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 811-08518
Gabelli Gold Fund, Inc.
(Exact name of registrant as specified in charter)
One Corporate Center
Rye, New York 10580-1422
(Address of principal executive offices) (Zip code)
Bruce N. Alpert
Gabelli Funds, LLC
One Corporate Center
Rye, New York 10580-1422
(Name and address of agent for service)
Registrant’s telephone number, including area code: 1-800-422-3554
Date of fiscal year end: December 31
Date of reporting period: June 30, 2017
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
Item 1. Reports to Stockholders.
The Report to Shareholders is attached herewith.
Gabelli Gold Fund, Inc.
Semiannual Report — June 30, 2017 |
Caesar M. P. Bryan Portfolio Manager |
To Our Shareholders,
For the six months ended June 30, 2017, the net asset value (“NAV”) per Class AAA Share of the Gabelli Gold Fund, Inc. increased 7.2% compared with increases of 2.4% and 5.4% for the Philadelphia Gold & Silver (“XAU”) Index and the NYSE Arca Gold Miners Index, respectively. See below for additional performance information.
Enclosed are the financial statements, including the schedule of investments as of June 30, 2017.
Comparative Results
| Average Annual Returns through June 30, 2017 (a) (Unaudited) | Since | ||||||||||||||||||||||||||||||||||
| Inception | |||||||||||||||||||||||||||||||||||
| Six Months | 1 Year | 5 Year | 10 Year | 15 Year | (7/11/94) | ||||||||||||||||||||||||||||||
Class AAA (GOLDX) | 7.21 | % | (16.93 | )% | (7.01 | )% | (0.64 | )% | 6.56 | % | 4.57 | % | |||||||||||||||||||||||
XAU Index | 2.43 | (17.27 | ) | (12.51 | ) | (5.07 | ) | 0.82 | (1.45 | ) | |||||||||||||||||||||||||
NYSE Arca Gold Miners Index | 5.39 | (19.60 | ) | (11.94 | ) | (4.07 | ) | 1.82 | 0.06 | (b) | |||||||||||||||||||||||||
Lipper Precious Metals Fund Classification | 5.92 | (17.87 | ) | (9.71 | ) | (2.83 | ) | 4.99 | 2.50 | ||||||||||||||||||||||||||
Standard & Poor’s (“S&P”) 500 Index | 9.34 | 17.90 | 14.63 | 7.18 | 8.34 | 9.73 | |||||||||||||||||||||||||||||
Class A (GLDAX) | 7.19 | (16.91 | ) | (7.00 | ) | (0.61 | ) | 6.58 | 4.58 | ||||||||||||||||||||||||||
With sales charge (c) | 1.03 | (21.69 | ) | (8.10 | ) | (1.20 | ) | 6.16 | 4.31 | ||||||||||||||||||||||||||
Class C (GLDCX) | 6.79 | (17.53 | ) | (7.70 | ) | (1.38 | ) | 5.80 | 4.08 | ||||||||||||||||||||||||||
With contingent deferred sales charge (d) | 5.79 | (18.35 | ) | (7.70 | ) | (1.38 | ) | 5.80 | 4.08 | ||||||||||||||||||||||||||
Class I (GLDIX) | 7.30 | (16.69 | ) | (6.78 | ) | (0.40 | ) | 6.73 | 4.68 | ||||||||||||||||||||||||||
In the current prospectuses dated April 28, 2017, the expense ratios for Class AAA, A, C, and I Shares are 1.51%, 1.51%, 2.26%, and 1.26%, respectively. See page 8 for the expense ratios for the six months ended June 30, 2017. 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.
| (a) | Returns represent past performance and do not guarantee future results. Total returns and average annual returns reflect changes in share price, reinvestment of distributions, and are net of expenses. Investment returns and the principal value of an investment will fluctuate. When shares are redeemed, they may be worth more or less than their original cost. Current performance may be lower or higher than the performance data presented. Visit www.gabelli.com for performance information as of the most recent month end. The Fund imposes a 2% redemption fee on shares sold or exchanged within seven days of purchase. Performance returns for periods of less than one year are not annualized. Investors should carefully consider the investment objectives, risks, charges, and expenses of the Fund before investing. The prospectuses contain information about these and other matters and should be read carefully before investing. To obtain a prospectus, please visit our website at www.gabelli.com. Investing in foreign securities involves risks not ordinarily associated with investments in domestic issues, including currency fluctuation, economic, and political risks. Investing in gold is considered speculative and is affected by a variety of worldwide economic, financial, and political factors. 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 23, 2002, and Class I Shares on January 11, 2008. The actual performance of the Class A Shares and Class C Shares would have been lower due to the additional fees and expenses associated with these classes of shares. The actual performance of the Class I Shares would have been higher due to lower expenses related to this class of shares. The XAU Index is an unmanaged indicator of stock market performance of large North American gold and silver companies. The NYSE Arca Gold Miners Index is a modified market capitalization weighted index comprised of publicly traded companies involved primarily in the mining for gold and silver. The Lipper Precious Metals Fund Classification reflects the average performance of mutual funds classified in this particular category. 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. Dividends are considered reinvested. You cannot invest directly in an index. |
| (b) | NYSE Arca Gold Miners Index since inception performance results is as of June 30, 1994. |
| (c) | Performance results include the effect of the maximum 5.75% sales charge at the beginning of the period. |
| (d) | Assuming payment of the 1% maximum contingent deferred sales change imposed on redemptions made within one year of purchase. |
| Gabelli Gold Fund, Inc. | ||
| Disclosure of Fund Expenses (Unaudited) | ||
For the Six Month Period from January 1, 2017 through June 30, 2017 | 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 01/01/17 | Ending Account Value 06/30/17 | Annualized Expense Ratio | Expenses Paid During Period* | |||||||||||||
Gabelli Gold Fund, Inc. |
| |||||||||||||||
Actual Fund Return |
| |||||||||||||||
Class AAA | $1,000.00 | $1,072.10 | 1.51 | % | $ 7.76 | |||||||||||
Class A | $1,000.00 | $1,071.90 | 1.51 | % | $ 7.76 | |||||||||||
Class C | $1,000.00 | $1,067.90 | 2.26 | % | $11.59 | |||||||||||
Class I | $1,000.00 | $1,073.00 | 1.26 | % | $ 6.48 | |||||||||||
Hypothetical 5% Return |
| |||||||||||||||
Class AAA | $1,000.00 | $1,017.31 | 1.51 | % | $ 7.55 | |||||||||||
Class A | $1,000.00 | $1,017.31 | 1.51 | % | $ 7.55 | |||||||||||
Class C | $1,000.00 | $1,013.59 | 2.26 | % | $11.28 | |||||||||||
Class I | $1,000.00 | $1,018.55 | 1.26 | % | $ 6.31 | |||||||||||
| * | 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 (181 days), then divided by 365. |
2
Summary of Portfolio Holdings (Unaudited)
The following table presents portfolio holdings as a percent of net assets as of June 30, 2017:
Gabelli Gold Fund, Inc.
North America | 66.2 | % | Africa | 1.4 | % | |||||||
United Kingdom | 22.1 | % | Other Assets and Liabilities (Net) | 0.1 | % | |||||||
|
| |||||||||||
Australia | 10.2 | % | 100.0 | % | ||||||||
|
|
The Fund files a complete schedule of portfolio holdings with the Securities and Exchange Commission (the “SEC”) for the first and third quarters of each fiscal year on Form N-Q. Shareholders may obtain this information at www.gabelli.com or by calling the Fund at 800-GABELLI (800-422-3554).The Fund’s Form N-Q is available on the SEC’s website at www.sec.gov and may also be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330.
Proxy Voting
The Fund files Form N-PX with its complete proxy voting record for the twelve months ended June 30, no later than August 31 of each year. A description of the Fund’s proxy voting policies, procedures, and how the Fund voted proxies relating to portfolio securities is available without charge, upon request, by (i) calling 800-GABELLI (800-422-3554); (ii) writing to The Gabelli Funds at One Corporate Center, Rye, NY 10580-1422; or (iii) visiting the SEC’s website at www.sec.gov.
3
Gabelli Gold Fund, Inc.
Schedule of Investments — June 30, 2017 (Unaudited)
| Shares | Cost | Market Value | ||||||||||
| COMMON STOCKS — 98.9% | ||||||||||||
| Metals and Mining — 98.9% | ||||||||||||
| Africa — 1.4% | ||||||||||||
| 366,200 | AngloGold Ashanti Ltd., ADR | $ | 5,389,372 | $ | 3,559,464 | |||||||
| 250,000 | Gold Fields Ltd., ADR | 1,282,620 | 870,000 | |||||||||
|
|
|
| |||||||||
| 6,671,992 | 4,429,464 | |||||||||||
|
|
|
| |||||||||
| Australia — 10.2% | ||||||||||||
| 7,000,000 | Gold Road Resources Ltd.† | 2,952,005 | 3,604,725 | |||||||||
| 947,079 | Newcrest Mining Ltd. | 21,884,592 | 14,660,783 | |||||||||
| 1,276,227 | Northern Star Resources Ltd. | 1,925,823 | 4,659,302 | |||||||||
| 4,450,000 | Perseus Mining Ltd.† | 3,579,845 | 1,012,299 | |||||||||
| 3,745,000 | Perseus Mining Ltd.† | 975,234 | 834,736 | |||||||||
| 4,827,272 | Saracen Mineral Holdings Ltd.† | 1,627,378 | 4,340,972 | |||||||||
| 1,956,756 | Westgold Resources Ltd.† | 2,302,849 | 2,767,285 | |||||||||
|
|
|
| |||||||||
| 35,247,726 | 31,880,102 | |||||||||||
|
|
|
| |||||||||
| North America — 65.2% | ||||||||||||
| 140,246 | Agnico Eagle Mines Ltd., New York | 1,861,020 | 6,327,899 | |||||||||
| 322,186 | Agnico Eagle Mines Ltd., Toronto | 4,607,237 | 14,529,177 | |||||||||
| 1,300,000 | Alacer Gold Corp.† | 2,994,011 | 2,085,133 | |||||||||
| 1,067,675 | Alamos Gold Inc., New York, Cl. A | 6,903,793 | 7,665,907 | |||||||||
| 425,000 | Alamos Gold Inc., Toronto, Cl. A | 3,710,047 | 3,015,114 | |||||||||
| 5,500,000 | Alexandria Minerals | 965,100 | 318,091 | |||||||||
| 1,100,000 | Amarillo Gold Corp.† | 318,969 | 288,402 | |||||||||
| 950,000 | Asanko Gold Inc.† | 2,071,372 | 1,457,819 | |||||||||
| 2,744,232 | AuRico Metals Inc.† | 1,758,451 | 2,412,419 | |||||||||
| 120,000 | B2Gold Corp., New York† | 319,968 | 337,200 | |||||||||
| 2,304,650 | B2Gold Corp., Toronto† | 6,663,921 | 6,486,715 | |||||||||
| 348,700 | Barrick Gold Corp., New York | 4,661,890 | 5,547,817 | |||||||||
| 122,661 | Barrick Gold Corp., Toronto | 3,309,806 | 1,951,339 | |||||||||
| 4,600,000 | Belo Sun Mining Corp.† | 2,970,194 | 2,128,316 | |||||||||
| 350,000 | Chesapeake Gold Corp.† | 1,099,856 | 850,170 | |||||||||
| 55,000 | Contango ORE Inc.† | 1,134,322 | 1,050,500 | |||||||||
| 1,500,000 | Continental Gold Inc.† | 2,720,201 | 4,418,569 | |||||||||
| 750,000 | Detour Gold Corp.† | 9,450,347 | 8,779,303 | |||||||||
| 125,000 | Eldorado Gold Corp., New York | 519,603 | 330,000 | |||||||||
| 467,500 | Eldorado Gold Corp., New York(a) | 3,150,558 | 1,240,070 | |||||||||
| 470,833 | Eldorado Gold Corp., Toronto | 3,173,324 | 1,249,030 | |||||||||
| 100,000 | Endeavour Mining Corp.† | 1,750,457 | 1,725,787 | |||||||||
| 575,000 | Fortuna Silver Mines Inc.† | 2,536,767 | 2,811,750 | |||||||||
| 244,700 | Franco-Nevada Corp.(a) | 6,599,423 | 17,656,214 | |||||||||
| 350,000 | Gold Standard Ventures Corp.† | 580,710 | 598,500 | |||||||||
| 533,800 | Goldcorp Inc. | 3,173,050 | 6,882,431 | |||||||||
| 1,500,000 | Golden Queen Mining Co. Ltd., New York†(a) | 959,844 | 809,323 | |||||||||
| 2,477,000 | Golden Queen Mining Co. Ltd., Toronto† | 1,586,161 | 1,337,423 | |||||||||
| 473,000 | Golden Queen Mining Co. Ltd., Toronto† | 231,169 | 255,321 | |||||||||
| Shares | Cost | Market Value | ||||||||||
| 4,000,000 | Integra Gold Corp.† | $ | 2,549,621 | $ | 2,899,445 | |||||||
| 250,000 | Kirkland Lake Gold Ltd., Toronto | 1,646,418 | 2,365,438 | |||||||||
| 460,000 | Klondex Mines Ltd.† | 1,709,675 | 1,550,123 | |||||||||
| 400,000 | MAG Silver Corp.† | 3,085,784 | 5,222,085 | |||||||||
| 5,050,000 | Mandalay Resources Corp. | 3,874,435 | 1,460,325 | |||||||||
| 2,950,000 | Midas Gold Corp.† | 1,240,620 | 1,637,878 | |||||||||
| 337,871 | Newmont Mining Corp. | 14,399,107 | 10,943,642 | |||||||||
| 1,672,000 | Northern Dynasty Minerals Ltd.† | 820,750 | 2,333,683 | |||||||||
| 2,395,850 | OceanaGold Corp. | 7,227,560 | 7,223,761 | |||||||||
| 306,860 | Osisko Gold Royalties Ltd. | 4,145,818 | 3,750,564 | |||||||||
| 601,800 | Osisko Mining Inc.† | 1,306,359 | 1,902,668 | |||||||||
| 200,000 | Pretium Resources Inc.† | 2,065,228 | 1,922,000 | |||||||||
| 10,600,000 | Redstar Gold Corp.† | 463,869 | 1,226,095 | |||||||||
| 560,000 | Richmont Mines Inc., New York† | 2,422,726 | 4,359,947 | |||||||||
| 40,000 | Richmont Mines Inc., Toronto†(a) | 173,979 | 313,094 | |||||||||
| 212,700 | Royal Gold Inc. | 11,756,719 | 16,626,759 | |||||||||
| 600,000 | SEMAFO Inc., New York†(a) | 1,780,070 | 1,383,636 | |||||||||
| 250,000 | SEMAFO Inc., Toronto† | 741,276 | 576,188 | |||||||||
| 50,000 | Tahoe Resources Inc., New York | 770,085 | 431,000 | |||||||||
| 850,000 | Tahoe Resources Inc., Toronto | 10,782,189 | 7,328,038 | |||||||||
| 140,000 | TMAC Resources Inc.† | 1,899,579 | 1,567,551 | |||||||||
| 50,000 | Torex Gold Resources Inc., New York†(a) | 543,060 | 953,501 | |||||||||
| 410,000 | Torex Gold Resources Inc., Toronto† | 6,013,625 | 7,818,708 | |||||||||
| 3,200,000 | Victoria Gold Corp.† | 1,552,561 | 1,431,215 | |||||||||
| 3,041,000 | Wesdome Gold Mines Ltd.† | 3,665,558 | 7,152,259 | |||||||||
| 215,000 | Wheaton Precious Metals Corp., New York | 4,649,611 | 4,276,350 | |||||||||
| 30,000 | Wheaton Precious Metals Corp., Toronto | 724,270 | 595,928 | |||||||||
|
|
|
| |||||||||
| 173,792,123 | 203,797,620 | |||||||||||
|
|
|
| |||||||||
| United Kingdom — 22.1% | ||||||||||||
| 1,190,000 | Acacia Mining plc | 5,037,184 | 4,617,221 | |||||||||
| 2,349,000 | Centamin plc | 2,333,984 | 4,736,060 | |||||||||
| 1,300,728 | Condor Gold plc†(a) | 1,006,434 | 940,249 | |||||||||
| 1,160,500 | Fresnillo plc | 11,149,537 | 22,460,900 | |||||||||
| 2,597,709 | Hochschild Mining plc | 5,111,367 | 9,277,290 | |||||||||
| 3,000,000 | Hummingbird Resources plc† | 1,082,952 | 1,030,569 | |||||||||
| 295,900 | Randgold Resources Ltd., ADR | 2,164,038 | 26,175,314 | |||||||||
|
|
|
| |||||||||
| 27,885,496 | 69,237,603 | |||||||||||
|
|
|
| |||||||||
| TOTAL COMMON STOCKS | 243,597,337 | 309,344,789 | ||||||||||
|
|
|
| |||||||||
| WARRANTS — 0.5% | ||||||||||||
| Metals and Mining — 0.5% | ||||||||||||
| North America — 0.5% | ||||||||||||
| 475,000 | Golden Queen Mining Co. Ltd., expire 08/03/19† | 202,333 | 8,540 | |||||||||
| 1,222,000 | Northern Dynasty Minerals Ltd., expire 06/15/21† | 0 | 1,452,696 | |||||||||
See accompanying notes to financial statements.
4
Gabelli Gold Fund, Inc.
Schedule of Investments (Continued) — June 30, 2017 (Unaudited)
| Shares | Cost | Market Value | ||||||||||
| WARRANTS (Continued) | ||||||||||||
| Metals and Mining (Continued) | ||||||||||||
| North America (Continued) | ||||||||||||
| 2,175,000 | Redstar Gold Corp., | $ | 51,378 | $ | 95,408 | |||||||
|
|
|
| |||||||||
| 253,711 | 1,556,644 | |||||||||||
|
|
|
| |||||||||
| United Kingdom — 0.0% | ||||||||||||
| 650,364 | Condor Gold plc, | 0 | 40,310 | |||||||||
|
|
|
| |||||||||
| TOTAL WARRANTS | 253,711 | 1,596,954 | ||||||||||
|
|
|
| |||||||||
| Principal Amount | ||||||||||||
| U.S. GOVERNMENT OBLIGATIONS — 0.5% | ||||||||||||
| $ 1,482,000 | U.S. Treasury Bills, | 1,476,693 | 1,476,909 | |||||||||
|
|
|
| |||||||||
| TOTAL INVESTMENTS — 99.9% | $ | 245,327,741 | 312,418,652 | |||||||||
|
| |||||||||||
| Other Assets and Liabilities (Net) — 0.1% | 458,633 | |||||||||||
|
| |||||||||||
| NET ASSETS — 100.0% | $ | 312,877,285 | ||||||||||
|
| |||||||||||
| (a) | Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At June 30, 2017, the market value of Rule 144A securities amounted to $23,654,488 or 7.56% of net assets. |
| (b) | At June 30, 2017, the Fund held an investment in a restricted and illiquid security amounting to $40,310 or 0.01% of net assets., which was valued under methods approved by the Board of Directors as follows: |
Acquisition | Issuer | Acquisition Date | Acquisition Cost | 06/30/17 Carrying Value Per Share | ||||
650,364 | Condor Gold plc warrants, | 02/27/17 | $0 | $0.0620 |
| † | Non-income producing security. |
| †† | Represents annualized yield at date of purchase. |
| ADR | American Depositary Receipt |
See accompanying notes to financial statements.
5
Gabelli Gold Fund, Inc.
Statement of Assets and Liabilities
June 30, 2017 (Unaudited)
Assets: | ||||
Investments, at value (cost $245,327,741) | $ | 312,418,652 | ||
Foreign currency, at value (cost $4) | 4 | |||
Cash | 3,823 | |||
Receivable for investments sold | 1,577,994 | |||
Receivable for Fund shares sold | 1,091,028 | |||
Prepaid expenses | 57,587 | |||
Dividends receivable | 9,684 | |||
|
| |||
Total Assets | 315,158,772 | |||
|
| |||
Liabilities: | ||||
Payable for Fund shares redeemed | 214,909 | |||
Payable for investments purchased | 1,622,048 | |||
Payable for investment advisory fees | 263,062 | |||
Payable for distribution fees | 53,826 | |||
Payable for accounting fees | 11,250 | |||
Other accrued expenses | 116,392 | |||
|
| |||
Total Liabilities | 2,281,487 | |||
|
| |||
Net Assets | ||||
(applicable to 22,331,289 shares outstanding) | $ | 312,877,285 | ||
|
| |||
Net Assets Consistof: | ||||
Paid-in capital | $ | 322,114,067 | ||
Accumulated net investment loss | (12,796,448 | ) | ||
Accumulated net realized loss on investments and foreign currency transactions | (63,531,389 | ) | ||
Net unrealized appreciation on investments | 67,090,911 | |||
Net unrealized appreciation on foreign currency translations | 144 | |||
|
| |||
Net Assets | $ | 312,877,285 | ||
|
| |||
Shares of Capital Stock, each at $0.001 par value: |
| |||
Class AAA: | ||||
Net Asset Value, offering, and redemption price per share ($166,761,171 ÷ 11,929,593 shares outstanding; 375,000,000 shares authorized) | $13.98 | |||
|
| |||
Class A: | ||||
Net Asset Value and redemption price per share | $14.01 | |||
|
| |||
Maximum offering price per share (NAV ÷ 0.9425, based on maximum sales charge of 5.75% of the offering price) | $14.86 | |||
|
| |||
Class C: | ||||
Net Asset Value and offering price per share | $12.90 | (a) | ||
|
| |||
Class I: | ||||
Net Asset Value, offering, and redemption price per share ($109,789,214 ÷ 7,700,521 shares outstanding; 125,000,000 shares authorized) | $14.26 | |||
|
|
| (a) | Redemption price varies based on the length of time held. |
Statement of Operations
For the Six Months Ended June 30, 2017 (Unaudited)
Investment Income: | ||||
Dividends (net of foreign withholding taxes of $94,645) | $ | 1,740,136 | ||
Interest | 3,875 | |||
|
| |||
Total Investment Income | 1,744,011 | |||
|
| |||
Expenses: | ||||
Investment advisory fees | 1,602,233 | |||
Distribution fees - Class AAA | 221,082 | |||
Distribution fees - Class A | 22,505 | |||
Distribution fees - Class C | 89,138 | |||
Shareholder services fees | 128,347 | |||
Shareholder communications expenses | 64,084 | |||
Directors’ fees | 54,051 | |||
Registration expenses | 45,045 | |||
Custodian fees | 32,100 | |||
Legal and audit fees | 25,374 | |||
Accounting fees | 22,500 | |||
Interest expense | 12,857 | |||
Miscellaneous expenses | 32,499 | |||
|
| |||
Total Expenses | 2,351,815 | |||
|
| |||
Less: | ||||
Expenses indirectly paid by broker (See Note 6) | (1,619 | ) | ||
|
| |||
Net Expenses | 2,350,196 | |||
|
| |||
Net Investment Loss | (606,185 | ) | ||
|
| |||
Net Realized and Unrealized Gain/(Loss) on Investments and Foreign Currency: | ||||
Net realized loss on investments | (6,299,702 | ) | ||
Net realized loss on foreign currency transactions | (5,326 | ) | ||
|
| |||
Net realized loss on investments and foreign currency transactions | (6,305,028 | ) | ||
|
| |||
Net change in unrealized appreciation: | ||||
on investments | 25,328,155 | |||
on foreign currency translations | 75 | |||
|
| |||
Net change in unrealized appreciation on investments and foreign currency translations | 25,328,230 | |||
|
| |||
Net Realized and Unrealized Gain/(Loss) on Investments and Foreign Currency | 19,023,202 | |||
|
| |||
Net Increase in Net Assets Resulting from Operations | $ | 18,417,017 | ||
|
|
See accompanying notes to financial statements.
6
Gabelli Gold Fund, Inc.
Statement of Changes in Net Assets
| Six Months Ended June 30, 2017 (Unaudited) | Year Ended December 31, 2016 | |||||||
Operations: | ||||||||
Net investment loss | $ | (606,185 | ) | $ | (419,761 | ) | ||
Net realized loss on investments and foreign currency transactions | (6,305,028 | ) | (2,375,392 | ) | ||||
Net change in unrealized appreciation on investments and foreign currency translations | 25,328,230 | 68,552,679 | ||||||
|
|
|
| |||||
Net Increase in Net Assets Resulting from Operations | 18,417,017 | 65,757,526 | ||||||
|
|
|
| |||||
Distributions to Shareholders: | ||||||||
Net investment income | ||||||||
Class AAA | — | (3,457,114 | ) | |||||
Class A | — | (348,601 | ) | |||||
Class C | — | (272,396 | ) | |||||
Class I | — | (2,048,475 | ) | |||||
|
|
|
| |||||
Total Distributions to Shareholders | — | (6,126,586 | ) | |||||
|
|
|
| |||||
Capital Share Transactions: | ||||||||
Class AAA | (5,309,585 | ) | 22,520,166 | |||||
Class A | 1,702,402 | 7,030,802 | ||||||
Class C | 842,357 | 8,686,946 | ||||||
Class I | 18,665,027 | 38,904,819 | ||||||
|
|
|
| |||||
Net Increase in Net Assets from Capital Share Transactions | 15,900,201 | 77,142,733 | ||||||
|
|
|
| |||||
Redemption Fees | 7,204 | 30,091 | ||||||
|
|
|
| |||||
Net Increase in Net Assets | 34,324,422 | 136,803,764 | ||||||
Net Assets: | ||||||||
Beginning of year | 278,552,863 | 141,749,099 | ||||||
|
|
|
| |||||
End of period (including undistributed net investment income of $0 and $0, respectively) | $ | 312,877,285 | $ | 278,552,863 | ||||
|
|
|
| |||||
See accompanying notes to financial statements.
7
Gabelli Gold Fund, Inc.
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 December 31 | Net Asset Value, Beginning of Year | Net Investment Income (Loss)(a) | Net Realized and Unrealized Loss on Investments | Total from Investment Operations | Net Investment Income | Net Realized Gain on Investments | Total Distributions | Redemption Fees(a)(b) | Net Asset Value, End of Period | Total Return† | Net Assets End of Period (in 000’s) | Net Investment Income (Loss) | Operating Expenses(c) | Portfolio Turnover Rate | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class AAA | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2017(d) | $ | 13.04 | $ | (0.03 | ) | $ | 0.97 | $ | 0.94 | — | — | — | $ | 0.00 | $ | 13.98 | 7.2 | % | $ | 166,761 | (0.42 | )%(e) | 1.51 | %(e)(f) | 4 | % | ||||||||||||||||||||||||||||||||||||||||||||
2016 | 8.69 | (0.03 | ) | 4.66 | 4.63 | $ | (0.28 | ) | — | $ | (0.28 | ) | 0.00 | 13.04 | 53.5 | 160,659 | (0.23 | ) | 1.51 | (g) | 14 | |||||||||||||||||||||||||||||||||||||||||||||||||
2015 | 10.57 | (0.06 | ) | (1.82 | ) | (1.88 | ) | — | — | — | 0.00 | 8.69 | (17.8 | ) | 93,630 | (0.62 | ) | 1.62 | (f) | 18 | ||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | 10.71 | (0.10 | ) | (0.04 | ) | (0.14 | ) | — | — | — | 0.00 | 10.57 | (1.3 | ) | 123,456 | (0.78 | ) | 1.58 | 18 | |||||||||||||||||||||||||||||||||||||||||||||||||||
2013 | 21.99 | (0.00 | )(b) | (11.28 | ) | (11.28 | ) | — | — | — | 0.00 | 10.71 | (51.3 | ) | 138,147 | (0.03 | ) | 1.57 | 4 | |||||||||||||||||||||||||||||||||||||||||||||||||||
2012 | 23.54 | (0.06 | ) | (0.95 | ) | (1.01 | ) | — | $ | (0.54 | ) | (0.54 | ) | (0.00 | ) | 21.99 | (4.3 | ) | 324,798 | (0.27 | ) | 1.48 | 5 | |||||||||||||||||||||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2017(d) | $ | 13.07 | $ | (0.03 | ) | $ | 0.97 | $ | 0.94 | — | — | — | $ | 0.00 | $ | 14.01 | 7.2 | % | $ | 18,730 | (0.43 | )%(e) | 1.51 | %(e)(f) | 4 | % | ||||||||||||||||||||||||||||||||||||||||||||
2016 | 8.71 | (0.02 | ) | 4.67 | 4.65 | $ | (0.29 | ) | — | $ | (0.29 | ) | 0.00 | 13.07 | 53.5 | 16,006 | (0.12 | ) | 1.51 | (g) | 14 | |||||||||||||||||||||||||||||||||||||||||||||||||
2015 | 10.60 | (0.06 | ) | (1.83 | ) | (1.89 | ) | — | — | — | 0.00 | 8.71 | (17.8 | ) | 6,590 | (0.61 | ) | 1.62 | (f) | 18 | ||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | 10.73 | (0.10 | ) | (0.03 | ) | (0.13 | ) | — | — | — | 0.00 | 10.60 | (1.2 | ) | 11,334 | (0.77 | ) | 1.58 | 18 | |||||||||||||||||||||||||||||||||||||||||||||||||||
2013 | 22.04 | (0.00 | )(b) | (11.31 | ) | (11.31 | ) | — | — | — | 0.00 | 10.73 | (51.3 | ) | 13,476 | (0.03 | ) | 1.57 | 4 | |||||||||||||||||||||||||||||||||||||||||||||||||||
2012 | 23.60 | (0.07 | ) | (0.95 | ) | (1.02 | ) | — | $ | (0.54 | ) | (0.54 | ) | (0.00 | ) | 22.04 | (4.3 | ) | 23,138 | (0.28 | ) | 1.48 | 5 | |||||||||||||||||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2017(d) | $ | 12.08 | $ | (0.08 | ) | $ | 0.90 | $ | 0.82 | — | — | — | $ | 0.00 | $ | 12.90 | 6.8 | % | $ | 17,597 | (1.17 | )%(e) | 2.26 | %(e)(f) | 4 | % | ||||||||||||||||||||||||||||||||||||||||||||
2016 | 8.07 | (0.11 | ) | 4.33 | 4.22 | $ | (0.21 | ) | — | $ | (0.21 | ) | 0.00 | 12.08 | 52.5 | 15,748 | (0.83 | ) | 2.26 | (g) | 14 | |||||||||||||||||||||||||||||||||||||||||||||||||
2015 | 9.90 | (0.13 | ) | (1.70 | ) | (1.83 | ) | — | — | — | 0.00 | 8.07 | (18.5 | ) | 5,466 | (1.37 | ) | 2.37 | (f) | 18 | ||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | 10.10 | (0.18 | ) | (0.02 | ) | (0.20 | ) | — | — | — | 0.00 | 9.90 | (2.0 | ) | 5,899 | (1.52 | ) | 2.33 | 18 | |||||||||||||||||||||||||||||||||||||||||||||||||||
2013 | 20.89 | (0.11 | ) | (10.68 | ) | (10.79 | ) | — | — | — | 0.00 | 10.10 | (51.7 | ) | 5,386 | (0.79 | ) | 2.32 | 4 | |||||||||||||||||||||||||||||||||||||||||||||||||||
2012 | 22.57 | (0.22 | ) | (0.92 | ) | (1.14 | ) | — | $ | (0.54 | ) | (0.54 | ) | (0.00 | ) | 20.89 | (5.0 | ) | 14,642 | (1.01 | ) | 2.23 | 5 | |||||||||||||||||||||||||||||||||||||||||||||||
Class I | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2017(d) | $ | 13.29 | $ | (0.01 | ) | $ | 0.98 | $ | 0.97 | — | — | — | $ | 0.00 | $ | 14.26 | 7.3 | % | $ | 109,789 | (0.17 | )%(e) | 1.26 | %(e)(f) | 4 | % | ||||||||||||||||||||||||||||||||||||||||||||
2016 | 8.85 | 0.03 | 4.73 | 4.76 | $ | (0.32 | ) | — | $ | (0.32 | ) | 0.00 | 13.29 | 54.0 | 86,140 | 0.20 | 1.26 | (g) | 14 | |||||||||||||||||||||||||||||||||||||||||||||||||||
2015 | 10.74 | (0.04 | ) | (1.85 | ) | (1.89 | ) | — | — | — | 0.00 | 8.85 | (17.6 | ) | 36,063 | (0.37 | ) | 1.37 | (f) | 18 | ||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | 10.85 | (0.06 | ) | (0.05 | ) | (0.11 | ) | — | — | — | 0.00 | 10.74 | (1.0 | ) | 38,958 | (0.51 | ) | 1.33 | 18 | |||||||||||||||||||||||||||||||||||||||||||||||||||
2013 | 22.23 | 0.03 | (11.41 | ) | (11.38 | ) | — | — | — | 0.00 | 10.85 | (51.2 | ) | 12,866 | 0.21 | 1.32 | 4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
2012 | 23.74 | (0.01 | ) | (0.96 | ) | (0.97 | ) | — | $ | (0.54 | ) | (0.54 | ) | (0.00 | ) | 22.23 | (4.1 | ) | 30,909 | (0.03 | ) | 1.23 | 5 | |||||||||||||||||||||||||||||||||||||||||||||||
| † | Total return represents aggregate total return of a hypothetical $1,000 investment at the beginning of the year and sold at the end of the period including reinvestment of distributions and does not reflect applicable sales charges. Total return for a period of less than one year is not annualized. |
| (a) | Per share amounts have been calculated using the average shares outstanding method. |
| (b) | Amount represents less than $0.005 per share. |
| (c) | The Fund incurred interest expense during the years ended December 31, 2016, 2015, and 2013. If interest expense had not been incurred, the ratio of operating expenses to average net assets would have been 1.50%,1.62%, and 1.56% (Class AAA and Class A), 2.25%, 2.36%, and 2.31% (Class C), and 1.25%,1.36%, and 1.31% (Class I), respectively. For the six months ended June 30, 2017 and the years ended December 31, 2014 and 2012, the effect of interest expense was minimal. |
| (d) | For the six months ended June 30, 2017, unaudited. |
| (e) | Annualized. |
| (f) | The Fund received credits from a designated broker who agreed to pay certain Fund operating expenses. For the six months ended June 30, 2017 and the year ended December 31, 2015, there was no impact on the expense ratios. |
| (g) | During the year ended December 31, 2016, the Fund received a one time reimbursement of custody expenses paid in prior years. Had such reimbursement (allocated by relative net asset values of the Fund’s share classes) been included in this period, the annualized expense ratios would have been 1.43% (Class AAA and Class A), 2.18% (Class C), and 1.18% (Class I). |
See accompanying notes to financial statements.
8
Gabelli Gold Fund, Inc.
Notes to Financial Statements (Unaudited)
1. Organization. Gabelli Gold Fund, Inc. was incorporated on May 13, 1994 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”). The Fund’s primary objective is long term capital appreciation. The Fund commenced investment operations on July 11, 1994.
The Fund may invest a high percentage of its assets in specific sectors of the market in order to achieve a potentially greater investment return. As a result, the Fund may be more susceptible to economic, political, and regulatory developments in a particular sector of the market, positive or negative, and may experience increased volatility to the Fund’s NAV and a magnified effect in its total return.
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. Such debt obligations are valued through prices provided by a pricing service approved by the Board. Certain securities are valued principally using dealer quotations.
Securities and assets for which market quotations are not readily available are fair valued as determined by the Board. Fair valuation methodologies and procedures may include, but are not limited to: analysis and review of available financial and non-financial information about the company; comparisons with the valuation and changes in valuation of similar securities, including a comparison of foreign securities with the equivalent U.S. dollar value American Depositary Receipt securities at the close of the U.S. exchange; and evaluation of any other information that could be indicative of the value of the security.
The Fund employs a fair value model to adjust prices to reflect events affecting the values of certain portfolio securities which occur between the close of trading on the principal market for such securities (foreign exchanges
9
Gabelli Gold Fund, Inc.
Notes to Financial Statements (Unaudited) (Continued)
and over-the-counter markets) at the time when net asset value of the Fund is determined. If the Fund’s valuation committee believes that a particular event would materially affect net asset value, further adjustment is considered.
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 June 30, 2017 is as follows:
| Valuation Inputs | ||||||||||||
| Level 1 Quoted Prices | Level 2 Other Significant Observable Inputs | Total Market Value at 6/30/17 | ||||||||||
INVESTMENTS IN SECURITIES: | ||||||||||||
ASSETS (Market Value): | ||||||||||||
Common Stocks: | ||||||||||||
Metals and Mining | ||||||||||||
Africa | $ | 4,429,464 | — | $ 4,429,464 | ||||||||
Australia | 17,219,319 | $ | 14,660,783 | 31,880,102 | ||||||||
North America | 201,538,298 | 2,259,322 | 203,797,620 | |||||||||
United Kingdom | 68,297,354 | 940,249 | 69,237,603 | |||||||||
Total Common Stocks | 291,484,435 | 17,860,354 | 309,344,789 | |||||||||
Warrants: | ||||||||||||
Metals and Mining | ||||||||||||
North America | — | 1,556,644 | 1,556,644 | |||||||||
United Kingdom | — | 40,310 | 40,310 | |||||||||
Total Warrants | — | 1,596,954 | 1,596,954 | |||||||||
U.S. Government Obligations | — | 1,476,909 | 1,476,909 | |||||||||
TOTAL INVESTMENTS IN SECURITIES – ASSETS | $ | 291,484,435 | $20,934,217 | $312,418,652 | ||||||||
During the six months ended June 30, 2017, the Fund did not have material transfers between Level 1 and Level 2. The Fund’s policy is to recognize transfers among Levels as of the beginning of the reporting period.
10
Gabelli Gold Fund, Inc.
Notes to Financial Statements (Unaudited) (Continued)
Additional Information to Evaluate Qualitative Information.
General. The Fund uses recognized industry pricing services – approved by the Board and unaffiliated with the Adviser – to value most of its securities, and uses broker quotes provided by market makers of securities not valued by these and other recognized pricing sources. Several different pricing feeds are received to value domestic equity securities, international equity securities, preferred equity securities, and fixed income securities. The data within these feeds are ultimately sourced from major stock exchanges and trading systems where these securities trade. The prices supplied by external sources are checked by obtaining quotations or actual transaction prices from market participants. If a price obtained from the pricing source is deemed unreliable, prices will be sought from another pricing service or from a broker/dealer that trades that security or similar securities.
Fair Valuation. Fair valued securities may be common or preferred equities, warrants, options, rights, or fixed income obligations. Where appropriate, Level 3 securities are those for which market quotations are not available, such as securities not traded for several days, or for which current bids are not available, or which are restricted as to transfer. When fair valuing a security, factors to consider include recent prices of comparable securities that are publicly traded, reliable prices of securities not publicly traded, the use of valuation models, current analyst reports, valuing the income or cash flow of the issuer, or cost if the preceding factors do not apply. A significant change in the unobservable inputs could result in a lower or higher value in Level 3 securities. The circumstances of Level 3 securities are frequently monitored to determine if fair valuation measures continue to apply.
The Adviser reports quarterly to the Board the results of the application of fair valuation policies and procedures. These may include backtesting the prices realized in subsequent trades of these fair valued securities to fair values previously recognized.
Foreign Currency Translations. The books and records of the Fund are maintained in U.S. dollars. Foreign currencies, investments, and other assets and liabilities are translated into U.S. dollars at current exchange rates. Purchases and sales of investment securities, income, and expenses are translated at the exchange rate prevailing on the respective dates of such transactions. Unrealized gains and losses that result from changes in foreign exchange rates and/or changes in market prices of securities have been included in unrealized appreciation/depreciation on investments and foreign currency translations. Net realized foreign currency gains and losses resulting from changes in exchange rates include foreign currency gains and losses between trade date and settlement date on investment securities transactions, foreign currency transactions, and the difference between the amounts of interest and dividends recorded on the books of the Fund and the amounts actually received. The portion of foreign currency gains and losses related to fluctuation in exchange rates between the initial purchase trade date and subsequent sale trade date is included in realized gain/(loss) on investments.
Foreign Securities. The Fund may directly purchase securities of foreign issuers. Investing in securities of foreign issuers involves special risks not typically associated with investing in securities of U.S. issuers. The risks include possible revaluation of currencies, the inability to repatriate funds, less complete financial information about companies, and possible future adverse political and economic developments. Moreover, securities of many foreign issuers and their markets may be less liquid and their prices more volatile than securities of comparable U.S. issuers.
11
Gabelli Gold Fund, Inc.
Notes to Financial Statements (Unaudited) (Continued)
Foreign Taxes. The Fund may be subject to foreign taxes on income, gains on investments, or currency repatriation, a portion of which may be recoverable. The Fund will accrue such taxes and recoveries as applicable, based upon its current interpretation of tax rules and regulations that exist in the markets in which it invests.
Restricted Securities. The Fund may invest up to 15% of its net assets in securities for which the markets are restricted. Restricted securities include securities whose disposition is subject to substantial legal or contractual restrictions. The sale of restricted securities often requires more time and results in higher brokerage charges or dealer discounts and other selling expenses than does the sale of securities eligible for trading on national securities exchanges or in the over-the-counter markets. Restricted securities may sell at a price lower than similar securities that are not subject to restrictions on resale. Securities freely saleable among qualified institutional investors under special rules adopted by the SEC may be treated as liquid if they satisfy liquidity standards established by the Board. The continued liquidity of such securities is not as well assured as that of publicly traded securities, and accordingly the Board will monitor their liquidity. For the restricted securities the Fund held at June 30, 2017, refer to the Schedule of Investments.
Securities Transactions and Investment Income. Securities transactions are accounted for on the trade date with realized gain/(loss) on investments determined by using the identified cost method. Interest income (including amortization of premium and accretion of discount) is recorded on the accrual basis. Premiums and discounts on debt securities are amortized using the effective yield to maturity method. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities that are recorded as soon after the ex-dividend date as the Fund becomes aware of such dividends.
Determination of Net Asset Value and Calculation of Expenses. Certain administrative expenses are common to, and allocated among, various affiliated funds. Such allocations are made on the basis of each fund’s average net assets or other criteria directly affecting the expenses as determined by the Adviser pursuant to procedures established by the Board.
In calculating the NAV per share of each class, investment income, realized and unrealized gains and losses, redemption fees, and expenses other than class specific expenses are allocated daily to each class of shares based upon the proportion of net assets of each class at the beginning of each day. Distribution expenses are borne solely by the class incurring the expense.
Distributions to Shareholders. Distributions to shareholders are recorded on the ex-dividend date. Distributions to shareholders are based on income and capital gains as determined in accordance with federal income tax regulations, which may differ from income and capital gains as determined under GAAP. These differences are primarily due to differing treatments of income and gains on passive foreign investment companies and other 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.
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
12
Gabelli Gold Fund, Inc.
Notes to Financial Statements (Unaudited) (Continued)
Fund to comply with the requirements of the Code applicable to regulated investment companies and to distribute substantially all of its net investment company taxable income and net capital gains. Therefore, no provision for federal income taxes is required.
At December 31, 2016, the Fund had net capital loss carryforwards for federal income tax purposes which are available to reduce future required distributions of net capital gains to shareholders. 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.
Short term capital loss carryforward with no expiration | $ | 2,607,811 | ||
Long term capital loss carryforward with no expiration | 54,337,640 | |||
|
| |||
Total capital loss carryforwards | $ | 56,945,451 | ||
|
|
The following summarizes the tax cost of investments and the related net unrealized depreciation at June 30, 2017:
| Cost | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Appreciation | |||||||||||
Investments | $ | 245,608,648 | $ | 112,516,208 | $ | (45,706,204 | ) | $66,810,004 | ||||||
The Fund is required to evaluate tax positions taken or expected to be taken in the course of preparing the Fund’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Income tax and related interest and penalties would be recognized by the Fund as tax expense in the Statement of Operations if the tax positions were deemed not to meet the more-likely-than-not threshold. For the six months ended June 30, 2017, the Fund did not incur any income tax, interest, or penalties. As of June 30, 2017, 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 Fund pays each Director who is not considered to be an affiliated person an annual retainer of $9,000 plus $2,000 for each Board meeting attended. Each Director is reimbursed by the Fund for any out of pocket expenses incurred in attending meetings. All Board committee members receive $500 per meeting attended and the Chairman of the Audit Committee and the Lead Director each receives a $2,000 annual fee. A Director may receive a single meeting fee, allocated among the participating funds, for participation in certain meetings held on behalf of multiple funds. Directors who are directors or employees of the Adviser or an affiliated company receive no compensation or expense reimbursement from the Fund.
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
13
Gabelli Gold Fund, Inc.
Notes to Financial Statements (Unaudited) (Continued)
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 June 30, 2017, other than short term securities and U.S. Government obligations, aggregated $25,461,041 and $12,019,602, respectively.
6. Transactions with Affiliates and Other Arrangements. During the six months ended June 30, 2017, the Distributor retained a total of $26,371 from investors representing commissions (sales charges and underwriting fees) on sales and redemptions of Fund shares.
The Fund receives credits from a designated broker who agrees to pay certain Fund operating expenses. During the six months ended June 30, 2017, the amount of such expenses paid through this directed brokerage arrangement during this period was $1,619.
The cost of calculating the Fund’s NAV per share is a Fund expense pursuant to the Advisory Agreement. During the six months ended June 30, 2017, the Fund paid or accrued $22,500 to the Adviser in connection with the cost of computing the Fund’s NAV.
7. Line of Credit. The Fund participates in an unsecured line of credit, which expires on March 8, 2018 and may be renewed annually, of up to $75,000,000 under which it may borrow up to 10% of its net assets from the custodian for temporary borrowing purposes. Borrowings under this arrangement bear interest at a floating rate equal to the higher of the overnight Federal Funds rate plus 125 basis points or the 30 day LIBOR plus 125 basis points in effect on that day. This amount, if any, would be included in “Interest expense” in the Statement of Operations. At June 30, 2017, there were no borrowings outstanding under the line of credit.
The average daily amount of borrowings outstanding under the line of credit during the six months ended June 30, 2017 was $515,641 with a weighted average interest rate of 1.11%. The maximum amount borrowed at any time during the six months ended June 30, 2017 was $6,724,000.
8. Capital Stock. The Fund offers four classes of shares – Class AAA Shares, Class A Shares, Class C Shares, and Class I Shares. Class AAA and Class I Shares are offered without a sales charge. Class A Shares are subject to a maximum front-end sales charge of 5.75%, and Class C Shares are subject to a 1.00% contingent deferred sales charge for one year after purchase.
The Fund imposes a redemption fee of 2.00% on all classes of shares that are redeemed or exchanged on or before the seventh day after the date of a purchase. The redemption fee is deducted from the proceeds otherwise payable to the redeeming shareholders and is retained by the Fund as an increase in paid-in capital. The redemption fees retained by the Fund during the six months ended June 30, 2017 and the year ended December 31, 2016, if any, can be found in the Statement of Changes in Net Assets under Redemption Fees.
14
Gabelli Gold Fund, Inc.
Notes to Financial Statements (Unaudited) (Continued)
Transactions in shares of capital stock were as follows:
| Six Months Ended June 30, 2017 (Unaudited) | Year Ended December 31, 2016 | |||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
Class AAA | ||||||||||||||||
Shares sold | 2,582,914 | $ | 37,775,886 | 10,744,574 | $ | 160,742,846 | ||||||||||
Shares issued upon reinvestment of distributions | — | — | 269,501 | 3,379,541 | ||||||||||||
Shares redeemed | (2,977,388 | ) | (43,085,471 | ) | (9,464,413 | ) | (141,602,221 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase/(decrease) | (394,474 | ) | $ | (5,309,585 | ) | 1,549,662 | $ | 22,520,166 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Class A | ||||||||||||||||
Shares sold | 449,734 | $ | 6,581,026 | 1,174,245 | $ | 17,694,695 | ||||||||||
Shares issued upon reinvestment of distributions | — | — | 23,888 | 300,272 | ||||||||||||
Shares redeemed | (337,301 | ) | (4,878,624 | ) | (730,020 | ) | (10,964,165 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase | 112,433 | $ | 1,702,402 | 468,113 | $ | 7,030,802 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Class C | ||||||||||||||||
Shares sold | 165,458 | $ | 2,233,743 | 907,569 | $ | 12,666,506 | ||||||||||
Shares issued upon reinvestment of distributions | — | — | 21,179 | 246,100 | ||||||||||||
Shares redeemed | (105,022 | ) | (1,391,386 | ) | (301,924 | ) | (4,225,660 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase | 60,436 | $ | 842,357 | 626,824 | $ | 8,686,946 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Class I | ||||||||||||||||
Shares sold | 2,403,759 | $ | 35,859,791 | 5,813,023 | $ | 87,794,087 | ||||||||||
Shares issued upon reinvestment of distributions | — | — | 136,376 | 1,742,887 | ||||||||||||
Shares redeemed | (1,187,041 | ) | (17,194,764 | ) | (3,539,632 | ) | (50,632,155 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase | 1,216,718 | $ | 18,665,027 | 2,409,767 | $ | 38,904,819 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
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. On July 5, 2017, the Fund began to offer for sale Class T Shares.
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 other subsequent events requiring recognition or disclosure in the financial statements.
15
Gabelli Gold Fund, Inc.
Board Consideration and Re-Approval of Investment Advisory Agreements (Unaudited)
Section 15(c) of the Investment Company Act of 1940, as amended (the “1940 Act”), contemplates that the Board of Directors (the “Board”) of Gabelli Gold Fund, Inc. (the “Fund”), including a majority of the Directors who have no direct or indirect interest in the investment advisory agreement and are not “interested persons” of the Fund, as defined in the 1940 Act (the “Independent Board Members”), are required annually to review and re-approve the terms of the Fund’s existing investment advisory agreement and approve any newly proposed terms therein. In this regard, the Board reviewed and re-approved, during the most recent six month period covered by this report, the Investment Advisory Agreement (the “Advisory Agreement”) with Gabelli Funds, LLC (the “Adviser”) for the Fund.
More specifically, at a meeting held on February 22, 2017, the Board, including the Independent Board Members, considered the factors and reached the conclusions described below relating to the selection of the Adviser and the re-approval of the Advisory Agreement.
1) The nature, extent, and quality of services provided by the Adviser.
The Board Members reviewed in detail the nature and extent of the services provided by the Adviser under the Advisory Agreement and the quality of those services over the past year. The Board noted that these services included managing the investment program of the Fund, including the purchase and sale of portfolio securities, and overseeing the Fund’s third party service providers as well providing general corporate services. The Board Members considered that the Adviser also provided, at its expense, office facilities for use by the Fund and supervisory personnel responsible for supervising the performance of administrative, accounting, and related services for the Fund, including monitoring to assure compliance with stated investment policies and restrictions under the 1940 Act and related securities regulation. The Board Members noted that, in addition to managing the investment program for the Fund, the Adviser provided certain non-advisory and compliance services, including services for the Fund’s Rule 38a-1 compliance program.
The Board Members also considered that the Adviser paid for all compensation of officers and Board Members of the Fund that are affiliated with the Adviser and that the Adviser further provided services to shareholders of the Fund who had invested through various programs offered by third party financial intermediaries. The Board Members evaluated these factors based on its direct experience with the Adviser and in consultation with Fund Counsel. The Board Members noted that the Adviser had engaged, at its expense, BNY Mellon Investment Servicing (US) Inc. (“BNY”) to assist it in performing certain of its administrative functions. The Board Members concluded that the nature and extent of the services provided was reasonable and appropriate in relation to the advisory fee, that the level of services provided by the Adviser, either directly or through BNY, had not diminished over the past year, and that the quality of service continued to be high.
The Board Members reviewed the personnel responsible for providing services to the Fund and concluded, based on their experience and interaction with the Adviser, that (i) the Adviser was able to retain quality personnel, (ii) the Adviser and its agents exhibited a high level of diligence and attention to detail in carrying out their advisory and administrative responsibilities under the Advisory Agreement, (iii) the Adviser was responsive to requests of the Board, (iv) the scope and depth of the Adviser’s resources was adequate, and (v) the Adviser had kept the Board apprised of developments relating to the Fund and the industry in general. The Board Members also focused on the Adviser’s reputation and long standing relationship with the Fund. The Board Members also believed that the Adviser had devoted substantial resources and made substantial commitments to address new regulatory compliance requirements applicable to the Fund.
16
Gabelli Gold Fund, Inc.
Board Consideration and Re-Approval of Investment Advisory Agreements (Unaudited) (Continued)
2) The performance of the Fund and the Adviser.
The Board Members reviewed the investment performance of the Fund, on an absolute basis, as compared with its Broadridge peer group of other SEC registered funds, and against the Fund’s broad based securities market benchmark as reflected in the Fund’s prospectus and annual report. The Board Members considered the Fund’s one, three, five, and ten year average annual total return for the periods ended December 31, 2016, but placed greater emphasis on the Fund’s longer term performance. The peer group considered by the Board Members was developed by Broadridge and was comprised of the Fund and all retail and institutional precious metals equity funds (the “Performance Peer Group”). The Board considered these comparisons helpful in their assessment as to whether the Adviser was obtaining for the Fund’s shareholders the total return performance that was available in the marketplace, given the Fund’s objectives, strategies, limitations, and restrictions. In reviewing the performance of the Fund, the Board Members noted that the Fund’s performance was above the median for the one year, three year, five year, and ten year periods. The Board Members concluded that the Fund’s performance was reasonable in comparison with that of the Performance Peer Group.
In connection with its assessment of the performance of the Adviser, the Board Members considered the Adviser’s financial condition and whether it had the resources necessary to continue to carry out its functions under the Advisory Agreement. The Board Members concluded that the Adviser had the financial resources necessary to continue to perform its obligations under the Advisory Agreement and to continue to provide the high quality services that it has provided to the Fund to date.
3) The cost of the advisory services and the profits to the Adviser and its affiliates from the relationship with the Fund.
In connection with the Board Members’ consideration of the cost of the advisory services and the profits to the Adviser and its affiliates from the relationship with the Fund, the Board Members considered a number of factors. First, the Board Members compared the level of the advisory fee for the Fund against comparative Broadridge expense peer group (“Expense Peer Group”). The Board Members also considered comparative non-advisory fee expenses and comparative total fund expenses of the Fund and the Expense Peer Group. The Board Members considered this information as useful in assessing whether the Adviser was providing services at a cost that was competitive with other similar funds. In assessing this information, the Board Members considered both the comparative contract rates as well as the level of advisory fees after waivers and/or reimbursements, with respect to the Expense Peer Group. The Board Members noted that the Fund’s advisory fee and expense ratio were higher than the median when compared with those of the Expense Peer Group.
The Board Members also reviewed the fees charged by the Adviser to provide similar advisory services to other registered investment companies or accounts with similar investment objectives, noting that the fees charged by the Adviser were the same or lower, than the fees charged to the Fund.
The Board Members also considered an analysis prepared by the Adviser of the estimated profitability to the Adviser of its relationship with the Fund and reviewed with the Adviser its cost allocation methodology in connection with its profitability. In this regard, the Board Members reviewed Pro-forma Income Statements of the Adviser for the year ended December 31, 2016. The Board Members considered one analysis for the
17
Gabelli Gold Fund, Inc.
Board Consideration and Re-Approval of Investment Advisory Agreements (Unaudited) (Continued)
Adviser as a whole, and a second analysis for the Adviser with respect to the Fund. With respect to the Fund analysis, the Board Members received an analysis based on the Fund’s average net assets during the period as well as a pro-forma analysis of profitability at higher and lower asset levels. The Board Members concluded that the profitability of the Fund to the Adviser under either analysis was not excessive.
4) The extent to which economies of scale will be realized as the Fund grows and whether fee levels reflect those economies of scale.
With respect to the Board Members’ consideration of economies of scale, the Board Members discussed whether economies of scale would be realized by the Fund at higher asset levels. The Board Members also reviewed data from the Expense Peer Group to assess whether the Expense Peer Group funds had advisory fee breakpoints and, if so, at what asset levels. The Board Members also assessed whether certain of the Adviser’s costs would increase if asset levels rise. The Board Members noted the Fund’s current size and concluded that under foreseeable conditions, they were unable to assess at this time whether economies of scale would be realized if the Fund were to experience significant asset growth. In the event there were to be significant asset growth in the Fund, the Board Members determined to reassess whether the advisory fee appropriately took into account any economies of scale that had been realized as a result of that growth.
5) Other Factors.
In addition to the above factors, the Board Members also discussed other benefits received by the Adviser from their management of the Fund. The Board Members considered that the Adviser does use soft dollars in connection with its management of the Fund.
Based on a consideration of all these factors in their totality, the Board Members, including all of the Independent Board Members, determined that the Fund’s advisory fee was fair and reasonable with respect to the quality of services provided and in light of the other factors described above that the Board Members deemed relevant. Accordingly, the Board Members determined to approve the continuation of the Fund’s Advisory Agreement. The Board Members based their decision on evaluations of all these factors as a whole and did not consider any one factor as all important or controlling.
18
GABELLI GOLD FUND, INC.
One Corporate Center
Rye, NY 10580-1422
Portfolio Manager Biography
Caesar M. P. Bryan joined GAMCO Asset Management in 1994. He is a member of the global investment team of Gabelli Funds, LLC and portfolio manager of several funds within the Gabelli/GAMCO Fund Complex. Prior to joining Gabelli, Mr. Bryan was a portfolio manager at Lexington Management. He began his investment career at Samuel Montagu Company, the London based merchant bank. Mr. Bryan graduated from the University of Southampton in England with a Bachelor of Law and is a member of the English Bar.
We have separated the portfolio manager’s commentary from the financial statements and investment portfolio due to corporate governance regulations stipulated by the Sarbanes-Oxley Act of 2002. We have done this to ensure that the content of the portfolio manager’s commentary is unrestricted. Both the commentary and the financial statements, including the portfolio of investments, will be available on our website at www.gabelli.com.
GABELLI GOLD FUND, INC.
One Corporate Center
Rye, New York 10580-1422
t 800-GABELLI (800-422-3554)
f 914-921-5118
e info@gabelli.com
GABELLI.COM
Net Asset Value per share available daily
by calling 800-GABELLI after 7:00 P.M.
BOARD OF DIRECTORS
Mario J. Gabelli, CFA Chairman and Chief Executive Officer, GAMCO Investors, Inc. Executive Chairman, Associated Capital Group Inc.
E. Val Cerutti Chief Executive Officer, Cerutti Consultants, Inc.
Anthony J. Colavita President, Anthony J. Colavita, P.C.
Werner J. Roeder, MD Former Medical Director, Lawrence Hospital
Anthonie C. van Ekris Chairman, BALMAC International, Inc.
Salvatore J. Zizza Chairman, Zizza & Associates Corp.
Daniel E. Zucchi President, Daniel E. Zucchi Associates
|
OFFICERS
Bruce N. Alpert President
Agnes Mullady Vice President
Andrea R. Mango Secretary
John C. Ball Treasurer
Richard J. Walz Chief Compliance Officer
DISTRIBUTOR
G.distributors, LLC
CUSTODIAN, TRANSFER AGENT, AND DIVIDEND DISBURSING AGENT
State Street Bank and Trust Company
LEGAL COUNSEL
Paul Hasting LLP | |
This report is submitted for the general information of the shareholders of the Gabelli Gold Fund, Inc. It is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus.
| ||
| GAB008Q217SR | ||
Item 2. Code of Ethics.
Not applicable.
Item 3. Audit Committee Financial Expert.
Not applicable.
Item 4. Principal Accountant Fees and Services.
Not applicable.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Investments.
| (a) | Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period is included as part of the report to shareholders filed under Item 1 of this form. |
| (b) | Not applicable. |
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the procedures by which the shareholders may recommend nominees to the registrant’s Board of Directors, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)), or this Item.
Item 11. Controls and Procedures.
| (a) | The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)). |
| (b) | There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d))) that occurred during the registrant’s second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
Item 12. Exhibits.
| (a)(1) | Not applicable. |
| (a)(2) | Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto. |
| (a)(3) | Not applicable. |
| (b) | Certifications pursuant to Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| (Registrant) Gabelli Gold Fund, Inc. |
| By (Signature and Title)* /s/ Bruce N. Alpert |
Bruce N. Alpert, Principal Executive Officer |
| Date 8/24/2017 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| By (Signature and Title)* /s/ Bruce N. Alpert |
Bruce N. Alpert, Principal Executive Officer |
| Date 8/24/2017 |
| By (Signature and Title)* /s/ John C. Ball |
John C. Ball, Principal Financial Officer and Treasurer |
| Date 8/24/2017 |
* Print the name and title of each signing officer under his or her signature.