.75 | ) | $ | 0.00 | $ | 32.71 | 23.07 | % | $ | 8 | (1.00 | )%(e) | 2.18 | %(e)(f) | 3 | % | |||||||||||||||||||||||
2011 | 28.26 | (0.33 | ) | (0.64 | ) | (0.97 | ) | — | — | 0.00 | 27.29 | (3.43 | ) | 17 | (1.05 | ) | 2.17 | (f) | 14 | |||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||
Class C |
| |||||||||||||||||||||||||||||||||||||||||||||||||||
2012(d) | $ | 27.31 | $ | (0.14 | ) | $ | 6.32 | $ | 6.18 | $ | (0.75 | ) | $ | (0.75 | ) | $ | 0.00 | $ | 32.74 | 23.09 | % | $ | 99,910 | (0.93 | )%(e) | 2.18 | %(e)(f) | 3 | % | |||||||||||||||||||||||
2011 | 28.28 | (0.34 | ) | (0.63 | ) | (0.97 | ) | — | — | 0.00 | 27.31 | (3.43 | ) | 81,289 | (1.05 | ) | 2.17 | (f) | 14 | |||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||
Class I |
| |||||||||||||||||||||||||||||||||||||||||||||||||||
2012(d) | $ | 29.44 | $ | 0.03 | $ | 6.82 | $ | 6.85 | $ | (0.75 | ) | $ | (0.75 | ) | $ | 0.00 | $ | 35.54 | 23.70 | % | $ | 380,138 | 0.18 | %(e) | 1.18 | %(e)(f) | 3 | % | ||||||||||||||||||||||||
2011 | 30.18 | (0.02 | ) | (0.72 | ) | (0.74 | ) | — | — | 0.00 | 29.44 | (2.45 | ) | 164,494 | (0.05 | ) | 1.17 | (f) | 14 | |||||||||||||||||||||||||||||||||
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%. |
(a) | Due to capital share activity throughout the period, net investment income (loss) per share and the ratio to average net assets are not necessarily correlated among the different classes of shares. |
(b) | Per share amounts have been calculated using the average shares outstanding method. |
(c) | Amount represents less than $0.005 per share. |
(d) | For the six months ended March 31, 2012, unaudited. |
(e) | Annualized. |
(f) | The ratios do not include a reduction of advisory fee on unsupervised assets for the six months ended March 31, 2012 and the years ended September 30, 2011, 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%, 1.41%, 1.42%, and 1.47% (Class AAA and Class A), 2.17%, 2.16%, 2.17% and 2.22% (Class B and Class C), and 1.17%, 1.16%, 1.17% and 1.22% (Class I), respectively. |
(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, a series of Gabelli Equity Series Funds, Inc. (the “Corporation”), was incorporated on July 25, 1991 in Maryland. 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 (Unaudited) (Continued)
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 the 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, 2012 is as follows:
Valuation Inputs | ||||||||||||||
Level 1 Quoted Prices | Level 2 Other Significant Observable Inputs | Level 3 Significant Unobservable Inputs | Total Market Value at 3/31/12 | |||||||||||
INVESTMENTS IN SECURITIES: | ||||||||||||||
ASSETS (Market Value): | ||||||||||||||
Common Stocks: | ||||||||||||||
Broadcasting | $ | 18,102,423 | — | $ | 0 | $ 18,102,423 | ||||||||
Cable | 33,510,363 | — | 0 | 33,510,363 | ||||||||||
Consumer Products | 44,766,234 | $ | 61 | — | 44,766,295 | |||||||||
Entertainment | 35,210,555 | — | 517,292 | 35,727,847 | ||||||||||
Equipment and Supplies | 212,478,586 | — | 2,220 | 212,480,806 | ||||||||||
Financial Services | 122,392,866 | — | 648 | 122,393,514 | ||||||||||
Real Estate | 32,286,805 | 140,250 | — | 32,427,055 | ||||||||||
Retail | 134,083,707 | — | 650 | 134,084,357 | ||||||||||
Telecommunications | 36,448,520 | — | 53 | 36,448,573 | ||||||||||
Other Industries (a) | 1,487,775,140 | — | — | 1,487,775,140 | ||||||||||
Total Common Stocks | 2,157,055,199 | 140,311 | 520,863 | 2,157,716,373 | ||||||||||
Preferred Stocks (a) | 1,637,458 | 4,950,000 | — | 6,587,458 | ||||||||||
Rights (a) | 1,282,500 | — | — | 1,282,500 | ||||||||||
Warrants (a) | 20,653 | 158,434 | 1 | 179,088 | ||||||||||
Convertible Corporate Bonds (a) | — | 515,000 | — | 515,000 | ||||||||||
Corporate Bonds (a) | — | — | 0 | — | ||||||||||
U.S. Government Obligations | — | 112,523,189 | — | 112,523,189 | ||||||||||
TOTAL INVESTMENTS IN SECURITIES – ASSETS | $ | 2,159,995,810 | $ | 118,286,934 | $ | 520,864 | $ 2,278,803,608 |
(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, 2012. The Fund’s policy is to recognize transfers among Levels as of the beginning of the reporting period.
In May 2011, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No. 2011-04 “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards (“IFRS”).” ASU 2011-04 includes common requirements for measurement of and disclosure about fair value between U.S. GAAP and IFRS. ASU 2011-04 will require reporting entities to disclose the following information for fair value measurements categorized within Level 3 of the fair value hierarchy: quantitative information about the unobservable inputs used in the fair value measurement, the valuation processes used by the reporting entity, and a narrative description of the sensitivity of the fair
17
The Gabelli Small Cap Growth Fund
Notes to Financial Statements (Continued)
value measurement to changes in unobservable inputs and the interrelationships between those unobservable inputs. In addition, ASU 2011-04 will require reporting entities to make disclosures about amounts and reasons for all transfers into and out of Level 1 and Level 2 fair value measurements. The new and revised disclosures are effective for interim and annual reporting periods beginning after December 15, 2011. At this time, management is evaluating the implications of ASU 2011-04 and its impact on the financial statements.
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, 2012, if any, are not accounted for as hedging instruments under GAAP and are disclosed in the Schedule of Investments together with the related counterparty.
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. At March 31, 2012, the Fund held no investments in futures contracts.
The Fund’s volume of equity futures contracts sold which were held from October 4, 2011 through October 6, 2011, had an average monthly notional amount while outstanding of approximately $5,025,390.
For the six months ended March 31, 2012, the effect of futures contracts with equity risk exposure can be found in the Statement of Operations under Net Realized and Unrealized Gain/(Loss) on Investments, Futures Contracts, and Foreign Currency, Net realized gain on futures contracts.
18
The Gabelli Small Cap Growth Fund
Notes to Financial Statements (Unaudited) (Continued)
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 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 those of securities of comparable U.S. issuers.
Foreign Taxes. The Fund may be subject to foreign taxes on income, gains on investments, or currency repatriation, a portion of which may be recoverable. The Fund will accrue such taxes and recoveries as applicable, based upon its current interpretation of tax rules and regulations that exist in the markets in which it invests.
Restricted and Illiquid Securities. The Fund may invest up to 15% of its net assets in securities for which the markets are illiquid. Illiquid securities include securities the disposition of which is subject to substantial legal or contractual restrictions. The sale of illiquid securities often requires more time and results in higher brokerage charges or dealer discounts and other selling expenses than does the sale of securities eligible for trading on national securities exchanges or in the over-the-counter markets. Restricted securities may sell at a price lower than similar securities that are not subject to restrictions on resale. Securities freely saleable among qualified institutional investors under special rules adopted by the SEC may be treated as liquid if they satisfy liquidity standards established by the Board. The continued liquidity of such securities is not as well assured as that of publicly traded securities, and accordingly the Board will monitor their liquidity. For the restricted and illiquid securities the Fund held as of March 31, 2012, 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.
19
The Gabelli Small Cap Growth Fund
Notes to Financial Statements (Unaudited) (Continued)
In calculating the NAV per share of each class, investment income, realized and unrealized gains and losses, redemption fees, and expenses other than class specific expenses are allocated daily to each class of shares based upon the proportion of net assets of each class at the beginning of each day. Distribution expenses are borne solely by the class incurring the expense.
Custodian Fee Credits and Interest Expense. When cash balances are maintained in the custody account, the Fund receives credits which are used to offset custodian fees. The gross expenses paid under the custody arrangement are included in custodian fees in the Statement of Operations with the corresponding expense offset, if any, shown as “Custodian fee credits.” When cash balances are overdrawn, the Fund is charged an overdraft fee equal to 2.00% above the federal funds rate on outstanding balances. This amount, if any, would be included in 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, 2011.
Provision for Income Taxes. The Fund intends to continue to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). It is the policy of the Fund to comply with the requirements of the Code applicable to regulated investment companies and to distribute substantially all of its net investment company taxable income and net capital gains. Therefore, no provision for federal income taxes is required.
Under the Regulated Investment Company Modernization Act of 2010, the Fund will be permitted to carry forward for an unlimited period capital losses incurred in years beginning after December 22, 2010. As a result of the rule, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law.
The following summarizes the tax cost of investments and the related net unrealized appreciation at March 31, 2012:
Cost | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Appreciation | |||||||||||
Investments | $1,515,592,746 | $ | 857,561,355 | $ | (94,350,493 | ) | $ | 763,210,862 |
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
20
The Gabelli Small Cap Growth Fund
Notes to Financial Statements (Unaudited) (Continued)
threshold. For the six months ended March 31, 2012, the Fund did not incur any income tax, interest, or penalties. As of March 31, 2012, 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, 2008 through September 30, 2011 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, 2012, 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 $128,631.
The Corporation pays each Director who is not considered an affiliated person an annual retainer of $18,000 plus $2,000 for each Board meeting attended, and they are reimbursed for any out of pocket expenses incurred in attending meetings. All Board committee members receive $1,000 per meeting attended. The Chairman of the Audit Committee receives a $3,000 annual fee, and the Lead Director receives an annual fee of $2,000. A Director may receive a single meeting fee, allocated among the participating funds, for attending 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. Under the Class AAA, Class A, Class B, and Class C Share Plans, payments are authorized to the G.distributors, LLC (the “Distributor”), an affiliate of the Fund, 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 during the six months ended March 31, 2012, other than short-term securities and U.S. Government obligations, aggregated $89,472,012 and $51,561,436, respectively.
6. Transactions with Affiliates. During the six months ended March 31, 2012, the Fund paid brokerage commissions on security trades of $151,891 to Gabelli & Company, Inc. (“Gabelli & Co.”), an affiliate of the Fund. Additionally the Distributor and its predecessor distributor, Gabelli & Co., retained a total of $60,237 from investors representing commissions (sales charges and underwriting fees) on sales and redemptions of Fund shares.
21
The Gabelli Small Cap Growth Fund
Notes to Financial Statements (Unaudited) (Continued)
The cost of calculating the Fund’s NAV per share is a Fund expense pursuant to the Advisory Agreement. During the six months ended March 31, 2012, 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 rate 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. At March 31, 2012, there were no borrowings outstanding under the line of credit.
The average daily amount of borrowings outstanding under the line of credit during the six months ended March 31, 2012 was $781 with a weighted average interest rate of 1.39%. The maximum amount borrowed at anytime during the six months ended March 31, 2012 was $143,000.
8. Capital Stock. The Fund offers five classes of shares – Class AAA Shares, Class A Shares, Class B Shares, Class C Shares, and Class I Shares. Class AAA Shares are offered without a sales charge only to investors who acquire them directly from the Distributor, through selected broker/dealers, or the transfer agent. Class I Shares are offered without a sales charge, solely to certain institutions, directly through the Distributor or brokers that have entered into selling agreements specifically with respect to Class I Shares. 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 the Distributor.
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, 2012 and the year ended September 30, 2011 amounted to $619 and $9,012, respectively.
22
The Gabelli Small Cap Growth Fund
Notes to Financial Statements (Unaudited) (Continued)
Transactions in shares of capital stock were as follows:
For the Six Months Ended March 31, 2012 (Unaudited) | Year Ended September 30, 2011 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Class AAA | ||||||||||||||||
Shares sold | 3,721,609 | $ | 121,621,590 | 16,630,596 | $ | 557,154,829 | ||||||||||
Shares issued upon reinvestment of distributions | 1,248,523 | 37,701,118 | — | — | ||||||||||||
Shares redeemed | (11,589,941 | ) | (391,536,355 | ) | (11,755,542 | ) | (392,171,306 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase/(decrease) | (6,619,809 | ) | $ | (232,213,647 | ) | 4,875,054 | $ | 164,983,523 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Class A | ||||||||||||||||
Shares sold | 865,405 | $ | 28,371,670 | 2,650,694 | $ | 90,164,240 | ||||||||||
Shares issued upon reinvestment of distributions | 113,467 | 3,426,712 | — | — | ||||||||||||
Shares redeemed | (1,059,274 | ) | (35,130,094 | ) | (1,522,155 | ) | (51,459,272 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase/(decrease) | (80,402 | ) | $ | (3,331,712 | ) | 1,128,539 | $ | 38,704,968 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Class B | ||||||||||||||||
Shares issued upon reinvestment of distributions | 15 | $ | 423 | — | — | |||||||||||
Shares redeemed | (385 | ) | (12,273 | ) | — | — | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net decrease | (370 | ) | $ | (11,850 | ) | — | — | |||||||||
|
|
|
|
|
|
|
| |||||||||
Class C | ||||||||||||||||
Shares sold | 337,174 | $ | 10,389,841 | 1,290,671 | $ | 41,172,835 | ||||||||||
Shares issued upon reinvestment of distributions | 73,277 | 2,064,384 | — | — | ||||||||||||
Shares redeemed | (335,518 | ) | (10,366,921 | ) | (606,592 | ) | (19,061,178 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase | 74,933 | $ | 2,087,304 | 684,079 | $ | 22,111,657 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Class I | ||||||||||||||||
Shares sold | 6,388,336 | $ | 224,021,431 | 2,679,868 | $ | 90,723,067 | ||||||||||
Shares issued upon reinvestment of distributions | 100,679 | 3,092,474 | — | — | ||||||||||||
Shares redeemed | (1,381,366 | ) | (45,253,205 | ) | (1,569,043 | ) | (52,567,444 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase | 5,107,649 | $ | 181,860,700 | 1,110,825 | $ | 38,155,623 | ||||||||||
|
|
|
|
|
|
|
|
9. Transactions in Securities of Affiliated Issuers. The 1940 Act defines affiliated issuers as those in which a 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, 2012 is set forth below:
Beginning Shares | Shares Purchased | Shares Sold | Ending Shares | Dividend Income | Net Change In Unrealized Appreciation/ Depreciation | Realized Gain/ (Loss) | Value at March 31, 2012 | Percent Owned of Shares Outstanding | ||||||||||||||||||||||||||||
Bel Fuse Inc., Cl. A. | 243,000 | 7,000 | — | 250,000 | $ | 29,520 | $ | 565,545 | — | $ | 4,867,500 | 11.49 | % | |||||||||||||||||||||||
Katy Industries Inc. | 416,000 | — | — | 416,000 | — | 232,128 | — | 249,600 | 5.23 | % | ||||||||||||||||||||||||||
Strattec Security | ||||||||||||||||||||||||||||||||||||
Corp. | 198,000 | 3,000 | — | 201,000 | 40,200 | (111,495 | ) | — | 4,703,400 | 6.09 | % | |||||||||||||||||||||||||
Sevcon Inc. | 250,000 | 4,833 | — | 254,833 | — | 97,452 | — | 1,715,026 | 7.34 | % | ||||||||||||||||||||||||||
Ingles Markets Inc., Cl. A | 660,051 | 2,000 | — | 662,051 | 217,899 | 2,245,601 | — | 11,678,580 | 5.12 | % | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||
Total | $ | 287,619 | $ | 3,029,231 | — | $ | 23,214,106 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
23
The Gabelli Small Cap Growth Fund
Notes to Financial Statements (Unaudited) (Continued)
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.
11. Other Matters. On April 24, 2008, the Adviser entered into a settlement with the SEC to resolve an inquiry regarding prior frequent trading 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. Under the terms of the settlement, the Adviser, without admitting or denying the SEC’s findings and allegations, paid $16 million (which included a $5 million civil monetary penalty). On the same day, the SEC filed a civil action in the U.S. District Court for the Southern District of New York 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, who also is an officer of the Global Growth Fund and other funds in the Gabelli/GAMCO complex, including this Fund, denies the allegations and is continuing in his positions with the Adviser and the funds. The settlement by the Adviser did not have, and the resolution of the action against the officer is not expected to have, a material adverse impact on 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.
The Overall Morningstar Rating™ is derived from a weighted average of the performance figures associated with its three, five and ten year (if applicable) Morningstar Rating metrics. Data presented reflects past performance, which is no guarantee of future results. Ratings are for Class AAA, A, B, C, or I shares, other classes may have different performance characteristics. Unrated classes of fund shares are not listed. For each fund with at least a three year history, Morningstar calculates a Morningstar Rating based on a Morningstar Risk-Adjusted Return measure (including the effects of sales charges, loads, and redemption fees) that accounts for variation in a fund’s monthly performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of the funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 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.) Strong relative performance is not indicative of positive fund returns. © 2012 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.
24
The Gabelli Small Cap Growth Fund
Board Consideration and Re-Approval of Management Agreement (Unaudited)
During the six months ended March 31, 2012, 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 three year periods and in the first quartile for the five year period.
Profitability. The Independent Board Members reviewed summary data regarding the profitability of the Fund to the Adviser both with an administrative overhead charge and without such a charge. The Independent Board Members also noted that a substantial portion of the Fund’s portfolio transactions were executed by an affiliated broker 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 material to their decision, various information comparing the advisory fees with the fees for other types of accounts managed by affiliates of the Adviser.
Conclusions. The Independent Board Members concluded that the Fund enjoyed highly experienced portfolio management services, good ancillary services, and a good performance record. The Independent Board Members also concluded that the Fund’s expense ratios and the profitability to the Adviser of managing the Fund were reasonable in light of the Fund’s performance and that economies of scale were not a significant factor in their thinking at this time. The Independent Board Members did not view the potential profitability of ancillary services as material to their decision. On the basis of the foregoing and without assigning particular weight to any single conclusion, the Independent Board Members determined to recommend continuation of the investment management agreement to the full Board.
25
The Gabelli Small Cap Growth Fund
Board Consideration and Re-Approval of Management Agreement (Unaudited) (Continued)
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 their decision on evaluations of all these factors as a whole and did not consider any one factor as all important or controlling.
26
Gabelli/GAMCO Funds and Your Personal Privacy.
Who are we?
The Gabelli/GAMCO Funds are investment companies registered with the Securities and Exchange Commission under the Investment Company Act of 1940. We are managed by Gabelli Funds, LLC, 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 fund shareholder?
If you apply to open an account directly with us, you will be giving us some non-public information about yourself. The non-public information we collect about you is:
• Information you give us on your application form. This could include your name, address, telephone number, social security number, bank account number, and other information.
• Information about your transactions with us, any transactions with our affiliates, and transactions with the entities we hire to provide services to you. This would include information about the shares that you buy or redeem. If we hire someone else to provide services — like a transfer agent — we will also have information about the transactions that you conduct through them.
What information do we disclose and to whom do we disclose it?
We do not disclose any non-public personal information about our customers or former customers to anyone other than our affiliates, our service providers who need to know such information, and as otherwise permitted by law. If you want to find out what the law permits, you can read the privacy rules adopted by the Securities and Exchange Commission. They are in volume 17 of the Code of Federal Regulations, Part 248. The Commission often posts information about its regulations on its website, www.sec.gov.
What do we do to protect your personal information?
We restrict access to non-public personal information about you to the people who need to know that information in order to provide services to you or the fund and to ensure that we are complying with the laws governing the securities business. We maintain physical, electronic, and procedural safeguards to keep your personal information confidential. |
Gabelli Equity Series Funds, Inc.
The Gabelli Small Cap Growth Fund
One Corporate Center
Rye, New York 10580-1422
800-GABELLI
800-422-3554
fax: 914-921-5118
website: www.gabelli.com
e-mail: info@gabelli.com
Net Asset Value per share available daily by calling
800-GABELLI after 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. | ||
Anthony J. Colavita | Kuni Nakamura | |
President, | President, | |
Anthony J. Colavita, P.C. | Advanced Polymer, Inc. | |
Vincent D. Enright | Anthony R. Pustorino | |
Former Senior Vice | Certified Public Accountant, | |
President | Professor Emeritus, | |
and Chief Financial Officer, | Pace University | |
KeySpan Corp. | ||
John D. Gabelli | Anthonie C. van Ekris | |
Senior Vice President, | Chairman, | |
Gabelli & Company, Inc. | BALMAC International, Inc. | |
Salvatore J. Zizza | ||
Chairman, | ||
Zizza & Associates Corp. | ||
Officers | ||
Bruce N. Alpert | Agnes Mullady | |
President, Secretary, and | Treasurer | |
Acting Chief | ||
Compliance Officer |
Custodian, Transfer Agent, and Dividend
Disbursing Agent
State Street Bank and Trust Company
Distributor
G.distributors, LLC
Legal Counsel
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.
GAB443Q112SR
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 ended March 31, 2012 among 585, 493, and 304 Small Blend funds, respectively. Morningstar RatingTM is based on risk-adjusted returns.
SEMIANNUAL REPORT
MARCH 31, 2012
The Gabelli Equity Income Fund
Semiannual Report — March 31, 2012
Morningstar® rated The Gabelli Equity Income Fund Class AAA Shares 5 stars overall, 5 stars for the five and ten year periods, and 4 stars for the three year period ended March 31, 2012 among 1,098, 973, 570, and 1,098 Large Value funds, respectively. Morningstar RatingTM is based on risk-adjusted returns.
Mario J. Gabelli, CFA
To Our Shareholders,
For the six months ended March 31, 2012, the net asset value (“NAV”) per Class AAA Share of The Gabelli Equity Income Fund rose 20.9% compared with an increase of 25.9% for the Standard & Poor’s (“S&P”) 500 Index. See below for additional performance information.
Enclosed are the schedule of investments and financial statements as of March 31, 2012.
Comparative Results
Average Annual Returns through March 31, 2012 (a)(b) (Unaudited) | ||||||||||||||||||||
Six Months | 1 Year | 5 Year | 10 Year | Since | ||||||||||||||||
Class AAA (GABEX) | 20.91 | % | 4.66 | % | 3.09 | % | 6.80 | % | 10.02 | % | ||||||||||
S&P 500 Index | 25.89 | 8.54 | 2.01 | 4.12 | 8.34 | (f) | ||||||||||||||
Nasdaq Composite Index | 28.73 | 12.37 | 6.02 | 6.12 | 8.55 | |||||||||||||||
Lipper Equity Income Fund Average | 22.66 | 5.99 | 0.79 | 4.31 | 7.75 | |||||||||||||||
Class A (GCAEX) | 20.85 | 4.63 | 3.10 | 6.79 | 10.02 | |||||||||||||||
With sales charge (c) | 13.90 | (1.39 | ) | 1.89 | 6.16 | 9.70 | ||||||||||||||
Class B (GCBEX) | 20.45 | 3.81 | 2.30 | 6.13 | 9.68 | |||||||||||||||
With contingent deferred sales charge (d) | 15.45 | (1.19 | ) | 1.93 | 6.13 | 9.68 | ||||||||||||||
Class C (GCCEX) | 20.49 | 3.91 | 2.33 | 6.16 | 9.69 | |||||||||||||||
With contingent deferred sales charge (e) | 19.49 | 2.91 | 2.33 | 6.16 | 9.69 | |||||||||||||||
Class I (GCIEX) | 21.07 | 4.90 | 3.32 | 6.92 | 10.08 |
In the current prospectus dated January 27, 2012, the expense ratios for Class AAA, A, B, C, and I Shares are 1.41%, 1.41%, 2.16%, 2.16%, and 1.16%, respectively. See page 13 for the expense ratios for the six months ended March 31, 2012. Class AAA and Class I Shares do not have a sales charge. The maximum sales charge for Class A, B, and C Shares is 5.75%, 5.00%, and 1.00%, respectively.
(a) 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. The Fund imposes a 2% redemption fee on shares sold or exchanged within seven days after the date of purchase. 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 these and other matters and should be read carefully before investing. The Class AAA Share NAVs 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 Index is a market capitalization weighted index of 500 large capitalization stocks commonly used to represent the U.S. equity market. The Nasdaq Composite Index is an unmanaged indicator of stock market performance. The Lipper Equity Income Fund Average includes the 30 largest equity funds in this category 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% which is gradually 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)
For the Six Month Period from October 1, 2011 through March 31, 2012
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 Account Value 10/01/11 | Ending Account Value 03/31/12 | Annualized Expense Ratio | Expenses Paid During | |||||||||||||
The Gabelli Equity Income Fund |
| |||||||||||||||
Actual Fund Return |
| |||||||||||||||
Class AAA | $ | 1,000.00 | $ | 1,209.10 | 1.41 | % | $ | 7.83 | ||||||||
Class A | $ | 1,000.00 | $ | 1,208.50 | 1.41 | % | $ | 7.83 | ||||||||
Class B | $ | 1,000.00 | $ | 1,204.50 | 2.16 | % | $ | 11.97 | ||||||||
Class C | $ | 1,000.00 | $ | 1,204.90 | 2.16 | % | $ | 11.97 | ||||||||
Class I | $ | 1,000.00 | $ | 1,210.70 | 1.16 | % | $ | 6.45 | ||||||||
Hypothetical 5% Return |
| |||||||||||||||
Class AAA | $ | 1,000.00 | $ | 1,018.05 | 1.41 | % | $ | 7.15 | ||||||||
Class A | $ | 1,000.00 | $ | 1,018.05 | 1.41 | % | $ | 7.15 | ||||||||
Class B | $ | 1,000.00 | $ | 1,014.28 | 2.16 | % | $ | 10.94 | ||||||||
Class C | $ | 1,000.00 | $ | 1,014.28 | 2.16 | % | $ | 10.94 | ||||||||
Class I | $ | 1,000.00 | $ | 1,019.30 | 1.16 | % | $ | 5.89 |
* | 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 (184 days), then divided by 366. |
2
Summary of Portfolio Holdings (Unaudited)
The following table presents portfolio holdings as a percent of net assets as of March 31, 2012:
The Gabelli Equity Income Fund
Food and Beverage | 12.6% | |||
Financial Services | 11.4% | |||
Health Care | 11.0% | |||
Retail | 6.4% | |||
Consumer Products | 5.4% | |||
Energy and Utilities: Oil | 4.7% | |||
Aerospace | 4.6% | |||
Energy and Utilities: Integrated | 4.5% | |||
Diversified Industrial | 4.1% | |||
U.S. Government Obligations. | 3.9% | |||
Telecommunications | 3.7% | |||
Automotive: Parts and Accessories. | 2.5% | |||
Computer Hardware | 2.1% | |||
Specialty Chemicals | 1.9% | |||
Computer Software and Services | 1.7% | |||
Metals and Mining | 1.7% | |||
Energy and Utilities: Services | 1.6% | |||
Electronics | 1.6% | |||
Energy and Utilities: Natural Gas | 1.4% | |||
Hotels and Gaming | 1.4% | |||
Machinery. | 1.3% | |||
Entertainment | 1.3% |
Automotive | 1.1% | |||
Communications Equipment | 1.0% | |||
Equipment and Supplies | 1.0% | |||
Wireless Communications. | 0.7% | |||
Energy and Utilities: Electric. | 0.7% | |||
Agriculture | 0.7% | |||
Broadcasting | 0.7% | |||
Cable and Satellite | 0.7% | |||
Business Services | 0.6% | |||
Real Estate Investment Trusts | 0.4% | |||
Transportation | 0.3% | |||
Aviation: Parts and Services | 0.3% | |||
Building and Construction | 0.2% | |||
Environmental Services | 0.2% | |||
Paper and Forest Products. | 0.2% | |||
Consumer Services | 0.1% | |||
Publishing. | 0.1% | |||
Energy and Utilities: Water | 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. 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 Equity Income Fund
Schedule of Investments — March 31, 2012 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS —95.4% |
| |||||||||||
Aerospace — 4.6% | ||||||||||||
100,000 | Exelis Inc. | $ | 1,205,431 | $ | 1,252,000 | |||||||
180,000 | Goodrich Corp. | 21,975,206 | 22,579,200 | |||||||||
2,000 | Lockheed Martin Corp. | 47,350 | 179,720 | |||||||||
10,000 | Raytheon Co. | 279,200 | 527,800 | |||||||||
320,000 | Rockwell Automation Inc. | 14,997,324 | 25,504,000 | |||||||||
2,000 | Rockwell Collins Inc. | 15,844 | 115,120 | |||||||||
1,625,000 | Rolls-Royce Holdings plc | 12,119,318 | 21,105,244 | |||||||||
415,000 | The Boeing Co. | 25,962,549 | 30,863,550 | |||||||||
|
|
|
| |||||||||
76,602,222 | 102,126,634 | |||||||||||
|
|
|
| |||||||||
Agriculture — 0.7% | ||||||||||||
99,000 | Archer-Daniels-Midland Co. | 2,838,337 | 3,134,340 | |||||||||
150,000 | Monsanto Co. | 2,423,783 | 11,964,000 | |||||||||
12,000 | The Mosaic Co. | 186,246 | 663,480 | |||||||||
|
|
|
| |||||||||
5,448,366 | 15,761,820 | |||||||||||
|
|
|
| |||||||||
Automotive — 1.1% | ||||||||||||
1,075,000 | Ford Motor Co. | 14,669,752 | 13,426,750 | |||||||||
130,000 | General Motors Co.† | 4,055,878 | 3,334,500 | |||||||||
157,500 | Navistar International Corp.† | 5,873,546 | 6,370,875 | |||||||||
31,000 | PACCAR Inc. | 1,399,566 | 1,451,730 | |||||||||
|
|
|
| |||||||||
25,998,742 | 24,583,855 | |||||||||||
|
|
|
| |||||||||
Automotive: Parts and Accessories — 2.5% |
| |||||||||||
29,000 | BorgWarner Inc.† | 1,909,195 | 2,445,860 | |||||||||
70,000 | Dana Holding Corp. | 992,304 | 1,085,000 | |||||||||
535,000 | Genuine Parts Co. | 23,325,283 | 33,571,250 | |||||||||
6,000 | Johnson Controls Inc. | 50,425 | 194,880 | |||||||||
70,000 | Modine Manufacturing Co.† | 836,454 | 618,100 | |||||||||
136,000 | O’Reilly Automotive Inc.† | 3,998,612 | 12,423,600 | |||||||||
55,100 | Tenneco Inc.† | 840,371 | 2,046,965 | |||||||||
140,000 | The Pep Boys - Manny, Moe & Jack | 1,583,944 | 2,088,800 | |||||||||
|
|
|
| |||||||||
33,536,588 | 54,474,455 | |||||||||||
|
|
|
| |||||||||
Aviation: Parts and Services — 0.3% |
| |||||||||||
65,000 | Curtiss-Wright Corp. | 944,125 | 2,405,650 | |||||||||
83,486 | GenCorp Inc.† | 534,598 | 592,751 | |||||||||
4,500 | Precision Castparts Corp. | 457,449 | 778,050 | |||||||||
21,000 | United Technologies Corp. | 609,942 | 1,741,740 | |||||||||
|
|
|
| |||||||||
2,546,114 | 5,518,191 | |||||||||||
|
|
|
| |||||||||
Broadcasting — 0.7% | ||||||||||||
300,000 | CBS Corp., Cl. A, Voting | 5,704,096 | 10,266,000 | |||||||||
152,000 | CBS Corp., Cl. B, Non-Voting | 3,436,092 | 5,154,320 | |||||||||
|
|
|
| |||||||||
132 | Granite Broadcasting Corp.†(a) | 10,795 | 0 | |||||||||
|
|
|
| |||||||||
9,150,983 | 15,420,320 | |||||||||||
Building and Construction — 0.2% |
| |||||||||||
245,000 | Fortune Brands Home & Security Inc.† | 2,712,564 | 5,407,150 |
Shares | Cost | Market Value | ||||||||||
22 | Orchard Supply Hardware Stores Corp., Cl. A† | $ | 1,460 | $ | 454 | |||||||
|
|
|
| |||||||||
2,714,024 | 5,407,604 | |||||||||||
|
|
|
| |||||||||
Business Services — 0.6% |
| |||||||||||
37,000 | Automatic Data Processing Inc. | 1,543,362 | 2,042,030 | |||||||||
193,000 | Diebold Inc. | 6,771,090 | 7,434,360 | |||||||||
4,000 | Landauer Inc. | 134,546 | 212,080 | |||||||||
10,500 | MasterCard Inc., Cl. A | 883,579 | 4,415,670 | |||||||||
2,400 | MSC Industrial Direct Co. Inc., Cl. A | 175,804 | 199,872 | |||||||||
|
|
|
| |||||||||
9,508,381 | 14,304,012 | |||||||||||
|
|
|
| |||||||||
Cable and Satellite — 0.7% | ||||||||||||
38,000 | AMC Networks Inc., Cl. A† | 689,290 | 1,695,940 | |||||||||
140,000 | Cablevision Systems Corp., Cl. A | 1,650,260 | 2,055,200 | |||||||||
10,000 | DIRECTV, Cl. A† | 331,857 | 493,400 | |||||||||
195,000 | DISH Network Corp., Cl. A | 3,976,858 | 6,421,350 | |||||||||
16,000 | EchoStar Corp., Cl. A† | 478,840 | 450,240 | |||||||||
500 | Jupiter Telecommunications Co. Ltd. | 492,514 | 500,785 | |||||||||
58,000 | Scripps Networks Interactive Inc., Cl. A | 2,452,305 | 2,824,020 | |||||||||
|
|
|
| |||||||||
10,071,924 | 14,440,935 | |||||||||||
|
|
|
| |||||||||
Communications Equipment — 1.0% |
| |||||||||||
420,000 | Corning Inc. | 6,061,191 | 5,913,600 | |||||||||
221,025 | Thomas & Betts Corp.† | 8,755,102 | 15,893,908 | |||||||||
|
|
|
| |||||||||
14,816,293 | 21,807,508 | |||||||||||
|
|
|
| |||||||||
Computer Hardware — 2.0% |
| |||||||||||
150,000 | Hewlett-Packard Co. | 3,843,064 | 3,574,500 | |||||||||
193,000 | International Business Machines Corp. | 16,640,171 | 40,269,450 | |||||||||
|
|
|
| |||||||||
20,483,235 | 43,843,950 | |||||||||||
|
|
|
| |||||||||
Computer Software and Services — 1.7% |
| |||||||||||
25,000 | eBay Inc.† | 779,839 | 922,250 | |||||||||
370,000 | EMC Corp.† | 9,412,030 | 11,055,600 | |||||||||
135,000 | Fidelity National Information Services Inc. | 2,392,326 | 4,471,200 | |||||||||
500,000 | Microsoft Corp. | 14,085,430 | 16,125,000 | |||||||||
350,000 | Yahoo! Inc.† | 6,968,450 | 5,327,000 | |||||||||
|
|
|
| |||||||||
33,638,075 | 37,901,050 | |||||||||||
|
|
|
| |||||||||
Consumer Products — 5.4% | ||||||||||||
45,000 | Altria Group Inc. | 538,092 | 1,389,150 | |||||||||
210,000 | Avon Products Inc. | 5,844,295 | 4,065,600 | |||||||||
15,000 | Compagnie Financiere Richemont SA, Cl. A | 478,768 | 940,512 | |||||||||
86,000 | Energizer Holdings Inc.† | 4,415,164 | 6,379,480 | |||||||||
5,000 | Hanesbrands Inc.† | 108,950 | 147,700 |
.
See accompanying notes to financial statements.
4
The Gabelli Equity Income Fund
Schedule of Investments (Continued) — March 31, 2012 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS (Continued) |
| |||||||||||
Consumer Products (Continued) |
| |||||||||||
188,000 | Harman International Industries Inc. | $ | 7,412,438 | $ | 8,800,280 | |||||||
240,000 | Kimberly-Clark Corp. | 15,287,550 | 17,733,600 | |||||||||
3,000 | National Presto Industries Inc. | 89,620 | 227,580 | |||||||||
50,000 | Philip Morris International Inc. | 1,501,172 | 4,430,500 | |||||||||
105,000 | Reckitt Benckiser Group plc | 3,432,951 | 5,933,541 | |||||||||
25,000 | Svenska Cellulosa AB, Cl. A. | 430,001 | 432,298 | |||||||||
1,250,000 | Swedish Match AB | 16,783,406 | 49,767,224 | |||||||||
15,000 | The Clorox Co. | 823,581 | 1,031,250 | |||||||||
230,000 | The Procter & Gamble Co. | 13,512,663 | 15,458,300 | |||||||||
81,000 | Unilever NV - NY Shares. | 1,639,778 | 2,756,430 | |||||||||
|
|
|
| |||||||||
72,298,429 | 119,493,445 | |||||||||||
|
|
|
| |||||||||
Consumer Services — 0.1% | ||||||||||||
100,000 | Rollins Inc. | 381,843 | 2,128,000 | |||||||||
|
|
|
| |||||||||
Diversified Industrial — 3.8% | ||||||||||||
5,000 | 3M Co. | 213,645 | 446,050 | |||||||||
4,000 | Acuity Brands Inc. | 42,447 | 251,320 | |||||||||
5,000 | Alstom SA | 269,036 | 195,121 | |||||||||
100,000 | Cooper Industries plc | 2,757,977 | 6,395,000 | |||||||||
100,000 | Crane Co. | 3,413,906 | 4,850,000 | |||||||||
1,380,000 | General Electric Co. | 27,960,930 | 27,696,600 | |||||||||
260,000 | Honeywell International Inc. | 9,173,758 | 15,873,000 | |||||||||
50,000 | ITT Corp. | 1,004,526 | 1,147,000 | |||||||||
27,000 | Jardine Matheson Holdings Ltd. | 1,149,054 | 1,350,000 | |||||||||
168,000 | Jardine Strategic Holdings Ltd. | 3,841,989 | 5,125,680 | |||||||||
413,503 | National Patent Development Corp.† | 1,018,283 | 1,232,239 | |||||||||
120,000 | Textron Inc. | 763,372 | 3,339,600 | |||||||||
20,000 | Toray Industries Inc. | 147,011 | 148,363 | |||||||||
55,000 | Trinity Industries Inc. | 1,573,781 | 1,812,250 | |||||||||
255,000 | Tyco International Ltd. | 10,510,134 | 14,325,900 | |||||||||
|
|
|
| |||||||||
63,839,849 | 84,188,123 | |||||||||||
|
|
|
| |||||||||
Electronics — 1.6% | ||||||||||||
70,000 | Emerson Electric Co. | 3,580,805 | 3,652,600 | |||||||||
460,000 | Intel Corp. | 9,105,181 | 12,930,600 | |||||||||
260,000 | LSI Corp.† | 2,364,968 | 2,256,800 | |||||||||
130,000 | TE Connectivity Ltd. | 4,330,657 | 4,777,500 | |||||||||
315,000 | Texas Instruments Inc. | 7,598,308 | 10,587,150 | |||||||||
27,000 | Thermo Fisher Scientific Inc. | 1,334,183 | 1,522,260 | |||||||||
|
|
|
| |||||||||
28,314,102 | 35,726,910 | |||||||||||
|
|
|
| |||||||||
Energy and Utilities: Electric — 0.7% |
| |||||||||||
36,000 | American Electric Power Co. Inc. | 1,159,431 | 1,388,880 | |||||||||
12,000 | DTE Energy Co. | 517,320 | 660,360 |
Shares | Cost | Market Value | ||||||||||
90,000 | El Paso Electric Co. | $ | 820,152 | $ | 2,924,100 | |||||||
150,000 | GenOn Energy Inc.† | 883,470 | 312,000 | |||||||||
1,200,000 | GenOn Energy Inc., Escrow†(a) | 0 | 0 | |||||||||
110,000 | Great Plains Energy Inc. | 2,663,694 | 2,229,700 | |||||||||
100,000 | Korea Electric Power Corp., ADR† | 1,479,637 | 973,000 | |||||||||
120,000 | Northeast Utilities | 2,586,598 | 4,454,400 | |||||||||
220,000 | The AES Corp.† | 2,018,708 | 2,875,400 | |||||||||
13,333 | UIL Holdings Corp. | 293,785 | 463,455 | |||||||||
|
|
|
| |||||||||
12,422,795 | 16,281,295 | |||||||||||
|
|
|
| |||||||||
Energy and Utilities: Integrated — 4.5% |
| |||||||||||
425,000 | BP plc, ADR. | 18,048,660 | 19,125,000 | |||||||||
51,000 | CH Energy Group Inc. | 2,105,013 | 3,403,230 | |||||||||
191,000 | CONSOL Energy Inc. | 8,102,838 | 6,513,100 | |||||||||
110,000 | Dominion Resources Inc. | 4,509,912 | 5,633,100 | |||||||||
195,000 | Duke Energy Corp. | 2,406,814 | 4,096,950 | |||||||||
760,068 | El Paso Corp. | 10,819,779 | 22,460,009 | |||||||||
29,000 | ENI SpA | 304,221 | 680,337 | |||||||||
46,500 | Exelon Corp. | 1,793,603 | 1,823,265 | |||||||||
50,350 | FirstEnergy Corp. | 1,229,350 | 2,295,457 | |||||||||
57,260 | Hess Corp. | 4,219,487 | 3,375,477 | |||||||||
13,069 | Iberdrola SA, ADR. | 530,951 | 297,058 | |||||||||
25,000 | Integrys Energy Group Inc. | 1,192,522 | 1,324,750 | |||||||||
120,000 | NextEra Energy Inc. | 5,753,101 | 7,329,600 | |||||||||
80,000 | NSTAR. | 1,282,183 | 3,890,400 | |||||||||
72,000 | OGE Energy Corp. | 1,955,611 | 3,852,000 | |||||||||
125,000 | PNM Resources Inc. | 1,469,710 | 2,287,500 | |||||||||
90,000 | Progress Energy Inc. | 3,857,884 | 4,779,900 | |||||||||
7,200 | Public Service Enterprise Group Inc. | 156,820 | 220,392 | |||||||||
30,000 | Suncor Energy Inc., New York. | 785,965 | 981,000 | |||||||||
21,000 | Suncor Energy Inc., Toronto | 908,497 | 686,140 | |||||||||
50,000 | TECO Energy Inc. | 652,639 | 877,500 | |||||||||
140,000 | Westar Energy Inc. | 2,333,669 | 3,910,200 | |||||||||
|
|
|
| |||||||||
74,419,229 | 99,842,365 | |||||||||||
|
|
|
| |||||||||
Energy and Utilities: Natural Gas — 1.4% |
| |||||||||||
13,000 | AGL Resources Inc. | 242,114 | 509,860 | |||||||||
15,000 | Atmos Energy Corp. | 394,549 | 471,900 | |||||||||
300,000 | National Fuel Gas Co. | 15,032,695 | 14,436,000 | |||||||||
73,000 | ONEOK Inc. | 1,642,426 | 5,961,180 | |||||||||
24,000 | Piedmont Natural Gas Co. Inc. | 394,017 | 745,680 | |||||||||
80,000 | Southwest Gas Corp. | 1,918,098 | 3,419,200 | |||||||||
200,000 | Spectra Energy Corp. | 4,249,072 | 6,310,000 | |||||||||
|
|
|
| |||||||||
23,872,971 | 31,853,820 | |||||||||||
|
|
|
| |||||||||
Energy and Utilities: Oil — 4.7% |
| |||||||||||
188,000 | Anadarko Petroleum Corp. | 9,647,792 | 14,727,920 | |||||||||
45,000 | Canadian Oil Sands Ltd. | 1,290,650 | 949,221 |
See accompanying notes to financial statements.
5
The Gabelli Equity Income Fund
Schedule of Investments (Continued) — March 31, 2012 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS (Continued) | ||||||||||||
Energy and Utilities: Oil (Continued) |
| |||||||||||
5,000 | (b) | Canadian Oil Sands Trust† | $ | 116,475 | $ | 105,469 | ||||||
190,000 | Chevron Corp. | 8,702,369 | 20,375,600 | |||||||||
185,000 | ConocoPhillips | 5,343,273 | 14,061,850 | |||||||||
22,000 | Denbury Resources Inc.† | 369,472 | 401,060 | |||||||||
49,000 | Devon Energy Corp. | 2,021,181 | 3,484,880 | |||||||||
151,000 | Exxon Mobil Corp. | 4,905,886 | 13,096,230 | |||||||||
40,000 | Marathon Oil Corp. | 1,000,063 | 1,268,000 | |||||||||
20,000 | Marathon Petroleum Corp. | 639,385 | 867,200 | |||||||||
30,000 | Nexen Inc. | 809,615 | 550,103 | |||||||||
2,000 | Niko Resources Ltd | 114,911 | 70,359 | |||||||||
100,000 | Occidental Petroleum Corp. | 4,145,051 | 9,523,000 | |||||||||
4,800 | PetroChina Co. Ltd., ADR. | 375,792 | 674,544 | |||||||||
103,000 | Petroleo Brasileiro SA, ADR | 3,819,949 | 2,735,680 | |||||||||
33,000 | Repsol YPF SA, ADR | 689,095 | 824,340 | |||||||||
120,000 | Royal Dutch Shell plc, Cl. A, ADR. | 5,524,835 | 8,415,600 | |||||||||
16,000 | SilverBirch Energy Corp.† | 93,825 | 153,993 | |||||||||
35,000 | Statoil ASA, ADR | 903,790 | 950,173 | |||||||||
80,000 | Statoil ASA, ADR | 1,779,821 | 2,168,800 | |||||||||
345,000 | Talisman Energy Inc. | 6,551,852 | 4,347,000 | |||||||||
17,518 | Total SA, ADR | 290,563 | 895,520 | |||||||||
90,000 | Transocean Ltd. | 5,742,644 | 4,923,000 | |||||||||
40,000 | WesternZagros Resources Ltd.† | 147,109 | 34,889 | |||||||||
|
|
|
| |||||||||
65,025,398 | 105,604,431 | |||||||||||
|
|
|
| |||||||||
Energy and Utilities: Services — 1.6% |
| |||||||||||
30,000 | ABB Ltd., ADR† | 351,824 | 612,300 | |||||||||
52,000 | Cameron International Corp.† | 746,014 | 2,747,160 | |||||||||
38,178 | GDF Suez† | 0 | 51 | |||||||||
350,000 | Halliburton Co. | 10,342,941 | 11,616,500 | |||||||||
94,000 | Oceaneering International Inc. | 2,032,090 | 5,065,660 | |||||||||
40,000 | Schlumberger Ltd. | 1,275,020 | 2,797,200 | |||||||||
900,000 | Weatherford International Ltd.† | 16,535,073 | 13,581,000 | |||||||||
|
|
|
| |||||||||
31,282,962 | 36,419,871 | |||||||||||
|
|
|
| |||||||||
Energy and Utilities: Water — 0.0% |
| |||||||||||
36,000 | Aqua America Inc. | 458,537 | 802,440 | |||||||||
Entertainment — 1.3% | ||||||||||||
125,000 | Grupo Televisa SA, ADR | 2,852,849 | 2,635,000 | |||||||||
38,750 | The Madison Square Garden Co., Cl. A†. | 480,606 | 1,325,250 | |||||||||
117,000 | Time Warner Inc. | 3,385,344 | 4,416,750 | |||||||||
304,000 | Viacom Inc., Cl. A | 11,971,735 | 15,798,880 | |||||||||
235,000 | Vivendi SA | 7,862,469 | 4,312,674 | |||||||||
|
|
|
| |||||||||
26,553,003 | 28,488,554 | |||||||||||
|
|
|
|
Shares | Cost | Market Value | ||||||||||
Environmental Services — 0.2% |
| |||||||||||
150,000 | Waste Management Inc. | $ | 4,915,425 | $ | 5,244,000 | |||||||
Equipment and Supplies — 1.0% |
| |||||||||||
18,000 | A.O. Smith Corp. | 253,184 | 809,100 | |||||||||
28,000 | Danaher Corp. | 1,074,985 | 1,568,000 | |||||||||
86,000 | Flowserve Corp. | 3,272,372 | 9,933,860 | |||||||||
12,000 | Ingersoll-Rand plc | 317,767 | 496,200 | |||||||||
1,500 | Minerals Technologies Inc. | 37,938 | 98,115 | |||||||||
85,000 | Mueller Industries Inc. | 3,248,424 | 3,863,250 | |||||||||
16,000 | Parker Hannifin Corp. | 791,261 | 1,352,800 | |||||||||
90,000 | Tenaris SA, ADR | 3,561,978 | 3,440,700 | |||||||||
|
|
|
| |||||||||
12,557,909 | 21,562,025 | |||||||||||
|
|
|
| |||||||||
Financial Services — 11.4% |
| |||||||||||
6,579 | Alleghany Corp.† | 1,015,114 | 2,165,149 | |||||||||
300,000 | AllianceBernstein Holding LP | 7,436,434 | 4,683,000 | |||||||||
383,000 | American Express Co. | 15,736,067 | 22,160,380 | |||||||||
405,000 | American International Group Inc.† | 9,708,940 | 12,486,150 | |||||||||
24,990 | Argo Group International Holdings Ltd. | 772,108 | �� | 746,451 | ||||||||
26,847 | Banco Popular Espanol SA | 189,203 | 96,319 | |||||||||
2,000 | Banco Santander Chile, ADR.. | 29,250 | 172,180 | |||||||||
160,000 | Banco Santander SA, ADR | 1,233,058 | 1,227,200 | |||||||||
340,000 | Bank of America Corp | 3,498,294 | 3,253,800 | |||||||||
12,156 | BNP Paribas SA | 506,339 | 576,761 | |||||||||
220,000 | Citigroup Inc. | 9,104,905 | 8,041,000 | |||||||||
54,000 | Deutsche Bank AG | 2,262,966 | 2,688,660 | |||||||||
105,000 | Discover Financial Services. | 1,820,893 | 3,500,700 | |||||||||
57,300 | Dundee Corp., Cl. A† | 1,357,319 | 1,435,588 | |||||||||
30,000 | Eaton Vance Corp. | 819,561 | 857,400 | |||||||||
290,000 | Energy Transfer Equity LP | 8,186,053 | 11,687,000 | |||||||||
125,000 | Federated Investors Inc., Cl. B. | 3,056,627 | 2,801,250 | |||||||||
31,674 | Fidelity Southern Corp. | 284,716 | 213,483 | |||||||||
235,000 | H&R Block Inc. | 4,453,931 | 3,870,450 | |||||||||
12,000 | Interactive Brokers Group Inc., Cl. A. | 197,243 | 204,000 | |||||||||
200,000 | Janus Capital Group Inc. | 1,988,303 | 1,782,000 | |||||||||
275,000 | JPMorgan Chase & Co. | 9,792,746 | 12,644,500 | |||||||||
75,000 | Julius Baer Group Ltd.† | 2,537,524 | 3,027,584 | |||||||||
40,000 | Kemper Corp. | 1,156,156 | 1,211,200 | |||||||||
69,100 | Kinnevik Investment AB, Cl. A. | 1,140,349 | 1,608,483 | |||||||||
18,000 | Kinnevik Investment AB, Cl. B. | 252,511 | 418,725 | |||||||||
469,000 | Legg Mason Inc. | 11,010,816 | 13,099,170 | |||||||||
36,052 | Leucadia National Corp. | 500,319 | 940,957 | |||||||||
178,000 | Loews Corp. | 7,718,585 | 7,096,860 | |||||||||
162,000 | M&T Bank Corp. | 11,968,496 | 14,074,560 | |||||||||
365,000 | Marsh & McLennan | 11,002,192 | 11,968,350 |
See accompanying notes to financial statements.
6
The Gabelli Equity Income Fund
Schedule of Investments (Continued) — March 31, 2012 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS (Continued) |
| |||||||||||
Financial Services (Continued) |
| |||||||||||
345,000 | Morgan Stanley | $ | 9,702,620 | $ | 6,775,800 | |||||||
213,000 | Northern Trust Corp. | 10,457,827 | 10,106,850 | |||||||||
50,000 | NYSE Euronext. | 1,254,092 | 1,500,500 | |||||||||
25,000 | Och-Ziff Capital Management Group LLC, Cl. A. | 250,727 | 232,000 | |||||||||
40,000 | Oritani Financial Corp. | 400,000 | 587,200 | |||||||||
90,000 | PNC Financial Services Group Inc. | 4,520,029 | 5,804,100 | |||||||||
380,000 | Popular Inc.† | 1,130,456 | 779,000 | |||||||||
500 | Raiffeisen Bank International AG | 28,874 | 17,672 | |||||||||
958 | Reinet Investments SCA†. | 188,972 | 17,760 | |||||||||
48,000 | Royal Bank of Canada | 2,548,864 | 2,786,400 | |||||||||
415,000 | SLM Corp. | 6,514,270 | 6,540,400 | |||||||||
165,000 | State Street Corp. | 7,541,187 | 7,507,500 | |||||||||
205,000 | Sterling Bancorp. | 3,037,170 | 1,965,950 | |||||||||
12,000 | SunTrust Banks Inc. | 251,737 | 290,040 | |||||||||
50,000 | T. Rowe Price Group Inc. | 1,388,039 | 3,265,000 | |||||||||
140,000 | TD Ameritrade Holding Corp. | 2,381,167 | 2,763,600 | |||||||||
950,000 | The Bank of New York Mellon Corp. | 27,350,785 | 22,923,500 | |||||||||
12,000 | The Charles Schwab Corp. | 216,320 | 172,440 | |||||||||
2,000 | The Dun & Bradstreet Corp. | 20,476 | 169,460 | |||||||||
17,500 | The Goldman Sachs Group Inc. | 2,220,293 | 2,176,475 | |||||||||
27,000 | The Travelers Companies Inc. | 1,032,136 | 1,598,400 | |||||||||
170,000 | Waddell & Reed Financial Inc., Cl. A. | 3,783,009 | 5,509,700 | |||||||||
500,000 | Wells Fargo & Co. | 15,174,227 | 17,070,000 | |||||||||
45,000 | WR Berkley Corp. | 1,615,690 | 1,625,400 | |||||||||
|
|
|
| |||||||||
233,745,985 | 252,924,457 | |||||||||||
|
|
|
| |||||||||
Food and Beverage — 12.6% | ||||||||||||
30,000 | Anheuser-Busch InBev NV. | 496,266 | 2,191,814 | |||||||||
270,000 | Beam Inc. | 10,770,209 | 15,813,900 | |||||||||
129,595 | Brown-Forman Corp., Cl. A | 7,502,332 | 10,556,809 | |||||||||
13,500 | Brown-Forman Corp., Cl. B | 825,919 | 1,125,765 | |||||||||
220,000 | Campbell Soup Co. | 6,862,318 | 7,447,000 | |||||||||
40,000 | Coca-Cola Amatil Ltd., ADR. | 246,845 | 1,038,000 | |||||||||
20,000 | Coca-Cola Enterprises Inc. | 450,000 | 572,000 | |||||||||
15,000 | Coca-Cola Femsa SAB de CV, ADR. | 539,060 | 1,588,650 | |||||||||
155,000 | Constellation Brands Inc., Cl. A† | 1,930,161 | 3,656,450 | |||||||||
136,389 | Danone | 6,897,164 | 9,513,523 | |||||||||
50,000 | Davide Campari - Milano SpA. | 370,971 | 340,429 | |||||||||
275,000 | Dean Foods Co.† | 4,486,626 | 3,330,250 | |||||||||
1,000 | Diageo plc | 20,487 | 24,032 | |||||||||
91,000 | Diageo plc, ADR. | 4,923,853 | 8,781,500 | |||||||||
103,000 | Dr Pepper Snapple Group Inc. | 2,277,323 | 4,141,630 |
Shares | Cost | Market Value | ||||||||||
10,000 | Feihe International Inc.† | $ | 94,460 | $ | 31,600 | |||||||
140,000 | Fomento Economico Mexicano SAB de CV, ADR . | 3,316,409 | 11,517,800 | |||||||||
270,000 | General Mills Inc. | 7,338,588 | 10,651,500 | |||||||||
3,150,000 | Grupo Bimbo SAB de CV, Cl. A. | 2,520,774 | 7,351,920 | |||||||||
115,000 | H.J. Heinz Co. | 4,066,762 | 6,158,250 | |||||||||
140,000 | Heineken NV | 6,437,001 | 7,781,512 | |||||||||
15,000 | Heineken NV, ADR. | 358,950 | 416,400 | |||||||||
245,000 | ITO EN Ltd. | 5,089,181 | 4,395,614 | |||||||||
20,600 | Kellogg Co. | 977,831 | 1,104,778 | |||||||||
1,035,000 | Kraft Foods Inc., Cl. A | 30,680,530 | 39,340,350 | |||||||||
24,000 | McCormick & Co. Inc., Non-Voting | 1,004,537 | 1,306,320 | |||||||||
102,000 | Nestlé SA | 2,185,232 | 6,418,079 | |||||||||
50,000 | Nestlé SA, ADR | 2,760,101 | 3,150,000 | |||||||||
130,000 | NISSIN FOODS HOLDINGS CO. LTD. | 4,309,367 | 4,861,061 | |||||||||
4,200,000 | Parmalat SpA | 11,859,744 | 10,491,738 | |||||||||
115,053 | PepsiCo Inc. | 7,381,586 | 7,633,767 | |||||||||
41,507 | Pernod-Ricard SA | 3,295,899 | 4,340,080 | |||||||||
10,000 | Post Holdings Inc.† | 263,033 | 329,300 | |||||||||
20,000 | Ralcorp Holdings Inc.† | 1,490,521 | 1,481,800 | |||||||||
50,841 | Remy Cointreau SA | 2,897,374 | 5,166,892 | |||||||||
20,000 | SABMiller plc | 733,959 | 802,783 | |||||||||
200,000 | Sapporo Holdings Ltd. | 1,204,920 | 739,398 | |||||||||
1,150,021 | Sara Lee Corp. | 18,451,295 | 24,759,952 | |||||||||
528,000 | The Coca-Cola Co. | 25,829,796 | 39,077,280 | |||||||||
27,000 | The Hershey Co. | 1,001,060 | 1,655,910 | |||||||||
74,343 | Tootsie Roll Industries Inc. | 1,672,249 | 1,703,206 | |||||||||
92,000 | Tyson Foods Inc., Cl. A | 1,010,004 | 1,761,800 | |||||||||
170,000 | Yakult Honsha Co. Ltd. | 4,613,282 | 5,843,301 | |||||||||
|
|
|
| |||||||||
201,443,979 | 280,394,143 | |||||||||||
|
|
|
| |||||||||
Health Care — 11.0% | ||||||||||||
120,000 | Abbott Laboratories | 5,696,718 | 7,354,800 | |||||||||
31,000 | Aetna Inc. | 1,085,139 | 1,554,960 | |||||||||
155,000 | Baxter International Inc. | 6,195,428 | 9,265,900 | |||||||||
156,000 | Becton, Dickinson and Co. | 11,121,420 | 12,113,400 | |||||||||
6,000 | Bio-Rad Laboratories Inc., Cl. A† | 625,829 | 622,140 | |||||||||
775,000 | Boston Scientific Corp.† | 6,870,636 | 4,634,500 | |||||||||
605,400 | Bristol-Myers Squibb Co. | 15,577,340 | 20,432,250 | |||||||||
310,000 | Covidien plc. | 11,737,716 | 16,950,800 | |||||||||
463,000 | Eli Lilly & Co. | 18,673,068 | 18,645,010 | |||||||||
14,076 | GlaxoSmithKline plc, ADR | 635,995 | 632,153 | |||||||||
22,000 | Henry Schein Inc.† | 566,365 | 1,664,960 | |||||||||
148,000 | Hospira Inc.† | 5,109,673 | 5,533,720 | |||||||||
350,000 | Johnson & Johnson. | 22,145,303 | 23,086,000 | |||||||||
16,000 | Laboratory Corp. of America Holdings† | 1,128,478 | 1,464,640 | |||||||||
124,000 | Mead Johnson Nutrition Co. | 5,745,112 | 10,227,520 |
See accompanying notes to financial statements.
7
The Gabelli Equity Income Fund
Schedule of Investments (Continued) — March 31, 2012 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS (Continued) | ||||||||||||
Health Care (Continued) | ||||||||||||
23,000 | Medco Health Solutions Inc.† | $ | 588,372 | $ | 1,616,900 | |||||||
30,000 | Medtronic Inc. | 1,005,816 | 1,175,700 | |||||||||
510,000 | Merck & Co. Inc. | 15,703,221 | 19,584,000 | |||||||||
5,000 | Nobel Biocare Holding AG† | 139,480 | 62,535 | |||||||||
278,000 | Novartis AG, ADR | 15,238,856 | 15,403,980 | |||||||||
141,000 | Patterson Companies Inc. | 4,906,745 | 4,709,400 | |||||||||
1,300,000 | Pfizer Inc. | 26,168,593 | 29,458,000 | |||||||||
68,000 | Roche Holding AG, ADR | 2,632,469 | 2,967,520 | |||||||||
40,000 | Roche Holding AG, Genusschein | 5,894,355 | 6,961,338 | |||||||||
20,000 | Smith & Nephew plc | 220,594 | 202,655 | |||||||||
54,000 | St. Jude Medical Inc. | 2,178,480 | 2,392,740 | |||||||||
1,000,000 | Tenet Healthcare Corp.† | 6,863,097 | 5,310,000 | |||||||||
240,000 | UnitedHealth Group Inc. | 9,652,496 | 14,145,600 | |||||||||
10,000 | Watson Pharmaceuticals Inc.† | 579,322 | 670,600 | |||||||||
18,000 | William Demant Holding A/S† | 880,509 | 1,677,570 | |||||||||
60,000 | Wright Medical Group Inc.† | 949,266 | 1,159,200 | |||||||||
54,000 | Zimmer Holdings Inc. | 3,182,725 | 3,471,120 | |||||||||
|
|
|
| |||||||||
209,698,616 | 245,151,611 | |||||||||||
|
|
|
| |||||||||
Hotels and Gaming — 1.4% | ||||||||||||
115,000 | International Game Technology | 2,147,759 | 1,930,850 | |||||||||
2,004,352 | Ladbrokes plc. | 10,531,607 | 5,132,705 | |||||||||
291,000 | Las Vegas Sands Corp. | 4,392,731 | 16,752,870 | |||||||||
100,000 | MGM Resorts International†. . | 953,235 | 1,362,000 | |||||||||
80,000 | Starwood Hotels & Resorts Worldwide Inc. | 1,673,543 | 4,512,800 | |||||||||
15,000 | Wynn Resorts Ltd. | 579,316 | 1,873,200 | |||||||||
|
|
|
| |||||||||
20,278,191 | 31,564,425 | |||||||||||
|
|
|
| |||||||||
Machinery — 1.3% | ||||||||||||
6,000 | Caterpillar Inc. | 35,181 | 639,120 | |||||||||
319,000 | Deere & Co. | 15,880,141 | 25,807,100 | |||||||||
115,000 | Xylem Inc. | 3,208,885 | 3,191,250 | |||||||||
|
|
|
| |||||||||
19,124,207 | 29,637,470 | |||||||||||
|
|
|
| |||||||||
Metals and Mining — 1.7% | ||||||||||||
750,000 | Alcoa Inc. | 12,057,939 | 7,515,000 | |||||||||
10,000 | Carpenter Technology Corp. | 327,255 | 522,300 | |||||||||
258,000 | Freeport-McMoRan Copper & Gold Inc. | 3,498,831 | 9,814,320 | |||||||||
333,000 | Newmont Mining Corp. | 15,746,869 | 17,072,910 | |||||||||
55,000 | Peabody Energy Corp. | 1,999,286 | 1,592,800 | |||||||||
2,000 | Royal Gold Inc. | 88,166 | 130,440 | |||||||||
6,615 | Teck Resources Ltd., Cl. B. | 533,053 | 236,162 | |||||||||
|
|
|
| |||||||||
34,251,399 | 36,883,932 | |||||||||||
|
|
|
|
Shares | Cost | Market Value | ||||||||||
Paper and Forest Products — 0.2% |
| |||||||||||
105,000 | International Paper Co. | $ | 3,334,075 | $ | 3,685,500 | |||||||
Publishing — 0.1% | ||||||||||||
6,016 | News Corp., Cl. B | 70,881 | 120,200 | |||||||||
30,000 | The McGraw-Hill Companies Inc. | 1,225,693 | 1,454,100 | |||||||||
400 | The Washington Post Co., Cl. B. | 231,390 | 149,428 | |||||||||
2,700 | Value Line Inc. | 38,523 | 33,156 | |||||||||
|
|
|
| |||||||||
1,566,487 | 1,756,884 | |||||||||||
|
|
|
| |||||||||
Real Estate — 0.0% | ||||||||||||
10,000 | Griffin Land & Nurseries Inc. | 224,290 | 264,100 | |||||||||
|
|
|
| |||||||||
Real Estate Investment Trusts — 0.4% | ||||||||||||
9,000 | Rayonier Inc. | 264,580 | 396,810 | |||||||||
420,000 | Weyerhaeuser Co. | 10,328,621 | 9,206,400 | |||||||||
|
|
|
| |||||||||
10,593,201 | 9,603,210 | |||||||||||
|
|
|
| |||||||||
Retail — 6.4% | ||||||||||||
40,266 | Copart Inc.† | 696,640 | 1,049,735 | |||||||||
225,000 | Costco Wholesale Corp. | 11,676,234 | 20,430,000 | |||||||||
585,000 | CVS Caremark Corp. | 20,812,484 | 26,208,000 | |||||||||
106,400 | Ingles Markets Inc., Cl. A. | 1,952,378 | 1,876,896 | |||||||||
159,000 | J.C. Penney Co. Inc. | 5,216,431 | 5,633,370 | |||||||||
500,000 | Macy’s Inc. | 7,988,643 | 19,865,000 | |||||||||
200,000 | Safeway Inc. | 4,259,793 | 4,042,000 | |||||||||
500 | Sears Holdings Corp.† | 39,103 | 33,125 | |||||||||
235,000 | SUPERVALU Inc. | 2,878,770 | 1,341,850 | |||||||||
520,000 | The Home Depot Inc. | 14,691,794 | 26,161,200 | |||||||||
93,000 | Tractor Supply Co. | 1,638,650 | 8,422,080 | |||||||||
125,000 | Walgreen Co. | 3,951,166 | 4,186,250 | |||||||||
234,000 | Wal-Mart Stores Inc. | 11,089,210 | 14,320,800 | |||||||||
10,000 | Weis Markets Inc. | 300,480 | 436,000 | |||||||||
100,000 | Whole Foods Market Inc. | 3,392,986 | 8,320,000 | |||||||||
|
|
|
| |||||||||
90,584,762 | 142,326,306 | |||||||||||
|
|
|
| |||||||||
Specialty Chemicals — 1.9% | ||||||||||||
11,000 | Airgas Inc. | 688,506 | 978,670 | |||||||||
44,000 | Albemarle Corp. | 576,219 | 2,812,480 | |||||||||
49,000 | Ashland Inc. | 1,903,340 | 2,991,940 | |||||||||
155,000 | E. I. du Pont de Nemours and Co. | 7,226,660 | 8,199,500 | |||||||||
275,000 | Ferro Corp.† | 2,880,064 | 1,633,500 | |||||||||
4,000 | FMC Corp. | 186,076 | 423,440 | |||||||||
52,500 | H.B. Fuller Co. | 1,084,497 | 1,723,575 | |||||||||
230,000 | International Flavors & Fragrances Inc. | 10,761,205 | 13,478,000 | |||||||||
3,500 | NewMarket Corp. | 13,508 | 655,900 | |||||||||
75,000 | Omnova Solutions Inc.† | 485,875 | 506,250 | |||||||||
5,000 | Quaker Chemical Corp. | 90,412 | 197,250 | |||||||||
3,000 | Rockwood Holdings Inc.† | 131,817 | 156,450 | |||||||||
40,000 | Sensient Technologies Corp. | 822,757 | 1,520,000 |
See accompanying notes to financial statements.
8
The Gabelli Equity Income Fund
Schedule of Investments (Continued) — March 31, 2012 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS (Continued) |
| |||||||||||
Specialty Chemicals (Continued) |
| |||||||||||
205,000 | The Dow Chemical Co. | $ | 7,366,124 | $ | 7,101,200 | |||||||
4,000 | Zep Inc. | 17,026 | 57,600 | |||||||||
|
|
|
| |||||||||
34,234,086 | 42,435,755 | |||||||||||
|
|
|
| |||||||||
Telecommunications — 3.6% |
| |||||||||||
400,000 | AT&T Inc. | 10,743,119 | 12,492,000 | |||||||||
525,000 | BCE Inc. | 12,011,920 | 21,031,500 | |||||||||
49,000 | Belgacom SA | 1,685,172 | 1,575,301 | |||||||||
4,495 | Bell Aliant Inc.(c) | 117,429 | 123,027 | |||||||||
50,000 | BT Group plc. | 204,914 | 181,062 | |||||||||
16,000 | BT Group plc, ADR | 469,025 | 578,560 | |||||||||
570,000 | Cincinnati Bell Inc.† | 2,113,891 | 2,291,400 | |||||||||
465,000 | Deutsche Telekom AG, ADR | 7,518,741 | 5,603,250 | |||||||||
19,000 | France Telecom SA, ADR | 491,889 | 282,150 | |||||||||
44,000 | Loral Space & Communications Inc.† | 3,000,327 | 3,502,400 | |||||||||
2,000,000 | Sprint Nextel Corp.† | 9,611,438 | 5,700,000 | |||||||||
27,585 | Telefonica SA, ADR. | 161,475 | 452,670 | |||||||||
355,000 | Telekom Austria AG | 5,365,738 | 4,134,304 | |||||||||
392,943 | Telephone & Data Systems Inc. | 11,855,740 | 9,096,624 | |||||||||
12,000 | TELUS Corp. | 185,454 | 696,336 | |||||||||
15,000 | TELUS Corp., Non-Voting, Cl. A. | 687,084 | 852,600 | |||||||||
305,000 | Verizon Communications Inc. | 10,282,392 | 11,660,150 | |||||||||
|
|
|
| |||||||||
76,505,748 | 80,253,334 | |||||||||||
|
|
|
| |||||||||
Transportation — 0.3% |
| |||||||||||
171,000 | GATX Corp | 6,081,094 | 6,891,300 | |||||||||
Wireless Communications — 0.7% |
| |||||||||||
140,000 | Cable & Wireless Communications plc | 106,768 | 72,306 | |||||||||
140,000 | Cable & Wireless Worldwide plc | 166,997 | 76,136 | |||||||||
36,000 | Millicom International Cellular SA, SDR | 2,802,200 | 4,081,139 | |||||||||
2,400 | NTT DoCoMo Inc. | 3,485,733 | 3,984,052 | |||||||||
80,000 | Turkcell Iletisim Hizmetleri A/S, ADR† | 1,272,518 | 1,008,000 | |||||||||
25,000 | United States Cellular Corp.† | 1,126,227 | 1,023,250 | |||||||||
230,000 | Vodafone Group plc, ADR | 5,904,062 | 6,364,100 | |||||||||
|
|
|
| |||||||||
14,864,505 | 16,608,983 | |||||||||||
|
|
|
| |||||||||
TOTAL COMMON STOCKS. | 1,617,388,024 | 2,123,607,023 | ||||||||||
PREFERRED STOCKS — 0.1% |
| |||||||||||
Building and Construction — 0.0% |
| |||||||||||
22 | Orchard Supply Hardware Stores Corp., Zero Coupon, Pfd., Ser.A | 127 | 46 | |||||||||
|
|
|
|
Shares | Cost | Market Value | ||||||||||
Communications Equipment — 0.0% |
| |||||||||||
1,100 | Lucent Technologies Capital Trust I, 7.750% Cv. Pfd | $ | 759,000 | $ | 893,750 | |||||||
|
|
|
| |||||||||
Telecommunications — 0.1% |
| |||||||||||
33,000 | Cincinnati Bell Inc., 6.750% | |||||||||||
Cv. Pfd., Ser. B | 807,518 | 1,370,160 | ||||||||||
|
|
|
| |||||||||
TOTAL PREFERRED STOCKS | 1,566,645 | 2,263,956 | ||||||||||
|
|
|
| |||||||||
RIGHTS — 0.0% | ||||||||||||
Health Care — 0.0% | ||||||||||||
424,000 | Sanofi, CVR , expire 12/31/20† | 889,779 | 572,400 | |||||||||
|
|
|
| |||||||||
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 | ||||||||||
|
|
|
| |||||||||
Principal Amount | ||||||||||||
CORPORATE BONDS — 0.4% |
| |||||||||||
Computer Hardware — 0.1% | ||||||||||||
$2,000,000 | SanDisk Corp., Cv., 1.000%, 05/15/13 | 1,811,246 | 2,005,000 | |||||||||
|
|
|
| |||||||||
Diversified Industrial — 0.3% |
| |||||||||||
6,500,000 | Griffon Corp., Sub. Deb. Cv., 4.000%, 01/15/17(c) | 6,467,912 | 6,630,000 | |||||||||
|
|
|
| |||||||||
Energy and Utilities: Electric — 0.0% |
| |||||||||||
100,000 | Texas Competitive Electric Holdings Co. LLC, Ser. B, 10.250%, 11/01/15 | 74,082 | 22,250 | |||||||||
|
|
|
| |||||||||
TOTAL CORPORATE BONDS | 8,353,240 | 8,657,250 | ||||||||||
|
|
|
| |||||||||
U.S. GOVERNMENT OBLIGATIONS — 3.9% |
| |||||||||||
86,200,000 | U.S. Treasury Bills, 0.010% to 0.120%††, 04/12/12 to 08/23/12 | 86,184,956 | 86,183,645 | |||||||||
|
|
|
|
See accompanying notes to financial statements.
9
The Gabelli Equity Income Fund
Schedule of Investments (Continued) — March 31, 2012 (Unaudited)
Cost | Market Value | |||||||||
TOTAL INVESTMENTS — 99.8% | $ | 1,714,382,644 | $ | 2,221,284,274 | ||||||
|
| |||||||||
Other Assets and Liabilities (Net) — 0.2% |
| 4,764,778 | ||||||||
|
| |||||||||
NET ASSETS — 100.0% |
| $ | 2,226,049,052 | |||||||
|
|
(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, 2012, the fair valued securities had no market value. |
(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, 2012, the market value of Rule 144A securities amounted to $6,753,027 or 0.30% of net assets. |
† | Non-income producing security. |
†† | Represents annualized yield at date of purchase. |
ADR | American Depositary Receipt |
Cv. | Convertible |
CVR | Contingent Value Right |
SDR | Swedish Depositary Receipt |
See accompanying notes to financial statements.
10
The Gabelli Equity Income Fund
Statement of Assets and Liabilities March 31,
2012 (Unaudited)
Assets: | ||||
Investments, at value (cost $1,714,382,644) | $ | 2,221,284,274 | ||
Receivable for Fund shares sold | 5,811,429 | |||
Receivable for investments sold | 866,826 | |||
Dividends and interest receivable | 5,365,994 | |||
Prepaid expenses | 81,549 | |||
|
| |||
Total Assets | 2,233,410,072 | |||
|
| |||
Liabilities: | ||||
Payable to custodian | 769 | |||
Payable for Fund shares redeemed | 3,698,057 | |||
Payable for investments purchased | 562,627 | |||
Payable for investment advisory fees | 1,919,802 | |||
Payable for distribution fees | 516,606 | |||
Payable for accounting fees | 7,500 | |||
Payable for shareholder services fees | 394,912 | |||
Other accrued expenses | 260,747 | |||
|
| |||
Total Liabilities | 7,361,020 | |||
|
| |||
Net Assets (applicable to 100,627,153 shares outstanding) | $ | 2,226,049,052 | ||
|
| |||
Net Assets Consist of: |
| |||
Paid-in capital | $ | 1,828,774,690 | ||
Accumulated distributions in excess of net investment income | (9,518,133 | ) | ||
Accumulated net realized loss on investments, swap contracts, and foreign currency transactions | (100,118,150 | ) | ||
Net unrealized appreciation on investments | 506,901,630 | |||
Net unrealized appreciation on foreign currency translations | 9,015 | |||
|
| |||
Net Assets | $ | 2,226,049,052 | ||
|
| |||
Shares of Capital Stock, each at $0.001 par value: |
| |||
Class AAA: | ||||
Net Asset Value, offering, and redemption price per share ($1,657,845,888 ÷ 74,688,041 shares outstanding; 150,000,000 shares authorized) | $22.20 | |||
|
| |||
Class A: | ||||
Net Asset Value and redemption price per share ($154,754,647 ÷ 6,991,840 shares outstanding; 50,000,000 shares authorized) | $22.13 | |||
|
| |||
Maximum offering price per share (NAV ÷ 0.9425, based on maximum sales charge of 5.75% of the offering price) | $23.48 | |||
|
| |||
Class B: | ||||
Net Asset Value and offering price per share ($67,021 ÷ 3,233 shares outstanding; 50,000,000 shares authorized) | $20.73 | (a) | ||
|
| |||
Class C: | ||||
Net Asset Value and offering price per share ($147,173,943 ÷ 7,094,049 shares outstanding; 50,000,000 shares authorized) | $20.75 | (a) | ||
|
| |||
Class I: | ||||
Net Asset Value, offering, and redemption price per share ($266,207,553 ÷ 11,849,990 shares outstanding; 50,000,000 shares authorized) | $22.46 | |||
|
|
(a) | Redemption price varies based on the length of time held. |
Statement of Operations
For the Six Months Ended March 31, 2012 (Unaudited)
Investment Income: |
| |||
Dividends (net of foreign withholding taxes of $448,616) | $ | 22,769,035 | ||
Interest | 248,263 | |||
|
| |||
Total Investment Income | 23,017,298 | |||
|
| |||
Expenses: |
| |||
Investment advisory fees | 10,204,039 | |||
Distribution fees – Class AAA | 2,023,972 | |||
Distribution fees – Class A | 174,392 | |||
Distribution fees – Class B | 348 | |||
Distribution fees – Class C | 614,392 | |||
Shareholder services fees | 1,058,700 | |||
Shareholder communication expenses | 238,718 | |||
Custodian fees | 125,362 | |||
Registration expenses. | 58,199 | |||
Directors’ fees. | 47,442 | |||
Legal and audit fees | 30,628 | |||
Accounting fees | 22,500 | |||
Miscellaneous expenses. | 61,320 | |||
|
| |||
Total Expenses | 14,660,012 | |||
|
| |||
Net Investment Income | 8,357,286 | |||
|
| |||
Net Realized and Unrealized Gain/(Loss) on |
| |||
Investments, Swap Contracts, and Foreign | ||||
Currency: | ||||
Net realized loss on investments | (8,573,304 | ) | ||
Net realized gain on swap contracts | 38,419 | |||
Net realized loss on foreign currency transactions | (23,069 | ) | ||
|
| |||
Net realized loss on investments, swap contracts, and foreign currency transactions | (8,557,954 | ) | ||
|
| |||
Net change in unrealized appreciation/ depreciation: | ||||
on investments | 376,772,428 | |||
on swap contracts | 9,278 | |||
on foreign currency translations | 21,194 | |||
|
| |||
Net change in unrealized appreciation/ depreciation on investments, swap contracts, and foreign currency translations | 376,802,900 | |||
|
| |||
Net Realized and Unrealized Gain/(Loss) on Investments, Swap Contracts, and Foreign Currency | 368,244,946 | |||
|
| |||
Net Increase in Net Assets Resulting from Operations | $ | 376,602,232 | ||
|
|
See accompanying notes to financial statements.
11
The Gabelli Equity Income Fund
Statement of Changes in Net Assets
Six Months Ended March 31, 2012 (Unaudited) | Year Ended September 30, 2011 | |||||||
Operations: | ||||||||
Net investment income | $ | 8,357,286 | $ | 14,097,997 | ||||
Net realized gain/(loss) on investments, swap contracts, and foreign currency transactions | (8,557,954 | ) | 9,388,852 | |||||
Net change in unrealized appreciation/depreciation on investments, swap contracts, and foreign currency translations | 376,802,900 | (43,001,186 | ) | |||||
|
|
|
| |||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 376,602,232 | (19,514,337 | ) | |||||
|
|
|
| |||||
Distributions to Shareholders: | ||||||||
Net investment income | ||||||||
Class AAA | (13,906,432 | ) | (12,220,093 | ) | ||||
Class A | (1,215,875 | ) | (906,966 | ) | ||||
Class B | (644 | ) | — | |||||
Class C | (1,149,184 | ) | (67,204 | ) | ||||
Class I | (1,454,728 | ) | (766,453 | ) | ||||
|
|
|
| |||||
(17,726,863 | ) | (13,960,716 | ) | |||||
|
|
|
| |||||
Return of capital | ||||||||
Class AAA | — | (15,178,601 | ) | |||||
Class A | — | (1,092,789 | ) | |||||
Class B | — | (2,286 | ) | |||||
Class C | — | (1,412,716 | ) | |||||
Class I | — | (477,241 | ) | |||||
|
|
|
| |||||
— | (18,163,633 | ) | ||||||
|
|
|
| |||||
Total Distributions to Shareholders. | (17,726,863 | ) | (32,124,349 | ) | ||||
|
|
|
| |||||
Capital Share Transactions: | ||||||||
Class AAA | (94,701,355 | ) | 162,555,317 | |||||
Class A | 15,098,745 | 54,690,034 | ||||||
Class B | (10,474 | ) | (86,297 | ) | ||||
Class C | 28,210,906 | 62,614,299 | ||||||
Class I | 127,415,320 | 79,934,807 | ||||||
|
|
|
| |||||
Net Increase in Net Assets from Capital Share Transactions | 76,013,142 | 359,708,160 | ||||||
|
|
|
| |||||
Redemption Fees | 2,499 | 30,363 | ||||||
|
|
|
| |||||
Net Increase in Net Assets | 434,891,010 | 308,099,837 | ||||||
Net Assets: | ||||||||
Beginning of period | 1,791,158,042 | 1,483,058,205 | ||||||
|
|
|
| |||||
End of period (including undistributed net investment income of $0 and $0, respectively) | $ | 2,226,049,052 | $ | 1,791,158,042 | ||||
|
|
|
|
See accompanying notes to financial statements.
12
The Gabelli Equity Income Fund
Financial Highlights
Selected data for a share of capital stock outstanding throughout each period:
Income (Loss) from Investment Operations | Distributions | Ratios to Average Net Assets/ Supplemental Data | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Period Ended September 30 | Net Asset Value, Beginning of Period | Net Investment Income/ (Loss)(a) | Net Realized and Unrealized Gain (Loss) on Investments | Total from Investment Operations | Net Investment Income | Net Realized Gain on Investments | Return of Capital | Total Distributions | Redemption Fees (a)(b) | Net Asset Value, End of Period | Total Return† | Net Assets End of Period (in 000’s) | Net Investment Income/ (loss) | Operating Expenses†† | Portfolio Turnover Rate††† | |||||||||||||||||||||||||||||||||||||||||||||
Class AAA |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2012(c) | $ | 18.52 | $ | 0.09 | $ | 3.77 | $ | 3.86 | $ | (0.18 | ) | — | — | $ | (0.18 | ) | $ | 0.00 | $ | 22.20 | 20.91 | % | $ | 1,657,846 | 0.83 | %(d) | 1.41 | %(d) | 2 | % | ||||||||||||||||||||||||||||||
2011 | 18.65 | 0.16 | 0.07 | 0.23 | (0.16 | ) | — | $ | (0.20 | ) | (0.36 | ) | 0.00 | 18.52 | 1.05 | 1,464,658 | 0.79 | 1.41 | 14 | |||||||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||||||||
Class A |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2012(c) | $ | 18.47 | $ | 0.09 | $ | 3.75 | $ | 3.84 | $ | (0.18 | ) | — | — | $ | (0.18 | ) | $ | 0.00 | $ | 22.13 | 20.85 | % | $ | 154,755 | 0.85 | %(d) | 1.41 | %(d) | 2 | % | ||||||||||||||||||||||||||||||
2011 | 18.60 | 0.17 | 0.06 | 0.23 | (0.16 | ) | — | $ | (0.20 | ) | (0.36 | ) | 0.00 | 18.47 | 1.06 | 115,210 | 0.82 | 1.41 | 14 | |||||||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||||||||
Class B |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2012(c) | $ | 17.37 | $ | 0.01 | $ | 3.53 | $ | 3.54 | $ | (0.18 | ) | — | — | $ | (0.18 | ) | $ | 0.00 | $ | 20.73 | 20.45 | % | $ | 67 | 0.07 | %(d) | 2.16 | %(d) | 2 | % | ||||||||||||||||||||||||||||||
2011 | 17.65 | (0.01 | ) | 0.09 | 0.08 | — | — | $ | (0.36 | ) | (0.36 | ) | 0.00 | 17.37 | 0.26 | �� | 65 | (0.03 | ) | 2.16 | 14 | |||||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||||||||
Class C |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2012(c) | $ | 17.38 | $ | 0.01 | $ | 3.54 | $ | 3.55 | $ | (0.18 | ) | — | — | $ | (0.18 | ) | $ | 0.00 | $ | 20.75 | 20.49 | % | $ | 147,174 | 0.11 | %(d) | 2.16 | %(d) | 2 | % | ||||||||||||||||||||||||||||||
2011 | 17.65 | 0.02 | 0.07 | 0.09 | (0.02 | ) | — | $ | (0.34 | ) | (0.36 | ) | 0.00 | 17.38 | 0.31 | 98,296 | 0.09 | 2.16 | 14 | |||||||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||||||||
Class I |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2012(c) | $ | 18.71 | $ | 0.13 | $ | 3.80 | $ | 3.93 | $ | (0.18 | ) | — | — | $ | (0.18 | ) | $ | 0.00 | $ | 22.46 | 21.07 | % | $ | 266,207 | 1.20 | %(d) | 1.16 | %(d) | 2 | % | ||||||||||||||||||||||||||||||
2011 | 18.80 | 0.23 | 0.04 | 0.27 | (0.22 | ) | — | $ | (0.14 | ) | (0.36 | ) | 0.00 | 18.71 | 1.26 | 112,929 | 1.10 | 1.16 | 14 | |||||||||||||||||||||||||||||||||||||||||
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”). For the six months ended March 31, 2012 there was no Custodian Fee Credits. For the years ended September 30, 2011, 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 year ended September 30, 2007 would have been 20%. |
(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, 2012, 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)
1. Organization. The Gabelli Equity Income Fund, a series of the Gabelli Equity Series Funds, Inc. (the “Corporation”), was incorporated on July 25, 1991 in Maryland. 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.
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 (Unaudited) (Continued)
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 the 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, 2012 is as follows:
Valuation Inputs | ||||||||||||||||
Level 1 Quoted Prices | Level 2 Other Significant Observable Inputs | Level 3 Significant Unobservable Inputs | Total Market Value at 3/31/12 | |||||||||||||
INVESTMENTS IN SECURITIES: | ||||||||||||||||
ASSETS (Market Value): | ||||||||||||||||
Common Stocks: | ||||||||||||||||
Broadcasting | $ | 15,420,320 | — | $ | 0 | $ | 15,420,320 | |||||||||
Energy and Utilities: Electric | 16,281,295 | — | 0 | 16,281,295 | ||||||||||||
Other Industries (a) | 2,091,905,408 | — | — | 2,091,905,408 | ||||||||||||
Total Common Stocks | 2,123,607,023 | — | 0 | 2,123,607,023 | ||||||||||||
Preferred Stocks(a) | 2,263,956 | — | — | 2,263,956 | ||||||||||||
Rights(a) | 572,400 | — | — | 572,400 | ||||||||||||
Warrants(a) | — | — | 0 | 0 | ||||||||||||
Corporate Bonds(a) | — | $ | 8,657,250 | — | 8,657,250 | |||||||||||
U.S. Government Obligations | — | 86,183,645 | — | 86,183,645 | ||||||||||||
TOTAL INVESTMENTS IN SECURITIES – ASSETS | $ | 2,126,443,379 | $ | 94,840,895 | $ | 0 | $ | 2,221,284,274 |
(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, 2012. The Fund’s policy is to recognize transfers among Levels as of the beginning of the reporting period.
In May 2011, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No. 2011-04 “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards (“IFRS”).” ASU 2011-04 includes common requirements for measurement of and disclosure about fair value between U.S. GAAP and IFRS. ASU 2011-04 will require reporting entities to disclose the following information for fair value measurements categorized within Level 3 of the fair value hierarchy: quantitative information about the unobservable inputs used in the fair value measurement, the valuation processes used by the reporting entity, and a narrative description of the sensitivity of the fair value measurement to changes in unobservable inputs and the interrelationships between those unobservable inputs. In addition, ASU 2011-04 will require reporting entities to make disclosures about amounts and reasons for all transfers into and out of Level 1 and Level 2 fair value measurements. The new and revised disclosures are effective for interim and annual reporting periods beginning after December 15, 2011. At this time, management is evaluating the implications of ASU 2011-04 and its impact on the financial statements.
15
The Gabelli Equity Income Fund
Notes to Financial Statements (Unaudited) (Continued)
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, 2012, if any, are not accounted for as hedging instruments under GAAP and are disclosed in the Schedule of Investments together with the related counterparty.
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 received or paid on swaps, is reported as unrealized gain or loss in the Statement of Operations. A realized gain or loss is recorded upon payment or receipt of a periodic payment or termination of swap agreements. At March 31, 2012, the Fund held no investments in equity contract for difference swap agreements.
The Fund’s volume of equity contract for difference swap agreements which were held through November 3, 2011 had an average monthly notional amount while outstanding of approximately $209,634.
For the six months ended March 31, 2012, the effect of equity contract for difference swap agreements can be found in the Statement of Operations under Net Realized and Unrealized Gain/(Loss) on Investments, Swap Contracts, and Foreign Currency, Net realized gain on swap contracts and Net change in unrealized appreciation/depreciation on swap contracts.
16
The Gabelli Equity Income Fund
Notes to Financial Statements (Unaudited) (Continued)
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 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 those of securities of comparable U.S. issuers.
Foreign Taxes. The Fund may be subject to foreign taxes on income, gains on investments, or currency repatriation, a portion of which may be recoverable. The Fund will accrue such taxes and recoveries as applicable, based upon its current interpretation of tax rules and regulations that exist in the markets in which it invests.
Restricted and Illiquid Securities. The Fund may invest up to 15% of its net assets in securities for which the markets are illiquid. Illiquid securities include securities the disposition of which is subject to substantial legal or contractual restrictions. The sale of illiquid securities often requires more time and results in higher brokerage charges or dealer discounts and other selling expenses than does the sale of securities eligible for trading on national securities exchanges or in the over-the-counter markets. Restricted securities may sell at a price lower than similar securities that are not subject to restrictions on resale. Securities freely saleable among qualified institutional investors under special rules adopted by the SEC may be treated as liquid if they satisfy liquidity standards established by the Board. The continued liquidity of such securities is not as well assured as that of publicly traded securities, and accordingly the Board will monitor their liquidity. The Fund held no illiquid securities at March 31, 2012. For the restricted securities the Fund held as of March 31, 2012, 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.
17
The Gabelli Equity Income Fund
Notes to Financial Statements (Unaudited) (Continued)
In calculating the NAV per share of each class, investment income, realized and unrealized gains and losses, redemption fees, and expenses other than class specific expenses are allocated daily to each class of shares based upon the proportion of net assets of each class at the beginning of each day. Distribution expenses are borne solely by the class incurring the expense.
Custodian Fee Credits and Interest Expense. When cash balances are maintained in the custody account, the Fund receives credits which are used to offset custodian fees. The gross expenses paid under the custody arrangement are included in custodian fees in the Statement of Operations with the corresponding expense offset, if any, shown as “Custodian fee credits.” When cash balances are overdrawn, the Fund is charged an overdraft fee equal to 2.00% above the federal funds rate on outstanding balances. This amount, if any, would be included in 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. 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, 2011 was as follows:
Distributions paid from: | ||||
Ordinary income | $ | 13,960,716 | ||
Return of capital | 18,163,633 | |||
|
| |||
Total distributions paid | $ | 32,124,349 | ||
|
|
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%. Distributions sourced from paid-in capital should not be considered as dividend yield or the total return from an investment in the Fund. 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.
18
The Gabelli Equity Income Fund
Notes to Financial Statements (Unaudited) (Continued)
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, 2011, the Fund had net capital loss carryforwards for federal income tax purposes which are available to reduce future required distributions of net capital gains to shareholders. Under the Regulated Investment Company Modernization Act of 2010, the Fund will be permitted to carry forward for an unlimited period capital losses incurred in years beginning after December 22, 2010. In addition, these losses must be utilized prior to the losses incurred in pre-enactment taxable years. As a result of the rule, pre-enactment capital loss carry forwards may have an increased likelihood of expiring unused. Additionally, post enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law.
Capital Loss Carryforward Available through 2017. | $ | 1,899,612 | ||
Capital Loss Carryforward Available through 2018. | 72,264,892 | |||
Capital Loss Carryforward Available through 2019. | 8,511,055 | |||
|
| |||
Total Capital Loss Carryforwards | $ | 82,675,559 | ||
|
|
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, 2011, the Fund deferred currency losses of $507,059.
The following summarizes the tax cost of investments and the related net unrealized appreciation at March 31, 2012:
Cost | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Appreciation | |||||||||||||
Investments | $ | 1,722,785,676 | $ | 579,865,959 | $ | (81,367,361 | ) | $ | 498,498,598 |
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, 2012, the Fund did not incur any income tax, interest, or penalties. As of March 31, 2012, 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, 2008 through September 30, 2011 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.
19
The Gabelli Equity Income Fund
Notes to Financial Statements (Unaudited) (Continued)
The Corporation pays each Director who is not considered an affiliated person an annual retainer of $18,000 plus $2,000 for each Board meeting attended, and they are reimbursed for any out of pocket expenses incurred in attending meetings. All Board committee members receive $1,000 per meeting attended. The Chairman of the Audit Committee receives a $3,000 annual fee, and the Lead Director receives an annual fee of $2,000. A Director may receive a single meeting fee, allocated among the participating funds, for attending 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. Under the Class AAA, Class A, Class B, and Class C Share Plans, payments are authorized to G.distributors, LLC (the “Distributor”), an affiliate of the Fund 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 during the six months ended March 31, 2012, other than short-term securities and U.S. Government obligations, aggregated $129,372,065 and $38,586,734 respectively.
6. Transactions with Affiliates. During the six months ended March 31, 2012, the Fund paid brokerage commissions on security trades of $138,157 to Gabelli & Company, Inc. (“Gabelli & Co.”), an affiliate of the Fund. Additionally the Distributor and its predecessor distributor, Gabelli & Co., retained a total of $86,889 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. During the six months ended March 31, 2012, 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 rate 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, 2012, 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 the Distributor, through selected broker/dealers, or the transfer agent. Class I Shares are offered without a sales charge, solely to certain institutions, directly through the Distributor or brokers that have entered into selling agreements specifically with respect to Class I Shares. 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
20
The Gabelli Equity Income Fund
Notes to Financial Statements (Unaudited) (Continued)
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 the Distributor.
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, 2012 and the year ended September 30, 2011 amounted to $2,499 and $30,363, respectively.
Transactions in shares of capital stock were as follows:
Six Months Ended March 31, 2012 (Unaudited) | Year Ended September 30, 2011 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Class AAA | ||||||||||||||||
Shares sold | 8,921,358 | $ | 185,646,422 | 24,293,210 | $ | 502,845,816 | ||||||||||
Shares issued upon reinvestment of distributions | 625,650 | 13,070,663 | 1,257,617 | 25,912,938 | ||||||||||||
Shares redeemed | (13,952,266 | ) | (293,418,440 | ) | (17,823,910 | ) | (366,203,437 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase/(decrease) | (4,405,258 | ) | $ | (94,701,355 | ) | 7,726,917 | $ | 162,555,317 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Class A | ||||||||||||||||
Shares sold | 2,124,634 | $ | 43,690,618 | 5,305,477 | $ | 109,653,700 | ||||||||||
Shares issued upon reinvestment of distributions | 48,587 | 1,013,524 | 81,765 | 1,687,500 | ||||||||||||
Shares redeemed | (1,420,759 | ) | (29,605,397 | ) | (2,767,847 | ) | (56,651,166 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase | 752,462 | $ | 15,098,745 | 2,619,395 | $ | 54,690,034 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Class B | ||||||||||||||||
Shares sold | 608 | $ | 11,530 | 532 | $ | 10,753 | ||||||||||
Shares issued upon reinvestment of distributions | 30 | 577 | 110 | 2,139 | ||||||||||||
Shares redeemed | (1,168 | ) | (22,581 | ) | (4,890 | ) | (99,189 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net decrease | (530 | ) | $ | (10,474 | ) | (4,248 | ) | $ | (86,297 | ) | ||||||
|
|
|
|
|
|
|
| |||||||||
Class C | ||||||||||||||||
Shares sold | 1,812,628 | $ | 35,467,695 | 3,689,978 | $ | 72,205,617 | ||||||||||
Shares issued upon reinvestment of distributions | 41,253 | 809,888 | 51,863 | 1,007,514 | ||||||||||||
Shares redeemed | (414,874 | ) | (8,066,677 | ) | (546,786 | ) | (10,598,832 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase | 1,439,007 | $ | 28,210,906 | 3,195,055 | $ | 62,614,299 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Class I | ||||||||||||||||
Shares sold | 7,207,856 | $ | 156,783,164 | 4,974,603 | $ | 102,960,466 | ||||||||||
Shares issued upon reinvestment of distributions | 62,240 | 1,331,838 | 52,504 | 1,085,444 | ||||||||||||
Shares redeemed | (1,454,601 | ) | (30,699,682 | ) | (1,184,417 | ) | (24,111,103 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase | 5,815,495 | $ | 127,415,320 | 3,842,690 | $ | 79,934,807 | ||||||||||
|
|
|
|
|
|
|
|
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.
21
The Gabelli Equity Income Fund
Notes to Financial Statements (Unaudited) (Continued)
10. Other Matters. On April 24, 2008, the Adviser entered into a settlement with the SEC to resolve an inquiry regarding prior frequent trading 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. Under the terms of the settlement, the Adviser, without admitting or denying the SEC’s findings and allegations, paid $16 million (which included a $5 million civil monetary penalty). On the same day, the SEC filed a civil action in the U.S. District Court for the Southern District of New York 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, who also is an officer of the Global Growth Fund and other funds in the Gabelli/GAMCO complex, including this Fund, denies the allegations and is continuing in his positions with the Adviser and the funds. The settlement by the Adviser did not have, and the resolution of the action against the officer is not expected to have, a material adverse impact on 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.
The Overall Morningstar Rating™ is derived from a weighted average of the performance figures associated with its three, five and ten year (if applicable) Morningstar Rating metrics. Data presented reflects past performance, which is no guarantee of future results. Ratings are for Class AAA, A, B, C, or I shares, other classes may have different performance characteristics. Unrated classes of fund shares are not listed. For each fund with at least a three year history, Morningstar calculates a Morningstar Rating based on a Morningstar Risk-Adjusted Return measure (including the effects of sales charges, loads, and redemption fees) that accounts for variation in a fund’s monthly performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of the funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 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.) Strong relative performance is not indicative of positive fund returns. © 2012 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.
22
The Gabelli Equity Income Fund
Board Consideration and Re-Approval of Management Agreement (Unaudited)
During the six months ended March 31, 2012, 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 third quartile of the funds in its category for the one year period, and approximately at or within the first 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, 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 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
23
The Gabelli Equity Income Fund
Board Consideration and Re-Approval of Management Agreement (Unaudited) (Continued)
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 their decision on evaluations of all these factors as a whole and did not consider any one factor as all important or controlling.
24
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 fund 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/GAMCO 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 Dividend Growth Fund (formerly Gabelli Blue Chip Value Fund)
Seeks to invest at least 80% of its net assets in dividend paying stocks. (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)
Team Managed
FOCUSED VALUE |
|
Gabelli Focus Five Fund (formerly Gabelli Woodland Small Cap Value Fund)
Seeks to invest up to 50% of its net assets in the equity securities of five companies with the remaining net assets invested in ten to twenty other companies or in short-term high grade investments or cash and cash equivalents. (Multiclass)
Team Managed
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 |
|
Gabelli Small Cap Growth 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
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 $500 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 distributions 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)
Team Managed
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
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)
Team Managed
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
Gabelli Gold Fund (formerly 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
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
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 these and other matters and should be read carefully before investing. Distributed by G. distributors, LLC, One Corporate Center, Rye, NY 10580.
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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 | ||
Mario J. Gabelli, CFA | Robert J. Morrissey | |
Chairman and Chief | Attorney-at-Law, | |
Executive Officer, | Morrissey, Hawkins & Lynch | |
GAMCO Investors, Inc. | ||
Anthony J. Colavita | Kuni Nakamura | |
President, | President, | |
Anthony J. Colavita, P.C. | Advanced Polymer, Inc. | |
Vincent D. Enright | Anthony R. Pustorino | |
Former Senior Vice | Certified Public Accountant, | |
President and | Professor Emeritus, | |
Chief Financial Officer, | Pace University | |
KeySpan Corp. | ||
John D. Gabelli | Anthonie C. van Ekris | |
Senior Vice President, | Chairman, | |
Gabelli & Company, Inc. | BALMAC International, Inc. | |
Salvatore J. Zizza | ||
Chairman, | ||
Zizza & Associates Corp. | ||
Officers | ||
Bruce N. Alpert | Agnes Mullady | |
President, Secretary, | Treasurer | |
and Acting Chief | ||
Compliance Officer |
Custodian, Transfer Agent, and Dividend
Disbursing Agent
State Street Bank and Trust Company
Distributor
G.distributors, LLC
Legal Counsel
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.
GAB444Q112SR
The
Gabelli
Equity
Income
Fund
Morningstar® rated the 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, 2012 among 1,098, 973, 570, and 1,098 Large Value funds, respectively. Morningstar RatingTM is based on risk-adjusted returns.
SEMIANNUAL REPORT
MARCH 31, 2012
The Gabelli Focus Five Fund
Semiannual Report — March 31, 2012
Sarah Donnelly | Elizabeth M. Lilly, CFA | Daniel M. Miller |
To Our Shareholders,
For the six months ended March 31, 2012, the net asset value (“NAV”) per Class AAA Share of The Gabelli Focus Five Fund increased 29.1% compared with the 25.9% increase in the Standard & Poor’s (“S&P”) 500 Index. See below for additional performance information.
Enclosed are the schedule of investments and financial statements as of March 31, 2012.
Comparative Results
Average Annual Returns through March 31, 2012 (a) (b) (Unaudited)
Six Months | 1 Year | 3 Year | 5 Year | Since | ||||||||||||||||
Class AAA (GWSVX) | 29.08 | % | (6.03 | )% | 25.33 | % | 2.40 | % | 7.59 | % | ||||||||||
S&P 500 Index | 25.89 | 8.54 | 23.42 | 2.01 | 7.35 | |||||||||||||||
Class A (GWSAX) | 29.08 | (5.98 | ) | 25.30 | 2.40 | 7.63 | ||||||||||||||
With sales charge (c) | 21.66 | (11.39 | ) | 22.85 | 1.16 | 6.93 | ||||||||||||||
Class C (GWSCX) | 28.61 | (6.68 | ) | 24.41 | 1.65 | 6.85 | ||||||||||||||
With contingent deferred sales charge (d) | 27.61 | (7.61 | ) | 24.41 | 1.65 | 6.85 | ||||||||||||||
Class I (GWSIX) | 29.29 | (5.72 | ) | 25.65 | 2.63 | 7.72 |
In the current prospectus dated January 27, 2012, the gross expense ratios for Class AAA, A, C, and I Shares are 2.80%, 2.80%, 3.55%, and 2.55%, respectively, and the net expense ratios after contractual reimbursements by Gabelli Funds, LLC (the “Adviser”) in place through January 31, 2013 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, 2012. Class AAA and Class I Shares do not have a sales charge. The maximum sales charge for Class A and C Shares is 5.75%, 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. The Fund imposes a 2% redemption fee on shares sold or exchanged within seven days after the date of purchase. 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 these and other matters and should be read carefully before investing. The Class AAA Share NAVs 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 related to this class of shares. The S&P 500 Index is a market capitalization weighted index of 500 large capitalization stocks commonly used to represent the U.S. equity market. The Russell 2000 Index is an unmanaged indicator which measures the performance of the small cap segment of the U.S. Equity Market. 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 1% contingent deferred sales charge imposed on redemptions made within one year of purchase. |
The Gabelli Focus Five Fund
Disclosure of Fund Expenses (Unaudited)
For the Six Month Period from October 1, 2011 through March 31, 2012
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 Account Value 10/01/11 | Ending Account Value 03/31/12 | Annualized Expense Ratio | Expenses Paid During Period* | |||||||||||||
The Gabelli Focus Five Fund |
| |||||||||||||||
Actual Fund Return |
| |||||||||||||||
Class AAA | $ | 1,000.00 | $ | 1,290.80 | 2.01 | % | $ | 11.57 | ||||||||
Class A | $ | 1,000.00 | $ | 1,290.80 | 2.01 | % | $ | 11.57 | ||||||||
Class C | $ | 1,000.00 | $ | 1,286.10 | 2.76 | % | $ | 15.86 | ||||||||
Class I | $ | 1,000.00 | $ | 1,292.90 | 1.76 | % | $ | 10.14 | ||||||||
Hypothetical 5% Return |
| |||||||||||||||
Class AAA | $ | 1,000.00 | $ | 1,015.03 | 2.01 | % | $ | 10.18 | ||||||||
Class A | $ | 1,000.00 | $ | 1,015.03 | 2.01 | % | $ | 10.18 | ||||||||
Class C | $ | 1,000.00 | $ | 1,011.26 | 2.76 | % | $ | 13.95 | ||||||||
Class I | $ | 1,000.00 | $ | 1,016.29 | 1.76 | % | $ | 8.92 |
* | 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 (184 days), then divided by 366. |
2
Summary of Portfolio Holdings (Unaudited)
The following table presents portfolio holdings as a percent of net assets as of March 31, 2012:
The Gabelli Focus Five Fund
Energy and Utilities | 15.2% | |||
U.S. Government Obligations | 14.7% | |||
Business Services | 9.6% | |||
Diversified Industrial | 7.6% | |||
Food and Beverage | 7.5% | |||
Telecommunications | 6.4% | |||
Health Care | 6.4% | |||
Metals and Mining | 4.7% | |||
Hotels and Gaming | 3.9% | |||
Retail | 3.6% | |||
Computer Software and Services | 3.5% | |||
Automotive: Parts and Accessories | 3.5% | |||
Aerospace | 3.3% |
Cable and Satellite | 3.2% | |||
Electronics | 1.9% | |||
Financial Services | 1.6% | |||
Entertainment | 1.5% | |||
Building and Construction | 1.5% | |||
Aviation: Parts and Services | 1.5% | |||
Machinery | 1.2% | |||
Consumer Products | 0.5% | |||
Equipment and Supplies | 0.0% | |||
Other Assets and Liabilities (Net) | (2.8)% | |||
|
| |||
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 N-Q. 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.
We have separated the portfolio managers’ 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 managers’ 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.
3
The Gabelli Focus Five Fund
Schedule of Investments — March 31, 2012 (Unaudited)
Shares | Cost | Market | ||||||||||
COMMON STOCKS — 88.1% | ||||||||||||
Aerospace — 3.3% | ||||||||||||
3,100 | API Technologies Corp.† | $ | 10,953 | $ | 10,819 | |||||||
53,000 | Kratos Defense & Security Solutions Inc.† | 337,030 | 283,020 | |||||||||
|
|
|
| |||||||||
347,983 | 293,839 | |||||||||||
|
|
|
| |||||||||
Automotive: Parts and Accessories — 3.5% |
| |||||||||||
20,000 | Dana Holding Corp. | 312,975 | 310,000 | |||||||||
|
|
|
| |||||||||
Aviation: Parts and Services — 1.5% |
| |||||||||||
3,500 | Curtiss-Wright Corp. | 130,441 | 129,535 | |||||||||
|
|
|
| |||||||||
Building and Construction — 1.5% |
| |||||||||||
6,000 | Fortune Brands Home & Security Inc.† | 109,203 | 132,420 | |||||||||
|
|
|
| |||||||||
Business Services — 9.6% |
| |||||||||||
4,000 | Macquarie Infrastructure Co. LLC | 74,716 | 131,960 | |||||||||
30,500 | The Brink’s Co. | 773,385 | 728,035 | |||||||||
|
|
|
| |||||||||
848,101 | 859,995 | |||||||||||
|
|
|
| |||||||||
Cable and Satellite — 3.2% |
| |||||||||||
10,000 | EchoStar Corp., Cl. A† | 260,375 | 281,400 | |||||||||
|
|
|
| |||||||||
Computer Software and Services — 3.5% |
| |||||||||||
7,000 | InterXion Holding NV† | 116,833 | 125,650 | |||||||||
14,000 | RealD Inc.† | 135,777 | 189,000 | |||||||||
|
|
|
| |||||||||
252,610 | 314,650 | |||||||||||
|
|
|
| |||||||||
Consumer Products — 0.5% |
| |||||||||||
1,500 | Avery Dennison Corp. | 43,582 | 45,195 | |||||||||
|
|
|
| |||||||||
Diversified Industrial — 7.6% |
| |||||||||||
19,500 | Texas Industries Inc. | 638,581 | 682,695 | |||||||||
|
|
|
| |||||||||
Electronics — 1.9% | ||||||||||||
2,550 | Analogic Corp. | 139,931 | 172,227 | |||||||||
|
|
|
| |||||||||
Energy and Utilities — 15.2% |
| |||||||||||
19,000 | CONSOL Energy Inc. | 645,825 | 647,900 | |||||||||
5,000 | National Fuel Gas Co. | 244,036 | 240,600 | |||||||||
30,000 | RPC Inc. | 305,433 | 318,300 | |||||||||
5,547 | Unitil Corp. | 150,855 | 148,826 | |||||||||
|
|
|
| |||||||||
1,346,149 | 1,355,626 | |||||||||||
|
|
|
| |||||||||
Entertainment — 1.5% | ||||||||||||
4,000 | The Madison Square Garden Co., Cl. A† | 116,479 | 136,800 | |||||||||
|
|
|
| |||||||||
Equipment and Supplies — 0.0% |
| |||||||||||
3,200 | Gerber Scientific Inc., Escrow†(a) | 0 | 32 | |||||||||
|
|
|
| |||||||||
Financial Services — 1.6% |
| |||||||||||
16,000 | Janus Capital Group Inc. | 135,158 | 142,560 | |||||||||
|
|
|
| |||||||||
Food and Beverage — 7.5% |
| |||||||||||
2,900 | Ralcorp Holdings Inc.† | 210,354 | 214,861 |
Shares | Cost | Market | ||||||||||
17,500 | Snyders-Lance Inc. | $ | 390,042 | $ | 452,375 | |||||||
|
|
|
| |||||||||
600,396 | 667,236 | |||||||||||
|
|
|
| |||||||||
Health Care — 6.4% |
| |||||||||||
19,000 | Metropolitan Health Networks Inc.† | 138,704 | 178,030 | |||||||||
40,000 | Rochester Medical Corp.† | 367,639 | 392,400 | |||||||||
|
|
|
| |||||||||
506,343 | 570,430 | |||||||||||
|
|
|
| |||||||||
Hotels and Gaming — 3.9% |
| |||||||||||
8,520 | Gaylord Entertainment Co.† | 193,116 | 262,416 | |||||||||
10,141 | Red Lion Hotels Corp.† | 85,781 | 83,258 | |||||||||
|
|
|
| |||||||||
278,897 | 345,674 | |||||||||||
|
|
|
| |||||||||
Machinery — 1.2% | ||||||||||||
4,000 | Xylem Inc. | 105,220 | 111,000 | |||||||||
|
|
|
| |||||||||
Metals and Mining — 4.7% |
| |||||||||||
3,500 | Barrick Gold Corp. | 150,947 | 152,180 | |||||||||
60,000 | Golden Queen Mining Co. Ltd.† | 160,819 | 154,594 | |||||||||
7,000 | Ivanhoe Mines Ltd.† | 116,865 | 110,180 | |||||||||
|
|
|
| |||||||||
428,631 | 416,954 | |||||||||||
|
|
|
| |||||||||
Retail — 3.6% | ||||||||||||
5,500 | Barnes & Noble Inc.† | 73,827 | 72,875 | |||||||||
1,500 | Coinstar Inc.† | 84,673 | 95,325 | |||||||||
8,550 | Regis Corp. | 153,305 | 157,576 | |||||||||
|
|
|
| |||||||||
311,805 | 325,776 | |||||||||||
|
|
|
| |||||||||
Telecommunications — 6.4% |
| |||||||||||
4,600 | Anaren Inc.† | 78,730 | 84,410 | |||||||||
40,000 | Cincinnati Bell Inc.† | 149,696 | 160,800 | |||||||||
18,000 | NII Holdings Inc.† | 327,972 | 329,580 | |||||||||
|
|
|
| |||||||||
556,398 | 574,790 | |||||||||||
|
|
|
| |||||||||
TOTAL COMMON STOCKS | 7,469,258 | 7,868,834 | ||||||||||
|
|
|
| |||||||||
Principal | ||||||||||||
U.S. GOVERNMENT OBLIGATIONS — 14.7% |
| |||||||||||
$1,313,000 | U.S. Treasury Bills, 0.040% to 0.135%††, 06/21/12 to 08/23/12 | 1,312,539 | 1,312,606 | |||||||||
|
|
|
| |||||||||
TOTAL INVESTMENTS — 102.8% | $ | 8,781,797 | 9,181,440 | |||||||||
|
| |||||||||||
Other Assets and Liabilities (Net) — (2.8)% |
| (253,427 | ) | |||||||||
|
| |||||||||||
NET ASSETS — 100.0% | $ | 8,928,013 | ||||||||||
|
|
See accompanying notes to financial statements.
4
The Gabelli Focus Five Fund
Schedule of Investments (Continued) — March 31, 2012 (Unaudited)
(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, 2012, the market value of the fair valued security amounted to $32 or 0.00% of net assets. |
† | Non-income producing security. |
†† | Represents annualized yield at date of purchase. |
See accompanying notes to financial statements.
5
The Gabelli Focus Five Fund
Statement of Assets and Liabilities
March 31, 2012 (Unaudited)
Assets: | ||||
Investments, at value (cost $8,781,797) | $ | 9,181,440 | ||
Cash | 12,873 | |||
Receivable for investments sold | 273,668 | |||
Receivable for Fund shares sold | 177,691 | |||
Dividends receivable | 1,700 | |||
Prepaid expenses | 20,904 | |||
|
| |||
Total Assets | 9,668,276 | |||
|
| |||
Liabilities: | ||||
Payable for investments purchased | 716,247 | |||
Payable for distribution fees | 1,919 | |||
Payable for investment advisory fees | 1,611 | |||
Other accrued expenses | 20,486 | |||
|
| |||
Total Liabilities | 740,263 | |||
|
| |||
Net Assets (applicable to 853,744 | $ | 8,928,013 | ||
|
| |||
Net Assets Consist of: | ||||
Paid-in capital | $ | 7,952,203 | ||
Accumulated net investment loss | (39,191 | ) | ||
Accumulated net realized gain on investments | 615,358 | |||
Net unrealized appreciation on investments | 399,643 | |||
|
| |||
Net Assets | $ | 8,928,013 | ||
|
| |||
Shares of Capital Stock, each at $0.001 par value: | ||||
Class AAA: | ||||
Net Asset Value, offering, and redemption price per share ($6,614,103 ÷ 630,661 shares outstanding; 100,000,000 shares authorized) | $10.49 | |||
|
| |||
Class A: | ||||
Net Asset Value and redemption price per share ($657,857 ÷ 62,184 shares outstanding; 50,000,000 shares authorized) | $10.58 | |||
|
| |||
Maximum offering price per share (NAV ÷ 0.9425, based on maximum sales charge of 5.75% of the offering price) | $11.23 | |||
|
| |||
Class C: | ||||
Net Asset Value and offering price per share ($526,318 ÷ 54,373 shares outstanding; 50,000,000 shares authorized) | $ 9.68 | (a) | ||
|
| |||
Class I: | ||||
Net Asset Value, offering, and redemption price per share ($1,129,735 ÷ 106,526 shares outstanding; 50,000,000 shares authorized) | $10.61 | |||
|
|
(a) | Redemption price varies based on the length of time held. |
Statement of Operations
For the Six Months Ended March 31, 2012
(Unaudited)
Investment Income: | ||||
Dividends | $ | 27,881 | ||
Interest | 236 | |||
|
| |||
Total Investment Income | 28,117 | |||
|
| |||
Expenses: | ||||
Investment advisory fees | 33,159 | |||
Distribution fees – Class AAA | 7,178 | |||
Distribution fees – Class A | 377 | |||
Distribution fees – Class C | 1,478 | |||
Registration expenses | 17,910 | |||
Shareholder communication expenses | 13,686 | |||
Legal and audit fees | 7,252 | |||
Shareholder services fees | 7,251 | |||
Custodian fees | 5,606 | |||
Interest expense | 246 | |||
Directors’ fees | 155 | |||
Miscellaneous expenses | 4,189 | |||
|
| |||
Total Expenses | 98,487 | |||
|
| |||
Less: | ||||
Expenses reimbursed by Adviser (See Note 3) | (31,179 | ) | ||
|
| |||
Net Expenses | 67,308 | |||
|
| |||
Net Investment Loss | (39,191 | ) | ||
|
| |||
Net Realized and Unrealized Gain on Investments: | ||||
Net realized gain on investments | 669,072 | |||
|
| |||
Net change in unrealized appreciation/depreciation: on investments | 956,089 | |||
|
| |||
Net Realized and Unrealized Gain on Investments | 1,625,161 | |||
|
| |||
Net Increase in Net Assets Resulting from Operations | $ | 1,585,970 | ||
|
|
See accompanying notes to financial statements.
6
The Gabelli Focus Five Fund
Statement of Changes in Net Assets
Six Months Ended March 31, 2012 (Unaudited) | Year Ended September 30, 2011 | |||||||
Operations: | ||||||||
Net investment loss. | $ | (39,191 | ) | $ | (84,626 | ) | ||
Net realized gain on investments | 669,072 | 888,128 | ||||||
Net change in unrealized appreciation/depreciation on investments | 956,089 | (1,312,015 | ) | |||||
|
|
|
| |||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 1,585,970 | (508,513 | ) | |||||
|
|
|
| |||||
Distributions to Shareholders: | ||||||||
Net realized gain | ||||||||
Class AAA | (42,840 | ) | — | |||||
Class A | (2,071 | ) | — | |||||
Class C | (1,905 | ) | — | |||||
Class I | (702 | ) | — | |||||
|
|
|
| |||||
Total Distributions to Shareholders | (47,518 | ) | — | |||||
|
|
|
| |||||
Capital Share Transactions: | ||||||||
Class AAA | 39,545 | (76,516 | ) | |||||
Class A | 456,028 | 42,652 | ||||||
Class C | 273,113 | 93,665 | ||||||
Class I | 1,001,210 | 27,202 | ||||||
|
|
|
| |||||
Net Increase in Net Assets from Capital Share Transactions | 1,769,896 | 87,003 | ||||||
|
|
|
| |||||
Redemption Fees | 14 | 119 | ||||||
|
|
|
| |||||
Net Increase/(Decrease) in Net Assets | 3,308,362 | (421,391 | ) | |||||
Net Assets: | ||||||||
Beginning of period | 5,619,651 | 6,041,042 | ||||||
|
|
|
| |||||
End of period (including undistributed net investment income of $0 and $0, respectively) | $ | 8,928,013 | $ | 5,619,651 | ||||
|
|
|
|
See accompanying notes to financial statements.
7
The Gabelli Focus Five Fund
Financial Highlights
Selected data for a share of capital stock outstanding throughout each period:
Income (Loss) from Investment Operations | Distributions | Ratios to Average Net Assets/Supplemental Data | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Period Ended September 30 | Net Asset Value, Beginning of Period | Net Investment Income (Loss)(a) | Net Realized and Unrealized Gain (Loss) on Investments | Total from Investment Operations | Net Investment Income | Net Realized Gain on Investments | Total Distributions | Redemption Fees (a)(b) | Net Asset Value, End of Period | Total Return† | Net Assets End of Period (in 000’s) | Net Investment Income (Loss)(c) | Expenses Net of Waivers/ Reimburse- ments(d) | Expenses Before Waivers/ Reimburse- ments(e) | Portfolio Turnover Rate | |||||||||||||||||||||||||||||||||||||||||||||
Class AAA |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2012(f) | $ | 8.19 | $ | (0.06 | ) | $ | 2.43 | $ | 2.37 | — | $ | (0.07 | ) | $ | (0.07 | ) | $ | 0.00 | $ | 10.49 | 29.08 | % | $ | 6,614 | (1.15 | )%(g) | 2.01 | %(g) | 2.95 | %(g) | 140 | % | ||||||||||||||||||||||||||||
2011 | 8.92 | (0.12 | ) | (0.61 | ) | (0.73 | ) | — | — | — | 0.00 | 8.19 | (8.18 | ) | 5,207 | (1.21 | ) | 2.01 | 2.80 | 40 | ||||||||||||||||||||||||||||||||||||||||
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 | 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 | 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 | 12.61 | 20.71 | 9,040 | 0.38 | 2.01 | 2.33 | 51 | |||||||||||||||||||||||||||||||||||||||||
Class A |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2012(f) | $ | 8.26 | $ | (0.06 | ) | $ | 2.45 | $ | 2.39 | — | $ | (0.07 | ) | $ | (0.07 | ) | $ | 0.00 | $ | 10.58 | 29.08 | % | $ | 658 | (1.19 | )%(g) | 2.01 | %(g) | 2.95 | %(g) | 140 | % | ||||||||||||||||||||||||||||
2011 | 8.99 | (0.12 | ) | (0.61 | ) | (0.73 | ) | — | — | — | 0.00 | 8.26 | (8.12 | ) | 139 | (1.21 | ) | 2.01 | 2.80 | 40 | ||||||||||||||||||||||||||||||||||||||||
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 | 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 | 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 | 12.69 | 20.94 | 65 | 1.00 | 2.01 | 2.33 | 51 | |||||||||||||||||||||||||||||||||||||||||
Class C |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2012(f) | $ | 7.59 | $ | (0.09 | ) | $ | 2.25 | $ | 2.16 | — | $ | (0.07 | ) | $ | (0.07 | ) | $ | 0.00 | $ | 9.68 | 28.61 | % | $ | 526 | (1.94 | )%(g) | 2.76 | %(g) | 3.70 | %(g) | 140 | % | ||||||||||||||||||||||||||||
2011 | 8.33 | (0.18 | ) | (0.56 | ) | (0.74 | ) | — | — | — | 0.00 | 7.59 | (8.88 | ) | 192 | (1.96 | ) | 2.76 | 3.55 | 40 | ||||||||||||||||||||||||||||||||||||||||
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 | 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 | 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 | 12.16 | 19.84 | 295 | (0.26 | ) | 2.76 | 3.08 | 51 | |||||||||||||||||||||||||||||||||||||||||
Class I |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2012(f) | $ | 8.27 | $ | (0.05 | ) | $ | 2.46 | $ | 2.41 | — | $ | (0.07 | ) | $ | (0.07 | ) | $ | 0.00 | $ | 10.61 | 29.29 | % | $ | 1,130 | (0.96 | )%(g) | 1.76 | %(g) | 2.70 | %(g) | 140 | % | ||||||||||||||||||||||||||||
2011 | 8.98 | (0.10 | ) | (0.61 | ) | (0.71 | ) | — | — | — | 0.00 | 8.27 | (7.91 | ) | 82 | (0.96 | ) | 1.76 | 2.55 | 40 | ||||||||||||||||||||||||||||||||||||||||
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 | 7.93 | (8.76 | ) | 59 | (0.79 | ) | 1.76 | 3.09 | 62 | ||||||||||||||||||||||||||||||||||||||
2008(h) | 9.41 | (0.03 | ) | (0.07 | ) | (0.10 | ) | — | — | — | 0.00 | 9.31 | (1.06 | ) | 72 | (0.44 | )(g) | 1.76 | (g) | 2.27 | (g) | 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) | Amount represents less than $0.005 per share. |
(c) | Due to capital share activity throughout the year, net investment income (loss) per share and the ratio to average net assets are not necessarily correlated among the different classes of shares. |
(d) | The Fund incurred interest expense during the six months ended March 31, 2012 and the years ended September 30, 2011, 2010, 2009, 2008, and 2007. If interest expense had not been incurred, each year the ratios of operating expenses to average net assets would have been 2.00% (Class AAA and Class A), 2.75% (Class C), and 1.75% (Class I), respectively. |
(e) | 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. |
(f) | For the six months ended March 31, 2012, unaudited. |
(g) | Annualized. |
(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 Focus Five Fund
Notes to Financial Statements (Unaudited)
1. Organization. The Gabelli Focus Five Fund, a series of Gabelli Equity Series Funds, Inc. (the “Corporation”), was incorporated on July 25, 1991 in Maryland. 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 commenced investment operations on December 31, 2002. On January 1, 2012, the Fund changed its name from The Gabelli Woodland Small Cap Value Fund to its current name.
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 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.
9
The Gabelli Focus Five Fund
Notes to Financial Statements (Unaudited) (Continued)
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 the 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, 2012 is as follows:
Valuation Inputs | ||||||||||||||||
Level 1 Quoted Prices | Level 2 Other Significant Observable Inputs | Level 3 Significant Unobservable Inputs | Total Market Value at 3/31/12 | |||||||||||||
INVESTMENTS IN SECURITIES: | ||||||||||||||||
ASSETS (Market Value): | ||||||||||||||||
Common Stocks: | ||||||||||||||||
Equipment and Supplies | — | — | $ | 32 | $ | 32 | ||||||||||
Other Industries (a) | $ | 7,868,802 | — | — | 7,868,802 | |||||||||||
Total Common Stocks | 7,868,802 | — | 32 | 7,868,834 | ||||||||||||
U.S. Government Obligations | — | $ | 1,312,606 | — | 1,312,606 | |||||||||||
TOTAL INVESTMENTS IN SECURITIES—ASSETS | $ | 7,868,802 | $ | 1,312,606 | $ | 32 | $ | 9,181,440 |
(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, 2012. The Fund’s policy is to recognize transfers among Levels as of the beginning of the reporting period.
In May 2011, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No. 2011-04 “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards (“IFRS”).” ASU 2011-04 includes common requirements for measurement of and disclosure about fair value between U.S. GAAP and IFRS. ASU 2011-04 will require reporting entities to disclose the following information for fair value measurements categorized within Level 3 of the fair value hierarchy: quantitative information about the unobservable inputs used in the fair value measurement, the valuation processes used by the reporting entity, and a narrative description of the sensitivity of the fair value measurement to changes in unobservable inputs and the interrelationships between those unobservable inputs. In addition, ASU 2011-04 will require reporting entities to make disclosures about amounts and reasons for all transfers into and out of Level 1 and Level 2 fair value measurements. The new and revised disclosures are effective for interim and annual reporting periods beginning after December 15, 2011. At this time, management is evaluating the implications of ASU 2011-04 and its impact on the financial statements.
10
The Gabelli Focus Five Fund
Notes to Financial Statements (Unaudited) (Continued)
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 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 those of securities of comparable U.S. issuers.
Foreign Taxes. The Fund may be subject to foreign taxes on income, gains on investments, or currency repatriation, a portion of which may be recoverable. The Fund will accrue such taxes and recoveries as applicable, based upon its current interpretation of tax rules and regulations that exist in the markets in which it invests.
Securities Transactions and Investment Income. Securities transactions are accounted for on the trade date with realized gain or loss on investments determined by using the identified cost method. Interest income (including amortization of premium and accretion of discount) is recorded on the accrual basis. Premiums and discounts on debt securities are amortized using the effective yield to maturity method. Dividend income is recorded on the ex-dividend date, except for certain dividends 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 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 the Statement of Operations.
11
The Gabelli Focus Five Fund
Notes to Financial Statements (Unaudited) (Continued)
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, 2011.
Provision For Income Taxes. The Fund intends to continue to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). It is the policy of the Fund to comply with the requirements of the Code applicable to regulated investment companies and to distribute substantially all of its net investment company taxable income and net capital gains. Therefore, no provision for federal income taxes is required.
Under the Regulated Investment Company Modernization Act of 2010, the Fund will be permitted to carry forward for an unlimited period capital losses incurred in years beginning after December 22, 2010. As a result of the rule, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law.
The following summarizes the tax cost of investments and the related net unrealized appreciation at March 31, 2012:
Cost | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Appreciation | |||||
Investments | $8,829,598 | $524,873 | $(173,031) | $351,842 |
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, 2012, the Fund did not incur any income tax, interest, or penalties. As of March 31, 2012, 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, 2008 through September 30, 2011 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.
12
The Gabelli Focus Five Fund
Notes to Financial Statements (Unaudited) (Continued)
The Adviser has contractually agreed to waive its investment advisory fees and/or reimburse expenses of the Fund to the extent necessary to maintain the annualized total operating expenses of the Fund (excluding of brokerage, acquired fund fees and expenses, 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, 2013. For the six months ended March 31, 2012, the Adviser reimbursed the Fund in the amount of $31,179. 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, after giving effect to the reimbursement, would not exceed the foregoing limitations. At March 31, 2012, the cumulative amount which the Fund may repay the Adviser is $150,356.
For the year ended September 30, 2010, expiring September 30, 2012 | $ | 64,417 | ||
For the year ended September 30, 2011, expiring September 30, 2013 | 54,760 | |||
For the six months ended March 31, 2012, expiring September 30, 2014 | 31,179 | |||
|
| |||
$ | 150,356 | |||
|
|
The Corporation pays each Director who is not considered an affiliated person an annual retainer of $18,000 plus $2,000 for each Board meeting attended, and they are reimbursed for any out of pocket expenses incurred in attending meetings. All Board committee members receive $1,000 per meeting attended. The Chairman of the Audit Committee receives a $3,000 annual fee, and the Lead Director receives an annual fee of $2,000. A Director may receive a single meeting fee, allocated among the participating funds, for attending 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. Under the Class AAA, Class A, and Class C Share Plans, payments are authorized to G.distributors, LLC (the “Distributor”), an affiliate of the Fund, 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 during the six months ended March 31, 2012, other than short-term securities and U.S. Government obligations, aggregated $9,226,073 and $8,231,018, respectively.
6. Transactions with Affiliates. During the six months ended March 31, 2012, the Distributor and its predecessor distributor, Gabelli & Company, Inc. (also an affiliate of the Fund), retained a total of $1,287 from investors representing commissions (sales charges and underwriting fees) 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 rate 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. At March 31, 2012, there were no borrowings outstanding under the line of credit.
13
The Gabelli Focus Five Fund
Notes to Financial Statements (Unaudited) (Continued)
The average daily amount of borrowings outstanding under the line of credit during the six months ended March 31, 2012 was $12,344 with a weighted average interest rate of 1.40%. The maximum amount borrowed at any time during the six months ended March 31, 2012 was $620,000.
8. Capital Stock Transactions. 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 the Distributor, through selected broker/dealers, or the transfer agent. Class I Shares are offered without a sales charge, solely to certain institutions, directly through the Distributor or brokers that have entered into selling agreements specifically with respect to Class I Shares. Class A Shares are subject to a maximum front-end sales charge of 5.75%. Class C Shares are subject to a 1.00% contingent deferred sales charge for one year after purchase. Class B Shares were fully redeemed on February 2, 2010 and are no longer available for sales or exchanges from other funds.
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, 2012 and the year ended September 30, 2011 amounted to $14 and $119, respectively.
Transactions in shares of capital stock were as follows:
For the Six Months Ended March 31, 2012 (Unaudited) | Year Ended September 30, 2011 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Class AAA | ||||||||||||||||
Shares sold | 188,126 | $ | 1,900,856 | 101,424 | $ | 1,037,463 | ||||||||||
Shares issued upon reinvestment of distributions | 4,401 | 39,124 | — | — | ||||||||||||
Shares redeemed | (197,665 | ) | (1,900,435 | ) | (109,018 | ) | (1,113,979 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase/(decrease) | (5,138 | ) | $ | 39,545 | (7,594 | ) | $ | (76,516 | ) | |||||||
|
|
|
|
|
|
|
| |||||||||
Class A | ||||||||||||||||
Shares sold | 50,431 | $ | 506,247 | 4,218 | $ | 46,026 | ||||||||||
Shares issued upon reinvestment of distributions | 200 | 1,797 | — | — | ||||||||||||
Shares redeemed | (5,241 | ) | (52,016 | ) | (359 | ) | (3,374 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase | 45,390 | $ | 456,028 | 3,859 | $ | 42,652 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Class C | ||||||||||||||||
Shares sold | 29,223 | $ | 274,010 | 11,719 | $ | 101,291 | ||||||||||
Shares issued upon reinvestment of distributions | 126 | 1,035 | — | — | ||||||||||||
Shares redeemed | (225 | ) | (1,932 | ) | (799 | ) | (7,626 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase | 29,124 | $ | 273,113 | 10,920 | $ | 93,665 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Class I | ||||||||||||||||
Shares sold | 98,352 | $ | 1,020,137 | 2,861 | $ | 30,377 | ||||||||||
Shares issued upon reinvestment of distributions | 77 | 694 | — | — | ||||||||||||
Shares redeemed | (1,847 | ) | (19,621 | ) | (307 | ) | (3,175 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase | 96,582 | $ | 1,001,210 | 2,554 | $ | 27,202 | ||||||||||
|
|
|
|
|
|
|
|
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.
14
The Gabelli Focus Five Fund
Notes to Financial Statements (Unaudited) (Continued)
10. Other Matters. On April 24, 2008, the Adviser entered into a settlement with the SEC to resolve an inquiry regarding prior frequent trading 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. Under the terms of the settlement, the Adviser, without admitting or denying the SEC’s findings and allegations, paid $16 million (which included a $5 million civil monetary penalty). On the same day, the SEC filed a civil action in the U.S. District Court for the Southern District of New York 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, who also is an officer of the Global Growth Fund and other funds in the Gabelli/GAMCO complex, including this Fund, denies the allegations and is continuing in his positions with the Adviser and the funds. The settlement by the Adviser did not have, and the resolution of the action against the officer is not expected to have, a material adverse impact on 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.
15
The Gabelli Focus Five Fund
Board Consideration and Re-Approval of Management Agreement (Unaudited)
During the six months ended March 31, 2012, 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 managers.
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 fourth quartile for the one year period, in the third quartile for the three year period and in the second quartile for the five year period. The Independent Board Members also noted that the Fund’s performance was of less relevance than is usually the case due to the recent changes in investment strategy and portfolio management team.
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 advisory 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 advisory 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 advisory 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 advisory 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 declining performance record during the past few years.
16
The Gabelli Focus Five Fund
Board Consideration and Re-Approval of Management Agreement (Unaudited) (Continued)
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 their decision on evaluations of all these factors as a whole and did not consider any one factor as all important or controlling.
17
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 fund 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/GAMCO 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 Dividend Growth Fund (formerly Gabelli Blue Chip Value Fund)
Seeks to invest at least 80% of its net assets in dividend paying stocks. (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) | Team Managed |
FOCUSED VALUE |
|
Gabelli Focus Five Fund (formerly Gabelli Woodland Small Cap Value Fund)
Seeks to invest up to 50% of its net assets in the equity securities of five companies with the remaining net assets invested in ten to twenty other companies or in short-term high grade investments or cash and cash equivalents.
(Multiclass) | Team Managed |
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 |
|
Gabelli Small Cap Growth 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 |
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 $500 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 distributions 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)
Team Managed
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
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)
Team Managed
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
Gabelli Gold Fund (formerly 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
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
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 these and other matters and should be read carefully before investing. Distributed by G.distributors, LLC, One Corporate Center, Rye, NY 10580.
Gabelli Equity Series Funds, Inc.
The Gabelli Focus Five 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 Executive Officer, | Attorney-at-Law, Morrissey, Hawkins & Lynch | |
Anthony J. Colavita President, Anthony J. Colavita, P.C. | Kuni Nakamura President, Advanced Polymer, Inc. | |
Vincent D. Enright | Anthony R. Pustorino | |
Former Senior Vice President and Chief Financial Officer, KeySpan Corp. | Certified Public Accountant, Professor Emeritus, Pace University | |
John D. Gabelli | Anthony C. van Ekris | |
Senior Vice President, | Chairman, | |
Gabelli & Company, Inc. | BALMAC International, Inc. | |
Salvatore J. Zizza | ||
Chairman, | ||
Zizza & Associates Corp. | ||
Officers | ||
Bruce N. Alpert | Agnes Mullady | |
President, Secretary, and | Treasurer | |
Acting Chief | ||
Compliance Officer | ||
Custodian, Transfer Agent, and, Dividend Disbursing Agent | ||
State Street Bank and Trust Company | ||
Distributor | ||
G.distributors, LLC | ||
Legal Counsel | ||
Skadden, Arps, Slate, Meagher & Flom LLP |
This report is submitted for the general information of the shareholders of The Gabelli Focus Five Fund. It is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus.
GAB840Q112SR
The
Gabelli
Focus
Five
Fund
SEMIANNUAL REPORT MARCH 31, 2012
Item 2. Code of Ethics.
Not applicable.
Item 3. Audit Committee Financial Expert.
Not applicable.
Item 4. Principal Accountant Fees and Services.
Not applicable.
Item 5. Audit Committee of Listed registrants.
Not applicable.
Item 6. Investments.
(a) | Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period is included as part of the report to shareholders filed under Item 1 of this form. |
(b) | Not applicable. |
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the procedures by which the shareholders may recommend nominees to the registrant’s board of directors, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)), or this Item.
Item 11. Controls and Procedures.
(a) | The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)). |
(b) | There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the registrant’s second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
Item 12. Exhibits.
(a)(1) | Not applicable. | |||
(a)(2) | Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto. | |||
(a)(3) | Not applicable. | |||
(b) | Certifications pursuant to Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(registrant) | Gabelli Equity Series Funds, Inc. | |
By (Signature and Title)* | /s/ Bruce N. Alpert | |
Bruce N. Alpert, Principal Executive Officer | ||
Date | 6/8/12 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By (Signature and Title)* | /s/ Bruce N. Alpert | |
Bruce N. Alpert, Principal Executive Officer | ||
Date | 6/8/12 | |
By (Signature and Title)* | /s/ Agnes Mullady | |
Agnes Mullady, Principal Financial Officer and Treasurer | ||
Date | 6/8/12 |
* Print the name and title of each signing officer under his or her signature.