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, 2021
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, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
Item 1. Reports to Stockholders.
(a) | The Report to Shareholders is attached herewith. |
The Gabelli Equity Income Fund
Semiannual Report — March 31, 2021
To Our Shareholders,
For the six months ended March 31, 2021, the net asset value (NAV) total return per Class AAA Share of The Gabelli Equity Income Fund was 24.7% compared with a total return of 19.1% for the Standard & Poor’s (S&P) 500 Index. Other classes of shares are available. See below for performance information for all classes.
Enclosed are the financial statements, including the schedule of investments, as of March 31, 2021.
Comparative Result
Average Annual Returns through March 31, 2021 (a)(b) (Unaudited)
Total returns and average annual returns reflect changes in share price, reinvestment of distributions, and are net of expenses. Performance for periods of less than one year is not annualized.
Six Months | 1 Year | 5 Year | 10 Year | Since Inception (01/02/92) | |||||
Class AAA (GABEX) | 24.72% | 56.77% | 9.82% | 8.85% | 9.81% | ||||
S&P 500 Index (c) | 19.07 | 56.35 | 16.29 | 13.91 | 10.21 | ||||
Lipper Equity Income Fund Average (c) | 22.54 | 47.83 | 11.75 | 10.53 | 8.75 | ||||
Class A (GCAEX) (d) | 24.71 | 56.84 | 9.82 | 8.85 | 9.81 | ||||
With sales charge (e) | 17.54 | 47.82 | 8.53 | 8.21 | 9.59 | ||||
Class C (GCCEX) (d) | 24.09 | 55.68 | 8.98 | 8.04 | 9.33 | ||||
With contingent deferred sales charge (f) | 23.09 | 54.68 | 8.98 | 8.04 | 9.33 | ||||
Class I (GCIEX) (d) | 24.95 | 57.25 | 10.10 | 9.13 | 9.94 |
(a) | The Fund imposes a 2% redemption fee on shares sold or exchanged within seven days of purchase. |
(b) | The Fund’s fiscal year ends September 30. |
(c) | 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. Inception performance is as of December 31, 1991. The Lipper Equity Income Fund Average includes the 30 largest equity funds in this category tracked by Lipper, Inc. Dividends are considered reinvested. You cannot invest directly in an index. |
(d) | 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. |
(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. |
In the current prospectuses dated January 28, 2021, the expense ratios for Class AAA, A, C, and I Shares are 1.48%, 1.48%, 2.23%, and 1.23%, respectively. See page 10 for the expense ratios for the six months ended March 31, 2021. Class AAA and Class I Shares do not have a sales charge. The maximum sales charge for Class A Shares, and Class C Shares is 5.75%, and 1.00%, respectively.
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.
Returns represent past performance and do not guarantee future results. Investment returns and the principal value of an investment will fluctuate. When shares are redeemed, they may be worth more or less than their original cost. 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.
As permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s annual and semiannual shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Fund’s website (www.gabelli.com), and you will be notified by mail each time a report is posted and provided with a website link to access the report. If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. To elect to receive all future reports on paper free of charge, please contact your financial intermediary, or, if you invest directly with the Fund, you may call 800-422-3554 or send an email request to info@gabelli.com. |
The Gabelli Equity Income Fund
Disclosure of Fund Expenses (Unaudited)
For the Six Month Period from October 1, 2020 through March 31, 2021 | 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 10/01/20 | Ending Account Value 03/31/21 | Annualized Expense Ratio | Expenses Paid During Period* | |
The Gabelli Equity Income Fund | ||||
Actual Fund Return | ||||
Class AAA | $1,000.00 | $1,247.20 | 1.43% | $ 8.01 |
Class A | $1,000.00 | $1,247.10 | 1.43% | $ 8.01 |
Class C | $1,000.00 | $1,240.90 | 2.18% | $12.18 |
Class I | $1,000.00 | $1,249.50 | 1.18% | $ 6.62 |
Hypothetical 5% Return | ||||
Class AAA | $1,000.00 | $1,017.80 | 1.43% | $ 7.19 |
Class A | $1,000.00 | $1,017.80 | 1.43% | $ 7.19 |
Class C | $1,000.00 | $1,014.06 | 2.18% | $10.95 |
Class I | $1,000.00 | $1,019.05 | 1.18% | $ 5.94 |
* | Expenses are equal to the Fund’s annualized expense ratio for the last six months multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half year (182 days), then divided by 365. |
2
Summary of Portfolio Holdings (Unaudited)
The following table presents portfolio holdings as a percent of net assets as of March 31, 2021:
The Gabelli Equity Income Fund
Food and Beverage | 16.4 | % | |
Financial Services | 15.8 | % | |
Consumer Products | 7.0 | % | |
Diversified Industrial | 5.8 | % | |
Retail | 4.7 | % | |
Health Care | 4.5 | % | |
Telecommunications | 4.5 | % | |
Equipment and Supplies | 4.4 | % | |
Business Services | 4.1 | % | |
Automotive: Parts and Accessories | 4.0 | % | |
Machinery | 4.0 | % | |
Entertainment | 2.5 | % | |
Electronics | 2.2 | % | |
Energy and Utilities: Oil | 2.1 | % | |
Building and Construction | 2.1 | % | |
Metals and Mining | 2.1 | % | |
Computer Software and Services. | 1.9 | % | |
Energy and Utilities: Natural Gas | 1.7 | % | |
Transportation | 1.6 | % | |
Computer Hardware | 1.6 | % | |
Specialty Chemicals | 1.1 | % |
Cable and Satellite | 0.9 | % | |
Real Estate | 0.7 | % | |
Agriculture | 0.6 | % | |
Aerospace | 0.6 | % | |
Energy and Utilities: Services | 0.5 | % | |
Energy and Utilities: Integrated | 0.5 | % | |
Energy and Utilities: Electric | 0.5 | % | |
Communications Equipment | 0.3 | % | |
Broadcasting | 0.3 | % | |
Environmental Services | 0.2 | % | |
Energy and Utilities: Water | 0.2 | % | |
Hotels and Gaming | 0.2 | % | |
Automotive | 0.2 | % | |
Consumer Services | 0.1 | % | |
Paper and Forest Products | 0.1 | % | |
Wireless Communications | 0.0 | %* | |
Publishing | 0.0 | %* | |
Other Assets and Liabilities (Net) | 0.0 | %* | |
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-PORT. 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-PORT 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, 2021 (Unaudited) |
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS — 100.0% Aerospace — 0.6% | ||||||||||||
2,000 | Lockheed Martin Corp. | $ | 47,350 | $ | 739,000 | |||||||
9,500 | Rockwell Automation Inc. | 285,402 | 2,521,680 | |||||||||
332,752 | 3,260,680 | |||||||||||
Agriculture — 0.6% | ||||||||||||
59,000 | Archer-Daniels-Midland Co. | 1,519,516 | �� | 3,363,000 | ||||||||
12,000 | The Mosaic Co. | 186,246 | 379,320 | |||||||||
1,705,762 | 3,742,320 | |||||||||||
Automotive — 0.2% | ||||||||||||
10,000 | PACCAR Inc. | 386,268 | 929,200 | |||||||||
Automotive: Parts and Accessories— 4.0% | ||||||||||||
76,000 | Dana Inc. | 1,193,901 | 1,849,080 | |||||||||
191,500 | Genuine Parts Co.(a) | 8,484,339 | 22,135,485 | |||||||||
9,678,240 | 23,984,565 | |||||||||||
Broadcasting — 0.3% | ||||||||||||
40,000 | Liberty Global plc, Cl. A† | 894,029 | 1,026,400 | |||||||||
10,000 | Liberty Global plc, Cl. C† | 216,949 | 255,400 | |||||||||
34,500 | MSG Networks Inc., Cl. A† | 128,602 | 518,880 | |||||||||
1,239,580 | 1,800,680 | |||||||||||
Building and Construction — 2.1% | ||||||||||||
30,000 | Carrier Global Corp. | 254,819 | 1,266,600 | |||||||||
49,000 | Fortune Brands Home & | |||||||||||
Security Inc. | 492,256 | 4,695,180 | ||||||||||
35,500 | Herc Holdings Inc.† | 1,112,593 | 3,597,215 | |||||||||
50,000 | Johnson Controls | |||||||||||
International plc | 879,939 | 2,983,500 | ||||||||||
2,739,607 | 12,542,495 | |||||||||||
Business Services — 4.1% | ||||||||||||
14,000 | Automatic Data Processing Inc. | 633,248 | 2,638,580 | |||||||||
34,000 | Mastercard Inc., Cl. A | 559,361 | 12,105,700 | |||||||||
2,400 | MSC Industrial Direct Co. Inc., Cl. A | 165,490 | 216,456 | |||||||||
32,000 | Pentair plc | 622,795 | 1,994,240 | |||||||||
21,000 | S&P Global Inc. | 895,452 | 7,410,270 | |||||||||
2,876,346 | 24,365,246 | |||||||||||
Cable and Satellite — 0.9% | ||||||||||||
134,000 | DISH Network Corp., Cl. A† | 2,404,558 | 4,850,800 | |||||||||
16,000 | EchoStar Corp., Cl. A† | 389,202 | 384,000 | |||||||||
2,793,760 | 5,234,800 | |||||||||||
Communications Equipment — 0.3% | ||||||||||||
42,000 | Corning Inc. | 481,575 | 1,827,420 | |||||||||
Computer Hardware — 1.6% | ||||||||||||
48,000 | Apple Inc. | 878,884 | 5,863,200 |
Shares | Cost | Market Value | ||||||||||
25,000 | International Business Machines Corp. | $ | 2,042,464 | $ | 3,331,500 | |||||||
2,921,348 | 9,194,700 | |||||||||||
Computer Software and Services — 1.9% | ||||||||||||
95,000 | Hewlett Packard Enterprise Co. | 543,304 | 1,495,300 | |||||||||
42,000 | Microsoft Corp. | 1,173,480 | 9,902,340 | |||||||||
1,716,784 | 11,397,640 | |||||||||||
Consumer Products — 7.0% | ||||||||||||
11,000 | Altria Group Inc. | 92,672 | 562,760 | |||||||||
6,000 | Edgewell Personal Care Co. | 182,805 | 237,600 | |||||||||
53,000 | Energizer Holdings Inc. | 1,441,783 | 2,515,380 | |||||||||
30,000 | Essity AB, Cl. A | 529,907 | 948,079 | |||||||||
1,000 | National Presto Industries Inc. | 30,628 | 102,070 | |||||||||
34,500 | Reckitt Benckiser Group plc | 1,023,563 | 3,090,559 | |||||||||
405,000 | Swedish Match AB | 5,061,232 | 31,617,402 | |||||||||
42,000 | Unilever plc, ADR | 838,099 | 2,344,860 | |||||||||
9,200,689 | 41,418,710 | |||||||||||
Consumer Services — 0.1% | ||||||||||||
1,600 | Allegion plc | 19,252 | 200,992 | |||||||||
16,000 | Rollins Inc. | 15,908 | 550,720 | |||||||||
35,160 | 751,712 | |||||||||||
Diversified Industrial — 5.8% | ||||||||||||
78,000 | Crane Co. | 2,384,873 | 7,324,980 | |||||||||
36,000 | Eaton Corp. plc | 1,330,537 | 4,978,080 | |||||||||
1,700 | Honeywell International Inc. | 36,448 | 369,019 | |||||||||
8,824 | Ingersoll Rand Inc.† | 46,675 | 434,229 | |||||||||
48,000 | ITT Inc. | 961,318 | 4,363,680 | |||||||||
31,000 | Jardine Matheson Holdings Ltd. | 1,528,820 | 2,027,090 | |||||||||
150,000 | Jardine Strategic Holdings Ltd. | 3,461,391 | 4,953,000 | |||||||||
22,000 | nVent Electric plc | 230,823 | 614,020 | |||||||||
109,000 | Textron Inc. | 848,582 | 6,112,720 | |||||||||
154,000 | Toray Industries Inc. | 1,030,505 | 990,969 | |||||||||
9,500 | Trane Technologies plc | 155,306 | 1,572,820 | |||||||||
23,000 | Trinity Industries Inc. | 302,107 | 655,270 | |||||||||
12,317,385 | 34,395,877 | |||||||||||
Electronics — 2.2% | ||||||||||||
15,000 | Sony Group Corp. | 403,011 | 1,570,783 | |||||||||
32,000 | Sony Group Corp., ADR | 724,495 | 3,392,320 | |||||||||
50,000 | TE Connectivity Ltd. | 1,653,991 | 6,455,500 | |||||||||
10,000 | Texas Instruments Inc. | 147,000 | 1,889,900 | |||||||||
2,928,497 | 13,308,503 | |||||||||||
Energy and Utilities: Electric — 0.5% | ||||||||||||
7,500 | Avangrid Inc. | 210,171 | 373,575 | |||||||||
22,000 | Korea Electric Power Corp., ADR† | 262,972 | 225,720 | |||||||||
8,000 | Portland General Electric Co. | 334,816 | 379,760 |
See accompanying notes to financial statements.
4
The Gabelli Equity Income Fund |
Schedule of Investments (Continued) — March 31, 2021 (Unaudited) |
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS (Continued) Energy and Utilities: Electric (Continued) | ||||||||||||
63,000 | The AES Corp. | $ | 291,918 | $ | 1,689,030 | |||||||
1,099,877 | 2,668,085 | |||||||||||
Energy and Utilities: Integrated — 0.5% | ||||||||||||
50,000 | Energy Transfer LP | 66,924 | 384,000 | |||||||||
21,000 | Eni SpA | 220,487 | 258,432 | |||||||||
6,500 | Iberdrola SA, ADR | 98,020 | 336,102 | |||||||||
58,000 | OGE Energy Corp. | 773,496 | 1,876,880 | |||||||||
1,158,927 | 2,855,414 | |||||||||||
Energy and Utilities: Natural Gas — 1.7% | ||||||||||||
108,000 | National Fuel Gas Co. | 4,793,408 | 5,398,920 | |||||||||
11,500 | ONE Gas Inc. | 48,202 | 884,465 | |||||||||
60,500 | ONEOK Inc. | 30,168 | 3,064,930 | |||||||||
7,500 | Southwest Gas Holdings Inc. | 153,948 | 515,325 | |||||||||
5,025,726 | 9,863,640 | |||||||||||
Energy and Utilities: Oil — 2.1% | ||||||||||||
50,000 | Chevron Corp. | 1,865,111 | 5,239,500 | |||||||||
7,000 | ConocoPhillips | 128,274 | 370,790 | |||||||||
7,747 | Devon Energy Corp. | 78,701 | 169,272 | |||||||||
12,000 | Exxon Mobil Corp. | 312,521 | 669,960 | |||||||||
61,500 | Hess Corp. | 2,961,809 | 4,351,740 | |||||||||
18,000 | Marathon Petroleum Corp. | 234,717 | 962,820 | |||||||||
6,000 | Royal Dutch Shell plc, Cl. A, ADR | 242,018 | 235,260 | |||||||||
15,000 | TOTAL SE, ADR | 252,772 | 698,100 | |||||||||
6,075,923 | 12,697,442 | |||||||||||
Energy and Utilities: Services — 0.5% | ||||||||||||
130,000 | Halliburton Co. | 2,925,492 | 2,789,800 | |||||||||
8,000 | Schlumberger NV | 161,590 | 217,520 | |||||||||
3,087,082 | 3,007,320 | |||||||||||
Energy and Utilities: Water — 0.2% | ||||||||||||
5,000 | Essential Utilities Inc. | 36,851 | 223,750 | |||||||||
25,000 | Severn Trent plc | 637,468 | 794,763 | |||||||||
674,319 | 1,018,513 | |||||||||||
Entertainment — 2.5% | ||||||||||||
28,000 | Grupo Televisa SAB, ADR† | 249,704 | 248,080 | |||||||||
1,000 | Madison Square Garden Entertainment Corp.† | 16,681 | 81,800 | |||||||||
1,000 | Madison Square Garden Sports Corp.† | 39,524 | 179,460 | |||||||||
304,000 | ViacomCBS Inc., Cl. A | 7,563,088 | 14,339,680 | |||||||||
7,868,997 | 14,849,020 | |||||||||||
Environmental Services — 0.2% | ||||||||||||
10,500 | Republic Services Inc. | 386,010 | 1,043,175 | |||||||||
2,500 | Waste Management Inc. | 72,276 | 322,550 | |||||||||
458,286 | 1,365,725 |
Shares | Cost | Market Value | ||||||||||
Equipment and Supplies — 4.4% | ||||||||||||
8,500 | A.O. Smith Corp. | $ | 22,649 | $ | 574,685 | |||||||
14,000 | Danaher Corp. | 406,841 | 3,151,120 | |||||||||
160,000 | Flowserve Corp. | 1,998,089 | 6,209,600 | |||||||||
52,000 | Graco Inc. | 884,335 | 3,724,240 | |||||||||
18,500 | Minerals Technologies Inc. | 703,572 | 1,393,420 | |||||||||
155,000 | Mueller Industries Inc. | 2,929,910 | 6,409,250 | |||||||||
15,200 | Parker-Hannifin Corp. | 814,541 | 4,794,536 | |||||||||
7,759,937 | 26,256,851 | |||||||||||
Financial Services — 15.8% | ||||||||||||
2,700 | Alleghany Corp.† | 399,634 | 1,690,983 | |||||||||
20,000 | AllianceBernstein Holding LP | 98,414 | 799,800 | |||||||||
29,000 | American Express Co.(a) | 435,290 | 4,101,760 | |||||||||
20,500 | Ameris Bancorp | 217,542 | 1,076,455 | |||||||||
6,000 | Argo Group International Holdings Ltd. | 110,474 | 301,920 | |||||||||
5,195 | Banco Santander Chile, ADR | 29,250 | 128,992 | |||||||||
145,000 | Bank of America Corp. | 938,097 | 5,610,050 | |||||||||
12,500 | BNP Paribas SA† | 534,851 | 760,496 | |||||||||
42,000 | Interactive Brokers Group Inc., CI. A | 625,837 | 3,067,680 | |||||||||
15,000 | Jefferies Financial Group Inc. | 263,160 | 451,500 | |||||||||
13,200 | JPMorgan Chase & Co. | 256,154 | 2,009,436 | |||||||||
56,000 | Julius Baer Group Ltd. | 1,816,954 | 3,581,061 | |||||||||
23,000 | Kinnevik AB, Cl. A | 550,008 | 1,190,366 | |||||||||
75,000 | Loews Corp. | 2,830,762 | 3,846,000 | |||||||||
15,200 | M&T Bank Corp. | 1,300,083 | 2,304,472 | |||||||||
22,000 | Marsh & McLennan Cos. Inc. | 616,355 | 2,679,600 | |||||||||
12,000 | Morgan Stanley | 549,368 | 931,920 | |||||||||
8,500 | Popular Inc. | 148,460 | 597,720 | |||||||||
70,000 | SLM Corp. | 342,586 | 1,257,900 | |||||||||
125,000 | State Street Corp. | 5,702,036 | 10,501,250 | |||||||||
265,000 | Sterling Bancorp | 2,828,809 | 6,100,300 | |||||||||
6,400 | T. Rowe Price Group Inc. | 127,634 | 1,098,240 | |||||||||
307,000 | The Bank of New York Mellon Corp.(a) | 7,744,038 | 14,518,030 | |||||||||
17,700 | The Goldman Sachs Group Inc. | 2,159,241 | 5,787,900 | |||||||||
78,000 | The PNC Financial Services Group Inc.(a) | 4,096,535 | 13,681,980 | |||||||||
53,000 | Valley National Bancorp | 331,250 | 728,220 | |||||||||
120,000 | Wells Fargo & Co. | 3,393,460 | 4,688,400 | |||||||||
38,446,282 | 93,492,431 | |||||||||||
Food and Beverage — 16.4% | ||||||||||||
1,000 | Anheuser-Busch InBev SA/NV | 15,876 | 63,033 | |||||||||
227,500 | Brown-Forman Corp., Cl. A | 3,878,105 | 14,484,925 | |||||||||
34,000 | Campbell Soup Co. | 1,061,533 | 1,709,180 | |||||||||
72,000 | Coca-Cola Amatil Ltd., ADR | 230,481 | 742,320 | |||||||||
19,000 | Coca-Cola European Partners plc | 427,500 | 991,040 |
See accompanying notes to financial statements.
5
The Gabelli Equity Income Fund |
Schedule of Investments (Continued) — March 31, 2021 (Unaudited) |
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS (Continued) Food and Beverage (Continued) | ||||||||||||
10,000 | Coca-Cola Femsa SAB de CV, ADR | $ | 340,563 | $ | 462,000 | |||||||
6,000 | Constellation Brands Inc., Cl. A | 74,420 | 1,368,000 | |||||||||
45,000 | Danone SA | 1,889,188 | 3,087,133 | |||||||||
75,000 | Davide Campari-Milano NV | 252,028 | 840,122 | |||||||||
49,500 | Diageo plc, ADR | 3,063,927 | 8,128,395 | |||||||||
86,000 | Fomento Economico Mexicano SAB de CV, ADR | 2,055,532 | 6,478,380 | |||||||||
1,000 | General Mills Inc. | 26,640 | 61,320 | |||||||||
1,880,000 | Grupo Bimbo SAB de CV, Cl. A | 1,505,754 | 3,945,889 | |||||||||
93,000 | Heineken NV | 4,417,436 | 9,555,934 | |||||||||
138,500 | ITO EN Ltd. | 2,503,543 | 8,493,249 | |||||||||
21,500 | Kellogg Co. | 1,125,039 | 1,360,950 | |||||||||
4,000 | McCormick & Co. Inc., Cl. V | 137,120 | 356,480 | |||||||||
31,500 | McCormick & Co. Inc., Non-Voting | 680,896 | 2,808,540 | |||||||||
37,000 | Mondelēz International Inc., Cl. A | 666,521 | 2,165,610 | |||||||||
34,000 | Nestlé SA | 696,743 | 3,789,409 | |||||||||
56,000 | Nissin Foods Holdings Co. Ltd. | 1,726,649 | 4,152,269 | |||||||||
35,000 | PepsiCo Inc. | 2,349,455 | 4,950,750 | |||||||||
26,000 | Pernod Ricard SA | 2,544,089 | 4,879,956 | |||||||||
38,500 | Remy Cointreau SA | 2,106,466 | 7,110,960 | |||||||||
32,000 | Sapporo Holdings Ltd. | 710,589 | 662,687 | |||||||||
10,000 | The Coca-Cola Co. | 208,400 | 527,100 | |||||||||
1,000 | The Hershey Co. | 36,300 | 158,160 | |||||||||
50,000 | The Kraft Heinz Co. | 1,403,471 | 2,000,000 | |||||||||
32,000 | Yakult Honsha Co. Ltd. | 799,840 | 1,618,424 | |||||||||
36,934,104 | 96,952,215 | |||||||||||
Health Care — 4.5% | ||||||||||||
5,500 | Abbott Laboratories | 126,068 | 659,120 | |||||||||
3,000 | AbbVie Inc. | 74,560 | 324,660 | |||||||||
4,000 | Alcon Inc.† | 133,378 | 280,720 | |||||||||
75,000 | Baxter International Inc. | 1,657,103 | 6,325,500 | |||||||||
4,400 | Bio-Rad Laboratories Inc., Cl. A† | 432,651 | 2,513,148 | |||||||||
94,000 | Bristol-Myers Squibb Co. | 2,264,836 | 5,934,220 | |||||||||
70,000 | Demant A/S† | 677,525 | 2,965,199 | |||||||||
8,000 | GlaxoSmithKline plc, ADR | 327,365 | 285,520 | |||||||||
32,000 | Henry Schein Inc.† | 324,916 | 2,215,680 | |||||||||
16,000 | Merck & Co. Inc. | 296,127 | 1,233,440 | |||||||||
15,000 | Novartis AG, ADR | 731,566 | 1,282,200 | |||||||||
20,000 | Pfizer Inc. | 320,152 | 724,600 | |||||||||
45,000 | Roche Holding AG, ADR | 826,666 | 1,825,200 | |||||||||
2,400 | Zimmer Biomet Holdings Inc. | 162,539 | 384,192 | |||||||||
8,355,452 | 26,953,399 | |||||||||||
Hotels and Gaming — 0.2% | ||||||||||||
21,000 | MGM Resorts International | 253,359 | 797,790 |
Shares | Cost | Market Value | ||||||||||
1,500 | Wynn Resorts Ltd.† | $ | 71,983 | $ | 188,055 | |||||||
325,342 | 985,845 | |||||||||||
Machinery — 4.0% | ||||||||||||
6,000 | Caterpillar Inc. | 35,181 | 1,391,220 | |||||||||
54,000 | Deere & Co. | 1,855,977 | 20,203,560 | |||||||||
10,000 | Otis Worldwide Corp. | 369,540 | 684,500 | |||||||||
11,000 | Xylem Inc. | 335,144 | 1,156,980 | |||||||||
2,595,842 | 23,436,260 | |||||||||||
Metals and Mining — 2.1% | ||||||||||||
117,000 | Freeport-McMoRan Inc.† | 1,337,301 | 3,852,810 | |||||||||
140,000 | Newmont Corp. | 3,329,662 | 8,437,800 | |||||||||
4,666,963 | 12,290,610 | |||||||||||
Paper and Forest Products — 0.1% | ||||||||||||
23,000 | Svenska Cellulosa AB SCA, Cl. A† | 94,735 | 409,781 | |||||||||
Publishing — 0.0% | ||||||||||||
3,000 | Value Line Inc. | 41,976 | 84,570 | |||||||||
Real Estate Investment Trusts — 0.7% | ||||||||||||
9,285 | Indus Realty Trust Inc. | 237,685 | 558,586 | |||||||||
100,000 | Weyerhaeuser Co. | 1,566,956 | 3,560,000 | |||||||||
1,804,641 | 4,118,586 | |||||||||||
Retail — 4.7% | ||||||||||||
14,000 | Cie Financiere Richemont SA, Cl. A | 470,500 | 1,344,083 | |||||||||
30,000 | Copart Inc.† | 264,751 | 3,258,300 | |||||||||
11,000 | Costco Wholesale Corp. | 514,650 | 3,877,280 | |||||||||
92,000 | CVS Health Corp. | 3,063,886 | 6,921,160 | |||||||||
68,000 | Ingles Markets Inc., Cl. A | 1,067,481 | 4,192,200 | |||||||||
76,000 | Seven & i Holdings Co. Ltd. | 2,269,992 | 3,063,337 | |||||||||
5,800 | The Home Depot Inc. | 160,264 | 1,770,450 | |||||||||
58,000 | Walgreens Boots Alliance Inc. | 1,738,806 | 3,184,200 | |||||||||
1,000 | Walmart Inc. | 43,340 | 135,830 | |||||||||
4,500 | Weis Markets Inc. | 135,216 | 254,340 | |||||||||
9,728,886 | 28,001,180 | |||||||||||
Specialty Chemicals — 1.1% | ||||||||||||
3,500 | Albemarle Corp. | 34,885 | 511,385 | |||||||||
2,500 | Ashland Global Holdings Inc. | 58,813 | 221,925 | |||||||||
66,000 | Ferro Corp.† | 116,767 | 1,112,760 | |||||||||
8,000 | FMC Corp. | 161,197 | 884,880 | |||||||||
46,000 | H.B. Fuller Co. | 950,216 | 2,893,860 | |||||||||
2,000 | NewMarket Corp. | 7,719 | 760,320 | |||||||||
600 | Quaker Chemical Corp. | 6,478 | 146,262 | |||||||||
1,336,075 | 6,531,392 | |||||||||||
Telecommunications — 4.5% | ||||||||||||
112,000 | BCE Inc. | 2,139,395 | 5,055,680 | |||||||||
190,000 | Deutsche Telekom AG, ADR | 2,540,248 | 3,845,600 |
See accompanying notes to financial statements.
6
The Gabelli Equity Income Fund |
Schedule of Investments (Continued) — March 31, 2021 (Unaudited) |
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS (Continued) Telecommunications (Continued) | ||||||||||||
15,500 | Loral Space & Communications Inc. | $ | 427,407 | $ | 583,885 | |||||||
12,000 | Orange SA, ADR | 138,547 | 147,960 | |||||||||
12,000 | Proximus SA | 296,509 | 261,184 | |||||||||
40,000 | Telefonica SA, ADR | 152,795 | 181,200 | |||||||||
135,000 | Telephone and Data Systems Inc. | 3,611,457 | 3,099,600 | |||||||||
94,000 | TELUS Corp. | 713,431 | 1,873,420 | |||||||||
198,000 | Verizon Communications Inc.(a) | 6,963,713 | 11,513,700 | |||||||||
16,983,502 | 26,562,229 | |||||||||||
Transportation — 1.6% | ||||||||||||
103,000 | GATX Corp. | 3,216,710 | 9,552,220 | |||||||||
Wireless Communications — 0.0% | ||||||||||||
80,000 | BT Group plc, Cl. A† | 222,654 | 170,726 | |||||||||
20,000 | Turkcell Iletisim Hizmetleri A/S, ADR | 91,562 | 93,400 | |||||||||
314,216 | 264,126 | |||||||||||
TOTAL COMMON STOCKS | 209,407,553 | 592,371,402 |
Shares | Cost | Market Value | ||||||||||
WARRANTS — 0.0% Energy and Utilities: Oil — 0.0% | ||||||||||||
1,250 | Occidental Petroleum Corp., expire 08/03/27† | $ | 6,187 | $ | 14,887 | |||||||
Retail — 0.0% | ||||||||||||
28,000 | Cie Financiere Richemont SA, expire 11/22/23† | 0 | 10,665 | |||||||||
TOTAL WARRANTS | 6,187 | 25,552 | ||||||||||
TOTAL INVESTMENTS — 100.0% | $ | 209,413,740 | 592,396,954 | |||||||||
Other Assets and Liabilities (Net ) — 0.0% | 107,061 | |||||||||||
NET ASSETS — 100.0% | $ | 592,504,015 | ||||||||||
(a) | Securities, or a portion thereof, with a value of $32,926,900 were deposited with Pershing LLC. |
† | Non-income producing security. |
ADR | American Depositary Receipt |
See accompanying notes to financial statements.
7
The Gabelli Equity Income Fund
Statement of Assets and Liabilities March 31, 2021 (Unaudited) | ||||
Assets: | ||||
Investments, at value (cost $209,413,740) | $ | 592,396,954 | ||
Foreign currency, at value (cost $11,363) | 11,243 | |||
Cash | 12,848 | |||
Deposit at brokers | 586,943 | |||
Receivable for investments sold | 1,099,553 | |||
Receivable for Fund shares sold | 745,017 | |||
Dividends receivable | 1,444,168 | |||
Prepaid expenses | 40,994 | |||
Total Assets | 596,337,720 | |||
Liabilities: | ||||
Line of credit payable | 2,155,000 | |||
Payable for Fund shares redeemed | 747,704 | |||
Payable for investment advisory fees | 508,143 | |||
Payable for distribution fees | 132,367 | |||
Payable for accounting fees | 7,500 | |||
Other accrued expenses | 282,991 | |||
Total Liabilities | 3,833,705 | |||
Net Assets | ||||
(applicable to 52,581,879 shares outstanding) | $ | 592,504,015 | ||
Net Assets Consist of: | ||||
Paid-in capital | $ | 192,897,296 | ||
Total distributable earnings | 399,606,719 | |||
Net Assets | $ | 592,504,015 | ||
Shares of Capital Stock, each at $0.001 par value: | ||||
Class AAA: | ||||
Net Asset Value, offering, and redemption price per share ($303,939,374 ÷ 25,622,336 shares outstanding; 150,000,000 shares authorized) | $ | 11.86 | ||
Class A: | ||||
Net Asset Value and redemption price per share ($92,322,630 ÷ 7,884,872 shares outstanding; 50,000,000 shares authorized) | $ | 11.71 | ||
Maximum offering price per share (NAV ÷ 0.9425, based on maximum sales charge of 5.75% of the offering price) | $ | 12.42 | ||
Class C: | ||||
Net Asset Value and offering price per share ($55,483,799 ÷ 8,464,930 shares outstanding; 50,000,000 shares authorized) | $ | 6.55 | (a) | |
Class I: | ||||
Net Asset Value, offering, and redemption price per share ($140,758,212 ÷ 10,609,741 shares outstanding; 50,000,000 shares authorized) | $ | 13.27 |
(a) | Redemption price varies based on the length of time held. |
Statement of Operations For the Six Months Ended March 31, 2021 (Unaudited) | ||||
Investment Income: | ||||
Dividends (net of foreign withholding taxes of $100,580) | $ | 5,124,847 | ||
Interest | 703 | |||
Total Investment Income | 5,125,550 | |||
Expenses: | ||||
Investment advisory fees | 2,811,769 | |||
Distribution fees - Class AAA | 364,028 | |||
Distribution fees - Class A | 101,659 | |||
Distribution fees - Class C | 275,228 | |||
Shareholder services fees | 220,534 | |||
Shareholder communication expenses | 76,666 | |||
Custodian fees | 59,604 | |||
Registration expenses | 32,320 | |||
Legal and audit fees | 29,432 | |||
Accounting fees | 22,500 | |||
Directors’ fees | 22,267 | |||
Interest expense | 17,389 | |||
Miscellaneous expenses | 28,040 | |||
Total Expenses | 4,061,436 | |||
Less: | ||||
Expenses paid indirectly by broker (See Note 6) | (2,554 | ) | ||
Net Expenses | 4,058,882 | |||
Net Investment Income | 1,066,668 | |||
Net Realized and Unrealized Gain/(Loss) on Investments, Securities Sold Short, and Foreign Currency: | ||||
Net realized gain on investments | 51,181,777 | |||
Net realized gain on securities sold short | 291,686 | |||
Net realized gain on foreign currency transactions | 1,486 | |||
Net realized gain on investments and foreign currency transactions | 51,474,949 | |||
Net change in unrealized appreciation/depreciation: | ||||
on investments | 70,940,338 | |||
on foreign currency translations | (6,871 | ) | ||
Net change in unrealized appreciation/ depreciation on investments and foreign currency translations | 70,933,467 | |||
Net Realized and Unrealized Gain/(Loss) on Investments, Securities Sold Short, and Foreign Currency | 122,408,416 | |||
Net Increase in Net Assets Resulting from Operations | $ | 123,475,084 |
See accompanying notes to financial statements.
8
The Gabelli Equity Income Fund
Statement of Changes in Net Assets | ||||||||
Six Months Ended March 31, 2021(Unaudited) | Year Ended September 30, 2020 | |||||||
Operations: | ||||||||
Net investment income | $ | 1,066,668 | $ | 4,517,675 | ||||
Net realized gain on investments, securities sold short, and foreign currency transactions | 51,474,949 | 137,694,507 | ||||||
Net change in unrealized appreciation/depreciation on investments and foreign currency translations | 70,933,467 | (141,908,799 | ) | |||||
Net Increase in Net Assets Resulting from Operations | 123,475,084 | 303,383 | ||||||
Distributions to Shareholders: | ||||||||
Accumulated earnings | ||||||||
Class AAA | (15,668,716 | )* | (60,530,136 | ) | ||||
Class A | (4,482,168 | )* | (14,287,953 | ) | ||||
Class C | (5,211,622 | )* | (19,964,287 | ) | ||||
Class I | (6,500,189 | )* | (29,113,541 | ) | ||||
(31,862,695 | ) | (123,895,917 | ) | |||||
Return of capital | ||||||||
Class AAA | — | (22,602,669 | ) | |||||
Class A | — | (6,706,415 | ) | |||||
Class C | — | (6,207,826 | ) | |||||
Class I | — | (8,566,767 | ) | |||||
— | (44,083,677 | ) | ||||||
Total Distributions to Shareholders | (31,862,695 | ) | (167,979,594 | ) | ||||
Capital Share Transactions: | ||||||||
Class AAA | (17,572,667 | ) | (21,606,608 | ) | ||||
Class A | 10,058,102 | 16,928,786 | ||||||
Class C | (4,814,879 | ) | (20,000,786 | ) | ||||
Class I | (13,468,297 | ) | (40,684,434 | ) | ||||
Net Decrease in Net Assets from Capital Share Transactions | (25,797,741 | ) | (65,363,042 | ) | ||||
Redemption Fees | 103 | 1,452 | ||||||
Net Increase/(Decrease) in Net Assets | 65,814,751 | (233,037,801 | ) | |||||
Net Assets: | ||||||||
Beginning of year | 526,689,264 | 759,727,065 | ||||||
End of period | $ | 592,504,015 | $ | 526,689,264 |
* | Based on year to date book income. Amounts are subject to change and recharacterization at year end. |
See accompanying notes to financial statements.
9
The Gabelli Equity Income Fund Financial Highlights | |||||||||||||||||||||||||||||||||||||||||||||
Selected data for a share of capital stock outstanding throughout each period:
| |||||||||||||||||||||||||||||||||||||||||||||
Income (Loss) from Investment Operations | Distributions | Ratios to Average Net Assets/ Supplemental Data | |||||||||||||||||||||||||||||||||||||||||||
Year Ended September 30 | Net Asset Value, Beginning of Year | Net Investment Income (Loss)(a) | Net Realized and Unrealized Gain/(Loss) on Investments | Total from Investment Operations | Net Investment Income | Net Realized Gain on Investments | Return of Capital | Total Distributions | Redemption Fees (a)(b) | Net Asset Value, End of Period | Total Return † | Net Assets End of period (in 000’s) | Net Investment Income (Loss) | Operating Expenses(c)(d) | Portfolio Turnover Rate | ||||||||||||||||||||||||||||||
Class AAA | |||||||||||||||||||||||||||||||||||||||||||||
2021(e) | $10.04 | $0.02 | $2.40 | $2.42 | $(0.50 | )* | $(0.10 | )* | — | $(0.60 | ) | $0.00 | $11.86 | 24.72 | % | $303,939 | 0.39 | %(f) | 1.43 | %(f) | 1 | % | |||||||||||||||||||||||
2020 | 13.61 | 0.10 | (g) | (0.02 | ) | 0.08 | (0.11 | ) | (2.39 | ) | $(1.15 | ) | (3.65 | ) | 0.00 | 10.04 | 0.93 | 272,980 | 0.75 | (g) | 1.45 | 0 | (h) | ||||||||||||||||||||||
2019 | 19.09 | 0.13 | (0.38 | ) | (0.25 | ) | (0.15 | ) | (3.72 | ) | (1.36 | ) | (5.23 | ) | 0.00 | 13.61 | (1.09 | ) | 377,589 | 0.76 | 1.45 | 1 | |||||||||||||||||||||||
2018 | 22.84 | 0.19 | 1.34 | 1.53 | (0.20 | ) | (3.68 | ) | (1.40 | ) | (5.28 | ) | 0.00 | 19.09 | 6.77 | 521,485 | 0.82 | 1.40 | 0 | (h) | |||||||||||||||||||||||||
2017 | 24.06 | 0.24 | 2.97 | 3.21 | (0.25 | ) | (3.33 | ) | (0.85 | ) | (4.43 | ) | 0.00 | 22.84 | 13.91 | 662,696 | 0.97 | 1.39 | 1 | ||||||||||||||||||||||||||
2016 | 25.08 | 0.26 | 2.72 | 2.98 | (0.26 | ) | (2.35 | ) | (1.39 | ) | (4.00 | ) | 0.00 | 24.06 | 11.31 | 833,154 | 0.99 | 1.39 | 1 | ||||||||||||||||||||||||||
Class A | |||||||||||||||||||||||||||||||||||||||||||||
2021(e) | $9.92 | $0.02 | $2.37 | $2.39 | $(0.50 | )* | $(0.10 | )* | — | $(0.60 | ) | $0.00 | $11.71 | 24.71 | % | $92,323 | 0.39 | %(f) | 1.43 | %(f) | 1 | % | |||||||||||||||||||||||
2020 | 13.49 | 0.10 | (g) | (0.02 | ) | 0.08 | (0.11 | ) | (2.39 | ) | $(1.15 | ) | (3.65 | ) | 0.00 | 9.92 | 0.95 | 69,201 | 0.75 | (g) | 1.45 | 0 | (h) | ||||||||||||||||||||||
2019 | 18.97 | 0.13 | (0.38 | ) | (0.25 | ) | (0.15 | ) | (3.72 | ) | (1.36 | ) | (5.23 | ) | 0.00 | 13.49 | (1.08 | ) | 72,778 | 0.76 | 1.45 | 1 | |||||||||||||||||||||||
2018 | 22.73 | 0.19 | 1.33 | 1.52 | (0.20 | ) | (3.68 | ) | (1.40 | ) | (5.28 | ) | 0.00 | 18.97 | 6.76 | 86,332 | 0.82 | 1.40 | 0 | (h) | |||||||||||||||||||||||||
2017 | 23.96 | 0.24 | 2.96 | 3.20 | (0.25 | ) | (3.33 | ) | (0.85 | ) | (4.43 | ) | 0.00 | 22.73 | 13.92 | 115,702 | 0.96 | 1.39 | 1 | ||||||||||||||||||||||||||
2016 | 24.99 | 0.26 | 2.71 | 2.97 | (0.26 | ) | (2.35 | ) | (1.39 | ) | (4.00 | ) | 0.00 | 23.96 | 11.31 | 160,593 | 0.99 | 1.39 | 1 | ||||||||||||||||||||||||||
Class C | |||||||||||||||||||||||||||||||||||||||||||||
2021(e) | $5.81 | $(0.01 | ) | $1.35 | $1.34 | $(0.50 | )* | $(0.10 | )* | — | $(0.60 | ) | $0.00 | $6.55 | 24.09 | % | $55,484 | (0.36 | %)(f) | 2.18 | %(f) | 1 | % | ||||||||||||||||||||||
2020 | 9.48 | 0.00 | (b)(g) | (0.02 | ) | (0.02 | ) | (0.06 | ) | (2.39 | ) | $(1.20 | ) | (3.65 | ) | 0.00 | 5.81 | 0.27 | 53,605 | 0.00 | (g)(i) | 2.20 | 0 | (h) | |||||||||||||||||||||
2019 | 15.03 | (0.00 | )(b) | (0.32 | ) | (0.32 | ) | (0.05 | ) | (3.72 | ) | (1.46 | ) | (5.23 | ) | 0.00 | 9.48 | (1.87 | ) | 100,467 | (0.00 | )(i) | 2.20 | 1 | |||||||||||||||||||||
2018 | 19.17 | 0.01 | 1.13 | 1.14 | (0.07 | ) | (3.68 | ) | (1.53 | ) | (5.28 | ) | 0.00 | 15.03 | 6.02 | 176,167 | 0.07 | 2.15 | 0 | (h) | |||||||||||||||||||||||||
2017 | 20.99 | 0.05 | 2.56 | 2.61 | (0.10 | ) | (3.33 | ) | (1.00 | ) | (4.43 | ) | 0.00 | 19.17 | 13.04 | 246,690 | 0.22 | 2.14 | 1 | ||||||||||||||||||||||||||
2016 | 22.48 | 0.06 | 2.45 | 2.51 | (0.09 | ) | (2.35 | ) | (1.56 | ) | (4.00 | ) | 0.00 | 20.99 | 10.51 | 306,349 | 0.24 | 2.14 | 1 | ||||||||||||||||||||||||||
Class I | |||||||||||||||||||||||||||||||||||||||||||||
2021(e) | $11.15 | $0.04 | $2.68 | $2.72 | $(0.50 | )* | $(0.10 | )* | — | $(0.60 | ) | $0.00 | $13.27 | 24.95 | % | $140,758 | 0.64 | %(f) | 1.18 | %(f) | 1 | % | |||||||||||||||||||||||
2020 | 14.68 | 0.14 | (g) | (0.02 | ) | 0.12 | (0.14 | ) | (2.39 | ) | $(1.12 | ) | (3.65 | ) | 0.00 | 11.15 | 1.14 | 130,903 | 1.00 | (g) | 1.20 | 0 | (h) | ||||||||||||||||||||||
2019 | 20.13 | 0.19 | (0.41 | ) | (0.22 | ) | (0.19 | ) | (3.72 | ) | (1.32 | ) | (5.23 | ) | 0.00 | 14.68 | (0.86 | ) | 208,893 | 1.00 | 1.20 | 1 | |||||||||||||||||||||||
2018 | 23.75 | 0.26 | 1.40 | 1.66 | (0.26 | ) | (3.68 | ) | (1.34 | ) | (5.28 | ) | 0.00 | 20.13 | 7.07 | 357,812 | 1.08 | 1.15 | 0 | (h) | |||||||||||||||||||||||||
2017 | 24.80 | 0.31 | 3.07 | 3.38 | (0.31 | ) | (3.33 | ) | (0.79 | ) | (4.43 | ) | 0.00 | 23.75 | 14.19 | 443,912 | 1.21 | 1.14 | 1 | ||||||||||||||||||||||||||
2016 | 25.68 | 0.33 | 2.79 | 3.12 | (0.32 | ) | (2.35 | ) | (1.33 | ) | (4.00 | ) | 0.00 | 24.80 | 11.59 | 484,305 | 1.24 | 1.14 | 1 |
† | 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 the applicable sales charges. Total return for a period of less than one year is not annualized. |
* | Based on year to date book income. Amounts are subject to change and recharacterization at year end. |
(a) | Per share amounts have been calculated using the average shares outstanding method. |
(b) | Amount represents less than $0.005 per share. |
(c) | The Fund incurred interest expense during the six months ended March 31, 2021 and the fiscal years ended September 30, 2020, 2019, 2018, and 2017. If interest expense had not been incurred, the ratio of operating expenses to average net assets would have been 1.42%, 1.42%, 1.40%, 1.39%, and 1.38% (Class AAA and Class A), 2.17%, 2.17%, 2.15%, 2.14%, and 2.13% (Class C), and 1.17%, 1.17%, 1.15%, 1.14%, and 1.13% (Class I), respectively. For the fiscal year ended September 30, 2016 the effect of interest expense was minimal. |
(d) | The Fund received credits from a designated broker who agreed to pay certain Fund operating expenses. For the six months ended March 31, 2021 and the fiscal years ended September 30, 2020, 2019, 2018, 2017, and 2016, there was no impact on the expense ratios. |
(e) | For the six months ended March 31, 2021, unaudited. |
(f) | Annualized. |
(g) | Includes income resulting from special dividends. Without these dividends, the per share income (loss) amounts would have been $0.09 (Class AAA and Class A), $(0.01) (Class C), and $0.13 (Class I), respectively, and the net investment income (loss) ratio would have been 0.68% (Class AAA and Class A), (0.07)% (Class C), and 0.93% (Class I), respectively. |
(h) | Amount represents less than 0.5%. |
(i) | Amount represents less than 0.005%. |
See accompanying notes to financial statements.
10
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 four 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.
The global outbreak of the novel coronavirus disease, known as COVID-19, has caused adverse effects on many companies, sectors, nations, regions and the markets in general, and may continue for an unpredictable duration. The effects of this pandemic may materially impact the value and performance of the Fund, its ability to buy and sell fund investments at appropriate valuations, and its ability to achieve its investment objectives.
New Accounting Pronouncements. To improve the effectiveness of fair value disclosure requirements, the Financial Accounting Standards Board issued Accounting Standard Update (ASU) 2018-13, Fair Value Measurement Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement (ASU 2018-13), which added, removed, and modified certain aspects relating to fair value disclosure. Management has fully adopted the ASU 2018-13 updates in these financial statements.
In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in the ASU provides optional temporary financial reporting relief from the effect of certain types of contract modifications due to the planned discontinuation of the London Interbank Offered Rate (LIBOR) and other interbank-offered based reference rates as of the end of 2021. The ASU is effective for certain reference rate-related contract modifications that occur through December 31, 2022. Management has reviewed the requirements and believes the adoption of this ASU will not have a material impact on the 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).
11
The Gabelli Equity Income Fund Notes to Financial Statements (Unaudited) (Continued) |
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 obligations 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 securities are valued using the closing bid price, 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. 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. OTC futures and options on futures for which market quotations are readily available will be valued by quotations received from a pricing service or, if no quotations are available from a pricing service, by quotations obtained from one or more dealers in the instrument in question by the Adviser.
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.
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 and other financial instruments by inputs used to value the Fund’s investments as of March 31, 2021 is as follows:
Valuation Inputs | |||
Level 1 Quoted Prices | Total Market Value at 3/31/21 | ||
INVESTMENTS IN SECURITIES: | |||
ASSETS (Market Value): | |||
Common Stocks: (a) | $592,371,402 | $592,371,402 | |
Warrants (a) | 25,552 | 25,552 | |
TOTAL INVESTMENTS IN SECURITIES – ASSETS | $592,396,954 | $592,396,954 |
(a) Please refer to the Schedule of Investments for the industry classifications of these portfolio holdings.
The Fund did not have transfers into or out of Level 3 during the six months ended March 31, 2021.
12
The Gabelli Equity Income 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 are 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 or preferred equities, warrants, options, rights, or 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. When fair valuing a security, factors to consider include 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 backtesting the prices realized in subsequent trades of these fair valued securities to fair values previously recognized.
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. The Net realized gain on securities sold short, if any, is included on the Statement of Operations. At March 31, 2021, there were no short sales.
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
13
The Gabelli Equity Income Fund Notes to Financial Statements (Unaudited) (Continued) |
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 the sale of securities eligible for trading on national securities exchanges or in the over-the-counter markets. Restricted securities may sell at a price lower than similar securities that are not subject to restrictions on resale. Securities freely saleable among qualified institutional investors under special rules adopted by the SEC may be treated as liquid if they satisfy liquidity standards established by the Board. The continued liquidity of such securities is not as well assured as that of publicly traded securities, and accordingly the Board will monitor their liquidity. At March 31, 2021, 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 or amortized to the earliest call date, if applicable. 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. The characterization of distributions to shareholders is based on income and capital gains as determined in accordance with federal
14
The Gabelli Equity Income Fund Notes to Financial Statements (Unaudited) (Continued) |
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 fiscal year ended September 30, 2020 was as follows:
Distributions paid from: | ||||
Ordinariy income | $ | 5,482,409 | ||
Net long term capital gains | 136,799,128 | |||
Return of capital | 44,083,677 | |||
Total distributions paid* | $ | 186,365,214 |
* 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, they are considered ordinary income or long term capital gains. 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 following summarizes the tax cost of investments and the related net unrealized appreciation at March 31, 2021:
Cost | Gross Unrealized Appreciation | Gross | Net Unrealized Appreciation | ||||||||
Investments | $211,306,142 | $383,898,135 | $(2,807,323) | $381,090,812 |
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. During the six months ended March 31, 2021, the Fund did not incur any income tax, interest, or penalties. As of March 31, 2021, 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
15
The Gabelli Equity Income Fund Notes to Financial Statements (Unaudited) (Continued) |
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.
4. Distribution Plan. The Fund’s Board has adopted a distribution 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, 2021, other than short term securities and U.S. Government obligations, aggregated $5,825,026 and $78,623,749, respectively.
6. Transactions with Affiliates and Other Arrangements. During the six months ended March 31, 2021, the Fund paid $6,609 in brokerage commissions on security trades to G.research, LLC, an affiliate of the Adviser. Additionally, the Distributor retained a total of $17,480 from investors representing commissions (sales charges and underwriting fees) on sales and redemptions of Fund shares.
During the six months ended March 31, 2021, 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 $2,554.
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, 2021, the Fund accrued $22,500 in connection with the cost of computing the Fund’s NAV.
The Corporation pays retainer and per meeting fees to Directors not affiliated with the Adviser, plus specified amounts to the Lead Director and Audit Committee Chairman. Directors are also reimbursed for out of pocket expenses incurred in attending meetings. Directors who are directors or employees of the Adviser or an affiliated company receive no compensation or expense reimbursement from the Corporation.
7. Line of Credit. The Fund participates in an unsecured line of credit, which expires on March 2, 2022 and may be renewed annually, of up to $75,000,000 under which it may borrow up to 10% of its net assets from the custodian for temporary borrowing purposes. Borrowings under this arrangement bear interest at a floating rate equal to the higher of the Overnight Federal Funds Rate plus 135 basis points or the Overnight Bank Funding Rate plus 135 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, 2021, there was $2,155,000 outstanding under the line of credit.
16
The Gabelli Equity Income Fund Notes to Financial Statements (Unaudited) (Continued) |
The average daily amount of borrowings outstanding under the line of credit during the six months ended March 31, 2021 was $1,802,049 with a weighted average interest rate of 1.34%. The maximum amount borrowed at any time during the six months ended March 31, 2021 was $18,892,000.
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%. 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, 2021 and the fiscal year ended September 30, 2020, 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, 2021 (Unaudited) | Year Ended September 30, 2020 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Class AAA | ||||||||||||||||
Shares sold | 395,690 | $ | 4,413,014 | 517,283 | $ | 6,576,297 | ||||||||||
Shares issued upon reinvestment of distributions | 1,384,531 | 15,221,372 | 7,517,054 | 80,737,011 | ||||||||||||
Shares redeemed | (3,348,448 | ) | (37,207,053 | ) | (8,582,075 | ) | (108,919,916 | ) | ||||||||
Net decrease | (1,568,227 | ) | $ | (17,572,667 | ) | (547,738 | ) | $ | (21,606,608 | ) | ||||||
Class A | ||||||||||||||||
Shares sold | 1,748,114 | $ | 19,182,904 | 2,531,411 | $ | 32,538,086 | ||||||||||
Shares issued upon reinvestment of distributions | 380,184 | 4,144,735 | 1,830,657 | 19,372,951 | ||||||||||||
Shares redeemed | (1,221,601 | ) | (13,269,537 | ) | (2,778,776 | ) | (34,982,251 | ) | ||||||||
Net increase | 906,697 | $ | 10,058,102 | 1,583,292 | $ | 16,928,786 | ||||||||||
Class C | ||||||||||||||||
Shares sold | 985,600 | $ | 6,236,656 | 1,439,486 | $ | 12,895,728 | ||||||||||
Shares issued upon reinvestment of distributions | 828,035 | 5,129,437 | 3,855,885 | 25,043,742 | ||||||||||||
Shares redeemed | (2,582,612 | ) | (16,180,972 | ) | (6,657,072 | ) | (57,940,256 | ) | ||||||||
Net decrease | (768,977 | ) | $ | (4,814,879 | ) | (1,361,701 | ) | $ | (20,000,786 | ) | ||||||
Class I | ||||||||||||||||
Shares sold | 671,561 | $ | 8,452,896 | 1,325,390 | $ | 18,231,196 | ||||||||||
Shares issued upon reinvestment of distributions | 523,736 | 6,419,061 | 3,055,726 | 36,304,618 | ||||||||||||
Shares redeemed | (2,323,689 | ) | (28,340,254 | ) | (6,873,418 | ) | (95,220,248 | ) | ||||||||
Net decrease | (1,128,392 | ) | $ | (13,468,297 | ) | (2,492,302 | ) | $ | (40,684,434 | ) |
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.
17
The Gabelli Equity Income Fund Notes to Financial Statements (Unaudited) (Continued) |
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.
18
The Gabelli Equity Income Fund |
Board Consideration and Re-Approval of Advisory Agreement (Unaudited) |
During the six months ended March 31, 2021, 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 supervisory, 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 (as of December 31, 2020) of the Fund against a peer group of eight other comparable funds prepared by the Adviser (the “Adviser Peer Group”) and against a peer group prepared by Broadridge (the “Broadridge Performance Peer Group”) consisting of all retail and institutional equity income funds, regardless of asset size or primary channel of distribution, as represented by the Lipper Equity Income Index. The Independent Board Members noted that the Fund’s performance was in the first quartile for the one year period, the third quartile for the three year period, and the fourth quartile for the five year period, as measured against the Adviser Peer Group. Against the Broadridge Performance Peer Group, the Independent Board Members noted that the Fund’s performance was in the second quintile for the one year period and the fourth quintile for the three year and five year periods. The Independent Board Members discussed the reasons for the Fund’s underperformance and the steps the Adviser was taking to improve the Fund’s performance.
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 Adviser Peer Group and a peer group of nineteen other equity income funds selected by Broadridge 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 ratio was above average within this group. The Independent Board Members also noted that the management fee structure was the same as that in effect for most of the Gabelli funds. The Independent Board Members were presented with,
19
The Gabelli Equity Income Fund |
Board Consideration and Re-Approval of Advisory Agreement (Unaudited) (Continued) |
but did not consider to be material to their decision, various information comparing the advisory fee with the fee for other types of accounts managed by the Adviser.
Conclusions. The Independent Board Members concluded that the Fund enjoyed highly experienced portfolio management services and good ancillary services. The Independent Board Members noted the reasons for the Fund’s underperformance and the steps the Adviser was taking to improve performance and indicated that they would continue to evaluate the Fund. The Independent Board Members also concluded that the Fund’s expense ratios and the profitability to the Adviser of managing the Fund were acceptable and that economies of scale were not a significant factor in their thinking at this time. The Independent Board Members did not view the potential profitability of ancillary services as material to their decision. On the basis of the foregoing and without assigning particular weight to any single conclusion, the Independent Board Members determined to recommend continuation of the investment management 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.
20
Gabelli Funds and Your Personal Privacy
Who are we?
The Gabelli Funds are investment companies registered with the Securities and Exchange Commission under the Investment Company Act of 1940. We are managed by Gabelli Funds, LLC, which is affiliated with GAMCO Investors, Inc., a publicly held company with 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 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 Executive Chairman 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
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Net Asset Value per share available daily by calling 800-GABELLI after 7:00 P.M. | |
BOARD OF DIRECTORS Mario J. Gabelli, CFA | Salvatore J. Zizza |
Chairman and | Chairman, |
Chief Executive Officer, | Zizza & Associates Corp. |
GAMCO Investors, Inc. Executive Chairman, | OFFICERS |
Associated Capital Group, Inc. | Bruce N. Alpert |
President | |
Elizabeth C. Bogan | |
Senior Lecturer, | John C. Ball |
Princeton University | Treasurer |
Anthony J. Colavita | Peter Goldstein |
President, | Secretary |
Anthony J. Colavita, P.C. | Richard J. Walz |
Chief Compliance Officer | |
Vincent D. Enright | |
Former Senior Vice | DISTRIBUTOR |
President and Chief | G.distributors, LLC |
Financial Officer, | |
KeySpan Corp. | |
CUSTODIAN | |
John D. Gabelli | State Street Bank and Trust |
Senior Vice President, | Company |
G.research, LLC | |
TRANSFER AGENT AND | |
Robert J. Morrissey | DIVIDEND DISBURSING AGENT |
Partner, Morrissey, Hawkins & Lynch | DST Asset Manager Solutions, Inc. |
Kuni Nakamura | LEGAL COUNSEL |
President, | Skadden, Arps, Slate, Meagher & |
Advanced Polymer, Inc. | Flom LLP |
Anthonie C. van Ekris BALMAC International, Inc.
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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. | |
GAB444Q121SR |
The Gabelli Small Cap Growth Fund
Semiannual Report — March 31, 2021
To Our Shareholders,
For the six months ended March 31, 2021, the net asset value (NAV) total return per Class AAA Share of The Gabelli Small Cap Growth Fund was 37.7% compared with a total return of 55.3% for the Standard & Poor’s (S&P) SmallCap 600 Index. Other classes of shares are available. See page 2 for performance information for all classes.
Enclosed are the financial statements, including the schedule of investments, as of March 31, 2021.
As permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s annual and semiannual shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Fund’s website (www.gabelli.com), and you will be notified by mail each time a report is posted and provided with a website link to access the report. If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. To elect to receive all future reports on paper free of charge, please contact your financial intermediary, or, if you invest directly with the Fund, you may call 800-422-3554 or send an email request to info@gabelli.com. |
Comparative Results
Average Annual Returns through March 31, 2021 (a)(b) (Unaudited)
Total returns and average annual returns reflect changes in share price, reinvestment of distributions, and are net of expenses. Performance for periods of less than one year is not annualized.
Six Months | 1 Year | 5 Year | 10 Year | 15 Year | Since Inception (10/22/91) | |||||||||||||||||||
Class AAA (GABSX) | 37.71 | % | 79.50 | % | 12.27 | % | 10.22 | % | 9.16 | % | 12.36 | % | ||||||||||||
S&P SmallCap 600 Index (c) | 55.26 | 95.33 | 15.60 | 12.97 | 9.78 | N/A | ||||||||||||||||||
Lipper Small-Cap Core Funds Average (d) | 50.98 | 91.51 | 14.45 | 10.86 | 8.53 | N/A | ||||||||||||||||||
Class A (GCASX) (e) | 37.73 | 79.51 | 12.27 | 10.22 | 9.16 | 12.36 | ||||||||||||||||||
With sales charge (f) | 29.81 | 69.19 | 10.94 | 9.57 | 8.73 | 12.13 | ||||||||||||||||||
Class C (GCCSX) (e) | 37.21 | 78.21 | 11.43 | 9.40 | 8.35 | 11.87 | ||||||||||||||||||
With contingent deferred sales charge (g) | 36.21 | 77.21 | 11.43 | 9.40 | 8.35 | 11.87 | ||||||||||||||||||
Class I (GACIX) (e) | 37.90 | 79.97 | 12.55 | 10.50 | 9.41 | 12.48 |
(a) | The Fund imposes a 2% redemption fee on shares sold or exchanged within seven days of purchase. |
(b) | The Fund’s fiscal year ends September 30. |
(c) | The S&P SmallCap 600 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. The inception date of the index is December 31, 1994. |
(d) | The Lipper Small-Cap Core Funds Average reflects the average performance of mutual funds classified in this particular category. Dividends are considered reinvested. You cannot invest directly in an index. The inception date of the index is December 31, 1991. |
(e) | 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. |
(f) | Performance results include the effect of the maximum 5.75% sales charge at the beginning of the period. |
(g) | Assuming payment of the 1% maximum contingent deferred sales charge imposed on redemptions made within one year of purchase. |
In the current prospectuses dated January 28, 2021, the expense ratios for Class AAA, A, C, and I Shares are 1.44%, 1.44%, 2.19%, and 1.19%, respectively. See page 10 for the expense ratios for the six months ended March 31, 2021. Class AAA and Class I Shares have no sales charge. The maximum sales charge for Class A Shares, and Class C Shares is 5.75% and 1.00%, respectively.
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. Investors should carefully consider the investment objectives, risks, sales 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.
Returns represent past performance and do not guarantee future results. Investment returns and the principal value of an investment will fluctuate. When shares are redeemed, they may be worth more or less than their original cost. 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.
2
The Gabelli Small Cap Growth Fund | |
Disclosure of Fund Expenses (Unaudited) | |
For the Six Month Period from October 1, 2020 through March 31, 2021 | 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 10/01/20 | Ending Account Value 03/31/21 | Annualized Expense Ratio | Expenses Paid During Period* | |
The Gabelli Small Cap Growth Fund | ||||
Actual Fund Return | ||||
Class AAA | $1,000.00 | $1,377.10 | 1.39% | $ 8.24 |
Class A | $1,000.00 | $1,377.30 | 1.39% | $ 8.24 |
Class C | $1,000.00 | $1,372.10 | 2.14% | $12.66 |
Class I | $1,000.00 | $1,379.00 | 1.14% | $ 6.76 |
Hypothetical 5% Return | ||||
Class AAA | $1,000.00 | $1,018.00 | 1.39% | $ 6.99 |
Class A | $1,000.00 | $1,018.00 | 1.39% | $ 6.99 |
Class C | $1,000.00 | $1,014.26 | 2.14% | $10.75 |
Class I | $1,000.00 | $1,019.25 | 1.14% | $ 5.74 |
* | Expenses are equal to the Fund’s annualized expense ratio for the last six months multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half year (182 days), then divided by 365. |
3
Summary of Portfolio Holdings (Unaudited)
The following table presents portfolio holdings as a percent of net assets as of March 31, 2021:
The Gabelli Small Cap Growth Fund
Equipment and Supplies | 15.0 | % | ||
Diversified Industrial | 10.9 | % | ||
Building and Construction | 6.7 | % | ||
Food and Beverage | 6.4 | % | ||
Retail | 5.4 | % | ||
Health Care | 5.2 | % | ||
Hotels and Gaming | 4.5 | % | ||
Financial Services | 4.3 | % | ||
Automotive: Parts and Accessories | 4.3 | % | ||
Specialty Chemicals | 3.5 | % | ||
Aviation: Parts and Services | 3.5 | % | ||
Business Services | 3.2 | % | ||
Machinery | 3.0 | % | ||
Consumer Products | 2.6 | % | ||
Real Estate | 2.5 | % | ||
Energy and Utilities | 2.3 | % | ||
Computer Software and Services | 2.0 | % | ||
Electronics | 2.0 | % | ||
Broadcasting | 2.0 | % | ||
Transportation | 1.9 | % | ||
Entertainment | 1.4 | % |
Manufactured Housing and Recreational Vehicles | 1.3 | % | ||
Aerospace | 1.1 | % | ||
Consumer Services | 1.0 | % | ||
Telecommunications | 0.9 | % | ||
Publishing | 0.9 | % | ||
Cable | 0.7 | % | ||
Environmental Services | 0.4 | % | ||
Home Furnishings | 0.4 | % | ||
Automotive | 0.2 | % | ||
Closed-End Funds | 0.2 | % | ||
Miscellaneous Investments | 0.2 | % | ||
Wireless Communications | 0.1 | % | ||
Communications Equipment | 0.1 | % | ||
Metals and Mining | 0.0 | %* | ||
Agriculture | 0.0 | %* | ||
Other Assets and Liabilities (Net) | (0.1 | )% | ||
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-PORT. 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-PORT 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.
4
The Gabelli Small Cap Growth Fund |
Summary Schedule of Investments — March 31, 2021 (Unaudited) |
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS* — 99.5% | ||||||||||||
Aerospace — 1.1% | ||||||||||||
451,000 | Aerojet Rocketdyne Holdings Inc. | $ | 1,589,054 | $ | 21,178,960 | |||||||
60,000 | Various Securities | 794,550 | 1,279,400 | |||||||||
2,383,604 | 22,458,360 | |||||||||||
Agriculture — 0.0% | ||||||||||||
30,000 | Various Securities | 417,194 | 430,080 | |||||||||
Automotive — 0.2% | ||||||||||||
104,200 | Various Securities | 631,404 | 4,079,704 | |||||||||
Automotive: Parts and Accessories — 4.1% | ||||||||||||
1,110,000 | Dana Inc. | 9,031,850 | 27,006,300 | |||||||||
848,000 | Freni Brembo SpA† | 1,568,167 | 10,561,055 | |||||||||
244,000 | Strattec Security Corp.†(a) | 4,677,938 | 11,443,600 | |||||||||
1,235,422 | Various Securities | 7,955,684 | 30,500,493 | |||||||||
23,233,639 | 79,511,448 | |||||||||||
Aviation: Parts and Services — 3.5% | ||||||||||||
679,600 | Kaman Corp. | 10,234,048 | 34,856,684 | |||||||||
3,000,000 | Signature Aviation plc† | 6,849,866 | 16,721,039 | |||||||||
236,200 | Various Securities | 3,016,154 | 16,864,440 | |||||||||
20,100,068 | 68,442,163 | |||||||||||
Broadcasting — 2.0% | ||||||||||||
2,144,002 | Various Securities | 12,698,399 | 38,326,867 | |||||||||
Building and Construction — 6.7% | ||||||||||||
359,500 | Herc Holdings Inc.† | 11,968,511 | 36,428,135 | |||||||||
390,000 | Lennar Corp., Cl. B | 9,481,128 | 32,112,600 | |||||||||
2,700 | NVR Inc.† | 1,908,453 | 12,719,511 | |||||||||
834,160 | Various Securities | 10,969,051 | 48,965,439 | |||||||||
34,327,143 | 130,225,685 | |||||||||||
Business Services — 3.2% | ||||||||||||
199,000 | IAA Inc.† | 1,619,256 | 10,972,860 | |||||||||
350,000 | The Interpublic Group of Companies Inc. | 1,483,114 | 10,220,000 | |||||||||
1,640,000 | Trans-Lux Corp.†(a) | 1,615,044 | 557,600 | |||||||||
36,100 | United Rentals Inc.† | 224,528 | 11,888,091 | |||||||||
1,610,000 | Various Securities | 10,449,863 | 28,281,286 | |||||||||
15,391,805 | 61,919,837 | |||||||||||
Cable — 0.7% | ||||||||||||
468,500 | Various Securities | 7,216,332 | 12,811,470 | |||||||||
Communications Equipment — 0.1% | ||||||||||||
242,000 | Various Securities | 1,610,888 | 1,442,320 | |||||||||
Computer Software and Services — 2.0% | ||||||||||||
38,000 | Rockwell Automation Inc. | 893,367 | 10,086,720 | |||||||||
38,000 | Tyler Technologies Inc.† | 76,025 | 16,132,140 | |||||||||
705,500 | Various Securities | 4,206,775 | 12,987,600 | |||||||||
5,176,167 | 39,206,460 | |||||||||||
Consumer Products — 2.6% | ||||||||||||
1,219,500 | Various Securities | 13,451,382 | 50,141,728 |
Shares | Cost | Market Value | ||||||||||
Consumer Services — 1.0% | ||||||||||||
412,000 | Rollins Inc. | $ | 395,943 | $ | 14,181,040 | |||||||
321,000 | Various Securities | 1,468,383 | 5,262,500 | |||||||||
1,864,326 | 19,443,540 | |||||||||||
Diversified Industrial — 10.9% | ||||||||||||
359,000 | Crane Co. | 7,725,236 | 33,713,690 | |||||||||
1,378,000 | Griffon Corp. | 15,500,530 | 37,440,260 | |||||||||
922,000 | Myers Industries Inc. | 12,671,530 | 18,218,720 | |||||||||
342,500 | Textron Inc. | 2,079,106 | 19,207,400 | |||||||||
2,770,487 | Various Securities | 45,934,604 | 104,544,391 | |||||||||
83,911,006 | 213,124,461 | |||||||||||
Electronics — 2.0% | ||||||||||||
138,500 | Badger Meter Inc. | 1,768,846 | 12,890,195 | |||||||||
214,000 | Bel Fuse Inc., Cl. A(a) | 4,054,114 | 3,826,320 | |||||||||
478,000 | CTS Corp. | 4,119,033 | 14,846,680 | |||||||||
263,000 | Various Securities | 2,117,528 | 7,180,360 | |||||||||
12,059,521 | 38,743,555 | |||||||||||
Energy and Utilities — 2.3% | ||||||||||||
2,542,000 | Various Securities | 13,026,558 | 45,013,157 | |||||||||
Entertainment — 1.4% | ||||||||||||
685,000 | Various Securities | 8,574,892 | 27,366,890 | |||||||||
Environmental Services — 0.4% | ||||||||||||
108,000 | Various Securities | 895,263 | 8,070,920 | |||||||||
Equipment and Supplies — 15.0% | ||||||||||||
414,000 | AMETEK Inc. | 704,459 | 52,880,220 | |||||||||
138,500 | Crown Holdings Inc. | 559,314 | 13,440,040 | |||||||||
174,000 | Franklin Electric Co. Inc. | 679,384 | 13,735,560 | |||||||||
472,000 | Graco Inc. | 2,839,862 | 33,804,640 | |||||||||
686,000 | Mueller Industries Inc. | 18,074,327 | 28,366,100 | |||||||||
173,000 | Tennant Co. | 2,935,527 | 13,820,970 | |||||||||
772,500 | The Gorman-Rupp Co. | 12,121,295 | 25,577,475 | |||||||||
61,000 | The Middleby Corp.† | 700,167 | 10,110,750 | |||||||||
2,344,003 | Various Securities | 20,710,511 | 101,012,310 | |||||||||
59,324,846 | 292,748,065 | |||||||||||
Financial Services — 4.3% | ||||||||||||
721,000 | KKR & Co. Inc. | 3,052,031 | 35,220,850 | |||||||||
10,000 | Waterloo Investment Holdings Ltd.†(b) | 1,373 | 3,000 | |||||||||
2,803,120 | Various Securities | 28,293,316 | 49,559,579 | |||||||||
31,346,720 | 84,783,429 | |||||||||||
Food and Beverage — 6.4% | ||||||||||||
200,000 | Chr. Hansen Holding A/S† | 8,325,007 | 18,173,649 | |||||||||
267,000 | Kikkoman Corp. | 1,859,850 | 15,890,991 | |||||||||
700,000 | Maple Leaf Foods Inc. | 12,211,478 | 15,958,463 | |||||||||
5,639,851 | Various Securities | 25,609,154 | 74,554,301 | |||||||||
48,005,489 | 124,577,404 | |||||||||||
Health Care — 5.2% | ||||||||||||
421,000 | Cutera Inc.† | 5,548,403 | 12,651,050 |
See accompanying notes to financial statements.
5
The Gabelli Small Cap Growth Fund |
Summary Schedule of Investments (Continued) — March 31, 2021 (Unaudited) |
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS* (Continued) | ||||||||||||
Health Care (Continued) | ||||||||||||
166,500 | Globus Medical Inc., Cl. A† | $ | 3,773,762 | $ | 10,268,055 | |||||||
79,000 | Quidel Corp.† | 350,658 | 10,106,470 | |||||||||
1,078,800 | Various Securities | 16,339,049 | 69,423,054 | |||||||||
26,011,872 | 102,448,629 | |||||||||||
Home Furnishings — 0.4% | ||||||||||||
258,500 | Various Securities | 3,152,168 | 7,659,585 | |||||||||
Hotels and Gaming — 4.5% | ||||||||||||
119,000 | Churchill Downs Inc. | 1,101,132 | 27,062,980 | |||||||||
308,000 | Ryman Hospitality Properties Inc., REIT† | 6,096,603 | 23,873,080 | |||||||||
7,686,048 | Various Securities | 15,715,445 | 36,730,988 | |||||||||
22,913,180 | 87,667,048 | |||||||||||
Machinery — 3.0% | ||||||||||||
343,000 | Astec Industries Inc. | 12,002,722 | 25,869,060 | |||||||||
1,427,000 | CNH Industrial NV† | 4,242,733 | 22,318,280 | |||||||||
455,300 | Various Securities | 6,529,199 | 11,519,304 | |||||||||
22,774,654 | 59,706,644 | |||||||||||
Manufactured Housing and Recreational Vehicles — 1.3% | ||||||||||||
71,000 | Cavco Industries Inc.† | 1,418,150 | 16,018,310 | |||||||||
209,000 | Various Securities | 1,887,271 | 10,159,440 | |||||||||
3,305,421 | 26,177,750 | |||||||||||
Metals and Mining — 0.0% | ||||||||||||
142,000 | Various Securities | 571,901 | 897,508 | |||||||||
Publishing — 0.9% | ||||||||||||
800,000 | The E.W. Scripps Co., Cl. A | 4,292,464 | 15,416,000 | |||||||||
59,700 | Various Securities | 1,309,652 | 2,919,168 | |||||||||
5,602,116 | 18,335,168 | |||||||||||
Real Estate — 2.5% | ||||||||||||
263,306 | Indus Realty Trust Inc., REIT | 5,140,301 | 15,840,489 | |||||||||
443,000 | The St. Joe Co. | 6,959,912 | 19,004,700 | |||||||||
444,267 | Various Securities | 6,099,577 | 13,947,637 | |||||||||
18,199,790 | 48,792,826 | |||||||||||
Retail — 5.4% | ||||||||||||
129,000 | AutoNation Inc.† | 2,094,018 | 12,025,380 | |||||||||
525,000 | Ingles Markets Inc., Cl. A | 7,841,951 | 32,366,250 | |||||||||
351,000 | Rush Enterprises Inc., Cl. B | 2,518,485 | 15,826,590 | |||||||||
754,775 | Various Securities | 8,329,675 | 44,643,020 | |||||||||
20,784,129 | 104,861,240 | |||||||||||
Specialty Chemicals — 3.5% | ||||||||||||
1,697,000 | Ferro Corp.† | 8,260,323 | 28,611,420 | |||||||||
278,000 | H.B. Fuller Co. | 3,451,731 | 17,488,980 | |||||||||
606,446 | Various Securities | 7,670,753 | 23,085,657 | |||||||||
19,382,807 | 69,186,057 | |||||||||||
Telecommunications — 0.9% | ||||||||||||
1,412,612 | Various Securities | 6,397,868 | 18,458,747 |
Shares | Cost | Market Value | ||||||||||
Transportation — 1.9% | ||||||||||||
384,000 | GATX Corp. | $ | 10,993,602 | $ | 35,612,160 | |||||||
109,653 | Various Securities | 884,110 | 906,891 | |||||||||
11,877,712 | 36,519,051 | |||||||||||
Wireless Communications — 0.1% | ||||||||||||
51,000 | Various Securities | 1,965,959 | 1,860,480 | |||||||||
TOTAL COMMON STOCKS | 558,586,223 | 1,945,438,276 | ||||||||||
CLOSED-END FUNDS* — 0.2% | ||||||||||||
207,266 | Various Securities | 3,198,981 | 4,036,354 | |||||||||
PREFERRED STOCKS* — 0.2% | ||||||||||||
Automotive: Parts and Accessories — 0.2% | ||||||||||||
105,000 | Various Securities | 718,782 | 5,048,474 | |||||||||
RIGHTS* — 0.0% | ||||||||||||
Entertainment — 0.0% | ||||||||||||
1,680,000 | Media General Inc., CVR†(b) | 2 | 2 | |||||||||
WARRANTS* — 0.0% | ||||||||||||
Business Services — 0.0% | ||||||||||||
1 | Internap Corp., expire 05/08/24†(b) | 0 | 652 | |||||||||
Diversified Industrial — 0.0% | ||||||||||||
140,000 | Various Securities | 95,648 | 184,800 | |||||||||
TOTAL WARRANTS | 95,648 | 185,452 | ||||||||||
TOTAL MISCELLANEOUS INVESTMENTS — 0.2%(c) | 2,485,938 | 3,243,476 | ||||||||||
TOTAL INVESTMENTS — 100.1% | $ | 565,085,574 | 1,957,952,034 | |||||||||
Other Assets and Liabilities (Net) — (0.1)% | (2,201,196 | ) | ||||||||||
NET ASSETS — 100.0% | $ | 1,955,750,838 |
See accompanying notes to financial statements.
6
The Gabelli Small Cap Growth Fund |
Summary Schedule of Investments (Continued) — March 31, 2021 (Unaudited) |
This Summary Schedule of Investments does not reflect the complete portfolio holdings of the Fund. It includes the Fund’s 50 largest holdings, each investment of any issuer that exceeds 1% of the Fund’s net assets, and affiliated or Level 3 securities, if any.
* | “Various Securities” consist of issuers not identified as a top 50 holding, issues or issuers not exceeding 1% of net assets individually or in the aggregate, any issuers that are not affiliated or level 3 securities, if any, as of March 31, 2021. The complete Schedule of Investments is available (i) without charge, upon request, by calling 800-GABELLI (800-422-3554); and (ii) on the SEC’S website at http://www.sec.gov. |
(a) | Security considered an affiliated holding because the Fund owns at least 5% of its outstanding shares. |
(b) | Security is valued under procedures adopted by the Board of Trustees and is classified as Level 3 in the fair value hierarchy. |
(c) | Represents previously undisclosed, unrestricted securities which the Fund has held for less than one year. |
† | Non-income producing security. |
REIT | Real Estate Investment Trust |
CVR | Contingent Value Right |
See accompanying notes to financial statements.
7
The Gabelli Small Cap Growth Fund
Statement of Assets and Liabilities |
March 31, 2021 (Unaudited) |
Assets: | ||||
Investments, at value (cost $554,738,478) | $ | 1,942,124,514 | ||
Investments in affiliates, at value (cost $10,347,096) | 15,827,520 | |||
Foreign currency, at value (cost $110,918) | 111,410 | |||
Cash | 430 | |||
Receivable for investments sold | 2,885,330 | |||
Receivable for Fund shares sold | 717,091 | |||
Dividends and interest receivable | 1,497,763 | |||
Prepaid expenses | 79,913 | |||
Total Assets | 1,963,243,971 | |||
Liabilities: | ||||
Line of credit payable | 2,371,000 | |||
Payable for Fund shares redeemed | 1,599,069 | |||
Payable for investments purchased | 744,412 | |||
Payable for investment advisory fees | 1,661,975 | |||
Payable for distribution fees | 326,595 | |||
Payable for accounting fees | 7,500 | |||
Other accrued expenses | 782,582 | |||
Total Liabilities | 7,493,133 | |||
Net Assets (applicable to 40,612,324 shares outstanding) | $ | 1,955,750,838 | ||
Net Assets Consist of: | ||||
Paid-in capital | $ | 429,758,102 | ||
Total distributable earnings | 1,525,992,736 | |||
Net Assets | $ | 1,955,750,838 | ||
Shares of Capital Stock, each at $0.001 par value: | ||||
Class AAA: | ||||
Net Asset Value, offering, and redemption price per share ($1,082,765,431 ÷ 22,528,423shares outstanding; 150,000,000 shares authorized) | $ | 48.06 | ||
Class A: | ||||
Net Asset Value and redemption price per share ($134,485,694 ÷ 2,801,021 shares outstanding; 50,000,000 shares authorized) | $ | 48.01 | ||
Maximum offering price per share (NAV ÷ 0.9425, based on maximum sales charge of 5.75% of the offering price) | $ | 50.94 | ||
Class C: | ||||
Net Asset Value and offering price per share ($77,114,656 ÷ 2,040,619 shares outstanding; 50,000,000 shares authorized) | $ | 37.79 | (a) | |
Class I: | ||||
Net Asset Value, offering, and redemption price per share ($661,385,057 ÷ 13,242,261 shares outstanding; 50,000,000 shares authorized) | $ | 49.95 |
(a) Redemption price varies based on the length of time held.
Statement of Operations |
For the Six Months Ended March 31, 2021 (Unaudited) |
Investment Income: | ||||
Dividends - unaffiliated (net of foreign withholding taxes of $90,268) | $ | 17,028,610 | ||
Dividends - affiliated | 25,800 | |||
Interest | 480 | |||
Total Investment Income | 17,054,890 | |||
Expenses: | ||||
Investment advisory fees | 9,136,704 | |||
Distribution fees - Class AAA | 1,259,920 | |||
Distribution fees - Class A | 151,925 | |||
Distribution fees - Class C | 395,013 | |||
Shareholder services fees | 752,368 | |||
Shareholder communication expenses | 196,883 | |||
Custodian fees | 103,335 | |||
Directors’ fees | 70,999 | |||
Interest expense | 56,746 | |||
Registration expenses | 37,666 | |||
Legal and audit fees | 29,210 | |||
Accounting fees | 22,500 | |||
Miscellaneous expenses | 59,056 | |||
Total Expenses | 12,272,325 | |||
Less: | ||||
Advisory fee reduction on unsupervised assets (See Note 3) | (67,647 | ) | ||
Expenses paid indirectly by broker (See Note 6) | (7,686 | ) | ||
Total Reductions | (75,333 | ) | ||
Net Expenses | 12,196,992 | |||
Net Investment Income | 4,857,898 | |||
Net Realized and Unrealized Gain/(Loss) on Investments and Foreign Currency: | ||||
Net realized gain on investments - unaffiliated | 175,992,759 | |||
Net realized loss on investments - affiliated | (70,850 | ) | ||
Net realized gain on foreign currency transactions | 2,614 | |||
Net realized gain on investments and foreign currency transactions | 175,924,523 | |||
Net change in unrealized appreciation/depreciation: | ||||
on investments | 387,163,182 | |||
on affiliates | 8,417,098 | |||
on foreign currency translations | (4,268 | ) | ||
Net change in unrealized appreciation/depreciation on investments and foreign currency translations | 395,576,012 | |||
Net Realized and Unrealized Gain/(Loss) on Investments and Foreign Currency | 571,500,535 | |||
Net Increase in Net Assets Resulting from Operations | $ | 576,358,433 |
See accompanying notes to financial statements.
8
The Gabelli Small Cap Growth Fund
Statement of Changes in Net Assets |
Six Months Ended March 31, 2021 (Unaudited) | Year Ended September 30, 2020 | |||||||
Operations: | ||||||||
Net investment income | $ | 4,857,898 | $ | 2,602,287 | ||||
Net realized gain on investments and foreign currency transactions | 175,924,523 | 421,208,660 | ||||||
Net change in unrealized appreciation/depreciation on investments and foreign currency translations | 395,576,012 | (501,380,754 | ) | |||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 576,358,433 | (77,569,807 | ) | |||||
Distributions to Shareholders: | ||||||||
Class AAA | (191,595,179 | ) | (225,788,690 | ) | ||||
Class A | (22,004,092 | ) | (32,301,744 | ) | ||||
Class C | (18,595,632 | ) | (27,339,966 | ) | ||||
Class I | (114,398,478 | ) | (154,155,709 | ) | ||||
Total Distributions to Shareholders | (346,593,381 | ) | (439,586,109 | ) | ||||
Capital Share Transactions: | ||||||||
Class AAA | 73,208,512 | (95,842,744 | ) | |||||
Class A | 7,452,263 | (23,192,192 | ) | |||||
Class C | (4,834,230 | ) | (33,587,375 | ) | ||||
Class I | 11,272,013 | (137,549,435 | ) | |||||
Net Increase/(Decrease) in Net Assets from Capital Share Transactions | 87,098,558 | (290,171,746 | ) | |||||
Redemption Fees | 1,719 | 5,069 | ||||||
Net Increase/(Decrease) in Net Assets | 316,865,329 | (807,322,593 | ) | |||||
Net Assets: | ||||||||
Beginning of year | 1,638,885,509 | 2,446,208,102 | ||||||
End of period | $ | 1,955,750,838 | $ | 1,638,885,509 |
See accompanying notes to financial statements.
9
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 September 30 | Net Asset Value, Beginning of Year | Net Investment Income (Loss) (a)(b) | Net Realized and Unrealized Gain (Loss) on Investments | Total from Investment Operations | Net Investment Income | Net Realized Gain on Investments | Total Distributions | Redemption Fees (b)(c) | Net Asset Value, End of Period | Total Return † | Net Assets End of Period (in 000’s) | Net Investment Income (Loss) (a) | Operating Expenses (d)(e) | Portfolio Turnover Rate | ||||||||||||||||||||||||
Class AAA | ||||||||||||||||||||||||||||||||||||||
2021(f) | $43.30 | $0.11 | $14.21 | $14.32 | — | $(9.56 | ) | $(9.56 | ) | $0.00 | $48.06 | 37.71 | % | $1,082,765 | 0.48 | %(g) | 1.40 | %(g)(h) | 1 | % | ||||||||||||||||||
2020 | 53.92 | 0.04 | (0.63 | ) | (0.59 | ) | $(0.07 | ) | (9.96 | ) | (10.03 | ) | 0.00 | 43.30 | (2.08 | ) | 884,341 | 0.08 | 1.41 | (h) | 0 | (i) | ||||||||||||||||
2019 | 59.61 | 0.03 | (3.50 | ) | (3.47 | ) | (0.09 | ) | (2.13 | ) | (2.22 | ) | 0.00 | 53.92 | (5.72 | ) | 1,243,608 | 0.06 | 1.39 | (h) | 1 | |||||||||||||||||
2018 | 58.63 | 0.09 | 4.01 | 4.10 | — | (3.12 | ) | (3.12 | ) | 0.00 | 59.61 | 7.21 | 1,711,850 | 0.16 | 1.36 | 3 | ||||||||||||||||||||||
2017 | 50.13 | 0.02 | 10.47 | 10.49 | — | (1.99 | ) | (1.99 | ) | 0.00 | 58.63 | 21.56 | 1,882,823 | 0.04 | 1.38 | 4 | ||||||||||||||||||||||
2016 | 45.47 | 0.02 | 6.36 | 6.38 | — | (1.72 | ) | (1.72 | ) | 0.00 | 50.13 | 14.26 | 1,779,333 | 0.05 | 1.39 | (j) | 4 | |||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||
2021(f) | $43.26 | $0.11 | $14.20 | $14.31 | — | $(9.56 | ) | $(9.56 | ) | $0.00 | $48.01 | 37.73 | % | $134,486 | 0.47 | %(g) | 1.40 | %(g)(h) | 1 | % | ||||||||||||||||||
2020 | 53.89 | 0.05 | (0.64 | ) | (0.59 | ) | $(0.08 | ) | (9.96 | ) | (10.04 | ) | 0.00 | 43.26 | (2.08 | ) | 110,975 | 0.11 | 1.41 | (h) | 0 | (i) | ||||||||||||||||
2019 | 59.58 | 0.03 | (3.50 | ) | (3.47 | ) | (0.09 | ) | (2.13 | ) | (2.22 | ) | 0.00 | 53.89 | (5.73 | ) | 170,189 | 0.06 | 1.39 | (h) | 1 | |||||||||||||||||
2018 | 58.60 | 0.09 | 4.01 | 4.10 | — | (3.12 | ) | (3.12 | ) | 0.00 | 59.58 | 7.21 | 208,947 | 0.16 | 1.36 | 3 | ||||||||||||||||||||||
2017 | 50.11 | 0.01 | 10.47 | 10.48 | — | (1.99 | ) | (1.99 | ) | 0.00 | 58.60 | 21.55 | 229,282 | 0.02 | 1.38 | 4 | ||||||||||||||||||||||
2016 | 45.45 | 0.02 | 6.36 | 6.38 | — | (1.72 | ) | (1.72 | ) | 0.00 | 50.11 | 14.26 | 270,163 | 0.05 | 1.39 | (j) | 4 | |||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||
2021(f) | $35.95 | $(0.05 | ) | $11.45 | $11.40 | — | $(9.56 | ) | $(9.56 | ) | $0.00 | $37.79 | 37.21 | % | $77,115 | (0.28) | %(g) | 2.15 | %(g)(h) | 1 | % | |||||||||||||||||
2020 | 46.63 | (0.24 | ) | (0.48 | ) | (0.72 | ) | — | (9.96 | ) | (9.96 | ) | 0.00 | 35.95 | (2.80 | ) | 75,505 | (0.65 | ) | 2.16 | (h) | 0 | (i) | |||||||||||||||
2019 | 52.16 | (0.32 | ) | (3.08 | ) | (3.40 | ) | — | (2.13 | ) | (2.13 | ) | 0.00 | 46.63 | (6.44 | ) | 141,522 | (0.69 | ) | 2.14 | (h) | 1 | ||||||||||||||||
2018 | 52.05 | (0.30 | ) | 3.53 | 3.23 | — | (3.12 | ) | (3.12 | ) | 0.00 | 52.16 | 6.41 | 215,939 | (0.59 | ) | 2.11 | 3 | ||||||||||||||||||||
2017 | 45.04 | (0.34 | ) | 9.34 | 9.00 | — | (1.99 | ) | (1.99 | ) | 0.00 | 52.05 | 20.65 | 233,786 | (0.71 | ) | 2.13 | 4 | ||||||||||||||||||||
2016 | 41.31 | (0.30 | ) | 5.75 | 5.45 | — | (1.72 | ) | (1.72 | ) | 0.00 | 45.04 | 13.41 | 227,464 | (0.70 | ) | 2.14 | (j) | 4 | |||||||||||||||||||
Class I | ||||||||||||||||||||||||||||||||||||||
2021(f) | $44.62 | $0.17 | $14.72 | $14.89 | — | $(9.56 | ) | $(9.56 | ) | $0.00 | $49.95 | 37.90 | % | $661,385 | 0.72 | %(g) | 1.15 | %(g)(h) | 1 | % | ||||||||||||||||||
2020 | 55.29 | 0.15 | (0.64 | ) | (0.49 | ) | $(0.22 | ) | (9.96 | ) | (10.18 | ) | 0.00 | 44.62 | (1.83 | ) | 568,065 | 0.34 | 1.16 | (h) | 0 | (i) | ||||||||||||||||
2019 | 61.09 | 0.17 | (3.59 | ) | (3.42 | ) | (0.25 | ) | (2.13 | ) | (2.38 | ) | 0.00 | 55.29 | (5.50 | ) | 890,889 | 0.32 | 1.14 | (h) | 1 | |||||||||||||||||
2018 | 59.86 | 0.25 | 4.10 | 4.35 | — | (3.12 | ) | (3.12 | ) | 0.00 | 61.09 | 7.49 | 1,624,806 | 0.43 | 1.11 | 3 | ||||||||||||||||||||||
2017 | 51.09 | 0.16 | 10.67 | 10.83 | (0.07 | ) | (1.99 | ) | (2.06 | ) | 0.00 | 59.86 | 21.84 | 1,404,639 | 0.30 | 1.13 | 4 | |||||||||||||||||||||
2016 | 46.19 | 0.13 | 6.49 | 6.62 | — | (1.72 | ) | (1.72 | ) | 0.00 | 51.09 | 14.56 | 1,138,299 | 0.29 | 1.14 | (j) | 4 |
† | Total return represents aggregate total return of a hypothetical investment at the beginning of the year and sold at the end of the period including reinvestment of distributions and does not reflect the 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 Fund received credits from a designated broker who agreed to pay certain Fund operating expenses. For all the periods presented, there was no impact on the expense ratios. (e) Ratio of operating expenses includes advisory fee reduction on unsupervised assets totaling 0.01% of net assets for the six months ended March 31, 2021 and year ended September 30, 2020. For the years ended September 30, 2019, 2018, 2017, and 2016 there was no impact on the expense ratios. |
(f) | For the six months ended March 31, 2021, unaudited. |
(g) | Annualized. |
(h) | The Fund incurred interest expense during the six months ended March 31, 2021 and the fiscal years ended September 30, 2020 and 2019. If interest expense had not been incurred, the ratios of operating expenses to average net assets would have been 1.38%, 1.39% and 1.38% (Class AAA and Class A), 2.13%, 2.14% and 2.13% (Class C), and 1.13%, 1.14% and 1.13% (Class I). For the years ended September 30, 2018, 2017, and 2016, the effect of interest expense was minimal. |
(i) | Amount represents less than 0.5%. |
(j) | During the year ended September 30, 2016, the Fund received a reimbursement of custody expenses paid in prior years. Had such reimbursement (allocated by relative net asset values of the Fund’s share classes) been included in that period, the expense ratios would have been 1.38% (Class AAA and Class A), 2.13% (Class C), and 1.13% (Class I). |
See accompanying notes to financial statements.
10
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), which 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 four 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.
The global outbreak of the novel coronavirus disease, known as COVID-19, has caused adverse effects on many companies, sectors, nations, regions and the markets in general, and may continue for an unpredictable duration. The effects of this pandemic may materially impact the value and performance of the Fund, its ability to buy and sell fund investments at appropriate valuations, and its ability to achieve its investment objectives.
New Accounting Pronouncements. To improve the effectiveness of fair value disclosure requirements, the Financial Accounting Standards Board issued Accounting Standard Update (ASU) 2018-13, Fair Value Measurement Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement (ASU 2018-13), which added, removed, and modified certain aspects relating to fair value disclosure. Management has fully adopted the ASU 2018-13 in these financial statements.
In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in the ASU provides optional temporary financial reporting relief from the effect of certain types of contract modifications due to the planned discontinuation of the London Interbank Offered Rate (LIBOR) and other interbank-offered based reference rates as of the end of 2021. The ASU is effective for certain reference rate-related contract modifications that occur through December 31, 2022. Management has reviewed the requirements and believes the adoption of this ASU will not have a material impact on the 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).
11
The Gabelli Small Cap Growth Fund |
Notes to Financial Statements (Unaudited) (Continued) |
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 obligations 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 securities are valued using the closing bid price, 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. 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. OTC futures and options on futures for which market quotations are readily available will be valued by quotations received from a pricing service or, if no quotations are available from a pricing service, by quotations obtained from one or more dealers in the instrument in question by the Adviser.
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.
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). |
12
The Gabelli Small Cap Growth Fund |
Notes to Financial Statements (Unaudited) (Continued) |
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, 2021 is as follows:
Valuation Inputs | ||||||||||||||||
Level 1 Quoted Prices | Level 2 Other Significant Observable Inputs | Level 3 Significant Unobservable Inputs | Total Market Value at 3/31/21 | |||||||||||||
INVESTMENTS IN SECURITIES: | ||||||||||||||||
ASSETS (Market Value): | ||||||||||||||||
Common Stocks: | ||||||||||||||||
Automotive: Parts and Accessories | $ | 79,510,840 | $ | 608 | — | $ | 79,511,448 | |||||||||
Aviation: Parts and Services | 66,662,928 | 1,779,235 | — | 68,442,163 | ||||||||||||
Equipment and Supplies | 290,689,619 | 2,058,446 | — | 292,748,065 | ||||||||||||
Financial Services | 83,270,479 | 1,509,950 | $3,000 | 84,783,429 | ||||||||||||
Manufactured Housing and Recreational Vehicles | 24,007,750 | 2,170,000 | — | 26,177,750 | ||||||||||||
Specialty Chemicals | 69,185,145 | 912 | — | 69,186,057 | ||||||||||||
Telecommunications | 16,082,615 | 2,376,132 | — | 18,458,747 | ||||||||||||
Other Industries (a) | 1,309,374,093 | — | — | 1,309,374,093 | ||||||||||||
Total Common Stocks | 1,938,783,469 | 9,895,283 | 3,000 | 1,948,681,752 | ||||||||||||
Closed-End Funds | 4,036,354 | — | — | 4,036,354 | ||||||||||||
Preferred Stocks (a) | 5,048,474 | — | — | 5,048,474 | ||||||||||||
Rights (a) | — | — | 2 | 2 | ||||||||||||
Warrants (a) | 184,800 | — | 652 | 185,452 | ||||||||||||
TOTAL INVESTMENTS IN SECURITIES –ASSETS | $ | 1,948,053,097 | $9,895,283 | $3,654 | $ | 1,957,952,034 |
(a) | Please refer to the Summary Schedule of Investments for the industry classifications of these portfolio holdings. |
The Fund did not have material transfers into or out of Level 3 during the six months ended March 31, 2021.
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 are 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 or preferred equities, warrants, options, rights, or 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. When fair valuing a security, factors to consider include 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
13
The Gabelli Small Cap Growth Fund |
Notes to Financial Statements (Unaudited) (Continued) |
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 backtesting the prices realized in subsequent trades of these fair valued securities to fair values previously recognized.
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 the sale of securities eligible for trading on national securities exchanges or in the over-the-counter markets. Restricted securities may sell at a price lower than similar securities that are not subject to restrictions on resale. Securities freely saleable among qualified institutional investors under special rules adopted by the SEC may be treated as liquid if they satisfy liquidity standards established by the Board. The continued liquidity of such securities is not as well assured as that of publicly traded securities, and accordingly the Board will monitor their liquidity. At March 31, 2021, the Fund did not hold any restricted securities.
Investments in other Investment Companies. The Fund may invest, from time to time, in shares of other investment companies (or entities that would be considered investment companies but are excluded from the definition pursuant to certain exceptions under the 1940 Act) (the Acquired Funds) in accordance with the 1940
14
The Gabelli Small Cap Growth Fund |
Notes to Financial Statements (Unaudited) (Continued) |
Act and related rules. Shareholders in the Fund would bear the pro rata portion of the periodic expenses of the Acquired Funds in addition to the Fund’s expenses. For the six months ended March 31, 2021, the Fund’s pro rata portion of the periodic expenses charged by the Acquired Funds was less than one basis point.
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 capital gains as determined under GAAP. 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 fiscal year ended September 30, 2020 was as follows:
Distributions paid from: | |||||
Ordinary income | $ | 5,852,594 | |||
Net long term capital gains | 503,827,323 | ||||
Total distributions paid* | $ | 509,679,917 |
* | Total distributions paid differs from the Statement of Changes in Net Assets due to the utilization of equalization. |
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.
15
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, 2021:
Cost | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Appreciation | ||||||||||||||
Investments | $ | 571,063,944 | $ | 1,400,435,846 | $ | (13,547,756 | ) | $ | 1,386,888,090 |
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. During the six months ended March 31, 2021, the Fund did not incur any income tax, interest, or penalties. As of March 31, 2021, 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, 2021, 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 $67,647.
4. Distribution Plan. The Fund’s Board has adopted a distribution 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 (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, 2021, other than short term securities and U.S. Government obligations, aggregated $9,894,015 and $277,801,619, respectively.
6. Transactions with Affiliates and Other Arrangements. During the six months ended March 31, 2021, the Fund paid $30,362 in brokerage commissions on security trades to G.research, LLC, an affiliate of the Adviser. Additionally, the Distributor retained a total of $5,212 from investors representing commissions (sales charges and underwriting fees) on sales and redemptions of Fund shares.
16
The Gabelli Small Cap Growth Fund |
Notes to Financial Statements (Unaudited) (Continued) |
During the six months ended March 31, 2021, 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 $7,686.
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, 2021, the Fund accrued $22,500 in connection with the cost of computing the Fund’s NAV.
The Corporation pays retainer and per meeting fees to Directors not affiliated with the Adviser, plus specified amounts to the Lead Director and Audit Committee Chairman. Directors are also reimbursed for out of pocket expenses incurred in attending meetings. Directors who are directors or employees of the Adviser or an affiliated company receive no compensation or expense reimbursement from the Corporation.
7. Line of Credit. The Fund participates in an unsecured line of credit, which expires on March 2, 2022 and may be renewed annually, of up to $75,000,000 under which it may borrow up to 10% of its net assets from the custodian for temporary borrowing purposes. Borrowings under this arrangement bear interest at a floating rate equal to the higher of the Overnight Federal Funds Rate plus 135 basis points or the Overnight Bank Funding Rate plus 135 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, 2021, there was $2,371,000 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, 2021 was $6,922,912 with a weighted average interest rate of 1.36%. The maximum amount borrowed at any time during the six months ended March 31, 2021 was $41,179,000.
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, 2021 and the fiscal year ended September 30, 2020, if any, can be found in the Statement of Changes in Net Assets under Redemption Fees.
17
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, 2021 (Unaudited) | Year Ended September 30, 2020 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Class AAA | ||||||||||||||||
Shares sold | 403,523 | $ | 18,295,981 | 598,564 | $ | 24,465,838 | ||||||||||
Shares issued upon reinvestment of distributions | 4,663,072 | 185,170,582 | 4,774,548 | 218,340,063 | ||||||||||||
Shares redeemed | (2,963,186 | ) | (130,258,051 | ) | (8,012,510 | ) | (338,648,645 | ) | ||||||||
Net increase/(decrease) | 2,103,409 | $ | 73,208,512 | (2,639,398 | ) | $ | (95,842,744 | ) | ||||||||
Class A | ||||||||||||||||
Shares sold | 408,855 | $ | 18,220,459 | 645,315 | $ | 29,221,937 | ||||||||||
Shares issued upon reinvestment of distributions | 509,989 | 20,231,248 | 665,223 | 30,394,069 | ||||||||||||
Shares redeemed | (683,067 | ) | (30,999,444 | ) | (1,903,125 | ) | (82,808,198 | ) | ||||||||
Net increase/(decrease) | 235,777 | $ | 7,452,263 | (592,587 | ) | $ | (23,192,192 | ) | ||||||||
Class C | ||||||||||||||||
Shares sold | 78,796 | $ | 2,778,355 | 151,481 | $ | 5,540,011 | ||||||||||
Shares issued upon reinvestment of distributions | 588,946 | 18,439,890 | 670,396 | 25,615,826 | ||||||||||||
Shares redeemed | (727,449 | ) | (26,052,475 | ) | (1,756,395 | ) | (64,743,212 | ) | ||||||||
Net decrease | (59,707 | ) | $ | (4,834,230 | ) | (934,518 | ) | $ | (33,587,375 | ) | ||||||
Class I | ||||||||||||||||
Shares sold | 1,072,317 | $ | 49,895,739 | 2,748,459 | $ | 121,429,673 | ||||||||||
Shares issued upon reinvestment of distributions | 2,640,278 | 108,858,645 | 2,942,208 | 138,342,624 | ||||||||||||
Shares redeemed | (3,202,696 | ) | (147,482,371 | ) | (9,070,988 | ) | (397,321,732 | ) | ||||||||
Net increase/(decrease) | 509,899 | $ | 11,272,013 | (3,380,321 | ) | $ | (137,549,435 | ) |
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, 2021 is set forth below:
Value at September 30, 2020 | Purchases | Sales Proceeds | Realized Gain/ (Loss) | Change in Unrealized Appreciation/ (Depreciation) | Value at March 31, 2021 | Dividends | Percent Owned of Shares Outstanding | |||||||||||||||||||||||||
Bel Fuse Inc., Cl. A | $ | 2,408,400 | — | $ | 27,479 | $ | (33,801 | ) | $ | 1,479,200 | $ | 3,826,320 | $ | 25,800 | 9.98 | % | ||||||||||||||||
Indus Realty Trust Inc., REIT* | 13,843,550 | $ | 507,965 | 243,121 | — | — | — | — | — | |||||||||||||||||||||||
Strattec Security Corp.† | 4,923,260 | 48,493 | 203,941 | 46,690 | 6,629,098 | 11,443,600 | — | 6.31 | % | |||||||||||||||||||||||
Trans-Lux Corp.† | 347,800 | — | 15,261 | (83,739 | ) | 308,800 | 557,600 | — | 12.17 | % | ||||||||||||||||||||||
Total | $ | (70,850 | ) | $ | 8,417,098 | $ | 15,827,520 | $ | 25,800 |
* | Name change from Griffin Industrial Realty Inc. Security is no longer considered affiliated at March 31, 2021. |
† | Non-income producing security. |
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.
18
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.
19
The Gabelli Small Cap Growth Fund |
Board Consideration and Re-Approval of Advisory Agreement (Unaudited) |
During the six months ended March 31, 2021, 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 supervisory, 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 (as of December 31, 2020) of the Fund against a peer group of ten other comparable funds prepared by the Adviser (the Adviser Peer Group) and against a peer group prepared by Broadridge (the Broadridge Performance Peer Group) consisting of all retail and institutional small-cap core funds, regardless of asset size or primary channel of distribution, as represented by the Lipper Small-Cap Core Index. The Independent Board Members noted that the Fund’s performance was in the first quartile for the one year period, in the second quartile for the three year period and in the second quartile in the five year period, as measured against the Adviser Peer Group. Against the Broadridge Performance Peer Group, the Independent Board Members noted that the Fund’s performance was in the second quintile for the one year and five year periods and in the third quintile for the three year period. The Independent Board Members noted the Fund’s better than average performance during the three year period as measured against the Adviser Peer Group and that the Fund’s total return was only slightly below the median total return for the one year period within the Adviser Peer Group.
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 Adviser Peer Group and a peer group of sixteen other small cap core funds selected by Broadridge 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 ratio was above average within this group, and the Fund’s size was above average within this group. The Independent Board Members also noted that the management fee structure was the same as that in effect for most of the Gabelli funds.
20
The Gabelli Small Cap Growth Fund |
Board Consideration and Re-Approval of Advisory Agreement (Unaudited) (Continued) |
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 an acceptable performance record. The Independent Board Members also concluded that the Fund’s expense ratios and the profitability to the Adviser of managing the Fund were reasonable in light of the Fund’s performance and that economies of scale were not a significant factor in their thinking at this time. The Independent Board Members did not view the potential profitability of ancillary services as material to their decision. On the basis of the foregoing and without assigning particular weight to any single conclusion, the Independent Board Members determined to recommend continuation of the investment management 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.
21
Gabelli Funds and Your Personal Privacy |
Who are we?
The Gabelli Funds are investment companies registered with the Securities and Exchange Commission under the Investment Company Act of 1940. We are managed by Gabelli Funds, LLC, which is affiliated with GAMCO Investors, Inc., a publicly held company with 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.
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 Executive Chairman 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 | Salvatore J. Zizza |
Mario J. Gabelli, CFA | Chairman, |
Chairman and | Zizza & Associates Corp. |
Chief Executive Officer, | |
GAMCO Investors, Inc. | OFFICERS |
Executive Chairman, | Bruce N. Alpert |
Associated Capital Group, Inc. | President |
Elizabeth C. Bogan | John C. Ball |
Senior Lecturer, | Treasurer |
Princeton University | |
Peter Goldstein | |
Anthony J. Colavita | Secretary |
President, | |
Anthony J. Colavita, P.C. | Richard J. Walz |
Chief Compliance Officer | |
Vincent D. Enright | |
Former Senior Vice | DISTRIBUTOR |
President and Chief | G.distributors, LLC |
Financial Officer, | |
KeySpan Corp. | CUSTODIAN |
State Street Bank and Trust | |
John D. Gabelli | Company |
Senior Vice President, | |
G.research, LLC | TRANSFER AGENT AND |
Robert J. Morrissey | DIVIDEND DISBURSING AGENT |
Partner, | DST Asset Manager |
Morrissey, Hawkins & Lynch | Solutions, Inc. |
Kuni Nakamura | LEGAL COUNSEL |
President, | Skadden, Arps, Slate, Meagher & |
Advanced Polymer, Inc. | Flom LLP |
Anthonie C. van Ekris | |
Chairman, | |
BALMAC International, Inc. |
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. |
GAB443Q121SR
The Gabelli Focused Growth and Semiannual Report — March 31, 2021 | ![]() | |
Daniel M. Miller Portfolio Manager GAMCO Investors BS, University of Miami |
To Our Shareholders,
For the six months ended March 31, 2021, the net asset value (NAV) total return per Class I Share of The Gabelli Focused Growth and Income Fund (formerly The Gabelli Focus Five Fund) was 32.4% compared with a total return of 31.0% for the Blended Index, the Fund’s benchmark. The Blended Index 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. Other classes of shares are available. See page 2 for performance information for all classes.
Enclosed are the financial statements, including the schedule of investments, as of March 31, 2021.
As permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s annual and semiannual shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Fund’s website (www.gabelli.com), and you will be notified by mail each time a report is posted and provided with a website link to access the report. If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. To elect to receive all future reports on paper free of charge, please contact your financial intermediary, or, if you invest directly with the Fund, you may call 800-422-3554 or send an email request to info@gabelli.com. |
Comparative Results
Average Annual Returns through March 31, 2021 (a)(b) (Unaudited)
Total returns and average annual returns reflect changes in share price, reinvestment of distributions, and are net of expenses. Performance for periods of less than one year is not annualized.
Six Months | 1 Year | 3 Year | 5 Year | 10 Year | Since Inception (12/31/02) | |||||||||||||
Class I (GWSIX)(c) | 32.35 | % | 76.01 | % | 6.98 | % | 6.11 | % | 5.82 | % | 7.46 | % | ||||||
Class AAA (GWSVX) | 32.02 | 75.28 | 6.63 | 5.81 | 5.52 | 7.24 | ||||||||||||
S&P MidCap 400 Index(d) | 41.13 | 83.46 | 13.40 | 14.37 | 11.92 | 12.01 | ||||||||||||
Russell 2500 Index(d) | 41.33 | 89.40 | 15.34 | 15.93 | 12.20 | 12.15 | ||||||||||||
Russell 1000 Index(d) | 20.41 | 60.59 | 17.31 | 16.66 | 13.97 | 11.13 | ||||||||||||
MSCI AC World Ex-U.S. Index(d) | 21.10 | 49.41 | 6.50 | 9.75 | 4.92 | 8.18 | ||||||||||||
Blended Index(d) | 31.04 | 72.20 | 13.62 | 14.57 | 10.82 | 10.90 | ||||||||||||
Class A (GWSAX) | 31.98 | 75.33 | 6.65 | 5.82 | 5.53 | 7.27 | ||||||||||||
With sales charge (e) | 24.39 | 65.24 | 4.57 | 4.58 | 4.91 | 6.91 | ||||||||||||
Class C (GWSCX) | 31.54 | 74.08 | 5.86 | 5.03 | 4.75 | 6.48 | ||||||||||||
With contingent deferred sales charge (f) | 30.54 | 73.08 | 5.86 | 5.03 | 4.75 | 6.48 |
(a) | 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 of purchase. |
(b) | The Fund’s fiscal year ends September 30. |
(c) | 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. |
(d) | The S&P Midcap 400 Index is an index comprised of U.S. stocks in the middle capitalization range, which is generally considered to be between $200 million and $5 billion in market value. The Russell 2500 Index is a market capitalization weighted index of 2,500 U.S. traded 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 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. |
(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. |
In the current prospectuses dated January 28, 2021, the expense ratios for Class AAA, A, C, and I Shares are 1.71%, 1.71%, 2.46%, and 1.46%, respectively, and the net expense ratios for these share classes after contractual reimbursements by Gabelli Funds, LLC, (the Adviser) are 1.71%, 1.71%, 2.46%, and 0.80%, respectively. See page 8 for the expense ratios for the six months ended March 31, 2021. Class AAA and Class I Shares have no sales charge. The maximum sales charge for Class A Shares, and Class C Shares is 5.75%, and 1.00%, respectively.
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.
Returns represent past performance and do not guarantee future results. Investment returns and the principal value of an investment will fluctuate. When shares are redeemed, they may be worth more or less than their original cost. 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.
2
The Gabelli Focused Growth and Income Fund
Disclosure of Fund Expenses (Unaudited)
For the Six Month Period from October 1, 2020 through March 31, 2021 | 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 10/01/20 | Ending Account Value 03/31/21 | Annualized Expense Ratio | Expenses Paid During Period* | ||||||||||||
The Gabelli Focused Growth and Income Fund | |||||||||||||||
Actual Fund Return | |||||||||||||||
Class AAA | $ | 1,000.00 | $ | 1,320.20 | 1.75 | % | $ | 10.12 | |||||||
Class A | $ | 1,000.00 | $ | 1,319.80 | 1.75 | % | $ | 10.12 | |||||||
Class C | $ | 1,000.00 | $ | 1,315.40 | 2.50 | % | $ | 14.43 | |||||||
Class I | $ | 1,000.00 | $ | 1,323.50 | 1.18 | % | $ | 6.84 | |||||||
Hypothetical 5% Return | |||||||||||||||
Class AAA | $ | 1,000.00 | $ | 1,016.21 | 1.75 | % | $ | 8.80 | |||||||
Class A | $ | 1,000.00 | $ | 1,016.21 | 1.75 | % | $ | 8.80 | |||||||
Class C | $ | 1,000.00 | $ | 1,012.47 | 2.50 | % | $ | 12.54 | |||||||
Class I | $ | 1,000.00 | $ | 1,019.05 | 1.18 | % | $ | 5.94 |
* | Expenses are equal to the Fund’s annualized expense ratio for the last six months multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half year (182 days), then divided by 365. |
3
Summary of Portfolio Holdings (Unaudited)
The following table presents portfolio holdings as a percent of net assets as of March 31, 2021:
The Gabelli Focused Growth and Income Fund
Energy and Utilities | 23.0 | % | |
Real Estate | 16.1 | % | |
Financial Services | 12.1 | % | |
Food and Beverage | 10.6 | % | |
Health Care | 5.9 | % | |
Retail | 4.4 | % | |
Diversified Industrial | 4.1 | % | |
Telecommunications | 3.6 | % | |
Entertainment | 3.2 | % | |
Building and Construction | 3.1 | % |
Automotive: Parts and Accessories | 3.0 | % | |
Computer Software and Services | 2.5 | % | |
Cable and Satellite | 2.3 | % | |
Consumer Products | 1.9 | % | |
Aerospace and Defense | 1.6 | % | |
U.S. Government Obligations | 1.4 | % | |
Automotive | 1.0 | % | |
Other Assets and Liabilities (Net) | 0.2 | % | |
100.0 | % |
The Fund files a complete schedule of portfolio holdings with the Securities and Exchange Commission (the SEC) for the first and third quarters of each fiscal year on Form N-PORT. 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-PORT 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.
4
The Gabelli Focused Growth and Income Fund
Schedule of Investments — March 31, 2021 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS — 86.6% | ||||||||||||
Aerospace and Defense — 1.6% | ||||||||||||
12,500 | Aerojet Rocketdyne Holdings Inc. | $ | 464,006 | $ | 587,000 | |||||||
Automotive — 1.0% | ||||||||||||
20,000 | Stellantis NV | 238,106 | 355,800 | |||||||||
Automotive: Parts and Accessories — 3.0% | ||||||||||||
8,000 | Aptiv plc† | 419,300 | 1,103,200 | |||||||||
341 | Faurecia SE† | 18,872 | 18,145 | |||||||||
438,172 | 1,121,345 | |||||||||||
Building and Construction — 3.1% | ||||||||||||
11,500 | Herc Holdings Inc.† | 224,858 | 1,165,295 | |||||||||
Cable and Satellite — 2.3% | ||||||||||||
1,250 | Liberty Broadband Corp., Cl. C† | 92,051 | 187,687 | |||||||||
17,227 | Liberty Media Corp.- Liberty Formula One, Cl. A† | 488,012 | 658,416 | |||||||||
580,063 | 846,103 | |||||||||||
Computer Software and Services — 2.5% | ||||||||||||
450 | Alphabet Inc., Cl. C† | 266,938 | 930,884 | |||||||||
Consumer Products — 1.9% | ||||||||||||
15,000 | Terminix Global Holdings Inc.† | 441,012 | 715,050 | |||||||||
Diversified Industrial — 0.9% | ||||||||||||
850 | Roper Technologies Inc. | 244,942 | 342,839 | |||||||||
Energy and Utilities — 18.8% | ||||||||||||
15,000 | Atlantica Sustainable Infrastructure plc | 523,279 | 549,450 | |||||||||
80,000 | Energy Transfer LP | 519,184 | 614,400 | |||||||||
71,000 | Enterprise Products Partners LP | 1,333,434 | 1,563,420 | |||||||||
105,000 | Kinder Morgan Inc. | 1,323,985 | 1,748,250 | |||||||||
35,000 | NextEra Energy Partners LP | 1,670,949 | 2,550,800 | |||||||||
5,370,831 | 7,026,320 | |||||||||||
Entertainment — 3.2% | ||||||||||||
198,699 | Sirius XM Holdings Inc. | 591,422 | 1,210,077 | |||||||||
Financial Services — 12.1% | ||||||||||||
42,500 | Apollo Global Management Inc. | 1,581,374 | 1,997,925 | |||||||||
12,500 | Morgan Stanley | 525,580 | 970,750 | |||||||||
90,000 | New York Community Bancorp Inc. | 765,462 | 1,135,800 | |||||||||
1,650 | PayPal Holdings Inc.† | 149,927 | 400,686 | |||||||||
3,022,343 | 4,505,161 | |||||||||||
Food and Beverage — 10.6% | ||||||||||||
75,000 | Maple Leaf Foods Inc. | 1,225,395 | 1,709,835 | |||||||||
16,500 | Mondele¯z International Inc., Cl. A | 675,416 | 965,745 | |||||||||
12,000 | Post Holdings Inc.† | 399,522 | 1,268,640 | |||||||||
2,300,333 | 3,944,220 |
Shares | Cost | Market Value | ||||||||||
Health Care �� 5.9% | ||||||||||||
9,000 | AbbVie Inc. | $ | 911,161 | $ | 973,980 | |||||||
69,000 | Option Care Health Inc.† | 381,193 | 1,224,060 | |||||||||
1,292,354 | 2,198,040 | |||||||||||
Real Estate Investment Trusts — 16.1% | ||||||||||||
43,000 | Blackstone Mortgage Trust Inc.,Cl. A | 1,067,666 | 1,333,000 | |||||||||
8,000 | Hannon Armstrong Sustainable Infrastructure Capital Inc. | 253,973 | 448,800 | |||||||||
30,000 | Healthpeak Properties Inc. | 881,663 | 952,200 | |||||||||
100,000 | MGM Growth Properties LLC, Cl. A | 2,386,056 | 3,262,000 | |||||||||
4,589,358 | 5,996,000 | |||||||||||
Telecommunications — 3.6% | ||||||||||||
55,000 | Lumen Technologies Inc. | 514,544 | 734,250 | |||||||||
5,000 | T-Mobile US Inc.† | 366,790 | 626,450 | |||||||||
881,334 | 1,360,700 | |||||||||||
TOTAL COMMON STOCKS | 20,946,072 | 32,304,834 | ||||||||||
PREFERRED STOCKS — 11.8% | ||||||||||||
Diversified Industrial — 3.2% | ||||||||||||
17,000 | Babcock & Wilcox Enterprises Inc. 8.125%, 02/28/26 | 426,983 | 450,330 | |||||||||
37,500 | Steel Partners Holdings LP, Ser. A, 6.000%, 02/07/26 | 766,174 | 751,875 | |||||||||
1,193,157 | 1,202,205 | |||||||||||
Energy and Utilities — 4.2% | ||||||||||||
65,000 | Energy Transfer Operating LP, Ser. D, 7.625%, 08/15/23 | 1,335,559 | 1,556,750 | |||||||||
Retail — 4.4% | ||||||||||||
16,000 | Qurate Retail Inc. 8.000%, 03/15/31 | 1,569,395 | 1,626,400 | |||||||||
TOTAL PREFERRED STOCKS | 4,098,111 | 4,385,355 | ||||||||||
Principal Amount | ||||||||||||
U.S. GOVERNMENT OBLIGATIONS — 1.4% | ||||||||||||
$ | 513,000 | U.S. Treasury Bills, 0.027% to 0.036%††, 05/20/21 to 09/23/21 | 512,954 | 512,967 | ||||||||
TOTAL INVESTMENTS — 99.8% | $ | 25,557,137 | 37,203,156 | |||||||||
Other Assets and Liabilities (Net)—0.2% | 81,894 | |||||||||||
NET ASSETS—100.0% | $ | 37,285,050 |
† | Non-income producing security. |
†† | Represents annualized yields at dates of purchase. |
See accompanying notes to financial statements.
5
The Gabelli Focused Growth and Income Fund
Statement of Assets and Liabilities
March 31, 2021 (Unaudited)
Assets: | ||||
Investments, at value (cost $25,557,137) | $ | 37,203,156 | ||
Foreign currency, at value (cost $9,086) | 9,131 | |||
Cash | 2,323 | |||
Receivable for Fund shares sold | 73,897 | |||
Receivable from Adviser | 7,880 | |||
Dividends receivable | 89,177 | |||
Prepaid expenses | 31,574 | |||
Total Assets | 37,417,138 | |||
Liabilities: | ||||
Payable for Fund shares redeemed | 49,816 | |||
Payable for investment advisory fees | 31,521 | |||
Payable for distribution fees | 10,052 | |||
Payable for shareholder communications expenses | 26,842 | |||
Payable for shareholder services fees | 7,305 | |||
Other accrued expenses | 6,552 | |||
Total Liabilities | 132,088 | |||
Net Assets | ||||
(applicable to 2,337,661 shares outstanding) | $ | 37,285,050 | ||
Net Assets Consist of: | ||||
Paid-in capital | $ | 28,150,127 | ||
Total distributable earnings | 9,134,923 | |||
Net Assets | $ | 37,285,050 | ||
Shares of Capital Stock, each at $0.001 par value: | ||||
Class AAA: | ||||
Net Asset Value, offering, and redemption price per share ($7,965,518 ÷ 489,007 shares outstanding; 100,000,000 shares authorized) | $ | 16.29 | ||
Class A: | ||||
Net Asset Value and redemption price per share ($8,378,739 ÷ 508,787 shares outstanding; 50,000,000 shares authorized) | $ | 16.47 | ||
Maximum offering price per share (NAV ÷ 0.9425, based on maximum sales charge of 5.75% of the offering price) | $ | 17.47 | ||
Class C: | ||||
Net Asset Value and offering price per share ($7,752,156 ÷ 561,330 shares outstanding; 50,000,000 shares authorized) | $ | 13.81 | (a) | |
Class I: | ||||
Net Asset Value, offering, and redemption price per share ($13,188,637 ÷ 778,537 shares outstanding; 50,000,000 shares authorized) | $ | 16.94 |
(a) | Redemption price varies based on the length of time held. |
Statement of Operations
For the Six Months Ended March 31, 2021 (Unaudited)
Investment Income: | ||||
Dividends (net of foreign withholding taxes of $3,008) | $ | 969,857 | ||
Interest | 622 | |||
Total Investment Income | 970,479 | |||
Expenses: | ||||
Investment advisory fees | 172,133 | |||
Distribution fees - Class AAA | 11,617 | |||
Distribution fees - Class A | 9,459 | |||
Distribution fees - Class C | 37,203 | |||
Registration expenses | 29,123 | |||
Legal and audit fees | 17,638 | |||
Shareholder communications expenses | 14,225 | |||
Shareholder services fees | 13,106 | |||
Custodian fees | 3,526 | |||
Directors’ fees | 1,336 | |||
Interest expense | 49 | |||
Miscellaneous expenses | 6,418 | |||
Total Expenses | 315,833 | |||
Less: | ||||
Expense reimbursements (See Note 3) | (15,826 | ) | ||
Net Expenses | 300,007 | |||
Net Investment Income | 670,472 | |||
Net Realized and Unrealized Gain/(Loss) on Investments and Foreign Currency: | ||||
Net realized gain on investments | 5,021,276 | |||
Net realized gain on foreign currency transactions | 108 | |||
Net realized gain on investments and foreign currency transactions | 5,021,384 | |||
Net change in unrealized appreciation/depreciation: | ||||
on investments | 3,695,288 | |||
on foreign currency translations | (3 | ) | ||
Net change in unrealized appreciation/depreciation on investments and foreign currency translations | 3,695,285 | |||
Net Realized and Unrealized Gain/(Loss)on Investments and Foreign Currency | 8,716,669 | |||
Net Increase in Net Assets Resulting from Operations | $ | 9,387,141 |
See accompanying notes to financial statements.
6
The Gabelli Focused Growth and Income Fund
Statement of Changes in Net Assets
Six Months Ended March 31, 2021 (Unaudited) | Year Ended September 30, 2020 | |||||||||
Operations: | ||||||||||
Net investment income/(loss) | $ | 670,472 | $ | (135,502 | ) | |||||
Net realized gain (loss) on investments, and foreign currency transactions | 5,021,384 | (1,877,976 | ) | |||||||
Net change in unrealized appreciation/depreciation on investments and foreign currency translations | 3,695,285 | (78,140 | ) | |||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 9,387,141 | (2,091,618 | ) | |||||||
Distributions to Shareholders: | ||||||||||
Class AAA | (100,912 | ) | — | |||||||
Class A | (90,419 | ) | — | |||||||
Class C | (102,108 | ) | — | |||||||
Class I | (128,110 | ) | — | |||||||
Total Distributions to Shareholders | (421,549 | ) | — | |||||||
Capital Share Transactions: | ||||||||||
Class AAA | (3,263,336 | ) | (2,854,458 | ) | ||||||
Class A | (239,823 | ) | (2,048,935 | ) | ||||||
Class C | (1,095,888 | ) | (6,433,896 | ) | ||||||
Class I | 2,302,722 | (6,519,450 | ) | |||||||
Net Decrease in Net Assets from Capital Share Transactions | (2,296,325 | ) | (17,856,739 | ) | ||||||
Redemption Fees | — | 137 | ||||||||
Net Increase/(Decrease) in Net Assets | 6,669,267 | (19,948,220 | ) | |||||||
Net Assets: | ||||||||||
Beginning of year | 30,615,783 | 50,564,003 | ||||||||
End of period | $ | 37,285,050 | $ | 30,615,783 |
See accompanying notes to financial statements.
7
The Gabelli Focused Growth and Income Fund
Financial Highlights
Selected data for a share of capital stock outstanding throughout each period:
Income (Loss) from Investment Operations | Distributions | Ratios to Average Net Assets/ Supplemental Data | ||||||||||||||||||||||||||||||||||||||
Year Ended September 30 | Net Asset Value, Beginning of Year | Net Investment Income (Loss) (a)(b) | Net Realized and Unrealized Gain (Loss) on Investments | Total from Investment Operations | Net Realized Gain on Investments | Total Distributions | Redemption Fees (b) | Net Asset Value, End of Period | Total Return † | Net Assets End of Period (in 000’s) | Net Investment Income (Loss) (a) | Operating Expenses(c) | Portfolio Turnover Rate | |||||||||||||||||||||||||||
Class AAA | ||||||||||||||||||||||||||||||||||||||||
2021(d) | $12.48 | $0.28 | $3.71 | $3.99 | $(0.18 | ) | $(0.18 | ) | — | $16.29 | 32.02 | % | $7,965 | 3.89 | %(e) | 1.75 | %(e) | 51 | % | |||||||||||||||||||||
2020 | 12.93 | (0.03 | ) | (0.42 | ) | (0.45 | ) | — | — | $0.00 | (f) | 12.48 | (3.48 | ) | 8,713 | (0.24 | ) | 1.71 | 59 | |||||||||||||||||||||
2019 | 13.84 | (0.07 | ) | (0.83 | ) | (0.90 | ) | (0.01 | ) | (0.01 | ) | — | 12.93 | (6.50 | ) | 12,189 | (0.56 | ) | 1.64 | (g) | 67 | |||||||||||||||||||
2018 | 14.61 | (0.09 | ) | (0.61 | ) | (0.70 | ) | (0.07 | ) | (0.07 | ) | 0.00 | (f) | 13.84 | (4.78 | ) | 16,630 | (0.63 | ) | 1.53 | 105 | |||||||||||||||||||
2017 | 13.70 | (0.15 | ) | 1.21 | 1.06 | (0.15 | ) | (0.15 | ) | 0.00 | (f) | 14.61 | 7.88 | 22,542 | (1.08 | ) | 1.43 | (g) | 77 | |||||||||||||||||||||
2016 | 12.00 | (0.14 | ) | 1.84 | 1.70 | — | — | 0.00 | (f) | 13.70 | 14.17 | 33,695 | (1.11 | ) | 1.42 | (g) | 60 | |||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||||
2021(d) | $12.62 | $0.29 | $3.74 | $4.03 | $(0.18 | ) | $(0.18 | ) | — | $16.47 | 31.98 | % | $8,379 | 3.88 | %(e) | 1.75 | %(e) | 51 | % | |||||||||||||||||||||
2020 | 13.06 | (0.03 | ) | (0.41 | ) | (0.44 | ) | — | — | $0.00 | (f) | 12.62 | (3.37 | ) | 6,644 | (0.24 | ) | 1.71 | 59 | |||||||||||||||||||||
2019 | 13.98 | (0.07 | ) | (0.84 | ) | (0.91 | ) | (0.01 | ) | (0.01 | ) | — | 13.06 | (6.51 | ) | 9,013 | (0.57 | ) | 1.64 | (g) | 67 | |||||||||||||||||||
2018 | 14.76 | (0.09 | ) | (0.62 | ) | (0.71 | ) | (0.07 | ) | (0.07 | ) | 0.00 | (f) | 13.98 | (4.80 | ) | 15,137 | (0.65 | ) | 1.53 | 105 | |||||||||||||||||||
2017 | 13.84 | (0.15 | ) | 1.22 | 1.07 | (0.15 | ) | (0.15 | ) | 0.00 | (f) | 14.76 | 7.87 | 29,391 | (1.08 | ) | 1.43 | (g) | 77 | |||||||||||||||||||||
2016 | 12.12 | (0.14 | ) | 1.86 | 1.72 | — | — | 0.00 | (f) | 13.84 | 14.19 | 43,775 | (1.10 | ) | 1.42 | (g) | 60 | |||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||
2021(d) | $10.64 | $0.19 | $3.16 | $3.35 | $(0.18 | ) | $(0.18 | ) | — | $13.81 | 31.54 | % | $7,752 | 3.10 | %(e) | 2.50 | %(e) | 51 | % | |||||||||||||||||||||
2020 | 11.10 | (0.11 | ) | (0.35 | ) | (0.46 | ) | — | — | $0.00 | (f) | 10.64 | (4.14 | ) | 6,926 | (1.00 | ) | 2.46 | 59 | |||||||||||||||||||||
2019 | 11.97 | (0.14 | ) | (0.72 | ) | (0.86 | ) | (0.01 | ) | (0.01 | ) | — | 11.10 | (7.18 | ) | 13,807 | (1.33 | ) | 2.39 | (g) | 67 | |||||||||||||||||||
2018 | 12.74 | (0.17 | ) | (0.53 | ) | (0.70 | ) | (0.07 | ) | (0.07 | ) | 0.00 | (f) | 11.97 | (5.48 | ) | 24,992 | (1.38 | ) | 2.28 | 105 | |||||||||||||||||||
2017 | 12.06 | (0.22 | ) | 1.05 | 0.83 | (0.15 | ) | (0.15 | ) | 0.00 | (f) | 12.74 | 7.04 | 37,147 | (1.83 | ) | 2.18 | (g) | 77 | |||||||||||||||||||||
2016 | 10.64 | (0.21 | ) | 1.63 | 1.42 | — | — | 0.00 | (f) | 12.06 | 13.35 | 57,796 | (1.85 | ) | 2.17 | (g) | 60 | |||||||||||||||||||||||
Class I | ||||||||||||||||||||||||||||||||||||||||
2021(d) | $12.94 | $0.35 | $3.83 | $4.18 | $(0.18 | ) | $(0.18 | ) | — | $16.94 | 32.35 | % | $13,189 | 4.50 | %(e) | 1.50 | %(e)(h) | 51 | % | |||||||||||||||||||||
2020 | 13.36 | 0.00 | (f) | (0.42 | ) | (0.42 | ) | — | — | $0.00 | (f) | 12.94 | (3.14 | ) | 8,333 | 0.01 | 1.46 | 59 | ||||||||||||||||||||||
2019 | 14.27 | (0.05 | ) | (0.85 | ) | (0.90 | ) | (0.01 | ) | (0.01 | ) | — | 13.36 | (6.30 | ) | 15,555 | (0.36 | ) | 1.39 | (g) | 67 | |||||||||||||||||||
2018 | 15.02 | (0.06 | ) | (0.62 | ) | (0.68 | ) | (0.07 | ) | (0.07 | ) | 0.00 | (f) | 14.27 | (4.50 | ) | 34,947 | (0.39 | ) | 1.28 | 105 | |||||||||||||||||||
2017 | 14.05 | (0.11 | ) | 1.23 | 1.12 | (0.15 | ) | (0.15 | ) | 0.00 | (f) | 15.02 | 8.11 | 71,138 | (0.83 | ) | 1.18 | (g) | 77 | |||||||||||||||||||||
2016 | 12.27 | (0.11 | ) | 1.89 | 1.78 | — | — | 0.00 | (f) | 14.05 | 14.51 | 103,490 | (0.85 | ) | 1.17 | (g) | 60 |
† | Total return represents aggregate total return of a hypothetical investment at the beginning of the year and sold at the end of the period including reinvestment of distributions and does not reflect the applicable sales charges. Total return for a period of less than one year is not annualized. |
(a) | Due to capital share activity, 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) | The Fund incurred interest expense. For the fiscal year ended September 30, 2020, if interest expense had not been incurred, the ratios of operating expenses to average net assets would have been 1.70% (Class AAA and Class A), 2.45% (Class C), and 1.45% (Class I). For the six months ended March 31, 2021 and the fiscal years ended September 30, 2019, 2018, 2017, and 2016, the effect of interest expense was minimal. |
(d) | For the six months ended March 31, 2021, unaudited. |
(e) | Annualized. |
(f) | Amount represents less than $0.005 per share. |
(g) | The Fund received credits from a designated broker who agreed to pay certain Fund operating expenses. If such credits had not been received the ratio of operating expenses to average net assets would have been 1.64% (Class AAA and Class A), 2.39% (Class C), and 1.40% (Class I) for the fiscal year ended September 30, 2019. For the fiscal years ended September 30, 2017 and 2016, there was no impact to the expense ratios. |
(h) | Under an expense reimbursement agreement with the Adviser, the Adviser reimbursed expenses of $15,826 with the operating expenses net of reimbursement ratio of 1.18% for the six months ended March 31, 2021. |
See accompanying notes to financial statements.
8
The Gabelli Focused Growth and Income Fund
Notes to Financial Statements (Unaudited)
1. Organization. Effective January 14, 2021, The Gabelli Focus Five Fund changed its name to Gabelli Focused Growth and Income Fund with a corresponding change in the name of each of its Classes of Shares. The Fund is a series of the Gabelli Equity Series Funds, Inc. (the Corporation), which 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 four 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.
The global outbreak of the novel coronavirus disease, known as COVID-19, has caused adverse effects on many companies, sectors, nations, regions and the markets in general, and may continue for an unpredictable duration. The effects of this pandemic may materially impact the value and performance of the Fund, its ability to buy and sell fund investments at appropriate valuations, and its ability to achieve its investment objectives.
New Accounting Pronouncements. To improve the effectiveness of fair value disclosure requirements, the Financial Accounting Standards Board issued Accounting Standard Update (ASU) 2018-13, Fair Value Measurement Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement (ASU 2018-13), which added, removed, and modified certain aspects relating to fair value disclosure. Management has fully adopted the ASU 2018-13 updates in these financial statements.
In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in the ASU provides optional temporary financial reporting relief from the effect of certain types of contract modifications due to the planned discontinuation of the London Interbank Offered Rate (LIBOR) and other interbank-offered based reference rates as of the end of 2021. The ASU is effective for certain reference rate-related contract modifications that occur during the period March 12, 2020 through December 31, 2022. Management has reviewed the requirements and believes the adoption of this ASU will not have a material impact on the 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).
9
The Gabelli Focused Growth and Income Fund
Notes to Financial Statements (Unaudited) (Continued)
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 obligations 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, 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. 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. OTC futures and options on futures for which market quotations are readily available will be valued by quotations received from a pricing service or, if no quotations are available from a pricing service, by quotations obtained from one or more dealers in the instrument in question by the Adviser.
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.
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. At March 31, 2021, the Fund did not hold any Level 3 securities. The summary of the Fund’s investments in securities and other financial instruments by inputs used to value the Fund’s investments as of March 31, 2021 is as follows:
Valuation Inputs | ||||||||||||
Level 1 Quoted Prices | Level 2 Other Significant Observable Inputs | Total Market Value at 3/31/21 | ||||||||||
INVESTMENTS IN SECURITIES: | ||||||||||||
ASSETS (Market Value): | ||||||||||||
Common Stocks (a) | $32,304,834 | — | $32,304,834 | |||||||||
Preferred Stocks (a) | 4,385,355 | — | 4,385,355 | |||||||||
U.S. Government Obligations | — | $512,967 | 512,967 | |||||||||
TOTAL INVESTMENTS IN SECURITIES – ASSETS | $36,690,189 | $512,967 | $37,203,156 |
(a) | Please refer to the Schedule of Investments for the industry classifications of these portfolio holdings. |
10
The Gabelli Focused Growth and Income 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 are 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 or preferred equities, warrants, options, rights, or 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. When fair valuing a security, factors to consider 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 backtesting the prices realized in subsequent trades of these fair valued securities to fair values previously recognized.
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.
11
The Gabelli Focused Growth and Income Fund
Notes to Financial Statements (Unaudited) (Continued)
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 or amortized to the earliest call date, if applicable. 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. 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. Permanent differences were primarily due to current year write-off of net operating loss. These reclassifications have no impact on the NAV of the Fund.
The Fund has a fixed distribution policy. Under the policy, the Fund declares and pays monthly distributions from net investment income, capital gains, and paid-in capital. The actual source of the distribution is determined after the end of the calendar year. Pursuant to this policy, distributions during the calendar year are made in excess of required distributions. To the extent such distributions are made from current earnings and profits, they are considered ordinary income or long term capital gains. 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.
There was no distribution during the fiscal year ended September 30, 2020.
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
12
The Gabelli Focused Growth and Income Fund
Notes to Financial Statements (Unaudited) (Continued)
substantially all of its net investment company taxable income and net capital gains. Therefore, no provision for federal income taxes is required.
The following summarizes the tax cost of investments and the related net unrealized appreciation at March 31, 2021:
Cost | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Appreciation | |||||
Investments | $25,581,491 | $11,661,045 | $(39,380) | $11,621,665 |
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, 2021, the Fund did not incur income tax, interest, or penalties. As of March 31, 2021, 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.
Effective January 21, 2021, the Adviser has contractually agreed to waive its investment advisory fees and/or to reimburse expenses of the Fund to the extent necessary to maintain the annualized total operating expenses of Class I (excluding brokerage costs, acquired fund fees and expenses, interest, taxes, and extraordinary expenses) at no more than an annual rate of 0.80% of the value of that class’s average daily net assets. This agreement is in effect through January 31, 2022 and may be terminated only by the Board before such time. During the six months ended March 31, 2021, the Adviser reimbursed expenses in the amount of $15,826 for Class I. In addition, the Fund has agreed, during the two year period following any waiver or reimbursement by the Adviser, to repay such amount to the extent, that after giving effect to the repayment, such adjusted annualized total operating expenses of the Class I Shares would not exceed 0.80% of the value of the Class I average daily net assets.
4. Distribution Plan. The Fund’s Board has adopted a distribution 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, 2021, other than short term securities and U.S. Government obligations, aggregated $16,548,182 and $17,142,919, respectively.
13
The Gabelli Focused Growth and Income Fund
Notes to Financial Statements (Unaudited) (Continued)
6. Transactions with Affiliates and Other Arrangements. During the six months ended March 31, 2021, the Distributor retained a total of $2,187 from investors representing commissions (sales charges and underwriting fees) on sales and redemptions of Fund shares.
The Corporation pays retainer and per meeting fees to Directors not affiliated with the Adviser, plus specified amounts to the Lead Director and Audit Committee Chairman. Directors are also reimbursed for out of pocket expenses incurred in attending meetings. Directors who are directors or employees of the Adviser or an affiliated company receive no compensation or expense reimbursement from the Corporation.
7. Line of Credit. The Fund participates in an unsecured line of credit, which expires on March 2, 2022 and may be renewed annually, of up to $75,000,000 under which it may borrow up to 10% of its net assets from the custodian for temporary borrowing purposes. Borrowings under this arrangement bear interest at a floating rate equal to the higher of the Overnight Federal Funds Rate plus 135 basis points or the Overnight Bank Funding Rate plus 135 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, 2021, 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, 2021 and the fiscal year ended September 30, 2020, if any, can be found in the Statement of Changes in Net Assets under Redemption Fees.
14
The Gabelli Focused Growth and Income Fund
Notes to Financial Statements (Unaudited) (Continued)
Transactions in shares of capital stock were as follows:
Six Months Ended March 31, 2021 (Unaudited) | Year Ended September 30, 2020 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Class AAA | ||||||||||||||||
Shares sold | 6,236 | $ | 93,842 | 31,364 | $ | 432,781 | ||||||||||
Shares issued upon reinvestment of distributions | 6,334 | 99,901 | — | — | ||||||||||||
Shares redeemed | (221,736 | ) | (3,457,079 | ) | (276,063 | ) | (3,287,239 | ) | ||||||||
Net decrease | (209,166 | ) | $ | (3,263,336 | ) | (244,699 | ) | $ | (2,854,458 | ) | ||||||
Class A | ||||||||||||||||
Shares sold | 54,877 | $ | 819,697 | 135,152 | $ | 1,638,263 | ||||||||||
Shares issued upon reinvestment of distributions | 5,016 | 80,274 | — | — | ||||||||||||
Shares redeemed | (77,755 | ) | (1,139,794 | ) | (298,561 | ) | (3,687,198 | ) | ||||||||
Net decrease | (17,862 | ) | $ | (239,823 | ) | (163,409 | ) | $ | (2,048,935 | ) | ||||||
Class C | ||||||||||||||||
Shares sold | 15,683 | $ | 192,042 | 36,416 | $ | 397,493 | ||||||||||
Shares issued upon reinvestment of distributions | 7,541 | 101,309 | — | — | ||||||||||||
Shares redeemed | (112,690 | ) | (1,389,239 | ) | (629,588 | ) | (6,831,389 | ) | ||||||||
Net decrease | (89,466 | ) | $ | (1,095,888 | ) | (593,172 | ) | $ | (6,433,896 | ) | ||||||
Class I | ||||||||||||||||
Shares sold | 222,825 | $ | 3,647,308 | 75,874 | $ | 1,024,738 | ||||||||||
Shares issued upon reinvestment of distributions | 7,256 | 119,598 | — | — | ||||||||||||
Shares redeemed | (95,567 | ) | (1,464,184 | ) | (595,926 | ) | (7,544,188 | ) | ||||||||
Net increase/(decrease) | 134,514 | $ | 2,302,722 | (520,052 | ) | $ | (6,519,450 | ) |
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.
15
The Gabelli Focused Growth and Income Fund
Board Consideration and Re-Approval of Advisory Agreement (Unaudited)
During the six months ended March 31, 2021, 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 supervisory, 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 (as of December 31, 2020) of the Fund against eight other comparable funds prepared by the Adviser (the Adviser Peer Group) and against a peer group prepared by Broadridge (the Broadridge Performance Peer Group) consisting of all retail and mid-cap core funds, regardless of asset size or primary channel of distribution, as represented by the Lipper Mid-Cap Core Index. The Independent Board Members noted that the Fund’s performance was in the third quartile for the one year and five year periods and the fourth quartile for the three year period, as measured against the Adviser Peer Group. Against the Broadridge Performance Peer Group, the Independent Board Members noted that the Fund’s performance was in the first quintile for the one year period, in the fourth quintile for the three year period, and in the fifth quintile for the five year period.
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 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 to expense ratios of the Adviser Peer Group and a peer group of twelve other midcap value funds selected by Broadridge 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 each peer group and that the Fund’s size was below average within the Adviser Peer Group and below average within the peer group of comparable funds selected by Broadridge. 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 fee with the fee for other types of accounts managed by the Adviser.
16
The Gabelli Focused Growth and Income Fund
Board Consideration and Re-Approval of Advisory Agreement (Unaudited) (Continued)
Conclusions. The Independent Board Members concluded that the Fund enjoyed highly experienced portfolio management services, good ancillary services, and an acceptable performance record that had begun to improve over the past year. The Independent Board Members also concluded that the Fund’s expense ratios were reasonable given the size of the Fund relative to its peers and the unique nature of the Fund’s best ideas investment strategy and that economies of scale were not a factor in their thinking at this time. The Independent Board Members did not view the potential profitability of ancillary services as material to their decision. On the basis of the foregoing and without assigning particular weight to any single conclusion, the Independent Board Members determined to recommend continuation of the Advisory Agreements to the full Board.
Based on a consideration of all these factors in their totality, the Board Members, including all of the Independent Board Members, determined that the Fund’s advisory fee was acceptable in light of 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 Funds and Your Personal Privacy
Who are we?
The Gabelli Funds are investment companies registered with the Securities and Exchange Commission under the Investment Company Act of 1940. We are managed by Gabelli Funds, LLC, which is affiliated with GAMCO Investors, Inc., a publicly held company with 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.
THE GABELLI FOCUSED GROWTH AND INCOME FUND
One Corporate Center
Rye, NY 10580-1422
Portfolio Manager Biography
Daniel M. Miller has been the portfolio manager of the Gabelli Focused Growth and Income Fund since the inception of the current investment strategy of the Fund. He currently serves as a portfolio manager of Gabelli Funds, LLC and 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. 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 FOCUSED GROWTH AND 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 | Salvatore J. Zizza | |
Chairman and | Chairman, | |
Chief Executive Officer, | Zizza & Associates Corp. | |
GAMCO Investors, Inc., | ||
Executive Chairman, | OFFICERS | |
Associated Capital Group, Inc. | Bruce N. Alpert | |
President | ||
Elizabeth C. Bogan | ||
Senior Lecturer, | John C. Ball | |
Princeton University | Treasurer | |
Anthony J. Colavita | Peter Goldstein | |
President, | Secretary | |
Anthony J. Colavita, P.C. | ||
Richard J. Walz | ||
Vincent D. Enright | Chief Compliance Officer | |
Former Senior Vice | ||
President and Chief | DISTRIBUTOR | |
Financial Officer, | G.distributors, LLC | |
KeySpan Corp. | ||
CUSTODIAN | ||
John D. Gabelli | State Street Bank and Trust | |
Senior Vice President, | Company | |
G.research, LLC | ||
TRANSFER AGENT AND | ||
Robert J. Morrissey | DIVIDEND DISBURSING AGENT | |
Partner, | DST Asset Manager | |
Morrissey, Hawkins & Lynch | Solutions, Inc. | |
Kuni Nakamura | LEGAL COUNSEL | |
President, | Skadden, Arps, Slate, Meagher & | |
Advanced Polymer, Inc. | Flom LLP | |
Anthonie C. van Ekris | ||
Chairman, | ||
BALMAC International, Inc. | ||
This report is submitted for the general information of the shareholders of The Gabelli Focused Growth and Income Fund. It is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||
GAB840Q121SR |
The Gabelli Global Financial Services Fund Semiannual Report — March 31, 2021 | ![]() |
Ian Lapey Portfolio Manager BA, Williams College MS, Northeastern University MBA, New York University |
To Our Shareholders,
For the six months ended March 31, 2021, the net asset value (NAV) total return per Class AAA Share of The Gabelli Global Financial Services Fund was 55.3% compared with a total return of 40.7% for the Morgan Stanley Capital International (MSCI) World Financials Index. Other classes of shares are available. See page 2 for performance information for all classes.
Enclosed are the financial statements, including the schedule of investments, as of March 31, 2021.
As permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s annual and semiannual shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Fund’s website (www.gabelli.com), and you will be notified by mail each time a report is posted and provided with a website link to access the report. If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. To elect to receive all future reports on paper free of charge, please contact your financial intermediary, or, if you invest directly with the Fund, you may call 800-422-3554 or send an email request to info@gabelli.com |
Comparative Results
Average Annual Returns through March 31, 2021 (a)(b) (Unaudited)
Total returns and average annual returns reflect changes in share price, reinvestment of distributions, and are net of expenses. Performance for periods of less than one year is not annualized.
Since | ||||||||||||
Inception | ||||||||||||
Six Months | 1 Year | 2 Year | (10/1/18) | |||||||||
Class AAA (GAFSX) | 55.29 | % | 82.93 | % | 11.41 | % | 4.97 | % | ||||
MSCI World Financials Index (c) | 40.74 | 62.65 | 13.63 | 2.97 | ||||||||
Class A (GGFSX) | 55.38 | 83.35 | 11.51 | 5.07 | ||||||||
With sales charge (d) | 46.45 | 72.81 | 8.25 | 2.61 | ||||||||
Class C (GCFSX) | 54.68 | 81.84 | 10.57 | 4.19 | ||||||||
With contingent deferred sales charge (e) | 53.68 | 80.84 | 10.57 | 4.19 | ||||||||
Class I (GFSIX) | 55.52 | 83.51 | 11.67 | 5.23 |
(a) | The Fund imposes a 2% redemption fee on shares sold or exchanged within seven days of purchase. Returns would have been lower had the Adviser not reimbursed certain expenses of the Fund. |
(b) | The Fund’s fiscal year ends September 30. |
(c) | The MSCI World Financials Index captures large and mid cap securities in the Financials sector across 23 Developed Markets countries. You cannot invest directly in an index. |
(d) | Performance results include the effect of the maximum 5.75% sales charge at the beginning of the period. |
(e) | Assuming payment of the 1% maximum contingent deferred sales charge imposed on redemptions made within one year of purchase. |
In the current prospectuses dated January 28, 2021, the gross expense ratios for Class AAA, A, C, and I Shares are 2.51%, 2.51%, 3.26%, and 2.26%, respectively, and the net expense ratios for these share classes after contractual reimbursements by Gabelli Funds, LLC, (the Adviser) are 1.25%, 1.25%, 2.00%, and 1.00%, respectively. See page 8 for the expense ratios for the six months ended March 31, 2021. The contractual reimbursements are in effect through January 31, 2022. Class AAA and Class I Shares do not have a sales charge. The maximum sales charge for Class A Shares and Class C Shares is 5.75% and 1.00%, respectively.
Investing in foreign securities involves risks not ordinarily associated with investments in domestic issues, including currency fluctuation, economic, and political risks. 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.
Returns represent past performance and do not guarantee future results. Investment returns and the principal value of an investment will fluctuate. When shares are redeemed, they may be worth more or less than their original cost. 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.
2
The Gabelli Global Financial Services Fund
Disclosure of Fund Expenses (Unaudited)
For the Six Month Period from October 1, 2020 through March 31, 2021 | Expense Table |
We believe it is important for you to understand the impact of fees and expenses regarding your investment. All mutual funds have operating expenses. As a shareholder of a fund, you incur ongoing costs, which include costs for portfolio management, administrative services, and shareholder reports (like this one), among others. Operating expenses, which are deducted from a fund’s gross income, directly reduce the investment return of a fund. When a fund’s expenses are expressed as a percentage of its average net assets, this figure is known as the expense ratio. The following examples are intended to help you understand the ongoing costs (in dollars) of investing in your Fund and to compare these costs with those of other mutual funds. The examples are based on an investment of $1,000 made at the beginning of the period shown and held for the entire period.
The Expense Table below illustrates your Fund’s costs in two ways:
Actual Fund Return: This section provides information about actual account values and actual expenses. You may use this section to help you to estimate the actual expenses that you paid over the period after any fee waivers and expense reimbursements. The “Ending Account Value” shown is derived from the Fund’s actual return during the past six months, and the “Expenses Paid During Period” shows the dollar amount that would have been paid by an investor who started with $1,000 in the Fund. You may use this information, together with the amount you invested, to estimate the expenses that you paid over the period.
To do so, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number given for your Fund under the heading “Expenses Paid During Period” to estimate the expenses you paid during this period.
Hypothetical 5% Return: This section provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio. It assumes a hypothetical annualized return of 5% before expenses during the period shown. In this case – because the hypothetical return used is not the Fund’s actual return – the results do not apply to your investment and you cannot use the hypothetical account value and expense to estimate the actual ending account balance or expenses you paid for the period. This example is useful in making comparisons of the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs such as sales charges (loads), redemption fees, or exchange fees, if any, which are described in the Prospectus. If these costs were applied to your account, your costs would be higher. Therefore, the 5% hypothetical return is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.
Beginning | Ending | Annualized | Expenses | ||||||||||
Account Value | Account Value | Expense | Paid During | ||||||||||
10/01/20 | 03/31/21 | Ratio | Period* | ||||||||||
The Gabelli Global Financial Services Fund | |||||||||||||
Actual Fund Return | |||||||||||||
Class AAA | $1,000.00 | $1,552.90 | 1.25 | % | $ | 7.96 | |||||||
Class A | $1,000.00 | $1,553.80 | 1.25 | % | $ | 7.96 | |||||||
Class C | $1,000.00 | $1,546.80 | 2.00 | % | $ | 12.70 | |||||||
Class I | $1,000.00 | $1,555.20 | 1.00 | % | $ | 6.37 | |||||||
Hypothetical 5% Return | |||||||||||||
Class AAA | $1,000.00 | $1,018.70 | 1.25 | % | $ | 6.29 | |||||||
Class A | $1,000.00 | $1,018.70 | 1.25 | % | $ | 6.29 | |||||||
Class C | $1,000.00 | $1,014.96 | 2.00 | % | $ | 10.05 | |||||||
Class I | $1,000.00 | $1,019.95 | 1.00 | % | $ | 5.04 |
* | Expenses are equal to the Fund’s annualized expense ratio for the last six months multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half year (182 days), then divided by 365. |
3
Summary of Portfolio Holdings (Unaudited)
The following table presents portfolio holdings as a percent of net assets as of March 31, 2021:
The Gabelli Global Financial Services Fund | ||||
Banks | 22.1 | % | ||
Diversified Banks | 16.9 | % | ||
Investment Management | 15.9 | % | ||
Life Insurance | 9.1 | % | ||
Institutional Brokerage | 9.0 | % | ||
Institutional Trust, Fiduciary, and Custody | 7.7 | % |
Consumer Finance | 6.4 | % | ||
Automobiles | 5.4 | % | ||
Homebuilders | 5.2 | % | ||
U.S. Government Obligations | 2.4 | % | ||
Other Assets and Liabilities (Net) | (0.1 | )% | ||
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-PORT. 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-PORT 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.
4
The Gabelli Global Financial Services Fund
Schedule of Investments — March 31, 2021 (Unaudited)
Market | ||||||||||||
Shares | Cost | Value | ||||||||||
COMMON STOCKS — 97.7% | ||||||||||||
Automobiles — 5.4% | ||||||||||||
7,000 | Daimler AG | $ | 378,427 | $ | 623,958 | |||||||
3,650 | Toyota Motor Corp., ADR | 456,455 | 569,619 | |||||||||
834,882 | 1,193,577 | |||||||||||
Banks — 22.1% | ||||||||||||
58,000 | Banco Bilbao Vizcaya Argentaria SA | 311,825 | 301,041 | |||||||||
19,950 | CIT Group Inc. | 377,937 | 1,027,625 | |||||||||
98,000 | Commerzbank AG† | 666,464 | 600,826 | |||||||||
251,500 | Dah Sing Banking Group Ltd. | 265,573 | 284,689 | |||||||||
192,600 | Dah Sing Financial Holdings Ltd. | 816,775 | 634,229 | |||||||||
26,200 | ING Groep NV | 203,976 | 320,520 | |||||||||
25,700 | Japan Post Bank Co. Ltd. | 282,620 | 246,961 | |||||||||
18,600 | Shinhan Financial Group Co. Ltd., ADR† | 637,036 | 623,844 | |||||||||
28,900 | Shinsei Bank Ltd.† | 426,982 | 466,942 | |||||||||
7,400 | Webster Financial Corp. | 220,568 | 407,814 | |||||||||
4,209,756 | 4,914,491 | |||||||||||
Consumer Finance — 6.4% | ||||||||||||
18,400 | Ally Financial Inc. | 449,620 | 831,864 | |||||||||
4,700 | Capital One Financial Corp. | 376,974 | 597,981 | |||||||||
826,594 | 1,429,845 | |||||||||||
Diversified Banks — 16.9% | ||||||||||||
262,500 | Barclays plc | 545,594 | 672,812 | |||||||||
12,650 | Citigroup Inc. | 758,072 | 920,288 | |||||||||
42,600 | Credit Agricole SA† | 498,451 | 616,719 | |||||||||
223,000 | Natwest Group plc | 559,553 | 603,327 | |||||||||
12,510 | Societe Generale SA† | 338,393 | 327,372 | |||||||||
89,100 | Standard Chartered plc | 627,730 | 613,552 | |||||||||
3,327,793 | 3,754,070 | |||||||||||
Homebuilders — 5.2% | ||||||||||||
3,010 | Cavco Industries Inc.† | 414,062 | 679,086 | |||||||||
27,409 | Legacy Housing Corp.† | 338,783 | 485,962 | |||||||||
752,845 | 1,165,048 | |||||||||||
Institutional Brokerage — 9.0% | ||||||||||||
37,700 | Credit Suisse Group AG, ADR | 392,538 | 399,620 | |||||||||
104,900 | Daiwa Securities Group Inc. | 562,038 | 542,003 | |||||||||
34,810 | Jefferies Financial Group Inc. | 700,918 | 1,047,781 | |||||||||
1,655,494 | 1,989,404 |
Market | ||||||||||||
Shares | Cost | Value | ||||||||||
Institutional Trust, Fiduciary, and Custody — 7.7% | ||||||||||||
8,450 | State Street Corp. | $ | 444,650 | $ | 709,885 | |||||||
21,150 | The Bank of New York Mellon Corp. | 981,482 | 1,000,184 | |||||||||
1,426,132 | 1,710,069 | |||||||||||
Insurance — 7.7% | ||||||||||||
173,117 | Aegon NV | 748,027 | 822,208 | |||||||||
17,929 | NN Group NV | 715,903 | 876,546 | |||||||||
1,463,930 | 1,698,754 | |||||||||||
Investment Management — 15.9% | ||||||||||||
30,750 | Franklin Resources Inc. | 830,188 | 910,200 | |||||||||
26,900 | Janus Henderson Group plc | 570,948 | 837,935 | |||||||||
42,200 | Waddell & Reed Financial Inc., Cl. A | 615,198 | 1,057,110 | |||||||||
49,829 | Westwood Holdings Group Inc. | 695,728 | 720,527 | |||||||||
2,712,062 | 3,525,772 | |||||||||||
Reinsurance — 1.4% | ||||||||||||
6,400 | Axis Capital Holdings Ltd. | 311,232 | 317,248 | |||||||||
TOTAL COMMON STOCKS | 17,520,720 | 21,698,278 |
Principal | ||||||||||||
Amount | ||||||||||||
U.S. GOVERNMENT OBLIGATIONS — 2.4% | ||||||||||||
$525,000 | U.S. Treasury Bills, | |||||||||||
0.021% to 0.027%††, | ||||||||||||
05/06/21 to 05/20/21 | 524,985 | 524,992 | ||||||||||
TOTAL | ||||||||||||
INVESTMENTS — 100.1% | $ | 18,045,705 | 22,223,270 | |||||||||
Other Assets and Liabilities (Net) — (0.1)% | (25,612 | ) | ||||||||||
NET ASSETS — 100.0% | $ | 22,197,658 |
† | Non-income producing security. |
†† | Represents annualized yields at dates of purchase. |
ADR | American Depositary Receipt |
See accompanying notes to financial statements.
5
The Gabelli Global Financial Services Fund
Statement of Assets and Liabilities | ||||
March 31, 2021 (Unaudited) | ||||
Assets: | ||||
Investments, at value (cost $18,045,705) | $ | 22,223,270 | ||
Receivable for investments sold | 21,920 | |||
Receivable for Fund shares sold | 10,501 | |||
Receivable from Adviser | 15,673 | |||
Dividends and interest receivable | 76,471 | |||
Prepaid expenses | 23,591 | |||
Total Assets | 22,371,426 | |||
Liabilities: | ||||
Cash overdraft | 5,967 | |||
Foreign currency overdraft, at value (cost $10) | 10 | |||
Payable for investments purchased | 73,299 | |||
Payable for Fund shares redeemed | 10,131 | |||
Payable for investment advisory fees | 18,840 | |||
Payable for distribution fees | 65 | |||
Payable for legal and audit fees | 13,939 | |||
Payable for shareholder communications expenses | 36,077 | |||
Payable for custodian fees | 9,597 | |||
Other accrued expenses | 5,843 | |||
Total Liabilities | 173,768 | |||
Net Assets | ||||
(applicable to 2,049,030 shares outstanding) | $ | 22,197,658 | ||
Net Assets Consist of: | ||||
Paid-in capital | $ | 19,416,610 | ||
Total distributable earnings | 2,781,048 | |||
Net Assets | $ | 22,197,658 | ||
Shares of Capital Stock, each at $0.001 par value: | ||||
Class AAA: | ||||
Net Asset Value, offering, and redemption price per share ($318,279 ÷ 29,347.93 shares outstanding; 120,000,000 shares authorized) | $ | 10.85 | ||
Class A: | ||||
Net Asset Value and redemption price per share ($23,991 ÷ 2,201 shares outstanding; 60,000,000 shares authorized) | $ | 10.90 | ||
Maximum offering price per share (NAV ÷ 0.9425, based on maximum sales charge of 5.75% of the offering price) | $ | 11.56 | ||
Class C: | ||||
Net Asset Value and offering price per share ($1,108 ÷ 102.76 shares outstanding; 20,000,000 shares authorized) | $ | 10.78 | (a) | |
Class I: | ||||
Net Asset Value, offering, and redemption price per share ($21,854,280 ÷ 2,017,378 shares outstanding; 150,000,000 shares authorized) | $ | 10.83 |
(a) | Redemption price varies based on the length of time held. |
Statement of Operations
For the Six Months Ended March 31, 2021 (Unaudited)
Investment Income: | ||||
Dividends (net of foreign withholding taxes of $4,663) | $ | 246,565 | ||
Interest | 84 | |||
Total Investment Income | 246,649 | |||
Expenses: | ||||
Investment advisory fees | 91,476 | |||
Distribution fees - Class AAA | 148 | |||
Distribution fees - Class A | 14 | |||
Distribution fees - Class C | 5 | |||
Registration expenses | 30,506 | |||
Shareholder communication expenses | 19,200 | |||
Legal and audit fees | 17,264 | |||
Custodian fees | 6,692 | |||
Shareholder services fees | 5,972 | |||
Directors’ fees | 623 | |||
Miscellaneous expenses | 6,081 | |||
Total Expenses | 177,981 | |||
Less: | ||||
Expense reimbursements (See Note 3) | (85,635 | ) | ||
Expenses paid indirectly by broker | ||||
(See Note 6) | (703 | ) | ||
Total Reductions | (86,338 | ) | ||
Net Expenses | 91,643 | |||
Net Investment Income | 155,006 | |||
Net Realized and Unrealized Gain/(Loss) on | ||||
Investments and Foreign Currency: | ||||
Net realized loss on investments | (272,706 | ) | ||
Net realized gain on foreign currency transactions | 75 | |||
Net realized loss on investments and foreign currency transactions | (272,631 | ) | ||
Net change in unrealized appreciation/depreciation: | ||||
on investments | 7,720,866 | |||
on foreign currency translations | (279 | ) | ||
Net change in unrealized appreciation/depreciation on investments and foreign currency translations | 7,720,587 | |||
Net Realized and Unrealized Gain/(Loss) on Investments and Foreign Currency | 7,447,956 | |||
Net Increase in Net Assets Resulting from Operations | $ | 7,602,962 |
See accompanying notes to financial statements.
6
The Gabelli Global Financial Services Fund
Statement of Changes in Net Assets
Six Months Ended | |||||||||
March 31, 2021 | Year Ended | ||||||||
(Unaudited) | September 30, 2020 | ||||||||
Operations: | |||||||||
Net investment income | $ | 155,006 | $ | 255,051 | |||||
Net realized loss on investments and foreign currency transactions | (272,631 | ) | (1,019,053 | ) | |||||
Net change in unrealized appreciation/depreciation on investments and foreign currency translations | 7,720,587 | (2,603,272 | ) | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 7,602,962 | (3,367,274 | ) | ||||||
Distributions to Shareholders: | |||||||||
Class AAA | (858 | ) | (1,646 | ) | |||||
Class A | (92 | ) | (264 | ) | |||||
Class C | (8 | ) | (17 | ) | |||||
Class I | (285,578 | ) | (377,283 | ) | |||||
Total Distributions to Shareholders | (286,536 | ) | (379,210 | ) | |||||
Capital Share Transactions: | |||||||||
Class AAA | 235,541 | (63,425 | ) | ||||||
Class A | 11,932 | (8,303 | ) | ||||||
Class C | 8 | 17 | |||||||
Class I | 1,132,578 | 4,081,055 | |||||||
Net Increase in Net Assets from Capital Share Transactions | 1,380,059 | 4,009,344 | |||||||
Redemption Fees | — | 503 | |||||||
Net Increase in Net Assets | 8,696,485 | 263,363 | |||||||
Net Assets: | |||||||||
Beginning of year | 13,501,173 | 13,237,810 | |||||||
End of period | $ | 22,197,658 | $ | 13,501,173 |
See accompanying notes to financial statements.
7
The Gabelli Global Financial Services Fund
Financial Highlights
Selected data for a share of capital stock outstanding throughout the period:
Income (Loss) from Investment Operations | Distributions | Ratios to Average Net Assets/Supplemental Data | ||||||||||||||||||||||||||||||||||||||||||||||
Year Ended September 30 | Net Asset Value, Beginning of Period | Net Investment Income(a) | Net Realized and Unrealized Gain/(Loss) on Investments | Total from Investment Operations | Net Investment Income | Total Distributions | Redemption Fees(a) | Net Asset Value, End of Period | Total Return † | Net Assets End of Period (in 000’s) | Net Investment Income | Operating Expenses Before Reimbursement | Operating Expenses Net of Reimbursement(b) | Portfolio Turnover Rate | ||||||||||||||||||||||||||||||||||
Class AAA | ||||||||||||||||||||||||||||||||||||||||||||||||
2021 (c) | $ | 7.08 | $ | 0.08 | $ | 3.82 | $ | 3.90 | $ | (0.13 | ) | $ | (0.13 | ) | — | $ | 10.85 | 55.29 | % | $ | 319 | 1.60%(d) | 2.19%(d) | 1.25%(d)(e) | 11 | % | ||||||||||||||||||||||
2020 | 9.09 | 0.11 | (1.90 | ) | (1.79 | ) | (0.22 | ) | (0.22 | ) | $ | 0.00 | (f) | 7.08 | (20.33 | ) | 47 | 1.34 | 2.51 | 1.25 (e) | 18 | |||||||||||||||||||||||||||
2019 (g) | 10.00 | 0.27 | (1.15 | ) | (0.88 | ) | (0.03 | ) | (0.03 | ) | — | 9.09 | (8.76 | ) | 134 | 3.01 | 2.32 | 1.25 | 14 | |||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||||||||||||
2021 (c) | $ | 7.08 | $ | 0.08 | $ | 3.82 | $ | 3.90 | $ | (0.08 | ) | $ | (0.08 | ) | — | $ | 10.90 | 55.38 | % | $ | 24 | 1.68%(d) | 2.19%(d) | 1.25%(d)(e) | 11 | % | ||||||||||||||||||||||
2020 | 9.10 | 0.16 | (1.94 | ) | (1.78 | ) | (0.24 | ) | (0.24 | ) | $ | 0.00 | (f) | 7.08 | (20.24 | ) | 8 | 1.12 | 2.51 | 1.25 (e) | 18 | |||||||||||||||||||||||||||
2019 (g) | 10.00 | 0.35 | (1.22 | ) | (0.87 | ) | (0.03 | ) | (0.03 | ) | — | 9.10 | (8.71 | ) | 10 | 3.77 | 2.32 | 1.25 | 14 | |||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||
2021 (c) | $ | 7.03 | $ | 0.03 | $ | 3.80 | $ | 3.83 | $ | (0.08 | ) | $ | (0.08 | ) | — | $ | 10.78 | 54.68 | % | $ | 1 | 0.69%(d) | 2.95%(d) | 2.00%(d)(e) | 11 | % | ||||||||||||||||||||||
2020 | 9.05 | 0.06 | (1.91 | ) | (1.85 | ) | (0.17 | ) | (0.17 | ) | $ | 0.00 | (f) | 7.03 | (20.97 | ) | 1 | 0.76 | 3.26 | 2.00 (e) | 18 | |||||||||||||||||||||||||||
2019 (g) | 10.00 | 0.17 | (1.11 | ) | (0.94 | ) | (0.01 | ) | (0.01 | ) | — | 9.05 | (9.39 | ) | 1 | 1.85 | 3.08 | 2.00 | 14 | |||||||||||||||||||||||||||||
Class I | ||||||||||||||||||||||||||||||||||||||||||||||||
2021 (c) | $ | 7.08 | $ | 0.08 | $ | 3.82 | $ | 3.90 | $ | (0.15 | ) | $ | (0.15 | ) | — | $ | 10.83 | 55.52 | % | $ | 21,854 | 1.70%(d) | 1.94%(d) | 1.00%(d)(e) | 11 | % | ||||||||||||||||||||||
2020 | 9.11 | 0.14 | (1.91 | ) | (1.77 | ) | (0.26 | ) | (0.26 | ) | $ | 0.00 | (f) | 7.08 | (20.17 | ) | 13,445 | 1.84 | 2.26 | 1.00 (e) | 18 | |||||||||||||||||||||||||||
2019 (g) | 10.00 | 0.28 | (1.13 | ) | (0.85 | ) | (0.04 | ) | (0.04 | ) | — | 9.11 | (8.51 | ) | 13,093 | 3.05 | 2.07 | 1.00 | 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 the 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) | Under an expense reimbursement agreement with the Adviser, the Adviser reimbursed expenses of $85,635, $174,126, and $124,154 for the six months ended March 31, 2021 and the fiscal years ended September 30, 2020, and 2019, respectively. |
(c) | For the six months ended March 31, 2021, unaudited. (d) Annualized. |
(e) | The Fund received credits from a designated broker who agreed to pay certain Fund expenses. For the six months ended March 31, 2021 and the fiscal year ended September 30, 2020, if credits had not been received, the expense ratios would have been 1.26% and 1.26% (Class AAA and Class A), 2.01% and 2.01% (Class C), and 1.01% and 1.01% (Class I), respectively. |
(f) | Amount represents less than $0.005 per share. |
(g) | The Fund commenced investment operations on October 1, 2018. |
See accompanying notes to financial statements.
8
The Gabelli Global Financial Services Fund
Notes to Financial Statements (Unaudited)
1. Organization. The Gabelli Global Financial Services 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 non-diversified open-end management investment company registered under the Investment Company Act of 1940, as amended (the 1940 Act), and one of four separately managed portfolios of the Corporation. The Fund seeks to provide capital appreciation. The Fund commenced investment operations on October 1, 2018.
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.
The global outbreak of the novel coronavirus disease, known as COVID-19, has caused adverse effects on many companies, sectors, nations, regions and the markets in general, and may continue for an unpredictable duration. The effects of this pandemic may materially impact the value and performance of the Fund, its ability to buy and sell fund investments at appropriate valuations, and its ability to achieve its investment objectives.
New Accounting Pronouncements. To improve the effectiveness of fair value disclosure requirements, the Financial Accounting Standards Board issued Accounting Standard Update (ASU) 2018-13, Fair Value Measurement Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement (ASU 2018-13), which added, removed, and modified certain aspects relating to fair value disclosure. Management has fully adopted the ASU 2018-13 in these financial statements.
In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in the ASU provides optional temporary financial reporting relief from the effect of certain types of contract modifications due to the planned discontinuation of the London Interbank Offered Rate (LIBOR) and other interbank-offered based reference rates as of the end of 2021. The ASU is effective for certain reference rate-related contract modifications that occur through December 31, 2022. Management has reviewed the requirements and believes the adoption of this ASU will not have a material impact on the 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
9
The Gabelli Global Financial Services Fund
Notes to Financial Statements (Unaudited) (Continued)
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 obligations 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 securities are valued using the closing bid price, 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. 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. OTC futures and options on futures for which market quotations are readily available will be valued by quotations received from a pricing service or, if no quotations are available from a pricing service, by quotations obtained from one or more dealers in the instrument in question by the Adviser.
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.
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. At March 31, 2021, the Fund did not hold any Level 3 securities. The summary of the Fund’s investments in securities and other financial instruments by inputs used to value the Fund’s investments as of March 31, 2021 is as follows:
Valuation Inputs | ||||||||||
Level 1 | Level 2 Other Significant | Total Market Value | ||||||||
Quoted Prices | Observable Inputs | at 3/31/21 | ||||||||
INVESTMENTS IN SECURITIES: | ||||||||||
ASSETS (Market Value): | ||||||||||
Common Stocks (a) | $21,698,278 | — | $21,698,278 | |||||||
U.S. Government Obligations | — | $524,992 | 524,992 | |||||||
TOTAL INVESTMENTS IN SECURITIES – ASSETS | $21,698,278 | $524,992 | $22,223,270 |
(a) | Please refer to the Schedule of Investments for the industry classifications of these portfolio holdings. |
10
The Gabelli Global Financial Services 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 are 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 or preferred equities, warrants, options, rights, or 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. When fair valuing a security, factors to consider include 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 backtesting the prices realized in subsequent trades of these fair valued securities to fair values previously recognized.
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.
11
The Gabelli Global Financial Services Fund
Notes to Financial Statements (Unaudited) (Continued)
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 the sale of securities eligible for trading on national securities exchanges or in the over-the-counter markets. Restricted securities may sell at a price lower than similar securities that are not subject to restrictions on resale. Securities freely saleable among qualified institutional investors under special rules adopted by the SEC may be treated as liquid if they satisfy liquidity standards established by the Board. The continued liquidity of such securities is not as well assured as that of publicly traded securities, and accordingly the Board will monitor their liquidity. At March 31, 2021, 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 or amortized to the earliest call date, if applicable. 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. The characterization of distributions to shareholders is 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, 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. Permanent differences were primarily due to the tax treatment of currency gains and losses. These reclassifications have no impact on the NAV of the Fund.
12
The Gabelli Global Financial Services Fund
Notes to Financial Statements (Unaudited) (Continued)
The tax character of distributions paid during the fiscal year ended September 30, 2020 was as follows:
Year Ended | |||
September 30, 2020 | |||
Distributions paid from: | |||
Ordinary income | $379,210 | ||
Total distributions paid | $379,210 |
Provision for Income Taxes. The Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended (the Code). It is the policy of the Fund to comply with the requirements of the Code applicable to regulated investment companies and to distribute substantially all of its net investment company taxable income and net capital gains. Therefore, no provision for federal income taxes is required.
The following summarizes the tax cost of investments and the related net unrealized appreciation at March 31, 2021:
Gross | Gross | |||||||
Unrealized | Unrealized | Net Unrealized | ||||||
Cost | Appreciation | Depreciation | Appreciation | |||||
Investments | $18,059,921 | $4,530,618 | $(367,269) | $4,163,349 |
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. During the six months ended March 31, 2021, the Fund did not incur any income tax, interest, or penalties. As of March 31, 2021, the Adviser has reviewed the current and previous tax periods and concluded that there was no impact to the Fund’s net assets or results of operations. The Fund’s federal and state returns for the current and previous 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.
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. As of September 30, 2020 the Fund had a short term capital loss carryforward with no expiration of $132,728 and qualified late year loss deferrals of $1,033,081.
3. Investment Advisory Agreement and Other Transactions. The Fund has entered into an investment advisory agreement (the Advisory Agreement) with the Adviser which provides that the Fund will pay the Adviser a fee, computed daily and paid monthly, at the annual rate of 1.00% of the value of its average daily net assets. In accordance with the Advisory Agreement, the Adviser provides a continuous investment program for the Fund’s portfolio, oversees the administration of all aspects of the Fund’s business and affairs, and pays the compensation of all Officers and Directors of the Fund who are affiliated persons of the Adviser.
The Adviser has contractually agreed to waive its investment advisory fees and/or to reimburse expenses of the Fund to the extent necessary to maintain the annualized total operating expenses of the Fund (excluding brokerage costs, acquired fund fees and expenses, interest, taxes, and extraordinary expenses) at no more than an annual rate of 1.25%, 1.25%, 2.00%, and 1.00% for Class AAA, Class A, Class C, and Class I shares,
13
The Gabelli Global Financial Services Fund
Notes to Financial Statements (Unaudited) (Continued)
respectively. This arrangement is in effect through January 31, 2022. For the six months ended March 31, 2021, the Adviser reimbursed the Fund in the amount of $85,635. In addition, the Fund has also agreed, during the two year period following any waiver or reimbursement by the Adviser, to repay such amount to the extent, that after giving effect to the repayments, such adjusted annualized total operating expenses of the Fund would not exceed the foregoing expense limitations of the value of the Fund’s average daily net assets for Class AAA, Class A, Class C, and Class I Shares. At March 31, 2021, the cumulative amount which the Fund may repay the Adviser, subject to the terms above, is $383,915:
For the fiscal year ended September 30, 2019, expiring September 30, 2021 | $124,154 | |
For the fiscal year ended September 30, 2020, expiring September 30, 2022 | 174,126 | |
For the six months ended March 31, 2021, expiring September 30, 2023 | 85,635 | |
$383,915 |
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, 2021, other than short term securities and U.S. Government obligations, aggregated $2,702,791 and $1,860,432, respectively.
6. Transactions with Affiliates and Other Arrangements. During the six months ended March 31, 2021, the Fund paid $1,506 in brokerage commissions on security trades to G.research, LLC, an affiliate of the Adviser. Additionally, the Distributor retained a total of $77 from investors representing commissions (sales charges and underwriting fees) on sales and redemptions of Fund shares.
During the six months ended March 31, 2021, 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 $703.
The cost of calculating the Fund’s NAV per share is a Fund expense pursuant to the Advisory Agreement. The Adviser did not seek a reimbursement during the six months ended March 31, 2021.
The Corporation pays retainer and per meeting fees to Directors not affiliated with the Adviser, plus specified amounts to the Lead Director and Audit Committee Chairman. Directors are also reimbursed for out of pocket expenses incurred in attending meetings. Directors who are directors or employees of the Adviser or an affiliated company receive no compensation or expense reimbursement from the Corporation.
7. Line of Credit. The Fund participates in an unsecured line of credit, which expires on March 2, 2022 and may be renewed annually, of up to $75,000,000 under which it may borrow up to 10% of its net assets from the custodian for temporary borrowing purposes. Borrowings under this arrangement bear interest at a floating rate equal to the higher of the Overnight Federal Funds Rate plus 135 basis points or the Overnight Bank Funding Rate plus 135 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, 2021, there were no borrowings under the line of credit.
14
The Gabelli Global Financial Services Fund
Notes to Financial Statements (Unaudited) (Continued)
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%. 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, 2021, 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:
Year Ended | ||||||||||||||
March 31, 2021 | Year Ended | |||||||||||||
(Unaudited) | September 30, 2020 | |||||||||||||
Shares | Amount | Shares | Amount | |||||||||||
Class AAA | ||||||||||||||
Shares sold | 23,922 | $ | 249,627 | 9,216 | $ | 71,042 | ||||||||
Shares issued upon reinvestment of distributions | 96 | 858 | 171 | 1,647 | ||||||||||
Shares redeemed | (1,400 | ) | (14,944 | ) | (17,429 | ) | (136,114 | ) | ||||||
Net increase/(decrease) | 22,618 | $ | 235,541 | (8,042 | ) | $ | (63,425 | ) | ||||||
Class A | ||||||||||||||
Shares sold | 1,102 | $ | 11,923 | 9,324 | $ | 59,425 | ||||||||
Shares issued upon reinvestment of distributions | 10 | 92 | 28 | 264 | ||||||||||
Shares redeemed | (9 | ) | (83 | ) | (9,349 | ) | (67,992 | ) | ||||||
Net increase/(decrease) | 1,103 | $ | 11,932 | 3 | $ | (8,303 | ) | |||||||
Class C | ||||||||||||||
Shares issued upon reinvestment of distributions | 1 | $ | 8 | 2 | $ | 17 | ||||||||
Net increase | 1 | $ | 8 | 2 | $ | 17 | ||||||||
Class I | ||||||||||||||
Shares sold | 91,411 | $ | 883,680 | 454,386 | $ | 3,950,997 | ||||||||
Shares issued upon reinvestment of distributions | 31,795 | 283,930 | 39,081 | 374,401 | ||||||||||
Shares redeemed | (3,781 | ) | (35,032 | ) | (32,357 | ) | (244,343 | ) | ||||||
Net increase | 119,425 | $ | 1,132,578 | 461,110 | $ | 4,081,055 |
9. Significant Shareholder. As of March 31, 2021, approximately 74.54% of the Fund was beneficially owned by the Adviser and its affiliates.
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 Global Financial Services Fund
Board Consideration and Re-Approval of Advisory Agreement (Unaudited)
During the six months ended March 31, 2021, 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 supervisory, 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 term performance of the Fund (as of December 31, 2020) of the Fund against a peer group of nine other comparable funds prepared by the Adviser (the “Adviser Peer Group”) and against a peer group prepared by Broadridge (the “Broadridge Performance Peer Group”) consisting of the Fund and all retail and institutional global financial services fund, regardless of asset size or primary channel of distribution. The Independent Board Members noted that the Fund’s performance was in the third quartile for the one year period, as measured against the Adviser Peer Group. Against the Broadridge Performance Peer Group, the Independent Board Members noted that the Fund’s performance was in the third quintile for the one year and three year periods. The Independent Board Members noted that at its current size, the Fund was not competitive among its peer groups and encouraged the Adviser to explore ways to increase the size of the Fund.
Profitability. The Independent Board Members reviewed summary data regarding the profitability of the Fund to the Adviser both with a pro rata administrative overhead charge and with a standalone administrative charge and noted the effect of the Deferral Agreement. The Independent Board Members also noted that a portion of the Fund’s portfolio transactions were executed by an affiliated broker of the Adviser and that another affiliated broker of the Adviser received distribution fees and minor amounts of sales commissions.
Economies of Scale. The Independent Board Members discussed the major elements of the Adviser’s cost structure and the relationship of those elements to potential economies of scale and reviewed data provided by the Adviser.
Sharing of Economies of Scale. The Independent Board Members noted that the investment management fee schedule for the Fund does not take into account any potential economies of scale that may develop.
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 Adviser Peer Group and a peer group of two other global financial services funds and seven other financial services funds selected by Broadridge 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 the effect of the Deferral Agreement in place for the Fund. The Independent Board Members noted that the Fund’s expense ratios were below average within each peer group and that the Fund’s size was below average within the Adviser Peer Group and below average within the peer group of comparable funds selected by Broadridge. The Independent Board Members also noted that the management fee structure was the same as that in effect
16
The Gabelli Global Financial Services Fund
Board Consideration and Re-Approval of Advisory Agreement (Unaudited) (Continued)
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 fee with the fee for other types of accounts managed by the Adviser.
Conclusions. The Independent Board Members concluded that the Fund enjoyed highly experienced portfolio management services and good ancillary services. The Independent Board Members noted the reasons for the Fund’s underperformance and the steps the Adviser was taking to improve performance and indicated that they would continue to evaluate the Fund. The Independent Board Members also concluded that the Fund’s expense ratios and profitability to the Adviser were acceptable, and that economies of scale were not a significant factor in their thinking at this time. The Board Members did not view the potential profitability of ancillary services as material to their decision. On the basis of the foregoing and without assigning particular weight to any single conclusion, the Independent Board Members determined to recommend continuation of the investment management agreement to the full Board.
Based on a consideration of all these factors in their totality, the Board Members, including all of the Independent Board Members, determined that the Fund’s advisory fee was acceptable in light of the quality of services provided and in light of the other factors described above that the Board deemed relevant. Accordingly, the Board Members determined to approve the continuation of the Fund’s Advisory Agreement. The Board Members based its decision on evaluations of all these factors as a whole and did not consider any one factor as all-important or controlling.
17
Gabelli Funds and Your Personal Privacy
Who are we?
The Gabelli Funds are investment companies registered with the Securities and Exchange Commission under the Investment Company Act of 1940. We are managed by Gabelli Funds, LLC, which is affiliated with GAMCO Investors, Inc., a publicly held company with 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.
THE GABELLI GLOBAL FINANCIAL SERVICES FUND
One Corporate Center
Rye, NY 10580-1422
Portfolio Manager Biography
Ian Lapey joined Gabelli in October 2018 as a portfolio manager. Prior to joining Gabelli, Mr. Lapey was a research analyst and partner at Moerus Capital Management LLC. Prior to joining Moerus, he was a partner, research analyst, and a portfolio manager at Third Avenue Management. Mr. Lapey holds an MBA in Finance and Statistics from the Stern School of Business at New York University. He also holds a Master’s degree in Accounting from Northeastern University and a BA in Economics from Williams College.
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 GLOBAL FINANCIAL SERVICES 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 | Salvatore J. Zizza |
Chairman and | Chairman, |
Chief Executive Officer, | Zizza & Associates Corp. |
GAMCO Investors, Inc. | |
Executive Chairman, | OFFICERS |
Associated Capital Group, Inc. | Bruce N. Alpert |
President | |
Elizabeth C. Bogan | |
Senior Lecturer, | John C. Ball |
Princeton University | Treasurer |
Anthony J. Colavita | Peter Goldstein |
President, | Secretary |
Anthony J. Colavita, P.C. | Richard J. Walz |
Vincent D. Enright | Chief Compliance Officer |
Former Senior Vice | |
DISTRIBUTOR | |
President and Chief | |
Financial Officer, | G.distributors, LLC |
KeySpan Corp. | |
CUSTODIAN | |
John D. Gabelli | State Street Bank and Trust |
Senior Vice President, | Company |
G.research, LLC | |
TRANSFER AGENT AND | |
Robert J. Morrissey | DIVIDEND DISBURSING AGENT |
Partner, | |
DST Asset Manager | |
Morrissey, Hawkins & Lynch | Solutions, Inc. |
Kuni Nakamura | |
President, | LEGAL COUNSEL |
Advanced Polymer, Inc. | Skadden, Arps, Slate, Meagher & |
Flom LLP | |
Anthonie C. van Ekris | |
Chairman, | |
BALMAC International, Inc. |
This report is submitted for the general information of the shareholders of The Gabelli Global Financial Services Fund.It is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus.
GAB3630Q121SR
(b) | Not applicable. |
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)
The Gabelli Small Cap Growth Fund
Schedule of Investments — March 31, 2021 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS — 99.5% | ||||||||||||
Aerospace — 1.1% | ||||||||||||
451,000 | Aerojet Rocketdyne Holdings Inc. | $ | 1,589,054 | $ | 21,178,960 | |||||||
20,000 | Allied Motion Technologies Inc. | 664,462 | 1,026,600 | |||||||||
40,000 | Innovative Solutions and Support Inc. | 130,088 | 252,800 | |||||||||
2,383,604 | 22,458,360 | |||||||||||
Agriculture — 0.0% | ||||||||||||
12,000 | Cadiz Inc.† | 93,950 | 115,080 | |||||||||
18,000 | Limoneira Co. | 323,244 | 315,000 | |||||||||
417,194 | 430,080 | |||||||||||
Automotive — 0.2% | ||||||||||||
20,000 | Navistar International Corp.† | 156,465 | 880,600 | |||||||||
1,200 | PACCAR Inc. | 44,521 | 111,504 | |||||||||
83,000 | The Shyft Group Inc. | 430,418 | 3,087,600 | |||||||||
631,404 | 4,079,704 | |||||||||||
Automotive: Parts and Accessories — 4.1% | ||||||||||||
150,000 | BorgWarner Inc. | 704,973 | 6,954,000 | |||||||||
88,022 | China Automotive Systems Inc.† | 420,368 | 417,224 | |||||||||
1,110,000 | Dana Inc. | 9,031,850 | 27,006,300 | |||||||||
848,000 | Freni Brembo SpA† | 1,568,167 | 10,561,055 | |||||||||
385,000 | Modine Manufacturing Co.† | 3,507,189 | 5,686,450 | |||||||||
18,000 | Monro Inc. | 80,738 | 1,184,400 | |||||||||
4,300 | O’Reilly Automotive Inc.† | 92,532 | 2,181,175 | |||||||||
45,000 | Puradyn Filter Technologies Inc.† | 11,732 | 608 | |||||||||
191,900 | Standard Motor Products Inc. | 1,468,735 | 7,979,202 | |||||||||
244,000 | Strattec Security Corp.†(a) | 4,677,938 | 11,443,600 | |||||||||
314,000 | Tenneco Inc., Cl. A† | 1,330,279 | 3,366,080 | |||||||||
19,200 | Thor Industries Inc. | 177,821 | 2,587,008 | |||||||||
20,000 | Uni-Select Inc.† | 161,317 | 144,346 | |||||||||
23,233,639 | 79,511,448 | |||||||||||
Aviation: Parts and Services — 3.5% | ||||||||||||
20,000 | AAR Corp.† | 230,415 | 833,000 | |||||||||
9,500 | Astronics Corp.† | 13,628 | 171,380 | |||||||||
22,700 | Astronics Corp., Cl. B† | 31,898 | 409,735 | |||||||||
46,000 | Ducommun Inc.† | 918,285 | 2,760,000 | |||||||||
679,600 | Kaman Corp. | 10,234,048 | 34,856,684 | |||||||||
89,000 | Moog Inc., Cl. A | 1,052,574 | 7,400,350 | |||||||||
16,500 | Moog Inc., Cl. B | 496,050 | 1,369,500 | |||||||||
3,000,000 | Signature Aviation plc† | 6,849,866 | 16,721,039 | |||||||||
32,500 | Woodward Inc. | 273,304 | 3,920,475 | |||||||||
20,100,068 | 68,442,163 | |||||||||||
Broadcasting — 2.0% | ||||||||||||
123,000 | Beasley Broadcast Group Inc., Cl. A† | 470,120 | 348,090 | |||||||||
10,000 | Cogeco Communications Inc. | 340,851 | 938,967 |
Shares | Cost | Market Value | ||||||||||
23,300 | Cogeco Inc. | $ | 592,837 | $ | 1,797,513 | |||||||
185,000 | Corus Entertainment Inc., Cl. B. | 679,390 | 842,047 | |||||||||
40,000 | Fox Corp., Cl. A | 1,662,000 | 1,444,400 | |||||||||
25,000 | Gray Television Inc. | 73,674 | 460,000 | |||||||||
72,350 | Gray Television Inc., Cl. A | 386,480 | 1,259,614 | |||||||||
260,000 | ITV plc† | 529,070 | 430,661 | |||||||||
13,000 | Liberty Broadband Corp., Cl. A† | 78,211 | 1,886,950 | |||||||||
11,000 | Liberty Broadband Corp., Cl. C† | 57,595 | 1,651,650 | |||||||||
20,000 | Liberty Media Corp.-Liberty Formula One, Cl. A† | 66,962 | 764,400 | |||||||||
27,000 | Liberty Media Corp.-Liberty Formula One, Cl. C† | 91,359 | 1,168,830 | |||||||||
64,000 | Liberty Media Corp.-Liberty SiriusXM, Cl. A† | 214,254 | 2,821,120 | |||||||||
34,452 | Liberty Media Corp.-Liberty SiriusXM, Cl. C† | 294,603 | 1,519,678 | |||||||||
33,000 | Madison Square Garden Entertainment Corp.† | 0 | 2,699,400 | |||||||||
345,000 | MSG Networks Inc., Cl. A† | 2,147,239 | 5,188,800 | |||||||||
22,900 | Nexstar Media Group Inc., Cl. A | 1,439,565 | 3,215,847 | |||||||||
130,000 | Salem Media Group Inc.† | 0 | 382,200 | |||||||||
225,000 | Sinclair Broadcast Group Inc., Cl. A | 3,257,418 | 6,583,500 | |||||||||
480,000 | Sirius XM Holdings Inc. | 316,771 | 2,923,200 | |||||||||
12,698,399 | 38,326,867 | |||||||||||
Building and Construction — 6.7% | ||||||||||||
79,000 | Arcosa Inc. | 942,643 | 5,142,110 | |||||||||
96,000 | D.R. Horton Inc. | 1,051,872 | 8,555,520 | |||||||||
28,000 | Gibraltar Industries Inc.† | 524,580 | 2,562,280 | |||||||||
359,500 | Herc Holdings Inc.† | 11,968,511 | 36,428,135 | |||||||||
128,000 | KB Home | 1,271,387 | 5,955,840 | |||||||||
2,500 | Legacy Housing Corp.† | 29,404 | 44,325 | |||||||||
390,000 | Lennar Corp., Cl. B | 9,481,128 | 32,112,600 | |||||||||
110,160 | MDC Holdings Inc. | 2,033,587 | 6,543,504 | |||||||||
18,500 | Meritage Homes Corp.† | 316,744 | 1,700,520 | |||||||||
2,700 | NVR Inc.† | 1,908,453 | 12,719,511 | |||||||||
150,000 | PulteGroup Inc. | 915,164 | 7,866,000 | |||||||||
64,000 | Titan Machinery Inc.† | 1,057,708 | 1,632,000 | |||||||||
158,000 | Toll Brothers Inc. | 2,825,962 | 8,963,340 | |||||||||
34,327,143 | 130,225,685 | |||||||||||
Business Services — 3.2% | ||||||||||||
13,000 | ACCO Brands Corp. | 60,332 | 109,720 | |||||||||
570,000 | Clear Channel Outdoor Holdings Inc.† | 1,214,257 | 1,026,000 | |||||||||
395,000 | Diebold Nixdorf Inc.† | 3,932,038 | 5,581,350 | |||||||||
62,000 | Element Solutions Inc. | 557,626 | 1,133,980 | |||||||||
70,000 | GP Strategies Corp.† | 579,429 | 1,221,500 | |||||||||
13,000 | GSE Systems Inc.† | 18,200 | 22,100 | |||||||||
199,000 | IAA Inc.† | 1,619,256 | 10,972,860 | |||||||||
50,000 | Live Nation Entertainment Inc.† | 423,371 | 4,232,500 | |||||||||
40,000 | Loomis AB | 402,123 | 1,216,472 |
See accompanying notes to financial statements.
1
The Gabelli Small Cap Growth Fund
Schedule of Investments (Continued) — March 31, 2021 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS (Continued) | ||||||||||||
Business Services (Continued) | ||||||||||||
165,000 | Macquarie Infrastructure Corp. | $ | 13,706 | $ | 5,248,650 | |||||||
16,000 | McGrath RentCorp | 411,253 | 1,290,400 | |||||||||
20,000 | Sealed Air Corp. | 587,044 | 916,400 | |||||||||
71,000 | Sohgo Security Services Co. Ltd. | 823,820 | 3,353,624 | |||||||||
8,000 | Stamps.com Inc.† | 66,565 | 1,596,080 | |||||||||
92,000 | Team Inc.† | 1,244,901 | 1,060,760 | |||||||||
350,000 | The Interpublic Group of Companies Inc. | 1,483,114 | 10,220,000 | |||||||||
25,000 | TransAct Technologies Inc.† | 115,198 | 271,750 | |||||||||
1,640,000 | Trans-Lux Corp.†(a) | 1,615,044 | 557,600 | |||||||||
36,100 | United Rentals Inc.† | 224,528 | 11,888,091 | |||||||||
15,391,805 | 61,919,837 | |||||||||||
Cable — 0.7% | ||||||||||||
53,500 | AMC Networks Inc., Cl. A† | 0 | 2,844,060 | |||||||||
39,000 | DISH Network Corp., Cl. A† | 726,991 | 1,411,800 | |||||||||
30,000 | EchoStar Corp., Cl. A† | 479,334 | 720,000 | |||||||||
121,000 | Liberty Global plc, Cl. A† | 2,700,564 | 3,104,860 | |||||||||
140,000 | Liberty Global plc, Cl. C† | 2,647,571 | 3,575,600 | |||||||||
85,000 | WideOpenWest Inc.† | 661,872 | 1,155,150 | |||||||||
7,216,332 | 12,811,470 | |||||||||||
Communications Equipment — 0.1% | ||||||||||||
242,000 | Communications Systems Inc. | 1,610,888 | 1,442,320 | |||||||||
Computer Software and Services — 2.0% | ||||||||||||
78,000 | Activision Blizzard Inc. | 1,021,036 | 7,254,000 | |||||||||
390,000 | Alithya Group Inc., Cl. A† | 1,196,401 | 947,700 | |||||||||
70,000 | Avid Technology Inc.† | 334,865 | 1,477,700 | |||||||||
155,000 | GTY Technology Holdings Inc.† | 1,436,675 | 990,450 | |||||||||
12,500 | MKS Instruments Inc. | 217,798 | 2,317,750 | |||||||||
38,000 | Rockwell Automation Inc. | 893,367 | 10,086,720 | |||||||||
38,000 | Tyler Technologies Inc.† | 76,025 | 16,132,140 | |||||||||
5,176,167 | 39,206,460 | |||||||||||
Consumer Products — 2.6% | ||||||||||||
35,000 | 1-800-Flowers.com Inc., Cl. A† | 336,212 | 966,350 | |||||||||
78,500 | Brunswick Corp. | 1,843,663 | 7,486,545 | |||||||||
32,000 | Chofu Seisakusho Co. Ltd. | 461,495 | 628,006 | |||||||||
41,000 | Church & Dwight Co. Inc. | 69,785 | 3,581,350 | |||||||||
17,000 | Energizer Holdings Inc. | 709,960 | 806,820 | |||||||||
5,000 | Ginko International Co. Ltd. | 35,851 | 31,542 | |||||||||
2,000 | Harley-Davidson Inc. | 4,713 | 80,200 | |||||||||
116,000 | Hunter Douglas NV† | 4,828,131 | 9,141,431 | |||||||||
2,500 | Kobayashi Pharmaceutical Co. Ltd. | 103,323 | 233,235 | |||||||||
3,800 | LCI Industries | 62,898 | 502,664 | |||||||||
220,000 | Marine Products Corp. | 136,308 | 3,579,400 | |||||||||
3,000 | National Presto Industries Inc. | 83,060 | 306,210 | |||||||||
225,000 | Sally Beauty Holdings Inc.† | 1,254,231 | 4,529,250 |
Shares | Cost | Market Value | ||||||||||
215,000 | Samick Musical Instruments Co. Ltd. | $ | 289,566 | $ | 305,854 | |||||||
3,700 | Shimano Inc. | 414,540 | 881,350 | |||||||||
13,500 | Steven Madden Ltd. | 32,850 | 503,010 | |||||||||
102,000 | Swedish Match AB | 1,947,751 | 7,962,901 | |||||||||
10,000 | The Scotts Miracle-Gro Co. | 174,942 | 2,449,700 | |||||||||
9,500 | WD-40 Co. | 248,399 | 2,908,710 | |||||||||
85,000 | Wolverine World Wide Inc. | 413,704 | 3,257,200 | |||||||||
13,451,382 | 50,141,728 | |||||||||||
Consumer Services — 1.0% | ||||||||||||
53,000 | Bowlin Travel Centers Inc.† | 53,947 | 166,950 | |||||||||
3,000 | H&E Equipment Services Inc. | 67,163 | 114,000 | |||||||||
5,000 | IAC/InterActiveCorp.† | 16,882 | 1,081,550 | |||||||||
260,000 | KAR Auction Services Inc.† | 1,330,391 | 3,900,000 | |||||||||
412,000 | Rollins Inc. | 395,943 | 14,181,040 | |||||||||
1,864,326 | 19,443,540 | |||||||||||
Diversified Industrial — 10.9% | ||||||||||||
10,500 | Acuity Brands Inc. | 99,097 | 1,732,500 | |||||||||
57,500 | Albany International Corp., Cl. A | 1,140,776 | 4,799,525 | |||||||||
233,496 | Ampco-Pittsburgh Corp.† | 1,346,333 | 1,576,098 | |||||||||
65,500 | Burnham Holdings Inc., Cl. A | 1,131,374 | 871,150 | |||||||||
359,000 | Crane Co. | 7,725,236 | 33,713,690 | |||||||||
108,000 | EnPro Industries Inc. | 5,761,157 | 9,209,160 | |||||||||
115,000 | Greif Inc., Cl. A | 2,267,516 | 6,555,000 | |||||||||
96,362 | Greif Inc., Cl. B | 4,378,812 | 5,515,761 | |||||||||
1,378,000 | Griffon Corp. | 15,500,530 | 37,440,260 | |||||||||
186,000 | Jardine Strategic Holdings Ltd. | 3,374,300 | 6,141,720 | |||||||||
5,000 | JSP Corp. | 111,873 | 83,992 | |||||||||
83,000 | Kimball International Inc., Cl. B | 785,684 | 1,162,000 | |||||||||
75,000 | L.B. Foster Co., Cl. A† | 1,029,012 | 1,342,500 | |||||||||
51,000 | Lawson Products Inc.† | 670,308 | 2,644,860 | |||||||||
50,500 | Lincoln Electric Holdings Inc. | 1,298,789 | 6,208,470 | |||||||||
40,000 | Lindsay Corp. | 851,873 | 6,664,800 | |||||||||
22,500 | Lydall Inc.† | 227,621 | 759,150 | |||||||||
30,000 | Matthews International Corp., Cl. A | 700,744 | 1,186,500 | |||||||||
922,000 | Myers Industries Inc. | 12,671,530 | 18,218,720 | |||||||||
72,000 | Oil-Dri Corp. of America | 501,026 | 2,479,680 | |||||||||
14,000 | Olin Corp. | 221,218 | 531,580 | |||||||||
300,000 | Park-Ohio Holdings Corp. | 2,642,414 | 9,447,000 | |||||||||
12,500 | Pentair plc | 296,897 | 779,000 | |||||||||
94,000 | Raven Industries Inc.† | 2,319,682 | 3,603,020 | |||||||||
15,600 | Roper Technologies Inc. | 293,574 | 6,292,104 | |||||||||
69,000 | Sonoco Products Co. | 2,033,683 | 4,367,700 | |||||||||
53,000 | Standex International Corp. | 1,391,239 | 5,065,210 | |||||||||
155,000 | Steel Connect Inc.† | 228,451 | 306,900 | |||||||||
75,029 | Steel Partners Holdings LP† | 903,428 | 1,031,649 | |||||||||
13,000 | T. Hasegawa Co. Ltd. | 236,726 | 248,318 | |||||||||
7,000 | Terex Corp. | 166,670 | 322,490 | |||||||||
342,500 | Textron Inc. | 2,079,106 | 19,207,400 |
See accompanying notes to financial statements.
2
The Gabelli Small Cap Growth Fund
Schedule of Investments (Continued) — March 31, 2021 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS (Continued) | ||||||||||||
Diversified Industrial (Continued) | ||||||||||||
385,000 | Tredegar Corp. | $ | 5,966,471 | $ | 5,778,850 | |||||||
228,000 | Trinity Industries Inc. | 2,595,295 | 6,495,720 | |||||||||
48,000 | Ultra Electronics Holdings plc | 962,561 | 1,341,984 | |||||||||
83,911,006 | 213,124,461 | |||||||||||
Electronics — 2.0% | ||||||||||||
138,500 | Badger Meter Inc. | 1,768,846 | 12,890,195 | |||||||||
214,000 | Bel Fuse Inc., Cl. A(a) | 4,054,114 | 3,826,320 | |||||||||
478,000 | CTS Corp. | 4,119,033 | 14,846,680 | |||||||||
30,000 | Daktronics Inc.† | 250,418 | 188,100 | |||||||||
115,000 | Gentex Corp. | 1,162,259 | 4,102,050 | |||||||||
20,000 | IMAX Corp.† | 158,565 | 402,000 | |||||||||
30,000 | Renesas Electronics Corp.† | 194,117 | 325,130 | |||||||||
68,000 | Stoneridge Inc.† | 352,169 | 2,163,080 | |||||||||
12,059,521 | 38,743,555 | |||||||||||
Energy and Utilities — 2.3% | ||||||||||||
19,000 | Avangrid Inc. | 736,250 | 946,390 | |||||||||
25,000 | Callon Petroleum Co.† | 174,121 | 963,750 | |||||||||
16,000 | Chesapeake Utilities Corp. | 208,066 | 1,857,280 | |||||||||
35,500 | CMS Energy Corp. | 181,989 | 2,173,310 | |||||||||
11,000 | Consolidated Water Co. Ltd. | 141,093 | 147,950 | |||||||||
100,000 | Covanta Holding Corp. | 24,597 | 1,386,000 | |||||||||
46,000 | Diamondback Energy Inc. | 2,289,635 | 3,380,540 | |||||||||
35,500 | Dril-Quip Inc.† | 1,314,846 | 1,179,665 | |||||||||
74,000 | Energy Recovery Inc.† | 316,427 | 1,357,160 | |||||||||
24,000 | Landis+Gyr Group AG | 1,466,993 | 1,614,982 | |||||||||
25,000 | Marathon Petroleum Corp. | 123,445 | 1,337,250 | |||||||||
31,000 | Middlesex Water Co. | 523,319 | 2,449,620 | |||||||||
11,000 | Northwest Natural Holding Co. | 518,541 | 593,450 | |||||||||
21,500 | NorthWestern Corp. | 582,609 | 1,401,800 | |||||||||
16,000 | Otter Tail Corp. | 317,433 | 738,720 | |||||||||
6,000 | PNM Resources Inc. | 47,396 | 294,300 | |||||||||
1,850,000 | RPC Inc.† | 864,702 | 9,990,000 | |||||||||
20,000 | Siemens Gamesa Renewable Energy SA† | 117,491 | 773,982 | |||||||||
89,000 | SJW Group | 1,619,026 | 5,606,110 | |||||||||
32,500 | Southwest Gas Holdings Inc. | 533,592 | 2,233,075 | |||||||||
9,000 | Spire Inc. | 354,680 | 665,010 | |||||||||
34,000 | The York Water Co. | 475,596 | 1,664,980 | |||||||||
11,000 | Vestas Wind Systems A/S | 94,711 | 2,257,833 | |||||||||
13,026,558 | 45,013,157 | |||||||||||
Entertainment — 1.4% | ||||||||||||
43,000 | Discovery Inc., Cl. A† | 624,892 | 1,868,780 | |||||||||
70,000 | Discovery Inc., Cl. C† | 461,173 | 2,582,300 | |||||||||
76,500 | Inspired Entertainment Inc.† | 479,260 | 710,685 | |||||||||
97,500 | Liberty Media Corp.-Liberty Braves, Cl. A† | 2,180,926 | 2,779,725 | |||||||||
197,000 | Liberty Media Corp.-Liberty Braves, Cl. C† | 2,839,832 | 5,480,540 |
|
Shares | Cost | Market Value | ||||||||||
34,000 | Madison Square Garden Sports Corp.† | $ | 186,907 | $ | 6,101,640 | |||||||
49,000 | Manchester United plc, Cl. A | 769,321 | 771,260 | |||||||||
10,000 | Take-Two Interactive Software Inc.† | 75,380 | 1,767,000 | |||||||||
4,000 | The Walt Disney Co.† | 22,938 | 738,080 | |||||||||
36,000 | Universal Entertainment Corp.† | 217,230 | 877,200 | |||||||||
68,000 | World Wrestling Entertainment Inc., Cl. A | 717,033 | 3,689,680 | |||||||||
8,574,892 | 27,366,890 | |||||||||||
Environmental Services — 0.4% | ||||||||||||
32,000 | Primo Water Corp. | 208,730 | 520,320 | |||||||||
76,000 | Republic Services Inc. | 686,533 | 7,550,600 | |||||||||
895,263 | 8,070,920 | |||||||||||
Equipment and Supplies — 15.0% | ||||||||||||
25,500 | A.O. Smith Corp. | 57,150 | 1,724,055 | |||||||||
414,000 | AMETEK Inc. | 704,459 | 52,880,220 | |||||||||
52,000 | AZZ Inc. | 1,771,545 | 2,618,200 | |||||||||
14,500 | Chart Industries Inc.† | 476,653 | 2,064,075 | |||||||||
144,000 | CIRCOR International Inc.† | 2,183,088 | 5,014,080 | |||||||||
325,000 | Core Molding Technologies Inc.† | 690,461 | 3,811,113 | |||||||||
138,500 | Crown Holdings Inc. | 559,314 | 13,440,040 | |||||||||
2,025 | Danaher Corp. | 13,122 | 455,787 | |||||||||
100,000 | Donaldson Co. Inc. | 575,112 | 5,816,000 | |||||||||
57,000 | Entegris Inc. | 243,736 | 6,372,600 | |||||||||
250,000 | Federal Signal Corp. | 1,335,797 | 9,575,000 | |||||||||
241,000 | Flowserve Corp. | 1,445,694 | 9,353,210 | |||||||||
174,000 | Franklin Electric Co. Inc. | 679,384 | 13,735,560 | |||||||||
472,000 | Graco Inc. | 2,839,862 | 33,804,640 | |||||||||
38,500 | IDEX Corp. | 141,072 | 8,058,820 | |||||||||
161,000 | Interpump Group SpA | 726,682 | 8,114,826 | |||||||||
8,000 | Littelfuse Inc. | 69,716 | 2,115,520 | |||||||||
110,000 | Maezawa Kyuso Industries Co. Ltd. | 359,609 | 1,137,503 | |||||||||
63,000 | Minerals Technologies Inc. | 2,717,321 | 4,745,160 | |||||||||
6,000 | MSA Safety Inc. | 179,592 | 900,120 | |||||||||
686,000 | Mueller Industries Inc. | 18,074,327 | 28,366,100 | |||||||||
365,000 | Mueller Water Products Inc., Cl. A | 2,505,408 | 5,069,850 | |||||||||
3,600 | Teleflex Inc. | 54,840 | 1,495,656 | |||||||||
173,000 | Tennant Co. | 2,935,527 | 13,820,970 | |||||||||
772,500 | The Gorman-Rupp Co. | 12,121,295 | 25,577,475 | |||||||||
98,000 | The Greenbrier Companies Inc. | 1,137,850 | 4,627,560 | |||||||||
110,003 | The L.S. Starrett Co., Cl. A† | 803,564 | 709,519 | |||||||||
30,000 | The Manitowoc Co. Inc.† | 283,157 | 618,600 | |||||||||
61,000 | The Middleby Corp.† | 700,167 | 10,110,750 | |||||||||
35,500 | The Timken Co. | 1,180,616 | 2,881,535 | |||||||||
30,000 | The Toro Co. | 524,020 | 3,094,200 | |||||||||
7,000 | Valmont Industries Inc. | 145,926 | 1,663,690 | |||||||||
4,500 | Vicor Corp.† | 21,045 | 382,635 |
See accompanying notes to financial statements.
3
The Gabelli Small Cap Growth Fund
Schedule of Investments (Continued) — March 31, 2021 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS (Continued) | ||||||||||||
Equipment and Supplies (Continued) | ||||||||||||
7,875 | Watsco Inc., Cl. B | $ | 23,627 | $ | 2,058,446 | |||||||
55,000 | Watts Water Technologies Inc., Cl. A | 1,044,108 | 6,534,550 | |||||||||
59,324,846 | 292,748,065 | |||||||||||
Financial Services — 4.3% | ||||||||||||
5,000 | Alleghany Corp.† | 762,027 | 3,131,450 | |||||||||
8,240 | Ameris Bancorp | 71,898 | 432,682 | |||||||||
25,000 | Argo Group International Holdings Ltd. | 493,734 | 1,258,000 | |||||||||
�� | 12,000 | Capitol Federal Financial Inc. | 120,000 | 158,940 | ||||||||
22,000 | Crazy Woman Creek Bancorp Inc. | 343,564 | 527,450 | |||||||||
325,000 | Energy Transfer LP | 0 | 2,496,000 | |||||||||
130 | Farmers & Merchants Bank of Long Beach | 846,022 | 1,004,900 | |||||||||
329,950 | Flushing Financial Corp. | 5,378,313 | 7,004,839 | |||||||||
66,000 | FNB Corp. | 659,922 | 838,200 | |||||||||
220,000 | GAM Holding AG† | 794,162 | 579,125 | |||||||||
278,000 | Hope Bancorp Inc. | 3,087,049 | 4,186,680 | |||||||||
410,000 | Huntington Bancshares Inc. | 3,921,829 | 6,445,200 | |||||||||
721,000 | KKR & Co. Inc. | 3,052,031 | 35,220,850 | |||||||||
80,000 | Medallion Financial Corp.† | 362,763 | 564,000 | |||||||||
55,000 | Pzena Investment Management Inc., Cl. A | 456,506 | 579,150 | |||||||||
44,000 | Sandy Spring Bancorp Inc. | 1,491,612 | 1,910,920 | |||||||||
13,500 | Sculptor Capital Management Inc. | 301,309 | 295,380 | |||||||||
800 | South State Corp. | 58,904 | 62,808 | |||||||||
9,000 | State Auto Financial Corp. | 208,279 | 177,390 | |||||||||
400,000 | Sterling Bancorp | 4,300,863 | 9,208,000 | |||||||||
70,000 | Synovus Financial Corp. | 1,857,562 | 3,202,500 | |||||||||
16,000 | TFS Financial Corp. | 234,831 | 325,920 | |||||||||
15,000 | Thomasville Bancshares Inc. | 570,703 | 982,500 | |||||||||
230,000 | Valley National Bancorp. | 1,437,500 | 3,160,200 | |||||||||
35,500 | Value Line Inc. | 443,012 | 1,000,745 | |||||||||
10,000 | Waterloo Investment Holdings Ltd.†(b) | 1,373 | 3,000 | |||||||||
133,000 | Wright Investors’ Service Holdings Inc.† | 90,952 | 26,600 | |||||||||
31,346,720 | 84,783,429 | |||||||||||
Food and Beverage — 6.4% | ||||||||||||
425,000 | Arca Continental SAB de CV | 763,179 | 2,089,704 | |||||||||
80,000 | Brown-Forman Corp., Cl. A | 460,939 | 5,093,600 | |||||||||
42,000 | Bull-Dog Sauce Co. Ltd. | 120,234 | 1,024,538 | |||||||||
900,000 | China Tontine Wines Group Ltd.† | 94,571 | 7,178 | |||||||||
200,000 | Chr. Hansen Holding A/S† | 8,325,007 | 18,173,649 | |||||||||
283,000 | Crimson Wine Group Ltd.† | 2,484,231 | 1,881,950 | |||||||||
220,000 | Denny’s Corp.† | 736,620 | 3,984,200 |
Shares | Cost | Market Value | ||||||||||
500,000 | Dynasty Fine Wines Group Ltd.† | $ | 74,726 | $ | 31,836 | |||||||
70,000 | Farmer Brothers Co.† | 770,486 | 730,800 | |||||||||
415,000 | Flowers Foods Inc. | 986,370 | 9,877,000 | |||||||||
116,500 | ITO EN Ltd. | 2,194,710 | 7,144,141 | |||||||||
46,000 | Iwatsuka Confectionery Co. Ltd. | 1,592,452 | 1,794,717 | |||||||||
23,000 | J & J Snack Foods Corp. | 509,737 | 3,611,690 | |||||||||
115,000 | Kameda Seika Co. Ltd. | 4,628,160 | 5,006,096 | |||||||||
267,000 | Kikkoman Corp. | 1,859,850 | 15,890,991 | |||||||||
700,000 | Maple Leaf Foods Inc. | 12,211,478 | 15,958,463 | |||||||||
6,000 | MEIJI Holdings Co. Ltd. | 117,526 | 385,821 | |||||||||
17,000 | MGP Ingredients Inc. | 23,756 | 1,005,550 | |||||||||
66,000 | Morinaga Milk Industry Co. Ltd. | 1,268,212 | 3,469,135 | |||||||||
45,000 | Nissin Foods Holdings Co. Ltd. | 1,497,492 | 3,336,645 | |||||||||
15,000 | Post Holdings Inc.† | 62,689 | 1,585,800 | |||||||||
75,000 | Rock Field Co. Ltd. | 505,724 | 1,142,696 | |||||||||
1,800 | The Boston Beer Co. Inc., Cl. A† | 34,506 | 2,171,304 | |||||||||
57,500 | The J.M. Smucker Co. | 1,332,411 | 7,275,475 | |||||||||
625,000 | Tingyi (Cayman Islands) Holding Corp. | 1,326,207 | 1,148,043 | |||||||||
36,051 | Tootsie Roll Industries Inc. | 313,205 | 1,194,371 | |||||||||
390,000 | Vina Concha y Toro SA | 716,197 | 669,637 | |||||||||
950,000 | Vitasoy International Holdings Ltd. | 542,729 | 3,653,799 | |||||||||
20,000 | Willamette Valley Vineyards Inc.† | 73,225 | 181,000 | |||||||||
100,000 | Yakult Honsha Co. Ltd. | 2,378,860 | 5,057,575 | |||||||||
48,005,489 | 124,577,404 | |||||||||||
Health Care — 5.2% | ||||||||||||
1,700 | Align Technology Inc.† | 11,859 | 920,601 | |||||||||
6,700 | Bio-Rad Laboratories Inc., Cl. A† | 283,604 | 3,826,839 | |||||||||
14,000 | Bruker Corp. | 114,310 | 899,920 | |||||||||
42,000 | Cantel Medical Corp.† | 416,122 | 3,353,280 | |||||||||
1,000 | Chemed Corp. | 13,731 | 459,820 | |||||||||
22,000 | CONMED Corp. | 452,985 | 2,872,980 | |||||||||
32,000 | Covetrus Inc.†. | 153,127 | 959,040 | |||||||||
421,000 | Cutera Inc.† | 5,548,403 | 12,651,050 | |||||||||
12,500 | Dexcom Inc.† | 68,464 | 4,492,375 | |||||||||
13,000 | Evolent Health Inc., Cl. A† | 138,590 | 262,600 | |||||||||
166,500 | Globus Medical Inc., Cl. A† | 3,773,762 | 10,268,055 | |||||||||
72,000 | Henry Schein Inc.† | 494,318 | 4,985,280 | |||||||||
28,500 | ICU Medical Inc.† | 926,671 | 5,855,040 | |||||||||
36,200 | Masimo Corp.† | 869,598 | 8,313,692 | |||||||||
80,000 | Meridian Bioscience Inc.† | 1,243,246 | 2,100,000 | |||||||||
24,000 | Neogen Corp.† | 485,992 | 2,133,360 | |||||||||
103,500 | NuVasive Inc.† | 2,717,209 | 6,785,460 | |||||||||
216,000 | OPKO Health Inc.† | 569,980 | 926,640 | |||||||||
129,000 | Orthofix Medical Inc.† | 2,865,834 | 5,592,150 | |||||||||
19,000 | Patterson Cos. Inc. | 414,269 | 607,050 |
See accompanying notes to financial statements.
4
The Gabelli Small Cap Growth Fund
Schedule of Investments (Continued) — March 31, 2021 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS (Continued) | ||||||||||||
Health Care (Continued) | ||||||||||||
79,000 | Quidel Corp.† | $ | 350,658 | $ | 10,106,470 | |||||||
24,000 | Seikagaku Corp. | 280,995 | 224,123 | |||||||||
17,000 | STERIS plc | 1,267,180 | 3,238,160 | |||||||||
1,900 | Straumann Holding AG | 170,618 | 2,370,100 | |||||||||
3,000 | Stryker Corp. | 142,188 | 730,740 | |||||||||
84,000 | Surgalign Holdings Inc.† | 367,355 | 183,120 | |||||||||
30,000 | SurModics Inc.† | 608,729 | 1,682,100 | |||||||||
27,700 | Teladoc Health Inc.† | 926,029 | 5,034,475 | |||||||||
100 | The Cooper Companies Inc. | 3,627 | 38,409 | |||||||||
38,000 | United-Guardian Inc. | 332,419 | 575,700 | |||||||||
26,011,872 | 102,448,629 | |||||||||||
Home Furnishings — 0.4% | ||||||||||||
177,500 | Bassett Furniture Industries Inc. | 1,776,891 | 4,307,925 | |||||||||
6,000 | Ethan Allen Interiors Inc. | 139,850 | 165,660 | |||||||||
75,000 | La-Z-Boy Inc. | 1,235,427 | 3,186,000 | |||||||||
3,152,168 | 7,659,585 | |||||||||||
Hotels and Gaming — 4.5% | ||||||||||||
164,000 | Boyd Gaming Corp.† | 839,194 | 9,669,440 | |||||||||
191,040 | Canterbury Park Holding Corp.† | 1,967,490 | 2,613,427 | |||||||||
119,000 | Churchill Downs Inc. | 1,101,132 | 27,062,980 | |||||||||
120,000 | Formosa International Hotels Corp. | 775,629 | 656,082 | |||||||||
554,000 | Full House Resorts Inc.† | 1,622,914 | 4,714,540 | |||||||||
48,508 | Gaming and Leisure Properties Inc., REIT | 391,873 | 2,058,194 | |||||||||
800,000 | Genting Singapore Ltd. | 741,067 | 547,131 | |||||||||
164,000 | Golden Entertainment Inc.† | 1,391,785 | 4,142,640 | |||||||||
2,800,000 | Mandarin Oriental International Ltd.† | 3,853,577 | 4,984,000 | |||||||||
3,500 | Penn National Gaming Inc.† | 15,200 | 366,940 | |||||||||
308,000 | Ryman Hospitality Properties Inc., REIT† | 6,096,603 | 23,873,080 | |||||||||
2,700,000 | The Hongkong & Shanghai Hotels Ltd. | 2,773,764 | 2,684,684 | |||||||||
127,000 | The Marcus Corp.† | 1,342,952 | 2,538,730 | |||||||||
14,000 | Wynn Resorts Ltd.† | 0 | 1,755,180 | |||||||||
22,913,180 | 87,667,048 | |||||||||||
Machinery — 3.0% | ||||||||||||
343,000 | Astec Industries Inc. | 12,002,722 | 25,869,060 | |||||||||
1,427,000 | CNH Industrial NV† | 4,242,733 | 22,318,280 | |||||||||
90,000 | Kennametal Inc. | 1,650,215 | 3,597,300 | |||||||||
5,300 | Nordson Corp. | 90,324 | 1,053,004 | |||||||||
160,000 | The Eastern Co. | 3,114,959 | 4,288,000 | |||||||||
100,000 | Twin Disc Inc.† | 1,080,068 | 956,000 | |||||||||
100,000 | Welbilt Inc.† | 593,633 | 1,625,000 | |||||||||
22,774,654 | 59,706,644 |
Shares | Cost | Market Value | ||||||||||
Manufactured Housing and Recreational Vehicles — 1.3% | ||||||||||||
71,000 | Cavco Industries Inc.† | $ | 1,418,150 | $ | 16,018,310 | |||||||
70,000 | Nobility Homes Inc. | 764,895 | 2,170,000 | |||||||||
85,000 | Skyline Champion Corp.† | 500,100 | 3,847,100 | |||||||||
54,000 | Winnebago Industries Inc. | 622,276 | 4,142,340 | |||||||||
3,305,421 | 26,177,750 | |||||||||||
Metals and Mining — 0.0% | ||||||||||||
45,000 | Ivanhoe Mines Ltd., Cl. A† | 117,783 | 231,678 | |||||||||
95,000 | Kinross Gold Corp. | 412,123 | 633,650 | |||||||||
2,000 | Turquoise Hill Resources Ltd.† | 41,995 | 32,180 | |||||||||
571,901 | 897,508 | |||||||||||
Publishing — 0.9% | ||||||||||||
2,200 | Graham Holdings Co., Cl. B | 981,258 | 1,237,368 | |||||||||
5,000 | John Wiley & Sons Inc., Cl. B | 19,375 | 266,250 | |||||||||
18,500 | Meredith Corp.† | 260,981 | 550,930 | |||||||||
34,000 | News Corp., Cl. A | 48,038 | 864,620 | |||||||||
800,000 | The E.W. Scripps Co., Cl. A | 4,292,464 | 15,416,000 | |||||||||
5,602,116 | 18,335,168 | |||||||||||
Real Estate — 2.5% | ||||||||||||
78,500 | Capital Properties Inc., Cl. A | 935,416 | 981,250 | |||||||||
6,967 | Gyrodyne LLC† | 201,352 | 107,013 | |||||||||
263,306 | Indus Realty Trust Inc., REIT | 5,140,301 | 15,840,489 | |||||||||
18,300 | Lamar Advertising Co., Cl. A, REIT | 110,842 | 1,718,736 | |||||||||
90,000 | Morguard Corp. | 1,140,881 | 8,379,088 | |||||||||
3,500 | Reading International Inc., Cl. B† | 66,647 | 70,035 | |||||||||
13,500 | Seritage Growth Properties, Cl. A, REIT† | 202,725 | 247,725 | |||||||||
133,500 | Tejon Ranch Co.† | 3,089,239 | 2,234,790 | |||||||||
443,000 | The St. Joe Co. | 6,959,912 | 19,004,700 | |||||||||
100,000 | Trinity Place Holdings Inc.† | 352,475 | 209,000 | |||||||||
18,199,790 | 48,792,826 | |||||||||||
Retail — 5.4% | ||||||||||||
129,000 | AutoNation Inc.† | 2,094,018 | 12,025,380 | |||||||||
33,000 | Big 5 Sporting Goods Corp. | 223,191 | 518,100 | |||||||||
975 | Biglari Holdings Inc., Cl. A† | 605,755 | 658,632 | |||||||||
92,600 | Copart Inc.† | 801,700 | 10,057,286 | |||||||||
500 | Hertz Global Holdings Inc.† | 1,420 | 860 | |||||||||
525,000 | Ingles Markets Inc., Cl. A | 7,841,951 | 32,366,250 | |||||||||
39,000 | Lands’ End Inc.† | 532,514 | 967,590 | |||||||||
80,000 | Movado Group Inc. | 1,290,737 | 2,276,000 | |||||||||
155,500 | Nathan’s Famous Inc. | 187,982 | 9,810,495 | |||||||||
72,000 | Penske Automotive Group Inc. | 1,051,522 | 5,777,280 | |||||||||
93,000 | Pets at Home Group plc | 159,631 | 529,506 | |||||||||
351,000 | Rush Enterprises Inc., Cl. B | 2,518,485 | 15,826,590 | |||||||||
10,000 | Salvatore Ferragamo SpA† | 198,277 | 191,854 | |||||||||
64,000 | The Cheesecake Factory Inc.† | 1,124,249 | 3,744,640 | |||||||||
45,000 | Tractor Supply Co. | 386,105 | 7,968,600 | |||||||||
56,000 | Village Super Market Inc., Cl. A | 1,372,348 | 1,319,920 |
See accompanying notes to financial statements.
5
The Gabelli Small Cap Growth Fund
Schedule of Investments (Continued) — March 31, 2021 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS (Continued) | ||||||||||||
Retail (Continued) | ||||||||||||
100 | Vroom Inc.† | $ | 2,200 | $ | 3,899 | |||||||
12,500 | Weis Markets Inc. | 350,853 | 706,500 | |||||||||
600 | Winmark Corp. | 41,191 | 111,858 | |||||||||
20,784,129 | 104,861,240 | |||||||||||
Specialty Chemicals — 3.5% | ||||||||||||
3,500 | Albemarle Corp. | 52,132 | 511,385 | |||||||||
28,000 | Ashland Global Holdings Inc. | 210,127 | 2,485,560 | |||||||||
1,697,000 | Ferro Corp.† | 8,260,323 | 28,611,420 | |||||||||
168,146 | GCP Applied Technologies Inc.† | 4,260,567 | 4,126,303 | |||||||||
278,000 | H.B. Fuller Co. | 3,451,731 | 17,488,980 | |||||||||
34,000 | Hawkins Inc. | 529,212 | 1,139,680 | |||||||||
65,000 | Huntsman Corp. | 211,485 | 1,873,950 | |||||||||
6,400 | NewMarket Corp. | 642,831 | 2,433,024 | |||||||||
9,200 | Quaker Chemical Corp. | 143,292 | 2,242,684 | |||||||||
58,500 | Sensient Technologies Corp. | 1,138,822 | 4,563,000 | |||||||||
2,500 | Takasago International Corp. | 66,073 | 59,359 | |||||||||
91,200 | The General Chemical Group Inc.† | 1,186 | 912 | |||||||||
140,000 | Valvoline Inc. | 415,026 | 3,649,800 | |||||||||
19,382,807 | 69,186,057 | |||||||||||
Telecommunications — 0.9% | ||||||||||||
74,000 | Consolidated Communications Holdings Inc.† | 478,442 | 532,800 | |||||||||
70,000 | Gogo Inc.† | 369,181 | 676,200 | |||||||||
162,000 | HC2 Holdings Inc.† | 508,522 | 638,280 | |||||||||
6,000 | IDT Corp., Cl. B† | 25,437 | 135,960 | |||||||||
71,500 | Iridium Communications Inc.† | 648,830 | 2,949,375 | |||||||||
50,000 | Loral Space & Communications Inc. | 1,661,975 | 1,883,500 | |||||||||
101,112 | Nuvera Communications Inc. | 808,593 | 2,376,132 | |||||||||
84,000 | Rogers Communications Inc., Cl. B | 302,780 | 3,872,400 | |||||||||
80,000 | Shenandoah Telecommunications Co. | 196,411 | 3,904,800 | |||||||||
710,000 | VEON Ltd., ADR† | 1,380,132 | 1,256,700 | |||||||||
4,000 | Verizon Communications Inc. | 17,565 | 232,600 | |||||||||
6,397,868 | 18,458,747 | |||||||||||
Transportation — 1.9% | ||||||||||||
384,000 | GATX Corp. | 10,993,602 | 35,612,160 | |||||||||
18,600 | Irish Continental Group plc† | 13,660 | 96,519 | |||||||||
91,053 | Navigator Holdings Ltd.† | 870,450 | 810,372 | |||||||||
11,877,712 | 36,519,051 | |||||||||||
Wireless Communications — 0.1% | ||||||||||||
51,000 | United States Cellular Corp.† | 1,965,959 | 1,860,480 | |||||||||
TOTAL COMMON STOCKS | 558,586,223 | 1,945,438,276 |
Shares | Cost | Market Value | ||||||||||
CLOSED-END FUNDS — 0.2% | ||||||||||||
55,000 | The Central Europe, Russia, and Turkey Fund Inc. | $ | 1,214,513 | $ | 1,324,400 | |||||||
32,729 | The European Equity Fund Inc. | 325,355 | 348,708 | |||||||||
119,537 | The New Germany Fund Inc. | 1,659,113 | 2,363,246 | |||||||||
TOTAL CLOSED-END FUNDS | 3,198,981 | 4,036,354 | ||||||||||
PREFERRED STOCKS — 0.2% | ||||||||||||
Automotive: Parts and Accessories — 0.2% | ||||||||||||
105,000 | Jungheinrich AG | 718,782 | 5,048,474 | |||||||||
RIGHTS — 0.0% | ||||||||||||
Entertainment — 0.0% | ||||||||||||
1,680,000 | Media General Inc., CVR†(b) | 2 | 2 | |||||||||
WARRANTS — 0.0% | ||||||||||||
Business Services — 0.0% | ||||||||||||
1 | Internap Corp., expire 05/08/24†(b) | 0 | 652 | |||||||||
Diversified Industrial — 0.0% | ||||||||||||
140,000 | Ampco-Pittsburgh Corp., expire 08/01/25† | 95,648 | 184,800 | |||||||||
TOTAL WARRANTS | 95,648 | 185,452 | ||||||||||
TOTAL MISCELLANEOUS INVESTMENTS — 0.2%(c). | 2,485,938 | 3,243,476 | ||||||||||
TOTAL INVESTMENTS — 100.1% | $ | 565,085,574 | 1,957,952,034 | |||||||||
Other Assets and Liabilities (Net) — (0.1)% | (2,201,196 | ) | ||||||||||
NET ASSETS — 100.0% | $ | 1,955,750,838 |
(a) | Security considered an affiliated holding because the Fund owns at least 5% of its outstanding shares. |
(b) | Security is valued under procedures adopted by the Board of Trustees and is classified as Level 3 in the fair value hierarchy. |
(c) | Represents previously undisclosed, unrestricted securities which the Fund has held for less than one year. |
† | Non-income producing security. |
ADR | American Depositary Receipt |
CVR | Contingent Value Right |
REIT | Real Estate Investment Trust |
See accompanying notes to financial statements.
6
(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 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. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.
Not applicable.
Item 13. 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. |
(a)(4) | 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 | May 28, 2021 |
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 | May 28, 2021 |
By (Signature and Title)* | /s/ John C. Ball | |
John C. Ball, Principal Financial Officer and Treasurer |
Date | May 28, 2021 |
* Print the name and title of each signing officer under his or her signature.