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)
John C. Ball
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, 2024
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549- 1090. 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, 2024
To Our Shareholders,
For the six months ended March 31, 2024, the net asset value (NAV) total return per Class AAA Share of The Gabelli Equity Income Fund was 14.9% compared with a total return of 23.5% for the Standard & Poor’s (S&P) 500 Index. Other classes of shares are available. See page 3 for performance information for all classes.
Enclosed are the financial statements, including the schedule of investments, as of March 31, 2024.
Investment Objective and Strategy (Unaudited)
The Fund seeks to provide a high level of total return on its assets with an emphasis on income. The Fund will seek to achieve its investment objective through a combination of capital appreciation and current income by investing, under normal market conditions, at least 80% of its net assets in income producing equity securities. Income producing equity securities include, for example, common stock, preferred stock, and convertible securities. In making stock selections, Gabelli Funds, LLC, the Adviser, looks for securities that have a better yield than the average of the S&P 500 Index, as well as capital gains potential.
Performance Discussion (Unaudited)
For the six months ended March 2024, the U.S. stock market performed very well. The S&P 500 Index was up over 20% on a total return basis, a very impressive return. Despite concerns from over a year ago that the economy might enter a recession by now, it continues to thrive. Unemployment remains low, productivity growth continues, and the consumer is generally healthy. Supply chains are functioning well, but geopolitical risks are on the rise. Another concerning macro dynamic is that government budget deficits are huge and, at some point, long term interest rates will need to rise due to these large deficits. Over the last 6 months, however, the yield on the 10 year U.S. Treasury note has moved down from 4.6% to 4.2%. The Federal Funds target rate, meanwhile, has stayed steady at 5.5% and the Federal Reserve keeps pushing out the timeframe as to when they will start to cut rates.
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. |
Of the eleven sectors that make up the S&P 500 Index, all were up over the past six months. The best performing sector was Technology, up about 30%, followed by Finance and Communication Services. The weakest sector over the last 6 months was Energy, which was up about 7%. One of the best performing stocks in (y)our portfolio during the past six months was The Bank of New York Mellon Corp. (3.3% of net assets as of March 31, 2024), a large global custody bank based in New York City. Two other top contributors to performance were Mueller Industries Inc. (2.1%), an industrial company, and Microsoft Corp. (2.4%), the global technology company.
There were, of course, also a number of stock holdings in (y)our portfolio that declined over the past six months. Two global spirits companies, Brown-Forman Corp., Cl. A. (1.9%), based in the U.S., and Remy Cointreau SA (0.6%), based in France, were big detractors to performance, as concerns about international growth intensified. Another weak performer in the quarter was ITO EN Ltd. (0.6%), a Japanese beverage company that sells non-alcoholic beverages.
We appreciate your confidence and trust.
The views expressed reflect the opinions of the Fund's portfolio manager and Gabelli Funds, LLC, the Adviser, as of the date of this report and are subject to change without notice based on changes in market, economic, or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results. |
2
Comparative Results
Average Annual Returns through March 31, 2024 (a)(b) (Unaudited)
Total returns and average annual returns reflect changes in share price, reinvestment of distributions, and are net of expenses.
Performance returns for periods of less than one year are not annualized.
Since | ||||||||||||||||||||||||
Inception | ||||||||||||||||||||||||
Six Months | 1 Year | 5 Year | 10 Year | 15 Year | (1/2/92) | |||||||||||||||||||
Class AAA (GABEX) | 14.94 | % | 11.58 | % | 9.21 | % | 7.08 | % | 11.45 | % | 9.53 | % | ||||||||||||
S&P 500 Index (c) | 23.48 | 29.88 | 15.05 | 12.96 | 15.63 | 10.33 | ||||||||||||||||||
Lipper Equity Income Fund Average (c) | 18.01 | 18.49 | 10.64 | 9.24 | 12.66 | 8.76 | ||||||||||||||||||
Class A (GCAEX) (d) | 14.79 | 11.47 | 9.20 | 7.07 | 11.44 | 9.52 | ||||||||||||||||||
With sales charge (e) | 8.19 | 5.06 | 7.92 | 6.44 | 11.01 | 9.32 | ||||||||||||||||||
Class C (GEICX) (d) | 14.42 | 10.94 | 8.40 | 6.28 | 10.63 | 9.02 | ||||||||||||||||||
With contingent deferred sales charge (f) | 13.42 | 9.94 | 8.40 | 6.28 | 10.63 | 9.02 | ||||||||||||||||||
Class C1 (GCCEX) (d) | 14.84 | 10.71 | 8.36 | 6.26 | 10.61 | 9.01 | ||||||||||||||||||
With contingent deferred sales charge (f) | 13.84 | 9.71 | 8.36 | 6.26 | 10.61 | 9.01 | ||||||||||||||||||
Class I (GCIEX) (d) | 14.98 | 11.81 | 9.46 | 7.34 | 11.72 | 9.66 |
(a) | The Fund’s fiscal year ends September 30. |
(b) | The Fund imposes a 2% redemption fee on shares sold or exchanged within seven days of purchase. |
(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 C1 Shares on December 31, 2002, and Class I Shares on January 11, 2008. The actual performance of the Class A Shares and Class C1 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 26, 2024, the expense ratios for Class AAA, A, C, and I Shares are 1.43%, 1.43%, 2.18%, and 1.18%, respectively. See page 12 for the expense ratios for the six months ended March 31, 2024. Class AAA and Class I Shares do not have a sales charge. The maximum sales charge for Class A Shares is 5.75%.
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.
3
The Gabelli Equity Income Fund | |
Disclosure of Fund Expenses (Unaudited) | |
For the Six Month Period from October 1, 2023 through March 31, 2024 | 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 | |||||||||
10/01/23 | 03/31/24 | Ratio | Period * | |||||||||
The Gabelli Equity Income Fund | ||||||||||||
Actual Fund Return | ||||||||||||
Class AAA | $1,000.00 | $1,149.40 | 1.43% | $ 7.68 | ||||||||
Class A | $1,000.00 | $1,147.90 | 1.43% | $ 7.68 | ||||||||
Class C | $1,000.00 | $1,144.20 | 2.18% | $11.69 | ||||||||
Class C1 | $1,000.00 | $1,148.40 | 2.18% | $11.71 | ||||||||
Class I | $1,000.00 | $1,149.80 | 1.18% | $ 6.34 | ||||||||
Hypothetical 5% Return | ||||||||||||
Class AAA | $1,000.00 | $1,017.85 | 1.43% | $ 7.21 | ||||||||
Class A | $1,000.00 | $1,017.85 | 1.43% | $ 7.21 | ||||||||
Class C | $1,000.00 | $1,014.10 | 2.18% | $10.98 | ||||||||
Class C1 | $1,000.00 | $1,014.10 | 2.18% | $10.98 | ||||||||
Class I | $1,000.00 | $1,019.10 | 1.18% | $ 5.96 |
* | Expenses are equal to the Fund’s annualized expense ratio for the last six months multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half year (183 days), then divided by 366. |
4
Summary of Portfolio Holdings (Unaudited)
The following table presents portfolio holdings as a percent of net assets as of March 31, 2024:
The Gabelli Equity Income Fund
Food and Beverage | 16.5 | % | ||
Financial Services | 14.5 | % | ||
Equipment and Supplies | 6.7 | % | ||
Diversified Industrial | 6.5 | % | ||
Automotive: Parts and Accessories | 5.0 | % | ||
Retail | 4.9 | % | ||
Health Care | 4.5 | % | ||
Energy and Utilities: Oil | 4.1 | % | ||
Business Services | 3.9 | % | ||
Machinery | 3.9 | % | ||
Telecommunications | 3.8 | % | ||
Computer Software and Services | 2.8 | % | ||
Energy and Utilities: Natural Gas | 2.5 | % | ||
Transportation | 2.4 | % | ||
Electronics | 2.2 | % | ||
Building and Construction | 2.1 | % | ||
Computer Hardware | 1.8 | % | ||
Entertainment | 1.7 | % | ||
Metals and Mining | 1.7 | % | ||
Consumer Products | 1.3 | % | ||
Specialty Chemicals | 1.0 | % |
Energy and Utilities: Services | 1.0 | % | ||
Automotive | 0.7 | % | ||
Energy and Utilities: Integrated | 0.6 | % | ||
Aerospace | 0.6 | % | ||
Agriculture | 0.6 | % | ||
Real Estate Investment Trusts | 0.4 | % | ||
Energy and Utilities: Electric | 0.4 | % | ||
Environmental Services | 0.3 | % | ||
Communications Equipment | 0.3 | % | ||
Broadcasting | 0.3 | % | ||
Energy and Utilities: Water | 0.2 | % | ||
Wireless Communications | 0.1 | % | ||
Hotels and Gaming | 0.1 | % | ||
Consumer Services | 0.1 | % | ||
Publishing | 0.0 | %* | ||
Cable and Satellite | 0.0 | %* | ||
Other Assets and Liabilities (Net) | 0.5 | % | ||
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.
5
The Gabelli Equity Income Fund
Schedule of Investments — March 31, 2024 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS — 99.5% | ||||||||||||
Aerospace — 0.6% | ||||||||||||
400 | L3Harris Technologies Inc. | $ | 71,673 | $ | 85,240 | |||||||
2,000 | Lockheed Martin Corp. | 47,350 | 909,740 | |||||||||
7,400 | Rockwell Automation Inc. | 222,313 | 2,155,842 | |||||||||
341,336 | 3,150,822 | |||||||||||
Agriculture — 0.6% | ||||||||||||
40,000 | Archer-Daniels-Midland Co. | 1,017,179 | 2,512,400 | |||||||||
10,000 | The Mosaic Co. | 155,338 | 324,600 | |||||||||
1,172,517 | 2,837,000 | |||||||||||
Automotive — 0.7% | ||||||||||||
2,500 | Daimler Truck Holding AG | 89,402 | 126,657 | |||||||||
20,000 | Iveco Group NV† | 175,902 | 297,763 | |||||||||
14,500 | PACCAR Inc. | 370,272 | 1,796,405 | |||||||||
44,000 | Traton SE | 796,414 | 1,582,630 | |||||||||
1,431,990 | 3,803,455 | |||||||||||
Automotive: Parts and Accessories — 5.0% | ||||||||||||
80,000 | Dana Inc. | 1,251,012 | 1,016,000 | |||||||||
161,200 | Genuine Parts Co. | 7,186,350 | 24,974,716 | |||||||||
8,437,362 | 25,990,716 | |||||||||||
Broadcasting — 0.3% | ||||||||||||
37,300 | Sinclair Inc. | 630,797 | 502,431 | |||||||||
50,000 | TEGNA Inc. | 803,491 | 747,000 | |||||||||
1,434,288 | 1,249,431 | |||||||||||
Building and Construction — 2.1% | ||||||||||||
23,200 | Carrier Global Corp. | 239,563 | 1,348,616 | |||||||||
33,000 | Fortune Brands Innovations Inc. | 280,788 | 2,794,110 | |||||||||
21,500 | Herc Holdings Inc. | 720,114 | 3,618,450 | |||||||||
40,000 | Johnson Controls International plc | 783,914 | 2,612,800 | |||||||||
8,000 | Knife River Corp.† | 289,430 | 648,640 | |||||||||
2,313,809 | 11,022,616 | |||||||||||
Business Services — 3.9% | ||||||||||||
8,000 | Automatic Data Processing Inc. | 395,200 | 1,997,920 | |||||||||
19,500 | Mastercard Inc., Cl. A | 304,103 | 9,390,615 | |||||||||
2,400 | MSC Industrial Direct Co. Inc., Cl. A | 165,490 | 232,896 | |||||||||
29,500 | Pentair plc | 557,298 | 2,520,480 | |||||||||
14,500 | S&P Global Inc. | 669,590 | 6,169,025 | |||||||||
2,091,681 | 20,310,936 | |||||||||||
Cable and Satellite — 0.0% | ||||||||||||
2,000 | EchoStar Corp., Cl. A† | 29,090 | 28,500 | |||||||||
Communications Equipment — 0.3% | ||||||||||||
42,000 | Corning Inc. | 481,575 | 1,384,320 |
Shares | Cost | Market Value | ||||||||||
Computer Hardware — 1.8% | ||||||||||||
26,000 | Apple Inc. | $ | 476,062 | $ | 4,458,480 | |||||||
25,000 | International Business Machines Corp. | 2,007,401 | 4,774,000 | |||||||||
2,483,463 | 9,232,480 | |||||||||||
Computer Software and Services — 2.8% | ||||||||||||
90,000 | Hewlett Packard Enterprise Co. | 509,279 | 1,595,700 | |||||||||
30,000 | Microsoft Corp. | 838,200 | 12,621,600 | |||||||||
1,347,479 | 14,217,300 | |||||||||||
Consumer Products — 1.3% | ||||||||||||
5,500 | Edgewell Personal Care Co. | 166,525 | 212,520 | |||||||||
49,500 | Energizer Holdings Inc. | 1,254,450 | 1,457,280 | |||||||||
30,000 | Essity AB, Cl. A | 529,907 | 714,686 | |||||||||
1,500 | National Presto Industries Inc. | 68,963 | 125,700 | |||||||||
31,700 | Reckitt Benckiser Group plc | 938,639 | 1,805,258 | |||||||||
4,000 | The Scotts Miracle-Gro Co. | 194,044 | 298,360 | |||||||||
40,000 | Unilever plc, ADR | 797,487 | 2,007,600 | |||||||||
3,950,015 | 6,621,404 | |||||||||||
Consumer Services — 0.1% | ||||||||||||
1,600 | Allegion plc | 19,252 | 215,536 | |||||||||
10,500 | Rollins Inc. | 10,439 | 485,835 | |||||||||
29,691 | 701,371 | |||||||||||
Diversified Industrial — 6.5% | ||||||||||||
1,400 | AMETEK Inc. | 201,828 | 256,060 | |||||||||
68,000 | Crane Co. | 1,319,498 | 9,188,840 | |||||||||
2,500 | Eaton Corp. plc | 92,398 | 781,700 | |||||||||
1,000 | Honeywell International Inc. | 21,440 | 205,250 | |||||||||
8,600 | Ingersoll Rand Inc. | 45,820 | 816,570 | |||||||||
46,500 | ITT Inc. | 931,915 | 6,325,395 | |||||||||
33,000 | Jardine Matheson Holdings Ltd. | 1,623,046 | 1,230,900 | |||||||||
2,500 | Modine Manufacturing Co.† | 52,004 | 237,975 | |||||||||
17,000 | Myers Industries Inc. | 338,975 | 393,890 | |||||||||
21,000 | nVent Electric plc | 221,694 | 1,583,400 | |||||||||
20,000 | Svenska Cellulosa AB SCA, Cl. A | 83,897 | 306,801 | |||||||||
101,000 | Textron Inc. | 921,180 | 9,688,930 | |||||||||
146,000 | Toray Industries Inc. | 973,915 | 699,813 | |||||||||
4,200 | Trane Technologies plc | 87,508 | 1,260,840 | |||||||||
25,000 | Trinity Industries Inc. | 357,494 | 696,250 | |||||||||
7,272,612 | 33,672,614 | |||||||||||
Electronics — 2.2% | ||||||||||||
6,500 | Sony Group Corp. | 138,865 | 555,192 | |||||||||
33,000 | Sony Group Corp., ADR | 963,587 | 2,829,420 | |||||||||
44,500 | TE Connectivity Ltd. | 1,455,925 | 6,463,180 | |||||||||
10,000 | Texas Instruments Inc. | 147,000 | 1,742,100 | |||||||||
2,705,377 | 11,589,892 |
See accompanying notes to financial statements.
6
The Gabelli Equity Income Fund
Schedule of Investments (Continued) — March 31, 2024 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS (Continued) | ||||||||||||
Energy and Utilities: Electric — 0.4% | ||||||||||||
1,200 | Avangrid Inc. | $ | 46,963 | $ | 43,728 | |||||||
20,000 | Korea Electric Power Corp., ADR† | 224,960 | 166,600 | |||||||||
13,500 | Portland General Electric Co. | 586,781 | 567,000 | |||||||||
63,000 | The AES Corp. | 291,918 | 1,129,590 | |||||||||
1,150,622 | 1,906,918 | |||||||||||
Energy and Utilities: Integrated — 0.6% | ||||||||||||
50,000 | Energy Transfer LP | 0 | 786,500 | |||||||||
21,000 | Eni SpA | 220,487 | 331,863 | |||||||||
5,000 | Iberdrola SA, ADR | 75,400 | 249,250 | |||||||||
56,500 | OGE Energy Corp. | 754,077 | 1,937,950 | |||||||||
1,049,964 | 3,305,563 | |||||||||||
Energy and Utilities: Natural Gas — 2.5% | ||||||||||||
115,000 | National Fuel Gas Co. | 5,209,133 | 6,177,800 | |||||||||
11,500 | ONE Gas Inc. | 48,202 | 742,095 | |||||||||
57,200 | ONEOK Inc. | 0 | 4,585,724 | |||||||||
16,800 | Southwest Gas Holdings Inc. | 742,817 | 1,278,984 | |||||||||
6,000,152 | 12,784,603 | |||||||||||
Energy and Utilities: Oil — 4.1% | ||||||||||||
30,000 | Callon Petroleum Co.† | 1,080,236 | 1,072,800 | |||||||||
35,000 | Chevron Corp. | 1,472,995 | 5,520,900 | |||||||||
4,000 | ConocoPhillips | 73,319 | 509,120 | |||||||||
6,800 | Devon Energy Corp. | 69,081 | 341,224 | |||||||||
12,000 | Exxon Mobil Corp. | 312,521 | 1,394,880 | |||||||||
50,200 | Hess Corp. | 2,361,892 | 7,662,528 | |||||||||
17,500 | Marathon Petroleum Corp. | 226,499 | 3,526,250 | |||||||||
13,000 | TotalEnergies SE, ADR | 222,755 | 894,790 | |||||||||
1,706 | Vitesse Energy Inc. | 11,197 | 40,483 | |||||||||
5,830,495 | 20,962,975 | |||||||||||
Energy and Utilities: Services — 1.0% | ||||||||||||
5,000 | Dril-Quip Inc.† | 116,400 | 112,650 | |||||||||
94,500 | Halliburton Co. | 1,852,120 | 3,725,190 | |||||||||
22,500 | MDU Resources Group Inc. | 451,895 | 567,000 | |||||||||
11,000 | Schlumberger NV | 285,160 | 602,910 | |||||||||
2,705,575 | 5,007,750 | |||||||||||
Energy and Utilities: Water — 0.2% | ||||||||||||
3,600 | Essential Utilities Inc. | 26,544 | 133,380 | |||||||||
22,000 | Severn Trent plc | 579,449 | 685,852 | |||||||||
605,993 | 819,232 | |||||||||||
Entertainment — 1.7% | ||||||||||||
20,000 | Atlanta Braves Holdings Inc., Cl. A† | 598,398 | 838,000 | |||||||||
12,197 | Atlanta Braves Holdings Inc., Cl. C† | 441,446 | 476,415 | |||||||||
125,000 | Grupo Televisa SAB, ADR | 516,099 | 400,000 |
Shares | Cost | Market Value | ||||||||||
6,000 | Madison Square Garden Entertainment Corp.† | $ | 69,853 | $ | 235,260 | |||||||
3,000 | Madison Square Garden Sports Corp.† | 393,581 | 553,560 | |||||||||
31,250 | Ollamani SAB† | 68,682 | 56,449 | |||||||||
270,000 | Paramount Global, Cl. A | 4,766,938 | 5,894,100 | |||||||||
10,000 | Sphere Entertainment Co.† | 188,768 | 490,800 | |||||||||
7,043,765 | 8,944,584 | |||||||||||
Environmental Services — 0.3% | ||||||||||||
7,500 | Republic Services Inc. | 284,610 | 1,435,800 | |||||||||
3,200 | Veralto Corp. | 31,891 | 283,712 | |||||||||
316,501 | 1,719,512 | |||||||||||
Equipment and Supplies — 6.7% | ||||||||||||
5,000 | A.O. Smith Corp. | 13,323 | 447,300 | |||||||||
14,000 | Danaher Corp. | 361,159 | 3,496,080 | |||||||||
154,200 | Flowserve Corp. | 1,994,346 | 7,043,856 | |||||||||
44,200 | Graco Inc. | 764,133 | 4,130,932 | |||||||||
18,000 | Minerals Technologies Inc. | 784,926 | 1,355,040 | |||||||||
200,500 | Mueller Industries Inc. | 1,767,150 | 10,812,965 | |||||||||
13,500 | Parker-Hannifin Corp. | 770,710 | 7,503,165 | |||||||||
6,455,747 | 34,789,338 | |||||||||||
Financial Services — 14.5% | ||||||||||||
20,000 | AllianceBernstein Holding LP | 36,630 | 694,800 | |||||||||
14,500 | American Express Co. | 390,637 | 3,301,505 | |||||||||
17,200 | Ameris Bancorp | 181,010 | 832,136 | |||||||||
5,195 | Banco Santander Chile, ADR | 29,250 | 103,017 | |||||||||
82,000 | Bank of America Corp. | 553,930 | 3,109,440 | |||||||||
11,500 | BNP Paribas SA | 472,765 | 817,110 | |||||||||
1,800 | EXOR NV | 178,716 | 200,116 | |||||||||
31,000 | Interactive Brokers Group Inc., Cl. A | 465,845 | 3,463,010 | |||||||||
13,500 | Jefferies Financial Group Inc. | 236,763 | 595,350 | |||||||||
7,500 | JPMorgan Chase & Co. | 145,542 | 1,502,250 | |||||||||
48,500 | Julius Baer Group Ltd. | 1,558,649 | 2,800,776 | |||||||||
6,000 | Kinnevik AB, Cl. A† | 122,062 | 67,601 | |||||||||
58,000 | Loews Corp. | 2,145,878 | 4,540,820 | |||||||||
10,000 | M&T Bank Corp. | 852,893 | 1,454,400 | |||||||||
11,000 | Marsh & McLennan Companies Inc. | 291,526 | 2,265,780 | |||||||||
6,200 | Morgan Stanley | 400,192 | 583,792 | |||||||||
5,800 | Popular Inc. | 93,650 | 510,922 | |||||||||
48,000 | SLM Corp. | 230,139 | 1,045,920 | |||||||||
120,000 | State Street Corp. | 5,474,761 | 9,278,400 | |||||||||
6,300 | T. Rowe Price Group Inc. | 157,957 | 768,096 | |||||||||
297,000 | The Bank of New York Mellon Corp. | 7,458,271 | 17,113,140 | |||||||||
14,400 | The Goldman Sachs Group Inc. | 1,827,159 | 6,014,736 |
See accompanying notes to financial statements.
7
The Gabelli Equity Income Fund
Schedule of Investments (Continued) — March 31, 2024 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS (Continued) | ||||||||||||
Financial Services (Continued) | ||||||||||||
20,500 | The PNC Financial Services Group Inc. | $ | 1,561,120 | $ | 3,312,800 | |||||||
2,100 | UBS Group AG | 48,790 | 64,594 | |||||||||
53,000 | Valley National Bancorp | 331,250 | 421,880 | |||||||||
88,000 | Webster Financial Corp. | 1,877,776 | 4,467,760 | |||||||||
98,000 | Wells Fargo & Co. | 2,729,808 | 5,680,080 | |||||||||
29,852,969 | 75,010,231 | |||||||||||
Food and Beverage — 16.5% | ||||||||||||
1,000 | Anheuser-Busch InBev SA/NV | 15,876 | 60,912 | |||||||||
186,500 | Brown-Forman Corp., Cl. A | 3,253,333 | 9,875,175 | |||||||||
34,000 | Campbell Soup Co. | 1,061,533 | 1,511,300 | |||||||||
19,000 | Coca-Cola Europacific Partners plc | 427,500 | 1,329,050 | |||||||||
10,000 | Coca-Cola Femsa SAB de CV, ADR | 340,563 | 972,000 | |||||||||
4,700 | Constellation Brands Inc., Cl. A | 151,101 | 1,277,272 | |||||||||
30,000 | Danone SA | 1,076,555 | 1,938,370 | |||||||||
33,000 | Davide Campari-Milano NV | 110,940 | 331,597 | |||||||||
49,500 | Diageo plc, ADR | 3,063,927 | 7,362,630 | |||||||||
80,000 | Fomento Economico Mexicano SAB de CV, ADR | 1,948,672 | 10,421,600 | |||||||||
1,000 | General Mills Inc. | 26,640 | 69,970 | |||||||||
1,485,000 | Grupo Bimbo SAB de CV, Cl. A | 1,195,228 | 7,009,411 | |||||||||
92,500 | Heineken NV | 4,399,938 | 8,915,562 | |||||||||
132,000 | ITO EN Ltd. | 2,344,495 | 3,224,574 | |||||||||
10,500 | Kellanova | 505,488 | 601,545 | |||||||||
4,000 | McCormick & Co. Inc. | 137,120 | 309,680 | |||||||||
31,200 | McCormick & Co. Inc., Non-Voting | 675,130 | 2,396,472 | |||||||||
25,100 | Mondelēz International Inc., Cl. A | 452,153 | 1,757,000 | |||||||||
31,300 | Nestlé SA | 643,107 | 3,323,141 | |||||||||
159,600 | Nissin Foods Holdings Co. Ltd. | 1,629,453 | 4,396,433 | |||||||||
27,500 | PepsiCo Inc. | 1,782,886 | 4,812,775 | |||||||||
23,800 | Pernod Ricard SA | 2,337,623 | 3,850,211 | |||||||||
31,200 | Remy Cointreau SA | 1,660,939 | 3,145,202 | |||||||||
30,000 | Sapporo Holdings Ltd. | 664,276 | 1,194,015 | |||||||||
4,200 | The Boston Beer Co. Inc., Cl. A† | 1,365,027 | 1,278,564 | |||||||||
9,000 | The Coca-Cola Co. | 187,560 | 550,620 | |||||||||
1,000 | The Hershey Co. | 36,300 | 194,500 | |||||||||
45,000 | The Kraft Heinz Co. | 1,263,863 | 1,660,500 | |||||||||
8,400 | WK Kellogg Co. | 92,816 | 157,920 |
Shares | Cost | Market Value | ||||||||||
64,000 | Yakult Honsha Co. Ltd. | $ | 799,840 | $ | 1,307,227 | |||||||
33,649,882 | 85,235,228 | |||||||||||
Health Care — 4.5% | ||||||||||||
4,400 | Abbott Laboratories | 134,434 | 500,104 | |||||||||
3,000 | AbbVie Inc. | 74,560 | 546,300 | |||||||||
3,200 | Alcon Inc. | 106,703 | 266,528 | |||||||||
75,000 | Baxter International Inc. | 1,657,103 | 3,205,500 | |||||||||
4,400 | Bio-Rad Laboratories Inc., Cl. A† | 432,651 | 1,521,828 | |||||||||
87,500 | Bristol-Myers Squibb Co. | 2,105,675 | 4,745,125 | |||||||||
69,000 | Demant A/S† | 667,858 | 3,423,129 | |||||||||
6,400 | GSK plc, ADR | 270,041 | 274,368 | |||||||||
8,000 | Haleon plc, ADR | 57,324 | 67,920 | |||||||||
32,000 | Henry Schein Inc.† | 483,167 | 2,416,640 | |||||||||
16,000 | Merck & Co. Inc. | 283,402 | 2,111,200 | |||||||||
12,000 | Novartis AG, ADR | 554,459 | 1,160,760 | |||||||||
25,000 | Perrigo Co. plc | 807,605 | 804,750 | |||||||||
21,500 | Pfizer Inc. | 387,082 | 596,625 | |||||||||
42,500 | Roche Holding AG, ADR | 781,653 | 1,356,600 | |||||||||
2,300 | Zimmer Biomet Holdings Inc. | 193,245 | 303,554 | |||||||||
10,000 | Zimvie Inc.† | 86,104 | 164,900 | |||||||||
9,083,066 | 23,465,831 | |||||||||||
Hotels and Gaming — 0.1% | ||||||||||||
12,000 | MGM Resorts International† | 144,776 | 566,520 | |||||||||
1,500 | Wynn Resorts Ltd. | 71,983 | 153,345 | |||||||||
216,759 | 719,865 | |||||||||||
Machinery — 3.9% | ||||||||||||
6,000 | Caterpillar Inc. | 35,181 | 2,198,580 | |||||||||
165,000 | CNH Industrial NV | 2,318,625 | 2,138,400 | |||||||||
35,200 | Deere & Co. | 1,057,028 | 14,458,048 | |||||||||
1,700 | Otis Worldwide Corp. | 98,145 | 168,759 | |||||||||
7,200 | Xylem Inc. | 242,260 | 930,528 | |||||||||
3,751,239 | 19,894,315 | |||||||||||
Metals and Mining — 1.7% | ||||||||||||
78,000 | Freeport-McMoRan Inc. | 988,238 | 3,667,560 | |||||||||
138,000 | Newmont Corp. | 3,315,522 | 4,945,920 | |||||||||
4,303,760 | 8,613,480 | |||||||||||
Publishing — 0.0% | ||||||||||||
3,000 | Value Line Inc. | 41,976 | 121,500 | |||||||||
Real Estate Investment Trusts — 0.4% | ||||||||||||
62,000 | Weyerhaeuser Co. | 944,665 | 2,226,420 | |||||||||
Retail — 4.9% | ||||||||||||
13,000 | Cie Financiere Richemont SA, Cl. A | 436,510 | 1,982,037 | |||||||||
74,000 | Copart Inc.† | 163,288 | 4,286,080 | |||||||||
6,000 | Costco Wholesale Corp. | 273,435 | 4,395,780 | |||||||||
80,000 | CVS Health Corp. | 2,708,539 | 6,380,800 |
See accompanying notes to financial statements.
8
The Gabelli Equity Income Fund
Schedule of Investments (Continued) — March 31, 2024 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS (Continued) | ||||||||||||
Retail (Continued) | ||||||||||||
44,600 | Ingles Markets Inc., Cl. A | $ | 693,507 | $ | 3,419,928 | |||||||
183,000 | Seven & i Holdings Co. Ltd. | 1,837,719 | 2,659,532 | |||||||||
3,000 | The Home Depot Inc. | 83,470 | 1,150,800 | |||||||||
50,000 | Walgreens Boots Alliance Inc. | 1,460,618 | 1,084,500 | |||||||||
3,000 | Walmart Inc. | 43,340 | 180,510 | |||||||||
7,700,426 | 25,539,967 | |||||||||||
Specialty Chemicals — 1.0% | ||||||||||||
2,700 | Albemarle Corp. | 27,306 | 355,698 | |||||||||
2,500 | Ashland Inc. | 58,813 | 243,425 | |||||||||
2,200 | FMC Corp. | 57,788 | 140,140 | |||||||||
40,000 | H.B. Fuller Co. | 826,264 | 3,189,600 | |||||||||
1,800 | NewMarket Corp. | 6,947 | 1,142,316 | |||||||||
600 | Quaker Chemical Corp. | 6,478 | 123,150 | |||||||||
983,596 | 5,194,329 | |||||||||||
Telecommunications — 3.8% | ||||||||||||
100,000 | BCE Inc. | 1,908,279 | 3,398,000 | |||||||||
190,000 | Deutsche Telekom AG, ADR | 2,540,249 | 4,599,900 | |||||||||
65,000 | Liberty Global Ltd., Cl. A† | 1,281,813 | 1,099,800 | |||||||||
9,000 | Liberty Global Ltd., Cl. C† | 188,010 | 158,760 | |||||||||
14,000 | Orange SA, ADR | 160,021 | 164,780 | |||||||||
70,000 | Telefonica SA, ADR | 293,673 | 308,700 | |||||||||
212,000 | Telephone and Data Systems Inc. | 3,330,310 | 3,396,240 |
Shares | Cost | Market Value | ||||||||||
94,000 | TELUS Corp. | $ | 713,431 | $ | 1,504,940 | |||||||
115,500 | Verizon Communications Inc. | 3,759,559 | 4,846,380 | |||||||||
14,175,345 | 19,477,500 | |||||||||||
Transportation — 2.4% | ||||||||||||
94,000 | GATX Corp. | 3,025,561 | 12,598,820 | |||||||||
Wireless Communications — 0.1% | ||||||||||||
70,000 | BT Group plc, Cl. A | 186,224 | 96,876 | |||||||||
40,000 | Telesat Corp.† | 372,453 | 344,000 | |||||||||
20,000 | Turkcell Iletisim Hizmetleri A/S, ADR | 91,562 | 103,800 | |||||||||
4,800 | United States Cellular Corp.† | 84,840 | 175,200 | |||||||||
735,079 | 719,876 | |||||||||||
TOTAL COMMON STOCKS | 175,145,422 | 514,870,694 | ||||||||||
TOTAL INVESTMENTS — 99.5% | $ | 175,145,422 | 514,870,694 | |||||||||
Other Assets and Liabilities (Net) — 0.5% | 2,607,813 | |||||||||||
NET ASSETS — 100.0% | $ | 517,478,507 |
† | Non-income producing security. |
ADR | American Depositary Receipt |
See accompanying notes to financial statements.
9
The Gabelli Equity Income Fund
Statement of Assets and Liabilities
March 31, 2024 (Unaudited)
Assets: | ||||
Investments, at value (cost $175,145,422) | $ | 514,870,694 | ||
Cash | 171,615 | |||
Foreign currency, at value (cost $18,625) | 18,463 | |||
Receivable for investments sold | 2,016,869 | |||
Receivable for Fund shares sold | 380,785 | |||
Dividends receivable | 1,579,888 | |||
Prepaid expenses | 87,413 | |||
Total Assets | 519,125,727 | |||
Liabilities: | ||||
Line of credit payable | 719,000 | |||
Payable for Fund shares redeemed | 234,422 | |||
Payable for investment advisory fees | 435,035 | |||
Payable for distribution fees | 94,207 | |||
Payable for accounting fees | 7,500 | |||
Other accrued expenses | 157,056 | |||
Total Liabilities | 1,647,220 | |||
Net Assets | ||||
(applicable to 70,127,357 shares outstanding) | $ | 517,478,507 | ||
Net Assets Consist of: | ||||
Paid-in capital | $ | 188,277,515 | ||
Total distributable earnings | 329,200,992 | |||
Net Assets | $ | 517,478,507 | ||
Shares of Capital Stock, each at $0.001 par value: | ||||
Class AAA: | ||||
Net Asset Value, offering, and redemption price per share ($239,590,198 ÷ 31,008,587 shares outstanding; 150,000,000 shares authorized) | $ | 7.73 | ||
Class A: | ||||
Net Asset Value and redemption price per share ($134,529,555 ÷ 17,770,693 shares outstanding; 50,000,000 shares authorized) | $ | 7.57 | ||
Maximum offering price per share (NAV ÷ 0.9425, based on maximum sales charge of 5.75% of the offering price) | $ | 8.03 | ||
Class C: | ||||
Net Asset Value and offering price per share ($2,555,795 ÷ 278,872 shares outstanding; 50,000,000 shares authorized) | $ | 9.16 | (a) | |
Class C1: | ||||
Net Asset Value and redemption price per share ($16,843,953 ÷ 7,667,215 shares outstanding; 50,000,000 shares authorized) | $ | 2.20 | (a) | |
Class I: | ||||
Net Asset Value, offering, and redemption price per share ($123,959,006 ÷ 13,401,990 shares outstanding; 50,000,000 shares authorized) | $ | 9.25 |
(a) | Redemption price varies based on the length of time held. |
Statement of Operations
For the six months ended March 31, 2024 (Unaudited)
Investment Income: | ||||
Dividends (net of foreign withholding taxes of $91,335) | $ | 5,170,024 | ||
Interest | 29,504 | |||
Total Investment Income | 5,199,528 | |||
Expenses: | ||||
Investment advisory fees | 2,517,703 | |||
Distribution fees - Class AAA | 288,580 | |||
Distribution fees - Class A | 153,810 | |||
Distribution fees - Class C | 7,695 | |||
Distribution fees - Class C1 | 93,665 | |||
Shareholder services fees | 202,235 | |||
Shareholder communications expenses | 69,306 | |||
Legal and audit fees | 37,940 | |||
Custodian fees | 29,712 | |||
Accounting fees | 22,500 | |||
Interest expense | 19,720 | |||
Directors’ fees | 19,530 | |||
Registration expenses | 14,505 | |||
Miscellaneous expenses | 39,753 | |||
Total Expenses | 3,516,654 | |||
Less: | ||||
Expenses paid indirectly by broker (See Note 6) | (4,423 | ) | ||
Net Expenses | 3,512,231 | |||
Net Investment Income | 1,687,297 | |||
Net Realized and Unrealized Gain on Investments and Foreign Currency: | ||||
Net realized gain on investments | 34,263,944 | |||
Net realized gain on foreign currency transactions | 4,374 | |||
Net realized gain on investments and foreign currency transactions | 34,268,318 | |||
Net change in unrealized appreciation/depreciation: | ||||
on investments | 34,194,874 | |||
on foreign currency translations | 3,331 | |||
Net change in unrealized appreciation/depreciation on investments and foreign currency translations | 34,198,205 | |||
Net Realized and Unrealized Gain on Investments and Foreign Currency | 68,466,523 | |||
Net Increase in Net Assets Resulting from Operations | $ | 70,153,820 |
See accompanying notes to financial statements.
10
The Gabelli Equity Income Fund
Statement of Changes in Net Assets
Six Months Ended March 31, 2024 (Unaudited) | Year Ended September 30, 2023 | |||||||
Operations: | ||||||||
Net investment income | $ | 1,687,297 | $ | 4,950,182 | ||||
Net realized gain on investments and foreign currency transactions | 34,268,318 | 43,102,333 | ||||||
Net change in unrealized appreciation/depreciation on investments and foreign currency translations | 34,198,205 | 11,162,508 | ||||||
Net Increase in Net Assets Resulting from Operations | 70,153,820 | 59,215,023 | ||||||
Distributions to Shareholders: | ||||||||
Accumulated earnings | ||||||||
Class AAA | (18,507,026 | )* | (21,408,216 | ) | ||||
Class A | (10,133,976 | )* | (9,925,480 | ) | ||||
Class C | (114,751 | )* | (23,419 | ) | ||||
Class C1 | (4,705,965 | )* | (6,357,512 | ) | ||||
Class I | (8,671,448 | )* | (10,928,078 | ) | ||||
(42,133,166 | ) | (48,642,705 | ) | |||||
Return of capital | ||||||||
Class AAA | — | (29,821,849 | ) | |||||
Class A | — | (14,580,547 | ) | |||||
Class C | — | (33,597 | ) | |||||
Class C1 | — | (5,018,493 | ) | |||||
Class I | — | (16,447,112 | ) | |||||
— | (65,901,598 | ) | ||||||
Total Distributions to Shareholders | (42,133,166 | ) | (114,544,303 | ) | ||||
Capital Share Transactions: | ||||||||
Class AAA | (1,287,956 | ) | 19,288,612 | |||||
Class A | 12,912,687 | 32,868,398 | ||||||
Class C | 1,839,906 | 699,312 | ||||||
Class C1 | (1,979,549 | ) | (3,091,637 | ) | ||||
Class I | (19,493,563 | ) | 16,984,005 | |||||
Net Increase/(Decrease) in Net Assets from Capital Share Transactions | (8,008,475 | ) | 66,748,690 | |||||
Redemption Fees | 213 | 204 | ||||||
Net Increase in Net Assets | 20,012,392 | 11,419,614 | ||||||
Net Assets: | ||||||||
Beginning of year | 497,466,115 | 486,046,501 | ||||||
End of period | $ | 517,478,507 | $ | 497,466,115 |
* | Based on year to date book income. Amounts are subject to change and recharacterization at year end. |
See accompanying notes to financial statements.
11
The Gabelli Equity Income Fund
Financial Highlights
Selected data for a share of capital stock outstanding throughout each period:
Income (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 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2024(e) | $ | 7.29 | $ | 0.02 | $ | 1.02 | $ | 1.04 | $ | (0.60 | )* | $ | — | $ | — | $ | (0.60 | ) | $ | 0.00 | $ | 7.73 | 14.94 | % | $ | 239,590 | 0.64 | %(f) | 1.43 | %(f) | 0 | %(g) | ||||||||||||||||||||||||||||
2023 | 8.09 | 0.08 | 0.91 | 0.99 | (0.08 | ) | (0.67 | ) | (1.04 | ) | (1.79 | ) | 0.00 | 7.29 | 11.92 | 227,248 | 0.89 | 1.43 | 5 | |||||||||||||||||||||||||||||||||||||||||
2022 | 10.85 | 0.06 | (1.01 | ) | (0.95 | ) | (0.06 | ) | (0.78 | ) | (0.97 | ) | (1.81 | ) | 0.00 | 8.09 | (10.08 | ) | 230,926 | 0.56 | 1.42 | 1 | ||||||||||||||||||||||||||||||||||||||
2021 | 10.04 | 0.07 | 3.00 | 3.07 | (0.08 | ) | (1.24 | ) | (0.94 | ) | (2.26 | ) | 0.00 | 10.85 | 31.32 | 297,369 | 0.64 | 1.42 | 1 | |||||||||||||||||||||||||||||||||||||||||
2020 | 13.61 | 0.10 | (h) | (0.02 | ) | 0.08 | (0.11 | ) | (2.39 | ) | (1.15 | ) | (3.65 | ) | 0.00 | 10.04 | 0.93 | 272,980 | 0.75 | (h) | 1.45 | 0 | (g) | |||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2024(e) | $ | 7.16 | $ | 0.02 | $ | 0.99 | $ | 1.01 | $ | (0.60 | )* | $ | — | $ | — | $ | (0.60 | ) | $ | 0.00 | $ | 7.57 | 14.79 | % | $ | 134,530 | 0.64 | %(f) | 1.43 | %(f) | 0 | %(g) | ||||||||||||||||||||||||||||
2023 | 7.96 | 0.07 | 0.91 | 0.98 | (0.08 | ) | (0.67 | ) | (1.03 | ) | (1.78 | ) | 0.00 | 7.16 | 11.94 | 114,513 | 0.90 | 1.43 | 5 | |||||||||||||||||||||||||||||||||||||||||
2022 | 10.69 | 0.06 | (0.99 | ) | (0.93 | ) | (0.06 | ) | (0.77 | ) | (0.97 | ) | (1.80 | ) | 0.00 | 7.96 | (10.05 | ) | 95,186 | 0.57 | 1.42 | 1 | ||||||||||||||||||||||||||||||||||||||
2021 | 9.92 | 0.08 | 2.95 | 3.03 | (0.08 | ) | (1.24 | ) | (0.94 | ) | (2.26 | ) | 0.00 | 10.69 | 31.31 | 98,631 | 0.65 | 1.42 | 1 | |||||||||||||||||||||||||||||||||||||||||
2020 | 13.49 | 0.10 | (h) | (0.02 | ) | 0.08 | (0.11 | ) | (2.39 | ) | (1.15 | ) | (3.65 | ) | 0.00 | 9.92 | 0.95 | 69,201 | 0.75 | (h) | 1.45 | 0 | (g) | |||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2024(e) | $ | 8.58 | $ | (0.00 | )(b) | $ | 1.18 | $ | 1.18 | $ | (0.60 | )* | $ | — | $ | — | $ | (0.60 | ) | $ | 0.00 | $ | 9.16 | 14.42 | % | $ | 2,556 | (0.07 | )%(f) | 2.18 | %(f) | 0 | %(g) | |||||||||||||||||||||||||||
2023(i) | 9.52 | 0.01 | 0.16 | 0.17 | (0.07 | ) | (0.55 | ) | (0.49 | ) | (1.11 | ) | 0.00 | 8.58 | 1.67 | 608 | 0.24 | (f) | 2.29 | (f) | 5 | |||||||||||||||||||||||||||||||||||||||
Class C1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2024(e) | $ | 2.49 | $ | (0.00 | )(b) | $ | 0.31 | $ | 0.31 | $ | (0.60 | )* | $ | — | $ | — | $ | (0.60 | ) | $ | 0.00 | $ | 2.20 | 14.84 | % | $ | 16,844 | (0.13 | )%(f) | 2.18 | %(f) | 0 | %(g) | |||||||||||||||||||||||||||
2023 | 3.41 | 0.00 | (b) | 0.42 | 0.42 | (0.07 | ) | (0.67 | ) | (0.60 | ) | (1.34 | ) | 0.00 | 2.49 | 11.34 | 21,071 | 0.13 | 2.18 | 5 | ||||||||||||||||||||||||||||||||||||||||
2022 | 5.24 | (0.01 | ) | (0.42 | ) | (0.43 | ) | (0.04 | ) | (0.78 | ) | (0.58 | ) | (1.40 | ) | 0.00 | 3.41 | (10.84 | ) | 31,620 | (0.21 | ) | 2.17 | 1 | ||||||||||||||||||||||||||||||||||||
2021 | 5.81 | (0.01 | ) | 1.70 | 1.69 | (0.05 | ) | (1.24 | ) | (0.97 | ) | (2.26 | ) | 0.00 | 5.24 | 30.29 | 51,140 | (0.12 | ) | 2.17 | 1 | |||||||||||||||||||||||||||||||||||||||
2020 | 9.48 | 0.00 | (b)(h) | (0.02 | ) | (0.02 | ) | (0.06 | ) | (2.39 | ) | (1.20 | ) | (3.65 | ) | 0.00 | 5.81 | 0.27 | 53,605 | 0.00 | (h)(j) | 2.20 | 0 | (g) | ||||||||||||||||||||||||||||||||||||
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 | )(j) | 2.20 | 1 | ||||||||||||||||||||||||||||||||||||
Class I | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2024(e) | $ | 8.61 | $ | 0.04 | $ | 1.20 | $ | 1.24 | $ | (0.60 | )* | $ | — | $ | — | $ | (0.60 | ) | $ | 0.00 | $ | 9.25 | 14.98 | % | $ | 123,959 | 0.88 | %(f) | 1.18 | %(f) | 0 | %(g) | ||||||||||||||||||||||||||||
2023 | 9.36 | 0.12 | 1.04 | 1.16 | (0.09 | ) | (0.67 | ) | (1.15 | ) | (1.91 | ) | 0.00 | 8.61 | 12.19 | 134,026 | 1.14 | 1.18 | 5 | |||||||||||||||||||||||||||||||||||||||||
2022 | 12.35 | 0.10 | (1.17 | ) | (1.07 | ) | (0.08 | ) | (0.77 | ) | (1.06 | ) | (1.92 | ) | 0.00 | 9.36 | (9.81 | ) | 128,315 | 0.81 | 1.17 | 1 | ||||||||||||||||||||||||||||||||||||||
2021 | 11.15 | 0.12 | 3.34 | 3.46 | (0.11 | ) | (1.24 | ) | (0.91 | ) | (2.26 | ) | 0.00 | 12.35 | 31.71 | 134,073 | 0.89 | 1.17 | 1 | |||||||||||||||||||||||||||||||||||||||||
2020 | 14.68 | 0.14 | (h) | (0.02 | ) | 0.12 | (0.14 | ) | (2.39 | ) | (1.12 | ) | (3.65 | ) | 0.00 | 11.15 | 1.14 | 130,903 | 1.00 | (h) | 1.20 | 0 | (g) | |||||||||||||||||||||||||||||||||||||
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 |
* | Based on year to date book income. Amounts are subject to change and recharacterization at year end. |
† | 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) | Per share amounts have been calculated using the average shares outstanding method. |
(b) | Amount represents less than $0.005 per share. |
(c) | The Fund received credits from a designated broker who agreed to pay certain Fund operating expenses. For all periods presented, there was no impact on the expense ratios. |
(d) | The Fund incurred interest expense during the six months ended March 31, 2024 and the fiscal years ended September 30, 2023, 2022, 2021, 2020, and 2019. If interest expense had not been incurred, the ratio of operating expenses to average net assets would have been 1.42%, 1.42%, 1.41%, 1.41%, 1.42%, and 1.40% (Class AAA and Class A), 2.17%, 2.17%, 2.16%, 2.16%, 2.17%, and 2.15% (Class C1), 1.17%, 1.17%, 1.16%, 1.16%, 1.17%, and 1.15% (Class I), and 2.17%, and 2.29% (Class C), respectively. |
(e) | For the six months ended March 31, 2024, unaudited. |
(f) | Annualized. |
(g) | Amount represents less than 0.5%. |
(h) | 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. |
(i) | Class C commenced on June 1, 2023. |
(j) | Amount represents less than 0.005%. |
See accompanying notes to financial statements.
12
The Gabelli Equity Income Fund
Notes to Financial Statements (Unaudited)
1. Organization. The Gabelli Equity Income Fund, a series of the Gabelli Equity Series Funds, Inc. (the Corporation), was incorporated on July 25, 1991 in Maryland. The Fund is a diversified open-end management investment company registered under the Investment Company Act of 1940, as amended (the 1940 Act), and is one of four separately managed portfolios (collectively, the Portfolios) of the Corporation. The Fund seeks to provide a high level of total return on its assets with an emphasis on income. The Fund commenced investment operations on January 2, 1992.
2. Significant Accounting Policies. As an investment company, the Fund follows the investment company accounting and reporting guidance, which is part of U.S. generally accepted accounting principles (GAAP) that may require the use of management estimates and assumptions in the preparation of its financial statements. Actual results could differ from those estimates. The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements.
Security Valuation. Portfolio securities listed or traded on a nationally recognized securities exchange or traded in the U.S. over-the-counter market for which market quotations are readily available are valued at the last quoted sale price or a market’s official closing price as of the close of business on the day the securities are being valued. If there were no sales that day, the security is valued at the average of the closing bid and asked prices or, if there were no asked prices quoted on that day, then the security is valued at the closing bid price on that day. If no bid or asked prices are quoted on such day, the security is valued at the most recently available price or, if the Board of Directors (the Board) so determines, by such other method as the Board shall determine in good faith to reflect its fair market value. Portfolio securities traded on more than one national securities exchange or market are valued according to the broadest and most representative market, as determined by the Adviser.
Portfolio securities primarily traded on a foreign market are generally valued at the preceding closing values of such securities on the relevant market, but may be fair valued pursuant to procedures established by the Board if market conditions change significantly after the close of the foreign market, but prior to the close of business on the day the securities are being valued. Debt 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 of 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.
13
The Gabelli Equity Income Fund
Notes to Financial Statements (Unaudited) (Continued)
The inputs and valuation techniques used to measure fair value of the Fund’s investments are summarized into three levels as described in the hierarchy below:
● | Level 1 — quoted prices in active markets for identical securities; |
● | Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.); and |
● | Level 3 — significant unobservable inputs (including the Board’s determinations as to the fair value of investments). |
A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input both individually and in the aggregate that is significant to the fair value measurement. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of the Fund’s investments in securities by inputs used to value the Fund’s investments as of March 31, 2024 is as follows:
Valuation Inputs | ||||||||
Level 1 | Total Market Value | |||||||
Quoted Prices | at 03/31/24 | |||||||
INVESTMENTS: | ||||||||
ASSETS (Market Value): | ||||||||
Common Stocks (a) | $ | 514,870,694 | $ | 514,870,694 | ||||
TOTAL INVESTMENTS – ASSETS | $ | 514,870,694 | $ | 514,870,694 | ||||
(a) | Please refer to the Schedule of Investments for the industry classifications of these portfolio holdings. |
The Fund held no Level 3 investments at March 31, 2024 or September 30, 2023. The Fund's policy is to recognize transfers among levels as of the beginning of the reporting period.
Additional Information to Evaluate Qualitative Information.
General. The Fund uses recognized industry pricing services – approved by the Board and unaffiliated with the Adviser – to value most of its securities, and uses broker quotes provided by market makers of securities not valued by these and other recognized pricing sources. Several different pricing feeds are received to value domestic equity securities, international equity securities, preferred equity securities, and fixed income securities. The data within these feeds 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
14
The Gabelli Equity Income Fund
Notes to Financial Statements (Unaudited) (Continued)
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 enters into short sale transactions. Short selling involves selling securities that may or may not be owned and, at times, borrowing the same securities for delivery to the purchaser, with an obligation to replace such borrowed securities at a later date. The proceeds received from short sales are recorded as liabilities and the Fund records an unrealized gain or loss to the extent of the difference between the proceeds received and the value of an open short position on the day of determination. The Fund records a realized gain or loss when the short position is closed out. By entering into a short sale, the Fund bears the market risk of an unfavorable change in the price of the security sold short. Dividends on short sales are recorded as an expense by the Fund on the ex-dividend date and interest expense is recorded on the accrual basis. The broker retains collateral for the value of the open positions, which is adjusted periodically as the value of the position fluctuates. At March 31, 2024, there were no short sales outstanding.
Foreign Currency Translations. The books and records of the Fund are maintained in U.S. dollars. Foreign currencies, investments, and other assets and liabilities are translated into U.S. dollars at current exchange rates. Purchases and sales of investment securities, income, and expenses are translated at the exchange rate prevailing on the respective dates of such transactions. Unrealized gains and losses that result from changes in foreign exchange rates and/or changes in market prices of securities have been included in unrealized appreciation/depreciation on investments and foreign currency translations. Net realized foreign currency gains and losses resulting from changes in exchange rates include foreign currency gains and losses between trade date and settlement date on investment securities transactions, foreign currency transactions, and the difference between the amounts of interest and dividends recorded on the books of the Fund and the amounts actually received. The portion of foreign currency gains and losses related to fluctuation in exchange rates between the initial purchase trade date and subsequent sale trade date is included in realized gain/(loss) on investments.
Foreign Securities. The Fund may directly purchase securities of foreign issuers. Investing in securities of foreign issuers involves special risks not typically associated with investing in securities of U.S. issuers. The risks include possible revaluation of currencies, the inability to repatriate funds, less complete financial information about companies, and possible future adverse political and economic developments. Moreover, securities of many foreign issuers and their markets may be less liquid and their prices more volatile than securities of comparable U.S. issuers.
Foreign Taxes. The Fund may be subject to foreign taxes on income, gains on investments, or currency repatriation, a portion of which may be recoverable. The Fund will accrue such taxes and recoveries as applicable, based upon its current interpretation of tax rules and regulations that exist in the markets in which it invests.
Restricted Securities. The Fund may invest up to 15% of its net assets in securities for which the markets are restricted. Restricted securities include securities whose disposition is subject to substantial legal or contractual restrictions. The sale of restricted securities often requires more time and results in higher brokerage charges or dealer discounts and other selling expenses than 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
15
The Gabelli Equity Income Fund
Notes to Financial Statements (Unaudited) (Continued)
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, 2024, the Fund did not hold any 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 an accrual basis. Premiums and discounts on debt securities are amortized using the effective yield to maturity method or amortized to 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 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, 2023 was as follows:
Distributions paid from: | ||||
Ordinary income | $ | 5,241,338 | ||
Net long term capital gains | 43,401,367 | |||
Return of capital | 65,901,598 | |||
Total distributions paid* | $ | 114,544,303 |
* | 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
16
The Gabelli Equity Income Fund
Notes to Financial Statements (Unaudited) (Continued)
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, 2024:
Gross | Gross | |||||||
Unrealized | Unrealized | Net Unrealized | ||||||
Cost | Appreciation | Depreciation | Appreciation | |||||
Investments | $177,045,614 | $342,062,060 | $(4,236,980) | $337,825,080 |
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, 2024, the Fund did not incur any income tax, interest, or penalties. As of March 31, 2024, 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.
4. Distribution Plan. The Fund’s Board has adopted a distribution plan (the Plan) for each class of shares, except for Class I Shares, pursuant to Rule 12b-1 under the 1940 Act. Under the Class AAA, Class A, Class C, and Class C1 Share Plans, payments are authorized to G.distributors, LLC (the Distributor), an affiliate of the Adviser, at annual rates of 0.25%, 0.25%, 1.00%, and 1.00%, respectively, of the average daily net assets of those classes, the annual limitations under each Plan. Such payments are accrued daily and paid monthly.
17
The Gabelli Equity Income Fund
Notes to Financial Statements (Unaudited) (Continued)
5. Portfolio Securities. Purchases and sales of securities during the six months ended March 31, 2024, other than short term securities and U.S. Government obligations, aggregated $2,014,807 and $48,745,107, respectively.
6. Transactions with Affiliates and Other Arrangements. During the six months ended March 31, 2024, the Fund paid $6,566 in brokerage commissions on security trades to G.research, LLC, an affiliate of the Adviser. Additionally, the Distributor retained a total of $72,589 from investors representing commissions (sales charges and underwriting fees) on sales and redemptions of Fund shares.
During the six months ended March 31, 2024, 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 $4,423.
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, 2024, 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 February 26, 2025 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 bank 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, 2024, there was $719,000 outstanding under the line of credit.
The average daily amount of borrowings outstanding under the line of credit for 68 days of borrowings during the six months ended March 31, 2024 was $1,795,676 with a weighted average interest rate of 6.55%. The maximum amount borrowed at any time during the six months ended March 31, 2024 was $8,936,000.
8. Capital Stock. The Fund offers four classes of shares – Class AAA Shares, Class A Shares, Class C Shares, and Class I Shares. On March 13, 2023, Class C shares were renamed Class C1 shares, and effective March 15 through May 30, 2023, the Fund temporarily reopened its Class C1 shares to purchases by new investors. After May 30, 2023, neither new nor existing shareholders may purchase additional C1 shares. Class C shares were issued beginning May 30, 2023. These changes have no effect on existing Class C1 shareholders' ability to redeem these 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, 2024 and the fiscal year
18
The Gabelli Equity Income Fund
Notes to Financial Statements (Unaudited) (Continued)
ended September 30, 2023, 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, 2024 | Year Ended | |||||||||||||||
(Unaudited) | September 30, 2023 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Class AAA | ||||||||||||||||
Shares sold | 738,754 | $ | 5,466,139 | 1,174,663 | $ | 10,172,938 | ||||||||||
Shares issued upon reinvestment of distributions | 2,420,109 | 17,874,775 | 6,147,305 | 49,649,725 | ||||||||||||
Shares redeemed | (3,302,110 | ) | (24,628,870 | ) | (4,706,054 | ) | (40,534,051 | ) | ||||||||
Net increase/(decrease) | (143,247 | ) | $ | (1,287,956 | ) | 2,615,914 | $ | 19,288,612 | ||||||||
Class A | ||||||||||||||||
Shares sold | 2,629,978 | $ | 19,214,275 | 4,258,757 | $ | 36,060,183 | ||||||||||
Shares issued upon reinvestment of distributions | 1,348,719 | 9,777,366 | 2,979,277 | 23,521,783 | ||||||||||||
Shares redeemed | (2,203,811 | ) | (16,078,954 | ) | (3,201,866 | ) | (26,713,568 | ) | ||||||||
Net increase | 1,774,886 | $ | 12,912,687 | 4,036,168 | $ | 32,868,398 | ||||||||||
Class C* | ||||||||||||||||
Shares sold | 220,152 | $ | 1,946,955 | 78,914 | $ | 783,387 | ||||||||||
Shares issued upon reinvestment of distributions | 12,980 | 114,751 | 6,499 | 57,017 | ||||||||||||
Shares redeemed | (25,123 | ) | (221,800 | ) | (14,550 | ) | (141,092 | ) | ||||||||
Net increase | 208,009 | $ | 1,839,906 | 70,863 | $ | 699,312 | ||||||||||
Class C1 | ||||||||||||||||
Shares sold | 27,910 | $ | 64,281 | 238,073 | $ | 769,577 | ||||||||||
Shares issued upon reinvestment of distributions | 2,022,205 | 4,594,699 | 3,538,227 | 11,034,199 | ||||||||||||
Shares redeemed | (2,854,033 | ) | (6,638,529 | ) | (4,569,461 | ) | (14,895,413 | ) | ||||||||
Net decrease | (803,918 | ) | $ | (1,979,549 | ) | (793,161 | ) | $ | (3,091,637 | ) | ||||||
Class I | ||||||||||||||||
Shares sold | 471,408 | $ | 3,995,490 | 3,283,389 | $ | 33,307,281 | ||||||||||
Shares issued upon reinvestment of distributions | 917,125 | 8,035,301 | 2,861,760 | 26,958,291 | ||||||||||||
Shares redeemed | (3,551,389 | ) | (31,524,354 | ) | (4,294,132 | ) | (43,281,567 | ) | ||||||||
Net increase/(decrease) | (2,162,856 | ) | $ | (19,493,563 | ) | 1,851,017 | $ | 16,984,005 |
* Class C shares were first offered on June 1, 2023.
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.
19
The Gabelli Equity Income Fund
Notes to Financial Statements (Unaudited) (Continued)
10. Subsequent Events. On April 22, 2024, the Fund announced that after the close of business on May 28, 2024 or, with respect to shares held in “street name” through intermediaries having a pre-existing contractual agreement requiring additional time, as soon as practicable thereafter, the Fund will convert Class C1 shares into Class C shares, and then eliminate Class C1 shares of the Fund. Management has evaluated the impact on the Fund of all other subsequent events occurring through the date the financial statements were issued and has determined that there were no subsequent events requiring recognition or disclosure in the financial statements.
20
The Gabelli Equity Income Fund
Board Consideration and Re-Approval of Management Agreement (Unaudited)
During the six months ended March 31, 2024, 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, 2023) of the Fund against a peer group of seven 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 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 second quartile for the five-year period, the third quartile for the one- and three-year periods, and the fourth quartile for the ten-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 three- and five-year periods, the fourth quintile for the one-year period, and the fifth quintile for the ten-year period.
Profitability. The Independent Board Members reviewed summary data regarding the profitability of the Fund to the Adviser both with an administrative overhead charge and without such a charge. The Independent Board Members also noted that a substantial portion of the Fund’s portfolio transactions were executed by an affiliated broker, that 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 18 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, 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.
21
The Gabelli Equity Income Fund
Board Consideration and Re-Approval of Management Agreement (Unaudited) (Continued)
Conclusions. The Independent Board Members concluded that the Fund enjoyed highly experienced portfolio management services, good ancillary services and an acceptable overall 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 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 Advisory 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 based its decision on evaluations of all these factors as a whole and did not consider any one factor as all-important or controlling.
22
THE GABELLI EQUITY INCOME FUND
One Corporate Center
Rye, NY 10580-1422
Portfolio Manager’s 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.
The Gabelli Small Cap Growth Fund
Semiannual Report — March 31, 2024
To Our Shareholders,
For the six months ended March 31, 2024, the net asset value (NAV) total return per Class AAA Share of The Gabelli Small Cap Growth Fund was 22.6% compared with a total return of 18.0% for the Standard & Poor’s (S&P) SmallCap 600 Index. Other classes of shares are available. See page 3 for performance information for all classes.
Enclosed are the financial statements, including the summary schedule of investments, as of March 31, 2024.
Investment Objective and Strategy (Unaudited)
Our stock selection process is based on the investment principles of Graham and Dodd, the first investors to articulate the fundamentals of value investing. Their work provided the framework for value investing, and we contributed to this framework with the discipline of Private Market Value with a Catalyst®. This proprietary research and valuation method identifies companies whose shares are selling at a discount to intrinsic value, with an identifiable path to realizing, or surfacing, that private market value. We define private market value as the price an informed acquirer would pay for an entire enterprise. The catalyst comprises identifiable events or circumstances that might reasonably result in the narrowing of the difference between the public market price of the stock and our estimate of the private market value. This realization of value can take place gradually or suddenly, with company specific changes such as management modifications or restructurings, the sale of assets or the business, in its entirety, or industry adjustments such as regulation revisions or changes in competition.
The Fund invests primarily in small cap companies that, through bottom-up fundamental research, the portfolio manager believes are attractively priced relative to their earnings growth potential or private market value. The Fund characterizes small capitalization companies as those companies with a market capitalization of $3 billion or less at the time of the Fund’s initial investment.
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. |
Performance Discussion (Unaudited)
For the six months ended March 31, 2024, the better performing stocks in (y)our portfolio included Kaman Corp. (1.6% of net assets as of March 31, 2024), KKR & Co. Inc. (3.7%), and Modine Manufacturing Co. (1.5%).
Kaman Corporation, together with its subsidiaries, operates in the aerospace, defense, medical, and industrial markets. The company operates through three segments: Engineered Products, Precision Products, and Structures. The Engineered Products segment produces and markets aircraft bearings and components. The Precision Products segment provides arming solutions for missile and bomb systems for the U.S. and allied militaries. The Structures segment offers metallic and composite aero structures for commercial, military, and general aviation fixed and rotary wing aircrafts. The Structures segment also provides medical imaging solutions. As of April 19, 2024, Kaman Corporation was taken private.
KKR & Co. Inc. is a private equity and real estate investment firm specializing in direct and fund of fund investments. It specializes in acquisitions, leveraged buyouts, management buyouts, credit special situations, growth equity, mature, mezzanine, distressed, turnaround, lower middle market, and middle market investments.
Modine Manufacturing Co. provides commercial, industrial and vehicular markets with trusted systems and solutions to manage heating and cooling and improve air quality. It operates through Climate Solutions and Performance Technologies segments.
Some of the detractors from (y)our fund’s performance included The E.W. Scripps Co. (0.2%), Dana Inc. (0.8%), and Ingles Markets Inc. (0.8%).
The E.W. Scripps Company, together with its subsidiaries, operates as a media enterprise through a portfolio of local television stations, national news, and entertainment networks in the United States. It operates through Local Media, Scripps Networks, and other segments. The company serves audiences and businesses through cable and satellite service providers.
Dana Incorporated and its subsidiaries provide power conveyance and energy management solutions for vehicles and machinery in North and South America, Europe, and the Asia-Pacific regions. The company operates through four segments: Light Vehicle Drive Systems, Commercial Vehicle Drive and Motion Systems, Off-Highway Drive and Motion Systems, and Power Technologies.
Ingles Markets, Incorporated, and its subsidiaries, operates a chain of supermarkets in the southeast United States. It offers food products, such as meat, dairy products, produce, and other perishables and grocery items. It also offers non-food products, which include fuel centers, pharmacies, health and beauty care products, and general merchandise. The company owns and operates a milk processing and packaging plant that supplies organic milk, fruit juices, and bottled water products to other retailers, food service distributors, and grocery warehouses. The company operates under the Ingles and Sav-Mor brand names.
We appreciate your confidence and trust.
The views expressed reflect the opinions of the Fund’s portfolio manager and Gabelli Funds, LLC, the Adviser, as of the date of this report and are subject to change without notice based on changes in market, economic, or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results. |
2
Comparative Results
Average Annual Returns through March 31, 2024 (a)(b) (Unaudited)
Total returns and average annual returns reflect changes in share price, reinvestment of distributions, and are net of expenses.
Performance returns for periods of less than one year are not annualized.
Six Months | 1 Year | 5 Year | 10 Year | 15 Year | Since Inception (10/22/91) | |||||||
Class AAA (GABSX) | 22.63% | 24.10% | 11.87% | 8.75% | 13.54% | 12.02% | ||||||
Russell 2000 Index (c) | 19.94 | 19.71 | 8.10 | 7.58 | 12.89 | 9.34 | ||||||
S&P SmallCap 600 Index (c) | 17.95 | 15.93 | 9.15 | 8.80 | 14.32 | N/A | ||||||
Lipper Small-Cap Core Funds Average (c) | 20.03 | 19.49 | 9.71 | 8.23 | 13.26 | N/A | ||||||
Class A (GCASX) (d) | 22.65 | 24.12 | 11.88 | 8.75 | 13.54 | 12.02 | ||||||
With sales charge (e) | 15.59 | 16.98 | 10.56 | 8.11 | 13.09 | 11.82 | ||||||
Class C (GCCSX) (d) | 22.17 | 23.15 | 11.04 | 7.94 | 12.70 | 11.50 | ||||||
With contingent deferred sales charge (f) | 21.17 | 22.15 | 11.04 | 7.94 | 12.70 | 11.50 | ||||||
Class I (GACIX) (d) | 22.81 | 24.42 | 12.16 | 9.03 | 13.83 | 12.16 | ||||||
(a) | The Fund’s fiscal year ends September 30. |
(b) | 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. |
(c) | The Russell 2000 Index is an unmanaged indicator which measures the performance of the small cap segment of the U.S. equity market. 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. The inception date of the index is December 31, 1994. The Lipper Small-Cap Core Funds Average reflects the average performance of mutual funds classified in this particular category. The inception date of the index is December 31, 1991. 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 26, 2024, the expense ratios for Class AAA, A, C, and I Shares are 1.39%, 1.39%, 2.14%, and 1.14%, respectively. See page 11 for the expense ratios for the six months ended March 31, 2024. 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, 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.
3
The Gabelli Small Cap Growth Fund
Disclosure of Fund Expenses (Unaudited)
For the Six Month Period from October 1, 2023 through March 31, 2024 | 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 10/01/23 | Ending Account Value 03/31/24 | Annualized Expense Ratio | Expenses Paid During Period * | ||
The Gabelli Small Cap Growth Fund | |||||
Actual Fund Return | |||||
Class AAA | $1,000.00 | $1,226.30 | 1.38% | $ | 7.68 |
Class A | $1,000.00 | $1,226.50 | 1.38% | $ | 7.68 |
Class C | $1,000.00 | $1,221.70 | 2.13% | $ | 11.83 |
Class I | $1,000.00 | $1,228.10 | 1.13% | $ | 6.29 |
Hypothetical 5% Return | |||||
Class AAA | $1,000.00 | $1,018.10 | 1.38% | $ | 6.96 |
Class A | $1,000.00 | $1,018.10 | 1.38% | $ | 6.96 |
Class C | $1,000.00 | $1,014.35 | 2.13% | $ | 10.73 |
Class I | $1,000.00 | $1,019.35 | 1.13% | $ | 5.70 |
* | Expenses are equal to the Fund’s annualized expense ratio for the last six months multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half year (183 days), then divided by 366. |
4
Summary of Portfolio Holdings (Unaudited)
The following table presents portfolio holdings as a percent of net assets as of March 31, 2024:
The Gabelli Small Cap Growth Fund
Equipment and Supplies | 19.2% | Consumer Products | 1.4 | % | |||
Diversified Industrial | 12.9% | Broadcasting | 1.3 | % | |||
Building and Construction | 7.2% | Computer Software and Services | 1.2 | % | |||
Retail | 6.1% | Consumer Services | 0.9 | % | |||
Financial Services | 5.6% | U.S. Government Obligations | 0.8 | % | |||
Food and Beverage | 4.6% | Telecommunications | 0.7 | % | |||
Automotive: Parts and Accessories | 4.5% | Environmental Services | 0.6 | % | |||
Hotels and Gaming | 3.9% | Automotive | 0.5 | % | |||
Electronics | 3.2% | Publishing | 0.3 | % | |||
Health Care | 3.1% | Home Furnishings | 0.3 | % | |||
Aviation: Parts and Services | 2.9% | Miscellaneous Investments | 0.2 | % | |||
Transportation | 2.6% | Cable | 0.1 | % | |||
Business Services | 2.5% | Wireless Communications | 0.1 | % | |||
Energy and Utilities | 2.5% | Closed-End Funds | 0.1 | % | |||
Machinery | 2.4% | Aerospace | 0.1 | % | |||
Manufactured Housing and Recreational Vehicles | 2.0% | Communications Equipment | 0.1 | % | |||
Specialty Chemicals | 2.0% | Metals and Mining | 0.1 | % | |||
Entertainment | 2.0% | Agriculture | 0.1 | % | |||
Real Estate | 1.8% | 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.
5
The Gabelli Small Cap Growth Fund
Summary Schedule of Investments — March 31, 2024 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS* — 98.6% | ||||||||||||
Aerospace — 0.1% | ||||||||||||
77,500 | Various Securities | $ | 915,671 | $ | 1,509,700 | |||||||
Agriculture — 0.1% | ||||||||||||
66,000 | Various Securities | 1,012,309 | 1,124,360 | |||||||||
Automotive — 0.5% | ||||||||||||
550,000 | Various Securities | 2,840,072 | 8,848,858 | |||||||||
Automotive: Parts and Accessories — 4.3% | ||||||||||||
840,000 | Brembo SpA | 1,552,407 | 10,756,998 | |||||||||
1,115,000 | Dana Inc. | 9,072,397 | 14,160,500 | |||||||||
288,000 | Modine Manufacturing Co.† | 2,101,455 | 27,414,720 | |||||||||
253,000 | Strattec Security Corp.†(a) | 4,905,435 | 6,003,690 | |||||||||
638,322 | Various Securities | 4,524,536 | 21,551,941 | |||||||||
22,156,230 | 79,887,849 | |||||||||||
Aviation: Parts and Services — 2.9% | ||||||||||||
650,000 | Kaman Corp. | 9,498,250 | 29,815,500 | |||||||||
88,900 | Moog Inc., Cl. A | 1,043,836 | 14,192,885 | |||||||||
138,812 | Various Securities | 2,080,560 | 10,208,740 | |||||||||
12,622,646 | 54,217,125 | |||||||||||
Broadcasting — 1.3% | ||||||||||||
2,346,652 | Various Securities | 10,739,399 | 24,154,786 | |||||||||
Building and Construction — 7.2% | ||||||||||||
216,500 | Herc Holdings Inc. | 7,059,215 | 36,436,950 | |||||||||
347,400 | Lennar Corp., Cl. B | 8,210,380 | 53,562,132 | |||||||||
1,175 | NVR Inc.† | 788,517 | 9,517,453 | |||||||||
614,927 | Various Securities | 5,680,002 | 32,148,227 | |||||||||
21,738,114 | 131,664,762 | |||||||||||
Business Services — 2.5% | ||||||||||||
1,600,000 | Trans-Lux Corp.†(a) | 1,575,044 | 1,424,000 | |||||||||
34,000 | United Rentals Inc. | 209,146 | 24,517,740 | |||||||||
1,440,240 | Various Securities | 7,050,455 | 20,798,745 | |||||||||
8,834,645 | 46,740,485 | |||||||||||
Cable — 0.1% | ||||||||||||
219,500 | Various Securities | 1,712,136 | 1,896,185 | |||||||||
Communications Equipment — 0.1% | ||||||||||||
150,000 | Various Securities | 1,857,239 | 1,290,000 | |||||||||
Computer Software and Services — 1.2% | ||||||||||||
31,000 | Tyler Technologies Inc.† | 61,675 | 13,175,310 | |||||||||
416,800 | Various Securities | 2,111,212 | 9,391,227 | |||||||||
2,172,887 | 22,566,537 | |||||||||||
Consumer Products — 1.4% | ||||||||||||
1,127,100 | Various Securities | 9,022,601 | 26,198,021 | |||||||||
Consumer Services — 0.9% | ||||||||||||
272,500 | Rollins Inc. | 253,576 | 12,608,575 |
Shares | Cost | Market Value | ||||||||||
254,000 | Various Securities | $ | 1,514,413 | $ | 4,630,180 | |||||||
1,767,989 | 17,238,755 | |||||||||||
Diversified Industrial — 12.9% | ||||||||||||
355,000 | Crane Co. | 4,913,967 | 47,971,150 | |||||||||
170,500 | Crane NXT Co. | 944,043 | 10,553,950 | |||||||||
76,000 | Enpro Inc. | 3,719,507 | 12,826,520 | |||||||||
220,500 | Griffon Corp. | 1,820,447 | 16,171,470 | |||||||||
40,000 | Lincoln Electric Holdings Inc. | 1,019,941 | 10,217,600 | |||||||||
940,000 | Myers Industries Inc. | 13,022,920 | 21,779,800 | |||||||||
334,200 | Textron Inc. | 2,019,423 | 32,059,806 | |||||||||
2,374,385 | Various Securities | 31,596,126 | 84,959,880 | |||||||||
59,056,374 | 236,540,176 | |||||||||||
Electronics — 3.2% | ||||||||||||
109,000 | Badger Meter Inc. | 1,337,724 | 17,637,290 | |||||||||
201,500 | Bel Fuse Inc., Cl. A(a) | 3,682,820 | 14,268,215 | |||||||||
400,000 | CTS Corp. | 3,294,245 | 18,716,000 | |||||||||
300,000 | Various Securities | 2,622,189 | 7,295,306 | |||||||||
10,936,978 | 57,916,811 | |||||||||||
Energy and Utilities — 2.5% | ||||||||||||
1,680,000 | RPC Inc. | 681,607 | 13,003,200 | |||||||||
616,600 | Various Securities | 12,751,455 | 32,758,992 | |||||||||
13,433,062 | 45,762,192 | |||||||||||
Entertainment — 2.0% | ||||||||||||
1,092,624 | Various Securities | 16,002,285 | 35,919,558 | |||||||||
Environmental Services — 0.6% | ||||||||||||
58,500 | Republic Services Inc. | 528,450 | 11,199,240 | |||||||||
Equipment and Supplies — 19.2% | ||||||||||||
387,000 | AMETEK Inc. | 658,516 | 70,782,300 | |||||||||
184,500 | Federal Signal Corp. | 969,062 | 15,658,515 | |||||||||
241,000 | Flowserve Corp. | 1,445,694 | 11,008,880 | |||||||||
152,500 | Franklin Electric Co. Inc. | 594,728 | 16,288,525 | |||||||||
419,000 | Graco Inc. | 2,237,317 | 39,159,740 | |||||||||
959,200 | Mueller Industries Inc. | 11,718,258 | 51,729,656 | |||||||||
167,000 | Tennant Co. | 2,784,423 | 20,308,870 | |||||||||
733,000 | The Gorman-Rupp Co. | 11,106,984 | 28,990,150 | |||||||||
1,782,373 | Various Securities | 16,199,309 | 98,547,850 | |||||||||
47,714,291 | 352,474,486 | |||||||||||
Financial Services — 5.6% | ||||||||||||
667,000 | KKR & Co. Inc. | 2,675,477 | 67,086,860 | |||||||||
10,000 | Waterloo Investment Holdings Ltd.†(b) | 1,373 | 5,000 | |||||||||
2,414,548 | Various Securities | 25,525,710 | 36,758,163 | |||||||||
28,202,560 | 103,850,023 | |||||||||||
Food and Beverage — 4.6% | ||||||||||||
400,000 | Flowers Foods Inc. | 950,682 | 9,500,000 | |||||||||
1,200,000 | Kikkoman Corp. | 1,630,295 | 15,346,809 | |||||||||
635,000 | Maple Leaf Foods Inc. | 11,018,968 | 10,411,834 |
See accompanying notes to financial statements.
6
The Gabelli Small Cap Growth Fund
Summary Schedule of Investments (Continued) — March 31, 2024 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS* (Continued) | ||||||||||||
Food and Beverage (Continued) | ||||||||||||
4,734,175 | Various Securities | $ | 24,521,201 | $ | 49,677,266 | |||||||
38,121,146 | 84,935,909 | |||||||||||
Health Care — 3.1% | ||||||||||||
216,000 | Globus Medical Inc., Cl. A† | 5,584,808 | 11,586,240 | |||||||||
1,199,500 | Various Securities | 14,209,822 | 44,552,945 | |||||||||
19,794,630 | 56,139,185 | |||||||||||
Home Furnishings — 0.3% | ||||||||||||
229,500 | Various Securities | 2,652,265 | 4,926,650 | |||||||||
Hotels and Gaming — 3.9% | ||||||||||||
138,500 | Churchill Downs Inc. | 554,640 | 17,139,375 | |||||||||
235,500 | Ryman Hospitality Properties Inc., REIT | 3,659,506 | 27,226,155 | |||||||||
6,711,000 | Various Securities | 14,254,304 | 27,216,185 | |||||||||
18,468,450 | 71,581,715 | |||||||||||
Machinery — 2.4% | ||||||||||||
326,000 | Astec Industries Inc. | 11,354,454 | 14,249,460 | |||||||||
1,415,000 | CNH Industrial NV | 3,631,392 | 18,338,400 | |||||||||
406,700 | Various Securities | 6,666,230 | 11,585,998 | |||||||||
21,652,076 | 44,173,858 | |||||||||||
Manufactured Housing and Recreational Vehicles — 2.0% | ||||||||||||
59,100 | Cavco Industries Inc.† | 1,147,687 | 23,584,446 | |||||||||
205,400 | Various Securities | 1,902,086 | 13,076,925 | |||||||||
3,049,773 | 36,661,371 | |||||||||||
Metals and Mining — 0.1% | ||||||||||||
190,000 | Various Securities | 538,036 | 1,147,707 | |||||||||
Publishing — 0.3% | ||||||||||||
816,200 | Various Securities | 5,383,705 | 6,181,203 | |||||||||
Real Estate — 1.8% | ||||||||||||
351,500 | The St. Joe Co. | 5,306,343 | 20,376,455 | |||||||||
522,107 | Various Securities | 6,300,271 | 13,499,775 | |||||||||
11,606,614 | 33,876,230 | |||||||||||
Retail — 6.1% | ||||||||||||
111,000 | AutoNation Inc.† | 1,763,898 | 18,379,380 | |||||||||
297,000 | Copart Inc.† | 622,069 | 17,202,240 | |||||||||
200,000 | Ingles Markets Inc., Cl. A | 2,545,477 | 15,336,000 | |||||||||
157,000 | Nathan’s Famous Inc. | 264,162 | 11,115,600 | |||||||||
69,000 | Penske Automotive Group Inc. | 1,005,952 | 11,177,310 | |||||||||
478,500 | Rush Enterprises Inc., Cl. B | 2,254,961 | 25,499,265 | |||||||||
507,900 | Various Securities | 5,720,635 | 13,653,208 | |||||||||
14,177,154 | 112,363,003 | |||||||||||
Specialty Chemicals — 2.0% | ||||||||||||
240,000 | H.B. Fuller Co. | 2,609,904 | 19,137,600 |
Shares | Cost | Market Value | ||||||||||
91,200 | The General Chemical Group Inc.†(b) | $ | 1,186 | $ | 0 | |||||||
216,100 | Various Securities | 2,599,661 | 17,445,167 | |||||||||
5,210,751 | 36,582,767 | |||||||||||
Telecommunications — 0.7% | ||||||||||||
712,556 | Various Securities | 9,241,465 | 13,400,593 | |||||||||
Transportation — 2.6% | ||||||||||||
344,500 | GATX Corp. | 9,705,693 | 46,173,335 | |||||||||
192,657 | Various Securities | 1,753,858 | 2,472,260 | |||||||||
11,459,551 | 48,645,595 | |||||||||||
Wireless Communications — 0.1% | ||||||||||||
49,500 | Various Securities | 1,289,328 | 1,806,750 | |||||||||
TOTAL COMMON STOCKS | 435,910,882 | 1,813,422,445 | ||||||||||
CLOSED-END FUNDS* — 0.1% | ||||||||||||
183,229 | Various Securities | 2,465,895 | 1,634,770 | |||||||||
PREFERRED STOCKS* — 0.2% | ||||||||||||
Automotive: Parts and Accessories — 0.2% | ||||||||||||
82,500 | Various Securities | 563,490 | 3,051,096 | |||||||||
RIGHTS* — 0.0% | ||||||||||||
Communications Equipment — 0.0% | ||||||||||||
60,500 | Various Securities | 0 | 63,840 | |||||||||
WARRANTS* — 0.0% | ||||||||||||
Business Services — 0.0% | ||||||||||||
1 | Internap Corp., expires 05/08/24†(b) | 0 | 652 | |||||||||
Diversified Industrial — 0.0% | ||||||||||||
140,000 | Various Securities | 95,648 | 14,000 | |||||||||
TOTAL WARRANTS | 95,648 | 14,652 |
See accompanying notes to financial statements.
7
The Gabelli Small Cap Growth Fund
Summary Schedule of Investments (Continued) — March 31, 2024 (Unaudited)
Principal Amount | Cost | Market Value | ||||||||||
U.S. GOVERNMENT OBLIGATIONS* — 0.8% | ||||||||||||
$ | 14,630,000 | Various Securities | $ | 14,535,580 | $ | 14,535,581 | ||||||
TOTAL U.S. GOVERNMENT OBLIGATIONS | 14,535,580 | 14,535,581 | ||||||||||
TOTAL MISCELLANEOUS INVESTMENTS— 0.2%(c) | 3,459,560 | 4,229,546 | ||||||||||
TOTAL INVESTMENTS — 99.9% | $ | 457,031,055 | 1,836,951,930 | |||||||||
Other Assets and Liabilities (Net) — 0.1% | 2,233,600 | |||||||||||
NET ASSETS — 100.0% | $ | 1,839,185,530 |
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, or 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, 2024. 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 using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy. |
(c) | Represents undisclosed, unrestricted securities which the Fund has held for less than one year. |
† | Non-income producing security. |
REIT | Real Estate Investment Trust |
See accompanying notes to financial statements.
8
The Gabelli Small Cap Growth Fund
Statement of Assets and Liabilities
March 31, 2024 (Unaudited)
Assets: | ||||
Investments, at value (cost $446,867,756) | $ | 1,815,256,025 | ||
Investments in affiliates, at value (cost $10,163,299) | 21,695,905 | |||
Cash | 535,943 | |||
Foreign currency, at value (cost $100,057) | 100,369 | |||
Receivable for investments sold | 1,972,363 | |||
Receivable for Fund shares sold | 1,963,141 | |||
Dividends receivable | 1,685,425 | |||
Prepaid expenses | 105,319 | |||
Total Assets | 1,843,314,490 | |||
Liabilities: | ||||
Payable for investments purchased | 364,282 | |||
Payable for Fund shares redeemed | 1,684,049 | |||
Payable for investment advisory fees | 1,511,697 | |||
Payable for distribution fees | 263,498 | |||
Payable for accounting fees | 7,500 | |||
Other accrued expenses | 297,934 | |||
Total Liabilities | 4,128,960 | |||
Net Assets | ||||
(applicable to 40,259,779 shares outstanding) | $ | 1,839,185,530 | ||
Net Assets Consist of: | ||||
Paid-in capital | $ | 443,148,314 | ||
Total distributable earnings | 1,396,037,216 | |||
Net Assets | $ | 1,839,185,530 | ||
Shares of Capital Stock, each at $0.001 par value: | ||||
Class AAA: | ||||
Net Asset Value, offering, and redemption price per share ($1,009,322,508 ÷ 22,325,403 shares outstanding; 150,000,000 shares authorized) | $ | 45.21 | ||
Class A: | ||||
Net Asset Value and redemption price per share ($145,991,769 ÷ 3,233,000 shares outstanding; 50,000,000 shares authorized) | $ | 45.16 | ||
Maximum offering price per share (NAV ÷ 0.9425, based on maximum sales charge of 5.75% of the offering price) | $ | 47.92 | ||
Class C: | ||||
Net Asset Value and offering price per share ($29,372,647 ÷ 877,730 shares outstanding; 50,000,000 shares authorized) | $ | 33.46 | (a) | |
Class I: | ||||
Net Asset Value, offering, and redemption price per share ($654,498,606 ÷ 13,823,646 shares outstanding; 50,000,000 shares authorized) | $ | 47.35 |
Statement of Operations
For the Six Months Ended March 31, 2024 (Unaudited)
Investment Income: | ||||
Dividends - unaffiliated (net of foreign withholding taxes of $92,624) | $ | 10,889,428 | ||
Dividends - affiliated | 24,750 | |||
Interest | 302,947 | |||
Total Investment Income | 11,217,125 | |||
Expenses: | ||||
Investment advisory fees | 8,242,723 | |||
Distribution fees - Class AAA | 1,166,751 | |||
Distribution fees - Class A | 161,829 | |||
Distribution fees - Class C | 139,090 | |||
Shareholder services fees | 647,864 | |||
Shareholder communications expenses | 164,528 | |||
Custodian fees | 70,124 | |||
Directors’ fees | 62,433 | |||
Legal and audit fees | 42,864 | |||
Accounting fees | 22,500 | |||
Registration expenses | 19,142 | |||
Interest expense | 517 | |||
Miscellaneous expenses | 78,249 | |||
Total Expenses | 10,818,614 | |||
Less: | ||||
Advisory fee reduction on unsupervised assets (See Note 3) | (37,441 | ) | ||
Expenses paid indirectly by broker (See Note 6) | (12,410 | ) | ||
Total Reductions | (49,851 | ) | ||
Net Expenses | 10,768,763 | |||
Net Investment Income | 448,362 | |||
Net Realized and Unrealized Gain on Investments and Foreign Currency: | ||||
Net realized gain on investments - unaffiliated | 46,677,365 | |||
Net realized gain on investments - affiliated | 184,340 | |||
Net realized gain on foreign currency transactions | 4,466 | |||
Net realized gain on investments and foreign currency transactions | 46,866,171 | |||
Net change in unrealized appreciation/depreciation: | ||||
on investments - unaffiliated | 289,133,641 | |||
on investments - affiliated | 5,535,234 | |||
on foreign currency translations | 3,658 | |||
Net change in unrealized appreciation/depreciation on investments and foreign currency translations | 294,672,533 | |||
Net Realized and Unrealized Gain on Investments and Foreign Currency | 341,538,704 | |||
Net Increase in Net Assets Resulting from Operations | $ | 341,987,066 |
(a) | Redemption price varies based on the length of time held. |
See accompanying notes to financial statements.
9
The Gabelli Small Cap Growth Fund
Statement of Changes in Net Assets
Six Months Ended March 31, 2024 (Unaudited) | Year Ended September 30, 2023 | |||||||||
Operations: | ||||||||||
Net investment income | $ | 448,362 | $ | 3,104,898 | ||||||
Net realized gain on investments and foreign currency transactions | 46,866,171 | 153,029,636 | ||||||||
Net change in unrealized appreciation/depreciation on investments and foreign currency translations | 294,672,533 | 157,495,632 | ||||||||
Net Increase in Net Assets Resulting from Operations | 341,987,066 | 313,630,166 | ||||||||
Distributions to Shareholders: | ||||||||||
Accumulated earnings | ||||||||||
Class AAA | (80,231,713 | ) | (78,244,179 | ) | ||||||
Class A | (10,652,797 | ) | (10,316,268 | ) | ||||||
Class C | (2,482,651 | ) | (3,309,037 | ) | ||||||
Class I | (45,194,453 | ) | (46,912,815 | ) | ||||||
Total Distributions to Shareholders | (138,561,614 | ) | (138,782,299 | ) | ||||||
Capital Share Transactions: | ||||||||||
Class AAA | (2,739,096 | ) | 591,787 | |||||||
Class A | 11,182,725 | 1,334,405 | ||||||||
Class C | (2,563,355 | ) | (10,408,315 | ) | ||||||
Class I | 65,856,367 | (9,319,216 | ) | |||||||
Net Increase/(Decrease) in Net Assets from Capital Share Transactions | 71,736,641 | (17,801,339 | ) | |||||||
Redemption Fees | 112 | 2,662 | ||||||||
Net Increase in Net Assets | 275,162,205 | 157,049,190 | ||||||||
Net Assets: | ||||||||||
Beginning of year | 1,564,023,325 | 1,406,974,135 | ||||||||
End of period | $ | 1,839,185,530 | $ | 1,564,023,325 |
See accompanying notes to financial statements.
10
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 | 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 Investment Income | Net Realized Gain on Investments | Total Distributions | Redemption Fees(a)(c) | Net Asset Value, End of Period | Total Return† | Net Assets, End of Period (in 000’s) | Net Investment Income (Loss)(b) | Operating Expenses(d)(e)(f) | Portfolio Turnover Rate | |||||||||||||||||||||||||||||||||||
Class AAA | |||||||||||||||||||||||||||||||||||||||||||||||||
2024(g) | $ | 40.51 | $ | (0.00 | )(c) | $ | 8.33 | $ | 8.33 | $ | (0.08 | ) | $ | (3.55 | ) | $ | (3.63 | ) | $ | 0.00 | $ | 45.21 | 22.63 | % | $ | 1,009,322 | (0.02 | )%(h) | 1.38 | %(h) | 1 | % | |||||||||||||||||
2023 | 36.11 | 0.05 | 7.96 | 8.01 | (0.01 | ) | (3.60 | ) | (3.61 | ) | 0.00 | 40.51 | 22.70 | 899,376 | 0.13 | 1.39 | 1 | ||||||||||||||||||||||||||||||||
2022 | 49.61 | 0.02 | (7.13 | ) | (7.11 | ) | (0.05 | ) | (6.34 | ) | (6.39 | ) | 0.00 | 36.11 | (17.07 | ) | 798,836 | 0.05 | 1.39 | 1 | |||||||||||||||||||||||||||||
2021 | 43.30 | 0.04 | 15.83 | 15.87 | — | (9.56 | ) | (9.56 | ) | 0.00 | 49.61 | 42.16 | 1,054,894 | 0.09 | 1.38 | 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 | 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 | 1 | |||||||||||||||||||||||||||||
Class A | |||||||||||||||||||||||||||||||||||||||||||||||||
2024(g) | $ | 40.46 | $ | (0.00 | )(c) | $ | 8.33 | $ | 8.33 | $ | (0.08 | ) | $ | (3.55 | ) | $ | (3.63 | ) | $ | 0.00 | $ | 45.16 | 22.65 | % | $ | 145,992 | (0.02 | )%(h) | 1.38 | %(h) | 1 | % | |||||||||||||||||
2023 | 36.06 | 0.05 | 7.95 | 8.00 | 0.00 | (c) | (3.60 | ) | (3.60 | ) | 0.00 | 40.46 | 22.72 | 118,557 | 0.13 | 1.39 | 1 | ||||||||||||||||||||||||||||||||
2022 | 49.56 | 0.02 | (7.13 | ) | (7.11 | ) | (0.05 | ) | (6.34 | ) | (6.39 | ) | 0.00 | 36.06 | (17.08 | ) | 104,317 | 0.04 | 1.39 | 1 | |||||||||||||||||||||||||||||
2021 | 43.26 | 0.04 | 15.82 | 15.86 | — | (9.56 | ) | (9.56 | ) | 0.00 | 49.56 | 42.17 | 134,005 | 0.08 | 1.38 | 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 | 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 | 1 | |||||||||||||||||||||||||||||
Class C | |||||||||||||||||||||||||||||||||||||||||||||||||
2024(g) | $ | 30.09 | $ | (0.12 | ) | $ | 6.18 | $ | 6.06 | $ | (0.06 | ) | $ | (2.63 | ) | $ | (2.69 | ) | $ | 0.00 | $ | 33.46 | 22.17 | % | $ | 29,373 | (0.77 | )%(h) | 2.13 | %(h) | 1 | % | |||||||||||||||||
2023 | 27.02 | (0.19 | ) | 5.95 | 5.76 | — | (2.69 | ) | (2.69 | ) | 0.00 | 30.09 | 21.79 | 28,818 | (0.64 | ) | 2.14 | 1 | |||||||||||||||||||||||||||||||
2022 | 38.86 | (0.24 | ) | (5.26 | ) | (5.50 | ) | — | (6.34 | ) | (6.34 | ) | 0.00 | 27.02 | (17.69 | ) | 35,068 | (0.72 | ) | 2.14 | 1 | ||||||||||||||||||||||||||||
2021 | 35.95 | (0.24 | ) | 12.71 | 12.47 | — | (9.56 | ) | (9.56 | ) | 0.00 | 38.86 | 41.10 | 66,467 | (0.64 | ) | 2.13 | 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 | 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 | 1 | ||||||||||||||||||||||||||||
Class I | |||||||||||||||||||||||||||||||||||||||||||||||||
2024(g) | $ | 42.36 | $ | 0.05 | $ | 8.73 | $ | 8.78 | $ | (0.08 | ) | $ | (3.71 | ) | $ | (3.79 | ) | $ | 0.00 | $ | 47.35 | 22.81 | % | $ | 654,499 | 0.24 | %(h) | 1.13 | %(h) | 1 | % | ||||||||||||||||||
2023 | 37.76 | 0.16 | 8.32 | 8.48 | (0.11 | ) | (3.77 | ) | (3.88 | ) | 0.00 | 42.36 | 23.02 | 517,272 | 0.38 | 1.14 | 1 | ||||||||||||||||||||||||||||||||
2022 | 51.62 | 0.13 | (7.47 | ) | (7.34 | ) | (0.18 | ) | (6.34 | ) | (6.52 | ) | 0.00 | 37.76 | (16.88 | ) | 468,753 | 0.29 | 1.14 | 1 | |||||||||||||||||||||||||||||
2021 | 44.62 | 0.17 | 16.39 | 16.56 | — | (9.56 | ) | (9.56 | ) | 0.00 | 51.62 | 42.51 | 644,066 | 0.34 | 1.13 | 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 | 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 | 1 |
† | 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) | Per share amounts have been calculated using the average shares outstanding method. |
(b) | 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. |
(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 periods presented, there was no impact on the expense ratios. |
(e) | The Fund incurred interest expense during the fiscal years ended September 30, 2023, 2022, 2021, 2020, and 2019. If interest expense had not been incurred, the ratios of operating expenses to average net assets would have been 1.38%, 1.38%, 1.37%, 1.39%, and 1.38% (Class AAA and Class A), 2.13%, 2.13%, 2.12%, 2.14%, and 2.13% (Class C), and 1.13%, 1.13%, 1.12%, 1.14%, and 1.13% (Class I), respectively. For the six months ended March 31, 2024, there was no impact on the expense ratios. |
(f) | Ratio of operating expenses includes advisory fee reduction on unsupervised assets totaling 0.01% of net assets for the six months ended March 31, 2024 with no impact on Class I and the fiscal year ended September 30, 2020. For the years ended September 30, 2023, 2022, 2021, and 2019, there was no impact on the expense ratios. |
(g) | For the six months ended March 31, 2024, unaudited. |
(h) | Annualized. |
(i) | Amount represents less than 0.5%. |
See accompanying notes to financial statements.
11
The Gabelli Small Cap Growth Fund
Notes to Financial Statements (Unaudited)
1. Organization. The Gabelli Small Cap Growth Fund, a series of the Gabelli Equity Series Funds, Inc. (the Corporation), was incorporated on July 25, 1991 in Maryland. The Fund is a diversified open-end management investment company registered under the Investment Company Act of 1940, as amended (the 1940 Act), and is one of four separately managed portfolios (collectively, the Portfolios) of the Corporation. The Fund seeks to provide a high level of capital appreciation. The Fund commenced investment operations on October 22, 1991. 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.
2. Significant Accounting Policies. As an investment company, the Fund follows the investment company accounting and reporting guidance, which is part of U.S. generally accepted accounting principles (GAAP) that may require the use of management estimates and assumptions in the preparation of its financial statements. Actual results could differ from those estimates. The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements.
Security Valuation. Portfolio securities listed or traded on a nationally recognized securities exchange or traded in the U.S. over-the-counter market for which market quotations are readily available are valued at the last quoted sale price or a market’s official closing price as of the close of business on the day the securities are being valued. If there were no sales that day, the security is valued at the average of the closing bid and asked prices or, if there were no asked prices quoted on that day, then the security is valued at the closing bid price on that day. If no bid or asked prices are quoted on such day, the security is valued at the most recently available price or, if the Board of Directors (the Board) so determines, by such other method as the Board shall determine in good faith to reflect its fair market value. Portfolio securities traded on more than one national securities exchange or market are valued according to the broadest and most representative market, as determined by the Adviser.
Portfolio securities primarily traded on a foreign market are generally valued at the preceding closing values of such securities on the relevant market, but may be fair valued pursuant to procedures established by the Board if market conditions change significantly after the close of the foreign market, but prior to the close of business on the day the securities are being valued. Debt 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 of 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.
12
The Gabelli Small Cap Growth Fund
Notes to Financial Statements (Unaudited) (Continued)
The inputs and valuation techniques used to measure fair value of the Fund’s investments are summarized into three levels as described in the hierarchy below:
● | Level 1 — quoted prices in active markets for identical securities; |
● | Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.); and |
● | Level 3 — significant unobservable inputs (including the Board’s determinations as to the fair value of investments). |
A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input both individually and in the aggregate that is significant to the fair value measurement. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of the Fund’s investments in securities by inputs used to value the Fund’s investments as of March 31, 2024 is as follows:
Valuation Inputs | ||||||||||||||||
Level 1 Quoted Prices | Level 2 Other Significant Observable Inputs | Level 3 Significant Unobservable Inputs (a) | Total Market Value at 03/31/24 | |||||||||||||
INVESTMENTS IN SECURITIES: | ||||||||||||||||
ASSETS (Market Value): | ||||||||||||||||
Common Stocks: | ||||||||||||||||
Automotive: Parts and Accessories | $ | 79,887,849 | $ | 0 | — | $ | 79,887,849 | |||||||||
Aviation: Parts and Services | 53,775,049 | 442,076 | — | 54,217,125 | ||||||||||||
Consumer Services | 17,016,155 | 222,600 | — | 17,238,755 | ||||||||||||
Diversified Industrial | 235,635,776 | 904,400 | — | 236,540,176 | ||||||||||||
Equipment and Supplies | 349,044,097 | 3,430,389 | — | 352,474,486 | ||||||||||||
Financial Services | 102,753,036 | 1,409,587 | $ | 5,000 | 104,167,623 | |||||||||||
Hotels and Gaming | 68,208,425 | 3,498,750 | — | 71,707,175 | ||||||||||||
Manufactured Housing and Recreational Vehicles | 34,298,258 | 2,363,113 | — | 36,661,371 | ||||||||||||
Publishing | 6,355,186 | 172,597 | — | 6,527,783 | ||||||||||||
Real Estate | 33,728,122 | 148,108 | — | 33,876,230 | ||||||||||||
Retail | 111,511,634 | 851,369 | — | 112,363,003 | ||||||||||||
Specialty Chemicals | 36,582,767 | — | 0 | 36,582,767 | ||||||||||||
Telecommunications | 12,462,738 | 937,855 | — | 13,400,593 | ||||||||||||
Other Industries (b) | 662,007,055 | — | — | 662,007,055 | ||||||||||||
Total Common Stocks | 1,803,266,147 | 14,380,844 | 5,000 | 1,817,651,991 | ||||||||||||
Closed-End Funds | 1,634,770 | — | — | 1,634,770 | ||||||||||||
Preferred Stocks (b) | 3,051,096 | — | — | 3,051,096 | ||||||||||||
Rights (b) | — | 63,840 | — | 63,840 | ||||||||||||
Warrants (b) | 14,000 | — | 652 | 14,652 | ||||||||||||
U.S. Government Obligations | — | 14,535,581 | — | 14,535,581 | ||||||||||||
TOTAL INVESTMENTS IN SECURITIES – ASSETS | $ | 1,807,966,013 | $ | 28,980,265 | $ | 5,652 | $ | 1,836,951,930 |
(a) | The inputs for these securities are not readily available and are derived based on the judgment of the Adviser according to procedures approved by the Board. |
(b) | Please refer to the Schedule of Investments for the industry classifications of these portfolio holdings. |
13
The Gabelli Small Cap Growth Fund
Notes to Financial Statements (Unaudited) (Continued)
During the six months ended March 31, 2024, the Fund did not have material transfers into or out of Level 3. The Fund’s policy is to recognize transfers among levels as of the beginning of the reporting period.
Additional Information to Evaluate Qualitative Information.
General. The Fund uses recognized industry pricing services – approved by the Board and unaffiliated with the Adviser – to value most of its securities, and uses broker quotes provided by market makers of securities not valued by these and other recognized pricing sources. Several different pricing feeds are received to value domestic equity securities, international equity securities, preferred equity securities, and fixed income securities. The data within these feeds 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
14
The Gabelli Small Cap Growth Fund
Notes to Financial Statements (Unaudited) (Continued)
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, 2024, 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 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, 2024, 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 an accrual basis. Premiums and discounts on debt securities are amortized using the effective yield to maturity method or amortized to 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 as determined under the GAAP. Distributions from net
15
The Gabelli Small Cap Growth Fund
Notes to Financial Statements (Unaudited) (Continued)
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, 2023 was as follows:
Distributions paid from: | ||||
Ordinary income (inclusive of short term capital gains) | $ | 2,325,442 | ||
Net long term capital gains | 146,113,135 | |||
Total distributions paid* | $ | 148,438,577 |
* | 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.
The following summarizes the tax cost of investments and the related net unrealized appreciation at March 31, 2024:
Cost | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Appreciation | |||||
Investments | $461,615,508 | $1,405,388,144 | $(30,051,722) | $1,375,336,422 | ||||
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, 2024, the Fund did not incur any income tax, interest, or penalties. As of March 31, 2024, 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.
16
The Gabelli Small Cap Growth Fund
Notes to Financial Statements (Unaudited) (Continued)
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, 2024, the Fund’s Proxy Voting Committee exercised control and discretion over all rights to vote or consent with respect to such securities (L.S. Starrett Co. and Strattec Security Corp.), and the Adviser reduced its fee with respect to such securities by $37,441.
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, 2024, other than short term securities and U.S. Government obligations, aggregated $13,755,748 and $64,069,181, respectively.
6. Transactions with Affiliates and Other Arrangements. During the six months ended March 31, 2024, the Fund paid $18,855 in brokerage commissions on security trades to G.research, LLC, an affiliate of the Adviser. Additionally, the Distributor retained a total of $10,107 from investors representing commissions (sales charges and underwriting fees) on sales and redemptions of Fund shares.
During the six months ended March 31, 2024, 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 $12,410.
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, 2024, 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 February 26, 2025 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 bank 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, 2024, there were no borrowings outstanding under the line of credit.
The average daily amount of borrowings outstanding under the line of credit for 2 days of borrowings during the six months ended March 31, 2024 was $1,224,000 with a weighted average interest rate of 6.59%. The maximum amount borrowed at any time during the six months ended March 31, 2024 was $1,710,000.
17
The Gabelli Small Cap Growth 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, 2024 and the fiscal year ended September 30, 2023, 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, 2024 (Unaudited) | Year Ended September 30, 2023 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Class AAA | ||||||||||||||||
Shares sold | 638,918 | $ | 25,044,125 | 1,459,702 | $ | 59,287,899 | ||||||||||
Shares issued upon reinvestment of distributions | 2,122,480 | 78,001,154 | 1,968,082 | 75,790,825 | ||||||||||||
Shares redeemed | (2,637,633 | ) | (105,784,375 | ) | (3,350,834 | ) | (134,486,937 | ) | ||||||||
Net increase/(decrease) | 123,765 | $ | (2,739,096 | ) | 76,950 | $ | 591,787 | |||||||||
Class A | ||||||||||||||||
Shares sold | 330,318 | $ | 13,249,722 | 386,753 | $ | 15,677,854 | ||||||||||
Shares issued upon reinvestment of distributions | 276,050 | 10,131,018 | 253,242 | 9,739,703 | ||||||||||||
Shares redeemed | (303,533 | ) | (12,198,015 | ) | (602,502 | ) | (24,083,151 | ) | ||||||||
Net increase | 302,835 | $ | 11,182,725 | 37,493 | $ | 1,334,406 | ||||||||||
Class C | ||||||||||||||||
Shares sold | 107,280 | $ | 3,277,507 | 72,924 | $ | 2,251,044 | ||||||||||
Shares issued upon reinvestment of distributions | 90,809 | 2,478,175 | 114,578 | 3,297,561 | ||||||||||||
Shares redeemed | (278,068 | ) | (8,319,037 | ) | (527,702 | ) | (15,956,920 | ) | ||||||||
Net decrease | (79,979 | ) | $ | (2,563,355 | ) | (340,200 | ) | $ | (10,408,315 | ) | ||||||
Class I | ||||||||||||||||
Shares sold | 2,216,165 | $ | 94,716,468 | 1,930,594 | $ | 82,465,637 | ||||||||||
Shares issued upon reinvestment of distributions | 1,152,679 | 44,308,968 | 1,139,763 | 45,807,093 | ||||||||||||
Shares redeemed | (1,755,539 | ) | (73,169,069 | ) | (3,272,433 | ) | (137,591,946 | ) | ||||||||
Net increase/(decrease) | 1,613,305 | $ | 65,856,367 | (202,076 | ) | $ | (9,319,216 | ) |
18
The Gabelli Small Cap Growth Fund
Notes to Financial Statements (Unaudited) (Continued)
9. Transactions in Securities of Affiliated Issuers. The 1940 Act defines affiliated issuers as those in which the Fund’s holdings of an issuer represent 5% or more of the outstanding voting securities of the issuer. A summary of the Fund’s transactions in the securities of these issuers during the six months ended March 31, 2024 is set forth below:
Market Value at September 30, 2023 | Purchases | Sales Proceeds | Realized Gain | Change In Unrealized Appreciation | Market Value at March 31, 2024 | Dividend Income | Percent Owned of Shares | |||||||||||||||||||||||||
Bel Fuse Inc., Cl. A | $ | 9,732,345 | — | $ | 328,994 | $ | 184,340 | $ | 4,680,524 | $ | 14,268,215 | $ | 24,750 | 9.41 | % | |||||||||||||||||
Strattec Security Corp.† | 5,751,900 | $ | 101,080 | — | — | 150,710 | 6,003,690 | — | 6.22 | % | ||||||||||||||||||||||
Trans-Lux Corp.† | 720,000 | — | — | — | 704,000 | 1,424,000 | — | 11.85 | % | |||||||||||||||||||||||
Total | $ | 184,340 | $ | 5,535,234 | $ | 21,695,905 | $ | 24,750 |
† | 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.
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 Investment Advisory Agreement (Unaudited)
During the six months ended March 31, 2024, 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, 2023) 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- and ten-year periods and the second quartile for the three- and five-year periods, 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-, three-, five-, and ten-year periods,. The Independent Board Members noted the Fund’s total return was above the median total return for the one-, three-, five-, and ten-year periods 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 twenty 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 near average within this group. The Independent Board Members also noted that the management fee structure was the same as that in effect for most of the Gabelli funds. The Independent Board Members were presented with, but did not consider to be material to their
20
The Gabelli Small Cap Growth Fund
Board Consideration and Re-Approval of Investment Advisory Agreement (Unaudited) (Continued)
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 overall 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 Advisory 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 based its 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’s 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.
The Gabelli Focused Growth and Income Fund
Semiannual Report — March 31, 2024 |
Daniel M. Miller Portfolio Manager GAMCO Investors BS, University of Miami |
To Our Shareholders,
For the six months ended March 31, 2024, the net asset value (NAV) total return per Class I Share of The Gabelli Focused Growth and Income Fund was 13.6% compared with a total return of 22.8% for the S&P MidCap 400 Index. Other classes of shares are available. See page 3 for performance information for all classes.
Enclosed are the financial statements, including the schedule of investments, as of March 31, 2024.
Investment Objective and Strategy (Unaudited)
The Gabelli Focused Growth and Income Fund is a concentrated, actively managed strategy. The Fund invests in a global portfolio of common and preferred equities, REITs, bonds, and other securities that have the potential for capital appreciation while emphasizing a high level of current net investment income. The Fund has a managed monthly distribution, currently set at $0.07 per share for Class A and Class I and $0.06 per share for Class AAA and Class C.
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. |
Performance Discussion (Unaudited)
The Fund increased 8.2% in the fourth quarter of 2023, and was up 12.4% for the full year 2023. U.S. stocks rallied in the last three months of 2023. The S&P 500, led by the Magnificent Seven, increased 11.2%. The Dow Jones saw the biggest quarterly percentage jump since the fourth quarter of 2020, and the Russell 2000 Small-Cap index also delivered its best quarterly return. The Fund increased its monthly distribution in the fourth quarter to $0.07 on I-shares from $0.06.
For the first quarter of 2024, the Fund increased 4.9%. Stocks surged with the S&P 500 posting a gain of 10.6%, led in part by the tech-heavy Magnificent Seven. Real estate was the only sector to decline, as investors contemplated the future trajectory of interest rates.
The economy has proved resilient in the face of geopolitical tensions and the uncertainty surrounding an election year. Inflation has decreased precipitously but remains above the Fed’s target, and the Fed maintains its interest rate target of 5.3%-5.5%. The portfolio currently offers an attractive gross dividend yield of approximately 7.4%.
The largest contributors for the period were Qurate Retail Inc. preferred shares (QRTEP) (7.7% of net assets as of March 31, 2024), Apollo Global Management Inc. (APO) (5.8%), and Energy Transfer LP (ET) (6.0%) - up 43.8%, 21.1%, and 16.6%, respectively. Laggards included investments that are most sensitive to interest rates, including VICI Properties Inc. (8.4%) and Blackstone Mortgage Trust Inc., Cl. A (6.1%).
We appreciate your confidence and trust.
The views expressed reflect the opinions of the Fund’s portfolio manager and Gabelli Funds, LLC, the Adviser, as of the date of this report and are subject to change without notice based on changes in market, economic, or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results. |
2
Comparative Results
Average Annual Returns through March 31, 2024 (a)(b) (Unaudited)
Total returns and average annual returns reflect changes in share price, reinvestment of distributions, and are net of expenses.
Performance returns for periods of less than one year are not annualized.
Six Months | 1 Year | 3 Year | 5 Year | 10 Year | Since Inception (12/31/02) | |||||||||||||||||||
Class I (GWSIX) (c) | 13.64 | % | 16.17 | % | 6.10 | % | 10.19 | % | 4.08 | % | 7.26 | % | ||||||||||||
Class AAA (GWSVX) | 13.07 | 15.00 | 5.00 | 9.35 | 3.55 | 6.92 | ||||||||||||||||||
S&P MidCap 400 Index (d) | 22.78 | 23.33 | 6.96 | 11.71 | 9.99 | 11.28 | ||||||||||||||||||
Lipper Equity Income Fund Average (d) | 18.01 | 18.49 | 8.77 | 10.64 | 9.24 | 8.97 | ||||||||||||||||||
Class A (GWSAX) | 13.38 | 15.66 | 5.32 | 9.55 | 3.66 | 6.99 | ||||||||||||||||||
With sales charge (e) | 6.86 | 9.01 | 3.26 | 8.26 | 3.04 | 6.68 | ||||||||||||||||||
Class C (GWSCX) | 12.67 | 14.17 | 4.25 | 8.57 | 2.80 | 6.16 | ||||||||||||||||||
With contingent deferred sales charge (f) | 11.67 | 13.17 | 4.25 | 8.57 | 2.80 | 6.16 |
(a) | The Fund’s fiscal year ends September 30. |
(b) | Returns would have been lower had the Adviser not reimbursed various expenses of the Fund. The Fund imposes a 2% redemption fee on shares sold or exchanged within seven days of purchase. |
(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 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. |
(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 26, 2024, the expense ratios for Class AAA, A, C, and I Shares are 1.79%, 1.79%, 2.54%, and 1.54%, respectively, and the net expense ratios for these share classes after contractual reimbursements by Gabelli Funds, LLC, (the Adviser) are 1.79%, 1.26%, 2.54%, and 0.81%, respectively. See page 10 for the expense ratios for the six months ended March 31, 2024. Class AAA and Class I Shares have no sales charge. The maximum sales charge for Class A Shares is 5.75%.
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.
3
The Gabelli Focused Growth and Income Fund
Disclosure of Fund Expenses (Unaudited)
For the Six Month Period from October 1, 2023 through March 31, 2024 | 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 | Ending Account Value | Annualized Expense | Expenses Paid During | |||||||||||||
10/01/23 | 03/31/24 | Ratio | Period * | |||||||||||||
The Gabelli Focused Growth and Income Fund | ||||||||||||||||
Actual Fund Return | ||||||||||||||||
Class AAA | $ | 1,000.00 | $ | 1,130.70 | 1.72 | % | $ | 9.16 | ||||||||
Class A | $ | 1,000.00 | $ | 1,133.80 | 1.25 | % | $ | 6.67 | ||||||||
Class C | $ | 1,000.00 | $ | 1,126.70 | 2.47 | % | $ | 13.13 | ||||||||
Class I | $ | 1,000.00 | $ | 1,136.40 | 0.80 | % | $ | 4.27 | ||||||||
Hypothetical 5% Return | ||||||||||||||||
Class AAA | $ | 1,000.00 | $ | 1,016.40 | 1.72 | % | $ | 8.67 | ||||||||
Class A | $ | 1,000.00 | $ | 1,018.75 | 1.25 | % | $ | 6.31 | ||||||||
Class C | $ | 1,000.00 | $ | 1,012.65 | 2.47 | % | $ | 12.43 | ||||||||
Class I | $ | 1,000.00 | $ | 1,021.00 | 0.80 | % | $ | 4.04 |
* | 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 (183 days), then divided by 366. |
4
Summary of Portfolio Holdings (Unaudited)
The following table presents portfolio holdings as a percent of net assets as of March 31, 2024:
The Gabelli Focused Growth and Income Fund
Energy and Utilities | 22.4 | % | ||
Real Estate Investment Trusts | 22.2 | % | ||
Financial Services | 11.8 | % | ||
Retail | 7.7 | % | ||
Telecommunications | 6.7 | % | ||
U.S. Government Obligations | 6.2 | % | ||
Health Care | 4.3 | % | ||
Food and Beverage | 3.9 | % | ||
Building and Construction | 2.6 | % |
Diversified Industrial | 2.5 | % | ||
Metals and Mining | 2.4 | % | ||
Computer Software and Services | 1.9 | % | ||
Automotive: Parts and Accessories | 1.1 | % | ||
Entertainment | 0.9 | % | ||
Specialty Chemicals | 0.9 | % | ||
Other Assets and Liabilities (Net) | 2.5 | % | ||
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.
5
The Gabelli Focused Growth and Income Fund
Schedule of Investments — March 31, 2024 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS — 77.4% | ||||||||||||
Automotive: Parts and Accessories — 1.1% | ||||||||||||
6,000 | Aptiv plc† | $ | 311,893 | $ | 477,900 | |||||||
Building and Construction — 2.6% | ||||||||||||
7,000 | Herc Holdings Inc. | 134,168 | 1,178,100 | |||||||||
Computer Software and Services — 1.9% | ||||||||||||
5,500 | Alphabet Inc., Cl. C† | 163,129 | 837,430 | |||||||||
Energy and Utilities — 22.4% | ||||||||||||
170,000 | Energy Transfer LP | 1,019,317 | 2,674,100 | |||||||||
100,000 | Enterprise Products Partners LP | 1,501,077 | 2,918,000 | |||||||||
110,000 | Kinder Morgan Inc. | 1,178,322 | 2,017,400 | |||||||||
8,500 | New Fortress Energy Inc. | 235,669 | 260,015 | |||||||||
68,500 | NextEra Energy Partners LP | 2,049,333 | 2,060,480 | |||||||||
5,983,718 | 9,929,995 | |||||||||||
Financial Services — 9.0% | ||||||||||||
23,000 | Apollo Global Management Inc. | 648,317 | 2,586,350 | |||||||||
15,000 | Morgan Stanley | 710,931 | 1,412,400 | |||||||||
1,359,248 | 3,998,750 | |||||||||||
Food and Beverage — 3.9% | ||||||||||||
65,000 | Maple Leaf Foods Inc. | 1,043,249 | 1,065,778 | |||||||||
8,000 | Mondelez International Inc., Cl. A | 327,345 | 560,000 | |||||||||
1,000 | Post Holdings Inc.† | 22,462 | 106,280 | |||||||||
1,393,056 | 1,732,058 | |||||||||||
Health Care — 4.3% | ||||||||||||
5,500 | AbbVie Inc. | 580,809 | 1,001,550 | |||||||||
27,000 | Option Care Health Inc.† | 147,593 | 905,580 | |||||||||
728,402 | 1,907,130 | |||||||||||
Metals and Mining — 2.4% | ||||||||||||
30,000 | Newmont Corp. | 1,092,553 | 1,075,200 | |||||||||
Real Estate Investment Trusts — 22.2% | ||||||||||||
135,000 | Blackstone Mortgage Trust Inc., Cl. A | 3,041,330 | 2,687,850 | |||||||||
130,000 | Franklin BSP Realty Trust Inc. | 1,739,293 | 1,736,800 | |||||||||
190,000 | Medical Properties Trust Inc. | 1,300,514 | 893,000 | |||||||||
5,000 | Simon Property Group Inc. | 523,059 | 782,450 | |||||||||
125,000 | VICI Properties Inc. | 2,228,930 | 3,723,750 | |||||||||
8,833,126 | 9,823,850 | |||||||||||
Specialty Chemicals — 0.9% | ||||||||||||
4,500 | International Flavors & Fragrances Inc. | 283,459 | 386,955 |
Shares | Cost | Market Value | ||||||||||
Telecommunications — 6.7% | ||||||||||||
140,000 | AT&T Inc. | $ | 2,168,379 | $ | 2,464,000 | |||||||
4,000 | GCI Liberty Inc., Escrow†(a) | 0 | 0 | |||||||||
3,000 | T-Mobile US Inc. | 215,747 | 489,660 | |||||||||
2,384,126 | 2,953,660 | |||||||||||
TOTAL COMMON STOCKS | 22,666,878 | 34,301,028 | ||||||||||
PREFERRED STOCKS — 13.0% | ||||||||||||
Diversified Industrial — 2.5% | ||||||||||||
32,812 | Babcock & Wilcox Enterprises Inc., 8.125%, 02/28/26 | 676,331 | 536,476 | |||||||||
25,018 | Steel Partners Holdings LP, Ser. A, 6.000%, 02/07/26 | 500,277 | 601,933 | |||||||||
1,176,608 | 1,138,409 | |||||||||||
Financial Services — 2.8% | ||||||||||||
39,091 | FTAI Aviation Ltd., Ser. A, 8.250% | 781,752 | 980,402 | |||||||||
25,874 | Greenidge Generation Holdings Inc., 8.500%, 10/31/26 | 157,884 | 265,209 | |||||||||
939,636 | 1,245,611 | |||||||||||
Retail — 7.7% | ||||||||||||
68,500 | Qurate Retail Inc., 8.000%, 03/15/31 | 2,799,924 | 3,405,820 | |||||||||
TOTAL PREFERRED STOCKS | 4,916,168 | 5,789,840 | ||||||||||
MANDATORY CONVERTIBLE SECURITIES(b) — 0.9% | ||||||||||||
Entertainment — 0.9% | ||||||||||||
29,000 | Paramount Global, Ser. A, 5.750%, 04/01/24 | 640,971 | 398,460 |
Principal Amount | ||||||||||||
U.S. GOVERNMENT OBLIGATIONS — 6.2% | ||||||||||||
$ | 2,750,000 | U.S. Treasury Bills, 5.266% to 5.313%††, 04/04/24 to 06/20/24 | 2,735,755 | 2,735,757 | ||||||||
TOTAL INVESTMENTS — 97.5% | $ | 30,959,772 | 43,225,085 | |||||||||
Other Assets and Liabilities (Net) — 2.5% | 1,097,585 | |||||||||||
NET ASSETS — 100.0% | $ | 44,322,670 |
See accompanying notes to financial statements.
6
The Gabelli Focused Growth and Income Fund
Schedule of Investments (Continued) — March 31, 2024 (Unaudited)
(a) | Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy. |
(b) | Mandatory convertible securities are required to be converted on the dates listed; they generally may be converted prior to these dates at the option of the holder. |
† | Non-income producing security. |
†† | Represents annualized yields at dates of purchase. |
See accompanying notes to financial statements.
7
The Gabelli Focused Growth and Income Fund
Statement of Assets and Liabilities
March 31, 2024 (Unaudited)
Assets: | ||||
Investments, at value (cost $30,959,772) | $ | 43,225,085 | ||
Cash | 34,189 | |||
Foreign currency, at value (cost $7,707) | 7,731 | |||
Receivable for investments sold | 1,017,027 | |||
Receivable for Fund shares sold | 47,941 | |||
Receivable from Adviser | 17,226 | |||
Dividends and interest receivable | 233,216 | |||
Prepaid expenses | 50,312 | |||
Total Assets | 44,632,727 | |||
Liabilities: | ||||
Payable for investments purchased | 148,868 | |||
Payable for Fund shares redeemed | 66,643 | |||
Payable for investment advisory fees | 36,991 | |||
Payable for distribution fees | 7,613 | |||
Payable for legal and audit fees | 39,341 | |||
Other accrued expenses | 10,601 | |||
Total Liabilities | 310,057 | |||
Net Assets | ||||
(applicable to 2,637,685 shares outstanding) | $ | 44,322,670 | ||
Net Assets Consist of: | ||||
Paid-in capital | $ | 33,234,549 | ||
Total distributable earnings | 11,088,121 | |||
Net Assets | $ | 44,322,670 | ||
Shares of Capital Stock, each at $0.001 par value: | ||||
Class AAA: | ||||
Net Asset Value, offering, and redemption price per share ($5,648,132 ÷ 342,844 shares outstanding; 100,000,000 shares authorized) | $ | 16.47 | ||
Class A: | ||||
Net Asset Value and redemption price per share ($20,549,190 ÷ 1,224,971 shares outstanding; 50,000,000 shares authorized) | $ | 16.78 | ||
Maximum offering price per share (NAV ÷ 0.9425, based on maximum sales charge of 5.75% of the offering price) | $ | 17.80 | ||
Class C: | ||||
Net Asset Value and offering price per share ($2,586,146 ÷ 194,434 shares outstanding; 50,000,000 shares authorized) | $ | 13.30 | (a) | |
Class I: | ||||
Net Asset Value, offering, and redemption price per share ($15,539,202 ÷ 875,436 shares outstanding; 50,000,000 shares authorized) | $ | 17.75 |
(a) | Redemption price varies based on the length of time held. |
Statement of Operations
For the six months ended March 31, 2024 (Unaudited)
Investment Income: | ||||
Dividends (net of foreign withholding taxes of $2,529) | $ | 1,140,538 | ||
Interest | 62,742 | |||
Total Investment Income | 1,203,280 | |||
Expenses: | ||||
Investment advisory fees | 206,783 | |||
Distribution fees - Class AAA | 6,721 | |||
Distribution fees - Class A | 23,049 | |||
Distribution fees - Class C | 12,584 | |||
Legal and audit fees | 39,669 | |||
Shareholder communications expenses | 16,737 | |||
Registration expenses | 16,605 | |||
Shareholder services fees | 10,680 | |||
Custodian fees | 4,090 | |||
Directors’ fees | 1,585 | |||
Interest expense | 276 | |||
Miscellaneous expenses | 8,148 | |||
Total Expenses | 346,927 | |||
Less: | ||||
Expense reimbursements (See Note 3) | (93,901 | ) | ||
Net Expenses | 253,026 | |||
Net Investment Income | 950,254 | |||
Net Realized and Unrealized Gain/(Loss) on | ||||
Investments and Foreign Currency: | ||||
Net realized loss on investments | (307,652 | ) | ||
Net realized gain on foreign currency transactions | 94 | |||
Net realized loss on investments and foreign currency transactions | (307,558 | ) | ||
Net change in unrealized appreciation/depreciation: | ||||
on investments | 4,580,163 | |||
on foreign currency translations | 174 | |||
Net change in unrealized appreciation/depreciation on investments and foreign currency translations | 4,580,337 | |||
Net Realized and Unrealized Gain/(Loss) on Investments and Foreign Currency | 4,272,779 | |||
Net Increase in Net Assets Resulting from Operations | $ | 5,223,033 |
See accompanying notes to financial statements.
8
The Gabelli Focused Growth and Income Fund
Statement of Changes in Net Assets
Six Months Ended March 31, 2024 (Unaudited) | Year Ended September 30, 2023 | |||||||
Operations: | ||||||||
Net investment income | $ | 950,254 | $ | 1,659,953 | ||||
Net realized loss on investments and foreign currency transactions | (307,558 | ) | (718,637 | ) | ||||
Net change in unrealized appreciation/depreciation on investments and foreign currency translations | 4,580,337 | 1,475,084 | ||||||
Net Increase in Net Assets Resulting from Operations | 5,223,033 | 2,416,400 | ||||||
Distributions to Shareholders: | ||||||||
Class AAA | (125,289 | ) | (247,172 | ) | ||||
Class A | (484,701 | ) | (683,676 | ) | ||||
Class C | (73,073 | ) | (207,466 | ) | ||||
Class I | (371,763 | ) | (723,663 | ) | ||||
Total Distributions to Shareholders | (1,054,826 | ) | (1,861,977 | ) | ||||
Capital Share Transactions: | ||||||||
Class AAA | (209,473 | ) | 123,815 | |||||
Class A | 2,274,817 | 5,597,058 | ||||||
Class C | (310,011 | ) | (1,733,319 | ) | ||||
Class I | (1,161,119 | ) | (4,309,454 | ) | ||||
Net Increase/(Decrease) in Net Assets from Capital Share Transactions | 594,214 | (321,900 | ) | |||||
Redemption Fees | — | 60 | ||||||
Net Increase in Net Assets | 4,762,421 | 232,583 | ||||||
Net Assets: | ||||||||
Beginning of year | 39,560,249 | 39,327,666 | ||||||
End of period | $ | 44,322,670 | $ | 39,560,249 |
See accompanying notes to financial statements.
9
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 Investment Income | Net Realized Gain on Investments | Total Distributions | Redemption Fees(a) | Net Asset Value, End of Period | Total Return† | Net Assets, End of Period (in 000’s) | Net Investment Income (Loss) | Operating Expenses Before Reimbursement | Operating Expenses Net of Reimbursement(c) | Portfolio Turnover Rate | ||||||||||||||||||||||||||||||||||||||||
Class AAA | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
2024(d) | $ | 14.91 | $ | 0.32 | $ | 1.60 | $ | 1.92 | $ | (0.36 | ) | $ | — | $ | (0.36 | ) | $ | — | $ | 16.47 | 13.07 | % | $ | 5,648 | 4.12 | %(e) | 1.72 | %(e) | 1.72 | %(e) | 15 | % | |||||||||||||||||||||||
2023 | 14.79 | 0.59 | 0.29 | 0.88 | (0.66 | ) | (0.10 | ) | (0.76 | ) | 0.00 | (f) | 14.91 | 5.91 | 5,321 | 3.79 | 1.79 | 1.79 | 36 | ||||||||||||||||||||||||||||||||||||
2022 | 17.50 | 0.32 | (2.31 | ) | (1.99 | ) | (0.66 | ) | (0.06 | ) | (0.72 | ) | — | 14.79 | (11.85 | ) | 5,134 | 1.85 | 1.72 | 1.72 | 46 | ||||||||||||||||||||||||||||||||||
2021 | 12.48 | 0.34 | 5.22 | 5.56 | (0.54 | ) | — | (0.54 | ) | — | 17.50 | 44.76 | 6,927 | 2.15 | 1.96 | 1.96 | 54 | ||||||||||||||||||||||||||||||||||||||
2020 | 12.93 | (0.03 | ) | (0.42 | ) | (0.45 | ) | — | — | — | 0.00 | (f) | 12.48 | (3.48 | ) | 8,713 | (0.24 | ) | 1.71 | 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 | 1.64 | (g) | 67 | ||||||||||||||||||||||||||||||||
Class A | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
2024(d) | $ | 15.19 | $ | 0.36 | $ | 1.63 | $ | 1.99 | $ | (0.40 | ) | $ | — | $ | (0.40 | ) | $ | — | $ | 16.78 | 13.38 | % | $ | 20,550 | 4.56 | %(e) | 1.72 | %(e) | 1.25 | %(e) | 15 | % | |||||||||||||||||||||||
2023 | 14.97 | 0.70 | 0.28 | 0.98 | (0.66 | ) | (0.10 | ) | (0.76 | ) | 0.00 | (f) | 15.19 | 6.53 | 16,368 | 4.43 | 1.79 | 1.26 | (h) | 36 | |||||||||||||||||||||||||||||||||||
2022 | 17.71 | 0.34 | (2.36 | ) | (2.02 | ) | (0.66 | ) | (0.06 | ) | (0.72 | ) | — | 14.97 | (11.88 | ) | 10,810 | 1.94 | 1.72 | 1.70 | (h) | 46 | |||||||||||||||||||||||||||||||||
2021 | 12.62 | 0.30 | 5.33 | 5.63 | (0.54 | ) | — | (0.54 | ) | — | 17.71 | 44.82 | 8,958 | 1.83 | 1.96 | 1.96 | 54 | ||||||||||||||||||||||||||||||||||||||
2020 | 13.06 | (0.03 | ) | (0.41 | ) | (0.44 | ) | — | — | — | 0.00 | (f) | 12.62 | (3.37 | ) | 6,644 | (0.24 | ) | 1.71 | 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 | 1.64 | (g) | 67 | ||||||||||||||||||||||||||||||||
Class C | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
2024(d) | $ | 12.15 | $ | 0.21 | $ | 1.30 | $ | 1.51 | $ | (0.36 | ) | $ | — | $ | (0.36 | ) | $ | — | $ | 13.30 | 12.67 | % | $ | 2,586 | 3.39 | %(e) | 2.47 | %(e) | 2.47 | %(e) | 15 | % | |||||||||||||||||||||||
2023 | 12.25 | 0.37 | 0.27 | 0.64 | (0.66 | ) | (0.08 | ) | (0.74 | ) | 0.00 | (f) | 12.15 | 5.17 | 2,666 | 2.90 | 2.54 | 2.54 | 36 | ||||||||||||||||||||||||||||||||||||
2022 | 14.73 | 0.15 | (1.91 | ) | (1.76 | ) | (0.66 | ) | (0.06 | ) | (0.72 | ) | — | 12.25 | (12.54 | ) | 4,357 | 1.02 | 2.47 | 2.47 | 46 | ||||||||||||||||||||||||||||||||||
2021 | 10.64 | 0.15 | 4.48 | 4.63 | (0.54 | ) | — | (0.54 | ) | — | 14.73 | 43.75 | 8,143 | 1.13 | 2.71 | 2.71 | 54 | ||||||||||||||||||||||||||||||||||||||
2020 | 11.10 | (0.11 | ) | (0.35 | ) | (0.46 | ) | — | — | — | 0.00 | (f) | 10.64 | (4.14 | ) | 6,926 | (1.00 | ) | 2.46 | 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 | 2.39 | (g) | 67 | ||||||||||||||||||||||||||||||||
Class I | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
2024(d) | $ | 16.01 | $ | 0.42 | $ | 1.72 | $ | 2.14 | $ | (0.40 | ) | $ | — | $ | (0.40 | ) | $ | — | $ | 17.75 | 13.64 | % | $ | 15,539 | 5.01 | %(e) | 1.47 | %(e) | 0.80 | %(e) | 15 | % | |||||||||||||||||||||||
2023 | 15.68 | 0.79 | 0.31 | 1.10 | (0.66 | ) | (0.11 | ) | (0.77 | ) | 0.00 | (f) | 16.01 | 6.97 | 15,205 | 4.77 | 1.54 | 0.81 | (h) | 36 | |||||||||||||||||||||||||||||||||||
2022 | 18.35 | 0.54 | (2.49 | ) | (1.95 | ) | (0.66 | ) | (0.06 | ) | (0.72 | ) | — | 15.68 | (11.07 | ) | 19,027 | 2.94 | 1.47 | 0.80 | (h) | 46 | |||||||||||||||||||||||||||||||||
2021 | 12.94 | 0.46 | 5.49 | 5.95 | (0.54 | ) | — | (0.54 | ) | — | 18.35 | 46.21 | 16,215 | 2.70 | 1.71 | 0.95 | (h) | 54 | |||||||||||||||||||||||||||||||||||||
2020 | 13.36 | 0.00 | (f) | (0.42 | ) | (0.42 | ) | — | — | — | 0.00 | (f) | 12.94 | (3.14 | ) | 8,333 | 0.01 | 1.46 | 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 | 1.39 | (g) | 67 |
† | 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) | Per share amounts have been calculated using the average shares outstanding method. |
(b) | 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. |
(c) | The Fund incurred interest expense. For the fiscal years ended September 30, 2023, 2022, and 2020, if interest expense had not been incurred, the ratios of operating expenses to average net assets would have been 1.78%, 1.72%, and 1.70% (Class AAA), 1.25%, 1.69%, and 1.70% (Class A), 2.53%, 2.47%, and 2.45% (Class C), and 0.80%, 0.80%, and 1.45% (Class I), respectively. For the six months ended March 31, 2024 and the fiscal years ended September 30, 2021 and 2019, the effect of interest expense was minimal. |
(d) | For the six months ended March 31, 2024, 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 ratios 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. |
(h) | Under an expense reimbursement agreement with the Adviser, the Adviser reimbursed expenses of $93,901, $187,761, and $119,130 for the six months ended March 31, 2024 and the fiscal years ended September 30, 2023 and 2022, respectively. |
See accompanying notes to financial statements.
10
The Gabelli Focused Growth and Income Fund
Notes to Financial Statements (Unaudited)
1. Organization. The Gabelli Focused Growth and Income Fund, a series of the Gabelli Equity Series Funds, Inc. (the Corporation), was incorporated on July 25, 1991 in Maryland. The Fund is a diversified open-end management investment company registered under the Investment Company Act of 1940, as amended (the 1940 Act), and is one of four separately managed portfolios (collectively, the Portfolios) of the Corporation. The Fund seeks to provide a high level of capital appreciation. The Fund commenced investment operations on December 31, 2002. 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.
2. Significant Accounting Policies. As an investment company, the Fund follows the investment company accounting and reporting guidance, which is part of U.S. generally accepted accounting principles (GAAP) that may require the use of management estimates and assumptions in the preparation of its financial statements. Actual results could differ from those estimates. The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements.
Security Valuation. Portfolio securities listed or traded on a nationally recognized securities exchange or traded in the U.S. over-the-counter market for which market quotations are readily available are valued at the last quoted sale price or a market’s official closing price as of the close of business on the day the securities are being valued. If there were no sales that day, the security is valued at the average of the closing bid and asked prices or, if there were no asked prices quoted on that day, then the security is valued at the closing bid price on that day. If no bid or asked prices are quoted on such day, the security is valued at the most recently available price or, if the Board of Directors (the Board) so determines, by such other method as the Board shall determine in good faith to reflect its fair market value. Portfolio securities traded on more than one national securities exchange or market are valued according to the broadest and most representative market, as determined by the Adviser.
Portfolio securities primarily traded on a foreign market are generally valued at the preceding closing values of such securities on the relevant market, but may be fair valued pursuant to procedures established by the Board if market conditions change significantly after the close of the foreign market, but prior to the close of business on the day the securities are being valued. Debt 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 of 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.
11
The Gabelli Focused Growth and Income Fund
Notes to Financial Statements (Unaudited) (Continued)
The inputs and valuation techniques used to measure fair value of the Fund’s investments are summarized into three levels as described in the hierarchy below:
● | Level 1 — quoted prices in active markets for identical securities; |
● | Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.); and |
● | Level 3 — significant unobservable inputs (including the Board’s determinations as to the fair value of investments). |
A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input both individually and in the aggregate that is significant to the fair value measurement. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of the Fund’s investments in securities by inputs used to value the Fund’s investments as of March 31, 2024 is as follows:
Valuation Inputs | ||||||||||||||||
Level 1 Quoted Prices | Level 2 Other Significant Observable Inputs | Level 3 Significant | Total Market Value | |||||||||||||
INVESTMENTS IN SECURITIES: | ||||||||||||||||
ASSETS (Market Value): | ||||||||||||||||
Common Stocks: | ||||||||||||||||
Telecommunications | $ | 2,953,660 | — | $ | 0 | $ | 2,953,660 | |||||||||
Other Industries (b) | 31,347,368 | — | — | 31,347,368 | ||||||||||||
Total Common Stocks | 34,301,028 | — | — | 34,301,028 | ||||||||||||
Preferred Stocks (b) | 5,789,840 | — | — | 5,789,840 | ||||||||||||
Mandatory Convertible Securities (b) | 398,460 | — | — | 398,460 | ||||||||||||
U.S. Government Obligations | — | $ | 2,735,757 | — | 2,735,757 | |||||||||||
TOTAL INVESTMENTS IN SECURITIES – ASSETS | $ | 40,489,328 | $ | 2,735,757 | $ | 0 | $ | 43,225,085 |
(a) | The inputs for this security are not readily available and are derived based on the judgment of the Adviser according to procedures approved by the Board. |
(b) | Please refer to the 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, 2024. The Fund's policy is to recognize transfers among levels as of the beginning of the reporting period.
Additional Information to Evaluate Qualitative Information.
General. The Fund uses recognized industry pricing services – approved by the Board and unaffiliated with the Adviser – to value most of its securities, and uses broker quotes provided by market makers of securities not valued by these and other recognized pricing sources. Several different pricing feeds are received to value domestic equity securities, international equity securities, preferred equity securities, and fixed income securities. The data within these feeds 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.
12
The Gabelli Focused Growth and Income Fund
Notes to Financial Statements (Unaudited) (Continued)
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.
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 an accrual basis. Premiums and discounts on debt securities are amortized using the effective yield to maturity method or amortized to 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.
13
The Gabelli Focused Growth and Income Fund
Notes to Financial Statements (Unaudited) (Continued)
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. 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.
The tax character of distributions paid during the fiscal year ended September 30, 2023 was as follows:
Distributions paid from: | ||||
Ordinary income | $ | 1,600,441 | ||
Net long term capital gains | 261,536 | |||
Total distributions paid | $ | 1,861,977 |
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.
14
The Gabelli Focused Growth and Income Fund
Notes to Financial Statements (Unaudited) (Continued)
The following summarizes the tax cost of investments and the related net unrealized appreciation at March 31, 2024:
Cost | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Appreciation | |||||||||||||||
Investments | $31,037,626 | $13,428,555 | $(1,241,096) | $12,187,459 |
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, 2024, the Fund did not incur any income tax, interest, or penalties. As of March 31, 2024, 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 August 17, 2022, the Adviser agreed to add the Fund’s Class A shares to the classes of shares of the Fund for which 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 and Class A (excluding brokerage costs, acquired fund fees and expenses, interest, taxes, and extraordinary expenses) at no more than an annual rate of 0.80% and 1.25% of the value of that class’s average daily net assets. This agreement is in effect through January 31, 2025 for Class I and Class A, and may be terminated only by the Board before such time. During the six months ended March 31, 2024, the Adviser reimbursed expenses in the amount of $93,901 for Class I and Class A. 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 would not exceed 0.80% and 1.25% of the value of the average daily net assets of Class I and Class A, respectively. At March 31, 2024, the cumulative amount which the Fund may repay the Adviser, subject to the terms above, is $400,792:
For the fiscal year ended September 30, 2022, expiring September 30, 2024 | $ | 119,130 | |||
For the fiscal year ended September 30, 2023, expiring September 30, 2025 | 187,761 | ||||
For the six months ended March 31, 2024, expiring September 30, 2026 | 93,901 | ||||
$ | 400,792 |
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
15
The Gabelli Focused Growth and Income Fund
Notes to Financial Statements (Unaudited) (Continued)
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, 2024, other than short term securities and U.S. Government obligations, aggregated $5,623,832 and $6,063,891, respectively.
6. Transactions with Affiliates and Other Arrangements. During the six months ended March 31, 2024, the Fund paid $30 in brokerage commissions on security trades to G.research, LLC, an affiliate of the Adviser. Additionally, the Distributor retained a total of $14,653 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 February 26, 2025 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 bank 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, 2024, 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. From January 3, 2022 through March 14, 2023, the Fund’s Class C Shares were closed to all purchases. On March 15, 2023, Class C Shares were re-opened for purchases. 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, 2024 and the fiscal year ended September 30, 2023, if any, can be found in the Statement of Changes in Net Assets under Redemption Fees.
16
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, 2024 (Unaudited) | Year Ended September 30, 2023 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Class AAA | ||||||||||||||||
Shares sold | 15,929 | $ | 238,961 | 82,978 | $ | 1,292,550 | ||||||||||
Shares issued upon reinvestment of distributions | 8,038 | 124,233 | 15,953 | 244,989 | ||||||||||||
Shares redeemed | (37,893 | ) | (572,667 | ) | (89,323 | ) | (1,413,724 | ) | ||||||||
Net increase/(decrease) | (13,926 | ) | $ | (209,473 | ) | 9,608 | $ | 123,815 | ||||||||
Class A | ||||||||||||||||
Shares sold | 198,719 | $ | 3,076,804 | 444,081 | $ | 6,994,691 | ||||||||||
Shares issued upon reinvestment of distributions | 29,446 | 465,398 | 41,391 | 645,659 | ||||||||||||
Shares redeemed | (80,672 | ) | (1,267,385 | ) | (129,980 | ) | (2,043,292 | ) | ||||||||
Net increase | 147,493 | $ | 2,274,817 | 355,492 | $ | 5,597,058 | ||||||||||
Class C | ||||||||||||||||
Shares sold | 35,127 | $ | 448,000 | 7,733 | $ | 98,511 | ||||||||||
Shares issued upon reinvestment of distributions | 5,729 | 71,656 | 16,264 | 205,883 | ||||||||||||
Shares redeemed | (65,864 | ) | (829,667 | ) | (160,129 | ) | (2,037,713 | ) | ||||||||
Net decrease | (25,008 | ) | $ | (310,011 | ) | (136,132 | ) | $ | (1,733,319 | ) | ||||||
Class I | ||||||||||||||||
Shares sold | 124,182 | $ | 2,073,754 | 388,157 | $ | 6,526,936 | ||||||||||
Shares issued upon reinvestment of distributions | 20,414 | 340,637 | 41,222 | 674,944 | ||||||||||||
Shares redeemed | (218,645 | ) | (3,575,510 | ) | (693,181 | ) | (11,511,334 | ) | ||||||||
Net decrease | (74,049 | ) | $ | (1,161,119 | ) | (263,802 | ) | $ | (4,309,454 | ) |
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.
17
The Gabelli Focused Growth and Income Fund
Board Consideration and Re-Approval of Management Agreement (Unaudited)
During the six months ended March 31, 2024, 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, 2023) of the Fund against 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 all retail and institutional multi-cap value funds, regardless of asset size or primary channel of distribution, as represented by the Lipper Mid-Cap Value Index. The Independent Board Members noted that the Fund’s performance was in the first quartile for the three-year period, second quartile for the five-year period, and the fourth quartile for the one- and ten-year periods, 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 five-year period, the third quintile for the one-year period, the fourth quintile for the three-year period and the fifth quintile for the ten-year period.
Profitability. The Independent Board Members reviewed summary data regarding the profitability of the Fund to the Adviser both with an administrative overhead charge and without such a charge. The Independent Board Members also noted that 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 nineteen 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 total expense ratio was approximately 13 basis points lower than the Adviser Peer Group average, was at approximately the median of the group selected by Broadridge and that the Fund’s size was below average within each peer 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 noted the contractual Expense Deferral Agreement between
18
The Gabelli Focused Growth and Income Fund
Board Consideration and Re-Approval of Management Agreement (Unaudited) (Continued)
the Adviser and the Company, on behalf of the Fund, pursuant to which the net expense ratio was limited to 1.25% for Class A Shares and 0.80% for Class I Shares. The Independent Board Members also discussed the rationale for the size of the Class I Shares waiver, noting their agreement with the strategy and rationale of coupling the Class I Shares waiver with a reduction in the Class I Shares investment minimum to match the minimum required for all other classes in an effort to stimulate sales and raise assets, while encouraging holders of other share classes to convert to Class I Shares. 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, good ancillary services, and an acceptable overall performance record. 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 also noted that they would continue to evaluate the Class I Shares waiver, revisit in a year whether it remained appropriate and expressed the view that it, coupled with the reduced investment minimum for Class I Shares, provided all new and existing investors the opportunity to invest in the Fund at the same expense ratio. 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 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 based its decision on evaluations of all these factors as a whole and did not consider any one factor as all-important or controlling.
19
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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THE GABELLI FOCUSED GROWTH AND INCOME FUND
One Corporate Center
Rye, NY 10580-1422
Portfolio Manager’s Biography
Daniel M. Miller 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.
The Gabelli Global Financial Services Fund
Semiannual Report — March 31, 2024 | ![]() |
Ian Lapey Portfolio Manager BA, Williams College MS, Northeastern University MBA, New York University |
To Our Shareholders,
For the six months ended March 31, 2024, the net asset value (NAV) total return per Class AAA Share of The Gabelli Global Financial Services Fund was 24.0% compared with a total return of 25.4% for the Morgan Stanley Capital International (MSCI) World Financials Index. Other classes of shares are available. See page 4 for performance information for all classes.
Enclosed are the financial statements, including the schedule of investments, as of March 31, 2024.
Performance Discussion (Unaudited)
The goal of the Fund is to generate long term capital appreciation, and under normal market conditions, the Fund will invest at least 80% of the value of its net assets in the securities of companies principally engaged in the group of industries comprising the financial services sector. The Fund considers a company to be engaged in financial services if it devotes a significant portion of its assets to or derives a significant portion of its revenues from providing financial services. The Adviser’s investment philosophy with respect to buying and selling equity securities is to identify assets that are selling in the public market at a discount to their private market value (“PMV”). The Adviser defines PMV as the value informed purchasers are willing to pay to acquire assets with similar characteristics.
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 largest contributor to performance for the first half of the fiscal year was the common stock of Capital One Financial Group (4.0% of net assets as of March 31, 2024; up 55%). Capital One reported solid fourth quarter earnings highlighted by 5% revenue growth and a robust capital position with a 12.9% Tier One Common Equity (“CET 1”) ratio partially offset by a higher provision for loan loss reserves. The company also announced the acquisition Discover Financial Services, a transaction that is projected to be more than 15% accretive to 2027 earnings and generate an internal rate of return of more than 20%.
The second largest contributor was the common stock of Citigroup (2.5%; +57%). Despite lower earnings in 2023, the company made significant progress in its transformation. Citi completed the sale of its ninth international consumer banking business and announced a significant corporate restructuring that will result in a headcount decline of about 8% and should enable it to generate an 11-12% Return on Tangible Common Equity (“ROTCE”) in the medium term. The company also maintained a strong capital position with a with a CET 1 ratio of 13.4% that is 110 basis points above its regulatory minimum and a high quality loan portfolio with a Non-performing Loan (NPL) ratio of only 0.46% and a loan loss reserve of $18 billion that equates to 2.6% of loans and 568% of NPLs. Additionally, the common stock of the Bank of New York Mellon (3.5%; +37%) benefited from strong financial results in 2023, including 10% growth in Adjusted Earnings per Share (”EPS”) and the repurchase of about 6% of its outstanding shares.
The largest negative contributor was the common stock of Standard Chartered (2.5%; -6%), a UK based bank focused on emerging markets, including Asia. The stock price decline appeared to be driven by concerns about commercial real estate and overall economic weakness in Hong Kong and China. Still, Standard Chartered reported strong financial results in 2023 with underlying EPS growth of 31% and a 10% ROTCE. The company also repurchased 8% of its outstanding shares at a significant discount to Tangible Book Value (“TBV”) and maintained a robust capital position with a 14.1% CET1 ratio.
The next largest detractor was the common stock of Diamond Hill Investment Group (2.6%; -7%), whose common stock appeared to decline due to a 29% decline in Adjusted EPS in 2023 and modest net outflows. Nevertheless, the company retained a robust capital position with $159 million of cash and investments (36% of its market cap) and no debt, and it repurchased about 6% of its outstanding shares. Finally, the common stock of HG Holdings (1.1%; -7%), declined owing primarily to the impact of higher interest rates on its title insurance and real estate businesses. Nevertheless, the company remains strongly financed with a debt free balance sheet, and the common stock trades at a 33% discount to TBV.
The Fund’s aggregate valuation metrics remain attractive at about 80% of book value, 90% of TBV and 9 times 2024 projected EPS. I have been impressed with the resilience of most global banks during the last few years. There have been numerous macroeconomic challenges, including the Covid-19 global pandemic, the war in Ukraine, rampant inflation in most counties and regional bank failures in the US. Nevertheless, most global banks have remained profitable, increased their TBV and maintained strong capital positions and loan loss reserves. Many banks have also repurchased shares at very attractive prices (below TBV). Most impressively, First Citizens BancShares, the Fund’s largest position, took advantage of the turmoil to acquire CIT Group and most of the assets of Silicon Valley Bank. These two transformative acquisitions drove a 349% increase in TBV from 2019-2023.
2
Global Banks – Resilient Business Performance Despite Pandemic, War, Inflation, and Bank Runs
2020-2023 | ||||||||||||||||||||||||||||
CET 1 ratio (1) | ACL (2) / Loans | Net | TBV (4) | % Chg. In | ||||||||||||||||||||||||
Company | 12/31/2019 | 12/31/2023 | 12/31/2019 | 12/31/2023 | Income (3) | Growth | O/S Shares | |||||||||||||||||||||
Barclays | 13.8 | % | 13.8 | % | 1.8 | % | 1.6 | % | 17,031 | 33 | % | -13 | % | |||||||||||||||
BBVA | 11.7 | % | 12.7 | % | 3.1 | % | 2.9 | % | 19,318 | 53 | % | -13 | % | |||||||||||||||
Capital One Financial | 12.2 | % | 12.9 | % | 2.7 | % | 4.8 | % | 25,966 | 27 | % | -17 | % | |||||||||||||||
Citigroup | 11.8 | % | 13.4 | % | 1.8 | % | 2.6 | % | 57,072 | 34 | % | -10 | % | |||||||||||||||
Dah Sing Bank | 13.4 | % | 16.2 | % | 0.7 | % | 0.8 | % | 6,620 | 28 | % | 0 | % | |||||||||||||||
First Citizens BancShares | 10.9 | % | 13.4 | % | 0.8 | % | 1.3 | % | 13,462 | 349 | % | 37 | % | |||||||||||||||
ING Group | 13.7 | % | 14.7 | % | 0.7 | % | 0.9 | % | 18,222 | 27 | % | -14 | % | |||||||||||||||
NatWest Group | 16.2 | % | 13.4 | % | 1.1 | % | 0.9 | % | 9,931 | 28 | % | -27 | % | |||||||||||||||
Standard Charted | 13.8 | % | 14.1 | % | 2.1 | % | 1.8 | % | 7,798 | 21 | % | -17 | % |
(1) Tier 1 Common Equity Ratio (common equity capital/risk weighted assets).
(2) Allowance for Credit Losses.
(3) In millions of USD except for Barclays (GBP), NatWest (GBP), ING (Euro), and Dah Sing ($HK).
(4) Tangible Book Value (adjusted for dividends).
Sources: Company reports, GAMCO Investors.
Thank you for your continued interest and trust.
The views expressed reflect the opinions of the Fund's portfolio manager and Gabelli Funds, LLC, the Adviser, as of the date of this report and are subject to change without notice based on changes in market, economic, or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results. |
3
Comparative Results
Average Annual Returns through March 31, 2024 (a)(b) (Unaudited)
Total returns and average annual returns reflect changes in share price, reinvestment of distributions, and are net of expenses.
Performance returns for periods of less than one year are not annualized.
Since | ||||||||||||||||||||
Inception | ||||||||||||||||||||
Six Months | 1 Year | 3 Year | 5 Year | (10/1/18) | ||||||||||||||||
Class AAA (GAFSX) | 23.95 | % | 30.82 | % | 11.03 | % | 11.18 | % | 8.24 | % | ||||||||||
MSCI World Financials Index (c) | 25.40 | 31.30 | 9.93 | 11.39 | 9.00 | |||||||||||||||
Class A (GGFSX) | 24.05 | 30.88 | 11.05 | 11.24 | 8.29 | |||||||||||||||
With sales charge (d) | 16.92 | 23.35 | 8.88 | 9.93 | 7.13 | |||||||||||||||
Class C (GCFSX) | 23.52 | 29.82 | 10.18 | 10.33 | 7.41 | |||||||||||||||
With contingent deferred sales charge (e) | 22.52 | 28.82 | 10.18 | 10.33 | 7.41 | |||||||||||||||
Class I (GFSIX) | 24.04 | 31.15 | 11.30 | 11.45 | 8.50 |
(a) | The Fund’s fiscal year ends September 30. |
(b) | 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. |
(c) | The MSCI World Financials Index captures large and mid cap securities in the Financials sector across Developed Markets countries. Dividends are considered reinvested. 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 26, 2024, the gross expense ratios for Class AAA, A, C, and I Shares are 1.91%, 1.91%, 2.66%, and 1.66%, 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 10 for the expense ratios for the six months ended March 31, 2024. The contractual reimbursements are in effect through January 31, 2025. 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.
4
The Gabelli Global Financial Services Fund | |
Disclosure of Fund Expenses (Unaudited) | |
For the Six Month Period from October 1, 2023 through March 31, 2024 | 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 10/01/23 | Ending Account Value 03/31/24 | Annualized Expense Ratio | Expenses Paid During Period * | ||||||||||
The Gabelli Global Financial Services Fund | |||||||||||||
Actual Fund Return | |||||||||||||
Class AAA | $1,000.00 | $1,239.50 | 1.25% | $ | 7.00 | ||||||||
Class A | $1,000.00 | $1,240.50 | 1.25% | $ | 7.00 | ||||||||
Class C | $1,000.00 | $1,235.20 | 2.00% | $ | 11.18 | ||||||||
Class I | $1,000.00 | $1,240.40 | 1.00% | $ | 5.60 | ||||||||
Hypothetical 5% Return | |||||||||||||
Class AAA | $1,000.00 | $1,018.75 | 1.25% | $ | 6.31 | ||||||||
Class A | $1,000.00 | $1,018.75 | 1.25% | $ | 6.31 | ||||||||
Class C | $1,000.00 | $1,015.00 | 2.00% | $ | 10.08 | ||||||||
Class I | $1,000.00 | $1,020.00 | 1.00% | $ | 5.05 |
* | Expenses are equal to the Fund’s annualized expense ratio for the last six months multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half year (183 days), then divided by 366. |
5
Summary of Portfolio Holdings (Unaudited)
The following table presents portfolio holdings as a percent of net assets as of March 31, 2024:
The Gabelli Global Financial Services Fund
Banks | 25.6 | % | ||
Diversified Banks | 13.3 | % | ||
Insurance | 11.6 | % | ||
Investment Management | 9.2 | % | ||
Automobiles | 7.2 | % | ||
Institutional Trust, Fiduciary, and Custody | 6.1 | % | ||
Consumer Finance | 6.1 | % | ||
Institutional Brokerage | 5.2 | % |
Homebuilders | 4.3 | % | ||
Reinsurance | 3.2 | % | ||
Institutional Banking | 2.8 | % | ||
Energy and Utilities | 2.6 | % | ||
U.S. Government Obligations | 2.4 | % | ||
Other Assets and Liabilities (Net) | 0.4 | % | ||
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.
6
The Gabelli Global Financial Services Fund
Schedule of Investments — March 31, 2024 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS — 97.2% | ||||||||||||
Automobiles — 7.2% | ||||||||||||
24,199 | Daimler Truck Holding AG | $ | 706,209 | $ | 1,225,989 | |||||||
7,450 | Mercedes-Benz Group AG | 400,900 | 593,243 | |||||||||
3,770 | Toyota Motor Corp., ADR | 467,591 | 948,834 | |||||||||
1,574,700 | 2,768,066 | |||||||||||
Banks — 25.6% | ||||||||||||
82,500 | Banco Bilbao Vizcaya Argentaria SA | 435,552 | 982,617 | |||||||||
82,000 | Commerzbank AG | 475,767 | 1,126,168 | |||||||||
972,100 | Dah Sing Banking Group Ltd. | 780,575 | 691,793 | |||||||||
394,600 | Dah Sing Financial Holdings Ltd. | 1,082,148 | 906,477 | |||||||||
976 | First Citizens BancShares Inc., Cl. A | 311,950 | 1,595,760 | |||||||||
45,663 | Flushing Financial Corp. | 642,339 | 575,810 | |||||||||
36,500 | ING Groep NV | 311,739 | 600,357 | |||||||||
44,900 | Japan Post Bank Co. Ltd. | 452,399 | 481,983 | |||||||||
14,100 | Shinhan Financial Group Co. Ltd., ADR | 391,255 | 500,409 | |||||||||
15,443 | Southern First Bancshares Inc.† | 487,671 | 490,470 | |||||||||
6,500 | Texas Capital Bancshares Inc.† | 390,581 | 400,075 | |||||||||
41,655 | TrustCo Bank Corp. NY | 1,253,008 | 1,173,005 | |||||||||
6,200 | Webster Financial Corp. | 171,046 | 314,774 | |||||||||
7,186,030 | 9,839,698 | |||||||||||
Consumer Finance — 6.1% | ||||||||||||
20,080 | Ally Financial Inc. | 487,356 | 815,047 | |||||||||
10,310 | Capital One Financial Corp. | 919,647 | 1,535,056 | |||||||||
1,407,003 | 2,350,103 | |||||||||||
Diversified Banks — 13.3% | ||||||||||||
118,000 | Barclays plc | 211,594 | 272,847 | |||||||||
15,050 | Citigroup Inc. | 670,751 | 951,762 | |||||||||
40,670 | Credit Agricole SA | 440,708 | 606,202 | |||||||||
17,668 | Hana Financial Group Inc. | 519,656 | 772,996 | |||||||||
169,785 | NatWest Group plc | 393,522 | 568,951 | |||||||||
8,110 | Societe Generale SA | 160,695 | 217,074 | |||||||||
111,200 | Standard Chartered plc | 733,968 | 942,317 | |||||||||
20,700 | UniCredit SpA | 270,951 | 785,535 | |||||||||
3,401,845 | 5,117,684 | |||||||||||
Energy and Utilities — 2.6% | ||||||||||||
41,522 | Vitesse Energy Inc. | 595,875 | 985,317 | |||||||||
Homebuilders — 4.3% | ||||||||||||
3,010 | Cavco Industries Inc.† | 443,036 | 1,201,170 | |||||||||
20,413 | Legacy Housing Corp.† | 234,611 | 439,288 | |||||||||
677,647 | 1,640,458 |
Shares | Cost | Market Value | ||||||||||
Institutional Banking — 2.8% | ||||||||||||
19,350 | Moelis & Co., Cl. A | $ | 696,637 | $ | 1,098,500 | |||||||
Institutional Brokerage — 5.2% | ||||||||||||
131,200 | Daiwa Securities Group Inc. | 665,137 | 993,230 | |||||||||
23,310 | Jefferies Financial Group Inc. | 425,633 | 1,027,971 | |||||||||
1,090,770 | 2,021,201 | |||||||||||
Institutional Trust, Fiduciary, and Custody — 6.1% | ||||||||||||
13,230 | State Street Corp. | 781,051 | 1,022,944 | |||||||||
23,300 | The Bank of New York Mellon Corp. | 994,781 | 1,342,546 | |||||||||
1,775,832 | 2,365,490 | |||||||||||
Insurance— 11.6% | ||||||||||||
143,618 | Aegon Ltd. | 557,510 | 875,424 | |||||||||
1,527 | E-L Financial Corp. Ltd. | 1,097,457 | 1,227,631 | |||||||||
18,767 | First American Financial Corp. | 1,042,812 | 1,145,725 | |||||||||
66,950 | HG Holdings Inc.† | 546,369 | 405,048 | |||||||||
17,755 | NN Group NV | 686,201 | 820,216 | |||||||||
3,930,349 | 4,474,044 | |||||||||||
Investment Management — 9.2% | ||||||||||||
6,390 | Diamond Hill Investment Group Inc. | 1,047,701 | 985,146 | |||||||||
16,700 | Janus Henderson Group plc | 452,010 | 549,263 | |||||||||
374,500 | The Westaim Corp.† | 849,177 | 1,022,960 | |||||||||
79,392 | Westwood Holdings Group Inc. | 964,687 | 978,109 | |||||||||
3,313,575 | 3,535,478 | |||||||||||
Reinsurance — 3.2% | ||||||||||||
18,800 | Axis Capital Holdings Ltd. | 949,439 | 1,222,376 | |||||||||
TOTAL COMMON STOCKS | 26,599,702 | 37,418,415 |
Principal | ||||||||||||
Amount | ||||||||||||
U.S. GOVERNMENT OBLIGATIONS — 2.4% | ||||||||||||
$ | 920,000 | U.S. Treasury Bills, 5.265% to 5.308%††, 04/18/24 to 05/14/24 | 917,127 | 917,109 | ||||||||
TOTAL INVESTMENTS — 99.6% | $ | 27,516,829 | 38,335,524 | |||||||||
Other Assets and Liabilities (Net) — 0.4% | 164,693 | |||||||||||
NET ASSETS — 100.0% | $ | 38,500,217 |
† | Non-income producing security. | |
†† | Represents annualized yields at dates of purchase. | |
ADR | American Depositary Receipt |
See accompanying notes to financial statements.
7
The Gabelli Global Financial Services Fund
Statement of Assets and Liabilities
March 31, 2024 (Unaudited)
Assets: | ||||
Investments, at value (cost $27,516,829) | $ | 38,335,524 | ||
Receivable for investments sold | 24,407 | |||
Receivable for Fund shares sold | 25 | |||
Receivable from Adviser | 13,984 | |||
Dividends receivable | 174,037 | |||
Prepaid expenses | 49,170 | |||
Total Assets | 38,597,147 | |||
Liabilities: | ||||
Payable to bank | 16,388 | |||
Payable for investments purchased | 15,224 | |||
Payable for investment advisory fees | 31,334 | |||
Payable for distribution fees | 372 | |||
Payable for legal and audit fees | 27,725 | |||
Other accrued expenses | 5,887 | |||
Total Liabilities | 96,930 | |||
Net Assets | ||||
(applicable to 2,791,447 shares outstanding) | $ | 38,500,217 | ||
Net Assets Consist of: | ||||
Paid-in capital | $ | 28,078,115 | ||
Total distributable earnings | 10,422,102 | |||
Net Assets | $ | 38,500,217 | ||
Shares of Capital Stock, each at $0.001 par value: | ||||
Class AAA: | ||||
Net Asset Value, offering, and redemption price per share ($1,812,660 ÷ 131,351 shares outstanding; 120,000,000 shares authorized) | $ | 13.80 | ||
Class A: | ||||
Net Asset Value and redemption price per share ($8,077 ÷ 579.61 shares outstanding; 60,000,000 shares authorized) | $ | 13.94 | ||
Maximum offering price per share (NAV ÷ 0.9425, based on maximum sales charge of 5.75% of the offering price) | $ | 14.79 | ||
Class C: | ||||
Net Asset Value and offering price per share ($1,481 ÷ 108 shares outstanding; 20,000,000 shares authorized) | $ | 13.71 | (a) | |
Class I: | ||||
Net Asset Value, offering, and redemption price per share ($36,677,999 ÷ 2,659,408 shares outstanding; 150,000,000 shares authorized) | $ | 13.79 |
(a) | Redemption price varies based on the length of time held. |
Statement of Operations
For the Six Months Ended March 31, 2024 (Unaudited)
Investment Income: | ||||
Dividends (net of foreign withholding taxes of $13,124) | $ | 395,643 | ||
Interest | 27,664 | |||
Total Investment Income | 423,307 | |||
Expenses: | ||||
Investment advisory fees | 160,701 | |||
Distribution fees - Class AAA | 1,487 | |||
Distribution fees - Class A | 9 | |||
Distribution fees - Class C | 7 | |||
Legal and audit fees | 27,958 | |||
Registration expenses | 21,737 | |||
Shareholder communications expenses | 11,745 | |||
Custodian fees | 8,425 | |||
Shareholder services fees | 6,231 | |||
Directors’ fees | 1,187 | |||
Miscellaneous expenses | 6,524 | |||
Total Expenses | 246,011 | |||
Less: | ||||
Expense reimbursements (See Note 3) | (82,976 | ) | ||
Expenses paid indirectly by broker (See Note 6) | (832 | ) | ||
Total Credits and Reimbursements | (83,808 | ) | ||
Net Expenses | 162,203 | |||
Net Investment Income | 261,104 | |||
Net Realized and Unrealized Gain/(Loss) on Investments and Foreign Currency: | ||||
Net realized loss on investments | (131,124 | ) | ||
Net realized gain on foreign currency transactions | 233 | |||
Net realized loss on investments and foreign currency transactions | (130,891 | ) | ||
Net change in unrealized appreciation/depreciation: | ||||
on investments | 6,997,565 | |||
on foreign currency translations | (79 | ) | ||
Net change in unrealized appreciation/depreciation on investments and foreign currency translations | 6,997,486 | |||
Net Realized and Unrealized Gain/(Loss) on Investments and Foreign Currency | 6,866,595 | |||
Net Increase in Net Assets Resulting from Operations | $ | 7,127,699 |
See accompanying notes to financial statements.
8
The Gabelli Global Financial Services Fund
Statement of Changes in Net Assets
Six Months Ended March 31, 2024 (Unaudited) | Year Ended September 30, 2023 | |||||||||
Operations: | ||||||||||
Net investment income | $ | 261,104 | $ | 734,654 | ||||||
Net realized gain/(loss) on investments and foreign currency transactions | (130,891 | ) | 368,100 | |||||||
Net change in unrealized appreciation/depreciation on investments and foreign currency translations | 6,997,486 | 4,714,056 | ||||||||
Net Increase in Net Assets Resulting from Operations | 7,127,699 | 5,816,810 | ||||||||
Distributions to Shareholders: | ||||||||||
Accumulated earnings | ||||||||||
Class AAA | (17,033 | ) | (10,218 | ) | ||||||
Class A | (137 | ) | (451 | ) | ||||||
Class C | (24 | ) | (20 | ) | ||||||
Class I | (815,347 | ) | (705,030 | ) | ||||||
Total Distributions to Shareholders | (832,541 | ) | (715,719 | ) | ||||||
Capital Share Transactions: | ||||||||||
Class AAA | 1,004,717 | 140,135 | ||||||||
Class A | 1,462 | (13,049 | ) | |||||||
Class C | 24 | 20 | ||||||||
Class I | 2,972,508 | 1,514,982 | ||||||||
Net Increase in Net Assets from Capital Share Transactions | 3,978,711 | 1,642,088 | ||||||||
Redemption Fees | 20 | 2 | ||||||||
Net Increase in Net Assets | 10,273,889 | 6,743,181 | ||||||||
Net Assets: | ||||||||||
Beginning of year | 28,226,328 | 21,483,147 | ||||||||
End of period | $ | 38,500,217 | $ | 28,226,328 |
See accompanying notes to financial statements.
9
The Gabelli Global Financial Services 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 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 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2024(c) | $ | 11.43 | $ | 0.09 | $ | 2.59 | $ | 2.68 | $ | (0.31 | ) | $ | (0.31 | ) | $ | 0.00 | (d) | $ | 13.80 | 23.95 | % | $ | 1,813 | 1.37 | %(e) | 1.77 | %(e) | 1.25 | %(e)(f) | 6 | % | |||||||||||||||||||||||||
2023 | 9.28 | 0.28 | 2.14 | 2.42 | (0.27 | ) | (0.27 | ) | — | 11.43 | 26.47 | 577 | 2.57 | 1.91 | 1.25 | (f) | 21 | |||||||||||||||||||||||||||||||||||||||
2022 | 11.80 | 0.27 | (g) | (2.56 | ) | (2.29 | ) | (0.23 | ) | (0.23 | ) | — | 9.28 | (19.79 | ) | 339 | 2.39 | (g) | 1.88 | 1.27 | (f)(h) | 26 | ||||||||||||||||||||||||||||||||||
2021 | 7.08 | 0.33 | 4.52 | 4.85 | (0.13 | ) | (0.13 | ) | — | 11.80 | 69.04 | 564 | 2.99 | 2.04 | 1.25 | (f) | 19 | |||||||||||||||||||||||||||||||||||||||
2020 | 9.09 | 0.11 | (1.90 | ) | (1.79 | ) | (0.22 | ) | (0.22 | ) | 0.00 | (d) | 7.08 | (20.33 | ) | 47 | 1.34 | 2.51 | 1.25 | (f) | 18 | |||||||||||||||||||||||||||||||||||
2019(i) | 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 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2024(c) | $ | 11.50 | $ | 0.07 | $ | 2.64 | $ | 2.71 | $ | (0.27 | ) | $ | (0.27 | ) | $ | — | $ | 13.94 | 24.05 | % | $ | 8 | 1.20 | %(e) | 1.77 | %(e) | 1.25 | %(e)(f) | 6 | % | ||||||||||||||||||||||||||
2023 | 9.34 | 0.27 | 2.17 | 2.44 | (0.28 | ) | (0.28 | ) | — | 11.50 | 26.44 | 6 | 2.51 | 1.91 | 1.25 | (f) | 21 | |||||||||||||||||||||||||||||||||||||||
2022 | 11.86 | 0.27 | (g) | (2.57 | ) | (2.30 | ) | (0.22 | ) | (0.22 | ) | — | 9.34 | (19.75 | ) | 15 | 2.34 | (g) | 1.88 | 1.27 | (f)(h) | 26 | ||||||||||||||||||||||||||||||||||
2021 | 7.08 | 0.32 | 4.54 | 4.86 | (0.08 | ) | (0.08 | ) | — | 11.86 | 69.07 | 33 | 2.94 | 2.04 | 1.25 | (f) | 19 | |||||||||||||||||||||||||||||||||||||||
2020 | 9.10 | 0.16 | (1.94 | ) | (1.78 | ) | (0.24 | ) | (0.24 | ) | 0.00 | (d) | 7.08 | (20.24 | ) | 8 | 2.12 | 2.51 | 1.25 | (f) | 18 | |||||||||||||||||||||||||||||||||||
2019(i) | 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 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2024(c) | $ | 11.32 | $ | 0.04 | $ | 2.58 | $ | 2.62 | $ | (0.23 | ) | $ | (0.23 | ) | $ | — | $ | 13.71 | 23.52 | % | $ | 1 | 0.60 | %(e) | 2.52 | %(e) | 2.00 | %(e)(f) | 6 | % | ||||||||||||||||||||||||||
2023 | 9.19 | 0.19 | 2.13 | 2.32 | (0.19 | ) | (0.19 | ) | — | 11.32 | 25.48 | 1 | 1.72 | 2.66 | 2.00 | (f) | 21 | |||||||||||||||||||||||||||||||||||||||
2022 | 11.68 | 0.29 | (g) | (2.64 | ) | (2.35 | ) | (0.14 | ) | (0.14 | ) | — | 9.19 | (20.35 | ) | 1 | 2.62 | (g) | 2.63 | 2.02 | (f)(h) | 26 | ||||||||||||||||||||||||||||||||||
2021 | 7.03 | 0.18 | 4.55 | 4.73 | (0.08 | ) | (0.08 | ) | — | 11.68 | 67.59 | 1 | 1.77 | 2.79 | 2.00 | (f) | 19 | |||||||||||||||||||||||||||||||||||||||
2020 | 9.05 | 0.06 | (1.91 | ) | (1.85 | ) | (0.17 | ) | (0.17 | ) | 0.00 | (d) | 7.03 | (20.97 | ) | 1 | 0.76 | 3.26 | 2.00 | (f) | 18 | |||||||||||||||||||||||||||||||||||
2019(i) | 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 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2024(c) | $ | 11.44 | $ | 0.10 | $ | 2.59 | $ | 2.69 | $ | (0.34 | ) | $ | (0.34 | ) | $ | 0.00 | (d) | $ | 13.79 | 24.04 | % | $ | 36,678 | 1.63 | %(e) | 1.52 | %(e) | 1.00 | %(e)(f) | 6 | % | |||||||||||||||||||||||||
2023 | 9.29 | 0.30 | 2.16 | 2.46 | (0.31 | ) | (0.31 | ) | 0.00 | (d) | 11.44 | 26.82 | 27,642 | 2.77 | 1.66 | 1.00 | (f) | 21 | ||||||||||||||||||||||||||||||||||||||
2022 | 11.80 | 0.31 | (g) | (2.57 | ) | (2.26 | ) | (0.25 | ) | (0.25 | ) | — | 9.29 | (19.57 | ) | 21,128 | 2.76 | (g) | 1.63 | 1.02 | (f)(h) | 26 | ||||||||||||||||||||||||||||||||||
2021 | 7.08 | 0.29 | 4.58 | 4.87 | (0.15 | ) | (0.15 | ) | — | 11.80 | 69.45 | 24,221 | 2.79 | 1.79 | 1.00 | (f) | 19 | |||||||||||||||||||||||||||||||||||||||
2020 | 9.11 | 0.14 | (1.91 | ) | (1.77 | ) | (0.26 | ) | (0.26 | ) | 0.00 | (d) | 7.08 | (20.17 | ) | 13,445 | 1.84 | 2.26 | 1.00 | (f) | 18 | |||||||||||||||||||||||||||||||||||
2019(i) | 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 investment at the beginning of the period and sold at the end of the period. 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 $82,976, $174,121, $149,730, $165,217, $174,126, and $124,154 for the six months ended March 31, 2024 and the fiscal years ended September 30, 2023, 2022, 2021, 2020, and 2019, respectively. |
(c) | For the six months ended March 31, 2024, unaudited. |
(d) | Amount represents less than $0.005 per share. |
(e) | Annualized. |
(f) | The Fund received credits from a designated broker who agreed to pay certain Fund expenses. For the six months ended March 31, 2024 and the fiscal years ended September 30, 2023, 2022, 2021, and 2020, if credits had not been received, the expense ratios would have been 1.26%, 1.26%, 1.28%, 1.26%, and 1.26% (Class AAA and Class A), 2.01%, 2.01%, 2.02%, 2.01%, and 2.01% (Class C), and 1.01%, 1.01%, 1.03%, 1.01%, and 1.01% (Class I), respectively. |
(g) | Includes income resulting from special dividends. Without these dividends, the per share income amounts would have been $0.21 (Class AAA and Class A), $0.23 (Class C), and $0.25 (Class I), and the net investment income ratios would have been 1.88% (Class AAA), 1.84% (Class A), 2.12% (Class C), and 2.25% (Class I) for the fiscal year ended September 30, 2022. |
(h) | The Fund incurred tax expense for the fiscal year ended September 30, 2022. If tax expense had not been incurred, the ratios of operating expenses to average net assets would have been 1.25% (Class AAA and Class A), 2.00% (Class C), and 1.00% (Class I). |
(i) | The Fund commenced investment operations on October 1, 2018. |
See accompanying notes to financial statements.
10
The Gabelli Global Financial Services Fund
Notes to Financial Statements (Unaudited)
1. Organization. The Gabelli Global Financial Services Fund, a series of the Gabelli Equity Series Funds, Inc. (the Corporation), was incorporated on July 25, 1991 in Maryland. The Fund is a non-diversified open-end management investment company registered under the Investment Company Act of 1940, as amended (the 1940 Act), and is one of four separately managed portfolios (collectively, the 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.
Security Valuation. Portfolio securities listed or traded on a nationally recognized securities exchange or traded in the U.S. over-the-counter market for which market quotations are readily available are valued at the last quoted sale price or a market’s official closing price as of the close of business on the day the securities are being valued. If there were no sales that day, the security is valued at the average of the closing bid and asked prices or, if there were no asked prices quoted on that day, then the security is valued at the closing bid price on that day. If no bid or asked prices are quoted on such day, the security is valued at the most recently available price or, if the Board of Directors (the Board) so determines, by such other method as the Board shall determine in good faith to reflect its fair market value. Portfolio securities traded on more than one national securities exchange or market are valued according to the broadest and most representative market, as determined by Gabelli Funds, LLC (the Adviser).
Portfolio securities primarily traded on a foreign market are generally valued at the preceding closing values of such securities on the relevant market, but may be fair valued pursuant to procedures established by the Board if market conditions change significantly after the close of the foreign market, but prior to the close of business on the day the securities are being valued. Debt 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 of 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.
11
The Gabelli Global Financial Services Fund
Notes to Financial Statements (Unaudited) (Continued)
The inputs and valuation techniques used to measure fair value of the Fund’s investments are summarized into three levels as described in the hierarchy below:
● | Level 1 — quoted prices in active markets for identical securities; |
● | Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.); and |
● | Level 3 — significant unobservable inputs (including the Board’s determinations as to the fair value of investments). |
A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input both individually and in the aggregate that is significant to the fair value measurement. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of the Fund’s investments in securities by inputs used to value the Fund’s investments as of March 31, 2024 is as follows:
Valuation Inputs | ||||||||||||
Level 2 Other | ||||||||||||
Level 1 | Significant | Total Market Value | ||||||||||
Quoted Prices | Observable Inputs | at 03/31/24 | ||||||||||
INVESTMENTS IN SECURITIES: | ||||||||||||
ASSETS (Market Value): | ||||||||||||
Common Stocks (a) | $ | 37,418,415 | — | $ | 37,418,415 | |||||||
U.S. Government Obligations | — | $ | 917,109 | 917,109 | ||||||||
TOTAL INVESTMENTS IN SECURITIES – ASSETS | $ | 37,418,415 | $ | 917,109 | $ | 38,335,524 |
(a) | Please refer to the Schedule of Investments for the industry classifications of these portfolio holdings. |
The Fund held no Level 3 investments at March 31, 2024 or September 30, 2023. The Fund's policy is to recognize transfers among levels as of the beginning of the reporting period.
Additional Information to Evaluate Qualitative Information.
General. The Fund uses recognized industry pricing services – approved by the Board and unaffiliated with the Adviser – to value most of its securities, and uses broker quotes provided by market makers of securities not valued by these and other recognized pricing sources. Several different pricing feeds are received to value domestic equity securities, international equity securities, preferred equity securities, and fixed income securities. The data within these feeds 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
12
The Gabelli Global Financial Services Fund
Notes to Financial Statements (Unaudited) (Continued)
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.
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, 2024, the Fund did not hold any 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 an accrual basis. Premiums and
13
The Gabelli Global Financial Services Fund
Notes to Financial Statements (Unaudited) (Continued)
discounts on debt securities are amortized using the effective yield to maturity method or amortized to 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. These reclassifications have no impact on the NAV of the Fund.
The tax character of distributions paid during the fiscal year ended September 30, 2023 was ordinary income.
Provision for Income Taxes. The Fund intends to continue to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended (the Code). It is the policy of the Fund to comply with the requirements of the Code applicable to regulated investment companies and to distribute substantially all of its net investment company taxable income and net capital gains. Therefore, no provision for federal income taxes is required.
The Fund is permitted to carry capital losses forward for an unlimited period. Capital losses that are carried forward will retain their character as either short term or long term capital losses. As of September 30, 2023, the Fund had a short term capital loss carryforward with no expiration of $201,250 and a long term capital loss carryforward with no expiration of $116,242.
The following summarizes the tax cost of investments and the related net unrealized appreciation at March 31, 2024:
Gross | Gross | |||||||
Unrealized | Unrealized | Net Unrealized | ||||||
Cost | Appreciation | Depreciation | Appreciation | |||||
Investments | $27,531,173 | $11,433,575 | $(629,224) | $10,804,351 |
14
The Gabelli Global Financial Services Fund
Notes to Financial Statements (Unaudited) (Continued)
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, 2024, the Fund did not incur any income tax, interest, or penalties. As of March 31, 2024, the Adviser has reviewed all open tax years and concluded that there was no impact to the Fund’s net assets or results of operations. The Fund’s federal and state tax returns for the prior three fiscal years remain open, subject to examination. On an ongoing basis, the Adviser will monitor the Fund’s tax positions to determine if adjustments to this conclusion are necessary.
3. Investment Advisory Agreement and Other Transactions. The Fund has entered into an investment advisory agreement (the Advisory Agreement) with the Adviser which provides that the Fund will pay the Adviser a fee, computed daily and paid monthly, at the annual rate of 1.00% of the value of its average daily net assets. In accordance with the Advisory Agreement, the Adviser provides a continuous investment program for the Fund’s portfolio, oversees the administration of all aspects of the Fund’s business and affairs, and pays the compensation of all Officers and Directors of the Fund who are affiliated persons of the Adviser.
The 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, respectively. This arrangement is in effect through June 1, 2024. For the six months ended March 31, 2024, the Adviser reimbursed the Fund in the amount of $82,976. 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, 2024, the cumulative amount which the Fund may repay the Adviser, subject to the terms above, is $406,827:
For the fiscal year ended September 30, 2022, expiring September 30, 2024 | $ | 149,730 | ||
For the fiscal year ended September 30, 2023, expiring September 30, 2025 | 174,121 | |||
For the six months ended March 31, 2024, expiring September 30, 2026 | 82,976 | |||
$ | 406,827 |
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, 2024, other than short term securities and U.S. Government obligations, aggregated $4,954,531 and $1,872,925, respectively.
6. Transactions with Affiliates and Other Arrangements. During the six months ended March 31, 2024, the Fund paid $1,693 in brokerage commissions on security trades to G.research, LLC, an affiliate of the Adviser.
15
The Gabelli Global Financial Services Fund
Notes to Financial Statements (Unaudited) (Continued)
During the six months ended March 31, 2024, 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 $832.
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, 2024.
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 February 26, 2025 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 bank 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, 2024, 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%. 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, 2024 and the fiscal year ended September 30, 2023, if any, can be found in the Statement of Changes in Net Assets under Redemption Fees.
16
The Gabelli Global Financial Services Fund
Notes to Financial Statements (Unaudited) (Continued)
Transactions in shares of capital stock were as follows:
Six Months Ended | ||||||||||||||||
March 31, 2024 | Year Ended | |||||||||||||||
(Unaudited) | September 30, 2023 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Class AAA | ||||||||||||||||
Shares sold | 102,632 | $ | 1,277,787 | 34,107 | $ | 370,430 | ||||||||||
Shares issued upon reinvestment of distributions | 1,455 | 16,912 | 987 | 10,111 | ||||||||||||
Shares redeemed | (23,260 | ) | (289,982 | ) | (21,125 | ) | (240,406 | ) | ||||||||
Net increase | 80,827 | $ | 1,004,717 | 13,969 | $ | 140,135 | ||||||||||
Class A | ||||||||||||||||
Shares sold | 639 | $ | 8,100 | 136 | $ | 1,500 | ||||||||||
Shares issued upon reinvestment of distributions | 12 | 137 | 44 | 451 | ||||||||||||
Shares redeemed | (549 | ) | (6,775 | ) | (1,302 | ) | (15,000 | ) | ||||||||
Net increase/(decrease) | 102 | $ | 1,462 | (1,122 | ) | $ | (13,049 | ) | ||||||||
Class C | ||||||||||||||||
Shares issued upon reinvestment of distributions | 2 | $ | 24 | 2 | $ | 20 | ||||||||||
Net increase | 2 | $ | 24 | 2 | $ | 20 | ||||||||||
Class I | ||||||||||||||||
Shares sold | 178,608 | $ | 2,233,546 | 111,795 | $ | 1,212,544 | ||||||||||
Shares issued upon reinvestment of distributions | 69,967 | 811,618 | 68,655 | 701,651 | ||||||||||||
Shares redeemed | (5,972 | ) | (72,656 | ) | (37,638 | ) | (399,213 | ) | ||||||||
Net increase | 242,603 | $ | 2,972,508 | 142,812 | $ | 1,514,982 |
9. Significant Shareholder. As of March 31, 2024, 87.79% of the Fund was beneficially owned by the Adviser and its affiliates, including managed accounts for which the Adviser and affiliates have voting control but disclaim pecuniary interest.
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.
17
The Gabelli Global Financial Services Fund
Board Consideration and Re-Approval of Management Agreement (Unaudited)
During the six months ended March 31, 2024, 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, 2023) 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 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 first quartile for the one- and three-year periods and in the second 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 first quintile for the three-year period and the second quintile for the one- and five-year periods.
Profitability. The Independent Board Members reviewed summary data regarding the historical lack of 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 three other global financial services funds and eight 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 lower than 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
18
The Gabelli Global Financial Services Fund
Board Consideration and Re-Approval of Management Agreement (Unaudited) (Continued)
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, good ancillary services, and an acceptable overall performance record. 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 Advisory 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 based its decision on evaluations of all these factors as a whole and did not consider any one factor as all-important or controlling.
19
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.
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THE GABELLI GLOBAL FINANCIAL SERVICES FUND
One Corporate Center
Rye, NY 10580-1422
Portfolio Manager’s 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 degree 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.
(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) | Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period is included as part of the report to shareholders filed under Item 1 of this form. |
The Gabelli Small Cap Growth Fund
Schedule of Investments — March 31, 2024 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS — 98.6% | ||||||||||||
Aerospace — 0.1% | ||||||||||||
30,500 | Allient Inc. | $ | 675,972 | $ | 1,088,240 | |||||||
40,000 | Innovative Solutions and Support Inc.† | 130,088 | 292,800 | |||||||||
7,000 | Kratos Defense & Security Solutions Inc.† | 109,611 | 128,660 | |||||||||
915,671 | 1,509,700 | |||||||||||
Agriculture — 0.1% | ||||||||||||
10,000 | Cadiz Inc.† | 67,958 | 29,000 | |||||||||
56,000 | Limoneira Co. | 944,351 | 1,095,360 | |||||||||
1,012,309 | 1,124,360 | |||||||||||
Automotive — 0.5% | ||||||||||||
35,000 | Blue Bird Corp.† | 722,987 | 1,341,900 | |||||||||
450,000 | Iveco Group NV† | 1,805,727 | 6,699,658 | |||||||||
65,000 | The Shyft Group Inc. | 311,358 | 807,300 | |||||||||
2,840,072 | 8,848,858 | |||||||||||
Automotive: Parts and Accessories — 4.3% | ||||||||||||
147,500 | BorgWarner Inc. | 609,138 | 5,124,150 | |||||||||
840,000 | Brembo SpA | 1,552,407 | 10,756,998 | |||||||||
94,022 | China Automotive Systems Inc.† | 443,798 | 333,778 | |||||||||
74,100 | Commercial Vehicle Group Inc.† | 657,163 | 476,463 | |||||||||
1,115,000 | Dana Inc. | 9,072,397 | 14,160,500 | |||||||||
288,000 | Modine Manufacturing Co.† | 2,101,455 | 27,414,720 | |||||||||
46,000 | Monro Inc. | 1,106,033 | 1,450,840 | |||||||||
4,300 | O'Reilly Automotive Inc.† | 92,532 | 4,854,184 | |||||||||
29,000 | Phinia Inc. | 80,435 | 1,114,470 | |||||||||
45,000 | Puradyn Filter Technologies Inc.† | 11,732 | 0 | |||||||||
180,000 | Standard Motor Products Inc. | 1,353,309 | 6,039,000 | |||||||||
253,000 | Strattec Security Corp.†(a) | 4,905,435 | 6,003,690 | |||||||||
18,400 | Thor Industries Inc. | 170,396 | 2,159,056 | |||||||||
22,156,230 | 79,887,849 | |||||||||||
Aviation: Parts and Services — 2.9% | ||||||||||||
20,000 | AAR Corp.† | 230,415 | 1,197,400 | |||||||||
9,500 | Astronics Corp.† | 13,628 | 180,880 | |||||||||
23,200 | Astronics Corp., Cl. B† | 38,562 | 442,076 | |||||||||
48,000 | Ducommun Inc.† | 1,015,870 | 2,462,400 | |||||||||
650,000 | Kaman Corp. | 9,498,250 | 29,815,500 | |||||||||
88,900 | Moog Inc., Cl. A | 1,043,836 | 14,192,885 | |||||||||
18,112 | Moog Inc., Cl. B | 638,257 | 2,843,584 | |||||||||
20,000 | Woodward Inc. | 143,828 | 3,082,400 | |||||||||
12,622,646 | 54,217,125 |
Shares | Cost | Market Value | ||||||||||
Broadcasting — 1.3% | ||||||||||||
150,000 | Beasley Broadcast Group Inc., Cl. A† | $ | 481,224 | $ | 117,000 | |||||||
10,000 | Cogeco Communications Inc. | 340,851 | 443,542 | |||||||||
24,000 | Cogeco Inc. | 632,315 | 1,008,158 | |||||||||
185,000 | Corus Entertainment Inc., Cl. B | 661,131 | 99,701 | |||||||||
39,500 | Fox Corp., Cl. A | 1,641,225 | 1,235,165 | |||||||||
25,000 | Gray Television Inc. | 73,674 | 158,000 | |||||||||
71,700 | Gray Television Inc., Cl. A | 377,715 | 617,337 | |||||||||
630,000 | Grupo Televisa SAB, ADR | 2,045,958 | 2,016,000 | |||||||||
280,000 | ITV plc | 497,942 | 261,164 | |||||||||
13,000 | Liberty Broadband Corp., Cl. A† | 78,211 | 742,560 | |||||||||
11,000 | Liberty Broadband Corp., Cl. C† | 57,595 | 629,530 | |||||||||
20,000 | Liberty Media Corp.-Liberty Formula One, Cl. A† | 64,271 | 1,174,800 | |||||||||
27,000 | Liberty Media Corp.-Liberty Formula One, Cl. C† | 88,133 | 1,771,200 | |||||||||
34,452 | Liberty Media Corp.-Liberty SiriusXM† | 230,901 | 1,023,569 | |||||||||
64,000 | Liberty Media Corp.-Liberty SiriusXM, Cl. A† | 160,824 | 1,900,800 | |||||||||
22,000 | Nexstar Media Group Inc. | 1,349,700 | 3,790,380 | |||||||||
100,000 | Salem Media Group Inc.†. | 0 | 37,500 | |||||||||
500,000 | Sirius XM Holdings Inc. | 394,571 | 1,940,000 | |||||||||
95,000 | Sphere Entertainment Co.† | 1,063,999 | 4,662,600 | |||||||||
8,000 | TEGNA Inc. | 124,680 | 119,520 | |||||||||
37,000 | Townsquare Media Inc., Cl. A | 374,479 | 406,260 | |||||||||
10,739,399 | 24,154,786 | |||||||||||
Building and Construction — 7.2% | ||||||||||||
78,000 | Arcosa Inc. | 928,708 | 6,697,080 | |||||||||
200,000 | Armstrong Flooring Inc.† | 26,719 | 2,000 | |||||||||
26,000 | D.R. Horton Inc. | 249,495 | 4,278,300 | |||||||||
30,000 | Gibraltar Industries Inc.† | 602,890 | 2,415,900 | |||||||||
216,500 | Herc Holdings Inc. | 7,059,215 | 36,436,950 | |||||||||
76,000 | KB Home | 678,186 | 5,386,880 | |||||||||
3,000 | Legacy Housing Corp.† | 38,431 | 64,560 | |||||||||
347,400 | Lennar Corp., Cl. B | 8,210,380 | 53,562,132 | |||||||||
47,000 | MDC Holdings Inc. | 817,179 | 2,956,770 | |||||||||
1,000 | Meritage Homes Corp | 15,039 | 175,460 | |||||||||
1,175 | NVR Inc.† | 788,517 | 9,517,453 | |||||||||
40,500 | PulteGroup Inc. | 172,020 | 4,885,110 | |||||||||
427 | The Monarch Cement Co. | 64,412 | 77,757 | |||||||||
90,000 | Titan Machinery Inc.† | 1,736,767 | 2,232,900 | |||||||||
23,000 | Toll Brothers Inc. | 350,156 | 2,975,510 | |||||||||
21,738,114 | 131,664,762 |
See accompanying notes to financial statements.
The Gabelli Small Cap Growth Fund
Schedule of Investments (Continued) — March 31, 2024 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS (Continued) | ||||||||||||
Business Services — 2.5% | ||||||||||||
13,000 | ACCO Brands Corp. | $ | 60,332 | $ | 72,930 | |||||||
650,000 | Clear Channel Outdoor Holdings Inc.† | 1,117,239 | 1,072,500 | |||||||||
60,000 | Element Solutions Inc. | 537,606 | 1,498,800 | |||||||||
22,900 | Keweenaw Land Association Ltd.† | 505,517 | 527,845 | |||||||||
35,500 | Live Nation Entertainment Inc.† | 298,668 | 3,754,835 | |||||||||
40,000 | Loomis AB | 402,123 | 1,116,592 | |||||||||
92,340 | Madison Square Garden Entertainment Corp.† | 1,166,708 | 3,620,651 | |||||||||
15,000 | McGrath RentCorp | 384,704 | 1,850,550 | |||||||||
31,000 | Outfront Media Inc., REIT | 478,744 | 520,490 | |||||||||
24,500 | RB Global Inc. | 363,774 | 1,866,165 | |||||||||
20,000 | Sealed Air Corp. | 587,044 | 744,000 | |||||||||
345,000 | Sohgo Security Services Co. Ltd. | 799,632 | 1,868,807 | |||||||||
66,000 | The Interpublic Group of Companies Inc. | 233,166 | 2,153,580 | |||||||||
25,000 | TransAct Technologies Inc.† | 115,198 | 131,000 | |||||||||
1,600,000 | Trans-Lux Corp.†(a) | 1,575,044 | 1,424,000 | |||||||||
34,000 | United Rentals Inc. | 209,146 | 24,517,740 | |||||||||
8,834,645 | 46,740,485 | |||||||||||
Cable — 0.1% | ||||||||||||
54,500 | AMC Networks Inc., Cl. A† | 36,140 | 661,085 | |||||||||
60,000 | EchoStar Corp., Cl. A† | 865,139 | 855,000 | |||||||||
105,000 | WideOpenWest Inc.† | 810,857 | 380,100 | |||||||||
1,712,136 | 1,896,185 | |||||||||||
Communications Equipment — 0.1% | ||||||||||||
150,000 | Telesat Corp.† | 1,857,239 | 1,290,000 | |||||||||
Computer Software and Services — 1.2% | ||||||||||||
370,000 | Alithya Group Inc., Cl. A† | 1,101,651 | 558,700 | |||||||||
1,300 | GSE Systems Inc.† | 18,200 | 3,042 | |||||||||
10,000 | I3 Verticals Inc., Cl. A† | 243,267 | 228,900 | |||||||||
11,000 | MKS Instruments Inc. | 189,530 | 1,463,000 | |||||||||
24,500 | Rockwell Automation Inc. | 558,564 | 7,137,585 | |||||||||
31,000 | Tyler Technologies Inc.† | 61,675 | 13,175,310 | |||||||||
2,172,887 | 22,566,537 | |||||||||||
Consumer Products — 1.4% | ||||||||||||
145,000 | 1-800-Flowers.com Inc., Cl. A† | 1,439,210 | 1,570,350 | |||||||||
67,000 | Brunswick Corp. | 1,342,085 | 6,466,840 | |||||||||
32,000 | Chofu Seisakusho Co. Ltd. | 461,495 | 455,120 | |||||||||
39,700 | Church & Dwight Co. Inc. | 67,573 | 4,141,107 | |||||||||
42,000 | Energizer Holdings Inc. | 1,482,780 | 1,236,480 | |||||||||
2,000 | Harley-Davidson Inc. | 4,713 | 87,480 | |||||||||
4,000 | HNI Corp. | 104,560 | 180,520 |
Shares | Cost | Market Value | ||||||||||
2,500 | Kobayashi Pharmaceutical Co. Ltd. | $ | 103,323 | $ | 81,005 | |||||||
3,200 | LCI Industries | 52,915 | 393,792 | |||||||||
216,000 | Marine Products Corp. | 133,661 | 2,538,000 | |||||||||
7,000 | National Presto Industries Inc. | 390,588 | 586,600 | |||||||||
225,000 | Sally Beauty Holdings Inc.† | 1,550,370 | 2,794,500 | |||||||||
215,000 | Samick Musical Instruments Co. Ltd. | 289,566 | 206,655 | |||||||||
3,700 | Shimano Inc. | 414,540 | 552,507 | |||||||||
9,500 | Steven Madden Ltd. | 19,995 | 401,660 | |||||||||
12,000 | The Scotts Miracle-Gro Co. | 288,362 | 895,080 | |||||||||
8,000 | Vista Outdoor Inc.† | 219,630 | 262,240 | |||||||||
9,500 | WD-40 Co. | 248,399 | 2,406,445 | |||||||||
84,000 | Wolverine World Wide Inc. | 408,836 | 941,640 | |||||||||
9,022,601 | 26,198,021 | |||||||||||
Consumer Services — 0.9% | ||||||||||||
53,000 | Bowlin Travel Centers Inc.† | 53,948 | 222,600 | |||||||||
16,000 | H&E Equipment Services Inc. | 554,892 | 1,026,880 | |||||||||
5,000 | IAC Inc.† | 11,719 | 266,700 | |||||||||
180,000 | OPENLANE Inc.† | 893,854 | 3,114,000 | |||||||||
272,500 | Rollins Inc. | 253,576 | 12,608,575 | |||||||||
1,767,989 | 17,238,755 | |||||||||||
Diversified Industrial — 12.9% | ||||||||||||
10,000 | Acuity Brands Inc. | 94,378 | 2,687,300 | |||||||||
51,000 | Albany International Corp., Cl. A | 986,047 | 4,769,010 | |||||||||
210,000 | Ampco-Pittsburgh Corp.† | 1,004,347 | 455,700 | |||||||||
68,000 | Burnham Holdings Inc., Cl. A | 1,130,769 | 904,400 | |||||||||
355,000 | Crane Co. | 4,913,967 | 47,971,150 | |||||||||
170,500 | Crane NXT Co. | 944,043 | 10,553,950 | |||||||||
99,000 | Distribution Solutions Group Inc.† | 693,477 | 3,512,520 | |||||||||
5,000 | Enerpac Tool Group Corp | 127,850 | 178,300 | |||||||||
76,000 | Enpro Inc. | 3,719,507 | 12,826,520 | |||||||||
103,500 | Greif Inc., Cl. A | 1,839,821 | 7,146,675 | |||||||||
93,500 | Greif Inc., Cl. B | 4,205,680 | 6,500,120 | |||||||||
220,500 | Griffon Corp. | 1,820,447 | 16,171,470 | |||||||||
32,000 | Hyster-Yale Materials Handling Inc. | 1,181,454 | 2,053,440 | |||||||||
205,085 | INNOVATE Corp.† | 530,491 | 143,703 | |||||||||
6,000 | JSP Corp. | 97,961 | 89,259 | |||||||||
115,500 | L.B. Foster Co., Cl. A† | 1,618,374 | 3,154,305 | |||||||||
40,000 | Lincoln Electric Holdings Inc. | 1,019,941 | 10,217,600 | |||||||||
30,200 | Lindsay Corp. | 590,816 | 3,553,332 | |||||||||
37,500 | Matthews International Corp., Cl. A | 959,116 | 1,165,500 | |||||||||
940,000 | Myers Industries Inc. | 13,022,920 | 21,779,800 |
See accompanying notes to financial statements.
The Gabelli Small Cap Growth Fund
Schedule of Investments (Continued) — March 31, 2024 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS (Continued) | ||||||||||||
Diversified Industrial (Continued) | ||||||||||||
70,000 | Oil-Dri Corp. of America | $ | 479,897 | $ | 5,219,200 | |||||||
13,000 | Olin Corp. | 203,184 | 764,400 | |||||||||
323,000 | Park-Ohio Holdings Corp. | 2,985,549 | 8,617,640 | |||||||||
12,500 | Pentair plc | 296,897 | 1,068,000 | |||||||||
14,000 | Roper Technologies Inc. | 263,139 | 7,851,760 | |||||||||
53,200 | Sonoco Products Co. | 1,529,361 | 3,077,088 | |||||||||
48,900 | Standex International Corp. | 1,250,732 | 8,910,558 | |||||||||
84,500 | Steel Partners Holdings LP† | 1,113,551 | 3,350,425 | |||||||||
13,000 | T. Hasegawa Co. Ltd. | 236,726 | 260,635 | |||||||||
7,000 | Terex Corp. | 166,670 | 450,800 | |||||||||
334,200 | Textron Inc. | 2,019,423 | 32,059,806 | |||||||||
448,000 | Tredegar Corp. | 5,499,588 | 2,920,960 | |||||||||
221,000 | Trinity Industries Inc. | 2,510,251 | 6,154,850 | |||||||||
59,056,374 | 236,540,176 | |||||||||||
Electronics — 3.2% | ||||||||||||
109,000 | Badger Meter Inc. | 1,337,724 | 17,637,290 | |||||||||
201,500 | Bel Fuse Inc., Cl. A(a) | 3,682,820 | 14,268,215 | |||||||||
400,000 | CTS Corp. | 3,294,245 | 18,716,000 | |||||||||
60,000 | Daktronics Inc.† | 443,126 | 597,600 | |||||||||
120,000 | Gentex Corp. | 1,305,089 | 4,334,400 | |||||||||
20,000 | IMAX Corp.† | 158,565 | 323,400 | |||||||||
10,000 | Napco Security Technologies Inc. | 232,442 | 401,600 | |||||||||
30,000 | Renesas Electronics Corp. | 194,117 | 531,906 | |||||||||
60,000 | Stoneridge Inc.† | 288,850 | 1,106,400 | |||||||||
10,936,978 | 57,916,811 | |||||||||||
Energy and Utilities — 2.5% | ||||||||||||
30,000 | Callon Petroleum Co.† | 743,530 | 1,072,800 | |||||||||
9,800 | Chesapeake Utilities Corp. | 127,440 | 1,051,540 | |||||||||
35,000 | CMS Energy Corp. | 67,088 | 2,111,900 | |||||||||
20,000 | Consolidated Water Co. Ltd. | 233,823 | 586,200 | |||||||||
36,500 | Diamondback Energy Inc. | 1,801,702 | 7,233,205 | |||||||||
123,000 | Dril-Quip Inc.† | 3,166,096 | 2,771,190 | |||||||||
74,000 | Energy Recovery Inc.† | 316,427 | 1,168,460 | |||||||||
29,000 | Landis+Gyr Group AG | 1,762,989 | 2,226,812 | |||||||||
21,500 | Marathon Petroleum Corp. | 104,157 | 4,332,250 | |||||||||
3,500 | Middlesex Water Co. | 54,166 | 183,750 | |||||||||
40,000 | Northwest Natural Holding Co. | 1,590,027 | 1,488,800 | |||||||||
21,500 | Northwestern Energy Group Inc. | 582,609 | 1,094,995 | |||||||||
10,000 | Otter Tail Corp. | 213,560 | 864,000 | |||||||||
30,000 | RGC Resources Inc. | 559,873 | 607,200 | |||||||||
1,680,000 | RPC Inc. | 681,607 | 13,003,200 | |||||||||
8,000 | SJW Group | 107,086 | 452,720 | |||||||||
32,000 | Southwest Gas Holdings Inc. | 524,817 | 2,436,160 | |||||||||
6,800 | Spire Inc. | 267,758 | 417,316 | |||||||||
31,000 | The York Water Co. | 433,596 | 1,124,370 |
Shares | Cost | Market Value | ||||||||||
55,000 | Vestas Wind Systems A/S† | $ | 94,711 | $ | 1,535,324 | |||||||
13,433,062 | 45,762,192 | |||||||||||
Entertainment — 2.0% | ||||||||||||
165,000 | Atlanta Braves Holdings Inc., Cl. A† | 4,202,224 | 6,913,500 | |||||||||
220,000 | Atlanta Braves Holdings Inc., Cl. C† | 3,798,928 | 8,593,200 | |||||||||
90,000 | Inspired Entertainment Inc.† | 654,479 | 887,400 | |||||||||
16,856 | Liberty Media Corp.-Liberty Live, Cl. A† | 54,885 | 713,852 | |||||||||
9,768 | Liberty Media Corp.-Liberty Live, Cl. C† | 65,382 | 428,034 | |||||||||
35,000 | Madison Square Garden Sports Corp.† | 363,177 | 6,458,200 | |||||||||
85,000 | Manchester United plc, Cl. A† | 1,197,973 | 1,186,600 | |||||||||
273,000 | Sinclair Inc. | 3,950,494 | 3,677,310 | |||||||||
7,800 | Take-Two Interactive Software Inc.† | 58,796 | 1,158,222 | |||||||||
3,500 | The Walt Disney Co. | 20,071 | 428,260 | |||||||||
47,700 | TKO Group Holdings Inc. | 502,394 | 4,121,757 | |||||||||
35,000 | Universal Entertainment Corp. | 210,518 | 445,303 | |||||||||
104,000 | Warner Bros Discovery Inc.† | 922,964 | 907,920 | |||||||||
16,002,285 | 35,919,558 | |||||||||||
Environmental Services — 0.6% | ||||||||||||
58,500 | Republic Services Inc. | 528,450 | 11,199,240 | |||||||||
Equipment and Supplies — 19.2% | ||||||||||||
17,200 | A.O. Smith Corp. | 35,260 | 1,538,712 | |||||||||
387,000 | AMETEK Inc. | 658,516 | 70,782,300 | |||||||||
20,000 | Ardagh Metal Packaging SA | 69,861 | 68,600 | |||||||||
54,500 | AZZ Inc. | 1,892,055 | 4,213,395 | |||||||||
9,200 | Chart Industries Inc.† | 301,823 | 1,515,424 | |||||||||
312,000 | Core Molding Technologies Inc.† | 604,271 | 5,906,160 | |||||||||
92,000 | Crown Holdings Inc. | 370,570 | 7,291,920 | |||||||||
2,025 | Danaher Corp. | 11,649 | 505,683 | |||||||||
100,000 | Donaldson Co. Inc. | 575,112 | 7,468,000 | |||||||||
38,700 | Entegris Inc. | 164,986 | 5,438,898 | |||||||||
184,500 | Federal Signal Corp. | 969,062 | 15,658,515 | |||||||||
241,000 | Flowserve Corp. | 1,445,694 | 11,008,880 | |||||||||
152,500 | Franklin Electric Co. Inc. | 594,728 | 16,288,525 | |||||||||
419,000 | Graco Inc. | 2,237,317 | 39,159,740 | |||||||||
33,000 | IDEX Corp. | 120,918 | 8,052,660 | |||||||||
125,000 | Interpump Group SpA | 547,330 | 6,094,154 | |||||||||
6,800 | Littelfuse Inc. | 54,921 | 1,647,980 | |||||||||
110,000 | Maezawa Kyuso Industries Co. Ltd. | 359,609 | 910,490 | |||||||||
65,000 | Minerals Technologies Inc. | 2,808,132 | 4,893,200 |
See accompanying notes to financial statements.
The Gabelli Small Cap Growth Fund
Schedule of Investments (Continued) — March 31, 2024 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS (Continued) | ||||||||||||
Equipment and Supplies (Continued) | ||||||||||||
6,000 | MSA Safety Inc. | $ | 179,592 | $ | 1,161,540 | |||||||
959,200 | Mueller Industries Inc. | 11,718,258 | 51,729,656 | |||||||||
335,000 | Mueller Water Products Inc., Cl. A | 2,243,532 | 5,390,150 | |||||||||
3,500 | Teleflex Inc. | 53,317 | 791,595 | |||||||||
167,000 | Tennant Co. | 2,784,423 | 20,308,870 | |||||||||
733,000 | The Gorman-Rupp Co. | 11,106,984 | 28,990,150 | |||||||||
92,000 | The Greenbrier Companies Inc. | 1,021,979 | 4,793,200 | |||||||||
136,573 | The L.S. Starrett Co., Cl. A† | 1,060,010 | 2,170,145 | |||||||||
50,500 | The Manitowoc Co. Inc.† | 499,591 | 714,070 | |||||||||
50,000 | The Middleby Corp.† | 533,815 | 8,039,500 | |||||||||
36,000 | The Timken Co. | 1,219,448 | 3,147,480 | |||||||||
30,000 | The Toro Co. | 524,020 | 2,748,900 | |||||||||
6,000 | Valmont Industries Inc. | 98,273 | 1,369,680 | |||||||||
7,875 | Watsco Inc., Cl. B | 23,627 | 3,430,389 | |||||||||
43,500 | Watts Water Technologies Inc., Cl. A | 825,608 | 9,245,925 | |||||||||
47,714,291 | 352,474,486 | |||||||||||
Financial Services — 5.6% | ||||||||||||
7,000 | Ameris Bancorp | 49,547 | 338,660 | |||||||||
12,300 | Capitol Federal Financial Inc. | 121,803 | 73,308 | |||||||||
20,700 | Crazy Woman Creek Bancorp Inc.† | 315,734 | 452,812 | |||||||||
43,000 | Eagle Bancorp Inc. | 1,308,331 | 1,010,070 | |||||||||
325,000 | Energy Transfer LP | 0 | 5,112,250 | |||||||||
240 | Farmers & Merchants Bank of Long Beach | 1,477,584 | 1,152,000 | |||||||||
350,000 | Flushing Financial Corp. | 5,679,119 | 4,413,500 | |||||||||
66,000 | FNB Corp. | 659,922 | 930,600 | |||||||||
150,000 | GAM Holding AG† | 173,563 | 43,494 | |||||||||
25,000 | Hanover Bancorp Inc. | 525,000 | 370,500 | |||||||||
270,000 | Hope Bancorp Inc. | 2,987,671 | 3,107,700 | |||||||||
410,000 | Huntington Bancshares Inc. | 3,921,829 | 5,719,500 | |||||||||
667,000 | KKR & Co. Inc. | 2,675,477 | 67,086,860 | |||||||||
80,000 | Medallion Financial Corp. | 362,763 | 632,800 | |||||||||
8,000 | PROG Holdings Inc. | 5,116 | 275,520 | |||||||||
54,000 | Sandy Spring Bancorp Inc. | 1,741,783 | 1,251,720 | |||||||||
47,000 | Synovus Financial Corp. | 1,218,657 | 1,882,820 | |||||||||
16,000 | TFS Financial Corp. | 234,831 | 200,960 | |||||||||
15,000 | Thomasville Bancshares Inc. | 570,703 | 956,775 | |||||||||
230,000 | Valley National Bancorp | 1,437,500 | 1,830,800 | |||||||||
34,308 | Value Line Inc. | 425,084 | 1,389,474 | |||||||||
10,000 | Waterloo Investment Holdings Ltd.†(b) | 1,373 | 5,000 | |||||||||
110,000 | Webster Financial Corp. | 2,216,198 | 5,584,700 |
Shares | Cost | Market Value | ||||||||||
141,000 | Wright Investors' Service Holdings Inc.† | $ | 92,972 | $ | 28,200 | |||||||
28,202,560 | 103,850,023 | |||||||||||
Food and Beverage — 4.6% | ||||||||||||
424,500 | Arca Continental SAB de CV | 762,263 | 4,633,254 | |||||||||
14,000 | BellRing Brands Inc.† | 14,534 | 826,420 | |||||||||
75,000 | Brown-Forman Corp., Cl. A | 407,541 | 3,971,250 | |||||||||
40,000 | Bull-Dog Sauce Co. Ltd. | 95,622 | 546,704 | |||||||||
82,000 | China Tontine Wines Group Ltd.† | 85,944 | 6,496 | |||||||||
269,200 | Crimson Wine Group Ltd.† | 2,353,691 | 1,558,668 | |||||||||
220,000 | Denny's Corp.† | 736,620 | 1,971,200 | |||||||||
500,000 | Dynasty Fine Wines Group Ltd.† | 74,726 | 17,887 | |||||||||
98,000 | Farmer Brothers Co.† | 600,724 | 349,860 | |||||||||
400,000 | Flowers Foods Inc. | 950,682 | 9,500,000 | |||||||||
114,000 | ITO EN Ltd. | 2,136,608 | 2,784,859 | |||||||||
92,000 | Iwatsuka Confectionery Co. Ltd. | 1,584,932 | 1,670,683 | |||||||||
23,000 | J & J Snack Foods Corp. | 509,737 | 3,324,880 | |||||||||
100,000 | Kameda Seika Co. Ltd. | 3,924,504 | 2,804,201 | |||||||||
1,200,000 | Kikkoman Cor.p | 1,630,295 | 15,346,809 | |||||||||
635,000 | Maple Leaf Foods Inc. | 11,018,968 | 10,411,834 | |||||||||
12,000 | MEIJI Holdings Co. Ltd. | 117,526 | 261,593 | |||||||||
8,000 | MGP Ingredients Inc. | 6,395 | 689,040 | |||||||||
124,000 | Morinaga Milk Industry Co. Ltd. | 1,182,249 | 2,533,571 | |||||||||
7,500 | National Beverage Corp.† | 330,160 | 355,950 | |||||||||
130,500 | Nissin Foods Holdings Co. Ltd. | 1,444,598 | 3,594,828 | |||||||||
13,000 | Post Holdings Inc.† | 36,151 | 1,381,640 | |||||||||
60,000 | Rock Field Co. Ltd. | 402,002 | 676,972 | |||||||||
3,000 | The Boston Beer Co. Inc., Cl. A† | 460,330 | 913,260 | |||||||||
70,000 | The Hain Celestial Group Inc.† | 705,657 | 550,200 | |||||||||
56,000 | The J.M. Smucker Co. | 1,289,479 | 7,048,720 | |||||||||
625,000 | Tingyi (Cayman Islands)Holding Corp. | 1,326,207 | 685,137 | |||||||||
33,475 | Tootsie Roll Industries Inc. | 261,510 | 1,072,204 | |||||||||
370,000 | Vina Concha y Toro SA | 676,676 | 448,070 | |||||||||
950,000 | Vitasoy International Holdings Ltd. | 542,729 | 814,435 | |||||||||
20,000 | Willamette Valley Vineyards Inc.† | 73,225 | 100,200 | |||||||||
200,000 | Yakult Honsha Co. Ltd. | 2,378,861 | 4,085,084 | |||||||||
38,121,146 | 84,935,909 | |||||||||||
Health Care — 3.1% | ||||||||||||
1,400 | Align Technology Inc.† | 9,766 | 459,088 | |||||||||
6,700 | Bio-Rad Laboratories Inc., Cl. A† | 283,604 | 2,317,329 |
See accompanying notes to financial statements.
The Gabelli Small Cap Growth Fund
Schedule of Investments (Continued) — March 31, 2024 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS (Continued) | ||||||||||||
Health Care (Continued) | ||||||||||||
13,300 | Bruker Corp. | $ | 105,444 | $ | 1,249,402 | |||||||
600 | Chemed Corp. | 8,238 | 385,158 | |||||||||
21,000 | CONMED Corp. | 429,146 | 1,681,680 | |||||||||
349,000 | Cutera Inc.† | 3,465,719 | 513,030 | |||||||||
50,000 | Dexcom Inc.† | 68,464 | 6,935,000 | |||||||||
15,000 | Evolent Health Inc., Cl. A† | 258,100 | 491,850 | |||||||||
216,000 | Globus Medical Inc., Cl. A† | 5,584,808 | 11,586,240 | |||||||||
70,000 | Henry Schein Inc.† | 480,305 | 5,286,400 | |||||||||
28,000 | ICU Medical Inc.† | 892,631 | 3,004,960 | |||||||||
33,000 | Masimo Corp.† | 790,451 | 4,846,050 | |||||||||
45,000 | Neogen Corp.† | 430,861 | 710,100 | |||||||||
4,000 | NeoGenomics Inc.† | 49,880 | 62,880 | |||||||||
20,000 | Neuronetics Inc.† | 104,941 | 95,200 | |||||||||
177,000 | OPKO Health Inc.† | 414,111 | 212,400 | |||||||||
135,000 | Orthofix Medical Inc.† | 2,860,796 | 1,960,200 | |||||||||
4,000 | Patterson Companies Inc. | 85,020 | 110,600 | |||||||||
70,500 | QuidelOrtho Corp.† | 312,578 | 3,379,770 | |||||||||
24,000 | Seikagaku Corp. | 263,881 | 120,174 | |||||||||
22,800 | STERIS plc | 1,057,872 | 5,125,896 | |||||||||
19,000 | Straumann Holding AG | 170,618 | 3,033,764 | |||||||||
3,000 | Stryker Corp | 142,188 | 1,073,610 | |||||||||
30,000 | SurModics Inc.† | 608,729 | 880,200 | |||||||||
18,800 | Teladoc Health Inc.† | 580,433 | 283,880 | |||||||||
400 | The Cooper Companies Inc. | 3,627 | 40,584 | |||||||||
38,000 | United-Guardian Inc. | 332,419 | 293,740 | |||||||||
19,794,630 | 56,139,185 | |||||||||||
Home Furnishings — 0.3% | ||||||||||||
161,500 | Bassett Furniture Industries Inc. | 1,528,688 | 2,383,740 | |||||||||
5,000 | Ethan Allen Interiors Inc. | 116,387 | 172,850 | |||||||||
63,000 | La-Z-Boy Inc. | 1,007,190 | 2,370,060 | |||||||||
2,652,265 | 4,926,650 | |||||||||||
Hotels and Gaming — 3.9% | ||||||||||||
48,000 | Boyd Gaming Corp. | 203,631 | 3,231,360 | |||||||||
190,000 | Canterbury Park Holding Corp. | 1,949,758 | 4,295,900 | |||||||||
138,500 | Churchill Downs Inc. | 554,640 | 17,139,375 | |||||||||
120,000 | Formosa International Hotels Corp.† | 775,629 | 849,282 | |||||||||
530,000 | Full House Resorts Inc.† | 1,541,909 | 2,952,100 | |||||||||
48,000 | Gaming and Leisure | |||||||||||
Properties Inc., REIT | 361,392 | 2,211,360 | ||||||||||
750,000 | Genting Singapore Ltd. | 688,148 | 491,576 | |||||||||
120,000 | Golden Entertainment Inc. | 1,800,595 | 4,419,600 | |||||||||
2,250,000 | Mandarin Oriental International Ltd. | 2,913,165 | 3,498,750 | |||||||||
3,000 | Penn Entertainment Inc.† | 13,028 | 54,630 | |||||||||
235,500 | Ryman Hospitality Properties Inc., REIT | 3,659,506 | 27,226,155 |
Shares | Cost | Market Value | ||||||||||
2,500,000 | The Hongkong & Shanghai Hotels Ltd.† | $ | 2,476,225 | $ | 1,900,497 | |||||||
139,000 | The Marcus Corp. | 1,530,824 | 1,982,140 | |||||||||
13,000 | Wynn Resorts Ltd. | 0 | 1,328,990 | |||||||||
18,468,450 | 71,581,715 | |||||||||||
Machinery — 2.4% | ||||||||||||
326,000 | Astec Industries Inc. | 11,354,454 | 14,249,460 | |||||||||
1,415,000 | CNH Industrial NV | 3,631,392 | 18,338,400 | |||||||||
100,000 | Kennametal Inc. | 1,912,660 | 2,494,000 | |||||||||
4,700 | Nordson Corp. | 77,665 | 1,290,338 | |||||||||
160,000 | The Eastern Co. | 3,114,959 | 5,454,400 | |||||||||
142,000 | Twin Disc Inc. | 1,560,946 | 2,347,260 | |||||||||
21,652,076 | 44,173,858 | |||||||||||
Manufactured Housing and Recreational Vehicles — 2.0% | ||||||||||||
59,100 | Cavco Industries Inc.† | 1,147,687 | 23,584,446 | |||||||||
72,700 | Nobility Homes Inc. | 848,246 | 2,363,113 | |||||||||
81,200 | Skyline Champion Corp.† | 469,346 | 6,902,812 | |||||||||
51,500 | Winnebago Industries Inc. | 584,494 | 3,811,000 | |||||||||
3,049,773 | 36,661,371 | |||||||||||
Metals and Mining — 0.1% | ||||||||||||
45,000 | Ivanhoe Mines Ltd., Cl. A† | 117,783 | 536,857 | |||||||||
95,000 | Kinross Gold Corp. | 412,123 | 582,350 | |||||||||
50,000 | Sierra Metals Inc.† | 8,130 | 28,500 | |||||||||
538,036 | 1,147,707 | |||||||||||
Publishing — 0.3% | ||||||||||||
2,700 | Graham Holdings Co., Cl. B | 1,295,342 | 2,072,736 | |||||||||
4,500 | John Wiley & Sons Inc., Cl. B | 17,438 | 172,597 | |||||||||
34,000 | News Corp., Cl. A | 48,038 | 890,120 | |||||||||
775,000 | The E.W. Scripps Co., Cl. A† | 4,022,887 | 3,045,750 | |||||||||
5,383,705 | 6,181,203 | |||||||||||
Real Estate — 1.8% | ||||||||||||
81,900 | Capital Properties Inc., Cl. A | 972,224 | 900,900 | |||||||||
18,007 | Gyrodyne LLC† | 295,989 | 148,108 | |||||||||
18,000 | Lamar Advertising Co., Cl. A, REIT | 164,305 | 2,149,380 | |||||||||
89,500 | Morguard Corp. | 1,134,375 | 7,819,150 | |||||||||
30,000 | Reading International Inc., Cl. A† | 133,615 | 55,200 | |||||||||
4,500 | Reading International Inc., Cl. B† | 84,127 | 65,655 | |||||||||
35,000 | Seritage Growth Properties, Cl. A† | 435,596 | 337,750 | |||||||||
130,200 | Tejon Ranch Co.† | 2,851,518 | 2,006,382 | |||||||||
351,500 | The St. Joe Co. | 5,306,343 | 20,376,455 | |||||||||
115,000 | Trinity Place Holdings Inc.† | 228,522 | 17,250 | |||||||||
11,606,614 | 33,876,230 | |||||||||||
Retail — 6.1% | ||||||||||||
111,000 | AutoNation Inc.† | 1,763,898 | 18,379,380 |
See accompanying notes to financial statements.
The Gabelli Small Cap Growth Fund
Schedule of Investments (Continued) — March 31, 2024 (Unaudited)
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS (Continued) | ||||||||||||
Retail (Continued) | ||||||||||||
115,000 | Big 5 Sporting Goods Corp. | $ | 715,245 | $ | 404,800 | |||||||
900 | Biglari Holdings Inc., Cl. A† | 548,428 | 851,369 | |||||||||
297,000 | Copart Inc.† | 622,069 | 17,202,240 | |||||||||
80,000 | Hertz Global Holdings Inc.† | 650,623 | 626,400 | |||||||||
200,000 | Ingles Markets Inc., Cl. A | 2,545,477 | 15,336,000 | |||||||||
52,000 | Lands' End Inc.† | 564,895 | 566,280 | |||||||||
70,000 | Movado Group Inc. | 1,036,083 | 1,955,100 | |||||||||
157,000 | Nathan's Famous Inc. | 264,162 | 11,115,600 | |||||||||
69,000 | Penske Automotive Group Inc. | 1,005,952 | 11,177,310 | |||||||||
80,000 | Pets at Home Group plc | 137,119 | 271,009 | |||||||||
478,500 | Rush Enterprises Inc., Cl. B | 2,254,961 | 25,499,265 | |||||||||
14,500 | Salvatore Ferragamo SpA | 258,823 | 176,300 | |||||||||
10,000 | The Cheesecake Factory Inc. | 93,274 | 361,500 | |||||||||
25,000 | Tractor Supply Co. | 214,313 | 6,543,000 | |||||||||
60,000 | Village Super Market Inc., Cl. A | 1,467,642 | 1,716,600 | |||||||||
500 | Winmark Corp. | 34,190 | 180,850 | |||||||||
14,177,154 | 112,363,003 | |||||||||||
Specialty Chemicals — 2.0% | ||||||||||||
3,200 | Albemarle Corp. | 47,663 | 421,568 | |||||||||
28,000 | Ashland Inc. | 210,127 | 2,726,360 | |||||||||
240,000 | H.B. Fuller Co. | 2,609,904 | 19,137,600 | |||||||||
37,500 | Hawkins Inc. | 640,205 | 2,880,000 | |||||||||
25,000 | Huntsman Corp. | 74,302 | 650,750 | |||||||||
5,600 | NewMarket Corp. | 561,284 | 3,553,872 | |||||||||
8,400 | Quaker Chemical Corp. | 128,365 | 1,724,100 | |||||||||
1,500 | Rogers Corp.† | 172,480 | 178,035 | |||||||||
24,400 | Sensient Technologies Corp. | 470,723 | 1,688,236 | |||||||||
2,500 | Takasago International Corp. | 66,073 | 56,646 | |||||||||
91,200 | The General Chemical Group Inc.†(b) | 1,186 | 0 | |||||||||
80,000 | Valvoline Inc.† | 228,439 | 3,565,600 | |||||||||
5,210,751 | 36,582,767 | |||||||||||
Telecommunications — 0.7% | ||||||||||||
9,000 | Consolidated Communications Holdings Inc.† | 46,803 | 38,880 | |||||||||
61,000 | Gogo Inc.† | 292,823 | 535,580 | |||||||||
3,500 | IDT Corp., Cl. B | 11,346 | 132,335 | |||||||||
152,000 | Liberty Global Ltd., Cl. A† | 3,234,004 | 2,571,840 | |||||||||
132,000 | Liberty Global Ltd., Cl. C† | 2,462,120 | 2,328,480 | |||||||||
100 | Liberty Latin America Ltd., Cl. B† | 1,002 | 1,755 | |||||||||
85,100 | Nuvera Communications Inc. | 625,036 | 936,100 | |||||||||
82,000 | Rogers Communications Inc., Cl. B | 293,920 | 3,362,000 |
Shares | Cost | Market Value | ||||||||||
105,000 | Shenandoah Telecommunications Co. | $ | 804,313 | $ | 1,823,850 | |||||||
40,000 | Telephone and Data Systems Inc. | 517,071 | 640,800 | |||||||||
42,856 | VEON Ltd., ADR† | 953,027 | 1,028,973 | |||||||||
9,241,465 | 13,400,593 | |||||||||||
Transportation — 2.6% | ||||||||||||
344,500 | GATX Corp. | 9,705,693 | 46,173,335 | |||||||||
18,600 | Irish Continental Group plc | 13,660 | 97,323 | |||||||||
124,000 | Navigator Holdings Ltd. | 1,188,912 | 1,903,400 | |||||||||
50,057 | Steel Connect Inc.† | 551,286 | 471,537 | |||||||||
11,459,551 | 48,645,595 | |||||||||||
Wireless Communications — 0.1% | ||||||||||||
49,500 | United States Cellular Corp.† | 1,289,328 | 1,806,750 | |||||||||
TOTAL COMMON STOCKS. | 435,910,882 | 1,813,422,445 | ||||||||||
CLOSED-END FUNDS — 0.1% | ||||||||||||
40,000 | The Central Europe, Russia, and Turkey Fund Inc. | 673,217 | 380,800 | |||||||||
32,229 | The European Equity Fund Inc. | 319,370 | 287,160 | |||||||||
111,000 | The New Germany Fund Inc. | 1,473,308 | 966,810 | |||||||||
2,465,895 | 1,634,770 | |||||||||||
TOTAL CLOSED-END FUNDS | 2,465,895 | 1,634,770 | ||||||||||
PREFERRED STOCKS — 0.2% | ||||||||||||
Automotive: Parts and Accessories — 0.2% | ||||||||||||
82,500 | Jungheinrich AG | 563,490 | 3,051,096 | |||||||||
RIGHTS — 0.0% | ||||||||||||
Communications Equipment — 0.0% | ||||||||||||
60,500 | Pineapple Energy Inc., CVR† | 0 | 63,840 | |||||||||
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 | 14,000 | |||||||||
TOTAL WARRANTS | 95,648 | 14,652 |
See accompanying notes to financial statements.
The Gabelli Small Cap Growth Fund
Schedule of Investments (Continued) — March 31, 2024 (Unaudited)
Principal Amount | Cost | Market Value | ||||||||||
U.S. GOVERNMENT OBLIGATIONS — 0.8% | ||||||||||||
$ | 14,630,000 | U.S. Treasury Bills, 5.262% to 5.325%††, 04/16/24 to 06/20/24 | $ | 14,535,580 | $ | 14,535,581 | ||||||
TOTAL MISCELLANEOUS INVESTMENTS — 0.2%(c) | 3,459,560 | 4,229,546 | ||||||||||
TOTAL INVESTMENTS — 99.7% | $ | 457,031,055 | 1,836,951,930 | |||||||||
Other Assets and Liabilities (Net) — 0.1% | 2,233,600 | |||||||||||
NET ASSETS — 100.0% | $ | 1,839,185,530 |
(a) | Security considered an affiliated holding because the Fund owns at least 5% of its outstanding shares. |
(b) | Security is valued using significant as Level 3 in the fair value hierarchy. |
(c) | Represents undisclosed, unrestricted securities which the Fund has held for less than one year. |
† | Non-income producing security. |
†† | Represents annualized yields at dates of purchase. |
ADR | American Depositary Receipt |
CVR | Contingent Value Right |
REIT | Real Estate Investment Trust |
See accompanying notes to financial statements.
(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)(2)(1) | Not applicable. |
(a)(2)(2) | 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/ John C. Ball | |
John C. Ball, Principal Executive Officer |
Date | June 6, 2024 |
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/ John C. Ball | |
John C. Ball, Principal Executive Officer |
Date | June 6, 2024 |
By (Signature and Title)* | /s/ John C. Ball | |
John C. Ball, Principal Financial Officer and Treasurer |
Date | June 6, 2024 |
* Print the name and title of each signing officer under his or her signature.