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, 2016
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 Equity Income Fund
Semiannual Report — March 31, 2016 | ![]() |
To Our Shareholders,
For the six months ended March 31, 2016, the net asset value (“NAV”) per Class AAA Share of The Gabelli Equity Income Fund increased 5.5% compared with an increase of 8.5% for the Standard & Poor’s (“S&P”) 500 Index. See below for additional performance information.
Enclosed are the financial statements, including the schedule of investments, as of March 31, 2016.
Comparative Results
Average Annual Returns through March 31, 2016 (a)(b) (Unaudited) | Since Inception | |||||||||||||||||||||||||||||
Six Months | 1 Year | 5 Year | 10 Year | 15 Year | ||||||||||||||||||||||||||
Class AAA (GABEX) | 5.51 | % | (4.26 | )% | 7.90 | % | 6.47% | 7.24% | 9.81% | |||||||||||||||||||||
S&P 500 Index | 8.49 | 1.78 | 11.58 | 7.01 | 5.99 | 9.00(e) | ||||||||||||||||||||||||
Nasdaq Composite Index | 6.14 | 0.66 | 13.31 | 8.79 | 7.78 | �� | 9.12(e) | |||||||||||||||||||||||
Lipper Equity Income Fund Average | 7.87 | (0.56 | ) | 9.33 | 5.78 | 5.82 | 8.15 | |||||||||||||||||||||||
Class A (GCAEX) | 5.53 | (4.28 | ) | 7.90 | 6.48 | 7.23 | 9.80 | |||||||||||||||||||||||
With sales charge (c) | (0.54 | ) | (9.78 | ) | 6.63 | 5.85 | 6.81 | 9.54 | ||||||||||||||||||||||
Class C (GCCEX) | 5.17 | (4.96 | ) | 7.10 | 5.68 | 6.59 | 9.40 | |||||||||||||||||||||||
With contingent deferred sales charge (d) | 4.17 | (5.91 | ) | 7.10 | 5.68 | 6.59 | 9.40 | |||||||||||||||||||||||
Class I (GCIEX) | 5.66 | (4.03 | ) | 8.17 | 6.70 | 7.39 | 9.91 |
In the current prospectuses dated January 28, 2016, the expense ratios for Class AAA, A, C, and I Shares are 1.37%, 1.37%, 2.12%, and 1.12%, respectively. See page 12 for the expense ratios for the six months ended March 31, 2016. 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. 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. 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. Investors should carefully consider the investment objectives, risks, charges, and expenses of the Fund before investing. The prospectuses contain information about these and other matters and should be read carefully before investing. To obtain a prospectus please visit www.gabelli.com. The Class AAA Share NAVs are used to calculate performance for the periods prior to the issuance of Class A Shares and Class C Shares on December 31, 2003 and Class I Shares on January 11, 2008. The actual performance of the Class A Shares and Class C Shares would have been lower due to the additional fees and expenses associated with these classes of shares. The actual performance of the 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 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 1% maximum contingent deferred sales charge imposed on redemptions made within one year of purchase. |
(e) | S&P 500 Index and Nasdaq Composite 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, 2015 through March 31, 2016 | 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 10/01/15 | Ending Account Value 03/31/16 | Annualized Expense Ratio | Expenses Paid During Period* | |||||
The Gabelli Equity Income Fund | ||||||||
Actual Fund Return | ||||||||
Class AAA | $1,000.00 | $1,055.10 | 1.40% | $ 7.19 | ||||
Class A | $1,000.00 | $1,055.30 | 1.40% | $ 7.19 | ||||
Class C | $1,000.00 | $1,051.70 | 2.15% | $11.03 | ||||
Class I | $1,000.00 | $1,056.60 | 1.15% | $ 5.91 | ||||
Hypothetical 5% Return | ||||||||
Class AAA | $1,000.00 | $1,018.00 | 1.40% | $ 7.06 | ||||
Class A | $1,000.00 | $1,018.00 | 1.40% | $ 7.06 | ||||
Class C | $1,000.00 | $1,014.25 | 2.15% | $10.83 | ||||
Class I | $1,000.00 | $1,019.25 | 1.15% | $ 5.81 |
* | 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 (183 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, 2016:
The Gabelli Equity Income Fund
Financial Services | 17.8 | % | ||
Food and Beverage | 14.0 | % | ||
Health Care | 12.7 | % | ||
Retail | 9.6 | % | ||
Diversified Industrial | 4.5 | % | ||
Consumer Products | 4.4 | % | ||
Telecommunications | 3.5 | % | ||
Energy and Utilities: Oil | 3.5 | % | ||
Automotive: Parts and Accessories | 2.9 | % | ||
Aerospace | 2.7 | % | ||
Specialty Chemicals | 2.2 | % | ||
Entertainment | 1.6 | % | ||
Energy and Utilities: Services | 1.4 | % | ||
Computer Software and Services | 1.2 | % | ||
Wireless Communications | 1.2 | % | ||
Computer Hardware | 1.2 | % | ||
Equipment and Supplies | 1.2 | % | ||
Business Services | 1.2 | % | ||
Broadcasting | 1.2 | % | ||
Energy and Utilities: Natural Gas | 1.2 | % | ||
Electronics | 1.0 | % | ||
Real Estate Investment Trusts | 0.9 | % |
Metals and Mining | 0.9 | % | ||
Machinery | 0.8 | % | ||
Hotels and Gaming | 0.8 | % | ||
Energy and Utilities: Integrated | 0.8 | % | ||
Building and Construction | 0.8 | % | ||
Communications Equipment | 0.7 | % | ||
Cable and Satellite | 0.7 | % | ||
Environmental Services | 0.6 | % | ||
Agriculture | 0.6 | % | ||
Automotive | 0.5 | % | ||
Transportation | 0.4 | % | ||
Aviation: Parts and Services | 0.3 | % | ||
Energy and Utilities: Electric | 0.3 | % | ||
Consumer Services | 0.2 | % | ||
Energy and Utilities: Water | 0.2 | % | ||
Paper and Forest Products | 0.1 | % | ||
Real Estate | 0.0 | %* | ||
Publishing | 0.0 | %* | ||
Other Assets and Liabilities (Net) | 0.2 | % | ||
|
| |||
|
100.0 |
% | ||
|
|
* Amount represents less than 0.05%.
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 30, no later than August 31 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, 2016 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS — 99.5% |
| |||||||||||
Aerospace — 2.7% |
| |||||||||||
70,000 | Aerojet Rocketdyne Holdings Inc.† | $ | 408,128 | $ | 1,146,600 | |||||||
2,000 | Lockheed Martin Corp. | 47,350 | 443,000 | |||||||||
10,000 | Raytheon Co. | 279,200 | 1,226,300 | |||||||||
240,000 | Rockwell Automation Inc. | 10,161,665 | 27,300,000 | |||||||||
2,000 | Rockwell Collins Inc. | 15,844 | 184,420 | |||||||||
1,600,000 | Rolls-Royce Holdings plc | 11,982,896 | 15,672,306 | |||||||||
58,000 | The Boeing Co. | 3,639,088 | 7,362,520 | |||||||||
|
|
|
| |||||||||
26,534,171 | 53,335,146 | |||||||||||
|
|
|
| |||||||||
Agriculture — 0.6% | ||||||||||||
100,000 | Archer Daniels Midland Co. | 2,734,560 | 3,631,000 | |||||||||
84,000 | Monsanto Co. | 1,687,651 | 7,370,160 | |||||||||
12,000 | The Mosaic Co. | 186,246 | 324,000 | |||||||||
|
|
|
| |||||||||
4,608,457 | 11,325,160 | |||||||||||
|
|
|
| |||||||||
Automotive — 0.5% | ||||||||||||
250,000 | Ford Motor Co. | 3,028,457 | 3,375,000 | |||||||||
15,000 | General Motors Co. | 299,826 | 471,450 | |||||||||
350,000 | Navistar International Corp.† | 7,656,695 | 4,382,000 | |||||||||
31,000 | PACCAR Inc. | 1,399,566 | 1,695,390 | |||||||||
|
|
|
| |||||||||
12,384,544 | 9,923,840 | |||||||||||
|
|
|
| |||||||||
Automotive: Parts and Accessories — 2.9% |
| |||||||||||
8,000 | BorgWarner Inc. | 246,560 | 307,200 | |||||||||
200,000 | Dana Holding Corp. | 3,345,824 | 2,818,000 | |||||||||
70,000 | Federal-Mogul Holdings Corp.† | 753,550 | 691,600 | |||||||||
495,000 | Genuine Parts Co. | 22,121,615 | 49,183,200 | |||||||||
40,000 | Modine Manufacturing Co.† | 377,136 | 440,400 | |||||||||
10,000 | O’Reilly Automotive Inc.† | 254,864 | 2,736,600 | |||||||||
42,000 | Tenneco Inc.† | 640,427 | 2,163,420 | |||||||||
|
|
|
| |||||||||
27,739,976 | 58,340,420 | |||||||||||
|
|
|
| |||||||||
Aviation: Parts and Services — 0.3% |
| |||||||||||
48,000 | Curtiss-Wright Corp. | 532,546 | 3,632,160 | |||||||||
29,000 | United Technologies Corp. | 1,453,950 | 2,902,900 | |||||||||
|
|
|
| |||||||||
1,986,496 | 6,535,060 | |||||||||||
|
|
|
| |||||||||
Broadcasting — 1.2% | ||||||||||||
350,359 | CBS Corp., Cl. A, Voting | 8,434,882 | 20,462,717 | |||||||||
54,000 | CBS Corp., Cl. B, Non-Voting | 1,242,718 | 2,974,860 | |||||||||
36,000 | MSG Networks Inc., Cl. A† | 134,967 | 622,440 | |||||||||
|
|
|
| |||||||||
9,812,567 | 24,060,017 | |||||||||||
|
|
|
| |||||||||
Building and Construction — 0.7% | ||||||||||||
235,000 | Fortune Brands Home & Security Inc. | 2,557,576 | 13,169,400 | |||||||||
|
|
|
| |||||||||
Business Services — 1.2% | ||||||||||||
37,000 | Automatic Data Processing Inc. | 1,358,159 | 3,319,270 |
Shares | Cost | Market Value | ||||||||||
30,000 | Blackhawk Network Holdings Inc.† | $ | 699,587 | $ | 1,029,000 | |||||||
150,000 | Diebold Inc. | 4,961,156 | 4,336,500 | |||||||||
4,000 | Landauer Inc. | 134,546 | 132,280 | |||||||||
100,000 | MasterCard Inc., Cl. A | 864,079 | 9,450,000 | |||||||||
30,000 | McGraw Hill Financial Inc. | 1,225,693 | 2,969,400 | |||||||||
12,000 | MSC Industrial Direct Co. Inc., Cl. A | 909,493 | 915,720 | |||||||||
40,000 | Pentair plc | 1,223,885 | 2,170,400 | |||||||||
4,000 | Vectrus Inc.† | 61,245 | 91,000 | |||||||||
|
|
|
| |||||||||
11,437,843 | 24,413,570 | |||||||||||
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|
|
| |||||||||
Cable and Satellite — 0.7% | ||||||||||||
10,000 | AMC Networks Inc., Cl. A† | 389,742 | 649,400 | |||||||||
500 | Cable One Inc. | 66,571 | 218,565 | |||||||||
168,000 | DISH Network Corp., Cl. A† | 3,451,041 | 7,771,680 | |||||||||
16,000 | EchoStar Corp., Cl. A† | 478,840 | 708,640 | |||||||||
58,000 | Scripps Networks Interactive Inc., Cl. A | 2,452,305 | 3,799,000 | |||||||||
7,000 | Time Warner Cable Inc. | 938,876 | 1,432,340 | |||||||||
|
|
|
| |||||||||
7,777,375 | 14,579,625 | |||||||||||
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|
|
| |||||||||
Communications Equipment — 0.7% |
| |||||||||||
700,000 | Corning Inc. | 9,266,662 | 14,623,000 | |||||||||
|
|
|
| |||||||||
Computer Hardware — 1.2% | ||||||||||||
22,000 | Apple Inc. | 1,611,288 | 2,397,780 | |||||||||
300,000 | HP Inc. | 2,896,840 | 3,696,000 | |||||||||
124,000 | International Business Machines Corp. | 9,997,048 | 18,779,800 | |||||||||
|
|
|
| |||||||||
14,505,176 | 24,873,580 | |||||||||||
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|
|
| |||||||||
Computer Software and Services — 1.2% |
| |||||||||||
11,000 | CDK Global Inc. | 171,508 | 512,050 | |||||||||
100,000 | EMC Corp. | 2,250,448 | 2,665,000 | |||||||||
111,500 | Fidelity National Information Services Inc. | 1,973,852 | 7,059,065 | |||||||||
300,000 | Hewlett Packard Enterprise Co. | 3,540,582 | 5,319,000 | |||||||||
50,000 | Microsoft Corp. | 1,397,000 | 2,761,500 | |||||||||
23,000 | NetScout Systems Inc.† | 371,369 | 528,310 | |||||||||
170,000 | Yahoo! Inc.† | 2,777,079 | 6,257,700 | |||||||||
|
|
|
| |||||||||
12,481,838 | 25,102,625 | |||||||||||
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|
|
| |||||||||
Consumer Products — 4.4% | ||||||||||||
44,000 | Altria Group Inc. | 517,039 | 2,757,040 | |||||||||
80,000 | Edgewell Personal Care Co. | 3,324,552 | 6,442,400 | |||||||||
70,000 | Energizer Holdings Inc. | 942,538 | 2,835,700 | |||||||||
1,000 | Hanesbrands Inc. | 5,448 | 28,340 | |||||||||
2,000 | National Presto Industries Inc. | 60,046 | 167,480 | |||||||||
50,000 | Philip Morris International Inc. | 1,501,172 | 4,905,500 | |||||||||
102,000 | Reckitt Benckiser Group plc | 3,247,436 | 9,859,248 |
See accompanying notes to financial statements.
4
The Gabelli Equity Income Fund
Schedule of Investments (Continued) — March 31, 2016 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS (Continued) | ||||||||||||
Consumer Products (Continued) | ||||||||||||
19,000 | Svenska Cellulosa AB, Cl. A | $ | 326,762 | $ | 594,229 | |||||||
1,200,000 | Swedish Match AB | 16,974,362 | 40,737,844 | |||||||||
194,000 | The Procter & Gamble Co. | 11,409,920 | 15,968,140 | |||||||||
81,000 | Unilever NV - NY Shares | 1,639,778 | 3,619,080 | |||||||||
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|
|
| |||||||||
39,949,053 | 87,915,001 | |||||||||||
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| |||||||||
Consumer Services — 0.2% | ||||||||||||
4,000 | Allegion plc | 59,916 | 254,840 | |||||||||
124,000 | Rollins Inc. | 298,952 | 3,362,880 | |||||||||
|
|
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| |||||||||
358,868 | 3,617,720 | |||||||||||
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| |||||||||
Diversified Industrial — 4.4% | ||||||||||||
600 | Acuity Brands Inc. | 5,693 | 130,884 | |||||||||
100,000 | Crane Co. | 3,402,503 | 5,386,000 | |||||||||
80,000 | Eaton Corp. plc | 3,945,548 | 5,004,800 | |||||||||
800,000 | General Electric Co. | 13,648,964 | 25,432,000 | |||||||||
204,000 | Honeywell International Inc. | 6,915,343 | 22,858,200 | |||||||||
50,000 | ITT Corp. | 1,004,526 | 1,844,500 | |||||||||
50,000 | Jardine Matheson Holdings Ltd. | 2,372,853 | 2,854,000 | |||||||||
180,000 | Jardine Strategic Holdings Ltd. | 4,227,653 | 5,373,000 | |||||||||
120,000 | Textron Inc. | 763,372 | 4,375,200 | |||||||||
350,000 | Toray Industries Inc. | 2,392,238 | 2,982,985 | |||||||||
26,000 | Trinity Industries Inc. | 376,576 | 476,060 | |||||||||
305,000 | Tyco International plc | 6,428,113 | 11,196,550 | |||||||||
|
|
|
| |||||||||
45,483,382 | 87,914,179 | |||||||||||
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| |||||||||
Electronics — 1.0% | ||||||||||||
41,000 | Dolby Laboratories Inc., Cl. A | 1,639,309 | 1,781,860 | |||||||||
45,000 | Sony Corp. | 1,174,377 | 1,156,737 | |||||||||
85,000 | Sony Corp., ADR | 2,025,391 | 2,186,200 | |||||||||
74,000 | TE Connectivity Ltd. | 2,500,525 | 4,582,080 | |||||||||
180,000 | Texas Instruments Inc. | 4,693,250 | 10,335,600 | |||||||||
|
|
|
| |||||||||
12,032,852 | 20,042,477 | |||||||||||
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|
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Energy and Utilities: Electric — 0.3% |
| |||||||||||
16,000 | American Electric Power Co. Inc. | 551,750 | 1,062,400 | |||||||||
7,000 | Avangrid Inc. | 137,482 | 280,770 | |||||||||
45,000 | El Paso Electric Co. | 351,450 | 2,064,600 | |||||||||
12,500 | Great Plains Energy Inc. | 237,842 | 403,125 | |||||||||
50,000 | Korea Electric Power Corp., ADR† | 650,030 | 1,287,500 | |||||||||
105,000 | The AES Corp. | 560,708 | 1,239,000 | |||||||||
|
|
|
| |||||||||
2,489,262 | 6,337,395 | |||||||||||
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| |||||||||
Energy and Utilities: Integrated — 0.8% |
| |||||||||||
32,000 | Dominion Resources Inc. | 1,147,041 | 2,403,840 | |||||||||
10,000 | Duke Energy Corp. | 466,157 | 806,800 | |||||||||
215,000 | Energy Transfer Equity LP | 1,505,747 | 1,532,950 | |||||||||
29,000 | Eni SpA | 304,221 | 438,889 |
Shares | Cost | Market Value | ||||||||||
36,000 | Eversource Energy | $ | 577,023 | $ | 2,100,240 | |||||||
6,500 | Iberdrola SA, ADR | 98,020 | 174,005 | |||||||||
6,000 | NextEra Energy Inc. | 242,837 | 710,040 | |||||||||
67,500 | OGE Energy Corp. | 900,738 | 1,932,525 | |||||||||
59,000 | PNM Resources Inc. | 607,016 | 1,989,480 | |||||||||
40,000 | TECO Energy Inc. | 496,772 | 1,101,200 | |||||||||
57,000 | Westar Energy Inc. | 654,501 | 2,827,770 | |||||||||
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|
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| |||||||||
7,000,073 | 16,017,739 | |||||||||||
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Energy and Utilities: Natural Gas — 1.2% |
| |||||||||||
6,000 | AGL Resources Inc. | 105,825 | 390,840 | |||||||||
2,300 | Atmos Energy Corp. | 60,499 | 170,798 | |||||||||
90,426 | California Resources Corp. | 309,037 | 93,138 | |||||||||
100,000 | Kinder Morgan Inc. | 3,211,500 | 1,786,000 | |||||||||
211,000 | National Fuel Gas Co. | 9,368,719 | 10,560,550 | |||||||||
17,000 | ONE Gas Inc. | 72,951 | 1,038,700 | |||||||||
126,000 | ONEOK Inc. | 1,274,422 | 3,762,360 | |||||||||
24,000 | Piedmont Natural Gas Co. Inc. | 394,017 | 1,435,920 | |||||||||
20,000 | Southwest Gas Corp. | 413,154 | 1,317,000 | |||||||||
90,000 | Spectra Energy Corp. | 2,134,239 | 2,754,000 | |||||||||
|
|
|
| |||||||||
17,344,363 | 23,309,306 | |||||||||||
|
|
|
| |||||||||
Energy and Utilities: Oil — 3.5% | ||||||||||||
192,000 | Anadarko Petroleum Corp. | 10,070,492 | 8,941,440 | |||||||||
210,000 | BP plc, ADR | 9,017,361 | 6,337,800 | |||||||||
155,000 | Chevron Corp. | 7,400,254 | 14,787,000 | |||||||||
150,000 | ConocoPhillips | 3,076,693 | 6,040,500 | |||||||||
16,000 | Denbury Resources Inc. | 47,450 | 35,520 | |||||||||
54,000 | Devon Energy Corp. | 2,183,608 | 1,481,760 | |||||||||
140,000 | Exxon Mobil Corp. | 4,743,815 | 11,702,600 | |||||||||
120,000 | Hess Corp. | 7,451,605 | 6,318,000 | |||||||||
28,000 | Marathon Oil Corp. | 652,294 | 311,920 | |||||||||
36,000 | Marathon Petroleum Corp. | 588,886 | 1,338,480 | |||||||||
90,000 | Occidental Petroleum Corp. | 3,590,043 | 6,158,700 | |||||||||
3,000 | PetroChina Co. Ltd., ADR | 234,161 | 198,900 | |||||||||
2,000 | Repsol SA, ADR | 21,640 | 22,620 | |||||||||
115,000 | Royal Dutch Shell plc, Cl. A, ADR | 5,200,302 | 5,571,750 | |||||||||
17,000 | Total SA, ADR | 282,789 | 772,140 | |||||||||
28,000 | WesternZagros Resources Ltd.† | 96,833 | 1,509 | |||||||||
|
|
|
| |||||||||
54,658,226 | 70,020,639 | |||||||||||
|
|
|
| |||||||||
Energy and Utilities: Services — 1.4% |
| |||||||||||
48,000 | Cameron International Corp.† | 687,368 | 3,218,400 | |||||||||
350,000 | Halliburton Co. | 10,342,941 | 12,502,000 | |||||||||
94,000 | Oceaneering International Inc. | 2,032,090 | 3,124,560 | |||||||||
40,000 | Schlumberger Ltd. | 1,275,020 | 2,950,000 | |||||||||
920,000 | Weatherford International plc† | 12,929,770 | 7,157,600 | |||||||||
|
|
|
| |||||||||
27,267,189 | 28,952,560 | |||||||||||
|
|
|
|
See accompanying notes to financial statements.
5
The Gabelli Equity Income Fund
Schedule of Investments (Continued) — March 31, 2016 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS (Continued) | ||||||||||||
Energy and Utilities: Water — 0.2% |
| |||||||||||
22,500 | Aqua America Inc. | $ | 166,116 | $ | 715,950 | |||||||
80,000 | Severn Trent plc | 2,133,400 | 2,496,768 | |||||||||
|
|
|
| |||||||||
2,299,516 | 3,212,718 | |||||||||||
|
|
|
| |||||||||
Entertainment — 1.6% | ||||||||||||
150,000 | Grupo Televisa SAB, ADR | 3,532,654 | 4,119,000 | |||||||||
12,000 | The Madison Square Garden Co, Cl. A† | 347,057 | 1,996,320 | |||||||||
115,000 | Time Warner Inc. | 3,180,120 | 8,343,250 | |||||||||
140,016 | Twenty-First Century Fox Inc., Cl. B | 4,461,794 | 3,948,451 | |||||||||
300,000 | Viacom Inc., Cl. A | 11,945,525 | 13,590,000 | |||||||||
|
|
|
| |||||||||
23,467,150 | 31,997,021 | |||||||||||
|
|
|
| |||||||||
Environmental Services — 0.6% | ||||||||||||
50,000 | Republic Services Inc. | 1,684,307 | 2,382,500 | |||||||||
175,000 | Waste Management Inc. | 5,905,150 | 10,325,000 | |||||||||
|
|
|
| |||||||||
7,589,457 | 12,707,500 | |||||||||||
|
|
|
| |||||||||
Equipment and Supplies — 1.2% | ||||||||||||
34,000 | A.O. Smith Corp. | 238,161 | 2,594,540 | |||||||||
16,346 | Danaher Corp. | 627,561 | 1,550,582 | |||||||||
190,000 | Flowserve Corp. | 2,554,267 | 8,437,900 | |||||||||
24,000 | Graco Inc. | 1,307,940 | 2,015,040 | |||||||||
12,000 | Ingersoll-Rand plc | 249,750 | 744,120 | |||||||||
26,000 | Minerals Technologies Inc. | 951,815 | 1,478,100 | |||||||||
190,000 | Mueller Industries Inc. | 3,794,476 | 5,589,800 | |||||||||
16,000 | Parker Hannifin Corp. | 835,168 | 1,777,280 | |||||||||
15,000 | Tenaris SA, ADR | 306,100 | 371,400 | |||||||||
|
|
|
| |||||||||
10,865,238 | 24,558,762 | |||||||||||
|
|
|
| |||||||||
Financial Services — 17.8% | ||||||||||||
6,579 | Alleghany Corp.† | 1,015,114 | 3,264,500 | |||||||||
380,000 | AllianceBernstein Holding LP | 7,016,152 | 8,903,400 | |||||||||
360,000 | American Express Co. | 14,759,917 | 22,104,000 | |||||||||
500,000 | American International Group Inc. | 12,953,205 | 27,025,000 | |||||||||
30,000 | Argo Group International Holdings Ltd. | 764,717 | 1,721,700 | |||||||||
22,932 | Banco Popular Espanol SA | 201,733 | 59,678 | |||||||||
5,195 | Banco Santander Chile, ADR | 29,250 | 100,523 | |||||||||
155,000 | Banco Santander SA, ADR | 1,193,258 | 675,800 | |||||||||
335,000 | Bank of America Corp. | 3,395,384 | 4,529,200 | |||||||||
13,056 | BNP Paribas SA | 580,935 | 657,101 | |||||||||
510,000 | Citigroup Inc. | 20,768,079 | 21,292,500 | |||||||||
32,000 | Deutsche Bank AG | 933,121 | 542,080 | |||||||||
65,000 | Dundee Corp., Cl. A† | 1,411,928 | 300,289 | |||||||||
44,000 | Eaton Vance Corp. | 1,344,334 | 1,474,880 | |||||||||
132,000 | Federated Investors Inc., Cl. B | 3,257,871 | 3,808,200 | |||||||||
34,000 | Fidelity Southern Corp. | 281,974 | 545,360 | |||||||||
260,000 | H&R Block Inc. | 4,668,619 | 6,869,200 |
Shares | Cost | Market Value | ||||||||||
54,000 | Interactive Brokers Group Inc., Cl. A | $ | 820,617 | $ | 2,123,280 | |||||||
315,034 | Janus Capital Group Inc. | 3,167,807 | 4,608,947 | |||||||||
270,000 | JPMorgan Chase & Co. | 9,499,666 | 15,989,400 | |||||||||
82,758 | Julius Baer Group Ltd. | 2,738,518 | 3,554,579 | |||||||||
32,000 | Kemper Corp. | 868,650 | 946,240 | |||||||||
90,100 | Kinnevik Investment AB, Cl. A | 1,682,511 | 2,661,409 | |||||||||
19,000 | Kinnevik Investment AB, Cl. B | 278,394 | 538,995 | |||||||||
473,000 | Legg Mason Inc. | 11,114,576 | 16,403,640 | |||||||||
15,000 | Leucadia National Corp. | 263,160 | 242,550 | |||||||||
160,000 | Loews Corp. | 6,743,634 | 6,121,600 | |||||||||
155,000 | M&T Bank Corp. | 11,346,097 | 17,205,000 | |||||||||
360,000 | Marsh & McLennan Companies Inc. | 10,845,255 | 21,884,400 | |||||||||
370,000 | Morgan Stanley | 9,894,694 | 9,253,700 | |||||||||
288,000 | Navient Corp. | 2,385,656 | 3,447,360 | |||||||||
75,000 | Northern Trust Corp. | 3,374,898 | 4,887,750 | |||||||||
30,000 | Och-Ziff Capital Management Group LLC, Cl. A | 284,735 | 130,500 | |||||||||
40,000 | Oritani Financial Corp. | 400,000 | 678,800 | |||||||||
40,000 | Popular Inc. | 1,006,510 | 1,144,400 | |||||||||
20,000 | Royal Bank of Canada | 1,012,831 | 1,151,200 | |||||||||
315,000 | SLM Corp.† | 1,496,699 | 2,003,400 | |||||||||
170,000 | State Street Corp. | 7,766,302 | 9,948,400 | |||||||||
310,000 | Sterling Bancorp | 3,484,951 | 4,938,300 | |||||||||
12,000 | SunTrust Banks Inc. | 251,737 | 432,960 | |||||||||
82,000 | T. Rowe Price Group Inc. | 3,733,964 | 6,023,720 | |||||||||
100,000 | TD Ameritrade Holding Corp. | 1,692,686 | 3,153,000 | |||||||||
1,160,000 | The Bank of New York Mellon Corp. | 34,363,918 | 42,722,800 | |||||||||
3,000 | The Dun & Bradstreet Corp. | 105,969 | 309,240 | |||||||||
21,000 | The Goldman Sachs Group Inc. | 2,643,896 | 3,296,580 | |||||||||
152,000 | The Hartford Financial Services Group Inc. | 4,798,325 | 7,004,160 | |||||||||
106,000 | The PNC Financial Services Group Inc. | 5,651,498 | 8,964,420 | |||||||||
17,500 | The Travelers Companies Inc. | 696,468 | 2,042,425 | |||||||||
78,000 | W. R. Berkley Corp. | 2,851,864 | 4,383,600 | |||||||||
140,000 | Waddell & Reed Financial Inc., Cl. A | 3,211,846 | 3,295,600 | |||||||||
870,000 | Wells Fargo & Co. | 27,599,927 | 42,073,200 | |||||||||
375,000 | Wright Investors’ Service Holdings Inc.† | 922,026 | 502,500 | |||||||||
|
|
|
| |||||||||
253,575,876 | 357,941,466 | |||||||||||
|
|
|
| |||||||||
Food and Beverage — 14.0% | ||||||||||||
1,000 | Ajinomoto Co. Inc. | 15,519 | 22,564 | |||||||||
30,000 | Anheuser-Busch InBev NV | 496,266 | 3,729,475 | |||||||||
190,500 | Brown-Forman Corp., Cl. A | 7,318,358 | 20,324,445 | |||||||||
20,250 | Brown-Forman Corp., Cl. B | 825,919 | 1,994,017 | |||||||||
210,000 | Campbell Soup Co. | 6,837,866 | 13,395,900 |
See accompanying notes to financial statements.
6
The Gabelli Equity Income Fund
Schedule of Investments (Continued) — March 31, 2016 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS (Continued) | ||||||||||||
Food and Beverage (Continued) | ||||||||||||
80,000 | Coca-Cola Amatil Ltd., ADR | $ | 246,845 | $ | 538,400 | |||||||
20,000 | Coca-Cola Enterprises Inc. | 450,000 | 1,014,800 | |||||||||
14,500 | Coca-Cola Femsa SAB de CV, ADR | 590,410 | 1,204,225 | |||||||||
12,000 | Constellation Brands Inc., Cl. A | 148,841 | 1,813,080 | |||||||||
144,000 | Danone SA | 7,408,425 | 10,242,760 | |||||||||
550,000 | Davide Campari-Milano SpA | 3,822,395 | 5,498,060 | |||||||||
3,000 | Diageo plc | 79,177 | 81,069 | |||||||||
99,000 | Diageo plc, ADR | 5,892,480 | 10,679,130 | |||||||||
60,000 | Dr Pepper Snapple Group Inc. | 1,148,908 | 5,365,200 | |||||||||
133,000 | Fomento Economico Mexicano SAB de CV, ADR | 3,194,849 | 12,809,230 | |||||||||
240,000 | General Mills Inc. | 6,648,484 | 15,204,000 | |||||||||
3,000,000 | Grupo Bimbo SAB de CV, Cl. A† | 2,411,096 | 8,874,728 | |||||||||
148,000 | Heineken NV | 6,988,553 | 13,413,821 | |||||||||
17,000 | Heineken NV, ADR | 430,190 | 769,930 | |||||||||
230,000 | ITO EN Ltd. | 4,740,133 | 7,265,094 | |||||||||
35,000 | Kellogg Co. | 1,790,141 | 2,679,250 | |||||||||
2,000 | McCormick & Co. Inc., Cl. V | 137,120 | 198,830 | |||||||||
28,000 | McCormick & Co. Inc., Non-Voting | 1,282,199 | 2,785,440 | |||||||||
965,000 | Mondelēz International Inc., Cl. A | 18,556,646 | 38,715,800 | |||||||||
115,000 | Nestlé SA | 3,174,203 | 8,593,157 | |||||||||
65,000 | Nestlé SA, ADR | 3,829,280 | 4,849,650 | |||||||||
130,000 | NISSIN FOODS HOLDINGS CO. LTD. | 4,309,367 | 6,110,445 | |||||||||
3,950,000 | Parmalat SpA | 11,019,148 | 10,931,146 | |||||||||
100,000 | PepsiCo Inc. | 6,444,340 | 10,248,000 | |||||||||
45,000 | Pernod Ricard SA | 3,674,041 | 5,018,150 | |||||||||
58,000 | Remy Cointreau SA | 3,534,133 | 4,403,409 | |||||||||
20,000 | SABMiller plc | 733,959 | 1,222,532 | |||||||||
200,000 | Sapporo Holdings Ltd. | 932,502 | 995,157 | |||||||||
115,000 | The Kraft Heinz Co. | 3,499,535 | 9,034,400 | |||||||||
500,000 | The Coca-Cola Co. | 12,461,102 | 23,195,000 | |||||||||
1,000 | The Hershey Co. | 36,300 | 92,090 | |||||||||
153,000 | The WhiteWave Foods Co.† | 2,058,578 | 6,217,920 | |||||||||
95,790 | Tootsie Roll Industries Inc. | 1,909,508 | 3,346,903 | |||||||||
20,000 | Tyson Foods Inc., Cl. A | 178,195 | 1,333,200 | |||||||||
155,000 | Yakult Honsha Co. Ltd. | 4,171,714 | 6,865,476 | |||||||||
|
|
|
| |||||||||
143,426,725 | 281,075,883 | |||||||||||
|
|
|
| |||||||||
Health Care — 12.7% | ||||||||||||
38,000 | Abbott Laboratories | 1,098,377 | 1,589,540 | |||||||||
18,500 | AbbVie Inc. | 460,207 | 1,056,720 | |||||||||
38,000 | Aetna Inc. | 1,540,997 | 4,269,300 | |||||||||
4,000 | Allergan plc† | 576,000 | 1,072,120 | |||||||||
67,000 | Baxalta Inc. | 1,242,073 | 2,706,800 | |||||||||
112,000 | Baxter International Inc. | 2,711,257 | 4,600,960 |
Shares | Cost | Market Value | ||||||||||
10,000 | Becton, Dickinson and Co. | $ | 774,341 | $ | 1,518,200 | |||||||
22,000 | Bio-Rad Laboratories Inc., Cl. A† | 2,262,601 | 3,007,840 | |||||||||
400,000 | Boston Scientific Corp.† | 2,821,780 | 7,524,000 | |||||||||
580,000 | Bristol-Myers Squibb Co. | 14,754,727 | 37,050,400 | |||||||||
425,000 | Eli Lilly & Co. | 16,483,491 | 30,604,250 | |||||||||
20,000 | Express Scripts Holding Co.† | 1,010,819 | 1,373,800 | |||||||||
14,076 | GlaxoSmithKline plc, ADR | 635,995 | 570,782 | |||||||||
21,500 | Henry Schein Inc.† | 550,269 | 3,711,545 | |||||||||
105,000 | Indivior plc | 68,659 | 245,964 | |||||||||
265,000 | Johnson & Johnson | 16,588,719 | 28,673,000 | |||||||||
22,000 | Laboratory Corp. of America Holdings† | 1,656,832 | 2,576,860 | |||||||||
85,000 | Mead Johnson Nutrition Co. | 3,961,753 | 7,222,450 | |||||||||
482,000 | Merck & Co. Inc. | 14,657,748 | 25,502,620 | |||||||||
259,500 | Novartis AG, ADR | 14,214,828 | 18,798,180 | |||||||||
215,000 | Patterson Companies Inc. | 7,565,090 | 10,003,950 | |||||||||
850,000 | Pfizer Inc. | 15,245,677 | 25,194,000 | |||||||||
135,000 | Roche Holding AG, ADR | 2,611,034 | 4,134,375 | |||||||||
37,000 | Roche Holding AG, Genusschein | 5,446,249 | 9,108,107 | |||||||||
45,000 | St. Jude Medical Inc. | 1,774,215 | 2,475,000 | |||||||||
90,000 | Tenet Healthcare Corp.† | 2,226,155 | 2,603,700 | |||||||||
44,000 | UnitedHealth Group Inc. | 1,208,837 | 5,671,600 | |||||||||
18,000 | William Demant Holding A/S† | 880,509 | 1,810,033 | |||||||||
61,854 | Wright Medical Group NV† | 1,273,574 | 1,026,776 | |||||||||
53,500 | Zimmer Biomet Holdings Inc. | 3,151,375 | 5,704,705 | |||||||||
80,000 | Zoetis Inc. | 2,404,538 | 3,546,400 | |||||||||
|
|
|
| |||||||||
141,858,726 | 254,953,977 | |||||||||||
|
|
|
| |||||||||
Hotels and Gaming — 0.8% | ||||||||||||
128,000 | Las Vegas Sands Corp. | 1,928,947 | 6,615,040 | |||||||||
78,000 | MGM Resorts International† | 799,235 | 1,672,320 | |||||||||
78,000 | Starwood Hotels & Resorts Worldwide Inc. | 1,586,433 | 6,507,540 | |||||||||
14,500 | Wynn Resorts Ltd. | 468,737 | 1,354,735 | |||||||||
|
|
|
| |||||||||
4,783,352 | 16,149,635 | |||||||||||
|
|
|
| |||||||||
Machinery — 0.8% | ||||||||||||
6,000 | Caterpillar Inc. | 35,181 | 459,240 | |||||||||
130,000 | Deere & Co. | 6,584,132 | 10,008,700 | |||||||||
160,000 | Xylem Inc. | 4,529,039 | 6,544,000 | |||||||||
|
|
|
| |||||||||
11,148,352 | 17,011,940 | |||||||||||
|
|
|
| |||||||||
Metals and Mining — 0.9% | ||||||||||||
900,000 | Alcoa Inc. | 9,233,842 | 8,622,000 | |||||||||
270,000 | Freeport-McMoRan Inc. | 3,886,726 | 2,791,800 | |||||||||
254,600 | Newmont Mining Corp. | 7,860,462 | 6,767,268 | |||||||||
2,000 | Royal Gold Inc. | 88,166 | 102,580 | |||||||||
|
|
|
| |||||||||
21,069,196 | 18,283,648 | |||||||||||
|
|
|
| |||||||||
Paper and Forest Products — 0.1% |
| |||||||||||
28,000 | International Paper Co. | 889,501 | 1,149,120 | |||||||||
|
|
|
|
See accompanying notes to financial statements.
7
The Gabelli Equity Income Fund
Schedule of Investments (Continued) — March 31, 2016 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS (Continued) | ||||||||||||
Publishing — 0.0% | ||||||||||||
800 | Graham Holdings Co., Cl. B | $ | 201,767 | $ | 384,000 | |||||||
3,000 | Value Line Inc. | 41,976 | 48,090 | |||||||||
|
|
|
| |||||||||
243,743 | 432,090 | |||||||||||
|
|
|
| |||||||||
Real Estate — 0.0% | ||||||||||||
64,000 | Dream Unlimited Corp., Cl. A† | 845,172 | 405,066 | |||||||||
10,000 | Griffin Industrial Realty Inc. | 224,290 | 245,600 | |||||||||
|
|
|
| |||||||||
1,069,462 | 650,666 | |||||||||||
|
|
|
| |||||||||
Real Estate Investment Trusts — 0.9% |
| |||||||||||
45,000 | Ryman Hospitality Properties Inc. | 1,712,312 | 2,316,600 | |||||||||
500 | Seritage Growth Properties, Cl. A | 20,584 | 24,985 | |||||||||
537,000 | Weyerhaeuser Co. | 12,638,337 | 16,636,260 | |||||||||
|
|
|
| |||||||||
14,371,233 | 18,977,845 | |||||||||||
|
|
|
| |||||||||
Retail — 9.6% |
| |||||||||||
16,000 | Compagnie Financiere Richemont SA | 540,728 | 1,057,459 | |||||||||
24,562 | Copart Inc.† | 433,098 | 1,001,393 | |||||||||
151,000 | Costco Wholesale Corp. | 7,903,558 | 23,794,580 | |||||||||
474,000 | CVS Health Corp. | 16,666,456 | 49,168,020 | |||||||||
140,000 | Hertz Global Holdings Inc.† | 2,745,639 | 1,474,200 | |||||||||
100,000 | Ingles Markets Inc., Cl. A | 1,788,883 | 3,750,000 | |||||||||
431,000 | J.C. Penney Co. Inc.† | 4,723,213 | 4,766,860 | |||||||||
455,000 | Macy’s Inc. | 6,840,720 | 20,060,950 | |||||||||
1,000 | Sears Canada Inc.† | 5,933 | 2,800 | |||||||||
1,000 | Sears Holdings Corp.† | 24,001 | 15,310 | |||||||||
209 | Sears Hometown and Outlet Stores Inc.† | 1,992 | 1,342 | |||||||||
90,000 | Seven & i Holdings Co. Ltd. | 2,692,986 | 3,832,067 | |||||||||
392,000 | The Home Depot Inc. | 11,105,834 | 52,304,560 | |||||||||
38,000 | Tractor Supply Co. | 300,519 | 3,437,480 | |||||||||
122,000 | Walgreens Boots Alliance Inc. | 3,832,028 | 10,277,280 | |||||||||
154,000 | Wal-Mart Stores Inc. | 7,199,219 | 10,547,460 | |||||||||
10,000 | Weis Markets Inc. | 300,480 | 450,600 | |||||||||
218,000 | Whole Foods Market Inc. | 4,142,651 | 6,781,980 | |||||||||
|
|
|
| |||||||||
71,247,938 | 192,724,341 | |||||||||||
|
|
|
| |||||||||
Specialty Chemicals — 2.2% |
| |||||||||||
24,000 | Albemarle Corp. | 345,659 | 1,534,320 | |||||||||
6,000 | Ashland Inc. | 275,062 | 659,760 | |||||||||
66,000 | E. I. du Pont de Nemours and Co. | 2,866,485 | 4,179,120 | |||||||||
294,000 | Ferro Corp.† | 2,479,612 | 3,489,780 | |||||||||
8,000 | FMC Corp. | 186,076 | 322,960 | |||||||||
46,000 | H.B. Fuller Co. | 950,216 | 1,952,700 | |||||||||
205,000 | International Flavors & Fragrances Inc. | 9,473,277 | 23,322,850 | |||||||||
2,400 | NewMarket Corp. | 9,263 | 951,024 | |||||||||
2,700 | Quaker Chemical Corp. | 46,704 | 229,122 |
Shares | Cost | Market Value | ||||||||||
38,000 | Sensient Technologies Corp. | $ | 779,808 | $ | 2,411,480 | |||||||
20,000 | The Chemours Co. | 210,932 | 140,000 | |||||||||
90,000 | The Dow Chemical Co. | 3,041,686 | 4,577,400 | |||||||||
|
|
|
| |||||||||
20,664,780 | 43,770,516 | |||||||||||
|
|
|
| |||||||||
Telecommunications — 3.4% |
| |||||||||||
20,000 | AT&T Inc. | 487,538 | 783,400 | |||||||||
450,000 | BCE Inc. | 9,912,971 | 20,493,000 | |||||||||
50,000 | BT Group plc, Cl. A | 204,914 | 316,333 | |||||||||
32,000 | BT Group plc, ADR | 469,025 | 1,026,560 | |||||||||
40,000 | CenturyLink Inc. | 1,274,072 | 1,278,400 | |||||||||
570,000 | Cincinnati Bell Inc.† | 2,113,892 | 2,205,900 | |||||||||
340,000 | Deutsche Telekom AG, ADR | 5,257,279 | 6,089,400 | |||||||||
12,000 | Harris Corp. | 949,244 | 934,320 | |||||||||
33,000 | Loral Space & Communications Inc.† | 1,317,447 | 1,159,290 | |||||||||
25,000 | Orange SA, ADR | 424,798 | 434,500 | |||||||||
48,000 | Proximus SA | 1,497,748 | 1,640,491 | |||||||||
25,000 | Sprint Corp.† | 124,240 | 87,000 | |||||||||
45,010 | Telefonica SA, ADR | 428,921 | 500,961 | |||||||||
370,000 | Telephone & Data Systems Inc. | 10,956,190 | 11,133,300 | |||||||||
24,000 | TELUS Corp. | 185,454 | 781,305 | |||||||||
30,000 | TELUS Corp., New York | 687,084 | 975,900 | |||||||||
350,000 | Verizon Communications Inc. | 12,750,738 | 18,928,000 | |||||||||
|
|
|
| |||||||||
49,041,555 | 68,768,060 | |||||||||||
|
|
|
| |||||||||
Transportation — 0.4% | ||||||||||||
171,000 | GATX Corp. | 6,081,094 | 8,122,500 | |||||||||
|
|
|
| |||||||||
Wireless Communications — 1.2% |
| |||||||||||
7,900,000 | Cable & Wireless Communications plc | 5,870,896 | 8,742,352 | |||||||||
13,000 | Millicom International Cellular SA | 856,288 | 716,690 | |||||||||
42,000 | Millicom International Cellular SA, SDR | 3,081,113 | 2,295,495 | |||||||||
240,000 | NTT DoCoMo Inc. | 3,485,733 | 5,443,156 | |||||||||
82,000 | Turkcell Iletisim Hizmetleri A/S, ADR | 1,219,006 | 861,820 | |||||||||
32,000 | United States Cellular Corp.† | 1,394,584 | 1,462,080 | |||||||||
170,000 | Vodafone Group plc, ADR | 8,234,210 | 5,448,500 | |||||||||
|
|
|
| |||||||||
24,141,830 | 24,970,093 | |||||||||||
|
|
|
| |||||||||
TOTAL COMMON STOCKS | 1,155,510,673 | 2,001,866,240 | ||||||||||
|
|
|
| |||||||||
CONVERTIBLE PREFERRED STOCKS — 0.1% |
| |||||||||||
Telecommunications — 0.1% | ||||||||||||
30,000 | Cincinnati Bell Inc., 6.750%, Ser. B | 625,446 | 1,455,000 | |||||||||
|
|
|
|
See accompanying notes to financial statements.
8
The Gabelli Equity Income Fund
Schedule of Investments (Continued) — March 31, 2016 (Unaudited)
Shares | Cost | Market Value | ||||||||||
RIGHTS — 0.0% | ||||||||||||
Retail — 0.0% | ||||||||||||
250,017 | Safeway Casa Ley, CVR, expire 01/30/19† | $ | 27,343 | $ | 112,508 | |||||||
250,017 | Safeway PDC, CVR, expire 01/30/17† | 1,313 | 12,201 | |||||||||
|
|
|
| |||||||||
TOTAL RIGHTS | 28,656 | 124,709 | ||||||||||
|
|
|
| |||||||||
WARRANTS — 0.0% | ||||||||||||
Energy and Utilities: Natural Gas — 0.0% |
| |||||||||||
310,000 | Kinder Morgan Inc., expire 05/25/17† | 553,864 | 11,315 | |||||||||
|
|
|
| |||||||||
Retail — 0.0% | ||||||||||||
105 | Sears Holdings Corp., expire 12/15/19† | 522 | 462 | |||||||||
|
|
|
| |||||||||
TOTAL WARRANTS | 554,386 | 11,777 | ||||||||||
|
|
|
|
Principal Amount | Cost | Market Value | ||||||||||
CONVERTIBLE CORPORATE BONDS — 0.1% |
| |||||||||||
Building and Construction — 0.1% |
| |||||||||||
$ 1,000,000 | Layne Christensen Co., | $ | 1,000,000 | $ | 729,375 | |||||||
|
|
|
| |||||||||
Transportation — 0.0% |
| |||||||||||
600,000 | Navistar International Corp., Sub. Deb., | 598,397 | 360,750 | |||||||||
|
|
|
| |||||||||
TOTAL CONVERTIBLE CORPORATE BONDS | 1,598,397 | 1,090,125 | ||||||||||
|
|
|
| |||||||||
CORPORATE BONDS — 0.1% |
| |||||||||||
Diversified Industrial — 0.1% | ||||||||||||
2,500,000 | Griffon Corp., Sub. Deb., | 2,494,140 | 2,884,375 | |||||||||
|
|
|
| |||||||||
Energy and Utilities: Electric — 0.0% |
| |||||||||||
100,000 | Texas Competitive Electric Holdings Co. LLC, Ser. B, | 83,290 | 3,500 | |||||||||
|
|
|
| |||||||||
Retail — 0.0% |
| |||||||||||
3,000 | Sears Holdings Corp., | 2,589 | 2,460 | |||||||||
|
|
|
| |||||||||
TOTAL CORPORATE BONDS | 2,580,019 | 2,890,335 | ||||||||||
|
|
|
| |||||||||
TOTAL INVESTMENTS — 99.8% | $ | 1,160,897,577 | 2,007,438,186 | |||||||||
|
| |||||||||||
Other Assets and Liabilities (Net) — 0.2% |
| 4,069,851 | ||||||||||
|
| |||||||||||
NET ASSETS — 100.0% | $ | 2,011,508,037 | ||||||||||
|
|
(a) | Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. This security may be resold in transactions exempt from registration, normally to qualified institutional buyers. At March 31, 2016, the market value of the Rule 144A security amounted to $2,884,375 or 0.14% of net assets. |
† | Non-income producing security. |
ADR | American Depositary Receipt |
CVR | Contingent Value Right |
SDR | Swedish Depositary Receipt |
See accompanying notes to financial statements.
9
The Gabelli Equity Income Fund
Statement of Assets and Liabilities
March 31, 2016 (Unaudited)
| ||||
Assets: | ||||
Investments, at value (cost $1,160,897,577) | $2,007,438,186 | |||
Foreign currency, at value (cost $10,509) | 10,502 | |||
Cash | 3,355 | |||
Receivable for investments sold | 4,771,746 | |||
Receivable for Fund shares sold | 1,730,419 | |||
Dividends and interest receivable | 5,157,913 | |||
Prepaid expenses | 75,825 | |||
Total Assets | 2,019,187,946 | |||
Liabilities: | ||||
Payable for Fund shares redeemed | 4,952,996 | |||
Payable for investment advisory fees | 1,691,761 | |||
Payable for distribution fees | 512,032 | |||
Payable for accounting fees | 3,750 | |||
Line of credit payable | 7,000 | |||
Other accrued expenses | 512,370 | |||
Total Liabilities | 7,679,909 | |||
Net Assets | $2,011,508,037 | |||
Net Assets Consist of: | ||||
Paid-in capital | $1,100,579,548 | |||
Distributions in excess of net investment income | (10,379,702 | ) | ||
Accumulated net realized gain on investments and foreign currency transactions | 74,786,230 | |||
Net unrealized appreciation on investments | 846,540,609 | |||
Net unrealized depreciation on foreign currency translations | (18,648 | ) | ||
Net Assets | $2,011,508,037 | |||
Shares of Capital Stock, each at $0.001 par value: |
| |||
Class AAA: | ||||
Net Asset Value, offering, and redemption price per share ($913,026,156 ÷ 35,315,247 shares outstanding; 150,000,000 shares authorized) | $25.85 | |||
Class A: | ||||
Net Asset Value and redemption price per share ($178,639,511 ÷ 6,934,940 shares outstanding; 50,000,000 shares authorized) | $25.76 | |||
Maximum offering price per share (NAV ÷ 0.9425, based on maximum sales charge of 5.75% of the offering price) | $27.33 | |||
Class C: | ||||
Net Asset Value and offering price per share ($337,639,838 ÷ 14,663,420 shares outstanding; 50,000,000 shares authorized) | $23.03 | (a) | ||
Class I: | ||||
Net Asset Value, offering, and redemption price per share ($582,202,532 ÷ 21,952,952 shares outstanding; 50,000,000 shares authorized) | $26.52 |
(a) | Redemption price varies based on the length of time held. |
Statement of Operations
For the Six Months Ended March 31, 2016 (Unaudited)
| ||||
Investment Income: | ||||
Dividends (net of foreign withholding taxes of $353,139) | $ 23,564,814 | |||
Interest | 91,816 | |||
Total Investment Income | 23,656,630 | |||
Expenses: | ||||
Investment advisory fees | 10,508,418 | |||
Distribution fees - Class AAA | 1,191,513 | |||
Distribution fees - Class A | 226,604 | |||
Distribution fees - Class C | 1,690,506 | |||
Shareholder services fees | 982,468 | |||
Shareholder communication expenses | 183,645 | |||
Custodian fees | 130,754 | |||
Interest expense | 54,801 | |||
Registration expenses | 47,263 | |||
Legal and audit fees | 35,521 | |||
Directors’ fees | 35,270 | |||
Accounting fees | 22,500 | |||
Miscellaneous expenses | 60,429 | |||
Total Expenses | 15,169,692 | |||
Expenses paid indirectly by broker (See Note 6) | (2,085 | ) | ||
Net Expenses | 15,167,607 | |||
Net Investment Income | 8,489,023 | |||
Net Realized and Unrealized Gain/(Loss) on Investments and Foreign Currency: | ||||
Net realized gain on investments | 92,443,038 | |||
Net realized loss on foreign currency transactions | (4,978 | ) | ||
Net realized gain on investments and foreign currency transactions | 92,438,060 | |||
Net change in unrealized appreciation/depreciation: |
| |||
on investments | 9,170,468 | |||
on foreign currency translations | 6,724 | |||
Net change in unrealized appreciation/depreciation on investments and foreign currency translations | 9,177,192 | |||
Net Realized and Unrealized Gain/(Loss) on Investments and Foreign Currency | 101,615,252 | |||
Net Increase in Net Assets Resulting from Operations | $110,104,275 |
See accompanying notes to financial statements.
10
The Gabelli Equity Income Fund
Statement of Changes in Net Assets
Six Months Ended March 31, 2016 (Unaudited) | Year Ended September 30, 2015 | |||||||||
Operations: | ||||||||||
Net investment income | $ | 8,489,023 | $ | 22,527,371 | ||||||
Net realized gain on investments, securities sold short, and foreign currency transactions | 92,438,060 | 165,930,458 | ||||||||
Net change in unrealized appreciation/depreciation on investments and foreign currency translations | 9,177,192 | (299,630,836 | ) | |||||||
|
|
|
| |||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 110,104,275 | (111,173,007 | ) | |||||||
|
|
|
| |||||||
Distributions to Shareholders: | ||||||||||
Net investment income | ||||||||||
Class AAA | (9,793,528 | )* | (10,878,119 | ) | ||||||
Class A | (1,877,646 | )* | (1,801,369 | ) | ||||||
Class C | (3,914,897 | )* | (3,397,674 | ) | ||||||
Class I | (6,277,486 | )* | (6,350,097 | ) | ||||||
|
|
|
| |||||||
(21,863,557 | ) | (22,427,259 | ) | |||||||
|
|
|
| |||||||
Net realized gain | ||||||||||
Class AAA | (2,767,978 | )* | (69,951,446 | ) | ||||||
Class A | (530,685 | )* | (13,005,643 | ) | ||||||
Class C | (1,106,480 | )* | (25,979,180 | ) | ||||||
Class I | (1,774,227 | )* | (46,112,598 | ) | ||||||
|
|
|
| |||||||
(6,179,370 | ) | (155,048,867 | ) | |||||||
|
|
|
| |||||||
Return of capital | ||||||||||
Class AAA | (9,671,248 | )* | — | |||||||
Class A | (1,854,202 | )* | — | |||||||
Class C | (3,866,016 | )* | — | |||||||
Class I | (6,199,107 | )* | — | |||||||
|
|
|
| |||||||
(21,590,573 | ) | — | ||||||||
|
|
|
| |||||||
Total Distributions to Shareholders | (49,633,500 | ) | (177,476,126 | ) | ||||||
|
|
|
| |||||||
Capital Share Transactions: | ||||||||||
Class AAA | (101,379,827 | ) | (491,853,048 | ) | ||||||
Class A | (10,000,026 | ) | (1,515,615 | ) | ||||||
Class C | 466,944 | 58,551,145 | ||||||||
Class I | (100,392,057 | ) | 97,181,640 | |||||||
|
|
|
| |||||||
Net Decrease in Net Assets from Capital Share Transactions | (211,304,966 | ) | (337,635,878 | ) | ||||||
|
|
|
| |||||||
Redemption Fees | 2,418 | 4,168 | ||||||||
|
|
|
| |||||||
Net Decrease in Net Assets | (150,831,773 | ) | (626,280,843 | ) | ||||||
Net Assets: | ||||||||||
Beginning of year | 2,162,339,810 | 2,788,620,653 | ||||||||
|
|
|
| |||||||
End of period (including undistributed net investment income of $0 and $2,994,832, respectively) | $ | 2,011,508,037 | $ | 2,162,339,810 | ||||||
|
|
|
|
* | Based on year to date book income. Amounts are subject to change and recharacterization at year end. |
See accompanying notes to financial statements.
11
The Gabelli Equity Income Fund
Financial Highlights
Selected data for a share of capital stock outstanding throughout each period:
Income from Investment Operations | Distributions | Ratios to Average Net Assets/ Supplemental Data | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Year Ended September 30 | Net Asset of Year | Net Investment Income (a) | Net on | 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 | Operating Expenses | Portfolio Turnover Rate | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class AAA | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2016(c) | $ | 25.08 | $ | 0.11 | $ | 1.26 | $ | 1.37 | $ | (0.26 | ) | $ | (0.08 | ) | $ | (0.26 | ) | $ | (0.60 | ) | $ | 0.00 | $ | 25.85 | 5.51 | % | $ | 913,026 | 0.85%(d) | 1.40%(d)(e)(f) | 0 | % | ||||||||||||||||||||||||||||||||||||||||||
2015 | 28.55 | 0.25 | (1.71 | ) | (1.46 | ) | (0.18 | ) | (1.83 | ) | — | (2.01 | ) | 0.00 | 25.08 | (5.40 | ) | 985,647 | 0.88 | 1.37(e) | 3 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | 26.68 | 0.30 | 3.05 | 3.35 | (0.44 | ) | (0.38 | ) | (0.66 | ) | (1.48 | ) | 0.00 | 28.55 | 12.64 | 1,604,629 | 1.06 | 1.37 | 4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
2013 | 22.54 | 0.29 | 4.49 | 4.78 | (0.64 | ) | — | — | (0.64 | ) | 0.00 | 26.68 | 21.38 | 1,726,724 | 1.15 | 1.39 | 6 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2012 | 18.52 | 0.25 | 4.13 | 4.38 | (0.35 | ) | — | (0.01 | ) | (0.36 | ) | 0.00 | 22.54 | 23.78 | 1,603,696 | 1.17 | 1.40 | 6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2016(c) | $ | 24.99 | $ | 0.11 | $ | 1.26 | $ | 1.37 | $ | (0.26 | ) | $ | (0.08 | ) | $ | (0.26 | ) | $ | (0.60 | ) | $ | 0.00 | $ | 25.76 | 5.53 | % | $ | 178,640 | 0.86%(d) | 1.40%(d)(e)(f) | 0 | % | ||||||||||||||||||||||||||||||||||||||||||
2015 | 28.45 | 0.26 | (1.71 | ) | (1.45 | ) | (0.18 | ) | (1.83 | ) | — | (2.01 | ) | 0.00 | 24.99 | (5.38 | ) | 183,418 | 0.90 | 1.37(e) | 3 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | 26.59 | 0.30 | 3.04 | 3.34 | (0.44 | ) | (0.38 | ) | (0.66 | ) | (1.48 | ) | 0.00 | 28.45 | 12.64 | 209,501 | 1.07 | 1.37 | 4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
2013 | 22.47 | 0.28 | 4.48 | 4.76 | (0.64 | ) | — | — | (0.64 | ) | 0.00 | 26.59 | 21.36 | 215,353 | 1.14 | 1.39 | 6 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2012 | 18.47 | 0.25 | 4.11 | 4.36 | (0.35 | ) | — | (0.01 | ) | (0.36 | ) | 0.00 | 22.47 | 23.73 | 164,177 | 1.19 | 1.40 | 6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2016(c) | $ | 22.48 | $ | 0.01 | $ | 1.14 | $ | 1.15 | $ | (0.26 | ) | $ | (0.08 | ) | $ | (0.26 | ) | $ | (0.60 | ) | $ | 0.00 | $ | 23.03 | 5.17 | % | $ | 337,640 | 0.11%(d) | 2.15%(d)(e)(f) | 0 | % | ||||||||||||||||||||||||||||||||||||||||||
2015 | 25.99 | 0.04 | (1.54 | ) | (1.50 | ) | (0.18 | ) | (1.83 | ) | — | (2.01 | ) | 0.00 | 22.48 | (6.10 | ) | 329,846 | 0.15 | 2.12(e) | 3 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | 24.59 | 0.08 | 2.80 | 2.88 | (0.25 | ) | (0.38 | ) | (0.85 | ) | (1.48 | ) | 0.00 | 25.99 | 11.78 | 321,772 | 0.31 | 2.12 | 4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
2013 | 20.97 | 0.09 | 4.17 | 4.26 | (0.64 | ) | — | — | (0.64 | ) | 0.00 | 24.59 | 20.50 | 224,804 | 0.38 | 2.14 | 6 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2012 | 17.38 | 0.09 | 3.86 | 3.95 | (0.21 | ) | — | (0.15 | ) | (0.36 | ) | 0.00 | 20.97 | 22.85 | 161,842 | 0.46 | 2.15 | 6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class I | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2016(c) | $ | 25.68 | $ | 0.14 | $ | 1.30 | $ | 1.44 | $ | (0.26 | ) | $ | (0.08 | ) | $ | (0.26 | ) | $ | (0.60 | ) | $ | 0.00 | $ | 26.52 | 5.66 | % | $ | 582,202 | 1.10%(d) | 1.15%(d)(e)(f) | 0 | % | ||||||||||||||||||||||||||||||||||||||||||
2015 | 29.11 | 0.34 | (1.76 | ) | (1.42 | ) | (0.18 | ) | (1.83 | ) | — | (2.01 | ) | 0.00 | 25.68 | (5.15 | ) | 663,429 | 1.15 | 1.12(e) | 3 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | 27.11 | 0.38 | 3.10 | 3.48 | (0.51 | ) | (0.38 | ) | (0.59 | ) | (1.48 | ) | 0.00 | 29.11 | 12.92 | 652,719 | 1.28 | 1.12 | 4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
2013 | 22.84 | 0.35 | 4.56 | 4.91 | (0.64 | ) | — | — | (0.64 | ) | 0.00 | 27.11 | 21.67 | 382,333 | 1.38 | 1.14 | 6 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2012 | 18.71 | 0.33 | 4.16 | 4.49 | (0.36 | ) | — | — | (0.36 | ) | 0.00 | 22.84 | 24.13 | 309,157 | 1.54 | 1.15 | 6 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 |
† | Total return represents aggregate total return of a hypothetical $1,000 investment at the beginning of the year and sold at the end of the period 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) | For the six months ended March 31, 2016, unaudited. |
(d) | Annualized. |
(e) | The Fund received credits from a designated broker who agreed to pay certain Fund operating expenses. For the six months ended March 31, 2016 and the year ended September 30, 2015, there was no impact to the expense ratios. |
(f) | The Fund incurred interest expense during the six months ended March 31, 2016. If interest expense had not been incurred during the six months, the ratio of operating expenses to average net assets would have been 1.39% (Class AAA and Class A), 2.14% (Class C), and 1.14% (Class I), respectively. |
See accompanying notes to financial statements.
12
The Gabelli Equity Income Fund
Notes to Financial Statements (Unaudited)
1. Organization. The Gabelli Equity Income Fund is a series of the Gabelli Equity Series Funds, Inc. (the “Corporation”). 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 of the Corporation. The Fund seeks to provide a high level of total return on its assets with an emphasis on income. The Fund commenced investment operations on January 2, 1992.
2. Significant Accounting Policies. As an investment company, the Fund follows the investment company accounting and reporting guidance, which is part of U.S. generally accepted accounting principles (“GAAP”) that may require the use of management estimates and assumptions in the preparation of its financial statements. Actual results could differ from those estimates. The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements.
Security Valuation. Portfolio securities listed or traded on a nationally recognized securities exchange or traded in the U.S. over-the-counter market for which market quotations are readily available are valued at the last quoted sale price or a market’s official closing price as of the close of business on the day the securities are being valued. If there were no sales that day, the security is valued at the average of the closing bid and asked prices or, if there were no asked prices quoted on that day, then the security is valued at the closing bid price on that day. If no bid or asked prices are quoted on such day, the security is valued at the most recently available price or, if the Board of Directors (the “Board”) so determines, by such other method as the Board shall determine in good faith to reflect its fair market value. Portfolio securities traded on more than one national securities exchange or market are valued according to the broadest and most representative market, as determined by Gabelli Funds, LLC (the “Adviser”).
Portfolio securities primarily traded on a foreign market are generally valued at the preceding closing values of such securities on the relevant market, but may be fair valued pursuant to procedures established by the Board if market conditions change significantly after the close of the foreign market, but prior to the close of business on the day the securities are being valued. Debt instruments with remaining maturities of sixty days or less that are not credit impaired are valued at amortized cost, unless the Board determines such amount does not reflect the securities’ fair value, in which case these securities will be fair valued as determined by the Board. Debt instruments having a maturity greater than sixty days for which market quotations are readily available are valued at the average of the latest bid and asked prices. If there were no asked prices quoted on such day, the security is valued using the closing bid price. U.S. government obligations with maturities greater than sixty days are normally valued using a model that incorporates market observable data such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued principally using dealer quotations.
Securities and assets for which market quotations are not readily available are fair valued as determined by the Board. Fair valuation methodologies and procedures may include, but are not limited to: analysis and review of available financial and non-financial information about the company; comparisons with the valuation and changes in valuation of similar securities, including a comparison of foreign securities with the equivalent U.S. dollar value American Depositary Receipt securities at the close of the U.S. exchange; and evaluation of any other information that could be indicative of the value of the security.
13
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 Board’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, 2016 is as follows:
Valuation Inputs | ||||||||||||||||
Level 1 Quoted Prices | Level 2 Other Significant Observable Inputs | Level 3 Significant Unobservable Inputs | Total Market Value at 3/31/16 | |||||||||||||
INVESTMENTS IN SECURITIES: | ||||||||||||||||
ASSETS (Market Value): | ||||||||||||||||
Broadcasting | $ | 3,597,300 | $20,462,717 | — | $ 24,060,017 | |||||||||||
Food and Beverage | 280,877,053 | 198,830 | 281,075,883 | |||||||||||||
Other Industries (a) | 1,696,730,340 | — | — | 1,696,730,340 | ||||||||||||
| ||||||||||||||||
Total Common Stocks | 1,981,204,693 | 20,661,547 | — | 2,001,866,240 | ||||||||||||
| ||||||||||||||||
Convertible Preferred Stocks (a) | 1,455,000 | — | 1,455,000 | |||||||||||||
Rights (a) | — | — | $124,709 | 124,709 | ||||||||||||
Warrants (a) | 11,777 | — | — | 11,777 | ||||||||||||
Convertible Corporate Bonds (a) | — | 1,090,125 | — | 1,090,125 | ||||||||||||
Corporate Bonds (a) | — | 2,890,335 | — | 2,890,335 | ||||||||||||
| ||||||||||||||||
TOTAL INVESTMENTS IN SECURITIES – ASSETS | $ | 1,982,671,470 | $24,642,007 | $124,709 | $2,007,438,186 | |||||||||||
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(a) | Please refer to the Schedule of Investments for the industry classifications of these portfolio holdings. |
The Fund did not have material transfers among Level 1, Level 2, and Level 3 during the six months ended March 31, 2016. The Fund’s policy is to recognize transfers among Levels as of the beginning of the reporting period.
Additional Information to Evaluate Qualitative Information.
General. The Fund uses recognized industry pricing services – approved by the Board and unaffiliated with the Adviser – to value most of its securities, and uses broker quotes provided by market makers of securities not valued by these and other recognized pricing sources. Several different pricing feeds are received to value domestic equity securities, international equity securities, preferred equity securities, and fixed income securities. The data within these feeds is ultimately sourced from major stock exchanges and trading systems where these securities trade. The prices supplied by external sources are checked by obtaining quotations or actual transaction prices from market participants. If a price obtained from the pricing source is deemed unreliable, prices will be sought from another pricing service or from a broker/dealer that trades that security or similar securities.
14
The Gabelli Equity Income Fund
Notes to Financial Statements (Unaudited) (Continued)
Fair Valuation. Fair valued securities may be common and preferred equities, warrants, options, rights, and fixed income obligations. Where appropriate, Level 3 securities are those for which market quotations are not available, such as securities not traded for several days, or for which current bids are not available, or which are restricted as to transfer. Among the factors to be considered to fair value a security are recent prices of comparable securities that are publicly traded, reliable prices of securities not publicly traded, the use of valuation models, current analyst reports, valuing the income or cash flow of the issuer, or cost if the preceding factors do not apply. A significant change in the unobservable inputs could result in a lower or higher value in Level 3 securities. The circumstances of Level 3 securities are frequently monitored to determine if fair valuation measures continue to apply.
The Adviser reports quarterly to the Board the results of the application of fair valuation policies and procedures. These may include back testing the prices realized in subsequent trades of these fair valued securities to fair values previously recognized.
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, 2016, 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 an equity contract for difference 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
15
The Gabelli Equity Income Fund
Notes to Financial Statements (Unaudited) (Continued)
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, 2016, the Fund held no investments in equity contract for difference swap agreements.
Securities Sold Short. The Fund may enter into short sale transactions. Short selling involves selling securities that may or may not be owned and, at times, borrowing the same securities for delivery to the purchaser, with an obligation to replace such borrowed securities at a later date. The proceeds received from short sales are recorded as liabilities and the Fund records an unrealized gain or loss to the extent of the difference between the proceeds received and the value of an open short position on the day of determination. The Fund records a realized gain or loss when the short position is closed out. By entering into a short sale, the Fund bears the market risk of an unfavorable change in the price of the security sold short. Dividends on short sales are recorded as an expense by the Fund on the ex-dividend date and interest expense is recorded on the accrual basis. The broker retains collateral for the value of the open positions, which is adjusted periodically as the value of the position fluctuates. At March 31, 2016, there were no short sales outstanding.
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 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 Securities. The Fund may invest up to 15% of its net assets in securities for which the markets are restricted. Restricted securities include securities whose disposition is subject to substantial legal or contractual restrictions. The sale of restricted 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
16
The Gabelli Equity Income Fund
Notes to Financial Statements (Unaudited) (Continued)
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. At March 31, 2016, the Fund did not hold restricted securities.
Securities Transactions and Investment Income. Securities transactions are accounted for on the trade date with realized gain/(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.
Distributions to Shareholders. Distributions to shareholders are recorded on the ex-dividend date. Distributions to shareholders are based on income and capital gains as determined in accordance with federal income tax regulations, which may differ from income and capital gains as determined under GAAP. These differences are primarily due to differing treatments of income and gains on various investment securities and foreign currency transactions held by the Fund, timing differences, and differing characterizations of distributions made by the Fund. Distributions from net investment income for federal income tax purposes include net realized gains on foreign currency transactions. These book/tax differences are either temporary or permanent in nature. To the extent these differences are permanent, adjustments are made to the appropriate capital accounts in the period when the differences arise. These reclassifications have no impact on the NAV of the Fund.
The tax character of distributions paid during the year ended September 30, 2015 was as follows:
Distributions paid from: | ||||
Ordinary income | $ | 24,713,020 | ||
Net long term capital gains | 162,112,388 | |||
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| |||
Total distributions paid | $ | 186,825,408* | ||
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* | Total distributions paid differs from the Statement of Changes in Net Assets due to the utilization of equalization. |
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,
17
The Gabelli Equity Income Fund
Notes to Financial Statements (Unaudited) (Continued)
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 20%, and may cause such gains to be treated as ordinary income subject to a maximum federal income tax rate of 39.6%. In addition, certain U.S. shareholders who are individuals, estates, or trusts and whose income exceeds certain thresholds will be required to pay 3.8% Medicare tax on their “net investment income,” which includes dividends received from the Fund and capital gains from the sale or other disposition of shares of the Fund. 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.
Provision for Income Taxes. The Fund intends to continue to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). It is the policy of the Fund to comply with the requirements of the Code applicable to regulated investment companies and to distribute substantially all of its net investment company taxable income and net capital gains. Therefore, no provision for federal income taxes is required.
The Fund is permitted to carry capital losses forward for an unlimited period. Capital losses that are carried forward will retain their character as either short term or long term capital losses.
The following summarizes the tax cost of investments and the related net unrealized appreciation at March 31, 2016:
Cost | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Appreciation | |||||||||||
Investments |
$ |
1,169,799,665 |
| $ | 895,418,140 | $(57,779,619 | ) | $837,638,521 |
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, 2016, the Fund did not incur any income tax, interest, or penalties. As of March 31, 2016, 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. The Fund’s federal and state tax returns for the prior three fiscal years remain open, subject to examination. On an ongoing basis, the Adviser will monitor the Fund’s tax positions to determine if adjustments to this conclusion are necessary.
3. Investment Advisory Agreement and Other Transactions. The Fund has entered into an investment advisory agreement (the “Advisory Agreement”) with the Adviser which provides that the Fund will pay the Adviser a fee, computed daily and paid monthly, at the annual rate of 1.00% of the value of its average daily net assets. In accordance with the Advisory Agreement, the Adviser provides a continuous investment program for the Fund’s portfolio, oversees the administration of all aspects of the Fund’s business and affairs, and pays the compensation of all Officers and Directors of the Fund who are affiliated persons of the Adviser.
The Corporation pays each Director who is not considered an affiliated person an annual retainer of $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
18
The Gabelli Equity Income Fund
Notes to Financial Statements (Unaudited) (Continued)
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 Adviser, 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, 2016, other than short term securities and U.S. Government obligations, aggregated $4,985,236 and $280,694,405, respectively.
6. Transactions with Affiliates and Other Arrangements. During the six months ended March 31, 2016, the Fund paid brokerage commissions on security trades of $169,288 to G.research, LLC, an affiliate of the Adviser. Additionally, the Distributor retained a total of $107,159 from investors representing commissions (sales charges and underwriting fees) on sales and redemptions of Fund shares.
During the six months ended March 31, 2016, the Fund received credits from a designated broker who agreed to pay certain Fund operating expenses. The amount of such expenses paid through this directed brokerage arrangement during this period was $2,085.
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, 2016, 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 bears interest at a floating rate equal to the higher of the overnight Federal Funds rate plus 125 basis points or the 30-DAY LIBOR plus 125 basis points in effect on that day. This amount, if any, would be included in “interest expense” in the Statement of Operations. At March 31, 2016, there was $7,000 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, 2016 was $8,535,356 with a weighted average interest rate of 0.69%. The maximum amount borrowed at any time during the six months ended March 31, 2016 was $28,635,000.
8. Capital Stock. The Fund offers four classes of shares – Class AAA Shares, Class A Shares, Class C Shares, and Class I Shares. Class AAA and Class I Shares are offered without a sales charge. Class A Shares are subject to a maximum front-end sales charge of 5.75%, and Class C Shares are subject to a 1.00% contingent deferred sales charge for one year after purchase.
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.
19
The Gabelli Equity Income Fund
Notes to Financial Statements (Unaudited) (Continued)
The redemption fees retained by the Fund during the six months ended March 31, 2016 and the year ended September 30, 2015, if any, can be found in the Statement of Changes in Net Assets under Redemption Fees.
Transactions in shares of capital stock were as follows:
Six Months Ended March 31, 2016 (Unaudited) | Year Ended September 30, 2015 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Class AAA | ||||||||||||||||
Shares sold | 900,330 | $ | 22,955,834 | 2,524,754 | $ | 72,709,871 | ||||||||||
Shares issued upon reinvestment of distributions | 821,128 | 21,034,885 | 2,944,279 | 79,537,003 | ||||||||||||
Shares redeemed | (5,707,045 | ) | (145,370,546 | ) | (22,375,421 | ) | (644,099,922 | ) | ||||||||
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Net decrease | (3,985,587 | ) | $ | (101,379,827 | ) | (16,906,388 | ) | $ | (491,853,048 | ) | ||||||
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Class A | ||||||||||||||||
Shares sold | 892,003 | $ | 22,723,241 | 2,028,495 | $ | 57,890,814 | ||||||||||
Shares issued upon reinvestment of distributions | 145,882 | 3,720,570 | 463,391 | 12,372,383 | ||||||||||||
Shares redeemed | (1,442,575 | ) | (36,443,837 | ) | (2,514,896 | ) | (71,778,812 | ) | ||||||||
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Net decrease | (404,690 | ) | $ | (10,000,026 | ) | (23,010 | ) | $ | (1,515,615 | ) | ||||||
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Class C | ||||||||||||||||
Shares sold | 1,840,356 | $ | 42,457,996 | 3,932,456 | $ | 102,375,805 | ||||||||||
Shares issued upon reinvestment of distributions | 331,354 | 7,575,481 | 967,909 | 23,322,668 | ||||||||||||
Shares redeemed | (2,179,221 | ) | (49,566,533 | ) | (2,608,248 | ) | (67,147,328 | ) | ||||||||
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Net increase/(decrease) | (7,511 | ) | $ | 466,944 | 2,292,117 | $ | 58,551,145 | |||||||||
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Class I | ||||||||||||||||
Shares sold | 1,426,666 | $ | 37,384,560 | 10,629,569 | $ | 311,718,190 | ||||||||||
Shares issued upon reinvestment of distributions | 487,826 | 12,817,888 | 1,693,262 | 46,565,405 | ||||||||||||
Shares redeemed | (5,796,424 | ) | (150,594,505 | ) | (8,909,295 | ) | (261,101,955 | ) | ||||||||
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| |||||||||
Net increase/(decrease) | (3,881,932 | ) | $ | (100,392,057 | ) | 3,413,536 | $ | 97,181,640 | ||||||||
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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.
10. 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.
20
The Gabelli Equity Income Fund
Board Consideration and Re-Approval of Advisory Agreement (Unaudited)
During the six months ended March 31, 2016, 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, three year 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 another 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 reasonable performance record. The Independent Board Members also concluded that the Fund’s expense ratios and the profitability to the Adviser of managing the Fund were reasonable, particularly in light of the Fund’s performance, and that economies of scale were not a significant factor in their thinking at this time. The Independent Board Members did not view the potential profitability of ancillary services as material to their decision. On the basis of the foregoing and without assigning
21
The Gabelli Equity Income Fund
Board Consideration and Re-Approval of Advisory Agreement (Unaudited) (Continued)
particular weight to any single conclusion, the Independent Board Members determined to recommend continuation of the investment management 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.
22
GABELLI EQUITY INCOME FUND
One Corporate Center
Rye, NY 10580-1422
Portfolio Manager Biography
Mario J. Gabelli, CFA, is Chairman, Chief Executive Officer, and Chief Investment Officer - Value Portfolios of GAMCO Investors, Inc. that he founded in 1977, and Chief Investment Officer - Value Portfolios of Gabelli Funds, LLC and GAMCO Asset Management Inc. He is also Chief Executive Officer and Chairman of the Board of Directors of Associated Capital Group, Inc. Mr. Gabelli is a summa cum laude graduate of Fordham University and holds an MBA degree from Columbia Business School and Honorary Doctorates from Fordham University and Roger Williams University.
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. Both the commentary and the financial statements, including the portfolio of investments, will be available on our website at www.gabelli.com.
Gabelli Equity Series Funds, Inc.
THE GABELLI EQUITY INCOME FUND
One Corporate Center
Rye, New York 10580-1422
t | 800-GABELLI (800-422-3554) |
f | 914-921-5118 |
e | info@gabelli.com |
GABELLI.COM |
Net Asset Value per share available daily
by calling 800-GABELLI after 7:00 P.M.
BOARD OF DIRECTORS
Mario J. Gabelli, CFA
Chairman and
Chief Executive Officer,
GAMCO Investors, Inc.
Chairman and
Chief Executive Officer,
Associated Capital Group, Inc.
Anthony J. Colavita
President,
Anthony J. Colavita, P.C.
Vincent D. Enright
Former Senior Vice
President and Chief
Financial Officer,
KeySpan Corp.
John D. Gabelli
Senior Vice President,
G.research, LLC.
Robert J. Morrissey
Partner,
Morrissey, Hawkins & Lynch
Kuni Nakamura
President,
Advanced Polymer, Inc.
Anthony R. Pustorino
Certified Public Accountant,
Professor Emeritus,
Pace University
Anthonie C. van Ekris
Chairman,
BALMAC International, Inc.
Salvatore J. Zizza
Chairman,
Zizza & Associates Corp.
OFFICERS
Bruce N. Alpert
President
Andrea R. Mango
Secretary
Agnes Mullady
Treasurer
Richard J. Walz
Chief Compliance Officer
DISTRIBUTOR
G.distributors, LLC
CUSTODIAN, TRANSFER
AGENT, AND DIVIDEND
DISBURSING AGENT
State Street Bank and Trust
Company
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.
GAB444Q116SR
The Gabelli Focus Five Fund
Semiannual Report — March 31, 2016
To Our Shareholders,
For the six months ended March 31, 2016, the net asset value (“NAV”) per Class AAA Share of The Gabelli Focus Five Fund increased 5.3% compared with an increase of 7.8% for the Russell 1000 Index. The Russell 2500 Index increased 3.7%. The Blended Index which consists of 50% of the Russell 2500 Index, 25% of the Russell 1000 Index, and 25% of the MSCI AC World Ex-U.S. Index increased 4.5%. See below for additional performance information.
Enclosed are the financial statements, including the schedule of investments, as of March 31, 2016.
Comparative Results
Average Annual Returns through March 31, 2016 (a)(b) (Unaudited) | ||||||||||||||||||||||||||||||||
Six Months | 1 Year | 5 Year | 10 Year | Since | Since | |||||||||||||||||||||||||||
Class AAA (GWSVX) | 5.33 | % | (14.19 | )% | 5.22 | % | 4.96 | % | 10.18 | % | 7.79 | % | ||||||||||||||||||||
Russell 2500 Index | 3.68 | (7.31 | ) | 8.58 | 6.47 | 13.03 | (d) | 10.75 | ||||||||||||||||||||||||
Russell 1000 Index | 7.75 | 0.50 | 11.35 | 7.06 | 14.71 | 9.12 | ||||||||||||||||||||||||||
MSCI AC World Ex-U.S. Index | 3.03 | (8.78 | ) | 0.76 | 2.39 | 5.20 | 8.07 | |||||||||||||||||||||||||
Blended Index | 4.51 | (5.80 | ) | 7.22 | 5.58 | 11.41 | 9.67 | |||||||||||||||||||||||||
Class A (GWSAX) | 5.36 | (14.18 | ) | 5.24 | 4.98 | 10.20 | 7.82 | |||||||||||||||||||||||||
With sales charge (e) | (0.70 | ) | (19.11 | ) | 4.00 | 4.35 | 8.29 | 7.32 | ||||||||||||||||||||||||
Class C (GWSCX) | 4.98 | (14.80 | ) | 4.46 | 4.19 | 9.37 | 7.03 | |||||||||||||||||||||||||
With contingent deferred sales charge (f) | 3.98 | (15.65 | ) | 4.46 | 4.19 | 9.37 | 7.03 | |||||||||||||||||||||||||
Class I (GWSIX) | 5.54 | (13.90 | ) | 5.52 | 5.19 | 10.05 | 7.97 |
In the current prospectuses dated January 28, 2016, the expense ratios for Class AAA, A, C, and I Shares are 1.37%, 1.37%, 2.12%, and 1.12%, respectively. See page 7 for the expense ratios for the six months ended March 31, 2016. Class AAA and Class I Shares have no 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. 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. Returns would have been lower had the Adviser not reimbursed certain expenses of the Fund. 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. Investors should carefully consider the investment objectives, risks, charges, and expenses of the Fund before investing. The prospectuses contain information about these and other matters and should be read carefully before investing. To obtain a prospectus please visit our website at www.gabelli.com. 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 associated with this class of shares. The Russell 2500 Index is a market capitalization weighted index of 2,500 U.S. traded stocks of small and mid capitalization stocks. The Russell 1000 Index is a market capitalization weighted index of 1,000 U.S. traded large capitalization stocks. The Morgan Stanley Capital International All Country World Index excluding the U.S. (MSCI ACWI Ex-U.S.) is a market capitalization weighted index of small, mid, and large capitalization stocks across developed and emerging markets, excluding U.S. stocks. The Blended Index consists of a 50% Russell 2500 Index, 25% Russell 1000 Index, and 25% MSCI ACWI Ex-U.S. Index. Dividends are considered reinvested. You cannot invest directly in an index. |
(b) | The Fund’s fiscal year ends September 30. |
(c) | On January 1, 2012, the Fund began operating under its current name. (d) Russell 2500 Index performance is as of December 31, 2011. |
(e) | Performance results include the effect of the maximum 5.75% sales charge at the beginning of the period. |
(f) | Assuming payment of the 1% maximum 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, 2015 through March 31, 2016 | 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 10/01/15 | Ending Account Value 03/31/16 | Annualized Expense Ratio | Expenses Paid During Period* | ||||||||||||||
The Gabelli Focus Five Fund |
| ||||||||||||||||
Actual Fund Return | |||||||||||||||||
Class AAA | $1,000.00 | $ | 1,053.30 | 1.46 | % | $ | 7.49 | ||||||||||
Class A | $1,000.00 | $ | 1,053.60 | 1.46 | % | $ | 7.50 | ||||||||||
Class C | $1,000.00 | $ | 1,049.80 | 2.21 | % | $ | 11.33 | ||||||||||
Class I | $1,000.00 | $ | 1,055.40 | 1.21 | % | $ | 6.22 | ||||||||||
Hypothetical 5% Return | |||||||||||||||||
Class AAA | $1,000.00 | $ | 1,017.70 | 1.46 | % | $ | 7.36 | ||||||||||
Class A | $1,000.00 | $ | 1,017.70 | 1.46 | % | $ | 7.36 | ||||||||||
Class C | $1,000.00 | $ | 1,013.95 | 2.21 | % | $ | 11.13 | ||||||||||
Class I | $1,000.00 | $ | 1,018.95 | 1.21 | % | $ | 6.11 |
* | 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 (183 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, 2016:
The Gabelli Focus Five Fund
Health Care | 19.8 | % | ||
Cable and Satellite | 14.4 | % | ||
Specialty Chemicals | 9.7 | % | ||
Food and Beverage | 8.6 | % | ||
Retail | 8.4 | % | ||
Computer Software and Services | 7.9 | % | ||
U.S. Government Obligations | 6.1 | % | ||
Consumer Products | 5.2 | % | ||
Diversified Industrial | 3.9 | % | ||
Hotels and Gaming | 3.8 | % |
Entertainment | 3.6 | % | ||
Semiconductors | 2.9 | % | ||
Telecommunications | 2.0 | % | ||
Energy and Utilities | 1.6 | % | ||
Business Services | 0.9 | % | ||
Building and Construction | 0.9 | % | ||
Other Assets and Liabilities (Net) | 0.3 | % | ||
|
| |||
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 30, no later than August 31 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.
Portfolio Manager Biography
Daniel M. Miller has been the portfolio manager of The Gabelli Focus Five Fund since inception of the investment strategy on January 1, 2012. He is also a Managing Director of GAMCO Investors, Inc. Mr. Miller joined the firm in 2002 and graduated magna cum laude with a degree in finance from the University of Miami in Coral Gables, Florida.
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.
|
3
The Gabelli Focus Five Fund
Schedule of Investments — March 31, 2016 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS — 93.6% |
| |||||||||||
Building and Construction — 0.9% |
| |||||||||||
160,000 | Taylor Morrison Home Corp., Cl. A† | $ | 2,041,175 | $ | 2,259,200 | |||||||
|
|
|
| |||||||||
Business Services — 0.9% |
| |||||||||||
100,000 | The Interpublic Group of Companies Inc. | 1,760,740 | 2,295,000 | |||||||||
|
|
|
| |||||||||
Cable and Satellite — 14.4% |
| |||||||||||
371,280 | EchoStar Corp., Cl. A† | 15,814,872 | 16,443,991 | |||||||||
515,000 | Liberty Global plc, Cl. C† | 17,038,889 | 19,343,400 | |||||||||
|
|
|
| |||||||||
32,853,761 | 35,787,391 | |||||||||||
|
|
|
| |||||||||
Computer Software and Services — 7.9% |
| |||||||||||
14,000 | Alphabet Inc., Cl. C†(a) | 8,595,019 | 10,429,300 | |||||||||
95,000 | Fortinet Inc.† | 2,913,513 | 2,909,850 | |||||||||
2,280,000 | Internap Corp.† | 13,305,420 | 6,224,400 | |||||||||
|
|
|
| |||||||||
24,813,952 | 19,563,550 | |||||||||||
|
|
|
| |||||||||
Consumer Products — 5.2% |
| |||||||||||
160,000 | Edgewell Personal Care Co. | 12,903,496 | 12,884,800 | |||||||||
|
|
|
| |||||||||
Diversified Industrial — 3.9% |
| |||||||||||
670,115 | API Technologies Corp.† | 1,266,101 | 1,320,127 | |||||||||
1,675,047 | Jason Industries Inc.†(b) | 13,585,960 | 5,862,665 | |||||||||
64,800 | Tyco International plc | 1,797,235 | 2,378,808 | |||||||||
|
|
|
| |||||||||
16,649,296 | 9,561,600 | |||||||||||
|
|
|
| |||||||||
Energy and Utilities — 1.6% |
| |||||||||||
494,700 | Weatherford International plc† | 3,240,180 | 3,848,766 | |||||||||
|
|
|
| |||||||||
Entertainment — 3.6% |
| |||||||||||
179,362 | Take-Two Interactive Software Inc.† | 3,306,462 | 6,756,567 | |||||||||
30,000 | Time Warner Inc. | 2,046,817 | 2,176,500 | |||||||||
|
|
|
| |||||||||
5,353,279 | 8,933,067 | |||||||||||
|
|
|
| |||||||||
Food and Beverage — 8.6% |
| |||||||||||
550,000 | Inventure Foods Inc.† | 3,152,968 | 3,107,500 | |||||||||
542,900 | Maple Leaf Foods Inc. | 9,355,128 | 11,349,170 | |||||||||
64,300 | Post Holdings Inc.† | 2,158,737 | 4,421,911 | |||||||||
58,300 | United Natural Foods Inc.† | 1,782,726 | 2,349,490 | |||||||||
|
|
|
| |||||||||
16,449,559 | 21,228,071 | |||||||||||
|
|
|
| |||||||||
Health Care — 19.8% |
| |||||||||||
200,000 | Akorn Inc.† | 4,347,192 | 4,706,000 | |||||||||
328,800 | Alere Inc.† | 12,276,689 | 16,640,568 | |||||||||
27,500 | Allergan plc† | 7,509,492 | 7,370,825 |
Shares | Cost | Market Value | ||||||||||
9,544,600 | BioScrip Inc.†(b) | $ | 39,860,394 | $ | 20,425,444 | |||||||
|
|
|
| |||||||||
63,993,767 | 49,142,837 | |||||||||||
|
|
|
| |||||||||
Hotels and Gaming — 3.8% |
| |||||||||||
435,000 | MGM Resorts International† | 8,200,172 | 9,326,400 | |||||||||
|
|
|
| |||||||||
Retail — 8.4% |
| |||||||||||
135,000 | Barnes & Noble Inc. | 1,698,989 | 1,668,600 | |||||||||
12,500 | Costco Wholesale Corp. | 1,870,752 | 1,969,750 | |||||||||
450,000 | CST Brands Inc. | 16,511,169 | 17,230,500 | |||||||||
|
|
|
| |||||||||
20,080,910 | 20,868,850 | |||||||||||
|
|
|
| |||||||||
Semiconductors — 2.9% |
| |||||||||||
350,000 | Integrated Device Technology Inc.† | 7,186,165 | 7,154,000 | |||||||||
|
|
|
| |||||||||
Specialty Chemicals — 9.7% |
| |||||||||||
725,000 | Chemtura Corp.† | 15,871,285 | 19,140,000 | |||||||||
155,000 | Methanex Corp. | 6,408,609 | 4,978,600 | |||||||||
|
|
|
| |||||||||
22,279,894 | 24,118,600 | |||||||||||
|
|
|
| |||||||||
Telecommunications — 2.0% |
| |||||||||||
450,000 | Gogo Inc.† | 6,117,249 | 4,954,500 | |||||||||
|
|
|
| |||||||||
TOTAL COMMON STOCKS | 243,923,595 | 231,926,632 | ||||||||||
|
|
|
| |||||||||
Principal Amount | ||||||||||||
U.S. GOVERNMENT OBLIGATIONS — 6.1% |
| |||||||||||
$15,197,000 | U.S. Treasury Bills, 0.025% to 0.451%††, 04/07/16 to 09/22/16 | 15,190,496 | 15,191,880 | |||||||||
|
|
|
| |||||||||
TOTAL INVESTMENTS — 99.7% | $ | 259,114,091 | 247,118,512 | |||||||||
|
| |||||||||||
Other Assets and Liabilities (Net) — 0.3% |
| 692,626 | ||||||||||
|
| |||||||||||
NET ASSETS — 100.0% |
| $ | 247,811,138 | |||||||||
|
|
(a) | Securities, or a portion thereof, with a value of $2,234,850 were deposited with the broker as collateral for options written. |
(b) | Security considered an affiliated holding because the Fund owns at least 5% of its outstanding shares. |
† | Non-income producing security. |
†† | Represents annualized yield at date of purchase. |
See accompanying notes to financial statements.
4
The Gabelli Focus Five Fund
Statement of Assets and Liabilities March 31, 2016 (Unaudited) |
Assets: | ||||
Investments, at value (cost $205,667,737) | $ | 220,830,403 | ||
Investments in affiliates, at value (cost $53,446,354) | 26,288,109 | |||
Foreign currency, at value (cost $34,057) | 34,013 | |||
Cash | 42,030 | |||
Receivable for investments sold | 2,678,768 | |||
Receivable for Fund shares sold | 195,615 | |||
Dividends receivable | 28,125 | |||
Prepaid expenses | 40,211 | |||
|
| |||
Total Assets | 250,137,274 | |||
|
| |||
Liabilities: | ||||
Payable for investments purchased | 1,388,926 | |||
Payable for Fund shares redeemed | 519,534 | |||
Payable for investment advisory fees | 209,457 | |||
Payable for distribution fees | 68,101 | |||
Payable for accounting fees | 3,750 | |||
Other accrued expenses | 136,368 | |||
|
| |||
Total Liabilities | 2,326,136 | |||
|
| |||
Net Assets | $ | 247,811,138 | ||
|
| |||
Net Assets Consist of: | ||||
Paid-in capital | $ | 258,109,451 | ||
Accumulated net investment loss | (4,660,536 | ) | ||
Accumulated net realized gain on investments, written options, and foreign currency transactions | 6,357,846 | |||
Net unrealized depreciation on investments | (11,995,579 | ) | ||
Net unrealized depreciation on foreign currency translations | (44 | ) | ||
|
| |||
Net Assets | $ | 247,811,138 | ||
|
|
Shares of Capital Stock, each at $0.001 par value: |
| |||
Class AAA: | ||||
Net Asset Value, offering, and redemption price per share ($33,225,898 ÷ 2,627,924 shares outstanding; 100,000,000 shares authorized) | $ | 12.64 | ||
|
| |||
Class A: | ||||
Net Asset Value and redemption price per share ($45,601,147 ÷ 3,570,755 shares outstanding; 50,000,000 shares authorized) | $ | 12.77 | ||
|
| |||
Maximum offering price per share (NAV ÷ 0.9425, based on maximum sales charge of 5.75% of the offering price) | $ | 13.55 | ||
|
| |||
Class C: | ||||
Net Asset Value and offering price per share ($61,302,326 ÷ 5,487,486 shares outstanding; 50,000,000 shares authorized) | $ | 11.17 | (a) | |
|
| |||
Class I: | ||||
Net Asset Value, offering, and redemption price per share ($107,681,767 ÷ 8,317,357 shares outstanding; 50,000,000 shares authorized) | $ | 12.95 | ||
|
|
(a) Redemption price varies based on the length of time held.
Statement of Operations For the Six Months Ended March 31, 2016 (Unaudited) |
Investment Income: | ||||
Dividends - unaffiliated (net of foreign withholding taxes of $34,037) | $ | 598,544 | ||
Interest | 2,286 | |||
|
| |||
Total Investment Income | 600,830 | |||
|
| |||
Expenses: | ||||
Investment advisory fees | 1,452,188 | |||
Distribution fees - Class AAA | 44,425 | |||
Distribution fees - Class A | 64,274 | |||
Distribution fees - Class C | 326,684 | |||
Shareholder services fees | 158,594 | |||
Registration expenses | 38,198 | |||
Shareholder communications expenses | 32,088 | |||
Accounting fees | 22,500 | |||
Custodian fees | 19,615 | |||
Legal and audit fees | 7,950 | |||
Interest expense | 6,243 | |||
Directors’ fees | 5,243 | |||
Miscellaneous expenses | 15,403 | |||
|
| |||
Total Expenses | 2,193,405 | |||
|
| |||
Expenses paid indirectly by broker | (1,903 | ) | ||
|
| |||
Net Expenses | 2,191,502 | |||
|
| |||
Net Investment Loss | (1,590,672 | ) | ||
|
| |||
Net Realized and Unrealized Gain/(Loss) on Investments and Foreign Currency: | ||||
Net realized gain on investments - unaffiliated | 13,366,899 | |||
Net realized loss on investments - affiliated | (4,062,354 | ) | ||
Net realized loss on foreign currency transactions | (620 | ) | ||
|
| |||
Net realized gain on investments and foreign currency transactions | 9,303,925 | |||
|
| |||
Net change in unrealized appreciation/depreciation: | ||||
on investments | 7,444,509 | |||
on foreign currency translations | (44 | ) | ||
|
| |||
Net change in unrealized appreciation/depreciation on investments and foreign currency translations | 7,444,465 | |||
|
| |||
Net Realized and Unrealized Gain/(Loss) on Investments and Foreign Currency | 16,748,390 | |||
|
| |||
Net Increase in Net Assets Resulting from Operations | $ | 15,157,718 | ||
|
|
See accompanying notes to financial statements.
5
The Gabelli Focus Five Fund
Statement of Changes in Net Assets
Six Months Ended | Year Ended | |||||||||
Operations: | ||||||||||
Net investment loss | $ | (1,590,672 | ) | $ | (4,119,153 | ) | ||||
Net realized gain/(loss) on investments, written options, and foreign currency transactions | 9,303,925 | (2,024,195 | ) | |||||||
Net change in unrealized appreciation/depreciation on investments and foreign currency translations | 7,444,465 | (51,737,361 | ) | |||||||
|
|
|
| |||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 15,157,718 | (57,880,709 | ) | |||||||
|
|
|
| |||||||
Distributions to Shareholders: | ||||||||||
Net realized gain | ||||||||||
Class AAA | — | (4,590,959 | ) | |||||||
Class A | — | (8,748,506 | ) | |||||||
Class C | — | (8,227,387 | ) | |||||||
Class I | — | (24,833,402 | ) | |||||||
|
|
|
| |||||||
Total Distributions to Shareholders | — | (46,400,254 | ) | |||||||
|
|
|
| |||||||
Capital Share Transactions: | ||||||||||
Class AAA | (7,502,218 | ) | (7,220,254 | ) | ||||||
Class A | (14,992,766 | ) | (28,863,265 | ) | ||||||
Class C | (12,044,060 | ) | 3,625,597 | |||||||
Class I | (74,783,050 | ) | (90,452,273 | ) | ||||||
|
|
|
| |||||||
Net Decrease in Net Assets from Capital Share Transactions | (109,322,094 | ) | (122,910,195 | ) | ||||||
|
|
|
| |||||||
Redemption Fees | 293 | 4,497 | ||||||||
|
|
|
| |||||||
Net Decrease in Net Assets | (94,164,083 | ) | (227,186,661 | ) | ||||||
Net Assets: | ||||||||||
Beginning of year | 341,975,221 | 569,161,882 | ||||||||
|
|
|
| |||||||
End of period (including undistributed net investment income of $0 and $0, respectively) | $ | 247,811,138 | $ | 341,975,221 | ||||||
|
|
|
|
See accompanying notes to financial statements.
6
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 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Year Ended 30 | Net Asset Value, Beginning of Year | Net | Net | Total from | Net Realized | Total | Redemption Fees (b)(c) | Net | Total | Net | Net Investment Loss (a) | Expenses Net of Waivers/ ments (d) | Expenses Waivers/ ments | Portfolio Turnover Rate | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class AAA | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2016(e) | $12.00 | $(0.06) | $ | 0.70 | $ | 0.64 | — | — | $0.00 | $ | 12.64 | 5.33 | % | $ | 33,226 | (1.04 | )%(f) | 1.46 | %(f) | 1.46 | %(f)(g) | 28 | % | |||||||||||||||||||||||||||||||||||||||||||||||
2015 | 15.22 | (0.12) | (1.81 | ) | (1.93 | ) | $ | (1.29 | ) | $ | (1.29 | ) | 0.00 | 12.00 | (14.11 | ) | 38,960 | (0.83 | ) | 1.37 | 1.37 | (g) | 73 | |||||||||||||||||||||||||||||||||||||||||||||||
2014 | 13.72 | (0.09) | 1.75 | 1.66 | (0.16 | ) | (0.16 | ) | 0.00 | 15.22 | 12.15 | 57,565 | (0.58 | ) | 1.38 | 1.38 | 94 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
2013 | 11.11 | (0.14) | 3.13 | 2.99 | (0.38 | ) | (0.38 | ) | 0.00 | 13.72 | 27.74 | 50,275 | (1.05 | ) | 1.54 | (h) | 1.54 | (h) | 69 | |||||||||||||||||||||||||||||||||||||||||||||||||||
2012 | 8.19 | (0.11) | 3.10 | 2.99 | (0.07 | ) | (0.07 | ) | 0.00 | 11.11 | 36.71 | 11,714 | (1.09 | ) | 2.01 | 2.69 | (i) | 140 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
2011 | 8.92 | (0.12) | (0.61 | ) | (0.73 | ) | — | — | 0.00 | 8.19 | (8.18 | ) | 5,207 | (1.21 | ) | 2.01 | 2.80 | (i) | 40 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2016(e) | $12.12 | $(0.06) | $ | 0.71 | $ | 0.65 | — | — | $0.00 | $ | 12.77 | 5.36 | % | $ | 45,601 | (1.04 | )%(f) | 1.46 | %(f) | 1.46 | %(f)(g) | 28 | % | |||||||||||||||||||||||||||||||||||||||||||||||
2015 | 15.36 | (0.12) | (1.83 | ) | (1.95 | ) | $ | (1.29 | ) | $ | (1.29 | ) | 0.00 | 12.12 | (14.11 | ) | 57,987 | (0.83 | ) | 1.37 | 1.37 | (g) | 73 | |||||||||||||||||||||||||||||||||||||||||||||||
2014 | 13.85 | (0.09) | 1.76 | 1.67 | (0.16 | ) | (0.16 | ) | 0.00 | 15.36 | 12.11 | 105,369 | (0.59 | ) | 1.38 | 1.38 | 94 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
2013 | 11.21 | (0.14) | 3.16 | 3.02 | (0.38 | ) | (0.38 | ) | 0.00 | 13.85 | 27.76 | 192,157 | (1.05 | ) | 1.54 | (h) | 1.54 | (h) | 69 | |||||||||||||||||||||||||||||||||||||||||||||||||||
2012 | 8.26 | (0.13) | 3.15 | 3.02 | (0.07 | ) | (0.07 | ) | 0.00 | 11.21 | 36.76 | 7,574 | (1.20 | ) | 2.01 | 2.69 | (i) | 140 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
2011 | 8.99 | (0.12) | (0.61 | ) | (0.73 | ) | — | — | 0.00 | 8.26 | (8.12 | ) | 139 | (1.21 | ) | 2.01 | 2.80 | (i) | 40 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2016(e) | $10.64 | $(0.10) | $ | 0.63 | $ | 0.53 | — | — | $0.00 | $ | 11.17 | 4.98 | % | $ | 61,302 | (1.79 | )%(f) | 2.21 | %(f) | 2.21 | %(f)(g) | 28 | % | |||||||||||||||||||||||||||||||||||||||||||||||
2015 | 13.73 | (0.20) | (1.60 | ) | (1.80 | ) | $ | (1.29 | ) | $ | (1.29 | ) | 0.00 | 10.64 | (14.74 | ) | 70,274 | (1.58 | ) | 2.12 | 2.12 | (g) | 73 | |||||||||||||||||||||||||||||||||||||||||||||||
2014 | 12.49 | (0.18) | 1.58 | 1.40 | (0.16 | ) | (0.16 | ) | 0.00 | 13.73 | 11.25 | 87,443 | (1.31 | ) | 2.13 | 2.13 | 94 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
2013 | 10.22 | (0.22) | 2.87 | 2.65 | (0.38 | ) | (0.38 | ) | 0.00 | 12.49 | 26.80 | 55,865 | (1.79 | ) | 2.29 | (h) | 2.29 | (h) | 69 | |||||||||||||||||||||||||||||||||||||||||||||||||||
2012 | 7.59 | (0.17) | 2.87 | 2.70 | (0.07 | ) | (0.07 | ) | 0.00 | 10.22 | 35.79 | 1,913 | (1.83 | ) | 2.76 | 3.44 | (i) | 140 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
2011 | 8.33 | (0.18) | (0.56 | ) | (0.74 | ) | — | — | 0.00 | 7.59 | (8.88 | ) | 192 | (1.96 | ) | 2.76 | 3.55 | (i) | 40 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Class I | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2016(e) | $12.27 | $(0.05) | $ | 0.73 | $ | 0.68 | — | — | $0.00 | $ | 12.95 | 5.54 | % | $ | 107,682 | (0.80 | )%(f) | 1.21 | %(f) | 1.21 | %(f)(g) | 28 | % | |||||||||||||||||||||||||||||||||||||||||||||||
2015 | 15.50 | (0.09) | (1.85 | ) | (1.94 | ) | $ | (1.29 | ) | $ | (1.29 | ) | 0.00 | 12.27 | (13.90 | ) | 174,754 | (0.58 | ) | 1.12 | 1.12 | (g) | 73 | |||||||||||||||||||||||||||||||||||||||||||||||
2014 | 13.94 | (0.05) | 1.77 | 1.72 | (0.16 | ) | (0.16 | ) | 0.00 | 15.50 | 12.39 | 318,785 | (0.30 | ) | 1.13 | 1.13 | 94 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
2013 | 11.26 | (0.11) | 3.17 | 3.06 | (0.38 | ) | (0.38 | ) | 0.00 | 13.94 | 28.00 | 110,170 | (0.79 | ) | 1.29 | (h) | 1.29 | (h) | 69 | |||||||||||||||||||||||||||||||||||||||||||||||||||
2012 | 8.27 | (0.09) | 3.15 | 3.06 | (0.07 | ) | (0.07 | ) | 0.00 | 11.26 | 37.21 | 14,862 | (0.84 | ) | 1.76 | 2.44 | (i) | 140 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
2011 | 8.98 | (0.10) | (0.61 | ) | (0.71 | ) | — | — | 0.00 | 8.27 | (7.91 | ) | 82 | (0.96 | ) | 1.76 | 2.55 | (i) | 40 |
† | Total return represents aggregate total return of a hypothetical $1,000 investment at the beginning of the year 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) | Due to capital share activity, net investment 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) | The Fund incurred interest expense during the year ended September 30, 2011. If interest expense had not been incurred, during the year the ratio 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. For the year ended September 30, 2013, there was no interest expense, and for six months ended March 31, 2016 and the years ended September 30, 2015, 2014 and 2012, the effect of interest expense was minimal. |
(e) | For the six months ended March 31, 2016, unaudited. |
(f) | Annualized. |
(g) | The Fund received credits from a designated broker who agreed to pay certain Fund operating expenses. For the six months ended March 31, 2016 and the year ended September 30, 2015, there was no impact to the expense ratios. |
(h) | Under an expense deferral agreement with the Adviser, the Adviser recovered from the Fund $140,973 for the year ended September 30, 2013, representing previously reimbursed expenses from the Adviser. Had such payment not been made, the expense ratio would have been 1.48% (Class AAA and Class A), 2.23% (Class C), and 1.23% (Class I). |
(i) | During the years ended September 30, 2012 and 2011, expenses were voluntarily reduced and/or reimbursed. If such fee reductions and/or reimbursements had not occurred, the ratio would have been as shown. |
See accompanying notes to financial statements.
7
The Gabelli Focus Five Fund
Notes to Financial Statements (Unaudited)
1. Organization. The Gabelli Focus Five Fund is a series of Gabelli Equity Series Funds, Inc. (the “Corporation”). 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 of the Corporation. The Fund seeks to provide a high level of capital appreciation. The Fund commenced investment operations on December 31, 2002.
2. Significant Accounting Policies. As an investment company, the Fund follows the investment company accounting and reporting guidance, which is part of U.S. generally accepted accounting principles (“GAAP”) that may require the use of management estimates and assumptions in the preparation of its financial statements. Actual results could differ from those estimates. The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements.
Security Valuation. Portfolio securities listed or traded on a nationally recognized securities exchange or traded in the U.S. over-the-counter market for which market quotations are readily available are valued at the last quoted sale price or a market’s official closing price as of the close of business on the day the securities are being valued. If there were no sales that day, the security is valued at the average of the closing bid and asked prices or, if there were no asked prices quoted on that day, then the security is valued at the closing bid price on that day. If no bid or asked prices are quoted on such day, the security is valued at the most recently available price or, if the Board of Directors (the “Board”) so determines, by such other method as the Board shall determine in good faith to reflect its fair market value. Portfolio securities traded on more than one national securities exchange or market are valued according to the broadest and most representative market, as determined by Gabelli Funds, LLC (the “Adviser”).
Portfolio securities primarily traded on a foreign market are generally valued at the preceding closing values of such securities on the relevant market, but may be fair valued pursuant to procedures established by the Board if market conditions change significantly after the close of the foreign market, but prior to the close of business on the day the securities are being valued. Debt instruments with remaining maturities of sixty days or less that are not credit impaired are valued at amortized cost, unless the Board determines such amount does not reflect the securities’ fair value, in which case these securities will be fair valued as determined by the Board. Debt instruments having a maturity greater than sixty days for which market quotations are readily available are valued at the average of the latest bid and asked prices. If there were no asked prices quoted on such day, the security is valued using the closing bid price. U.S. government obligations with maturities greater than sixty days are normally valued using a model that incorporates market observable data such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued principally using dealer quotations.
Securities and assets for which market quotations are not readily available are fair valued as determined by the Board. Fair valuation methodologies and procedures may include, but are not limited to: analysis and review of available financial and non-financial information about the company; comparisons with the valuation and changes in valuation of similar securities, including a comparison of foreign securities with the equivalent U.S. dollar value American Depositary Receipt securities at the close of the U.S. exchange; and evaluation of any other information that could be indicative of the value of the security.
8
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 Board’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, 2016 is as follows:
Valuation Inputs | |||||||||||||||||
Level 1 Quoted Prices | Level 2 Other Significant Observable Inputs | Total Market Value at 3/31/16 | |||||||||||||||
INVESTMENTS IN SECURITIES: | |||||||||||||||||
ASSETS (Market Value): | |||||||||||||||||
Common Stocks (a) | $231,926,632 | — | $231,926,632 | ||||||||||||||
U.S. Government Obligations | — | $15,191,880 | 15,191,880 | ||||||||||||||
TOTAL INVESTMENTS IN SECURITIES – ASSETS | $231,926,632 | 15,191,880 | $247,118,512 |
(a) Please refer to the Schedule of Investments for the industry classifications of these portfolio holdings.
The Fund did not have transfers between Level 1 and Level 2 during the six months ended March 31, 2016. The Fund’s policy is to recognize transfers among Levels as of the beginning of the reporting period.
There were no Level 3 investments held at March 31, 2016 or September 30, 2015.
Additional Information to Evaluate Qualitative Information.
General. The Fund uses recognized industry pricing services – approved by the Board and unaffiliated with the Adviser – to value most of its securities, and uses broker quotes provided by market makers of securities not valued by these and other recognized pricing sources. Several different pricing feeds are received to value domestic equity securities, international equity securities, preferred equity securities, and fixed income securities. The data within these feeds is ultimately sourced from major stock exchanges and trading systems where these securities trade. The prices supplied by external sources are checked by obtaining quotations or actual transaction prices from market participants. If a price obtained from the pricing source is deemed unreliable, prices will be sought from another pricing service or from a broker/dealer that trades that security or similar securities.
Fair Valuation. Fair valued securities may be common and preferred equities, warrants, options, rights, and fixed income obligations. Where appropriate, Level 3 securities are those for which market quotations are not available, such as securities not traded for several days, or for which current bids are not available, or which are restricted as to transfer. Among the factors to be considered to fair value a security are recent prices of comparable securities that are publicly traded, reliable prices of securities not publicly traded, the use of valuation models, current analyst reports, valuing the income or cash flow of the issuer, or cost if the preceding
9
The Gabelli Focus Five Fund
Notes to Financial Statements (Unaudited) (Continued)
factors do not apply. The circumstances of Level 3 securities are frequently monitored to determine if fair valuation measures continue to apply.
The Adviser reports quarterly to the Board the results of the application of fair valuation policies and procedures. These may include back testing the prices realized in subsequent trades of these fair valued securities to fair values previously recognized.
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, 2016, if any, are not accounted for as hedging instruments under GAAP and are disclosed in the Schedule of Investments together with the related counterparty.
Options. The Fund may purchase or write call or put options on securities or indices for the purpose of increasing the income of the Fund. As a writer of put options, the Fund receives a premium at the outset and then bears the risk of unfavorable changes in the price of the financial instrument underlying the option. The Fund would incur a loss if the price of the underlying financial instrument decreases between the date the option is written and the date on which the option is terminated. The Fund would realize a gain, to the extent of the premium, if the price of the financial instrument increases between those dates.
As a purchaser of put options, the Fund pays a premium for the right to sell to the seller of the put option the underlying security at a specified price. The seller of the put has the obligation to purchase the underlying security upon exercise at the exercise price. If the price of the underlying security declines, the Fund would realize a gain upon sale or exercise. If the price of the underlying security increases or stays the same, the Fund would realize a loss upon sale or at expiration date, but only to the extent of the premium paid.
If a written call option is exercised, the premium is added to the proceeds from the sale of the underlying security in determining whether there has been a realized gain or loss. If a written put option is exercised, the premium reduces the cost basis of the security. In the case of call options, the exercise prices are referred to as “in-the-money,” “at-the-money,” and “out-of-the-money,” respectively. The Fund may write (a) in-the-money call options when the Adviser expects that the price of the underlying security will remain stable or decline during the option period, (b) at-the-money call options when the Adviser expects that the price of the underlying security will remain stable, decline, or advance moderately during the option period, and (c) out-of-the-money
10
The Gabelli Focus Five Fund
Notes to Financial Statements (Unaudited) (Continued)
call options when the Adviser expects that the premiums received from writing the call option will be greater than the appreciation in the price of the underlying security above the exercise price. By writing a call option, the Fund limits its opportunity to profit from any increase in the market value of the underlying security above the exercise price of the option. Out-of-the-money, at-the-money, and in-the-money put options (the reverse of call options as to the relation of exercise price to market price) may be utilized in the same market environments that such call options are used in equivalent transactions. At March 31, 2016, the Fund held no investments in equity options contracts.
The Fund’s volume of activity in equity options contracts during the six months ended March 31, 2016 had an average monthly market value of approximately $40,563. Please refer to Note 5 for option activity during the six months ended March 31, 2016.
For the six months ended March 31, 2016, the effect of equity option positions if any, can be found in the Statement of Operations under Net Realized and Unrealized Gain/(Loss) on Investments, Written Options, and Foreign Currency, within Net realized gain on written options.
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 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/(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
11
The Gabelli Focus Five Fund
Notes to Financial Statements (Unaudited) (Continued)
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.
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. 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, 2015 was as follows:
Distributions paid from: | ||||
Ordinary income (inclusive of short term capital gains) | $ | 31,010,091 | ||
Net long term capital gains | 15,390,163 | |||
|
| |||
Total distributions paid | $ | 46,400,254 | ||
|
|
Provision for Income Taxes. The Fund intends to continue to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). It is the policy of the Fund to comply with the requirements of the Code applicable to regulated investment companies and to distribute substantially all of its net investment company taxable income and net capital gains. Therefore, no provision for federal income taxes is required,
The Fund is permitted to carry capital losses forward for an unlimited period. Capital losses that are carried forward will retain their character as either short term or long term capital losses.
The following summarizes the tax cost of investments and the related net unrealized depreciation at March 31, 2016:
Cost | Gross | Gross | Net Unrealized Depreciation | |||||||||||||||||
Investments | $ | 261,134,165 | $ | 26,427,130 | $ | (40,442,783) | $(14,015,653) |
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
12
The Gabelli Focus Five Fund
Notes to Financial Statements (Unaudited) (Continued)
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, 2016, the Fund did not incur any income tax, interest, or penalties. As of March 31, 2016, 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. The Fund’s federal and state tax returns for the prior three fiscal years remain open, subject to examination. On an ongoing basis, the Adviser will monitor the Fund’s tax positions to determine if adjustments to this conclusion are necessary.
3. Investment Advisory Agreement and Other Transactions. The Fund has entered into an investment advisory agreement (the “Advisory Agreement”) with the Adviser which provides that the Fund will pay the Adviser a fee, computed daily and paid monthly, at the annual rate of 1.00% of the value of its average daily net assets. In accordance with the Advisory Agreement, the Adviser provides a continuous investment program for the Fund’s portfolio, oversees the administration of all aspects of the Fund’s business and affairs, and pays the compensation of all Officers and Directors of the Fund who are affiliated persons of the Adviser.
The Corporation pays each Director who is not considered an affiliated person an annual retainer of $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 Adviser, 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, 2016, other than short term securities and U.S. Government obligations, aggregated $81,148,601 and $204,564,725, respectively.
Written options activity for the Fund for the six months ended March 31, 2016 was as follows:
Number of | Premiums | |||||||||
Options outstanding at September 30, 2015 | — | — | ||||||||
Options written | 350 | $ | 50,566 | |||||||
Options repurchased | (350 | ) | (50,566 | ) | ||||||
|
|
|
| |||||||
Options outstanding at March 31, 2016 | — | — | ||||||||
|
|
|
|
6. Transactions with Affiliates and Other Arrangements. During the six months ended March 31, 2016, the Distributor retained a total of $16,320 from investors representing commissions (sales charges and underwriting fees) on sales and redemptions of Fund shares.
13
The Gabelli Focus Five Fund
Notes to Financial Statements (Unaudited) (Continued)
During the six months ended March 31, 2016, the Fund received credits from a designated broker who agreed to pay certain Fund operating expenses. The amount of such expenses paid through this directed brokerage arrangement during this period was $1,903.
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, 2016, the Fund paid or accrued $22,500 to the Adviser in connection with the cost of computing the Fund’s NAV.
During the six months ended March 31, 2016, the Fund engaged in purchase and sale transactions with funds that have a common investment adviser. These purchase and sale transactions complied with Rule 17a-7 under the Act and amount to $3,571,100 and $438,800, respectively.
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 bears interest at a floating rate equal to the higher of the overnight Federal Funds rate plus 125 basis points or the 30-DAY LIBOR plus 125 basis points in effect on that day. This amount, if any, would be included in “Interest expense” in the Statement of Operations. At March 31, 2016, there were no borrowings under the line of credit.
The average daily amount of borrowings outstanding under the line of credit during the six months ended March 31, 2016 was $916,206 with a weighted average interest rate of 0.81%. The maximum amount borrowed at any time during the six months ended March 31, 2016 was $23,374,000.
8. Capital Stock. The Fund offers four classes of shares–Class AAA Shares, Class A Shares, Class C Shares, and Class I Shares. Class AAA and Class I Shares are offered without a sales charge. Class A Shares are subject to a maximum front-end sales charge of 5.75%, and Class C Shares are subject to a 1.00% contingent deferred sales charge for one year after purchase.
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, 2016, and the year ended September 30, 2015, if any, can be found in the Statement of Changes in Net Assets under Redemption Fees.
14
The Gabelli Focus Five Fund
Notes to Financial Statements (Unaudited) (Continued)
Transactions in shares of capital stock were as follows:
Six Months Ended March 31, 2016 (Unaudited) | Year Ended September 30, 2015 | |||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||
Class AAA | ||||||||||||||||||||||
Shares sold | 222,667 | $ | 2,654,029 | 613,887 | $ | 8,810,559 | ||||||||||||||||
Shares issued upon reinvestment of distributions | — | — | 305,052 | 4,411,053 | ||||||||||||||||||
Shares redeemed | (842,527 | ) | (10,156,247 | ) | (1,454,097 | ) | (20,441,866 | ) | ||||||||||||||
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Net decrease | (619,860 | ) | $ | (7,502,218 | ) | (535,158 | ) | $ | (7,220,254 | ) | ||||||||||||
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Class A | ||||||||||||||||||||||
Shares sold | 341,165 | $ | 4,252,569 | 1,269,743 | $ | 18,577,441 | ||||||||||||||||
Shares issued upon reinvestment of distributions | — | — | 530,683 | 7,747,971 | ||||||||||||||||||
Shares redeemed | (1,555,970 | ) | (19,245,335 | ) | (3,875,110 | ) | (55,188,677 | ) | ||||||||||||||
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Net decrease | (1,214,805 | ) | $ | (14,992,766 | ) | (2,074,684 | ) | $ | (28,863,265 | ) | ||||||||||||
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Class C | ||||||||||||||||||||||
Shares sold | 474,664 | $ | 5,184,384 | 1,737,215 | $ | 22,450,442 | ||||||||||||||||
Shares issued upon reinvestment of distributions | — | — | 512,106 | 6,606,165 | ||||||||||||||||||
Shares redeemed | (1,592,263 | ) | (17,228,444 | ) | (2,012,006 | ) | (25,431,010 | ) | ||||||||||||||
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Net increase/(decrease) | (1,117,599 | ) | $ | (12,044,060 | ) | 237,315 | $ | 3,625,597 | ||||||||||||||
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Class I | ||||||||||||||||||||||
Shares sold | 850,680 | $ | 10,394,925 | 3,482,601 | $ | 51,033,834 | ||||||||||||||||
Shares issued upon reinvestment of distributions | — | — | 1,336,689 | 19,716,160 | ||||||||||||||||||
Shares redeemed | (6,777,092 | ) | (85,177,975 | ) | (11,144,226 | ) | (161,202,267 | ) | ||||||||||||||
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Net decrease | (5,926,412 | ) | $ | (74,783,050 | ) | (6,324,936 | ) | $ | (90,452,273 | ) | ||||||||||||
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9. Transactions in Securities of Affiliated Issuers. The 1940 Act defines affiliated issuers as those in which the Fund’s holdings of an issuer represent 5% or more of the outstanding voting securities of the issuer. A summary of the Fund’s transactions in the securities of these issuers during the six months ended March 31, 2016 is set forth below:
Beginning Shares | Shares Purchased | Shares Sold | Ending Shares | Dividend Income | Realized Loss | Value at March 31, 2016 | Percent Owned of Shares Outstanding | ||||||||||||||||||||||||||||
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Bioscrip Inc. | 7,639,940 | 2,660,060 | (755,400 | ) | 9,544,600 | — | $ | (3,850,882 | ) | $ | 20,425,444 | 13.88% | |||||||||||||||||||||||
Jason Industries Inc. | 1,595,212 | 117,515 | (37,680 | ) | 1,675,047 | — | (211,472 | ) | 5,862,665 | 7.51% | |||||||||||||||||||||||||
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— | $ | (4,062,354 | ) | $ | 26,288,109 | ||||||||||||||||||||||||||||||
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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. 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 Advisory Agreement (Unaudited)
During the six months ended March 31, 2016, the Board of Directors of the Corporation approved the continuation of the investment advisory agreement with the Adviser for the Fund on the basis of the recommendation by the directors (the “Independent Board Members”) who are not “interested persons” of the Fund. The following paragraphs summarize the material information and factors considered by the Independent Board Members as well as their conclusions relative to such factors.
Nature, Extent, and Quality of Services. The Independent Board Members considered information regarding the portfolio manager, the depth of the analyst pool available to the Adviser and the portfolio manager, the scope of administrative, shareholder, and other services supervised or provided by the Adviser and the absence of significant service problems reported to the Board. The Independent Board Members noted the experience, length of service, and reputation of the portfolio manager.
Investment Performance. The Independent Board Members reviewed the performance of the Fund over various periods against a peer group of mid-cap core funds. The Independent Board Members noted that the Fund’s performance was in the fourth quartile for the one year, three year and five year periods. The Independent Board Members also noted that the Fund’s five year performance was of less relevance than is usually the case due to the relatively recent changes in investment strategy and portfolio management team.
Profitability. The Independent Board Members reviewed summary data regarding the historical 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 another affiliate received minor amounts of sales commissions and that the Adviser received a moderate level of soft dollar research benefits through the Fund’s portfolio brokerage.
Economies of Scale. The Independent Board Members discussed the major elements of the Adviser’s cost structure and the relationship of those elements to potential economies of scale.
Sharing of Economies of Scale. The Independent Board Members noted that the investment management fee schedule for the Fund does not take into account any potential economies of scale that may develop or any losses or diminished profitability to the Adviser in prior years.
Service and Cost Comparisons. The Independent Board Members compared the expense ratios of the investment management fee, other expenses, and total expenses of the Fund with similar expense ratios of the peer group of mid-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 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 an acceptable performance record. 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
16
The Gabelli Focus Five Fund
Board Consideration and Re-Approval of Advisory Agreement (Unaudited) (Continued)
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
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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 and GAMCO Asset Management Inc., which are affiliated with GAMCO Investors, Inc. GAMCO Investors, Inc. is a publicly held company that has subsidiaries and affiliates that provide investment advisory 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.
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Gabelli Equity Series Funds, Inc.
THE GABELLI FOCUS FIVE FUND
One Corporate Center
Rye, New York 10580-1422
t 800-GABELLI (800-422-3554)
f 914-921-5118
e info@gabelli.com
GABELLI.COM
Net Asset Value per share available daily by calling 800-GABELLI after 7:00 P.M. | ![]() | |||
BOARD OF DIRECTORS
Mario J. Gabelli, CFA Chairman and Chief Executive Officer, GAMCO Investors, Inc. Chairman and Chief Executive Officer, Associated Capital Group, Inc.
Anthony J. Colavita President, Anthony J. Colavita, P.C.
Vincent D. Enright Former Senior Vice President and Chief Financial Officer, KeySpan Corp.
John D. Gabelli Senior Vice President, G.research, LLC
Robert J. Morrissey Partner, Morrissey, Hawkins & Lynch
Kuni Nakamura President, Advanced Polymer, Inc.
Anthony R. Pustorino Certified Public Accountant, Professor Emeritus, Pace University
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Anthonie C. van Ekris Chairman, BALMAC International, Inc.
Salvatore J. Zizza Chairman, Zizza & Associates Corp.
OFFICERS
Bruce N. Alpert President
Andrea R. Mango Secretary
Agnes Mullady Treasurer
Richard J. Walz Chief Compliance Officer
DISTRIBUTOR
G.distributors, LLC
CUSTODIAN, TRANSFER AGENT, AND DIVIDEND DISBURSING AGENT
State Street Bank and Trust Company
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.
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GAB840Q116SR | ||||
The Gabelli Small Cap Growth Fund
Semiannual Report — March 31, 2016 | ![]() | |
To Our Shareholders,
For the six months ended March 31, 2016, the net asset value (“NAV”) per Class AAA Share of The Gabelli Small Cap Growth Fund increased 6.1% compared with an increase of 2.0% for the Russell 2000 Index. See below for additional performance information.
Enclosed are the financial statements, including the schedule of investments, as of March 31, 2016.
Comparative Results
Average Annual Returns through March 31, 2016 (a)(b) (Unaudited) | Since Inception (10/22/91) | |||||||||||||||||||||||
Six Months | 1 Year | 5 Year | 10 Year | 15 Year | ||||||||||||||||||||
Class AAA (GABSX) | 6.14% | (5.26) | % | 8.21% | 7.64% | 9.86% | 12.37% | |||||||||||||||||
Russell 2000 Index | 2.02 | (9.76) | 7.20 | 5.26 | 7.65 | 9.16 | ||||||||||||||||||
Class A (GCASX) | 6.14 | (5.26) | 8.21 | 7.64 | 9.86 | 12.37 | ||||||||||||||||||
With sales charge (c) | 0.04 | (10.71) | 6.94 | 7.00 | 9.43 | 12.10 | ||||||||||||||||||
Class C (GCCSX) | 5.76 | (5.97) | 7.41 | 6.85 | 9.20 | 11.96 | ||||||||||||||||||
With contingent deferred sales charge (d) | 4.76 | (6.91) | 7.41 | 6.85 | 9.20 | 11.96 | ||||||||||||||||||
Class I (GACIX) | 6.29 | (5.00) | 8.49 | 7.87 | 10.02 | 12.47 |
In the current prospectuses dated January 28, 2016, the expense ratios for Class AAA, A, C, and I Shares are 1.38%, 1.38%, 2.13%, and 1.13%, respectively. See page 15 for the expense ratios for the six months ended March 31, 2016. Class AAA and Class I Shares have no 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. 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. 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. Investors should carefully consider the investment objectives, risks, charges, and expenses of the Fund before investing. The prospectuses contain information about these and other matters and should be read carefully before investing. To obtain a prospectus please visit our website at www.gabelli.com. The Class AAA Share NAVs are used to calculate performance for the periods prior to the issuance of Class A Shares and Class C Shares on December 31, 2003, and the Class I Shares on January 11, 2008. The actual performance of the Class A Shares and Class C Shares would have been lower due to the additional fees and expenses associated with these classes of shares. The actual performance of the Class I Shares would have been higher due to lower expenses associated with this class 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 1% maximum contingent deferred sales charge imposed on redemptions made within one year of purchase.
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The Gabelli Small Cap Growth Fund Disclosure of Fund Expenses (Unaudited) For the Six Month Period from October 1, 2015 through March 31, 2016
| Expense Table
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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 10/01/15 | Ending Account Value | Annualized Expense Ratio | Expenses Paid During Period* | |||||
The Gabelli Small Cap Growth Fund | ||||||||
Actual Fund Return | ||||||||
Class AAA | $1,000.00 | $1,061.40 | 1.40% | $ 7.21 | ||||
Class A | $1,000.00 | $1,061.40 | 1.40% | $ 7.21 | ||||
Class C | $1,000.00 | $1,057.60 | 2.15% | $11.06 | ||||
Class I | $1,000.00 | $1,062.90 | 1.15% | $ 5.93 | ||||
Hypothetical 5% Return | ||||||||
Class AAA | $1,000.00 | $1,018.00 | 1.40% | $ 7.06 | ||||
Class A | $1,000.00 | $1,018.00 | 1.40% | $ 7.06 | ||||
Class C | $1,000.00 | $1,014.25 | 2.15% | $10.83 | ||||
Class I | $1,000.00 | $1,019.25 | 1.15% | $ 5.81 |
* | 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 (183 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, 2016:
The Gabelli Small Cap Growth Fund
Food and Beverage | 10.7 | % | ||
Equipment and Supplies | 8.4 | % | ||
Energy and Utilities | 6.8 | % | ||
Automotive: Parts and Accessories | 6.7 | % | ||
Retail | 6.6 | % | ||
Business Services | 5.7 | % | ||
Diversified Industrial | 5.5 | % | ||
Health Care | 4.9 | % | ||
Specialty Chemicals | 4.2 | % | ||
Financial Services | 4.1 | % | ||
Hotels and Gaming | 3.6 | % | ||
Aviation: Parts and Services | 3.5 | % | ||
U.S. Government Obligations | 3.1 | % | ||
Building and Construction | 2.8 | % | ||
Entertainment | 2.6 | % | ||
Computer Software and Services | 2.5 | % | ||
Telecommunications | 2.1 | % | ||
Wireless Communications | 1.7 | % | ||
Consumer Products | 1.6 | % | ||
Electronics | 1.5 | % | ||
Consumer Services | 1.4 | % | ||
Machinery | 1.4 | % | ||
Broadcasting | 1.2 | % |
Real Estate | 1.1 | % | ||
Cable | 1.1 | % | ||
Publishing | 0.9 | % | ||
Transportation | 0.9 | % | ||
Aerospace | 0.6 | % | ||
Home Furnishings | 0.6 | % | ||
Environmental Services | 0.6 | % | ||
Automotive | 0.6 | % | ||
Metals and Mining | 0.4 | % | ||
Manufactured Housing and | 0.4 | % | ||
Communications Equipment | 0.1 | % | ||
Closed-End Funds | 0.1 | % | ||
Educational Services | 0.0 | %* | ||
Closed-End Business Development | 0.0 | %* | ||
Paper and Forest Products | 0.0 | %* | ||
Agriculture | 0.0 | %* | ||
Other Assets and Liabilities (Net) | 0.0 | %* | ||
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100.0 | % | |||
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* | Amount represents less than 0.05%. |
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 30, no later than August 31 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, 2016 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS — 96.7% |
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Aerospace — 0.6% |
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1,245,095 | Aerojet Rocketdyne Holdings Inc.† | $ | 8,096,303 | $ | 20,394,656 | |||||||
25,000 | Embraer SA, ADR | 430,623 | 659,000 | |||||||||
20,000 | Innovative Solutions & Support Inc.† | 69,694 | 52,600 | |||||||||
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8,596,620 | 21,106,256 | |||||||||||
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Agriculture — 0.0% |
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380,000 | Black Earth Farming Ltd., SDR† | 490,756 | 183,020 | |||||||||
12,000 | Cadiz Inc.† | 93,950 | 62,640 | |||||||||
10,000 | Ceres Inc.† | 123,134 | 2,200 | |||||||||
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707,840 | 247,860 | |||||||||||
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Automotive — 0.6% |
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1,370,000 | Navistar International Corp.† | 38,515,807 | 17,152,400 | |||||||||
15,000 | PACCAR Inc. | 627,598 | 820,350 | |||||||||
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39,143,405 | 17,972,750 | |||||||||||
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Automotive: Parts and Accessories — 6.6% |
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236,000 | BorgWarner Inc. | 1,330,291 | 9,062,400 | |||||||||
680,000 | Brembo SpA | 7,506,079 | 35,168,011 | |||||||||
90,022 | China Automotive Systems Inc.† | 447,666 | 417,702 | |||||||||
350,000 | Cooper Tire & Rubber Co. | 9,226,758 | 12,957,000 | |||||||||
1,175,000 | Dana Holding Corp. | 10,521,115 | 16,555,750 | |||||||||
1,360,000 | Federal-Mogul Holdings Corp.† | 16,478,722 | 13,436,800 | |||||||||
756,000 | Modine Manufacturing Co.† | 9,525,533 | 8,323,560 | |||||||||
22,000 | Monro Muffler Brake Inc. | 150,657 | 1,572,340 | |||||||||
225,000 | O’Reilly Automotive Inc.† | 5,975,301 | 61,573,500 | |||||||||
45,000 | Puradyn Filter Technologies Inc.† | 11,732 | 2,250 | |||||||||
190,000 | SORL Auto Parts Inc.† | 1,091,977 | 342,000 | |||||||||
80,375 | Spartan Motors Inc. | 388,580 | 317,481 | |||||||||
225,000 | Standard Motor Products Inc. | 1,824,108 | 7,796,250 | |||||||||
207,000 | Strattec Security Corp.(a) | 4,420,973 | 11,879,730 | |||||||||
400,000 | Superior Industries International Inc. | 6,650,124 | 8,832,000 | |||||||||
475,000 | Tenneco Inc.† | 4,109,505 | 24,467,250 | |||||||||
26,000 | Thor Industries Inc. | 240,934 | 1,658,020 | |||||||||
15,500 | Visteon Corp. | 1,591,078 | 1,233,645 | |||||||||
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81,491,133 | 215,595,689 | |||||||||||
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|
| |||||||||
Aviation: Parts and Services — 3.5% |
| |||||||||||
25,000 | AAR Corp. | 302,990 | 581,750 | |||||||||
9,500 | Astronics Corp.† | 18,095 | 362,425 | |||||||||
15,616 | Astronics Corp., Cl. B† | 28,889 | 600,279 | |||||||||
36,000 | B/E Aerospace Inc. | 1,926,253 | 1,660,320 | |||||||||
9,650,000 | BBA Aviation plc | 22,126,931 | 27,774,969 | |||||||||
490,000 | Curtiss-Wright Corp. | 14,055,963 | 37,078,300 |
Shares | Cost | Market Value | ||||||||||
44,000 | Ducommun Inc.† | $ | 868,225 | $ | 671,000 | |||||||
880,018 | Kaman Corp. | 16,923,967 | 37,567,968 | |||||||||
50,000 | KLX Inc.† | 1,946,560 | 1,607,000 | |||||||||
85,000 | Moog Inc., Cl. A† | 703,065 | 3,882,800 | |||||||||
16,200 | Moog Inc., Cl. B† | 471,841 | 731,268 | |||||||||
68,000 | Woodward Inc. | 1,052,020 | 3,537,360 | |||||||||
|
|
|
| |||||||||
60,424,799 | 116,055,439 | |||||||||||
|
|
|
| |||||||||
Broadcasting — 1.2% |
| |||||||||||
520,836 | ACME Communications Inc.† | 10,417 | 85,625 | |||||||||
247,034 | Beasley Broadcast Group Inc., Cl. A | 1,430,627 | 867,089 | |||||||||
10,000 | Cogeco Communications Inc. | 340,851 | 533,282 | |||||||||
23,300 | Cogeco Inc. | 592,837 | 1,020,805 | |||||||||
440,000 | Crown Media Holdings Inc., Cl. A† | 1,582,399 | 2,235,200 | |||||||||
25,000 | Gray Television Inc.† | 73,674 | 293,000 | |||||||||
71,200 | Gray Television Inc., Cl. A† | 373,008 | 745,820 | |||||||||
400,000 | ITV plc | 1,310,259 | 1,385,689 | |||||||||
20,000 | Liberty Broadband Corp., Cl. A† | 124,003 | 1,163,200 | |||||||||
52,362 | Liberty Broadband Corp., Cl. C† | 730,014 | 3,034,378 | |||||||||
440 | Liberty Global plc LiLAC, Cl. A† | 4,313 | 15,426 | |||||||||
1,320 | Liberty Global plc LiLAC, Cl. C† | 15,336 | 50,002 | |||||||||
80,000 | Liberty Media Corp., Cl. A† | 372,009 | 3,090,400 | |||||||||
160,000 | Liberty Media Corp., Cl. C† | 731,764 | 6,094,400 | |||||||||
360,000 | MSG Networks Inc., Cl. A† | 2,378,357 | 6,224,400 | |||||||||
150,000 | Pandora Media Inc.† | 2,027,795 | 1,342,500 | |||||||||
594,500 | Salem Media Group Inc. | 2,210,372 | 3,424,320 | |||||||||
170,000 | Sinclair Broadcast Group Inc., Cl. A | 1,335,314 | 5,227,500 | |||||||||
450,000 | Sirius XM Holdings Inc.† | 219,282 | 1,777,500 | |||||||||
|
|
|
| |||||||||
15,862,631 | 38,610,536 | |||||||||||
|
|
|
| |||||||||
Building and Construction — 2.8% |
| |||||||||||
60,000 | Beazer Homes USA Inc.† | 1,092,968 | 523,200 | |||||||||
270,000 | CalAtlantic Group Inc. | 4,420,032 | 9,023,400 | |||||||||
295,000 | D.R. Horton Inc. | 3,487,620 | 8,917,850 | |||||||||
52,000 | Gibraltar Industries Inc.† | 1,113,797 | 1,487,200 | |||||||||
750,000 | Hovnanian Enterprises Inc., Cl. A† | 1,928,866 | 1,170,000 | |||||||||
200,000 | KB Home | 2,123,861 | 2,856,000 | |||||||||
415,000 | Layne Christensen Co.† | 8,431,152 | 2,983,850 | |||||||||
75,000 | Lennar Corp., Cl. A | 1,070,083 | 3,627,000 | |||||||||
450,000 | Lennar Corp., Cl. B | 12,077,844 | 17,419,500 | |||||||||
600,000 | Louisiana-Pacific Corp.† | 5,071,723 | 10,272,000 | |||||||||
130,000 | MDC Holdings Inc. | 3,265,051 | 3,257,800 | |||||||||
155,000 | Meritage Homes Corp.† | 3,454,885 | 5,651,300 | |||||||||
12,000 | Nortek Inc.† | 436,978 | 579,480 | |||||||||
2,700 | NVR Inc.† | 1,908,453 | 4,677,480 |
See accompanying notes to financial statements.
4
The Gabelli Small Cap Growth Fund
Schedule of Investments (Continued) — March 31, 2016 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS (Continued) |
| |||||||||||
Building and Construction (Continued) |
| |||||||||||
345,000 | PulteGroup Inc. | $ | 2,447,273 | $ | 6,454,950 | |||||||
380,000 | Toll Brothers Inc.† | 7,446,446 | 11,213,800 | |||||||||
|
|
|
| |||||||||
59,777,032 | 90,114,810 | |||||||||||
|
|
|
| |||||||||
Business Services — 5.7% | ||||||||||||
40,000 | ACCO Brands Corp.† | 363,855 | 359,200 | |||||||||
125,000 | Ascent Capital Group Inc., Cl. A† | 3,184,059 | 1,851,250 | |||||||||
125,000 | Blackhawk Network Holdings Inc.† | 2,894,657 | 4,287,500 | |||||||||
525,006 | Clear Channel Outdoor Holdings Inc., Cl. A | 1,909,003 | 2,467,528 | |||||||||
1,225,000 | Diebold Inc. | 40,196,982 | 35,414,750 | |||||||||
560,488 | Edgewater Technology Inc.† | 2,775,139 | 4,366,202 | |||||||||
95,000 | GP Strategies Corp.† | 791,180 | 2,603,000 | |||||||||
30,000 | GSE Systems Inc.† | 130,842 | 81,300 | |||||||||
400,000 | Internap Corp.† | 2,649,451 | 1,092,000 | |||||||||
17,000 | Landauer Inc. | 443,034 | 562,190 | |||||||||
1,100,000 | Live Nation Entertainment Inc.† | 11,276,960 | 24,541,000 | |||||||||
220,000 | Loomis AB, Cl. B | 2,378,280 | 6,219,321 | |||||||||
200,000 | Macquarie Infrastructure Corp. | 2,469,909 | 13,488,000 | |||||||||
94,000 | McGrath RentCorp | 2,555,092 | 2,357,520 | |||||||||
373,000 | Scientific Games Corp., Cl. A† | 4,659,375 | 3,517,390 | |||||||||
15,000 | Sealed Air Corp. | 362,982 | 720,150 | |||||||||
20,000 | Sequential Brands Group Inc.† | 209,491 | 127,800 | |||||||||
120,000 | Sohgo Security Services Co. Ltd. | 1,459,559 | 6,504,065 | |||||||||
40,000 | Stamps.com Inc.† | 377,584 | 4,251,200 | |||||||||
179,392 | Team Inc.† | 5,345,577 | 5,449,929 | |||||||||
400,000 | The Brink’s Co. | 9,807,432 | 13,436,000 | |||||||||
2,000,000 | The Interpublic Group of Companies Inc. | 15,460,476 | 45,900,000 | |||||||||
100,418 | TNT Express NV† | 887,655 | 901,101 | |||||||||
33,050 | TransAct Technologies Inc. | 168,459 | 269,027 | |||||||||
404,250 | Trans-Lux Corp.†(a) | 3,958,047 | 1,657,425 | |||||||||
47,000 | United Rentals Inc.† | 587,456 | 2,922,930 | |||||||||
14,444 | Vectrus Inc.† | 306,666 | 328,601 | |||||||||
|
|
|
| |||||||||
117,609,202 | 185,676,379 | |||||||||||
|
|
|
| |||||||||
Cable — 1.1% | ||||||||||||
167,000 | AMC Networks Inc., Cl. A† | 2,124,059 | 10,844,980 | |||||||||
4,000 | Cable One Inc. | 1,226,313 | 1,748,520 | |||||||||
525,000 | Cablevision Systems Corp., Cl. A | 956,653 | 17,325,000 | |||||||||
50,000 | DISH Network Corp., Cl. A† | 968,420 | 2,313,000 | |||||||||
36,000 | EchoStar Corp., Cl. A† | 708,109 | 1,594,440 | |||||||||
8,800 | Liberty Global plc, Cl. A† | 103,508 | 338,800 |
Shares | Cost | Market Value | ||||||||||
26,400 | Liberty Global plc, Cl. C† | $ | 291,379 | $ | 991,584 | |||||||
|
|
|
| |||||||||
6,378,441 | 35,156,324 | |||||||||||
|
|
|
| |||||||||
Closed-End Business Development Company — 0.0% |
| |||||||||||
112,000 | MVC Capital Inc. | 1,278,512 | 835,520 | |||||||||
|
|
|
| |||||||||
Closed-End Funds — 0.1% |
| |||||||||||
93,067 | The Central Europe, Russia, and Turkey Fund Inc. | 2,986,027 | 1,728,254 | |||||||||
31,977 | The European Equity Fund Inc. | 318,173 | 252,938 | |||||||||
101,878 | The New Germany Fund Inc. | 1,397,254 | 1,435,461 | |||||||||
|
|
|
| |||||||||
4,701,454 | 3,416,653 | |||||||||||
|
|
|
| |||||||||
Communications Equipment — 0.1% |
| |||||||||||
240,000 | Communications Systems Inc. | 2,168,311 | 1,764,000 | |||||||||
52,000 | Fortinet Inc.† | 1,067,508 | 1,592,760 | |||||||||
290,000 | Sycamore Networks Inc.† | 412,061 | 113,100 | |||||||||
|
|
|
| |||||||||
3,647,880 | 3,469,860 | |||||||||||
|
|
|
| |||||||||
Computer Software and Services — 2.5% |
| |||||||||||
194,000 | Activision Blizzard Inc. | 3,062,298 | 6,564,960 | |||||||||
44,000 | Avid Technology Inc.† | 436,719 | 297,440 | |||||||||
55,600 | comScore Inc.† | 2,365,232 | 1,670,224 | |||||||||
900,000 | EarthLink Holdings Corp. | 4,885,192 | 5,103,000 | |||||||||
16,500 | Electronic Arts Inc.† | 222,609 | 1,090,815 | |||||||||
400,000 | FalconStor Software Inc.† | 1,130,208 | 536,000 | |||||||||
253,231 | Global Sources Ltd.† | 1,641,060 | 2,051,171 | |||||||||
73,077 | Guidance Software Inc.† | 659,687 | 314,231 | |||||||||
42,000 | InterXion Holding NV† | 687,045 | 1,452,360 | |||||||||
60,000 | Mentor Graphics Corp. | 720,436 | 1,219,800 | |||||||||
20,000 | Mercury Systems Inc.† | 303,410 | 406,000 | |||||||||
20,187 | MKS Instruments Inc. | 367,981 | 760,041 | |||||||||
440,000 | NCR Corp.† | 4,746,089 | 13,169,200 | |||||||||
3,996 | NetScout Systems Inc.† | 14,188 | 91,788 | |||||||||
65,000 | Quantum Corp.† | 204,798 | 39,650 | |||||||||
8,000 | Rocket Internet SE† | 373,499 | 224,030 | |||||||||
100,000 | Rockwell Automation Inc. | 2,731,906 | 11,375,000 | |||||||||
170,000 | Stratasys Ltd.† | 7,981,560 | 4,406,400 | |||||||||
253,000 | Tyler Technologies Inc.† | 1,079,554 | 32,538,330 | |||||||||
|
|
|
| |||||||||
33,613,471 | 83,310,440 | |||||||||||
|
|
|
| |||||||||
Consumer Products — 1.6% |
| |||||||||||
295,000 | 1-800-FLOWERS.COM Inc., Cl. A† | 1,342,595 | 2,324,600 | |||||||||
54,000 | Brunswick Corp. | 951,695 | 2,590,920 | |||||||||
33,500 | Chofu Seisakusho Co. Ltd. | 484,644 | 776,294 | |||||||||
50,000 | Church & Dwight Co. Inc. | 266,314 | 4,609,000 | |||||||||
30,000 | Elizabeth Arden Inc.† | 399,953 | 245,700 | |||||||||
62,000 | Ginko International Co. Ltd. | 861,733 | 618,382 | |||||||||
2,000 | Harley-Davidson Inc. | 4,712 | 102,660 | |||||||||
25,000 | Harman International Industries Inc. | 1,186,027 | 2,226,000 |
See accompanying notes to financial statements.
5
The Gabelli Small Cap Growth Fund
Schedule of Investments (Continued) — March 31, 2016 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS (Continued) |
| |||||||||||
Consumer Products (Continued) |
| |||||||||||
143,000 | Hunter Douglas NV | $ | 6,146,472 | $ | 6,182,548 | |||||||
200 | Kobayashi Pharmaceutical Co Ltd. | 16,701 | 17,557 | |||||||||
491,085 | Marine Products Corp. | 1,506,990 | 3,727,335 | |||||||||
10,000 | National Presto Industries Inc. | 300,897 | 837,400 | |||||||||
420,000 | Sally Beauty Holdings Inc.† | 2,845,224 | 13,599,600 | |||||||||
220,000 | Samick Musical Instruments Co. Ltd. | 299,584 | 562,697 | |||||||||
13,000 | Shimano Inc. | 1,500,919 | 2,037,585 | |||||||||
9,750 | Steven Madden Ltd.† | 36,466 | 361,140 | |||||||||
150,000 | Swedish Match AB | 2,992,162 | 5,092,230 | |||||||||
87,425 | Syratech Corp.† | 17,426 | 262 | |||||||||
25,000 | The Scotts Miracle-Gro Co., Cl. A | 771,996 | 1,819,250 | |||||||||
22,000 | WD-40 Co. | 606,916 | 2,376,220 | |||||||||
105,000 | Wolverine World Wide Inc. | 542,857 | 1,934,100 | |||||||||
|
|
|
| |||||||||
23,082,283 | 52,041,480 | |||||||||||
|
|
|
| |||||||||
Consumer Services — 1.4% | ||||||||||||
53,000 | Bowlin Travel Centers Inc.† | 53,947 | 82,150 | |||||||||
2,750 | Collectors Universe Inc. | 2,778 | 45,650 | |||||||||
18,000 | IAC/InterActiveCorp | 199,991 | 847,440 | |||||||||
265,017 | KAR Auction Services Inc. | 3,573,437 | 10,107,748 | |||||||||
100,000 | Liberty Interactive Corp. QVC Group, Cl. A† | 1,487,382 | 2,525,000 | |||||||||
37,000 | Liberty TripAdvisor Holdings Inc., Cl. A† | 393,577 | 819,920 | |||||||||
50,000 | Liberty Ventures, Cl. A† | 644,225 | 1,956,000 | |||||||||
900,000 | Rollins Inc. | 2,281,581 | 24,408,000 | |||||||||
46,000 | The ADT Corp. | 1,141,327 | 1,897,960 | |||||||||
445,000 | TiVo Inc.† | 4,707,322 | 4,231,950 | |||||||||
|
|
|
| |||||||||
14,485,567 | 46,921,818 | |||||||||||
|
|
|
| |||||||||
Diversified Industrial — 5.4% | ||||||||||||
18,000 | Acuity Brands Inc. | 259,730 | 3,926,520 | |||||||||
30,000 | Aegion Corp.† | 561,304 | 632,700 | |||||||||
105,000 | Albany International Corp., Cl. A | 2,386,753 | 3,946,950 | |||||||||
240,000 | Ampco-Pittsburgh Corp. | 3,889,732 | 3,338,400 | |||||||||
6,000 | Anixter International Inc.† | 57,120 | 312,660 | |||||||||
37,000 | Burnham Holdings Inc., Cl. A | 745,640 | 612,350 | |||||||||
40,076 | Covisint Corp.† | 103,328 | 80,152 | |||||||||
402,000 | Crane Co. | 9,587,092 | 21,651,720 | |||||||||
95,000 | EnPro Industries Inc. | 5,408,344 | 5,479,600 | |||||||||
115,000 | Greif Inc., Cl. A | 2,267,516 | 3,766,250 | |||||||||
117,970 | Greif Inc., Cl. B | 5,709,954 | 5,520,996 | |||||||||
1,245,000 | Griffon Corp. | 13,703,772 | 19,235,250 | |||||||||
34,000 | Haynes International Inc. | 1,694,519 | 1,241,000 | |||||||||
190,000 | Jardine Strategic Holdings Ltd. | 3,487,637 | 5,671,500 |
Shares | Cost | Market Value | ||||||||||
500,000 | Katy Industries Inc.†(a) | $ | 724,863 | $ | 875,000 | |||||||
48,000 | Key Technology Inc.† | 678,183 | 327,360 | |||||||||
205,018 | Kimball International Inc., Cl. B | 2,084,730 | 2,326,954 | |||||||||
14,000 | L.B. Foster Co., Cl. A | 292,417 | 254,240 | |||||||||
75,000 | Lawson Products Inc.† | 1,075,729 | 1,468,500 | |||||||||
96,000 | Lincoln Electric Holdings Inc. | 2,586,322 | 5,622,720 | |||||||||
61,000 | Lindsay Corp. | 1,511,197 | 4,368,210 | |||||||||
39,000 | Lydall Inc.† | 436,651 | 1,268,280 | |||||||||
31,000 | Matthews International Corp., Cl. A | 738,675 | 1,595,570 | |||||||||
592,576 | Myers Industries Inc. | 6,667,772 | 7,620,527 | |||||||||
126,000 | Oil-Dri Corp. of America | 1,382,128 | 4,256,280 | |||||||||
125,000 | Olin Corp. | 2,446,749 | 2,171,250 | |||||||||
310,000 | Park-Ohio Holdings Corp. | 3,082,761 | 13,274,200 | |||||||||
19,000 | Pentair plc | 727,134 | 1,030,940 | |||||||||
99,000 | Raven Industries Inc. | 2,453,433 | 1,585,980 | |||||||||
32,000 | Roper Technologies Inc. | 620,029 | 5,848,640 | |||||||||
311,422 | Sevcon Inc.†(a) | 1,964,610 | 3,129,791 | |||||||||
96,000 | Sonoco Products Co. | 2,940,089 | 4,662,720 | |||||||||
58,000 | Standex International Corp. | 1,563,076 | 4,512,980 | |||||||||
260,046 | Steel Partners Holdings LP† | 4,412,407 | 3,965,701 | |||||||||
7,000 | T Hasegawa Co. Ltd. | 105,119 | 106,046 | |||||||||
390,000 | Textron Inc. | 2,523,213 | 14,219,400 | |||||||||
539,036 | Tredegar Corp. | 9,222,799 | 8,473,646 | |||||||||
240,000 | Trinity Industries Inc. | 3,711,264 | 4,394,400 | |||||||||
147,000 | Tyco International plc | 2,752,473 | 5,396,370 | |||||||||
|
|
|
| |||||||||
106,566,264 | 178,171,753 | |||||||||||
|
|
|
| |||||||||
Educational Services — 0.0% | ||||||||||||
59,000 | Career Education Corp.† | 416,169 | 267,860 | |||||||||
125,000 | Corinthian Colleges Inc.† | 209,899 | 119 | |||||||||
295,000 | Universal Technical Institute Inc. | 4,819,462 | 1,271,450 | |||||||||
|
|
|
| |||||||||
5,445,530 | 1,539,429 | |||||||||||
|
|
|
| |||||||||
Electronics — 1.5% | ||||||||||||
98,000 | Badger Meter Inc. | 2,797,399 | 6,517,980 | |||||||||
285,000 | Bel Fuse Inc., Cl. A(a) | 6,485,444 | 3,985,725 | |||||||||
550,000 | CTS Corp. | 5,306,161 | 8,657,000 | |||||||||
575,000 | Cypress Semiconductor Corp. | 4,591,733 | 4,979,500 | |||||||||
40,000 | Daktronics Inc. | 362,126 | 316,000 | |||||||||
106,000 | Dolby Laboratories Inc., Cl. A | 4,361,252 | 4,606,760 | |||||||||
239,000 | Gentex Corp. | 2,974,296 | 3,749,910 | |||||||||
76,500 | Greatbatch Inc.† | 1,765,151 | 2,726,460 | |||||||||
20,000 | IMAX Corp.† | 158,565 | 621,800 | |||||||||
68,000 | KEMET Corp.† | 264,474 | 131,240 | |||||||||
33,000 | Kimball Electronics Inc.† | 199,878 | 368,610 | |||||||||
70,000 | MOCON Inc. | 1,038,750 | 969,500 | |||||||||
346,399 | Park Electrochemical Corp. | 6,151,063 | 5,545,848 | |||||||||
55,500 | Renesas Electronics Corp.† | 362,072 | 357,030 |
See accompanying notes to financial statements.
6
The Gabelli Small Cap Growth Fund
Schedule of Investments (Continued) — March 31, 2016 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS (Continued) |
| |||||||||||
Electronics (Continued) |
| |||||||||||
135,000 | Rofin-Sinar Technologies Inc.† | $ | 3,214,465 | $ | 4,349,700 | |||||||
170,000 | Stoneridge Inc.† | 1,355,936 | 2,475,200 | |||||||||
|
|
|
| |||||||||
41,388,765 | 50,358,263 | |||||||||||
|
|
|
| |||||||||
Energy and Utilities — 6.8% |
| |||||||||||
11,000 | Amec Foster Wheeler plc, ADR | 25,671 | 70,400 | |||||||||
1,500 | Aqua America Inc. | 43,853 | 47,730 | |||||||||
70,000 | Avangrid Inc. | 2,750,953 | 2,807,700 | |||||||||
125,000 | Avista Corp. | 4,157,796 | 5,097,500 | |||||||||
350,000 | Black Hills Corp. | 8,948,315 | 21,045,500 | |||||||||
70,000 | Black Ridge Oil and Gas Inc.† | 0 | 4,550 | |||||||||
135,000 | Callon Petroleum Co.† | 874,106 | 1,194,750 | |||||||||
47,000 | Chesapeake Utilities Corp. | 862,472 | 2,959,590 | |||||||||
6,000 | Clean Energy Fuels Corp.† | 52,782 | 17,580 | |||||||||
170,000 | Cleco Corp. | 9,304,336 | 9,385,700 | |||||||||
38,000 | CMS Energy Corp. | 197,906 | 1,612,720 | |||||||||
23,000 | Connecticut Water Service Inc. | 464,832 | 1,037,300 | |||||||||
15,000 | CONSOL Energy Inc. | 197,331 | 169,350 | |||||||||
11,000 | Consolidated Water Co. Ltd. | 141,093 | 133,870 | |||||||||
155,000 | Covanta Holding Corp. | 502,271 | 2,613,300 | |||||||||
103,000 | Diamondback Energy Inc.† | 5,377,395 | 7,949,540 | |||||||||
406,000 | El Paso Electric Co. | 5,906,970 | 18,627,280 | |||||||||
80,000 | Energy Recovery Inc.† | 352,081 | 827,200 | |||||||||
60,000 | EXCO Resources Inc.† | 293,962 | 59,346 | |||||||||
20,000 | Gamesa Corporacion Tecnologica SA | 117,491 | 395,193 | |||||||||
175,000 | Great Plains Energy Inc. | 3,533,494 | 5,643,750 | |||||||||
110,000 | Hawaiian Electric Industries Inc. | 2,784,810 | 3,564,000 | |||||||||
44,000 | Middlesex Water Co. | 755,374 | 1,357,400 | |||||||||
95,000 | National Fuel Gas Co. | 5,556,830 | 4,754,750 | |||||||||
16,000 | Northwest Natural Gas Co. | 764,416 | 861,600 | |||||||||
90,000 | NorthWestern Corp. | 2,722,813 | 5,557,500 | |||||||||
80,000 | Oceaneering International Inc. | 1,366,984 | 2,659,200 | |||||||||
310,000 | Otter Tail Corp. | 7,388,107 | 9,182,200 | |||||||||
12,000 | Patterson-UTI Energy Inc. | 241,902 | 211,440 | |||||||||
2,000 | Peabody Energy Corp. | 17,446 | 4,640 | |||||||||
1,250,000 | PNM Resources Inc. | 14,688,912 | 42,150,000 | |||||||||
122,000 | Rowan Companies plc, Cl. A | 4,271,947 | 1,964,200 | |||||||||
2,285,000 | RPC Inc. | 3,229,570 | 32,401,300 | |||||||||
129,200 | SJW Corp. | 2,597,728 | 4,696,420 | |||||||||
185,000 | Southwest Gas Corp. | 4,522,987 | 12,182,250 | |||||||||
240,000 | Steel Excel Inc.† | 6,057,005 | 2,330,400 | |||||||||
129,000 | SunEdison Inc.† | 489,820 | 69,686 | |||||||||
30,000 | Tesoro Corp. | 352,883 | 2,580,300 | |||||||||
19,000 | The Laclede Group Inc. | 759,384 | 1,287,250 | |||||||||
43,000 | The York Water Co. | 605,831 | 1,312,360 |
Shares | Cost | Market Value | ||||||||||
14,000 | Vestas Wind Systems A/S | $ | 132,040 | $ | 987,707 | |||||||
220,000 | Westar Energy Inc. | 4,036,837 | 10,914,200 | |||||||||
|
|
|
| |||||||||
107,448,736 | 222,728,652 | |||||||||||
|
|
|
| |||||||||
Entertainment — 2.6% |
| |||||||||||
75,000 | Carmike Cinemas Inc.† | 510,631 | 2,253,000 | |||||||||
50,000 | Discovery Communications Inc., Cl. A† | 863,334 | 1,431,500 | |||||||||
100,000 | Discovery Communications Inc., Cl. C† | 926,160 | 2,700,000 | |||||||||
431,384 | Dover Motorsports Inc. | 1,595,309 | 979,242 | |||||||||
12,000 | Eros International plc† | 138,247 | 138,120 | |||||||||
5,000 | Global Eagle Entertainment Inc.† | 58,677 | 42,600 | |||||||||
69,000 | International Speedway Corp., Cl. A | 2,180,287 | 2,546,790 | |||||||||
6,814 | International Speedway Corp., Cl. B | 167,786 | 253,549 | |||||||||
24,000 | Lions Gate Entertainment Corp. | 491,231 | 524,400 | |||||||||
1,830,000 | Media General Inc.† | 11,498,332 | 29,847,300 | |||||||||
72,000 | Starz, Cl. A† | 180,768 | 1,895,760 | |||||||||
210,000 | Take-Two Interactive Software Inc.† | 1,957,272 | 7,910,700 | |||||||||
124,000 | The Madison Square Garden Co, Cl. A† | 6,688,655 | 20,628,640 | |||||||||
260,000 | Twenty-First Century Fox Inc., Cl. A | 673,473 | 7,248,800 | |||||||||
157,000 | Universal Entertainment Corp. | 2,117,510 | 2,607,250 | |||||||||
153,000 | World Wrestling Entertainment Inc., Cl. A | 1,680,845 | 2,701,980 | |||||||||
|
|
|
| |||||||||
31,728,517 | 83,709,631 | |||||||||||
|
|
|
| |||||||||
Environmental Services — 0.6% |
| |||||||||||
400,000 | Republic Services Inc. | 5,798,456 | 19,060,000 | |||||||||
|
|
|
| |||||||||
Equipment and Supplies — 8.4% |
| |||||||||||
44,000 | A.O. Smith Corp. | 328,585 | 3,357,640 | |||||||||
538,000 | AMETEK Inc. | 1,016,606 | 26,889,240 | |||||||||
40,500 | AZZ Inc. | 1,280,665 | 2,292,300 | |||||||||
12,000 | Belden Inc. | 141,760 | 736,560 | |||||||||
545,000 | CIRCOR International Inc. | 15,694,341 | 25,282,550 | |||||||||
223,000 | CLARCOR Inc. | 1,454,445 | 12,887,170 | |||||||||
325,000 | Core Molding Technologies Inc.† | 638,902 | 4,056,000 | |||||||||
165,000 | Crown Holdings Inc.† | 666,877 | 8,182,350 | |||||||||
2,335 | Danaher Corp. | 19,909 | 221,498 | |||||||||
178,000 | Donaldson Co. Inc. | 1,577,779 | 5,679,980 | |||||||||
215,000 | Entegris Inc.† | 1,209,536 | 2,928,300 | |||||||||
830,063 | Federal Signal Corp. | 5,906,469 | 11,006,635 | |||||||||
300,000 | Flowserve Corp. | 2,954,946 | 13,323,000 | |||||||||
315,500 | Franklin Electric Co. Inc. | 1,601,373 | 10,149,635 |
See accompanying notes to financial statements.
7
The Gabelli Small Cap Growth Fund
Schedule of Investments (Continued) — March 31, 2016 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS (Continued) |
| |||||||||||
Equipment and Supplies (Continued) |
| |||||||||||
244,000 | Graco Inc. | $ | 8,720,951 | $ | 20,486,240 | |||||||
95,000 | IDEX Corp. | 747,617 | 7,873,600 | |||||||||
455,000 | Interpump Group SpA | 2,802,617 | 6,653,031 | |||||||||
68,000 | Itron Inc.† | 2,820,377 | 2,836,960 | |||||||||
15,750 | Jarden Corp.† | 115,037 | 928,463 | |||||||||
38,000 | Littelfuse Inc. | 745,492 | 4,678,180 | |||||||||
55,000 | Maezawa Kyuso Industries Co. Ltd. | 359,609 | 686,126 | |||||||||
100,000 | Manitowoc Foodservice Inc.† | 513,586 | 1,474,000 | |||||||||
81,000 | Minerals Technologies Inc. | 4,034,941 | 4,604,850 | |||||||||
6,000 | MSA Safety Inc. | 179,592 | 290,100 | |||||||||
670,000 | Mueller Industries Inc. | 17,918,374 | 19,711,400 | |||||||||
530,000 | Mueller Water Products Inc., Cl. A | 3,997,254 | 5,236,400 | |||||||||
10,000 | Plantronics Inc. | 262,977 | 391,900 | |||||||||
2,000 | Regal Beloit Corp. | 59,351 | 126,180 | |||||||||
94,032 | SL Industries Inc.† | 1,340,944 | 3,197,088 | |||||||||
5,000 | Teleflex Inc. | 76,167 | 785,050 | |||||||||
282,000 | Tennant Co. | 5,860,985 | 14,517,360 | |||||||||
870,000 | The Gorman-Rupp Co. | 14,653,416 | 22,559,100 | |||||||||
155,000 | The Greenbrier Companies Inc. | 2,327,736 | 4,284,200 | |||||||||
258,800 | The L.S. Starrett Co., Cl. A | 3,187,042 | 2,678,580 | |||||||||
100,000 | The Manitowoc Co. Inc. | 153,409 | 433,000 | |||||||||
75,000 | The Middleby Corp.† | 1,121,311 | 8,007,750 | |||||||||
35,000 | The Timken Co. | 1,218,937 | 1,172,150 | |||||||||
24,000 | The Toro Co. | 845,248 | 2,066,880 | |||||||||
7,500 | Valmont Industries Inc. | 172,236 | 928,800 | |||||||||
149,649 | Vicor Corp.† | 1,308,465 | 1,568,322 | |||||||||
7,875 | Watsco Inc., Cl. B | 23,627 | 1,028,633 | |||||||||
176,500 | Watts Water Technologies Inc., Cl. A | 4,730,803 | 9,730,445 | |||||||||
|
|
|
| |||||||||
114,790,294 | 275,927,646 | |||||||||||
|
|
|
| |||||||||
Financial Services — 4.1% | ||||||||||||
10,800 | Alleghany Corp.† | 1,858,236 | 5,358,960 | |||||||||
26,620 | Argo Group International Holdings Ltd. | 724,275 | 1,527,722 | |||||||||
20,000 | Astoria Financial Corp. | 309,633 | 316,800 | |||||||||
310,000 | BBCN Bancorp Inc. | 3,512,655 | 4,708,900 | |||||||||
107,700 | BKF Capital Group Inc.† | 210,018 | 78,352 | |||||||||
130,000 | Calamos Asset Management Inc., Cl. A | 1,559,099 | 1,103,700 | |||||||||
12,500 | Capitol Federal Financial Inc. | 125,000 | 165,750 | |||||||||
22,000 | Crazy Woman Creek Bancorp Inc. | 343,564 | 273,460 | |||||||||
636,000 | Energy Transfer Equity LP | 1,598,450 | 4,534,680 | |||||||||
80,000 | FCB Financial Holdings Inc., Cl. A† | 2,298,603 | 2,660,800 | |||||||||
9,967 | Fidelity Southern Corp. | 63,366 | 159,871 |
Shares | Cost | Market Value | ||||||||||
230,000 | First Niagara Financial Group Inc. | $ | 2,957,474 | $ | 2,226,400 | |||||||
265,000 | FirstMerit Corp. | 4,813,827 | 5,578,250 | |||||||||
500,093 | Flushing Financial Corp. | 8,835,466 | 10,812,011 | |||||||||
290,064 | Fortress Investment Group LLC, Cl. A | 1,683,938 | 1,386,506 | |||||||||
1,150,000 | GAM Holding AG | 14,934,620 | 16,624,200 | |||||||||
265,000 | Hilltop Holdings Inc.† | 6,358,238 | 5,003,200 | |||||||||
1,350,000 | Janus Capital Group Inc. | 13,871,453 | 19,750,500 | |||||||||
750,072 | KKR & Co. LP | 4,395,628 | 11,018,558 | |||||||||
180,000 | Legg Mason Inc. | 4,136,892 | 6,242,400 | |||||||||
15,000 | M&T Bank Corp. | 1,294,650 | 1,665,000 | |||||||||
11,500 | Manning & Napier Inc. | 117,859 | 92,805 | |||||||||
60,024 | Medallion Financial Corp. | 463,920 | 554,022 | |||||||||
247,000 | Och-Ziff Capital Management Group LLC, Cl. A | 1,750,284 | 1,074,450 | |||||||||
165,000 | Oritani Financial Corp. | 1,685,540 | 2,800,050 | |||||||||
32,000 | PrivateBancorp Inc. | 541,949 | 1,235,200 | |||||||||
56,000 | Pzena Investment Management Inc., Cl. A | 555,107 | 422,800 | |||||||||
12,000 | State Auto Financial Corp. | 284,397 | 264,720 | |||||||||
431,887 | Sterling Bancorp | 4,773,930 | 6,879,960 | |||||||||
14,000 | T. Rowe Price Group Inc. | 603,780 | 1,028,440 | |||||||||
14,000 | TFS Financial Corp. | 205,115 | 243,180 | |||||||||
150,000 | The Charles Schwab Corp. | 2,404,087 | 4,203,000 | |||||||||
10,000 | Universal American Corp. | 73,364 | 71,400 | |||||||||
40,782 | Value Line Inc. | 570,979 | 653,735 | |||||||||
18,000 | Virtu Financial Inc., Cl. A | 342,000 | 397,980 | |||||||||
440,000 | Waddell & Reed Financial Inc., Cl. A | 8,348,981 | 10,357,600 | |||||||||
10,121 | Waterloo Investment Holdings Ltd.† | 1,390 | 405 | |||||||||
572,300 | Wright Investors’ Service Holdings Inc.† | 1,177,469 | 766,882 | |||||||||
30,000 | Yadkin Financial Corp. | 648,150 | 710,100 | |||||||||
|
|
|
| |||||||||
100,433,386 | 132,952,749 | |||||||||||
|
|
|
| |||||||||
Food and Beverage — 10.7% | ||||||||||||
575,000 | Arca Continental SAB de CV | 1,132,490 | 3,991,385 | |||||||||
3,000 | Blue Buffalo Pet Products Inc.† | 55,641 | 76,980 | |||||||||
57,150 | Brown-Forman Corp., Cl. A | 1,115,861 | 6,097,333 | |||||||||
7,500 | Brown-Forman Corp., Cl. B | 144,052 | 738,525 | |||||||||
210,000 | Bull-Dog Sauce Co. Ltd. | 120,234 | 391,843 | |||||||||
5,000,000 | China Tontine Wines Group Ltd.† | 960,438 | 174,029 | |||||||||
220,000 | Chr. Hansen Holding A/S | 9,205,103 | 14,768,573 | |||||||||
575,000 | Cott Corp. | 4,350,426 | 7,986,750 | |||||||||
340,000 | Crimson Wine Group Ltd.† | 3,027,381 | 2,849,200 | |||||||||
1,800,000 | Davide Campari-Milano SpA | 11,746,861 | 17,993,651 | |||||||||
55,000 | Dean Foods Co. | 656,947 | 952,600 | |||||||||
275,000 | Denny’s Corp.† | 906,156 | 2,849,000 |
See accompanying notes to financial statements.
8
The Gabelli Small Cap Growth Fund
Schedule of Investments (Continued) — March 31, 2016 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS (Continued) |
| |||||||||||
Food and Beverage (Continued) |
| |||||||||||
306,000 | Dr Pepper Snapple Group Inc. | $ | 6,223,918 | $ | 27,362,520 | |||||||
3,500,000 | Dynasty Fine Wines Group Ltd.† | 1,246,520 | 649,706 | |||||||||
110,000 | Farmer Brothers Co.† | 1,983,969 | 3,065,700 | |||||||||
510,000 | Flowers Foods Inc. | 1,347,594 | 9,414,600 | |||||||||
157,000 | Ingredion Inc. | 3,314,102 | 16,766,030 | |||||||||
180,000 | ITO EN Ltd. | 3,741,497 | 5,685,726 | |||||||||
85,000 | Iwatsuka Confectionery Co. Ltd. | 4,918,996 | 3,708,294 | |||||||||
23,500 | J & J Snack Foods Corp. | 531,096 | 2,544,580 | |||||||||
145,000 | Kameda Seika Co. Ltd. | 5,875,621 | 5,771,913 | |||||||||
1,325,000 | Kikkoman Corp. | 14,057,979 | 43,560,354 | |||||||||
240,043 | Lifeway Foods Inc.† | 2,482,791 | 2,599,666 | |||||||||
1,200,000 | Maple Leaf Foods Inc. | 21,546,913 | 25,085,659 | |||||||||
6,000 | MEIJI Holdings Co. Ltd. | 117,526 | 482,474 | |||||||||
70,000 | MGP Ingredients Inc. | 331,262 | 1,696,800 | |||||||||
450,000 | Morinaga Milk Industry Co. Ltd. | 1,808,850 | 2,411,036 | |||||||||
17,000 | National Beverage Corp.† | 637,544 | 719,440 | |||||||||
85,000 | NISSIN FOODS HOLDINGS CO. LTD. | 2,907,986 | 3,995,291 | |||||||||
30,000 | Nutrisystem Inc. | 382,707 | 626,100 | |||||||||
6,500,000 | Parmalat SpA | 17,935,803 | 17,987,961 | |||||||||
278,000 | Post Holdings Inc.† | 9,878,024 | 19,118,060 | |||||||||
162,000 | Rock Field Co. Ltd. | 2,539,700 | 4,930,028 | |||||||||
889,236 | Snyder’s-Lance Inc. | 20,473,780 | 27,993,149 | |||||||||
25,400 | The Boston Beer Co. Inc., Cl. A† | 543,660 | 4,700,778 | |||||||||
428,000 | The Hain Celestial Group Inc.† | 3,744,555 | 17,509,480 | |||||||||
76,000 | The J.M. Smucker Co. | 2,608,859 | 9,867,840 | |||||||||
185,000 | The WhiteWave Foods Co.† | 2,425,256 | 7,518,400 | |||||||||
850,000 | Tingyi (Cayman Islands) Holding Corp. | 1,941,545 | 950,002 | |||||||||
337,840 | Tootsie Roll Industries Inc. | 6,491,597 | 11,804,130 | |||||||||
95,000 | United Natural Foods Inc.† | 2,727,489 | 3,828,500 | |||||||||
22,000 | Vina Concha Y Toro SA, ADR | 820,659 | 761,200 | |||||||||
1,400,000 | Vitasoy International Holdings Ltd. | 1,028,189 | 2,613,264 | |||||||||
20,000 | Willamette Valley Vineyards Inc.† | 73,225 | 138,400 | |||||||||
150,000 | Yakult Honsha Co. Ltd. | 3,747,741 | 6,644,009 | |||||||||
|
|
|
| |||||||||
183,858,543 | 351,380,959 | |||||||||||
|
|
|
| |||||||||
Health Care — 4.9% | ||||||||||||
41,000 | Achaogen Inc.† | 446,931 | 113,160 | |||||||||
32,000 | Alere Inc.† | 773,166 | 1,619,520 | |||||||||
14,000 | Align Technology Inc.† | 102,423 | 1,017,660 | |||||||||
22,000 | Allergan plc† | 6,783,480 | 5,896,660 | |||||||||
78,000 | AngioDynamics Inc.† | 856,768 | 958,620 |
Shares | Cost | Market Value | ||||||||||
7,000 | Anika Therapeutics Inc.† | $ | 63,228 | $ | 313,040 | |||||||
200,000 | ArthroCare Corp. Stub† | 0 | 70,000 | |||||||||
43,000 | Biolase Inc.† | 38,708 | 56,330 | |||||||||
12,400 | Bio-Rad Laboratories Inc., Cl. A† | 883,151 | 1,695,328 | |||||||||
18,000 | Bruker Corp. | 164,974 | 504,000 | |||||||||
200,000 | Cantel Medical Corp. | 2,353,900 | 14,272,000 | |||||||||
48,000 | Cempra Inc.† | 486,026 | 840,960 | |||||||||
218,000 | Cepheid Inc.† | 2,991,037 | 7,272,480 | |||||||||
180,000 | Chemed Corp. | 4,982,598 | 24,381,000 | |||||||||
59,000 | CONMED Corp. | 1,505,771 | 2,474,460 | |||||||||
385,000 | Cutera Inc.† | 4,034,485 | 4,331,250 | |||||||||
87,000 | DexCom Inc.† | 795,191 | 5,908,170 | |||||||||
210,024 | Exactech Inc.† | 3,283,169 | 4,255,086 | |||||||||
50,000 | Globus Medical Inc., Cl. A† | 1,231,219 | 1,187,500 | |||||||||
43,000 | Henry Schein Inc.† | 844,050 | 7,423,090 | |||||||||
4,500 | Heska Corp.† | 36,434 | 128,250 | |||||||||
46,500 | ICU Medical Inc.† | 2,163,255 | 4,840,650 | |||||||||
94,000 | Kindred Healthcare Inc. | 1,652,584 | 1,160,900 | |||||||||
19,100 | Lexicon Pharmaceuticals Inc.† | 257,605 | 228,245 | |||||||||
40,001 | LivaNova plc† | 2,133,204 | 2,159,247 | |||||||||
122,000 | Masimo Corp.† | 3,191,918 | 5,104,480 | |||||||||
204,000 | Meridian Bioscience Inc. | 4,152,151 | 4,204,440 | |||||||||
19,853 | Neogen Corp.† | 576,800 | 999,599 | |||||||||
145,000 | NuVasive Inc.† | 4,284,884 | 7,054,250 | |||||||||
25,500 | Nuvectra Corp.† | 174,575 | 137,955 | |||||||||
18,000 | Ophthotech Corp.† | 726,750 | 760,860 | |||||||||
319,500 | OPKO Health Inc.† | 1,967,486 | 3,319,605 | |||||||||
163,444 | Orthofix International NV† | 4,090,071 | 6,786,195 | |||||||||
69,678 | Owens & Minor Inc. | 1,452,849 | 2,816,385 | |||||||||
160,000 | Pain Therapeutics Inc.† | 516,921 | 356,800 | |||||||||
50,000 | Patterson Companies Inc. | 1,908,401 | 2,326,500 | |||||||||
636,000 | Quidel Corp.† | 7,144,104 | 10,977,360 | |||||||||
205,000 | RTI Surgical Inc.† | 1,010,145 | 820,000 | |||||||||
25,000 | Seikagaku Corp. | 292,810 | 376,516 | |||||||||
54,084 | STERIS plc | 4,031,421 | 3,842,668 | |||||||||
2,300 | Straumann Holding AG | 206,988 | 792,938 | |||||||||
3,000 | Stryker Corp. | 142,188 | 321,870 | |||||||||
40,000 | SurModics Inc.† | 833,602 | 736,400 | |||||||||
14,000 | Syneron Medical Ltd.† | 116,750 | 102,340 | |||||||||
48,000 | Tetraphase Pharmaceuticals Inc.† | 491,486 | 222,240 | |||||||||
29,000 | The Cooper Companies Inc. | 1,198,854 | 4,465,130 | |||||||||
45,500 | United-Guardian Inc. | 411,719 | 940,485 | |||||||||
70,000 | Vascular Solutions Inc.† | 528,293 | 2,277,100 | |||||||||
404,500 | Wright Medical Group NV† | 8,320,598 | 6,714,700 | |||||||||
15,000 | Zeltiq Aesthetics Inc.† | 378,421 | 407,400 | |||||||||
|
|
|
| |||||||||
87,013,542 | 159,971,822 | |||||||||||
|
|
|
|
See accompanying notes to financial statements.
9
The Gabelli Small Cap Growth Fund
Schedule of Investments (Continued) — March 31, 2016 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS (Continued) |
| |||||||||||
Home Furnishings — 0.6% |
| |||||||||||
212,050 | Bassett Furniture Industries Inc. | $ | 2,326,401 | $ | 6,755,913 | |||||||
35,000 | Bed Bath & Beyond Inc.† | 992,346 | 1,737,400 | |||||||||
160,000 | Ethan Allen Interiors Inc. | 4,116,768 | 5,091,200 | |||||||||
215,000 | La-Z-Boy Inc. | 4,297,905 | 5,749,100 | |||||||||
|
|
|
| |||||||||
11,733,420 | 19,333,613 | |||||||||||
|
|
|
| |||||||||
Hotels and Gaming — 3.6% | ||||||||||||
152,000 | Belmond Ltd., Cl. A† | 1,430,860 | 1,442,480 | |||||||||
500,000 | Boyd Gaming Corp.† | 4,146,653 | 10,330,000 | |||||||||
180,080 | Canterbury Park Holding Corp. | 1,851,475 | 1,865,629 | |||||||||
226,500 | Churchill Downs Inc. | 9,606,838 | 33,494,820 | |||||||||
170,000 | Dover Downs Gaming & Entertainment Inc.† | 760,617 | 181,900 | |||||||||
130,000 | Formosa International Hotels Corp. | 1,196,129 | 783,619 | |||||||||
70,000 | Gaming and Leisure Properties Inc. | 1,377,812 | 2,164,400 | |||||||||
1,000,000 | Genting Singapore plc | 1,020,254 | 619,505 | |||||||||
160,000 | Golden Entertainment Inc.† | 1,348,531 | 1,734,400 | |||||||||
18,000 | Homeinns Hotel Group, ADR† | 343,247 | 641,700 | |||||||||
65,573 | International Game Technology plc | 1,242,608 | 1,196,707 | |||||||||
173,000 | Las Vegas Sands Corp. | 908,003 | 8,940,640 | |||||||||
3,150,000 | Mandarin Oriental International Ltd. | 4,525,377 | 4,284,000 | |||||||||
94,500 | Morgans Hotel Group Co.† | 642,826 | 130,410 | |||||||||
34,000 | Penn National Gaming Inc.† | 149,835 | 567,460 | |||||||||
250,000 | Pinnacle Entertainment Inc.† | 2,070,992 | 8,775,000 | |||||||||
560,000 | Ryman Hospitality Properties Inc. | 16,389,148 | 28,828,800 | |||||||||
2,900,000 | The Hongkong & Shanghai Hotels Ltd. | 3,109,105 | 3,076,695 | |||||||||
385,057 | The Marcus Corp. | 4,939,900 | 7,296,830 | |||||||||
24,000 | Wynn Resorts Ltd. | 199,481 | 2,242,320 | |||||||||
|
|
|
| |||||||||
57,259,691 | 118,597,315 | |||||||||||
|
|
|
| |||||||||
Machinery — 1.4% | ||||||||||||
470,000 | Astec Industries Inc. | 17,146,572 | 21,934,900 | |||||||||
3,000 | Capstone Turbine Corp.† | 4,212 | 4,800 | |||||||||
1,685,000 | CNH Industrial NV | 5,677,380 | 11,390,600 | |||||||||
2,000 | Disco Corp. | 156,366 | 169,532 | |||||||||
20,000 | Global Power Equipment Group Inc. | 259,171 | 40,000 | |||||||||
320,000 | Kennametal Inc. | 7,389,766 | 7,196,800 | |||||||||
6,000 | Nordson Corp. | 107,171 | 456,240 | |||||||||
158,930 | The Eastern Co. | 3,107,627 | 2,609,631 | |||||||||
187,000 | Twin Disc Inc. | 3,703,646 | 1,894,310 |
Shares | Cost | Market Value | ||||||||||
10,000 | Xylem Inc. | $ | 362,059 | $ | 409,000 | |||||||
|
|
|
| |||||||||
37,913,970 | 46,105,813 | |||||||||||
|
|
|
| |||||||||
Manufactured Housing and Recreational Vehicles — 0.4% |
| |||||||||||
91,000 | Cavco Industries Inc.† | 2,571,702 | 8,504,860 | |||||||||
14,000 | Drew Industries Inc. | 237,825 | 902,440 | |||||||||
73,992 | Nobility Homes Inc.† | 850,472 | 1,030,339 | |||||||||
84,490 | Skyline Corp.† | 493,561 | 783,222 | |||||||||
60,000 | Winnebago Industries Inc. | 734,195 | 1,347,000 | |||||||||
|
|
|
| |||||||||
4,887,755 | 12,567,861 | |||||||||||
|
|
|
| |||||||||
Metals and Mining — 0.4% | ||||||||||||
52,003 | Barrick Gold Corp. | 1,522,648 | 706,201 | |||||||||
210,000 | Century Aluminum Co.† | 2,419,257 | 1,480,500 | |||||||||
20,000 | Constellium NV, Cl. A† | 309,983 | 103,800 | |||||||||
45,000 | Ivanhoe Mines Ltd., Cl. A† | 117,783 | 29,105 | |||||||||
135,000 | Kinross Gold Corp.† | 796,824 | 459,000 | |||||||||
200,000 | Lynas Corp Ltd.† | 184,524 | 11,958 | |||||||||
345,000 | Materion Corp. | 7,808,783 | 9,135,600 | |||||||||
52,100 | Stillwater Mining Co.† | 477,514 | 554,865 | |||||||||
47,000 | TimkenSteel Corp. | 916,228 | 427,700 | |||||||||
245,000 | Turquoise Hill Resources Ltd.† | 1,368,145 | 622,300 | |||||||||
61,000 | United States Steel Corp. | 606,932 | 979,050 | |||||||||
15,000 | Yamana Gold Inc. | 50,671 | 45,600 | |||||||||
|
|
|
| |||||||||
16,579,292 | 14,555,679 | |||||||||||
|
|
|
| |||||||||
Paper and Forest Products — 0.0% |
| |||||||||||
16,000 | Schweitzer-Mauduit International Inc. | 373,701 | 503,680 | |||||||||
|
|
|
| |||||||||
Publishing — 0.9% | ||||||||||||
80,000 | Cambium Learning Group Inc.† | 261,134 | 341,600 | |||||||||
3,200 | Graham Holdings Co., Cl. B | 1,491,702 | 1,536,000 | |||||||||
1,075,000 | Il Sole 24 Ore SpA† | 1,242,777 | 675,231 | |||||||||
12,000 | John Wiley & Sons Inc., Cl. B | 46,500 | 586,620 | |||||||||
369,922 | Journal Media Group Inc. | 1,358,781 | 4,424,267 | |||||||||
57,000 | Meredith Corp. | 1,779,993 | 2,707,500 | |||||||||
65,000 | News Corp., Cl. A | 91,837 | 830,050 | |||||||||
1,120,056 | The E.W. Scripps Co., Cl. A | 10,377,554 | 17,461,673 | |||||||||
|
|
|
| |||||||||
16,650,278 | 28,562,941 | |||||||||||
|
|
|
| |||||||||
Real Estate — 1.1% | ||||||||||||
51,100 | Capital Properties Inc., Cl. A† | 584,199 | 518,665 | |||||||||
160,000 | Cohen & Steers Inc. | 3,713,184 | 6,227,200 | |||||||||
235,000 | Griffin Industrial Realty Inc. | 4,084,962 | 5,771,600 | |||||||||
6,967 | Gyrodyne LLC† | 201,352 | 187,552 | |||||||||
20,000 | Lamar Advertising Co., Cl. A | 184,258 | 1,230,000 | |||||||||
103,000 | Morguard Corp. | 1,314,900 | 11,463,831 | |||||||||
43,747 | New Senior Investment Group Inc. | 502,221 | 450,594 | |||||||||
130,000 | Tejon Ranch Co.† | 3,608,091 | 2,674,100 |
See accompanying notes to financial statements.
10
The Gabelli Small Cap Growth Fund
Schedule of Investments (Continued) — March 31, 2016 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS (Continued) |
| |||||||||||
Real Estate (Continued) |
| |||||||||||
505,060 | The St. Joe Co.† | $ | 8,182,966 | $ | 8,661,779 | |||||||
|
|
|
| |||||||||
22,376,133 | 37,185,321 | |||||||||||
|
|
|
| |||||||||
Retail — 6.6% | ||||||||||||
330,000 | Aaron’s Inc. | 3,379,591 | 8,283,000 | |||||||||
200,000 | AutoNation Inc.† | 3,399,442 | 9,336,000 | |||||||||
20,224 | Barnes & Noble Education Inc.† | 151,401 | 198,195 | |||||||||
32,000 | Barnes & Noble Inc. | 293,897 | 395,520 | |||||||||
320,700 | Big 5 Sporting Goods Corp. | 4,271,391 | 3,562,977 | |||||||||
22,561 | Biglari Holdings Inc.† | 6,337,182 | 8,386,149 | |||||||||
235,000 | Casey’s General Stores Inc. | 9,084,566 | 26,630,200 | |||||||||
50,000 | Coldwater Creek Inc.† | 71,495 | 735 | |||||||||
82,000 | Copart Inc.† | 1,407,742 | 3,343,140 | |||||||||
1,000 | Cracker Barrel Old Country Store Inc. | 59,645 | 152,670 | |||||||||
440,000 | CST Brands Inc. | 14,998,743 | 16,847,600 | |||||||||
462,041 | Dominion Diamond Corp. | 6,616,045 | 5,124,035 | |||||||||
2,500 | Dunkin’ Brands Group Inc. | 47,500 | 117,925 | |||||||||
13,000 | Fairway Group Holdings Corp.† | 59,930 | 4,551 | |||||||||
67,500 | GNC Holdings Inc., Cl. A | 2,164,657 | 2,143,125 | |||||||||
80,000 | HSN Inc. | 2,423,032 | 4,184,800 | |||||||||
665,000 | Ingles Markets Inc., Cl. A | 11,051,587 | 24,937,500 | |||||||||
650,000 | J.C. Penney Co. Inc.† | 7,974,851 | 7,189,000 | |||||||||
378,000 | Krispy Kreme Doughnuts Inc.† | 2,405,608 | 5,893,020 | |||||||||
30,000 | Lands’ End Inc.† | 719,085 | 765,300 | |||||||||
180,000 | Macy’s Inc. | 2,590,692 | 7,936,200 | |||||||||
80,000 | Movado Group Inc. | 1,353,733 | 2,202,400 | |||||||||
100,000 | Murphy USA Inc.† | 3,922,648 | 6,145,000 | |||||||||
157,000 | Nathan’s Famous Inc.† | 2,358,179 | 6,845,200 | |||||||||
100,000 | Penske Automotive Group Inc. | 1,476,842 | 3,790,000 | |||||||||
540,000 | Pier 1 Imports Inc. | 6,404,774 | 3,785,400 | |||||||||
10,000 | Regis Corp.† | 185,808 | 151,900 | |||||||||
290,000 | Rush Enterprises Inc., Cl. B† | 3,282,048 | 5,295,400 | |||||||||
3,100 | Sprouts Farmers Market Inc.† | 57,829 | 90,024 | |||||||||
302,000 | SUPERVALU Inc.† | 2,704,584 | 1,739,520 | |||||||||
435,000 | The Bon-Ton Stores Inc. | 3,425,183 | 987,450 | |||||||||
440,000 | The Cheesecake Factory Inc. | 13,457,066 | 23,359,600 | |||||||||
199,500 | Tractor Supply Co. | 1,824,293 | 18,046,770 | |||||||||
44,073 | Village Super Market Inc., Cl. A | 1,147,845 | 1,064,804 | |||||||||
110,000 | Vitamin Shoppe, Inc.† | 3,686,267 | 3,405,600 | |||||||||
56,000 | Weis Markets Inc. | 1,772,705 | 2,523,360 | |||||||||
1,054 | Winmark Corp. | 72,976 | 103,271 |
Shares | Cost | Market Value | ||||||||||
12,000 | Yoox Net-A-Porter Group SpA† | $ | 295,129 | $ | 368,271 | |||||||
|
|
|
| |||||||||
126,935,991 | 215,335,612 | |||||||||||
|
|
|
| |||||||||
Specialty Chemicals — 4.2% |
| |||||||||||
28,000 | A. Schulman Inc. | 660,272 | 762,160 | |||||||||
17,000 | Airgas Inc. | 534,158 | 2,407,880 | |||||||||
110,000 | Albemarle Corp. | 3,909,202 | 7,032,300 | |||||||||
72,000 | Ashland Inc. | 2,304,412 | 7,917,120 | |||||||||
1,450,000 | Chemtura Corp.† | 31,620,144 | 38,280,000 | |||||||||
2,307,100 | Ferro Corp.† | 15,212,349 | 27,385,277 | |||||||||
305,000 | H.B. Fuller Co. | 4,074,383 | 12,947,250 | |||||||||
91,000 | Hawkins Inc. | 3,325,886 | 3,284,190 | |||||||||
1,050,000 | Huntsman Corp. | 7,984,216 | 13,965,000 | |||||||||
16,000 | NewMarket Corp. | 1,655,130 | 6,340,160 | |||||||||
300,000 | OMNOVA Solutions Inc.† | 574,864 | 1,668,000 | |||||||||
12,000 | Quaker Chemical Corp. | 196,457 | 1,018,320 | |||||||||
250,000 | Sensient Technologies Corp. | 5,092,725 | 15,865,000 | |||||||||
|
|
|
| |||||||||
77,144,198 | 138,872,657 | |||||||||||
|
|
|
| |||||||||
Telecommunications — 2.1% |
| |||||||||||
240,000 | AT&T Inc. | 3,054,503 | 9,400,800 | |||||||||
88,000 | Atlantic Tele-Network Inc. | 4,011,257 | 6,673,040 | |||||||||
2,800,000 | Cincinnati Bell Inc.† | 9,218,908 | 10,836,000 | |||||||||
65,000 | Consolidated Communications Holdings Inc. | 744,345 | 1,674,400 | |||||||||
960,000 | Gogo Inc.† | 16,250,676 | 10,569,600 | |||||||||
33,000 | Harris Corp. | 2,613,407 | 2,569,380 | |||||||||
250,000 | HC2 Holdings Inc.† | 1,000,923 | 955,000 | |||||||||
6,000 | IDT Corp., Cl. B | 48,867 | 93,540 | |||||||||
12,000 | Iridium Communications Inc.† | 96,080 | 94,440 | |||||||||
350,000 | Ixia† | 4,960,487 | 4,361,000 | |||||||||
35,000 | Loral Space & Communications Inc.† | 1,383,726 | 1,229,550 | |||||||||
140,000 | New ULM Telecom Inc. | 1,294,046 | 1,098,300 | |||||||||
40,000 | Pharol SGPS SA† | 16,517 | 6,099 | |||||||||
115,000 | Rogers Communications Inc., Cl. B | 555,319 | 4,602,300 | |||||||||
232,010 | Shenandoah Telecommunications Co. | 982,995 | 6,206,267 | |||||||||
705,000 | Sprint Corp.† | 3,684,619 | 2,453,400 | |||||||||
37,584 | Verizon Communications Inc. | 846,702 | 2,032,543 | |||||||||
808,000 | VimpelCom Ltd., ADR | 2,333,746 | 3,442,080 | |||||||||
|
|
|
| |||||||||
53,097,123 | 68,297,739 | |||||||||||
|
|
|
| |||||||||
Transportation — 0.9% |
| |||||||||||
490,000 | GATX Corp. | 15,218,669 | 23,275,000 | |||||||||
20,000 | Irish Continental Group plc | 14,688 | 120,504 | |||||||||
415,000 | ModusLink Global Solutions Inc.† | 1,509,095 | 610,050 | |||||||||
130,000 | Navigator Holdings Ltd.† | 2,441,668 | 2,099,500 |
See accompanying notes to financial statements.
11
The Gabelli Small Cap Growth Fund
Schedule of Investments (Continued) — March 31, 2016 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS (Continued) |
| |||||||||||
Transportation (Continued) |
| |||||||||||
133,332 | Providence and Worcester Railroad Co. | $ | 1,892,820 | $ | 1,919,981 | |||||||
|
|
|
| |||||||||
21,076,940 | 28,025,035 | |||||||||||
|
|
|
| |||||||||
Wireless Communications — 1.7% |
| |||||||||||
45,987,500 | Cable & Wireless Communications plc | 39,273,931 | 50,891,002 | |||||||||
54,000 | Millicom International Cellular SA, SDR | 4,018,240 | 2,951,350 | |||||||||
50,000 | United States Cellular Corp.† | 1,991,054 | 2,284,500 | |||||||||
|
|
|
| |||||||||
45,283,225 | 56,126,852 | |||||||||||
|
|
|
| |||||||||
TOTAL COMMON STOCKS | 1,746,584,020 | 3,170,402,836 | ||||||||||
|
|
|
| |||||||||
PREFERRED STOCKS — 0.1% |
| |||||||||||
Automotive: Parts and Accessories — 0.1% |
| |||||||||||
46,000 | Jungheinrich AG | 948,781 | 4,196,379 | |||||||||
|
|
|
| |||||||||
CONVERTIBLE PREFERRED STOCKS — 0.1% |
| |||||||||||
Business Services — 0.0% |
| |||||||||||
14,748 | Trans-Lux Pfd., | 2,949,576 | 1,676,918 | |||||||||
|
|
|
| |||||||||
Diversified Industrial — 0.1% |
| |||||||||||
60,098 | Sevcon Inc., | 1,292,107 | 1,811,955 | |||||||||
|
|
|
| |||||||||
TOTAL CONVERTIBLE PREFERRED STOCKS | 4,241,683 | 3,488,873 | ||||||||||
|
|
|
| |||||||||
RIGHTS — 0.0% |
| |||||||||||
Health Care — 0.0% |
| |||||||||||
58,000 | Durata Therapeutics Inc., CVR† | 0 | 0 | |||||||||
300,000 | Sanofi, CVR, expire 12/31/20† | 280,936 | 34,200 | |||||||||
|
|
|
| |||||||||
280,936 | 34,200 | |||||||||||
|
|
|
| |||||||||
Wireless Communications — 0.0% |
| |||||||||||
200,000 | Leap Wireless International Inc., CVR, expire 03/14/17† | 463,949 | 504,000 | |||||||||
|
|
|
| |||||||||
TOTAL RIGHTS | 744,885 | 538,200 | ||||||||||
|
|
|
|
Shares | Cost | Market Value | ||||||||||
WARRANTS — 0.0% | ||||||||||||
Real Estate — 0.0% | ||||||||||||
11,091 | Tejon Ranch Co., expire 08/31/16† | $ | 66,494 | $ | 1 | |||||||
|
|
|
| |||||||||
Principal Amount | ||||||||||||
CORPORATE BONDS — 0.0% |
| |||||||||||
Automotive — 0.0% |
| |||||||||||
$ | 300,000 | Navistar International Corp., 8.250%, 11/01/21 | 199,370 | 220,500 | ||||||||
|
|
|
| |||||||||
Real Estate — 0.0% |
| |||||||||||
65,376 | Capital Properties Inc., 5.000%, 12/31/22 | 65,376 | 53,445 | |||||||||
|
|
|
| |||||||||
TOTAL CORPORATE BONDS | 264,746 | 273,945 | ||||||||||
|
|
|
| |||||||||
U.S. GOVERNMENT OBLIGATIONS — 3.1% |
| |||||||||||
99,848,000 | U.S. Treasury Bills, 0.025% to 0.587%††, 04/07/16 to 09/22/16 | 99,764,214 | 99,795,370 | |||||||||
|
|
|
| |||||||||
TOTAL INVESTMENTS — 100.0% | $ | 1,852,614,823 | 3,278,695,604 | |||||||||
|
| |||||||||||
Other Assets and Liabilities (Net) — 0.0% |
| 1,313,933 | ||||||||||
|
| |||||||||||
NET ASSETS — 100.0% | $ | 3,280,009,537 | ||||||||||
|
|
(a) | Security considered an affiliated holding because the Fund owns at least 5% of its outstanding shares. |
† | 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, 2016 (Unaudited)
|
| |||
Assets: | ||||
Investments, at value (cost $1,835,060,886) | $ | 3,257,167,933 | ||
Investments in affiliates, at value (cost $17,553,937) | 21,527,671 | |||
Foreign currency, at value (cost $81,046) | 80,893 | |||
Cash | 5,132 | |||
Receivable for Fund shares sold | 3,705,476 | |||
Receivable for investments sold | 2,936,309 | |||
Dividends and interest receivable | 3,360,050 | |||
Prepaid expenses | 105,299 | |||
|
| |||
Total Assets | 3,288,888,763 | |||
|
| |||
Liabilities: | ||||
Payable for Fund shares redeemed | 4,707,131 | |||
Payable for investments purchased | 15,447 | |||
Payable for investment advisory fees | 2,709,839 | |||
Payable for distribution fees | 603,325 | |||
Payable for accounting fees | 3,750 | |||
Payable for shareholder services fees | 550,921 | |||
Other accrued expenses | 288,813 | |||
|
| |||
Total Liabilities | 8,879,226 | |||
|
| |||
Net Assets | $ | 3,280,009,537 | ||
|
| |||
Net Assets Consist of: | ||||
Paid-in capital | $ | 1,799,805,236 | ||
Accumulated net investment loss | (2,988,565 | ) | ||
Accumulated net realized gain on investments and foreign currency transactions | 57,107,252 | |||
Net unrealized appreciation on investments | 1,426,080,781 | |||
Net unrealized appreciation on foreign currency translations | 4,833 | |||
|
| |||
Net Assets | $ | 3,280,009,537 | ||
|
| |||
Shares of Capital Stock, each at $0.001 par value: |
| |||
Class AAA: | ||||
Net Asset Value, offering, and redemption price per share ($1,748,592,075 ÷ 37,549,486 shares outstanding; 150,000,000 shares authorized) | $46.57 | |||
Class A: | ||||
Net Asset Value and redemption price per share ($272,763,326 ÷ 5,859,907 shares outstanding; 50,000,000 shares authorized) | $46.55 | |||
Maximum offering price per share (NAV ÷ 0.9425, based on maximum sales charge of 5.75% of the offering price) | $49.39 | |||
Class C: | ||||
Net Asset Value and offering price per share ($223,758,992 ÷ 5,328,079 shares outstanding; 50,000,000 shares authorized) | $42.00 | (a) | ||
Class I: | ||||
Net Asset Value, offering, and redemption price per share ($1,034,895,144 ÷ 21,834,966 shares outstanding; 50,000,000 shares authorized) | $47.40 |
Statement of Operations For the Six Months Ended March 31, 2016 (Unaudited)
|
| |||
Investment Income: | ||||
Dividends - unaffiliated (net of foreign withholding taxes of $152,991) | $ | 22,438,240 | ||
Dividends - affiliated | 87,704 | |||
Interest | 213,542 | |||
|
| |||
Total Investment Income | 22,739,486 | |||
|
| |||
Expenses: | ||||
Investment advisory fees | 16,505,988 | |||
Distribution fees - Class AAA | 2,193,589 | |||
Distribution fees - Class A | 343,856 | |||
Distribution fees - Class C | 1,106,241 | |||
Shareholder services fees | 1,716,494 | |||
Shareholder communication expenses | 313,027 | |||
Custodian fees | 190,403 | |||
Registration expenses | 61,405 | |||
Directors’ fees | 54,827 | |||
Legal and audit fees | 40,156 | |||
Accounting fees | 22,500 | |||
Interest expense | 434 | |||
Miscellaneous expenses | 78,580 | |||
|
| |||
Total Expenses | 22,627,500 | |||
|
| |||
Less: | ||||
Advisory fee reduction on unsupervised assets (See Note 3) | (4,809 | ) | ||
Expenses paid indirectly by broker (See Note 6) | (2,595 | ) | ||
|
| |||
Total Reductions | (7,404 | ) | ||
|
| |||
Net Expenses | 22,620,096 | |||
|
| |||
Net Investment Income | 119,390 | |||
|
| |||
Net Realized and Unrealized Gain/(Loss) on Investments and Foreign Currency: | ||||
Net realized gain on investments - unaffiliated | 81,989,004 | |||
Net realized loss on foreign currency transactions | (31 | ) | ||
|
| |||
Net realized gain on investments and foreign currency transactions | 81,988,973 | |||
|
| |||
Net change in unrealized appreciation/depreciation: |
| |||
on investments | 108,300,417 | |||
on foreign currency translations | 11,495 | |||
|
| |||
Net change in unrealized appreciation/ depreciation on investments and foreign currency translations | 108,311,912 | |||
|
| |||
Net Realized and Unrealized Gain/(Loss) on Investments and Foreign Currency | 190,300,885 | |||
|
| |||
Net Increase in Net Assets Resulting from Operations | $ | 190,420,275 | ||
|
|
(a) | Redemption price varies based on the length of time held. |
See accompanying notes to financial statements.
13
The Gabelli Small Cap Growth Fund
Statement of Changes in Net Assets
Six Months Ended | ||||||||||
March 31, 2016 | Year Ended | |||||||||
(Unaudited) | September 30, 2015 | |||||||||
Operations: | ||||||||||
Net investment income/(loss) | $ 119,390 | $ (2,633,265) | ||||||||
Net realized gain on investments and foreign currency transactions | 81,988,973 | 125,584,801 | ||||||||
Net change in unrealized appreciation/depreciation on investments and foreign currency translations | 108,311,912 | (159,185,970) | ||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 190,420,275 | (36,234,434) | ||||||||
Distributions to Shareholders: | ||||||||||
Net realized gain | ||||||||||
Class AAA | (66,085,581) | (40,491,589) | ||||||||
Class A | (10,407,406) | (5,714,487) | ||||||||
Class C | (9,096,124) | (4,769,460) | ||||||||
Class I | (38,921,755) | (17,578,191) | ||||||||
Total Distributions to Shareholders | (124,510,866) | (68,553,727) | ||||||||
Capital Share Transactions: | ||||||||||
Class AAA | (72,486,617) | (275,000,296) | ||||||||
Class A | (9,380,058) | (7,559,787) | ||||||||
Class C | (114,630) | 7,660,328 | ||||||||
Class I | (27,252,043) | 184,769,629 | ||||||||
Net Decrease in Net Assets from Capital Share Transactions | (109,233,348) | (90,130,126) | ||||||||
Redemption Fees | 7,008 | 10,209 | ||||||||
Net Decrease in Net Assets | (43,316,931) | (194,908,078) | ||||||||
Net Assets: | ||||||||||
Beginning of year | 3,323,326,468 | 3,518,234,546 | ||||||||
End of period (including undistributed net investment income of $0 and $0, respectively) | $3,280,009,537 | $3,323,326,468 |
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 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Year Ended 30 | Net Asset Value, Beginning of Year | Net Income | Net Realized and Unrealized Gain (Loss) on Investments | Total from Operations | Net Investment Income | Net Realized Gain on Investments | Total Distributions | Redemption Fees (b)(c) | Net Asset End of | Total Return † | Net Assets End of Period (in 000’s) | Net Investment Income (Loss) (a) | Operating Expenses (d) | Portfolio Turnover Rate | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class AAA | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2016(e) | $ | 45.47 | $ | (0.01 | ) | $ | 2.83 | $ | 2.82 | — | $ | (1.72 | ) | $ | (1.72 | ) | $ | 0.00 | $ | 46.57 | 6.14 | % | $ | 1,748,592 | (0.02 | )%(f) | 1.40 | %(f)(g) | 2 | % | |||||||||||||||||||||||||||||||||||||||||||||
2015 | 46.91 | (0.05 | ) | (0.47 | ) | (0.52 | ) | — | (0.92 | ) | (0.92 | ) | 0.00 | 45.47 | (1.25 | ) | 1,784,050 | (0.10 | ) | 1.38 | (g) | 9 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | 45.82 | (0.14 | ) | 2.65 | 2.51 | — | (1.42 | ) | (1.42 | ) | 0.00 | 46.91 | 5.47 | 2,103,544 | (0.28 | ) | 1.38 | 5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2013 | 35.84 | 0.20 | 10.87 | 11.07 | $ | (0.25 | ) | (0.84 | ) | (1.09 | ) | 0.00 | 45.82 | 31.82 | 2,171,213 | 0.50 | 1.39 | 5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2012 | 29.16 | (0.03 | ) | 7.46 | 7.43 | — | (0.75 | ) | (0.75 | ) | 0.00 | 35.84 | 25.98 | 1,535,477 | (0.09 | ) | 1.41 | 7 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2011 | 29.97 | (0.10 | ) | (0.71 | ) | (0.81 | ) | — | — | — | 0.00 | 29.16 | (2.70 | ) | 1,539,100 | (0.30 | ) | 1.42 | 14 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class A | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2016(e) | $ | 45.45 | $ | (0.00 | )(c) | $ | 2.82 | $ | 2.82 | — | $ | (1.72 | ) | $ | (1.72 | ) | $ | 0.00 | $ | 46.55 | 6.14 | % | $ | 272,764 | (0.02 | )%(f) | 1.40 | %(f)(g) | 2 | % | |||||||||||||||||||||||||||||||||||||||||||||
2015 | 46.89 | (0.05 | ) | (0.47 | ) | (0.52 | ) | — | (0.92 | ) | (0.92 | ) | 0.00 | 45.45 | (1.25 | ) | 276,603 | (1.10 | ) | 1.38 | (g) | 9 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | 45.80 | (0.14 | ) | 2.65 | 2.51 | — | (1.42 | ) | (1.42 | ) | 0.00 | 46.89 | 5.47 | 292,796 | (0.28 | ) | 1.38 | 5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2013 | 35.84 | 0.17 | 10.89 | 11.06 | $ | (0.26 | ) | (0.84 | ) | (1.10 | ) | 0.00 | 45.80 | 31.80 | 305,617 | 0.43 | 1.39 | 5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2012 | 29.15 | (0.03 | ) | 7.47 | 7.44 | — | (0.75 | ) | (0.75 | ) | 0.00 | 35.84 | 26.02 | 169,823 | (0.08 | ) | 1.41 | 7 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2011 | 29.96 | (0.10 | ) | (0.71 | ) | (0.81 | ) | — | — | — | 0.00 | 29.15 | (2.70 | ) | 145,049 | (0.31 | ) | 1.42 | 14 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class C | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2016(e) | $ | 41.31 | $ | (0.16 | ) | $ | 2.57 | $ | 2.41 | — | $ | (1.72 | ) | $ | (1.72 | ) | $ | 0.00 | $ | 42.00 | 5.76 | % | $ | 223,759 | (0.77 | )%(f) | 2.15 | %(f)(g) | 2 | % | |||||||||||||||||||||||||||||||||||||||||||||
2015 | 43.01 | (0.38 | ) | (0.40 | ) | (0.78 | ) | — | (0.92 | ) | (0.92 | ) | 0.00 | 41.31 | (1.98 | ) | 220,763 | (0.85 | ) | 2.13 | (g) | 9 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | 42.43 | (0.46 | ) | 2.46 | 2.00 | — | (1.42 | ) | (1.42 | ) | 0.00 | 43.01 | 4.68 | 222,684 | (1.03 | ) | 2.13 | 5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2013 | 33.27 | (0.12 | ) | 10.12 | 10.00 | — | (0.84 | ) | (0.84 | ) | 0.00 | 42.43 | 30.80 | 186,540 | (0.32 | ) | 2.14 | 5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2012 | 27.31 | (0.26 | ) | 6.97 | 6.71 | — | (0.75 | ) | (0.75 | ) | 0.00 | 33.27 | 25.08 | 102,214 | (0.83 | ) | 2.16 | 7 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2011 | 28.28 | (0.34 | ) | (0.63 | ) | (0.97 | ) | — | — | — | 0.00 | 27.31 | (3.43 | ) | 81,289 | (1.05 | ) | 2.17 | 14 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class I | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2016(e) | $ | 46.19 | $ | 0.05 | $ | 2.88 | $ | 2.93 | — | $ | (1.72 | ) | $ | (1.72 | ) | $ | 0.00 | $ | 47.40 | 6.29 | % | $ | 1,034,895 | 0.23 | %(f) | 1.15 | %(f)(g) | 2 | % | ||||||||||||||||||||||||||||||||||||||||||||||
2015 | 47.52 | 0.08 | (0.49 | ) | (0.41 | ) | — | (0.92 | ) | (0.92 | ) | 0.00 | 46.19 | (1.00 | ) | 1,041,910 | 0.17 | 1.13 | (g) | 9 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | 46.29 | (0.01 | ) | 2.66 | 2.65 | — | (1.42 | ) | (1.42 | ) | 0.00 | 47.52 | 5.72 | 899,211 | (0.03 | ) | 1.13 | 5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2013 | 36.29 | 0.29 | 10.99 | 11.28 | $ | (0.44 | ) | (0.84 | ) | (1.28 | ) | 0.00 | 46.29 | 32.14 | 568,573 | 0.71 | 1.14 | 5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2012 | 29.44 | 0.08 | 7.52 | 7.60 | — | (0.75 | ) | (0.75 | ) | 0.00 | 36.29 | 26.31 | 344,869 | 0.24 | 1.16 | 7 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2011 | 30.18 | (0.02 | ) | (0.72 | ) | (0.74 | ) | — | — | — | 0.00 | 29.44 | (2.45 | ) | 164,494 | (0.05 | ) | 1.17 | 14 |
† | Total return represents aggregate total return of a hypothetical $1,000 investment at the beginning of the year 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) | 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) | The ratios do not include a reduction of advisory fee on unsupervised assets for the years ended September 30, 2012 and 2011. Including such advisory fee reduction on unsupervised assets, the ratios of operating expenses to average net assets would have been 1.40% and 1.41% (Class AAA and Class A), 2.15% and 2.16% (Class C), and 1.15% and 1.16% (Class I), respectively. For the six months ended March 31, 2016 and the years ended September 30, 2015, 2014, and 2013, the effect was minimal. |
(e) | For the six months ended March 31, 2016, unaudited. |
(f) | Annualized. |
(g) | The Fund received credits from a designated broker who agreed to pay certain Fund operating expenses. For the six months ended March 31, 2016 and the year ended September 30, 2015, there was no impact on the expense ratios. |
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 is a series of the Gabelli Equity Series Funds, Inc. (the “Corporation”). 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 of the Corporation. The Fund seeks to provide a high level of capital appreciation. Gabelli Funds, LLC (the “Adviser”) currently characterizes small capitalization companies for the Fund as those with total common stock market values of $3 billion or less at the time of investment. The Fund commenced investment operations on October 22, 1991.
2. Significant Accounting Policies. As an investment company, the Fund follows the investment company accounting and reporting guidance, which is part of U.S. generally accepted accounting principles (“GAAP”) that may require the use of management estimates and assumptions in the preparation of its financial statements. Actual results could differ from those estimates. The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements.
Security Valuation. Portfolio securities listed or traded on a nationally recognized securities exchange or traded in the U.S. over-the-counter market for which market quotations are readily available are valued at the last quoted sale price or a market’s official closing price as of the close of business on the day the securities are being valued. If there were no sales that day, the security is valued at the average of the closing bid and asked prices or, if there were no asked prices quoted on that day, then the security is valued at the closing bid price on that day. If no bid or asked prices are quoted on such day, the security is valued at the most recently available price or, if the Board of Directors (the “Board”) so determines, by such other method as the Board shall determine in good faith to reflect its fair market value. Portfolio securities traded on more than one national securities exchange or market are valued according to the broadest and most representative market, as determined by 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.
16
The Gabelli Small Cap Growth Fund
Notes to Financial Statements (Unaudited) (Continued)
dollar value American Depositary Receipt securities at the close of the U.S. exchange; and evaluation of any other information that could be indicative of the value of the security.
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 Board’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, 2016 is as follows:
Valuation Inputs | ||||||||||||||||||||
Level 1 Quoted Prices | Level 2 Other Significant Observable Inputs | Level 3 Significant Unobservable Inputs | Total Market Value at 3/31/16 | |||||||||||||||||
INVESTMENTS IN SECURITIES: | ||||||||||||||||||||
ASSETS (Market Value): | ||||||||||||||||||||
Common Stocks: | ||||||||||||||||||||
Broadcasting | $ | 37,779,091 | $ | 831,445 | — | $ | 38,610,536 | |||||||||||||
Consumer Products | 52,041,218 | — | $ | 262 | 52,041,480 | |||||||||||||||
Consumer Services | 46,839,668 | 82,150 | — | 46,921,818 | ||||||||||||||||
Educational Services | 1,539,310 | — | 119 | 1,539,429 | ||||||||||||||||
Electronics | 46,372,538 | 3,985,725 | — | 50,358,263 | ||||||||||||||||
Entertainment | 83,456,082 | 253,549 | — | 83,709,631 | ||||||||||||||||
Equipment and Supplies | 274,899,013 | 1,028,633 | — | 275,927,646 | ||||||||||||||||
Financial Services | 132,600,532 | 351,812 | 405 | 132,952,749 | ||||||||||||||||
Food and Beverage | 350,731,253 | — | 649,706 | 351,380,959 | ||||||||||||||||
Health Care | 159,901,822 | — | 70,000 | 159,971,822 | ||||||||||||||||
Manufactured Housing and Recreational Vehicles | 11,537,522 | 1,030,339 | — | 12,567,861 | ||||||||||||||||
Publishing | 27,976,321 | 586,620 | — | 28,562,941 | ||||||||||||||||
Retail | 215,334,877 | — | 735 | 215,335,612 | ||||||||||||||||
Other Industries (a) | 1,720,522,089 | — | — | 1,720,522,089 | ||||||||||||||||
Total Common Stocks | 3,161,531,336 | 8,150,273 | 721,227 | 3,170,402,836 | ||||||||||||||||
Preferred Stocks (a) | 4,196,379 | — | — | 4,196,379 | ||||||||||||||||
Convertible Preferred Stocks (a) | — | 3,488,873 | — | 3,488,873 | ||||||||||||||||
Rights (a) | 34,200 | — | 504,000 | 538,200 | ||||||||||||||||
Warrants (a) | 1 | — | — | 1 | ||||||||||||||||
Corporate Bonds (a) | — | 273,945 | — | 273,945 | ||||||||||||||||
U.S. Government Obligations | — | 99,795,370 | — | 99,795,370 | ||||||||||||||||
TOTAL INVESTMENTS IN SECURITIES – ASSETS | $ | 3,165,761,916 | $ | 111,708,461 | $ | 1,225,227 | $ | 3,278,695,604 |
(a) | Please refer to the Schedule of Investments for the industry classifications of these portfolio holdings. |
The Fund did not have material transfers among Level 1, Level 2, and Level 3 during the six months ended March 31, 2016. The Fund’s policy is to recognize transfers among Levels as of the beginning of the reporting period.
17
The Gabelli Small Cap Growth Fund
Notes to Financial Statements (Unaudited) (Continued)
Additional Information to Evaluate Qualitative Information.
General. The Fund uses recognized industry pricing services – approved by the Board and unaffiliated with the Adviser – to value most of its securities, and uses broker quotes provided by market makers of securities not valued by these and other recognized pricing sources. Several different pricing feeds are received to value domestic equity securities, international equity securities, preferred equity securities, and fixed income securities. The data within these feeds is ultimately sourced from major stock exchanges and trading systems where these securities trade. The prices supplied by external sources are checked by obtaining quotations or actual transaction prices from market participants. If a price obtained from the pricing source is deemed unreliable, prices will be sought from another pricing service or from a broker/dealer that trades that security or similar securities.
Fair Valuation. Fair valued securities may be common and preferred equities, warrants, options, rights, and fixed income obligations. Where appropriate, Level 3 securities are those for which market quotations are not available, such as securities not traded for several days, or for which current bids are not available, or which are restricted as to transfer. Among the factors to be considered to fair value a security are recent prices of comparable securities that are publicly traded, reliable prices of securities not publicly traded, the use of valuation models, current analyst reports, valuing the income or cash flow of the issuer, or cost if the preceding factors do not apply. A significant change in the unobservable inputs could result in a lower or higher value in Level 3 securities. The circumstances of Level 3 securities are frequently monitored to determine if fair valuation measures continue to apply.
The Adviser reports quarterly to the Board the results of the application of fair valuation policies and procedures. These may include back testing the prices realized in subsequent trades of these fair valued securities to fair values previously recognized.
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 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, 2016, 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
18
The Gabelli Small Cap Growth Fund
Notes to Financial Statements (Unaudited) (Continued)
to a certain percentage of the contract amount. This is known as the “initial margin.” Subsequent payments (“variation margin”) are made or received by the Fund each day, depending on the daily fluctuations in the value of the contract, and are included in unrealized appreciation/depreciation on futures contracts. The Fund recognizes a realized gain or loss when the contract is closed.
There are several risks in connection with the use of futures contracts as a hedging instrument. The change in value of futures contracts primarily corresponds with the value of their underlying instruments, which may not correlate with the change in value of the hedged investments. In addition, there is the risk that the Fund may not be able to enter into a closing transaction because of an illiquid secondary market. During the six months ended March 31, 2016, the Fund held no investments in futures contracts.
Foreign Currency Translations. The books and records of the Fund are maintained in U.S. dollars. Foreign currencies, investments, and other assets and liabilities are translated into U.S. dollars at current exchange rates. Purchases and sales of investment securities, income, and expenses are translated at the exchange rate prevailing on the respective dates of such transactions. Unrealized gains and losses that result from changes in foreign exchange rates and/or changes in market prices of securities have been included in unrealized appreciation/depreciation on investments and foreign currency translations. Net realized foreign currency gains and losses resulting from changes in exchange rates include foreign currency gains and losses between trade date and settlement date on investment securities transactions, foreign currency transactions, and the difference between the amounts of interest and dividends recorded on the books of the Fund and the amounts actually received. The portion of foreign currency gains and losses related to fluctuation in exchange rates between the initial purchase trade date and subsequent sale trade date is included in realized gain/(loss) on investments.
Foreign Securities. The Fund may directly purchase securities of foreign issuers. Investing in securities of foreign issuers involves special risks not typically associated with investing in securities of U.S. issuers. The risks include possible revaluation of currencies, the inability to repatriate funds, less complete financial information about companies, and possible future adverse political and economic developments. Moreover, securities of many foreign issuers and their markets may be less liquid and their prices more volatile than securities of comparable U.S. issuers.
Foreign Taxes. The Fund may be subject to foreign taxes on income, gains on investments, or currency repatriation, a portion of which may be recoverable. The Fund will accrue such taxes and recoveries as applicable, based upon its current interpretation of tax rules and regulations that exist in the markets in which it invests.
Restricted Securities. The Fund may invest up to 15% of its net assets in securities for which the markets are restricted. Restricted securities include securities whose disposition is subject to substantial legal or contractual restrictions. The sale of restricted 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
19
The Gabelli Small Cap Growth Fund
Notes to Financial Statements (Unaudited) (Continued)
traded securities, and accordingly the Board will monitor their liquidity. At March 31, 2016, the Fund held no restricted securities.
Securities Transactions and Investment Income. Securities transactions are accounted for on the trade date with realized gain/( 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.
Distributions to Shareholders. Distributions to shareholders are recorded on the ex-dividend date. Distributions to shareholders are based on income and capital gains as determined in accordance with federal income tax regulations, which may differ from income and capital gains as determined under GAAP. These differences are primarily due to differing treatments of income and gains on various investment securities and foreign currency transactions held by the Fund, timing differences, and differing characterizations of distributions made by the Fund. Distributions from net investment income for federal income tax purposes include net realized gains on foreign currency transactions. These book/tax differences are either temporary or permanent in nature. To the extent these differences are permanent, adjustments are made to the appropriate capital accounts in the period when the differences arise. These reclassifications have no impact on the NAV of the Fund.
The tax character of distributions paid during the year ended September 30, 2015 was $68,553,727 of net long term capital gains.
Provision for Income Taxes. The Fund intends to continue to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). It is the policy of the Fund to comply with the requirements of the Code applicable to regulated investment companies and to distribute substantially all of its net investment company taxable income and net capital gains. Therefore, no provision for federal income taxes is required.
The Fund is permitted to carry capital losses forward for an unlimited period. Capital losses that are carried forward will retain their character as either short term or long term capital losses.
20
The Gabelli Small Cap Growth Fund
Notes to Financial Statements (Unaudited) (Continued)
The following summarizes the tax cost of investments and the related net unrealized appreciation at March 31, 2016:
Cost | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Appreciation | |||||||||||||
Investments | $ | 1,862,541,596 | $ | 1,569,688,649 | $ | (153,534,641 | ) | $ | 1,416,154,008 |
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, 2016, the Fund did not incur any income tax, interest, or penalties. As of March 31, 2016, 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. The Fund’s federal and state tax returns for the prior three fiscal years remain open, subject to examination. 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, 2016, 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 $4,809.
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 Adviser, 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.
21
The Gabelli Small Cap Growth Fund
Notes to Financial Statements (Unaudited) (Continued)
5. Portfolio Securities. Purchases and sales of securities during the six months ended March 31, 2016, other than short term securities and U.S. Government obligations, aggregated $75,473,584 and $147,042,270, respectively.
6. Transactions with Affiliates and Other Arrangements. During the six months ended March 31, 2016, the Fund paid brokerage commissions on security trades of $73,961 to G.research, LLC, an affiliate of the Adviser. Additionally, the Distributor retained a total of $58,959 from investors representing commissions (sales charges and underwriting fees) on sales and redemptions of Fund shares.
During the six months ended March 31, 2016, the Fund received credits from a designated broker who agreed to pay certain Fund operating expenses. The amount of such expenses paid through this directed brokerage arrangement during this period was $2,595.
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, 2016, 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 bears interest at a floating rate equal to the higher of the overnight Federal Funds rate plus 125 basis points or the 30-DAY LIBOR plus 125 basis points in effect on that day. This amount, if any, would be included in “Interest expense” in the Statement of Operations. During the six months ended March 31, 2016, there were no borrowings under the line of credit.
8. Capital Stock. The Fund offers four classes of shares – Class AAA Shares, Class A Shares, Class C Shares, and Class I Shares. Class AAA and Class I Shares are offered without a sales charge. Class A Shares are subject to a maximum front-end sales charge of 5.75%, and Class C Shares are subject to a 1.00% contingent deferred sales charge for one year after purchase.
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, 2016 and the year ended September 30, 2015, if any, can be found in the Statement of Changes in Net Assets under Redemption Fees.
22
The Gabelli Small Cap Growth Fund
Notes to Financial Statements (Unaudited) (Continued)
Transactions in shares of capital stock were as follows:
Six Months Ended March 31, 2016 (Unaudited) | Year Ended September 30, 2015 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Class AAA | ||||||||||||||||
Shares sold | 1,377,659 | $ | 62,153,920 | 3,319,959 | $ | 162,417,991 | ||||||||||
Shares issued upon reinvestment of distributions | 1,366,459 | 64,729,176 | 809,664 | 39,560,198 | ||||||||||||
Shares redeemed | (4,432,514 | ) | (199,369,713 | ) | (9,736,323 | ) | (476,978,485 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net decrease | (1,688,396 | ) | $ | (72,486,617 | ) | (5,606,700 | ) | $ | (275,000,296 | ) | ||||||
|
|
|
|
|
|
|
| |||||||||
Class A | ||||||||||||||||
Shares sold | 489,468 | $ | 22,314,007 | 1,117,567 | $ | 54,900,120 | ||||||||||
Shares issued upon reinvestment of distributions | 198,812 | 9,413,748 | 101,724 | 4,968,185 | ||||||||||||
Shares redeemed | (914,392 | ) | (41,107,813 | ) | (1,377,817 | ) | (67,428,092 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net decrease | (226,112 | ) | $ | (9,380,058 | ) | (158,526 | ) | $ | (7,559,787 | ) | ||||||
|
|
|
|
|
|
|
| |||||||||
Class C | ||||||||||||||||
Shares sold | 356,092 | $ | 14,650,779 | 889,352 | $ | 39,843,004 | ||||||||||
Shares issued upon reinvestment of distributions | 196,038 | 8,396,317 | 96,136 | 4,294,403 | ||||||||||||
Shares redeemed | (567,972 | ) | (23,161,726 | ) | (818,494 | ) | (36,477,079 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase/(decrease) | (15,842 | ) | $ | (114,630 | ) | 166,994 | $ | 7,660,328 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Class I | ||||||||||||||||
Shares sold | 2,887,117 | $ | 131,760,433 | 9,409,515 | $ | 472,777,435 | ||||||||||
Shares issued upon reinvestment of distributions | 720,229 | 34,693,416 | 311,616 | 15,434,375 | ||||||||||||
Shares redeemed | (4,328,580 | ) | (193,705,892 | ) | (6,086,578 | ) | (303,442,181 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase/(decrease) | (721,234 | ) | $ | (27,252,043 | ) | 3,634,553 | $ | 184,769,629 | ||||||||
|
|
|
|
|
|
|
|
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, 2016 is set forth below:
Beginning Shares | Shares Purchased | Shares Sold/Closed | Ending Shares | Dividend Income | Realized Gain | Value at March 31, 2016 | Percent Owned of Shares Outstanding | |||||||||||||||||||||||||||||||||
Bel Fuse Inc., Cl. A | 281,368 | 3,632 | — | 285,000 | $ | 33,884 | — | $ | 3,985,725 | 13.07 | % | |||||||||||||||||||||||||||||
Katy Industries Inc. | 500,000 | — | — | 500,000 | — | — | 875,000 | 6.29 | % | |||||||||||||||||||||||||||||||
Sevcon Inc. | 300,000 | 11,422 | — | 311,422 | — | — | 3,129,791 | 7.34 | % | |||||||||||||||||||||||||||||||
Strattec Security Corp. | 207,000 | — | — | 207,000 | 53,820 | — | 11,879,730 | 5.69 | % | |||||||||||||||||||||||||||||||
Trans-Lux Corp. | 404,180 | 70 | — | 404,250 | — | — | 1,657,425 | 23.64 | % | |||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||
Total | $ | 87,704 | — | $ | 21,527,671 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
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.
23
The Gabelli Small Cap Growth Fund
Notes to Financial Statements (Unaudited) (Continued)
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.
24
The Gabelli Small Cap Growth Fund
Board Consideration and Re-Approval of Advisory Agreement (Unaudited)
During the six months ended March 31, 2016, 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 funds chosen by Broadridge as being comparable. The Independent Board Members noted that the Fund’s performance was in the second quartile for the one year period and in the third quartile for the three year 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 another affiliated broker received distribution fees and minor amounts of sales commissions, and that the Adviser received a moderate level of soft dollar research benefits through the Fund’s portfolio brokerage.
Economies of Scale. The Independent Board Members discussed the major elements of the Adviser’s cost structure and the relationship of those elements to potential economies of scale.
Sharing of Economies of Scale. The Independent Board Members noted that the investment management fee schedule for the Fund does not take into account any potential economies of scale that may develop.
Service and Cost Comparisons. The Independent Board Members compared the expense ratios of the investment management fee, other expenses and total expenses of the Fund to similar expense ratios of the peer group of 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 and size were above average within this group. The Independent Board Members also noted that the management fee structure was the same as that in effect for most of the Gabelli funds. The Independent Board Members were presented with, but did not consider to be material to their decision, various information comparing the advisory fees to 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
25
The Gabelli Small Cap Growth Fund
Board Consideration and Re-Approval of Advisory Agreement (Unaudited) (Continued)
conclusion, the Independent Board Members determined to recommend continuation of the investment management 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.
26
THE GABELLI SMALL CAP GROWTH FUND
One Corporate Center
Rye, NY 10580-1422
Portfolio Manager Biography
Mario J. Gabelli, CFA, is Chairman, Chief Executive Officer, and Chief Investment Officer - Value Portfolios of GAMCO Investors, Inc. that he founded in 1977, and Chief Investment Officer - Value Portfolios of Gabelli Funds, LLC and GAMCO Asset Management Inc. He is also Chief Executive Officer and Chairman of the Board of Directors of Associated Capital Group, Inc. Mr. Gabelli is a summa cum laude graduate of Fordham University and holds an MBA degree from Columbia Business School and Honorary Doctorates from Fordham University and Roger Williams University.
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. Both the commentary and the financial statements, including the portfolio of investments, will be available on our website at www.gabelli.com.
Gabelli Equity Series Funds, Inc.
THE GABELLI SMALL CAP GROWTH FUND
One Corporate Center
Rye, New York 10580-1422
t 800-GABELLI (800-422-3554)
f 914-921-5118
e info@gabelli.com
GABELLI.COM
Net Asset Value per share available daily
by calling 800-GABELLI after 7:00 P.M.
BOARD OF DIRECTORS
Mario J. Gabelli, CFA Chairman and Chief Executive Officer, GAMCO Investors, Inc. Chairman and Chief Executive Officer, Associated Capital Group, Inc.
Anthony J. Colavita President, Anthony J. Colavita, P.C.
Vincent D. Enright Former Senior Vice President and Chief Financial Officer, KeySpan Corp.
John D. Gabelli Senior Vice President, G.research, LLC
Robert J. Morrissey Partner, Morrissey, Hawkins & Lynch
Kuni Nakamura President, Advanced Polymer, Inc.
Anthony R. Pustorino Certified Public Accountant, Professor Emeritus, Pace University | Anthonie C. van Ekris Chairman, BALMAC International, Inc.
Salvatore J. Zizza Chairman, Zizza & Associates Corp.
OFFICERS
Bruce N. Alpert President
Andrea R. Mango Secretary
Agnes Mullady Treasurer
Richard J. Walz Chief Compliance Officer
DISTRIBUTOR
G.distributors, LLC
CUSTODIAN, TRANSFER AGENT, AND DIVIDEND DISBURSING AGENT
State Street Bank and Trust Company
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.
GAB443Q116SR
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 | 6/6/2016 |
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 | 6/6/2016 |
By (Signature and Title)* | /s/ Agnes Mullady | |||
Agnes Mullady, Principal Financial Officer and Treasurer |
Date | 6/6/2016 |
* Print the name and title of each signing officer under his or her signature.