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 811-07896 --------- Gabelli Global Series Funds, Inc. ------------------------------------------------------- (Exact name of registrant as specified in charter) One Corporate Center Rye, New York 10580-1422 ------------------------------------------------------- (Address of principal executive offices) (Zip code) Bruce N. Alpert Gabelli Funds, LLC One Corporate Center Rye, New York 10580-1422 ------------------------------------------------------- (Name and address of agent for service) registrant's telephone number, including area code: 1-800-422-3554 -------------- Date of fiscal year end: December 31 ----------- Date of reporting period: December 31, 2003 ----------------- 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. ss. 3507. ITEM 1. REPORTS TO STOCKHOLDERS. The Annual Report to Shareholders is attached herewith. THE GABELLI GLOBAL CONVERTIBLE SECURITIES FUND ANNUAL REPORT DECEMBER 31, 2003 TO OUR SHAREHOLDERS, The Sarbanes-Oxley Act requires a Fund's principal executive and financial officers to certify the entire contents of the semi-annual and annual shareholder reports in a filing with the Securities and Exchange Commission on Form N-CSR. This certification would cover the portfolio manager's commentary and subjective opinions if they are attached to or a part of the financial statements. Many of these comments and opinions would be difficult or impossible to certify. Because we do not want our portfolio managers to eliminate their opinions and/or restrict their commentary to historical facts, we have separated their commentary from the financial statements and investment portfolio and have sent it to you separately. Both the commentary and the financial statements, including the portfolio of investments, will be available on our website at www.gabelli.com/funds. Enclosed are the audited financial statements and the investment portfolio as of December 31, 2003 with a description of the factors that affected the performance during the past year. PERFORMANCE DISCUSSION During the fourth quarter, the Gabelli Global Convertible Securities Fund (the "Fund") generated a total rate of return of 5.11%, which includes its regular monthly distributions of ten cents per share. For 2003, the Fund was up 21.48%. This compares to the Merrill Lynch Global 300 Convertible Index, which gained 7.52% in the quarter and 21.20% for the year. In 2003, the Fund outperformed its benchmark and participated in 70% of the rally in global equities, which is in keeping with the hybrid nature of the convertible asset class. Global equity markets, as measured by the Morgan Stanley Capital International ("MSCI") World Free Index, rose 13.92% in the quarter and 30.81% for the year. Global bond markets, as measured by the AA1-rated Merrill Lynch Global Bond Index, rose 3.72% in the quarter and 11.71% since the beginning of the year. Speculative grade bonds, as measured by the B1-rated Merrill Lynch Global High Yield Index, which gained 6.64% during the quarter, were up 30.72% for the year. The strong performance of high yield debt was achieved despite the general increase in interest rates as credit spreads continued to tighten. The portfolio consists of approximately 53 investments, excluding cash and common stock. No single position represents more than 5% of the portfolio or any one sector more than 25%. The main sector weightings include Communications (i.e. Telecom and Media) at 24%, Consumer Non-cyclicals (18%) and Consumer Cyclicals (17%). Geographic allocations during the quarter remained relatively unchanged with a slight decline in Europe (26% to 22%), to the benefit of Asia (18% to 20%), as North America was stable (52%). These adjustments caused our investment in convertible bonds to fall from 71% of the portfolio to approximately 69% while our holdings in convertible preferred stock rose from 29% to 31%. About 47% of these convertibles offer a balanced total return profile with 35% being more bond-like and 18% more equity-like. This distribution changed from 55%, 14% and 29%, respectively, over the period. During the fourth quarter, we took profits in high-yielder Infogrammes, the French interactive entertainment software maker, which tendered for its convertibles in an exchange offer after completing a re-capitalization through its Atari subsidiary. Although more limited after last year's dramatic credit spread tightening, we continue to see selective opportunities in the busted convertible area. New investments in balanced convertibles included Suzuki Motor and Asia Optical. Our Nextel 4.75% 2007 convertibles were called and replaced with the 6%'s of 2011. Sincerely yours, /s/ BRUCE N. ALPERT Bruce N. Alpert President February 24, 2004 [GRAPHIC OMITTED] PLOT POINTS FOLLOW: COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE GABELLI GLOBAL CONVERTIBLE SECURITIES FUND, THE LIPPER CONVERTIBLE SECURITIES FUND AVERAGE AND THE UBS GLOBAL CONVERTIBLE INDEX Gabelli Global Lipper Convertible UBS Global Convertible Securities Securities Fund Convertible Fund Average Index 2/3/94 10,000 10,000 10,000 12/94 10,090 9,324 9,709 12/95 11,360 11,262 11,146 12/96 11,900 12,940 11,883 12/97 12,236 15,219 12,058 12/98 13,293 15,889 14,545 12/99 20,086 20,778 19,735 12/00 17,272 20,876 17,685 12/01 14,985 19,235 16,635 12/02 14,258 17,698 16,535 12/03 17,321 22,425 20,598 PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. The performance tables and graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. COMPARATIVE RESULTS - -------------------------------------------------------------------------------- AVERAGE ANNUAL RETURNS THROUGH DECEMBER 31, 2003 (A) SINCE QUARTER 1 YEAR 3 YEAR 5 YEAR INCEPTION (B) ------- ------ ------ ------ ------------- Gabelli Global Convertible Sec. Fund Class AAA ...... 5.11% 21.48% 0.09% 5.43% 5.77% UBS Global Convertible Index ........................ 8.21% 24.57% 5.23% 7.22% 7.89% Merrill Lynch Global Bond Index ..................... 3.72% 11.71% 10.22% 6.29% 6.96% MSCI AC World Free Index ............................14.52% 34.63% (2.84)% 0.02% 6.52% Class A ............................................. 4.95% 21.47% 0.09% 5.43% 5.77% (1.07)%(c) 14.42%(c) (1.82)%(c) 4.21%(c) 5.15%(c) Class B ............................................. 4.77% 20.68% (0.60)% 4.99% 5.55% 1.79%(d) 17.27%(d) (1.19)%(d) 4.75%(d) 5.55%(d) Class C ............................................. 4.88% 20.67% (0.36)% 5.15% 5.63% 4.28%(d) 19.98%(d) (0.36)%(d) 5.15%(d) 5.63%(d) (a) Past performance does not guarantee future results. Investment returns and the principal value of an investment will fluctuate. Total returns and average annual returns reflect changes in share price and reinvestment of dividends and are net of expenses. When shares are redeemed, they may be worth more or less than their original cost. The UBS (formerly Warburg Dillon Reed) Global Convertible Index, the Merrill Lynch Global Bond Index and the Morgan Stanley Capital International (MSCI) All Country (AC) World Free Index are unmanaged indicators of investment performance. Performance for periods less than one year is not annualized. The Class AAA Shares' net asset values are used to calculate performance for the periods prior to the issuance of Class A Shares, Class B Shares and Class C Shares on May 2, 2001, March 28, 2001 and November 26, 2001, respectively. The actual performance for the Class B Shares and Class C Shares would have been lower due to the additional expenses associated with these classes of shares. (b) From commencement of investment operations on February 3, 1994. (c) Includes the effect of the maximum 5.75% sales charge at the beginning of the period. (d) Includes the effect of the applicable contingent deferred sales charge at the end of the period shown for Class B and Class C Shares, respectively. Note: Investing in foreign securities involves risks not ordinarily associated with investments in domestic issues, including currency fluctuation, economic and political risks. - -------------------------------------------------------------------------------- 2 THE GABELLI GLOBAL CONVERTIBLE SECURITIES FUND PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2003 - -------------------------------------------------------------------------------- PRINCIPAL MARKET AMOUNT COST VALUE --------- ---- ----- CORPORATE BONDS -- 65.8% AEROSPACE -- 2.9% $ 500,000 GenCorp Inc., Sub. Deb. Cv., 5.750%, 04/15/07 ................ $ 452,312 $ 503,125 ----------- ----------- AGRICULTURE-- 1.3% 200,000 Bunge Ltd. Financial Corp., Cv., 3.750%, 11/15/22 ................ 220,443 234,250 ----------- ----------- AUTOMOTIVE: PARTS AND ACCESSORIES -- 1.9% 125,000 Standard Motor Products Inc., Sub. Deb. Cv., 6.750%, 07/15/09 ................ 125,000 117,500 20,000,000(b)Suzuki Motor Corp., Cv., Zero Coupon, 03/31/10+ .......... 208,471 209,180 ----------- ----------- 333,471 326,680 ----------- ----------- DIVERSIFIED INDUSTRIAL -- 5.4% 198,217(c)Elektrim Finance BV, 2.000%, 12/15/05 ................ 183,293 218,769 39,000,000(b)Fuji Seal Inc., Cv., Zero Coupon, 09/29/06 + ......... 385,879 455,970 177,905(c)Vivendi Universal SA, Cv., 1.000%, 03/01/06 ................ 179,123 262,260 ----------- ----------- 748,295 936,999 ----------- ----------- EDUCATIONAL SERVICES -- 2.3% 350,000 School Specialty Inc., Sub. Deb. Cv., 6.000%, 08/01/08 ................ 361,565 406,000 ----------- ----------- ELECTRONICS -- 1.6% 250,000 Asia Optical Co., Cv., Zero Coupon, 10/14/08+ .......... 276,201 273,700 ----------- ----------- ENERGY AND UTILITIES -- 3.0% 251,460(c)Belgelectric Finance SA, Cv., 1.500%, 08/04/04 ................ 240,151 322,449 110,000 Devon Energy Corp., Sub. Deb. Cv., 4.950%, 08/15/08 ................ 112,543 112,887 100,000 Hanover Compressor Co., Cv., 4.750%, 03/15/08 ................ 92,770 93,000 ----------- ----------- 445,464 528,336 ----------- ----------- ENTERTAINMENT -- 1.2% 200,000 Liberty Media Corp., Sub. Deb. Cv., 3.250%, 03/15/31 (a) ............ 200,000 209,000 ----------- ----------- EQUIPMENT AND SUPPLIES -- 4.8% 40,000,000(b)Horiba Ltd., Cv., 0.850%, 03/17/06 ................ 363,239 427,844 297,000(c)Neopost SA, Cv., 1.500%, 02/01/05 ................ 261,659 407,921 ----------- ----------- 624,898 835,765 ----------- ----------- PRINCIPAL MARKET AMOUNT COST VALUE --------- ---- ----- FINANCIAL SERVICES -- 4.3% $ 175,000 First Data Corp., Cv., 2.000%, 03/01/08 ................ $ 181,216 $ 190,313 200,000(d)Forester Ltd., Cv., 3.750%, 11/12/09 ................ 376,989 455,204 200,000(c)Wuertt AG Versich-Beteil, Cv., 1.150%, 04/17/08 ................ 141,653 113,828 ----------- ----------- 699,858 759,345 ----------- ----------- FOOD AND BEVERAGE -- 3.7% 620,000(c)Parmalat Netherlands BV, Cv., 0.875%, 06/30/21 (e) ............ 552,059 211,150 278,200(c)Pernod Ricard SA, Cv., 2.500%, 01/01/08 ................ 337,129 432,833 ----------- ----------- 889,188 643,983 ----------- ----------- HEALTH CARE -- 5.1% 40,000,000(b)Fujirebio Inc., Cv., Zero Coupon, 12/29/06 + ......... 357,900 470,281 400,000 Quest Diagnostic Inc., Sub. Deb. Cv., 1.750%, 11/30/21 ................ 408,486 412,500 ----------- ----------- 766,386 882,781 ----------- ----------- METALS AND MINING -- 3.5% 150,000 Agnico Eagle Mines Ltd., Sub. Deb. Cv., 4.500%, 02/15/12 ................ 181,594 166,507 150,000 Freeport-McMoRan Copper & Gold Inc., Cv., 8.250%, 01/31/06 ................ 168,330 446,438 ----------- ----------- 349,924 612,945 ----------- ----------- PAPER AND FOREST PRODUCTS -- 1.8% 30,000,000(b) Daio Paper Corp., Cv., 0.700%, 03/31/08 ................ 298,826 308,762 ----------- ----------- PUBLISHING -- 1.2% 150,000(c) VNU NV, Sub. Deb. Cv., 1.750%, 11/15/04 ................ 147,241 210,079 ----------- ----------- RETAIL -- 7.9% 35,000,000(b)Belluna Co. Ltd., Cv., 0.200%, 03/30/07 ................ 314,870 378,837 25,000,000(b)Don Quijote Co. Ltd., Cv., 0.250%, 06/30/07 ................ 268,088 319,615 30,000,000(b)Kasumi Co. Ltd., Cv., 1.100%, 02/28/07 ................ 294,063 303,025 150,000 The Gap Inc., Cv., 5.750%, 03/15/09 ................ 162,629 230,813 10,000,000(b)USS Co. Ltd., Cv., Zero Coupon, 09/29/06 + ......... 84,807 150,281 ----------- ----------- 1,124,457 1,382,571 ----------- ----------- See accompanying notes to financial statements. 3 THE GABELLI GLOBAL CONVERTIBLE SECURITIES FUND PORTFOLIO OF INVESTMENTS (CONTINUED) -- DECEMBER 31, 2003 - -------------------------------------------------------------------------------- PRINCIPAL MARKET AMOUNT COST VALUE --------- ---- ----- TELECOMMUNICATIONS -- 10.3% $ 250,000(c)Colt Telecom Group plc, Cv., 2.000%, 12/16/06 ................ $ 261,045 $ 342,930 225,000 Harris Corp., Sub. Deb. Cv., 3.500%, 08/15/22 ................ 232,765 251,437 250,000(c)Portugal Telecom SGPS SA, Cv., 1.500%, 06/07/04 ................ 258,041 314,755 325,000(c)Telecom Italia SpA, Cv., 1.500%, 01/01/10 ................ 387,217 495,127 350,000 Telefonos de Mexico SA, Sub. Deb. Cv., 4.250%, 06/15/04 ................ 427,632 402,055 ----------- ----------- 1,566,700 1,806,304 ----------- ----------- TRANSPORTATION -- 1.1% 15,000,000(b) Yamaha Motor Co., Cv., Zero Coupon, 03/31/09 + ......... 123,325 196,868 ----------- ----------- WIRELESS COMMUNICATIONS -- 2.5% 350,000 Nextel Communications Inc., Cv., 6.000%, 06/01/11 ................ 389,149 435,750 ----------- ----------- TOTAL CORPORATE BONDS ............. 10,017,703 11,493,243 ----------- ----------- SHARES ----- PREFERRED STOCKS -- 27.6% AEROSPACE -- 2.9% 40,000 BAE Systems plc, 7.750% Cv. Pfd. ................. 101,529 87,360 4,000 Northrop Grumman Corp., 7.250% Cv. Pfd. ................. 450,540 414,800 ----------- ----------- 552,069 502,160 ----------- ----------- AUTOMOTIVE -- 0.8% 5,000 General Motors Corp., 5.250% Cv. Pfd., Ser. B ......... 137,494 134,350 ----------- ----------- CABLE -- 2.4% 17,000 CVC Equity Securities Trust I, 6.500% Cv. Pfd. ................. 344,522 424,490 ----------- ----------- DIVERSIFIED INDUSTRIAL -- 1.9% 6,500 Cendant Corp., 7.750% Cv. Pfd. ................. 272,232 325,390 ----------- ----------- ENERGY AND UTILITIES -- 7.7% 4,500 Arch Coal Inc., 5.000% Cv. Pfd. ................. 259,875 384,030 7,000 Calpine Capital Trust II, 5.500% Cv. Pfd. ................. 304,500 309,750 2,000 Dominion Resources Inc., 9.500% Cv. Pfd. ................. 100,000 114,500 6,500 FPL Group Inc., 8.000% Cv. Pfd., Ser. B ......... 366,730 367,185 3,500 Kerr-McGee Corp., 5.500% Cv. Pfd. ................. 150,010 174,650 ----------- ----------- 1,181,115 1,350,115 ----------- ----------- FINANCIAL SERVICES -- 1.5% 1,000 Doral Financial Corp., 4.750% Cv. Pfd. (a) ............. 250,000 258,500 ----------- ----------- MARKET SHARES COST VALUE --------- ---- ----- HEALTH CARE -- 3.6% 10,000 Omnicare Inc., 4.000% Cv. Pfd. ................. $ 504,375 $ 637,500 ----------- ----------- PAPER AND FOREST PRODUCTS -- 0.7% 2,000 Amcor Ltd., 7.250% Cv. Pfd. ................. 94,000 125,000 ----------- ----------- TELECOMMUNICATIONS -- 4.1% 10,000 Cincinnati Bell Inc., 6.750% Cv. Pfd., Ser. B ......... 416,750 410,000 12,000 Citizens Communications, 6.750% Cv. Pfd. ................. 264,840 303,480 ----------- ----------- 681,590 713,480 ----------- ----------- TRANSPORTATION -- 2.0% 10,000 Teekay Shipping Corp., 7.250% Cv. Pfd. ................. 315,500 358,500 ----------- ----------- TOTAL PREFERRED STOCKS 4,332,897 4,829,485 ----------- ----------- COMMON STOCKS -- 3.3% EQUIPMENT AND SUPPLIES -- 1.2% 9,886 Sato Corp. ........................ 184,786 215,394 ----------- ----------- METALS AND MINING -- 1.0% 11,500 Meridian Gold Inc.+ ............... 198,950 168,015 ----------- ----------- TELECOMMUNICATIONS -- 1.1% 5,000 Commonwealth Telephone Enterprises Inc.+ ............... 186,750 188,750 ----------- ----------- TOTAL COMMON STOCKS ............... 570,486 572,159 ----------- ----------- PRINCIPAL AMOUNT ------ U.S. GOVERNMENT OBLIGATIONS -- 3.4% $ 601,000 U.S. Treasury Bills, 0.867% to 0.936%++, 01/02/04 to 02/12/04 ............ 600,869 600,869 ----------- ----------- TOTAL INVESTMENTS -- 100.1% .......................... $15,521,955 17,495,756 =========== OTHER ASSETS AND LIABILITIES (NET) -- (0.1)% (21,837) ----------- NET ASSETS-- 100.0% ............................ $17,473,919 =========== - ---------------- For Federal tax purposes: Aggregate cost .................................. $15,521,955 =========== Gross unrealized appreciation ................... $ 2,483,937 Gross unrealized depreciation ................... (510,136) ----------- Net unrealized appreciation ..................... $ 1,973,801 =========== - ---------------- (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 December 31, 2003, the market value of Rule 144A securities amounted to $467,500 or 2.68% of net assets. (b) Principal amount denoted in Japanese Yen. (c) Principal amount denoted in Euros. (d) Principal amount denoted in British Pounds. (e) Security in default. + Non-income producing security. ++ Represents annualized yield at date of purchase. See accompanying notes to financial statements. 4 THE GABELLI GLOBAL CONVERTIBLE SECURITIES FUND STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 2003 - -------------------------------------------------------------------------------- ASSETS: Investments, at value (Cost $15,521,955) ................... $17,495,756 Cash and foreign currency, at value (Cost $90,627) ........................................... 96,519 Receivable for Fund shares sold ............................ 26,083 Dividends, reclaims and interest receivable ................ 89,855 Other assets ............................................... 2,317 ----------- TOTAL ASSETS ............................................... 17,710,530 ----------- LIABILITIES: Payable for investments purchased .......................... 113,700 Payable for Fund shares redeemed ........................... 43,162 Payable for investment advisory fees ....................... 22,960 Payable for distribution fees .............................. 3,762 Other accrued expenses ..................................... 53,027 ----------- TOTAL LIABILITIES .......................................... 236,611 ----------- NET ASSETS applicable to 2,581,674 shares outstanding ....................................... $17,473,919 =========== NET ASSETS CONSIST OF: Capital stock, at par value ................................ $ 2,582 Additional paid-in capital ................................. 17,090,589 Accumulated net realized loss on investments and foreign currency transactions ........................ (1,600,488) Net unrealized appreciation on investments and foreign currency transactions ........................ 1,981,236 ----------- TOTAL NET ASSETS ........................................... $17,473,919 =========== SHARES OF CAPITAL STOCK: CLASS AAA: Net Asset Value, offering and redemption price per share ($17,281,074 / 2,552,832 shares outstanding) ...................................... $6.77 ===== CLASS A: Net Asset Value and redemption price per share ($85,801 / 12,666 shares outstanding) .................... $6.77 ===== Maximum offering price per share (NAV / 0.9425, based on maximum sales charge of 5.75% of the offering price at December 31, 2003) .................................... $7.18 ===== CLASS B: Net Asset Value and offering price per share ($67,896 / 10,298 shares outstanding) .................... $6.59(a) ===== CLASS C: Net Asset Value and offering price per share ($39,148 / 5,878 shares outstanding) ..................... $6.66(a) ===== - ---------------------- (a) Redemption price varies based on length of time held. STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2003 - -------------------------------------------------------------------------------- INVESTMENT INCOME: Dividends (net of foreign taxes of $1,780) .................. $ 251,427 Interest .................................................... 243,607 ---------- TOTAL INVESTMENT INCOME ..................................... 495,034 ---------- EXPENSES: Investment advisory fees .................................... 158,388 Distribution fees ........................................... 40,088 Shareholder communications expenses ......................... 36,138 Shareholder services fees ................................... 28,847 Registration fees ........................................... 24,299 Legal and audit fees ........................................ 18,297 Custodian fees .............................................. 15,647 Interest expense ............................................ 1,530 Directors' fees ............................................. 1,034 Miscellaneous expenses ...................................... 3,519 ---------- TOTAL EXPENSES .............................................. 327,787 ---------- Expense Reimbursement ....................................... (9,740) ---------- TOTAL NET EXPENSES .......................................... 318,047 ---------- NET INVESTMENT INCOME ....................................... 176,987 ---------- NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS: Net realized gain on investments and foreign currency transactions ............................. 225,461 Net change in unrealized appreciation/ depreciation on investments and foreign currency transactions ..................................... 2,678,711 ---------- NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS ..................................... 2,904,172 ---------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ........................................... $3,081,159 ========== % OF MARKET MARKET GEOGRAPHIC DIVERSIFICATION VALUE VALUE - ------------------------------------ ----- ------ North America ............................... 51.6% $ 9,025,779 Europe ...................................... 22.2% 3,874,664 Japan ....................................... 19.6% 3,436,058 Latin America ............................... 4.3% 760,555 Asia/Pacific ................................ 2.3% 398,700 ----- ----------- 100.0% $17,495,756 ===== =========== See accompanying notes to financial statements. 5 THE GABELLI GLOBAL CONVERTIBLE SECURITIES FUND STATEMENT OF CHANGES IN NET ASSETS - -------------------------------------------------------------------------------- YEAR ENDED YEAR ENDED DECEMBER 31, 2003 DECEMBER 31, 2002 ----------------- ----------------- OPERATIONS: Net investment income ........................................................ $ 176,987 $ 88,709 Net realized gain/(loss) on investments and foreign currency transactions .... 225,461 (1,218,691) Net change in unrealized appreciation/depreciation on investments and foreign currency transactions .......................................... 2,678,711 711,485 ----------- ----------- NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS .............. 3,081,159 (418,497) ----------- ----------- DISTRIBUTIONS TO SHAREHOLDERS: Net investment income Class AAA .................................................................. (270,727) (48,067) Class A .................................................................... (665) (38) Class B .................................................................... (843) (101) Class C .................................................................... (353) (60) ----------- ----------- (272,588) (48,266) ----------- ----------- Return of Capital Class AAA .................................................................. (2,551,348) (1,477,728) Class A .................................................................... (6,270) (1,172) Class B .................................................................... (7,941) (3,101) Class C .................................................................... (3,329) (1,855) ----------- ----------- (2,568,888) (1,483,856) ----------- ----------- TOTAL DISTRIBUTIONS TO SHAREHOLDERS .......................................... (2,841,476) (1,532,122) ----------- ----------- CAPITAL SHARE TRANSACTIONS: Class AAA .................................................................... 7,713,607 2,971,655 Class A ...................................................................... 83,934 (5,415) Class B ...................................................................... 44,081 21,582 Class C ...................................................................... 26,679 14,694 ----------- ----------- NET INCREASE IN NET ASSETS FROM CAPITAL SHARE TRANSACTIONS ................... 7,868,301 3,002,516 ----------- ----------- REDEMPTION FEES: Redemption fees .............................................................. 10,969 -- ----------- ----------- NET INCREASE IN NET ASSETS ................................................... 8,118,953 1,051,897 NET ASSETS: Beginning of period .......................................................... 9,354,966 8,303,069 ----------- ----------- End of period ................................................................ $17,473,919 $ 9,354,966 =========== =========== See accompanying notes to financial statements. 6 THE GABELLI GLOBAL CONVERTIBLE SECURITIES FUND NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 1. ORGANIZATION. The Gabelli Global Convertible Securities Fund (the "Fund"), a series of Gabelli Global Series Funds, Inc. (the "Corporation"), was organized on July 16, 1993 as a Maryland corporation. The Fund is a non-diversified, open-end management investment company registered under the Investment Company Act of 1940, as amended (the "1940 Act"), and one of four separately managed portfolios (collectively, the "Portfolios") of the Corporation. The Fund's primary objective is to obtain a high rate of total return. The Fund commenced investment operations on February 3, 1994. 2. SIGNIFICANT ACCOUNTING POLICIES. The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts and disclosures in the 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 so determines, by such other method as the Board of Directors 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 foreign markets are generally valued at the preceding closing values of such securities on their respective exchanges or if, after the close, market conditions change significantly, certain foreign securities may be fair valued pursuant to procedures established by the Board of Directors. Securities and assets for which market quotations are not readily available are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Board of Directors. Short term debt securities with remaining maturities of 60 days or less are valued at amortized cost, unless the Board of Directors determines such does not reflect the securities' fair value, in which case these securities will be valued at their fair value as determined by the Board of Directors. Debt instruments having a maturity greater than 60 days for which market quotations are readily available are valued at the latest average of the bid and asked prices. If there were no asked prices quoted on such day, the security is valued using the closing bid price. Options are valued at the last sale price on the exchange on which they are listed. If no sales of such options have taken place that day, they will be valued at the mean between their closing bid and asked prices. REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements with primary government securities dealers recognized by the Federal Reserve Board with member banks of the Federal Reserve System or with other brokers or dealers that meet credit guidelines established by the Adviser and reviewed by the Board of Directors. Under the terms of a typical repurchase agreement, the Fund takes possession of an underlying debt obligation subject to an obligation of the seller to repurchase, and the Fund to resell, the obligation at an agreed-upon price and time, thereby determining the yield during the Fund's holding period. The Fund will always receive and maintain securities as collateral whose market value, including accrued interest, will be at least equal to 102% of the dollar amount invested by the Fund in each agreement. The Fund will make payment for such securities only upon physical delivery or upon evidence of book entry transfer of the collateral to the account of the custodian. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market on a daily basis to maintain the adequacy of the collateral. If the seller defaults and the value of the collateral 7 THE GABELLI GLOBAL CONVERTIBLE SECURITIES FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- declines or if bankruptcy proceedings are commenced with respect to the seller of the security, realization of the collateral by the Fund may be delayed or limited. At December 31, 2003, there were no repurchase agreements. OPTIONS. The Fund may purchase or write call or put options on securities or indices. As a writer of call options, the Fund receives a premium at the outset and then bears the risk of unfavorable changes in the price of the financial instrument underlying the option. The Fund would incur a loss if the price of the underlying financial instrument increases between the date the option is written and the date on which the option is terminated. The Fund would realize a gain, to the extent of the premium, if the price of the financial instrument decreases between those dates. As a purchaser of put options, the Fund pays a premium for the right to sell to the seller of the put option the underlying security at a specified price. The seller of the put has the obligation to purchase the underlying security upon exercise at the exercise price. If the price of the underlying security declines, the Fund would realize a gain upon sale or exercise. If the price of the underlying security increases, the Fund would realize a loss upon sale or at expiration date, but only to the extent of the premium paid. For the year ended December 31, 2003, the Fund did not purchase or write options. FUTURES CONTRACTS. The Fund may engage in futures contracts for the purpose of hedging against changes in the value of its portfolio securities and in the value of securities it intends to purchase. Upon entering into a futures contract, the Fund is required to deposit with the broker an amount of cash or cash equivalents equal to a certain percentage of the contract amount. This is known as the "initial margin". Subsequent payments ("variation margin") are made or received by the Fund each day, depending on the daily fluctuation of the value of the contract. The daily changes in the contract are included in unrealized gains or losses. The Fund recognizes a realized gain or loss when the contract is closed. At December 31, 2003, there were no open futures contracts. There are several risks in connection with the use of futures contracts as a hedging device. The change in value of futures contracts primarily corresponds with the value of their underlying instruments, which may not correlate with the change in value of the hedged investments. In addition, there is the risk that the Fund may not be able to enter into a closing transaction because of an illiquid secondary market. FORWARD FOREIGN EXCHANGE CONTRACTS. The Fund may engage in forward foreign exchange contracts for hedging a specific transaction with respect to either the currency in which the transaction is denominated or another currency as deemed appropriate by the Adviser. Forward foreign exchange contracts are valued at the forward rate and are marked-to-market daily. The change in market value is included in unrealized appreciation/depreciation on investments and foreign currency transactions. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. The use of forward foreign exchange contracts does not eliminate fluctuations in the underlying prices of the Fund's portfolio securities, but it does establish a rate of exchange that can be achieved in the future. Although forward foreign exchange contracts limit the risk of loss due to a decline in the value of the hedged currency, they also limit any potential gain/(loss) that might result should the value of the currency increase. In addition, the Fund could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts. FOREIGN CURRENCY TRANSLATION. 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 the exchange rates prevailing at the end of the period, and 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, which 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 transactions. Net realized foreign currency gains and losses resulting from changes in exchange rates include foreign 8 THE GABELLI GLOBAL CONVERTIBLE SECURITIES FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- 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 trade date and subsequent sale trade date is included in realized gain/(loss) on investments. SECURITIES TRANSACTIONS AND INVESTMENT INCOME. Securities transactions are accounted for on the trade date with realized gain or loss on investments determined by using the identified cost method. Interest income (including amortization of premium and accretion of discount) is recorded as earned. Premiums and discounts on debt securities are amortized using the yield to maturity method. Dividend income is recorded on the ex-dividend date. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders are recorded on the ex-dividend date. Income and long term capital gain distributions are determined in accordance with Federal income tax regulations which may differ from accounting principles generally accepted in the U.S. These differences are primarily due to differing treatments of income and gains on various investment securities held by the Fund, timing differences and differing characterization of distributions made by the Fund. For the year ended December 31, 2003, reclassifications were made to decrease accumulated net investment loss for $2,664,489 and to increase accumulated net realized loss on investments and foreign currency transactions for $95,601, with an offsetting adjustment to additional paid-in capital. The tax characters of distributions paid during the Fiscal year ended December 31, 2003 and December 31, 2002 were as follows: YEAR ENDED YEAR ENDED DECEMBER 31, 2003 DECEMBER 31, 2002 ----------------- ----------------- DISTRIBUTIONS PAID FROM: Ordinary income ................... $ 272,588 $ 48,266 Non taxable return on capital ..... 2,568,888 1,483,856 ---------- ---------- Total distributions paid .......... $2,841,476 $1,532,122 ========== ========== EXPENSES. Certain administrative expenses are common to, and allocated among, the Portfolios and then, among the Classes of Shares. Such allocations are made on the basis of each Portfolio's and Class' average net assets or other criteria directly affecting the expenses as determined by the Adviser. 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. It is the Fund's policy to comply with the requirements of the InternalRevenue 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. Dividends and interest from non-U.S. sources received by the Fund are generally subject to non-U.S. withholding taxes at rates ranging up to 30%. Such withholding taxes may be reduced or eliminated under the terms of applicable U.S. income tax treaties, and the Fund intends to undertake any procedural steps required to claim the benefits of such treaties. If the value of more than 50% of the Fund's total assets at the close of any taxable year consists of stocks or securities of non-U.S. corporations, the Fund is permitted and may elect to treat any non-U.S. taxes paid by it as paid by its shareholders. As of December 31, 2003, the components of accumulated earnings/(losses) on a tax basis were as follows: Accumulated capital loss carryforward .................. $(1,600,488) Net unrealized appreciation ............................ 1,973,801 Net unrealized appreciation on foreign receivables and payables .............................. 7,435 ----------- Total accumulated gain ................................. $ 380,748 =========== 9 THE GABELLI GLOBAL CONVERTIBLE SECURITIES FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- The Fund has a net capital loss carryforward for Federal income tax purposes at December 31, 2003 of $1,600,488. This capital loss carryforward is available to reduce future distributions of net capital gains to shareholders. $594,413 of the loss carryforward is available through 2009; and $1,006,075 is available through 2010. For the year ended December 31, 2003, the Fund deducted net capital losses carryovers from prior years against its current year net capital gains in the amount of $129,860. 3. INVESTMENT ADVISORY AGREEMENT. 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 the Fund's 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 its affiliates. The Adviser has voluntarily agreed to reimburse expenses of the Fund to the extent necessary to maintain the annualized total operating expenses (exclusive of interest expense) of 2.00%, 2.00%, 2.75% and 2.75% of average daily net assets for Class AAA, A, B and C, respectively. For the year ended December 31, 2003, the Adviser reimbursed the Fund in the amount of $9,740. 4. DISTRIBUTION PLAN. The Fund's Board of Directors has adopted a distribution plan (the "Plan") pursuant to Rule 12b-1 under the 1940 Act. For the year ended December 31, 2003 the Fund incurred distribution costs payable to Gabelli & Company, Inc., an affiliate of the Adviser, of $39,340 and $90 for Class AAA and Class A Shares, respectively, or 0.25% of average daily net assets, the annual limitation under the Plan. Class B and Class C incurred distribution costs of $466 and $192, respectively, or 1.00% of average daily net assets, the annual limitation under this Plan. Such payments are accrued daily and paid monthly. 5. PORTFOLIO SECURITIES. Purchases and sales of securities for the year ended December 31, 2003, other than short term securities, aggregated $12,471,593 and $7,685,146, respectively. 6. TRANSACTIONS WITH AFFILIATES. During the year ended December 31, 2003, Gabelli & Company, Inc. received $637 from investors representing commissions (sales charges and underwriting fees) on sales of Fund shares. 7. LINE OF CREDIT. The Fund has access to an unsecured line of credit up to $25,000,000 from the custodian for temporary borrowing purposes. Borrowings under this arrangement bear interest at 0.75% above the Federal Funds rate on outstanding balances. There were no borrowings outstanding at December 31, 2003. The average daily amount of borrowings within the year ended December 31, 2003 was $20,981 with a related weighted average interest rate of 1.80%. The maximum amount borrowed at any time during the year ended December 31, 2003 was $1,297,000. 8. CAPITAL STOCK TRANSACTIONS. The Fund offers four classes of shares -- Class AAA Shares, Class A Shares, Class B Shares, and Class C Shares. Class AAA Shares are offered through selected dealers without a sales charge. Class A Shares are subject to a maximum front-end sales charge of 5.75%. Class B Shares are subject to a contingent deferred sales charge (CDSC) upon redemption within six years of purchase. The applicable CDSC is equal to a declining percentage of the lesser of the net asset value per share at the date of original purchase or at the date of redemption, based on the length of time held. Class C Shares are subject to a 1% CDSC for two years after purchase (one year beginning May 1, 2004). The Fund imposes a redemption fee of 2.00% on Class AAA and Class A Shares that are redeemed within sixty days of purchase.The redemption fee is deducted from the proceeds otherwise payable to the redeeming shareholders. The redemption fees returned to the assets of the Fund during the period ended December 31, 2003 amounted to $10,969. 10 - -------------------------------------------------------------------------------- THE GABELLI GLOBAL CONVERTIBLE SECURITIES FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) Transactions in shares of capital stock were as follows: YEAR ENDED YEAR ENDED DECEMBER 31, 2003 DECEMBER 31, 2002 ---------------------------- ------------------------- SHARES AMOUNT SHARES AMOUNT ---------- ------------ -------- ----------- CLASS AAA CLASS AAA ---------------------------- ------------------------- Shares sold ...................................... 3,253,286 $ 21,853,374 659,466 $ 4,907,845 Shares issued upon reinvestment of dividends ..... 394,703 2,639,266 204,813 1,434,450 Shares redeemed .................................. (2,494,872) (16,779,033) (464,885) (3,370,640) ---------- ------------ -------- ----------- Net increase ................................. 1,153,117 $ 7,713,607 399,394 $ 2,971,655 ========== ============ ======== =========== CLASS A CLASS A ---------------------------- ------------------------- Shares sold ...................................... 12,044 $ 81,495 105 $ 532 Shares issued upon reinvestment of dividends ..... 361 2,439 67 487 Shares redeemed .................................. -- -- (1,030) (6,434) ---------- ------------ -------- ----------- Net increase (decrease) ...................... 12,405 $ 83,934 (858) $ (5,415) ========== ============ ======== =========== CLASS B CLASS B ---------------------------- ------------------------- Shares sold ...................................... 7,064 $ 46,753 2,830 $ 20,954 Shares issued upon reinvestment of dividends ..... 327 2,142 93 628 Shares redeemed .................................. (745) (4,814) -- -- ---------- ------------ -------- ----------- Net increase ................................. 6,646 $ 44,081 2,923 $ 21,582 ========== ============ ======== =========== CLASS C CLASS C ---------------------------- ------------------------- Shares sold ...................................... 4,466 $ 30,016 1,806 $ 13,976 Shares issued upon reinvestment of dividends ..... 324 2,148 104 718 Shares redeemed .................................. (834) (5,485) -- -- ---------- ------------ -------- ----------- Net increase ................................. 3,956 $ 26,679 1,910 $ 14,694 ========== ============ ======== =========== 9. CHANGE IN FUND'S AUDITOR. On November 19, 2003, based on the recommendation of the Audit Committee of the Fund, the Board of Directors voted to appoint Ernst & Young LLP as the Fund's independent auditor for the current fiscal year ending December 31, 2003, replacing Grant Thornton LLP ("GT"). During the two most recent fiscal years, GT audit reports contained no adverse opinion or disclaimer of opinion; nor were the reports qualified or modified as to uncertainty, audit scope, or accounting principles. Further, there were no disagreements between the Fund and GT on accounting principles, financial statement disclosure or audit scope, which if not resolved to the satisfaction of GT would have caused it to make reference to the disagreements in connection with its report. 10. OTHER MATTERS. On October 7, 2003, the Fund's Adviser received a subpoena from the Attorney General of the State of New York requesting information on mutual fund shares trading practices. The Adviser is fully cooperating in responding to the request. The Fund does not believe that this matter will have a material adverse effect on the Fund's financial position or results of the operations. 11 THE GABELLI GLOBAL CONVERTIBLE SECURITIES FUND FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- Selected data for a share of capital stock outstanding throughout each period: INCOME FROM INVESTMENT OPERATIONS DISTRIBUTIONS ----------------------------------------------------- ------------------------------------------------------- Net Net Asset Net Realized and Total Net Period Value, Investment Unrealized from Net Realized Return Ended Beginning Income Gain (Loss) on Investment Investment Gain on of Total December 31, of Period (Loss) Investments Operations Income Investments Capital Distributions - ------------ --------- -------- -------------- ---------- ---------- ----------- ------- ------------- CLASS AAA 2003(h) $ 6.66 $ 0.07 $ 1.24 $ 1.31 $(0.11) -- $(1.09) $(1.20) 2002(h) 8.29 0.07 (0.50) (0.43) (0.04) -- (1.16) (1.20) 2001(h) 10.86 (0.09) (1.28) (1.37) -- $(0.00)(d) (1.20) (1.20) 2000(h) 13.88 (0.54) (1.28) (1.82) -- (1.20) -- (1.20) 1999 10.12 (0.18) 5.33 5.15 (0.03) (1.36) -- (1.39) CLASS A 2003(h) 6.66 0.07 1.24 1.31 (0.11) -- (1.09) (1.20) 2002(h) 8.28 0.07 (0.49) (0.42) (0.04) -- (1.16) (1.20) 2001(b)(h) 10.27 (0.09) (1.10) (1.19) -- (0.00)(d) (0.80) (0.80) CLASS B 2003(h) 6.55 0.03 1.21 1.24 (0.07) -- (1.13) (1.20) 2002(h) 8.23 0.02 (0.50) (0.48) (0.04) -- (1.16) (1.20) 2001(a)(h) 10.04 (0.16) (0.75) (0.91) -- (0.00)(d) (0.90) (0.90) CLASS C 2003(h) 6.61 0.03 1.22 1.25 (0.07) -- (1.13) (1.20) 2002(h) 8.27 0.02 (0.48) (0.46) (0.04) -- (1.16) (1.20) 2001(c)(h) 8.58 (0.14) 0.03 (0.11) -- (0.00)(d) (0.20) (0.20) NET ASSETS/SUPPLEMENTAL DATA --------------------------------------------------- Net Operating Operating Net Asset Net Assets Investment Expenses to Expenses to Period Value, End of Income (Loss) Average Net Average Net Portfolio Ended Redemption End of Total Period to Average Assets Before Assets Net of Turnover December 31, Fees Period Return+ (in 000's) Net Assets Reimbursement Reimbursement(e)(f) Rate - ------------ ---------- -------- ------- ---------- ----------- -------------- ------------------ --------- CLASS AAA 2003(h) $0.00(d) $ 6.77 21.5% $17,281 1.12% 2.07% 2.01% 54% 2002(h) -- 6.66 (4.9) 9,316 0.97 2.83 2.83 33 2001(h) -- 8.29 (13.2) 8,288 (0.93) 2.69 2.69 49 2000(h) -- 10.86 (14.0) 10,552 (3.19) 2.64 2.64 89 1999 -- 13.88 51.1 17,593 (2.29) 2.44 2.44 151 CLASS A 2003(h) 0.00(d) 6.77 21.5 86 1.12 2.07 2.01 54 2002(h) -- 6.66 (4.7) 2 0.97 2.83 2.83 33 2001(b)(h) -- 8.28 (13.3) 9 (0.93)(g) 2.69(g) 2.69 49 CLASS B 2003(h) 0.00(d) 6.59 20.7 68 0.37 2.82 2.76 54 2002(h) -- 6.55 (5.6) 24 0.22 3.58 3.58 33 2001(a)(h) -- 8.23 (13.8) 6 (1.68)(g) 3.44(g) 3.44 49 CLASS C 2003(h) 0.00(d) 6.66 20.7 39 0.37 2.82 2.76 54 2002(h) -- 6.61 (5.3) 13 0.22 3.58 3.58 33 2001(c)(h) -- 8.27 (13.5) 0 (1.68)(g) 3.44(g) 3.44 49 - -------------------------------------------------------------------------------- + Total return represents aggregate total return of a hypothetical $1,000 investment at the beginning of the period and sold at the end of the period including reinvestment of dividends. Total return for the period of less than one year is not annualized. (a) From March 28, 2001, the date the shares were continuously outstanding. (b) From May 2, 2001, the date the shares were continuously outstanding. Class A shares were outstanding for the period March 13, 2000 through November 30, 2000. Financial Highlights are not presented for Class A for the period ending December 31, 2000, as the information for this period is not considered meaningful. (c) From November 26, 2001, the date the shares were continuously outstanding. (d) Amount represents less than $0.005 per share. (e) The Fund incurred interest expense during the years ended December 31, 2003, 2002 and 2001. If interest expense had not been incurred, the ratios of operating expenses to average net assets would have been 2.00%, 2.82% and 2.67% (Class AAA), 2.00%, 2.82% and 2.67% (Class A), 2.75%, 3.57% and 3.42% (Class B) and 2.75%, 3.57% and 3.42% (Class C), respectively. (f) The Fund incurred interest expense during the years ended December 31, 2000 and 1999. If interest expense had not been incurred, the ratios of operating expenses to average net assets would have been 2.46% and 2.42%, respectively. (g) Annualized. (h) Per share amounts have been calculated using the average month-end shares outstanding method. See accompanying notes to financial statements. 12 THE GABELLI GLOBAL CONVERTIBLE SECURITIES FUND REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS - -------------------------------------------------------------------------------- Shareholders and Board of Directors of The Gabelli Global Convertible Securities Fund We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of The Gabelli Global Convertible Securities Fund (the "Fund"), a series of Gabelli Global Series Funds, Inc., as of December 31, 2003, and the related statement of operations, the statement of changes in net assets, and financial highlights for the year then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The statement of changes in net assets of the Fund for the year ended December 31, 2002 and the financial highlights for each of the four years in the period then ended were audited by other auditors whose report dated January 31, 2003, expressed an unqualified opinion on those financial statements and financial highlights. We conducted our audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of securities owned as of December 31, 2003, by correspondence with the Fund's custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of The Gabelli Global Convertible Securities Fund at December 31, 2003, the results of its operations, the changes in its net assets, and the financial highlights for the year then ended, in conformity with accounting principles generally accepted in the United States. /s/ ERNST & YOUNG New York, New York February 10, 2004 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2003 TAX NOTICE TO SHAREHOLDERS (Unaudited) For the fiscal year ended December 31, 2003, the Fund paid to shareholders an ordinary income dividend (comprised of net investment income) totaling $0.11, $0.11, $0.07 and $0.07 per share for Class AAA, Class A, Class B and Class C, respectively. For the fiscal year ended December 31, 2003, 84.15% of the ordinary income dividend qualifies for the dividend received deduction available to corporations, and 86.3% of the ordinary income distribution was qualifying dividend income. Additionally, 91% of the distributions paid in 2003 were a nontaxable return of capital for Class AAA and Class A Shares (95% for Class B and Class C Shares) which should be deducted from the cost basis of the securities held as of the payment date. U.S. GOVERNMENT INCOME The percentage of the ordinary income dividend paid by the Fund during fiscal year 2003 which was derived from U.S. Treasury securities was 3.43%. Such income is exempt from state and local tax in all states. However, many states, including New York and California, allow a tax exemption for a portion of the income earned only if a mutual fund has invested at least 50% of its assets at the end of each quarter of the Fund's fiscal year in U.S. Government securities. The Gabelli Global Convertible Securities Fund did not meet this strict requirement in 2003. Due to the diversity in state and local tax law, it is recommended that you consult your personal tax advisor as to the applicability of the information provided to your specific situation. - -------------------------------------------------------------------------------- 13 THE GABELLI GLOBAL CONVERTIBLE SECURITIES FUND ADDITIONAL FUND INFORMATION (UNAUDITED) - -------------------------------------------------------------------------------- The business and affairs of the Company are managed under the direction of the Company's Board of Directors. Information pertaining to the Directors and officers of the Company is set forth below. The Fund's Statement of Additional Information includes additional information about Gabelli Global Convertible Securities Fund Directors and is available, without charge, upon request, by calling 800-GABELLI (800-422-3554) or by writing to Gabelli Global Convertible Securities Fund at One Corporate Center, Rye, NY 10580-1422. TERM OF NUMBER OF OFFICE AND FUNDS IN FUND NAME, POSITION(S) LENGTH OF COMPLEX ADDRESS 1 TIME OVERSEEN BY PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIPS AND AGE SERVED 2 DIRECTOR DURING PAST FIVE YEARS HELD BY DIRECTOR - ---------------- ---------- ------------ ---------------------- ------------------ INTERESTED DIRECTORS 3: - ---------------------- MARIO J. GABELLI Since 1993 24 Chairman of the Board and Chief Executive Director of Morgan Group Director, President Officer of Gabelli Asset Management Inc. Holdings, Inc. (holding and Chief Investment and Chief Investment Officer of Gabelli Funds, company); Vice Chairman of Officer LLC and GAMCO Investors, Inc.; Vice Chairman Lynch Corporation Age: 61 and Chief Executive Officer of Lynch (diversified manufacturing) Interactive Corporation (multimedia and services) JOHN D. GABELLI Since 1993 10 Senior Vice President of Gabelli & Company, -- Director Inc. Director of Gabelli Advisers, Inc. Age: 59 KARL OTTO POHL Since 1993 33 Member of the Shareholder Committee of Director of Gabelli Asset Director Sal Oppenheim Jr. & Cie (private investment Management Inc. (investment Age: 74 bank); Former President of the Deutsche management); Chairman, Bundesbank and Chairman of its Central Bank Incentive Capital and Council (1980-1991) Incentive Asset Management (Zurich); Director at Sal Oppenheim Jr. & Cie, Zurich NON-INTERESTED DIRECTORS: - ------------------------- E. VAL CERUTTI Since 2001 7 Chief Executive Officer of Cerutti Director of Lynch Director Consultants, Inc.; former President and Corporation (diversified Age: 64 Chief Operating Officer of Stella manufacturing) D'oro Biscuit Company (through 1992); Adviser, Iona College School of Business ANTHONY J. COLAVITA Since 1993 35 President and Attorney at Law in the law firm -- Director of Anthony J. Colavita, P.C. Age: 68 ARTHUR V. FERRARA Since 2001 9 Formerly, Chairman of the Board and Chief Director of The Guardian Director Executive Officer of The Guardian Life Life Insurance Company of Age: 73 Insurance Company of America from America and 25 mutual funds January 1993 to December 1995; President, within the Guardian Fund Chief Executive Officer and a Director prior Complex thereto WERNER J. ROEDER, MD Since 1993 26 Vice President/Medical Affairs Lawrence -- Director Hospital Center and practicing private physician Age: 63 ANTHONIE C. VAN EKRIS Since 1993 20 Managing Director of BALMAC Director of Aurado Director International, Inc. (commodities) Exploration, Inc. Age: 69 (oil and gas operations) 14 THE GABELLI GLOBAL CONVERTIBLE SECURITIES FUND ADDITIONAL FUND INFORMATION (UNAUDITED) (CONTINUED) - -------------------------------------------------------------------------------- TERM OF NUMBER OF OFFICE AND FUNDS IN FUND NAME, POSITION(S) LENGTH OF COMPLEX ADDRESS 1 TIME OVERSEEN BY PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIPS AND AGE SERVED 2 DIRECTOR DURING PAST FIVE YEARS HELD BY DIRECTOR - ---------------- ---------- ------------ -------------------- ------------------ OFFICERS: - -------- BRUCE N. ALPERT Since 2003 -- Executive Vice President and Chief Operating -- President Officer of Gabelli Funds, LLC since 1988 and Age: 52 an officer of all mutual funds advised by Gabelli Funds, LLC and its affiliates. Director and President of Gabelli Advisers, Inc. JAMES E. MCKEE Since 1995 -- Vice President, General Counsel and Secretary -- Secretary of Gabelli Asset Management Inc. since 1999 Age: 40 and GAMCO Investors, Inc. since 1993; Secretary of all mutual funds advised by Gabelli Advisers, Inc. and Gabelli Funds, LLC - -------------------------------------------------------------------------------- 1 Address: One Corporate Center, Rye, NY 10580-1422, unless otherwise noted. 2 Each Director will hold office for an indefinite term until the earliest of (i) the next meeting of shareholders if any, called for the purpose of considering the election or re-election of such Director and until the election and qualification of his or her successor, if any, elected at such meeting, or (ii) the date a Director resigns or retires, or a Director is removed by the Board of Directors or shareholders, in accordance with the Company's By-Laws and Articles of Incorporation. 3 "Interested person" of the Company as defined in the Investment Company Act of 1940. Messrs. M. Gabelli, J. Gabelli and Pohl are each considered an "interested person" because of their affiliation with Gabelli Funds, LLC which acts as the Company's investment adviser. Mario J. Gabelli and John D. Gabelli are brothers. - -------------------------------------------------------------------------------- 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, Gabelli Advisers, Inc. and Gabelli Fixed Income, LLC, which are affiliated with Gabelli Asset Management Inc. Gabelli Asset Management is a publicly-held company that has subsidiaries that provide investment advisory or brokerage services for a variety of clients. WHAT KIND OF NON-PUBLIC INFORMATION DO WE COLLECT ABOUT YOU IF YOU BECOME A GABELLI CUSTOMER? 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: o 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. o 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, and the deposits and withdrawals that you make. 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 web site, 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. - -------------------------------------------------------------------------------- 15 Gabelli Global Series Funds, Inc. THE GABELLI GLOBAL CONVERTIBLE SECURITIES FUND One Corporate Center Rye, New York 10580-1422 800-GABELLI 800-422-3554 FAX: 914-921-5118 WEBSITE: WWW.GABELLI.COM E-MAIL: INFO@GABELLI.COM Net Asset Value available daily by calling 800-GABELLI after 6:00 P.M. BOARD OF DIRECTORS Mario J. Gabelli, CFA John D. Gabelli CHAIRMAN AND CHIEF SENIOR VICE PRESIDENT INVESTMENT OFFICER GABELLI & COMPANY, INC. GABELLI ASSET MANAGEMENT INC. E. Val Cerutti Karl Otto Pohl CHIEF EXECUTIVE OFFICER FORMER PRESIDENT CERUTTI CONSULTANTS, INC. DEUTSCHE BUNDESBANK Anthony J. Colavita Werner J. Roeder, MD ATTORNEY-AT-LAW VICE PRESIDENT/MEDICAL AFFAIRS ANTHONY J. COLAVITA, P.C. LAWRENCE HOSPITAL CENTER Arthur V. Ferrara Anthonie C. van Ekris FORMER CHAIRMAN AND MANAGING DIRECTOR CHIEF EXECUTIVE OFFICER BALMAC INTERNATIONAL, INC. GUARDIAN LIFE INSURANCE COMPANY OF AMERICA OFFICERS Bruce N. Alpert James E. McKee PRESIDENT SECRETARY DISTRIBUTOR Gabelli & Company, Inc. CUSTODIAN, TRANSFER AGENT AND DIVIDEND AGENT State Street Bank and Trust Company LEGAL COUNSEL Skadden, Arps, Slate, Meagher & Flom LLP [GRAPHIC OMITTED] MARIO GABELLI PHOTO THE GABELLI GLOBAL CONVERTIBLE SECURITIES FUND - -------------------------------------------------------------------------------- This report is submitted for the general information of the shareholders of The Gabelli Global Convertible Securities Fund. It is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. - -------------------------------------------------------------------------------- GAB441Q403SR ANNUAL REPORT DECEMBER 31, 2003 THE GABELLI GLOBAL GROWTH FUND ANNUAL REPORT DECEMBER 31, 2003 TO OUR SHAREHOLDERS, The Sarbanes-Oxley Act requires a Fund's principal executive and financial officers to certify the entire contents of the semi-annual and annual shareholder reports in a filing with the Securities and Exchange Commission on Form N-CSR. This certification would cover the portfolio manager's commentary and subjective opinions if they are attached to or a part of the financial statements. Many of these comments and opinions would be difficult or impossible to certify. Because we do not want our portfolio managers to eliminate their opinions and/or restrict their commentary to historical facts, we have separated their commentary from the financial statements and investment portfolio and have sent it to you separately. Both the commentary and the financial statements, including the portfolio of investments, will be available on our website at www.gabelli.com/funds. Enclosed are the audited financial statements and the investment portfolio as of December 31, 2003 with a description of the factors that affected the performance during the past year. PERFORMANCE DISCUSSION The Gabelli Global Growth Fund's (the "Fund") net asset value rose 41.4% during 2003. This compares with a rise of 34.6% for the Morgan Stanley Capital International ("MSCI") All Country ("AC") World Free Index and a gain of 32.1% for the average global fund monitored by Lipper Inc. For the fourth quarter, the Fund's net asset value rose 11.3% compared with a rise of 14.5% and 13.5% for the MSCI AC World Free Index and Lipper Global Fund Average, respectively. A combination of low interest rates, excellent corporate earnings and, thankfully, a lack of any major terrorist attack enticed investors back into the equity markets. Of course, two consecutive quarters of positive returns gave investors some added confidence that the bear has gone into hibernation. Returns to dollar-based investors were assisted by the weakness of the dollar. For the year, the dollar declined by about 22% vis-a-vis the euro and by about half that amount against the yen. During 2003, wireless communication investments such as Rural Cellular, Western Wireless and Rogers Wireless were a few of our best performers. Norwegian telecommunications operator Telenor and Dublin-based Anglo-Irish Bank were also at the top of our year-end leaderboard. On the other side of the ledger, Japanese consumer electronics stocks Sony and Nintendo declined during 2003. The Fund's gold-mining stocks provided mixed results with Eldorado Ltd. and Freeport McMoRan posting gains while Harmony Gold and Meridian declined during 2003. Sincerely yours, /s/Bruce N. Alpert Bruce N. Alpert President February 24, 2004 [GRAPHIC OMITTED] PLOT POINTS FOLLOW: COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE GABELLI GLOBAL GROWTH FUND CLASS AAA SHARES, THE LIPPER GLOBAL FUND AVERAGE AND THE MSCI AC WORLD FREE INDEX Gabelli Global Lipper MSCI Growth Fund Global Fund AC World Class AAA Shares Fund Average Free Index 2/7/94 10,000 10,000 10,000 12/94 10,250 9,835 9,849 12/95 12,080 11,214 11,766 12/96 13,590 13,042 13,319 12/97 19,257 14,743 15,316 12/98 24,828 16,857 18,681 12/99 53,643 22,939 23,691 12/00 30,564 20,583 20,387 12/01 23,183 17,008 17,143 12/02 17,436 13,686 13,889 12/03 24,653 18,078 18,699 Past performance is not predictive of future results. The performance tables and graph do hot reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. COMPARATIVE RESULTS - -------------------------------------------------------------------------------- AVERAGE ANNUAL RETURNS THROUGH DECEMBER 31, 2003 (A) SINCE QUARTER 1 YEAR 3 YEAR 5 YEAR INCEPTION (B) ------- ------ ------ ------ ------------ Gabelli Global Growth Fund Class AAA ............ 11.31% 41.39% (6.91)% 1.73% 10.57% MSCI AC World Free Index ........................ 14.52% 34.63% (2.84)% 0.02% 6.52% Lipper Global Fund Average ...................... 13.46% 32.09% (3.92)% 2.20% 7.00% Class A ......................................... 11.30% 41.44% (6.88)% 1.75% 10.59% 4.91%(c) 33.31%(c) (8.69)%(c) 0.55%(c) 9.93%(c) Class B ......................................... 11.10% 40.28% (7.59)% 1.22% 10.29% 6.46%(d) 35.65%(d) (7.94)%(d) 1.06%(d) 10.29%(d) Class C ......................................... 11.13% 40.33% (7.59)% 1.16% 10.26% 10.21%(d) 39.41%(d) (7.59)%(d) 1.16%(d) 10.26%(d) (a) Returns represent past performance and do not guarantee future results. Total returns and average annual returns reflect changes in share price and reinvestment of dividends and are net of expenses. Investment returns and the principal value of an investment will fluctuate. When shares are redeemed, they may be worth more or less than their original cost. The Morgan Stanley Capital International (MSCI) All Country (AC) World Free Index is an unmanaged indicator of stock market performance, while the Lipper Average reflects the average performance of mutual funds classified in this particular category. Performance for periods less than one year is not annualized. The Class AAA Shares' net asset values are used to calculate performance for the periods prior to the issuance of Class A Shares, Class B Shares and Class C Shares on March 2, 2000, May 5, 2000 and March 12, 2000, respectively. The actual performance for the Class B Shares and Class C Shares would have been lower due to the additional expenses associated with these Classes of shares. (b) From commencement of investment operations on February 7, 1994. (c) Includes the effect of the maximum 5.75% sales charge at the beginning of the period. (d) Includes the effect of the applicable contingent deferred sales charge at the end of the period shown for Class B and Class C Shares, respectively. Note: Investing in foreign securities involves risks not ordinarily associated with investments in domestic issues, including currency fluctuation, economic and political risks. - -------------------------------------------------------------------------------- 2 THE GABELLI GLOBAL GROWTH FUND PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2003 - -------------------------------------------------------------------------------- MARKET SHARES COST VALUE ------- ---- ----- COMMON STOCKS -- 76.5% ADVERTISING -- 0.5% 29,712 JC Decaux SA+ .................. $ 349,345 $ 485,706 5,000 Valassis Communications Inc.+ ........................ 130,797 146,750 ------------ ------------ 480,142 632,456 AEROSPACE -- 0.3% 2,144 General Dynamics Corp. ......... 123,323 193,796 1,929 Northrop Grumman Corp. ......... 168,073 184,412 ------------ ------------ 291,396 378,208 ------------ ------------ AUTOMOTIVE -- 0.2% 26,100 Brembo SpA ..................... 161,385 197,857 3,400 Toyota Motor Corp. ............. 100,888 114,845 ------------ ------------ 262,273 312,702 ------------ ------------ BROADCASTING -- 3.0% 8 Antena 3 Television SA+ ........ 220 352 35,000 British Sky Broadcasting Group plc+ ................... 388,730 440,468 5,000 Gray Television Inc. ........... 54,182 75,600 9,371 Mediaset SpA ................... 65,284 111,346 17,300 Nippon Broadcasting System Inc. .................. 673,332 805,515 2,500 Nippon Television Network Corp. ........................ 352,958 371,606 39,305 NRJ Group ...................... 588,375 837,859 18,000 Sinclair Broadcast Group Inc., Cl. A+ ................. 210,856 268,560 15,000 Tokyo Broadcasting System Inc. .................. 192,725 238,919 41,700 Young Broadcasting Inc., Cl. A+ ................. 537,006 835,668 ------------ ------------ 3,063,668 3,985,893 ------------ ------------ BUILDING AND CONSTRUCTION -- 1.7% 20,000 CRH plc ........................ 358,723 409,939 11,974 Fomento de Construcciones y Contratas SA ............... 287,404 441,624 10,000 Heijmans NV .................... 235,049 240,918 1,000 Imerys SA ...................... 190,004 210,520 15,200 Italcementi SpA ................ 160,365 189,617 42,500 Persimmon plc .................. 335,603 408,559 15,000 Sekisui House Ltd. ............. 150,161 154,941 1,500 Technip SA ..................... 137,228 162,336 ------------ ------------ 1,854,537 2,218,454 ------------ ------------ BUSINESS SERVICES -- 1.5% 53,942 Cendant Corp.+ ................. 794,551 1,201,288 11,500 Daiseki Co. Ltd. ............... 173,038 156,989 5,000 Secom Co. Ltd. ................. 206,539 186,619 500 SGS Societe Generale de Surveillance Holding SA ...... 216,990 313,726 MARKET SHARES COST VALUE ------- ---- ----- 15,000 Sohgo Security Services Co. Ltd. ..................... $ 206,083 $ 173,836 ------------ ------------ 1,597,201 2,032,458 ------------ ------------ CABLE -- 0.6% 6,956 Cablevision Systems Corp., Cl. A+ ....................... 58,213 162,701 50,000 Charter Communications Inc., Cl. A+ ....................... 56,614 201,000 5,000 Comcast Corp., Cl. A+ .......... 146,150 164,350 8,232 Hughes Electronics Corp.+ ...... 101,500 136,239 20,000 UnitedGlobalCom Inc., Cl. A+ ....................... 38,400 169,600 ------------ ------------ 400,877 833,890 ------------ ------------ CHEMICALS AND ALLIED PRODUCTS -- 0.4% 18,000 Aica Kogyo Co. Ltd. ............ 177,815 186,097 5,000 Dow Chemical Co. ............... 188,476 207,850 3,000 Shin-Etsu Chemical Co. Ltd. .... 117,836 122,609 ------------ ------------ 484,127 516,556 ------------ ------------ COMMUNICATIONS EQUIPMENT -- 0.6% 80,000 Agere Systems Inc., Cl. A+ ..... 196,688 244,000 10,900 Aiphone Co. Ltd. ............... 162,020 175,344 23 G-mode Co. Ltd. ................ 154,050 149,370 40,000 Stratos International Inc.+ .... 218,717 271,200 ------------ ------------ 731,475 839,914 ------------ ------------ COMPUTER HARDWARE -- 0.2% 13,638 Hewlett-Packard Co. ............ 253,207 313,265 ------------ ------------ COMPUTER SOFTWARE AND SERVICES -- 0.8% 20,000 Ascential Software Corp.+ ...... 288,302 518,600 120 EC-One Inc.+ ................... 167,188 176,915 25 Index Corp. .................... 120,222 146,963 85 NIWS Co. Ltd. .................. 210,857 190,352 ------------ ------------ 786,569 1,032,830 ------------ ------------ CONSUMER PRODUCTS -- 2.1% 9,924 Altadis SA ..................... 166,300 281,647 10,000 Chofu Seisakusho Co. Ltd. ...... 154,507 156,481 5,314 Compagnie Financiere Richemont AG, Cl. A .......... 132,276 127,613 12,247 Gallaher Group plc ............. 113,420 131,544 7,600 Nintendo Co. Ltd. .............. 832,286 709,154 194,500 Saeco International Group SpA .................... 836,758 883,199 4,643 Swatch Group AG, Cl. B ......... 393,944 557,498 ------------ ------------ 2,629,491 2,847,136 ------------ ------------ CONSUMER SERVICES -- 3.0% 112,171 InterActiveCorp.+ .............. 1,522,695 3,805,962 15,000 Martha Stewart Living Omnimedia Inc., Cl. A+ ....... 130,269 147,750 ------------ ------------ 1,652,964 3,953,712 ------------ ------------ See accompanying notes to financial statements. 3 THE GABELLI GLOBAL GROWTH FUND PORTFOLIO OF INVESTMENTS (CONTINUED) -- DECEMBER 31, 2003 - -------------------------------------------------------------------------------- MARKET SHARES COST VALUE ------- ---- ----- COMMON STOCKS (CONTINUED) DIVERSIFIED INDUSTRIAL -- 1.1% 18,200 Bouygues SA .................... $ 545,013 $ 636,357 3,837 Eiffage SA ..................... 289,393 455,426 12,236 Honeywell International Inc. ... 89,927 409,050 ------------ ------------ 1,124,333 1,500,833 ------------ ------------ ELECTRONICS -- 3.2% 2,200 Mabuchi Motor Co. Ltd. ......... 175,830 169,357 1,100 Rohm Co. Ltd. .................. 144,883 128,917 3,570 Samsung Electronics Co. Ltd. ... 585,150 1,351,297 70,000 Sony Corp., ADR ................ 2,520,392 2,426,900 16,000 Yamaichi Electronics Co. Ltd. .. 185,837 173,929 ------------ ------------ 3,612,092 4,250,400 ------------ ------------ ENERGY AND UTILITIES -- 4.5% 110,000 AES Corp.+ ..................... 745,827 1,038,400 3,427 CMS Energy Corp.+ .............. 82,248 29,198 2,133 ConocoPhillips ................. 104,053 139,861 42,277 Devon Energy Corp. ............. 1,847,394 2,420,781 75,857 El Paso Corp. .................. 560,100 621,269 4,998 Eni SpA ........................ 74,776 94,311 10,000 Equitable Resources Inc. ....... 300,017 429,200 15,000 FirstEnergy Corp. .............. 432,936 528,000 10,288 Pioneer Natural Resources Co.+ ......................... 266,756 328,496 2,851 Public Service Enterprise Group Inc. 101,923 124,874 1,063 Total SA ....................... 160,736 197,636 5,551 TXU Corp. ...................... 100,529 131,670 ------------ ------------ 4,777,295 6,083,696 ------------ ------------ ENTERTAINMENT -- 9.0% 20,000 Crown Media Holdings Inc., Cl. A+ ................. 64,027 165,400 103,592 Fox Kids Europe NV+ ............ 1,110,330 790,529 30,000 Gemstar-TV Guide International Inc.+ .......... 112,806 151,500 300,910 Liberty Media Corp., Cl. A+ .... 3,145,118 3,577,820 17,000 Metro-Goldwyn-Mayer Inc.+ ...... 226,650 290,530 150,000 Publishing & Broadcasting Ltd. ......................... 873,242 1,414,977 85,303 Rank Group plc ................. 307,677 426,431 19,000 Shaw Brothers (Hong Kong) Ltd. ......................... 17,530 20,924 5,000 The Walt Disney Co. ............ 110,900 116,650 68,878 Time Warner Inc.+ .............. 834,627 1,239,115 7,447 Viacom Inc., Cl. A ............. 293,932 329,679 111,680 Vivendi Universal SA+ .......... 3,261,913 2,714,523 31,000 Vivendi Universal SA, ADR+ ..... 492,879 752,680 ------------ ------------ 10,851,631 11,990,758 ------------ ------------ MARKET SHARES COST VALUE ------- ---- ----- EQUIPMENT AND SUPPLIES -- 0.9% 3,000 Canon Inc. ..................... $ 135,093 $ 139,685 40,000 Interpump Group SpA ............ 159,760 179,112 20,400 Maezawa Kyuso Industries Co. Ltd. ..................... 147,903 152,281 4,000 Nakanishi Inc. ................. 196,070 173,369 6,901 Neopost SA ..................... 221,035 348,184 978 Tennant Co. .................... 34,377 42,347 2,600 Vallourec SA ................... 178,979 216,448 ------------ ------------ 1,073,217 1,251,426 ------------ ------------ FINANCIAL SERVICES -- 2.9% 3,000 American Express Co. ........... 129,490 144,690 33,834 Anglo Irish Bank Corp. plc ..... 159,103 533,884 29,039 Bank of Ireland ................ 280,065 396,319 4,000 Citigroup Inc. ................. 175,256 194,160 2,666 Countrywide Financial Corp. .... 190,500 2,216 6,000 Fannie Mae ..................... 396,334 450,360 5,000 Freddie Mac .................... 253,706 291,600 2,000 Hartford Financial Services Group Inc. 94,700 118,060 11,914 Irish Life & Permanent plc ..... 129,749 192,355 9,788 JP Morgan Chase & Co. .......... 214,651 359,513 3,895 Merrill Lynch & Co. Inc. ....... 141,116 228,442 25,000 Nikko Cordial Corp. ............ 140,051 139,265 10,316 RAS SpA ........................ 119,878 175,664 25,000 UnumProvident Corp. ............ 293,125 394,250 ------------ ------------ 2,717,724 3,820,778 ------------ ------------ FOOD AND BEVERAGE -- 1.3% 12,000 Ajinomoto Co. Inc. ............. 124,772 138,061 13,828 Autogrill SpA+ ................. 144,490 197,792 8,996 Coca-Cola Hellenic Bottling Co. SA ....................... 114,238 187,455 980 Constellation Brands Inc., Cl. A+ ....................... 25,505 32,271 4,300 Davide Campari-Milano SpA ...... 162,912 208,817 873 Del Monte Foods Co.+ ........... 7,551 9,079 25,366 Diageo plc ..................... 295,907 333,757 3,947 Hain Celestial Group Inc.+ ..... 93,141 91,610 1,957 Heinz (H.J.) Co. ............... 72,952 71,294 9,300 Hurxley Corp. .................. 144,062 134,506 2,500 Pernod-Ricard SA ............... 180,871 277,970 ------------ ------------ 1,366,401 1,682,612 ------------ ------------ HEALTH CARE -- 5.0% 3,170 Aventis SA ..................... 207,688 209,521 6,000 Baxter International Inc. ...... 150,171 183,120 5,984 Boiron SA ...................... 93,761 139,637 6,700 Fukuda Denshi Co. Ltd. ......... 164,947 141,290 25,000 GlaxoSmithKline plc ............ 711,446 572,850 3,000 Merck & Co. Inc. ............... 147,567 138,600 65,000 Nanogen Inc.+ .................. 196,502 585,650 See accompanying notes to financial statements. 4 THE GABELLI GLOBAL GROWTH FUND PORTFOLIO OF INVESTMENTS (CONTINUED) -- DECEMBER 31, 2003 - -------------------------------------------------------------------------------- MARKET SHARES COST VALUE ------- ---- ----- COMMON STOCKS (CONTINUED) HEALTH CARE (CONTINUED) 14,000 Novartis AG .................... $ 496,737 $ 635,618 7,776 Pfizer Inc. .................... 230,829 274,726 24,415 Pliva dd, Reg S, GDR ........... 299,609 397,964 15,000 Recordati SpA .................. 213,569 292,508 6,200 Roche Holding AG ............... 495,747 625,389 3,533 Sanofi-Synthelabo SA ........... 233,219 266,044 300,000 Snia SpA ....................... 660,197 745,459 6,363 Stada Arzneimittel AG .......... 218,031 394,718 300 Synthes-Stratec Inc. ........... 202,384 296,907 4,700 Takeda Chemical Industries Ltd. ......................... 169,601 186,386 20,000 Tenet Healthcare Corp.+ ........ 296,239 321,000 5,725 Wyeth .......................... 219,669 243,026 ------------ ------------ 5,407,913 6,650,413 ------------ ------------ HOTELS AND GAMING -- 0.2% 5,550 Greek Organization of Football Prognostics ......... 51,808 79,806 62,011 Hilton Group plc ............... 226,293 249,493 ------------ ------------ 278,101 329,299 ------------ ------------ METALS AND MINING -- 23.0% 12,295 Agnico-Eagle Mines Ltd., New York ..................... 147,293 148,401 51,918 Agnico-Eagle Mines Ltd., Toronto ...................... 592,898 627,958 7,000 Anglo American Platinum Corp. Ltd. ................... 318,776 305,693 32,742 AngloGold Ltd., ADR ............ 1,063,053 1,529,051 190,271 Apollo Gold Corp.+ ............. 362,697 435,831 50,000 Aurizon Mines Ltd.+ ............ 72,700 76,224 31,000 Barrick Gold Corp., New York ... 674,938 704,010 8,000 Barrick Gold Corp., Toronto .... 176,411 181,451 34,368 Compania de Minas Buenaventura SA, ADR ......... 455,175 971,927 500,000 Croesus Mining NL .............. 260,916 233,569 100,000 Crystallex International Corp.+ 293,617 276,000 25,000 Cumberland Resources Ltd.+ ..... 93,975 83,575 107,362 Durban Roodepoort Deep Ltd., ADR+ ................... 242,510 343,558 205,000 Eldorado Gold Corp.+ ........... 645,840 642,484 47,404 Freeport-McMoRan Copper & Gold Inc., Cl. B ........... 1,160,157 1,997,130 30,000 Gammon Lake Resources Inc.+ ........................ 152,775 146,256 10,000 Glamis Gold Ltd., New York+ .... 154,380 171,200 76,484 Glamis Gold Ltd., Toronto+ ..... 361,191 1,318,679 25,000 Gold Fields Ltd. ............... 325,000 357,678 91,026 Gold Fields Ltd., ADR .......... 705,941 1,268,902 53,944 Goldcorp Inc. .................. 416,008 860,766 MARKET SHARES COST VALUE ------- ---- ----- 70,000 Golden Star Resources Ltd.+ .... $ 455,966 $ 490,772 125,679 Harmony Gold Mining Co. Ltd. ..................... 1,607,432 2,042,872 98,733 Harmony Gold Mining Co. Ltd., ADR ................ 1,026,790 1,602,437 178,624 IAMGOLD Corp. .................. 767,938 1,246,809 5,000 Impala Platinum Holdings Ltd. ......................... 451,303 434,457 39,329 Ivanhoe Mines Ltd.+ ............ 147,873 313,475 300,000 Kenor ASA+ ..................... 230,134 224,567 180,000 Kingsgate Consolidated Ltd. .... 524,282 520,784 94,490 Kinross Gold Corp.+ ............ 782,724 754,975 740,225 Lihir Gold Ltd. ................ 631,978 808,697 20,000 Lonmin plc ..................... 362,934 390,970 69,474 Meridian Gold Inc.+ ............ 883,033 1,015,015 25,000 Metallic Ventures Gold Inc.+ ... 160,240 147,998 230,000 Miramar Mining Corp.+ .......... 420,956 596,247 65,000 Nevsun Resources Ltd.+ ......... 414,160 338,015 39,473 Newmont Mining Corp. ........... 1,157,082 1,918,783 40,000 Northern Orion Resources Inc.+ ........................ 98,920 95,338 750,000 Oxiana Ltd.+ ................... 543,126 593,341 1,469 Peabody Energy Corp. ........... 41,646 61,272 29,980 Placer Dome Inc., Australia .... 249,899 519,533 82,026 Placer Dome Inc., New York ..... 1,127,212 1,469,086 46,692 Randgold Resources Ltd., ADR+ ......................... 939,146 1,274,692 200,000 Riddarhyttan Resources AB+ ..... 159,004 183,453 70,000 River Gold Mines Ltd.+ ......... 222,437 222,093 3,000 Umicore ........................ 205,211 210,583 125,000 Wheaton River Minerals Ltd.+ ... 298,895 374,347 50,000 Wolfden Resources Inc.+ ........ 252,340 219,385 ------------ ------------ 22,838,912 30,750,339 ------------ ------------ PUBLISHING -- 1.0% 10,000 Belo Corp., Cl. A .............. 240,737 283,400 2,500 Knight-Ridder Inc. ............. 165,919 193,425 12,000 Pearson plc .................... 133,471 133,617 6,469 Tribune Co. .................... 297,405 333,800 200 Washington Post Co., Cl. B ..... 135,890 158,280 12,920 Wolters Kluwer NV .............. 276,425 202,079 ------------ ------------ 1,249,847 1,304,601 ------------ ------------ RETAIL -- 0.8% 15,554 Boots Group plc ................ 142,970 192,403 7,070 Ito-Yokado Co. Ltd. ............ 260,367 222,319 4,500 Matsumotokiyoshi Co. Ltd. ...... 110,497 100,984 3,500 Matsumotokiyoshi Co. Ltd. (when issued)+ ............... 88,755 78,543 6,700 Nagaileben Co. Ltd. ............ 182,122 180,988 1,900 Shimamura Co. Ltd. ............. 131,482 129,066 See accompanying notes to financial statements. 5 THE GABELLI GLOBAL GROWTH FUND PORTFOLIO OF INVESTMENTS (CONTINUED) -- DECEMBER 31, 2003 - -------------------------------------------------------------------------------- MARKET SHARES COST VALUE ------- ---- ----- COMMON STOCKS (CONTINUED) RETAIL (CONTINUED) 4,000 Sundrug Co. Ltd. ............... $ 153,220 $ 142,951 1,063 Tod's SpA ...................... 51,421 46,258 ------------ ------------ 1,120,834 1,093,512 ------------ ------------ TELECOMMUNICATIONS: BROADBAND -- 0.6% 57,500 Cesky Telecom AS ............... 601,347 652,329 25,000 Tiscali SpA+ ................... 123,467 174,697 ------------ ------------ 724,814 827,026 ------------ ------------ TELECOMMUNICATIONS: LOCAL -- 0.9% 2,500 ALLTEL Corp. ................... 120,998 116,450 4,000 CenturyTel Inc. ................ 128,050 130,480 60,000 Cincinnati Bell Inc.+ .......... 319,328 303,000 2,447 Citizens Communications Co.+ ......................... 24,837 30,392 7,500 D&E Communications Inc. ........ 98,683 108,825 5,000 SureWest Communications ........ 155,550 202,100 7,500 Verizon Communications Inc. .... 255,260 263,100 ------------ ------------ 1,102,706 1,154,347 ------------ ------------ TELECOMMUNICATIONS: LONG DISTANCE -- 0.7% 72 KDDI Corp. ..................... 305,783 412,504 31,624 Sprint Corp. - FON Group ....... 496,801 519,266 ------------ ------------ 802,584 931,770 ------------ ------------ TELECOMMUNICATIONS: NATIONAL -- 1.8% 100,000 Cable & Wireless plc ........... 95,873 238,986 16,000 France Telecom SA+ ............. 426,514 457,316 35,000 Magyar Tavkozlesi Rt ........... 135,238 133,307 50,000 Portugal Telecom SGPS SA ....... 389,237 503,279 13,000 TDC A/S ........................ 358,192 469,072 110,483 Telecom Italia SpA, RNC+ ....... 122,437 225,063 30,000 Telefonica SA .................. 359,450 440,464 ------------ ------------ 1,886,941 2,467,487 ------------ ------------ TRANSPORTATION -- 0.2% 16,000 Amadeus Global Travel Distribution SA, Cl. A ....... 90,097 103,936 33 West Japan Railway Co. ......... 122,929 129,635 ------------ ------------ 213,026 233,571 ------------ ------------ WIRELESS COMMUNICATIONS -- 4.5% 25,000 AT&T Wireless Services Inc.+ ... 158,369 199,750 91,700 Centennial Communications Corp.+ ....................... 1,313,332 482,342 50,000 China Mobile (Hong Kong) Ltd. ......................... 121,358 153,601 395,000 mm02 plc+ ...................... 370,396 544,476 100 NTT DoCoMo Inc. ................ 252,469 226,743 18,100 Rogers Wireless Communications Inc.+ ......... 219,045 389,383 MARKET SHARES COST VALUE ------- ---- ----- 33,100 Rogers Wireless Communications Inc., Cl. B+ ....................... $ 463,317 $ 708,340 30,000 Rural Cellular Corp., Cl. A+ ... 88,926 238,500 60,000 Sprint Corp. - PCS Group+ ...... 312,302 337,200 20,769 Telefonica Moviles SA+ ......... 154,464 216,911 143,750 Telenor ASA .................... 642,408 939,924 979 Telephone & Data Systems Inc. ......................... 84,243 61,237 20,000 Turkcell Iletisim Hizmetleri AS, ADR+ ..................... 328,388 531,000 300,000 Vodafone Group plc ............. 609,483 743,810 13,000 Western Wireless Corp., Cl. A+ ....................... 59,341 238,680 ------------ ------------ 5,177,841 6,011,897 ------------ ------------ TOTAL COMMON STOCKS ............ 80,814,139 102,232,239 ------------ ------------ PREFERRED STOCKS -- 0.8% CABLE -- 0.1% 915 CSC Holdings Inc., 11.750% Pfd., Ser. H ......... 63,208 95,389 ------------ ------------ ENTERTAINMENT -- 0.2% 14,800 ProSieben Sat.1 Media AG, Pfd. ..................... 122,948 247,351 ------------ ------------ PUBLISHING -- 0.0% 920 News Corp. Ltd., Pfd., ADR ..... 26,793 27,830 ------------ ------------ TELECOMMUNICATIONS -- 0.5% 2,936 Cincinnati Bell Inc., 6.750% Cv. Pfd., Ser. B ...... 91,163 120,376 225,000,000 Telesp Celular Participacoes SA, Pfd.+ .................... 291,473 590,381 ------------ ------------ 382,636 710,757 ------------ ------------ TOTAL PREFERRED STOCKS ......... 595,585 1,081,327 ------------ ------------ WARRANTS -- 0.0% BUSINESS SERVICES -- 0.0% 34,000 MindArrow Systems Inc., Ser. C Warrants expire 11/11/11+ (a) ......... 0 0 9,444 MindArrow Systems Inc., Warrants expire 08/03/05+ (a) ................ 0 0 ------------ ------------ 0 0 ------------ ------------ COMPUTER SOFTWARE AND SERVICES -- 0.0% 15,375 Diversinet Corp. Warrants+ ..... 0 0 ------------ ------------ TOTAL WARRANTS ................. 0 0 ------------ ------------ See accompanying notes to financial statements. 6 THE GABELLI GLOBAL GROWTH FUND PORTFOLIO OF INVESTMENTS (CONTINUED) -- DECEMBER 31, 2003 - ------------------------------------------------------------------------------- PRINCIPAL MARKET AMOUNT COST VALUE ------ ---- ----- U.S. GOVERNMENT OBLIGATIONS -- 23.2% $31,047,000 U.S. Treasury Bills, 0.867% to 0.923%++, 01/02/04 to 01/22/04 ......... $ 31,032,366 $ 31,032,366 ------------ ------------ TOTAL INVESTMENTS -- 100.5% ........ $112,442,090 134,345,932 ------------ ------------ OTHER ASSETS AND LIABILITIES (NET) -- (0.5)% (616,043) ------------ NET ASSETS -- 100.0% ............................ $133,729,889 ============ - ------------------------ For Federal tax purposes: Aggregate cost of investments ................... $114,316,092 ============ Gross unrealized appreciation ................... $ 22,817,449 Gross unrealized depreciation ................... (2,787,609) ------------ Net unrealized appreciation ..................... $ 20,029,840 ============ - ------------------------ (a) Security fair valued under procedures established by the Board of Directors. At December 31, 2003, the market value of fair valued securities amounted to $0 or 0.0% of total net assets. + Non-income producing security. ++ Represents annualized yield at date of purchase. ADR - American Depository Receipt. GDR - Global Depository Receipt. RNC - Non-Convertible Savings Shares. % OF MARKET MARKET GEOGRAPHIC DIVERSIFICATION VALUE VALUE - -------------------------- ----- ------------ North America ...................................... 59.3% $79,695,286 Europe ............................................. 22.4% 30,134,436 Japan .............................................. 7.4% 9,944,232 South Africa ....................................... 5.9% 7,884,649 Asia/Pacific ....................................... 3.8% 5,125,021 Latin America ...................................... 1.2% 1,562,308 ----- ------------ 100.0% $134,345,932 ===== ============ SECURITIES SOLD SHORT SHARES COMMON STOCKS PROCEEDS MARKET VALUE ------ ------------- -------- ------------ 25,000 Technology Select Sector SPDR ....................... $(444,479) $ (509,500) See accompanying notes to financial statements. 7 THE GABELLI GLOBAL GROWTH FUND STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 2003 - -------------------------------------------------------------------------------- ASSETS: Investments, at value (Cost $112,442,090) .................. $134,345,932 Cash and foreign currency, at value (Cost $598,001) ...................... 602,129 Deposit at brokers ..................... 501,175 Receivable for Fund shares sold ........ 195,664 Receivable for investments sold ........ 190,478 Dividends, interest and reclaims receivable 129,686 Other assets ........................... 7,380 ------------ TOTAL ASSETS ........................... 135,972,444 ------------ LIABILITIES: Securities sold short (proceeds $444,479) 509,500 Payable for investments purchased ...... 1,198,690 Payable for Fund shares redeemed ....... 198,054 Payable for investment advisory fees ... 111,387 Payable for distribution fees .......... 28,102 Other accrued expenses ................. 196,822 ------------ TOTAL LIABILITIES ...................... 2,242,555 ------------ NET ASSETS applicable to 8,141,767 shares outstanding ................... $133,729,889 ============ NET ASSETS CONSIST OF: Capital stock, at par value ............ $ 8,142 Additional paid-in capital ............. 203,814,242 Accumulated net realized loss on investments and foreign currency transactions ................ (91,942,931) Net unrealized appreciation on investments and foreign currency transactions .... 21,850,436 ------------ TOTAL NET ASSETS ....................... $133,729,889 ============ SHARES OF CAPITAL STOCK: CLASS AAA: Net Asset Value, offering and redemption price per share ($132,885,931 / 8,089,737 shares outstanding) .................. $16.43 ====== CLASS A: Net Asset Value and redemption price per share ($425,484 / 25,868 shares outstanding) $16.45 ====== Maximum offering price per share (NAV / 0.9425, based on maximum sales charge of 5.75% of the offering price at December 31, 2003) $17.45 ====== CLASS B: Net Asset Value and offering price per share ($211,090 / 13,176 shares outstanding) $16.02(a) ====== CLASS C: Net Asset Value and offering price per share ($207,384 / 12,986 shares outstanding) $15.97(a) ====== - ------------------------ (a) Redemption price varies based on length of time held STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2003 - -------------------------------------------------------------------------------- INVESTMENT INCOME: Dividends (net of foreign taxes of $69,930) ................... $ 1,305,059 Interest .............................. 186,321 ----------- TOTAL INVESTMENT INCOME ............... 1,491,380 ----------- EXPENSES: Investment advisory fees .............. 1,179,180 Distribution fees ..................... 296,682 Shareholder services fees ............. 243,151 Custodian fees ........................ 89,171 Shareholder communications expenses ... 72,130 Legal and audit fees .................. 45,008 Registration fees ..................... 40,583 Directors' fees ....................... 8,484 Miscellaneous expenses ................ 47,571 ----------- TOTAL EXPENSES ........................ 2,021,960 ----------- NET INVESTMENT LOSS ................... (530,580) ----------- NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS: Net realized loss on investments and foreign currency transactions ....... (1,577,113) Net change in unrealized appreciation/ depreciation on investments and foreign currency transactions ............... 43,212,753 ----------- NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS ............... 41,635,640 ----------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ..................... $41,105,060 =========== See accompanying notes to financial statements. 8 THE GABELLI GLOBAL GROWTH FUND STATEMENT OF CHANGES IN NET ASSETS - -------------------------------------------------------------------------------- YEAR ENDED YEAR ENDED DECEMBER 31, 2003 DECEMBER 31, 2002 ----------------- ----------------- OPERATIONS: Net investment loss ....................................................... $ (530,580) $ (818,361) Net realized loss on investments and foreign currency transactions ........ (1,577,113) (33,278,221) Net change in unrealized appreciation/depreciation of investments and foreign currency transactions ....................................... 43,212,753 (3,573,454) ------------- ------------ NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ........... 41,105,060 (37,670,036) ------------- ------------ CAPITAL SHARE TRANSACTIONS: Class AAA ................................................................. (13,217,980) (35,944,535) Class A ................................................................... 209,766 43,315 Class B ................................................................... 83,557 49,845 Class C ................................................................... 67,902 68,074 ------------- ------------ NET DECREASE IN NET ASSETS FROM CAPITAL SHARE TRANSACTIONS ................ (12,856,755) (35,783,301) ------------- ------------ REDEMPTION FEES Redemption fees ........................................................... 85,069 -- ------------- ------------ NET INCREASE/(DECREASE) IN NET ASSETS ..................................... 28,333,374 (73,453,337) ------------- ------------ NET ASSETS: Beginning of period ....................................................... 105,396,515 178,849,852 ------------- ------------ End of period ............................................................. $ 133,729,889 $105,396,515 ============= ============ NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 1. ORGANIZATION. The Gabelli Global Growth Fund (the "Fund"), a series of Gabelli Global Series Funds, Inc. (the "Corporation"), was organized on July 16, 1993 as a Maryland corporation. The Fund is a non-diversified, open-end management investment company registered under the Investment Company Act of 1940, as amended (the "1940 Act"), and one of four separately managed portfolios (collectively, the "Portfolios") of the Corporation. The Fund's primary objective is capital appreciation. The Fund commenced investment operations on February 7, 1994. Prior to January 13, 2000, the Fund's name was The Gabelli Global Interactive Couch Potato(R) Fund. 2. SIGNIFICANT ACCOUNTING POLICIES. The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts and disclosures in the 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 so determines, by such other method as the Board of Directors shall 9 THE GABELLI GLOBAL GROWTH FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- 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 foreign markets are generally valued at the preceding closing values of such securities on their respective exchanges or if, after the close, market conditions change significantly, certain foreign securities may be fair valued pursuant to procedures established by the Board of Directors. Securities and assets for which market quotations are not readily available are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Board of Directors. Short term debt securities with remaining maturities of 60 days or less are valued at amortized cost, unless the Board of Directors determines such does not reflect the securities' fair value, in which case these securities will be valued at their fair value as determined by the Board of Directors. Debt instruments having a maturity greater than 60 days for which market quotations are readily available are valued at the latest average of the bid and asked prices. If there were no asked prices quoted on such day, the security is valued using the closing bid price. Options are valued at the last sale price on the exchange on which they are listed. If no sales of such options have taken place that day, they will be valued at the mean between their closing bid and asked prices. REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements with primary government securities dealers recognized by the Federal Reserve Board, with member banks of the Federal Reserve System or with other brokers or dealers that meet credit guidelines established by the Adviser and reviewed by the Board of Directors. Under the terms of a typical repurchase agreement, the Fund takes possession of an underlying debt obligation subject to an obligation of the seller to repurchase, and the Fund to resell, the obligation at an agreed-upon price and time, thereby determining the yield during the Fund's holding period. The Fund will always receive and maintain securities as collateral whose market value, including accrued interest, will be at least equal to 102% of the dollar amount invested by the Fund in each agreement. The Fund will make payment for such securities only upon physical delivery or upon evidence of book entry transfer of the collateral to the account of the custodian. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market on a daily basis to maintain the adequacy of the collateral. If the seller defaults and the value of the collateral declines or if bankruptcy proceedings are commenced with respect to the seller of the security, realization of the collateral by the Fund may be delayed or limited. At December 31, 2003, there were no repurchase agreements. OPTIONS. The Fund may purchase or write call or put options on securities or indices. As a writer of call options, the Fund receives a premium at the outset and then bears the risk of unfavorable changes in the price of the financial instrument underlying the option. The Fund would incur a loss if the price of the underlying financial instrument increases between the date the option is written and the date on which the option is terminated. The Fund would realize a gain, to the extent of the premium, if the price of the financial instrument decreases between those dates. At December 31, 2003, there were no open option contracts. As a purchaser of put options, the Fund pays a premium for the right to sell to the seller of the put option the underlying security at a specified price. The seller of the put has the obligation to purchase the underlying security upon exercise at the exercise price. If the price of the underlying security declines, the Fund would realize a gain upon sale or exercise. If the price of the underlying security increases, the Fund would realize a loss upon sale or at expiration date, but only to the extent of the premium paid. 10 THE GABELLI GLOBAL GROWTH FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- FUTURES CONTRACTS. The Fund may engage in futures contracts for the purpose of hedging against changes in the value of its portfolio securities and in the value of securities it intends to purchase. Upon entering into a futures contract, the Fund is required to deposit with the broker an amount of cash or cash equivalents equal to a certain percentage of the contract amount. This is known as the "initial margin". Subsequent payments ("variation margin") are made or received by the Fund each day, depending on the daily fluctuation of the value of the contract. The daily changes in the contract are included in unrealized gains or losses. The Fund recognizes a realized gain or loss when the contract is closed. At December 31, 2003, there were no open futures contracts. There are several risks in connection with the use of futures contracts as a hedging device. The change in value of futures contracts primarily corresponds with the value of their underlying instruments, which may not correlate with the change in value of the hedged investments. In addition, there is the risk that the Fund may not be able to enter into a closing transaction because of an illiquid secondary market. SECURITIES SOLD SHORT. A short sale involves selling a security which the Fund does not own. The proceeds received for 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 the 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. FORWARD FOREIGN EXCHANGE CONTRACTS. The Fund may engage in forward foreign exchange contracts for hedging a specific transaction with respect to either the currency in which the transaction is denominated or another currency as deemed appropriate by the Adviser. Forward foreign exchange contracts are valued at the forward rate and are marked-to-market daily. The change in market value is included in unrealized appreciation/depreciation on investments and foreign currency transactions. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. The use of forward foreign exchange contracts does not eliminate fluctuations in the underlying prices of the Fund's portfolio securities, but it does establish a rate of exchange that can be achieved in the future. Although forward foreign exchange contracts limit the risk of loss due to a decline in the value of the hedged currency, they also limit any potential gain/(loss) that might result should the value of the currency increase. In addition, the Fund could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts. FOREIGN CURRENCY TRANSLATION. The books and records of the Fund are maintained in United States (U.S.) dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars at the exchange rates prevailing at the end of the period, and 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, which 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 transactions. 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 11 THE GABELLI GLOBAL GROWTH FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- 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 trade date and subsequent sale trade date is included in realized gain/(loss) on investments. SECURITIES TRANSACTIONS AND INVESTMENT INCOME. Securities transactions are accounted for on the trade date with realized gain or loss on investments determined by using the identified cost method. Interest income (including amortization of premium and accretion of discount) is recorded as earned. Dividend income is recorded on the ex-dividend date. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders are recorded on the ex-dividend date. Income and net capital gain distributions are determined in accordance with Federal income tax regulations which may differ from accounting principles generally accepted in the United States. These differences are primarily due to differing treatments of income and gains on various investment securities held by the Fund, timing differences and differing characterization of distributions made by the Fund. For the year ended December 31, 2003, reclassifications were made to decrease accumulated net investment loss for $530,580 and to decrease accumulated net realized loss on investments and foreign currency transactions for $85,013, with an offsetting adjustment to additional paid-in capital. EXPENSES. Certain administrative expenses are common to, and allocated among, the Portfolios and then, among the Classes of Shares. Such allocations are made on the basis of each Portfolio's and Class' average net assets or other criteria directly affecting the expenses as determined by the Adviser. 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. It is the Fund's policy to comply with the requirements of the Internal Revenue 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. As of December 31, 2003, the components of accumulated earnings/(losses) on a tax basis were as follows: Accumulated capital loss carryforward .................. $(90,068,929) Net unrealized appreciation on investments ............. 20,029,840 Net unrealized depreciation on securities sold short ... (65,021) Net unrealized appreciation on foreign receivables and payables ..................... 11,615 ----------- Total accumulated loss ................................. $(70,092,495) ============ Dividends and interest from non-U.S. sources received by the Fund are generally subject to non-U.S. withholding taxes at rates ranging up to 30%. Such withholding taxes may be reduced or eliminated under the terms of applicable U.S. income tax treaties, and the Fund intends to undertake any procedural steps required to claim the benefits of such treaties. If the value of more than 50% of the Fund's total assets at the close of any taxable year consists of stocks or securities of non-U.S. corporations, the Fund is permitted and may elect to treat any non-U.S. taxes paid by it as paid by its shareholders. 12 THE GABELLI GLOBAL GROWTH FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- The Fund has a net capital loss carryforward for Federal income tax purposes at December 31, 2003 of $90,068,929. This capital loss carryforward is available to reduce future distributions of net capital gains to shareholders. $48,819,742 of loss carryforward is available through 2009; $39,969,419 is available through 2010; and $1,279,768 is available through 2011. 3. INVESTMENT ADVISORY AGREEMENT. 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 the Fund's 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 its affiliates. 4. DISTRIBUTION PLAN. The Fund's Board of Directors has adopted a distribution plan (the "Plan") for each class of shares pursuant to Rule 12b-1 under the 1940 Act. For the year ended December 31, 2003, the Fund incurred distribution costs payable to Gabelli & Company, Inc., an affiliate of the Adviser, of $293,397 and $768 for Class AAA and Class A Shares, respectively, or 0.25% of average daily net assets, the annual limitation under each Plan. Class B and Class C Shares incurred distribution costs of $1,372 and $1,145, respectively, or 1.00% of average daily net assets, the annual limitation under each Plan. Such payments are accrued daily and paid monthly. 5. PORTFOLIO SECURITIES. Purchases and sales of securities for the year ended December 31, 2003, other than short term securities, aggregated $60,689,138 and $95,147,753, respectively. 6. TRANSACTIONS WITH AFFILIATES. During the year ended December 31, 2003, the Fund paid brokerage commissions of $6,941 to Gabelli & Company, Inc. During the year ended December 31, 2003, Gabelli & Company, Inc. received $1,404 from investors representing commissions (sales charges and underwriting fees) on sales of Fund shares. The cost of calculating the Fund's net asset value per share is a Fund expense pursuant to the Investment Advisory Agreement between the Fund and the Adviser. During fiscal 2003, the Fund reimbursed the Adviser $34,800 in connection with the cost of computing the Fund's net asset value, which is included in miscellaneous expenses on the Statement of Operations. 7. LINE OF CREDIT. The Fund has access to an unsecured line of credit up to $25,000,000 from the custodian for temporary borrowing purposes. Borrowings under this arrangement bear interest at 0.75% above the Federal Funds rate on outstanding balances. There were no borrowings during the year ended December 31, 2003. 8. CAPITAL STOCK TRANSACTIONS. The Fund offers four classes of shares -- Class AAA Shares, Class A Shares, Class B Shares, and Class C Shares. Class A Shares are subject to a maximum front-end sales charge of 5.75%. Class B Shares are subject to a contingent deferred sales charge (CDSC) upon redemption within six years of purchase. The applicable CDSC is equal to a declining percentage of the lesser of the net asset value per share at the date of original purchase or at the date of redemption, based on the length of time held. Class C Shares are subject to a 1% CDSC for two years after purchase (one year beginning May 1, 2004). 13 THE GABELLI GLOBAL GROWTH FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- The Fund imposes a redemption fee of 2.00% on Class AAA and Class A Shares that are redeemed within sixty days of purchase. The redemption fee is deducted from the proceeds otherwise payable to the redeeming shareholders. The redemption fees returned to the assets of the Fund during the year ended December 31, 2003 amounted to $85,069. Transactions in shares of capital stock were as follows: YEAR ENDED YEAR ENDED DECEMBER 31, 2003 DECEMBER 31, 2002 ----------------------------- ------------------------------ SHARES AMOUNT SHARES AMOUNT ----------- ------------ ------------ ------------- CLASS AAA CLASS AAA ----------------------------- ------------------------------ Shares sold ...................................... 3,808,797 $ 45,481,542 57,002,879 $ 782,882,461 Shares issued upon reinvestment of dividends ..... -- -- -- -- Shares redeemed .................................. (4,759,485) (58,699,522) (59,517,422) (818,826,996) ----------- ------------ ------------ ------------- Net decrease ................................. (950,688) $(13,217,980) (2,514,543) $ (35,944,535) =========== ============ ============ ============= CLASS A CLASS A ----------------------------- ------------------------------ Shares sold ...................................... 409,125 $ 4,755,463 11,912 $ 144,803 Shares issued upon reinvestment of dividends ..... -- -- -- -- Shares redeemed .................................. (398,393) (4,545,697) (7,307) (101,488) ----------- ------------ ------------ ------------- Net increase ................................. 10,732 $ 209,766 4,605 $ 43,315 =========== ============ ============ ============= CLASS B CLASS B ----------------------------- ------------------------------ Shares sold ...................................... 7,154 $ 101,286 3,968 $ 51,975 Shares issued upon reinvestment of dividends ..... -- -- -- -- Shares redeemed .................................. (1,531) (17,729) (144) (2,130) ----------- ------------ ------------ ------------- Net increase ................................. 5,623 $ 83,557 3,824 $ 49,845 =========== ============ ============ ============= CLASS C CLASS C ----------------------------- ------------------------------ Shares sold ...................................... 6,903 $ 103,864 8,996 $ 121,905 Shares issued upon reinvestment of dividends ..... -- -- -- -- Shares redeemed .................................. (2,780) (35,962) (3,737) (53,831) ----------- ------------ ------------ ------------- Net increase ................................. 4,123 $ 67,902 5,259 $ 68,074 =========== ============ ============ ============= 9. CHANGE IN FUND'S AUDITOR. On November 19, 2003, based on the recommendation of the Audit Committee of the Fund, the Board of Directors voted to appoint Ernst & Young LLP as the Fund's independent auditor for the current fiscal year ending December 31, 2003, replacing Grant Thornton LLP ("GT"). During the two most recent fiscal years, GT audit reports contained no adverse opinion or disclaimer of opinion; nor were the reports qualified or modified as to uncertainty, audit scope, or accounting principles. Further, there were no disagreements between the Fund and GT on accounting principles, financial statement disclosure or audit scope, which if not resolved to the satisfaction of GT would have caused it to make reference to the disagreements in connection with its report. 10. OTHER MATTERS. On October 7, 2003, the Fund's Adviser received a subpoena from the Attorney General of the State of New York requesting information on mutual fund shares trading practices. The Adviser is fully cooperating in responding to the request. The Fund does not believe that this matter will have a material adverse effect on the Fund's financial position or results of the operations. 14 THE GABELLI GLOBAL GROWTH FUND FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- Selected data for a share of capital stock outstanding throughout each period: INCOME FROM INVESTMENT OPERATIONS DISTRIBUTIONS ---------------------------------------- ----------------------------------------------------- Net Net Asset Realized and Total Net Period Value, Net Unrealized from Net Realized Ended Beginning Investment Gain (Loss) on Investment Investment Gain on Paid-in- Total December 31 of Period Loss Investments Operations Income Investments Capital Distributions - ----------- --------- ---------- ------------- ---------- ---------- ----------- ---------- ------------- CLASS AAA 2003(f) $11.62 $(0.06) $ 4.86 $ 4.81 -- -- -- -- 2002(f) 15.45 (0.08) (3.75) (3.83) -- -- -- -- 2001(f) 20.37 (0.16) (4.76) (4.92) -- -- -- -- 2000(f) 35.17 (0.29) (12.92) (13.21) -- $(1.48) $(0.11) $(1.59) 1999 16.99 (0.13) 19.77 19.64 $(0.00)(b) (1.46) -- (1.46) CLASS A 2003(f) 11.63 (0.06) 4.81 4.82 -- -- -- -- 2002(f) 15.47 (0.08) (3.76) (3.84) -- -- -- -- 2001(f) 20.37 (0.16) (4.74) (4.90) -- -- -- -- 2000(a)(f) 38.80 (0.28) (16.56) (16.84) -- (1.48) (0.11) (1.59) CLASS B 2003(f) 11.42 (0.16) 4.59 4.60 -- -- -- -- 2002(f) 15.30 (0.17) (3.71) (3.88) -- -- -- -- 2001(f) 20.30 (0.29) (4.71) (5.00) -- -- -- -- 2000(a)(f) 38.80 (0.46) (16.45) (16.91) -- (1.48) (0.11) (1.59) CLASS C 2003(f) 11.38 (0.16) 4.58 4.59 -- -- -- -- 2002(f) 15.26 (0.17) (3.71) (3.88) -- -- -- -- 2001(f) 20.24 (0.28) (4.70) (4.98) -- -- -- -- 2000(a)(f) 38.80 (0.46) (16.51) (16.97) -- (1.48) (0.11) (1.59) RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA ---------------------------------------------------------------------- Net Net Asset Net Assets Investment Operating Period Value, End of Loss Expenses to Portfolio Ended Redemption End of Total Period to Average Average Net Turnover December 31 Fees Period Return+ (in 000's) Net Assets Assets (c)(d) Rate - ----------- -------- -------- ------- ---------- ----------- ------------ --------- CLASS AAA 2003(f) $0.01 $16.43 41.4% $132,886 (0.45)% 1.71% 63% 2002(f) -- 11.62 (24.8) 105,034 (0.58) 1.75 82 2001(f) -- 15.45 (24.2) 178,575 (0.91) 1.75 102 2000(f) -- 20.37 (37.5) 271,572 (0.95) 1.60 93 1999 -- 35.17 116.1 447,769 (0.85) 1.58 63 CLASS A 2003(f) 0.01 16.45 41.4 426 (0.45) 1.71 63 2002(f) -- 11.63 (24.8) 176 (0.58) 1.75 82 2001(f) -- 15.47 (24.1) 163 (0.91) 1.75 102 2000(a)(f) -- 20.37 (43.3) 241 (0.95)(e) 1.60(e) 93 CLASS B 2003(f) 0.01 16.02 40.3 211 (1.20) 2.46 63 2002(f) -- 11.42 (25.4) 86 (1.33) 2.50 82 2001(f) -- 15.30 (24.6) 57 (1.66) 2.50 102 2000(a)(f) -- 20.30 (43.5) 77 (1.70)(e) 2.35(e) 93 CLASS C 2003(f) 0.01 15.97 40.3 207 (1.20) 2.46 63 2002(f) -- 11.38 (25.4) 101 (1.33) 2.50 82 2001(f) -- 15.26 (24.6) 55 (1.66) 2.50 102 2000(a)(f) -- 20.24 (43.7) 26 (1.70)(e) 2.35(e) 93 - -------------------------------------------------------------------------------- + Total return represents aggregate total return of a hypothetical $1,000 investment at the beginning of the period and sold at the end of the period including reinvestment of dividends. Total return for the period of less than one year is not annualized. (a) From commencement of offering on March 1, 2000. (b) Amount represents less than $0.005 per share. (c) The Fund incurred interest expense during the period ended December 31, 2002, 2001 and 2000. If interest expense had not been incurred, the ratios of operating expenses to average net assets would have been 1.70%,1.59% and 1.49% (Class AAA), 1.70%, 1.59% and 1.49% (Class A), 2.45%, 2.34% and 2.24% (Class B), and 2.45%, 2.34% and 2.24% (Class C), respectively. (d) The Fund incurred interest expense during the year ended December 31, 1999. If interest expense had not been incurred, the ratios of operating expenses to average net assets would have been 1.55%. (e) Annualized. (f) Per share amounts have been calculated using the average month-end shares outstanding method. See accompanying notes to financial statements. 15 THE GABELLI GLOBAL GROWTH FUND REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS - -------------------------------------------------------------------------------- Shareholders and Board of Directors of The Gabelli Global Growth Fund We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of The Gabelli Global Growth Fund (the "Fund"), a series of Gabelli Global Series Funds, Inc., as of December 31, 2003, and the related statement of operations, the statement of changes in net assets, and financial highlights for the year then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The statement of changes in net assets of the Fund for the year ended December 31, 2002 and the financial highlights for each of the four years in the period then ended were audited by other auditors whose report dated January 31, 2003, expressed an unqualified opinion on those financial statements and financial highlights. We conducted our audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of securities owned as of December 31, 2003, by correspondence with the Fund's custodian and brokers, or by other auditing procedures where replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of The Gabelli Global Growth Fund at December 31, 2003, the results of its operations, the changes in its net assets, and the financial highlights for the year then ended, in conformity with accounting principles generally accepted in the United States. /s/ ERNST & YOUNG LLP New York, New York February 10, 2004 16 THE GABELLI GLOBAL GROWTH FUND ADDITIONAL FUND INFORMATION (UNAUDITED) - -------------------------------------------------------------------------------- The business and affairs of the Company are managed under the direction of the Company's Board of Directors. Information pertaining to the Directors and officers of the Company is set forth below. The Fund's Statement of Additional Information includes additional information about Gabelli Global Growth Fund's Directors and is available, without charge, upon request, by calling 800-GABELLI (800-422-3554) or by writing to Gabelli Global Growth Fund at One Corporate Center, Rye, NY 10580. TERM OF NUMBER OF OFFICE AND FUNDS IN FUND NAME, POSITION(S) LENGTH OF COMPLEX ADDRESS 1 TIME OVERSEEN BY PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIPS AND AGE SERVED 2 DIRECTOR DURING PAST FIVE YEARS HELD BY DIRECTOR - ---------------- ---------- ------------ ---------------------- ---------------- INTERESTED DIRECTORS 3: - ---------------------- MARIO J. GABELLI Since 1993 24 Chairman of the Board and Chief Executive Director of Morgan Group Director and Officer of Gabelli Asset Management Inc. Holdings, Inc. (holding Chief Investment Officer and Chief Investment Officer of Gabelli company); Vice Chairman of Age: 61 Funds, LLC and GAMCO Investors, Inc.; Lynch Corporation Vice Chairman and Chief Executive Officer (diversified manufacturing) of Lynch Interactive Corporation (multimedia and services) JOHN D. GABELLI Since 1993 10 Senior Vice President of Gabelli & Company, Inc. -- Director Director of Gabelli Advisers, Inc. Age: 59 KARL OTTO POHL Since 1993 33 Member of the Shareholder Committee of Director of Gabelli Asset Director Sal Oppenheim Jr. & Cie (private investment Management Inc. (investment Age: 74 bank); Former President of the Deutsche management); Chairman, Bundesbank and Chairman of its Central Bank Incentive Capital and Council (1980-1991) Incentive Asset Management (Zurich); Director at Sal Oppenheim Jr. & Cie, Zurich NON-INTERESTED DIRECTORS: - ------------------------- E. VAL CERUTTI Since 2001 7 Chief Executive Officer of Cerutti Director of Lynch Director Consultants, Inc.; Former President and Chief Corporation (diversified Age: 64 Operating Officer of Stella D'oro Biscuit manufacturing) Company (through 1992); Adviser, Iona College School of Business ANTHONY J. COLAVITA Since 1993 35 President and Attorney at Law in the law firm -- Director of Anthony J. Colavita, P.C. Age: 68 ARTHUR V. FERRARA Since 2001 9 Formerly, Chairman of the Board and Chief Director of The Guardian Director Executive Officer of The Guardian Life Life Insurance Company of Age: 73 Insurance Company of America from America; and 25 mutual funds January 1993 to December 1995; President, within the Guardian Fund Chief Executive Officer and a Director prior Complex thereto WERNER J. ROEDER, MD Since 1993 26 Vice President/Medical Affairs, Lawrence -- Director Hospital Center and practicing private physician Age: 63 ANTHONIE C. VAN EKRIS Since 1993 20 Managing Director of BALMAC International, Director of Aurado Director Inc. (commodities) Exploration, Inc. (oil & Age: 69 gas operations) 17 THE GABELLI GLOBAL GROWTH FUND ADDITIONAL FUND INFORMATION (UNAUDITED) (CONTINUED) - -------------------------------------------------------------------------------- TERM OF NUMBER OF OFFICE AND FUNDS IN FUND NAME, POSITION(S) LENGTH OF COMPLEX ADDRESS 1 TIME OVERSEEN BY PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIPS AND AGE SERVED 2 DIRECTOR DURING PAST FIVE YEARS HELD BY DIRECTOR - ---------------- ---------- ------------ ---------------------- ---------------- OFFICERS: BRUCE N. ALPERT Since 2003 -- Executive Vice President and Chief Operating -- President Officer of Gabelli Funds, LLC since 1988 and Age: 52 an officer of all mutual funds advised by Gabelli Funds, LLC and its affiliates. Director and President of Gabelli Advisers, Inc. JAMES E. MCKEE Since 1995 -- Vice President, General Counsel and Secretary -- Secretary of Gabelli Asset Management Inc. since 1999 Age: 40 and GAMCO Investors, Inc. since 1993; Secretary of all mutual funds advised by Gabelli Advisers, Inc. and Gabelli Funds, LLC - -------------------------------------------------------------------------------- 1 Address: One Corporate Center, Rye, NY 10580, unless otherwise noted. 2 Each Director will hold office for an indefinite term until the earliest of (i) the next meeting of shareholders if any, called for the purpose of considering the election or re-election of such Director and until the election and qualification of his or her successor, if any, elected at such meeting, or (ii) the date a Director resigns or retires, or a Director is removed by the Board of Directors or shareholders, in accordance with the Company's By-Laws and Articles of Incorporation. 3 "Interested person" of the Company as defined in the Investment Company Act of 1940. Messrs. M. Gabelli, J. Gabelli and Pohl are each considered an "interested person" because of their affiliation with Gabelli Funds, LLC which acts as the Company's investment adviser. Mario J. Gabelli and John D. Gabelli are brothers. 18 - -------------------------------------------------------------------------------- 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, Gabelli Advisers, Inc. and Gabelli Fixed Income, LLC, which are affiliated with Gabelli Asset Management Inc. Gabelli Asset Management is a publicly-held company that has subsidiaries that provide investment advisory or brokerage services for a variety of clients. WHAT KIND OF NON-PUBLIC INFORMATION DO WE COLLECT ABOUT YOU IF YOU BECOME A GABELLI CUSTOMER? 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: o 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. o 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, and the deposits and withdrawals that you make. 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 web site, www.sec.gov. WHAT DO WE DO TO PROTECT YOUR PERSONAL INFORMATION? We restrict access to non-public personal information about you to the people who need to know that information in order to provide services to you or the Fund and to ensure that we are complying with the laws governing the securities business. We maintain physical, electronic, and procedural safeguards to keep your personal information confidential. - -------------------------------------------------------------------------------- Gabelli Global Series Funds, Inc. THE GABELLI GLOBAL GROWTH FUND One Corporate Center Rye, New York 10580-1422 800-GABELLI 800-422-3554 FAX: 914-921-5118 WEBSITE: WWW.GABELLI.COM E-MAIL: INFO@GABELLI.COM Net Asset Value available daily by calling 800-GABELLI after 6:00 P.M. BOARD OF DIRECTORS Mario J. Gabelli, CFA John D. Gabelli CHAIRMAN AND CHIEF SENIOR VICE PRESIDENT INVESTMENT OFFICER GABELLI & COMPANY, INC. GABELLI ASSET MANAGEMENT INC. E. Val Cerutti Karl Otto Pohl CHIEF EXECUTIVE OFFICER FORMER PRESIDENT CERUTTI CONSULTANTS, INC. DEUTSCHE BUNDESBANK Anthony J. Colavita Werner J. Roeder, MD ATTORNEY-AT-LAW VICE PRESIDENT/MEDICAL AFFAIRS ANTHONY J. COLAVITA, P.C. LAWRENCE HOSPITAL CENTER Arthur V. Ferrara Anthonie C. van Ekris FORMER CHAIRMAN AND MANAGING DIRECTOR CHIEF EXECUTIVE OFFICER BALMAC INTERNATIONAL, INC. GUARDIAN LIFE INSURANCE COMPANY OF AMERICA OFFICERS Bruce N. Alpert James E. McKee PRESIDENT SECRETARY DISTRIBUTOR Gabelli & Company, Inc. CUSTODIAN, TRANSFER AGENT AND DIVIDEND AGENT State Street Bank and Trust Company LEGAL COUNSEL Skadden, Arps, Slate, Meagher & Flom LLP [GRAPHIC OMITTED] GABELLI PHOTO THE GABELLI GLOBAL GROWTH FUND - -------------------------------------------------------------------------------- This report is submitted for the general information of the shareholders of The Gabelli Global Growth Fund. It is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. - -------------------------------------------------------------------------------- GAB442Q403SR ANNUAL REPORT DECEMBER 31, 2003 THE GABELLI GLOBAL OPPORTUNITY FUND ANNUAL REPORT DECEMBER 31, 2003 TO OUR SHAREHOLDERS, The Sarbanes-Oxley Act requires a Fund's principal executive and financial officers to certify the entire contents of the semi-annual and annual shareholder reports in a filing with the Securities and Exchange Commission on Form N-CSR. This certification would cover the portfolio manager's commentary and subjective opinions if they are attached to or a part of the financial statements. Many of these comments and opinions would be difficult or impossible to certify. Because we do not want our portfolio managers to eliminate their opinions and/or restrict their commentary to historical facts, we have separated their commentary from the financial statements and investment portfolio and have sent it to you separately. Both the commentary and the financial statements, including the portfolio of investments, will be available on our website at www.gabelli.com/funds. Enclosed are the audited financial statements and the investment portfolio as of December 31, 2003 with a description of the factors that affected the performance during the past year. PERFORMANCE DISCUSSION The Gabelli Global Opportunity Fund's (the "Fund") net asset value rose 13.5% during the fourth quarter. This compares with a rise of 14.5% for the Morgan Stanley Capital International ("MSCI") All Country ("AC") World Free Index and a gain of 13.5% for the average global fund monitored by Lipper Inc. For 2003, the Fund's net asset value rose 37.4% compared with a rise of 34.6% and 32.1% for the MSCI AC World Free Index and Lipper Global Fund Average, respectively. A combination of low interest rates, excellent corporate earnings and, thankfully, a lack of any major terrorist attack enticed investors back into the equity markets. Of course, two consecutive quarters of positive returns gave investors some added confidence that the bear has gone into hibernation. Adjusted for movements in the dollar, Germany, one of the hardest hit markets in the downtown, rose 30.8%, the United Kingdom rose 18.1% and Japan's Topix Index appreciated by 6.9%. Returns to dollar-based investors were assisted by the weakness of the dollar. For the quarter, this added about 4.5% to Japanese investments and about double that for investments in the Euro Zone. For the year, the dollar declined by about 22% vis-a-vis the euro and by about half that amount against the yen. During 2003, the Fund's best performers were companies that tend to benefit from faster economic growth. These include Invik (+174.1%), Vivendi Universal (+51.1%) and the Italian broadcaster Mediaset (+29.8%). Consumer products manufacturers Marzotto and Christian Dior also rose sharply during the year. Several of the Fund's Japanese holdings performed poorly during the year including Kikkoman, Nintendo and Shiseido. Aerospace giant Lockheed Martin and gold mining company Harmony Gold faltered in 2003 after enjoying large gains in previous years. Sincerely yours, /s/ Bruce N. Alpert Bruce N. Alpert President February 24, 2004 COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE GABELLI GLOBAL OPPORTUNITY FUND CLASS AAA SHARES, THE LIPPER GLOBAL FUND AVERAGE AND THE MSCI AC WORLD FREE INDEX [GRAPH OMITTED] PLOT POINTS FOLLOW: Gabelli Global Opportunity Fund Lipper Global Morgan Stanley Class AAA Shares Fund Average World Free Index 5/11/98 10,000 10,000 10,000 12/31/98 11,009 9,922 10,613 12/31/99 19,729 13,459 14,430 12/31/00 17,068 12,077 11,619 12/31/01 12,130 9,979 9,770 12/31/02 10,737 8,030 7,916 12/31/03 14,753 10,607 10,657 Past performance is not predictive of future results. The performance tables and graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. COMPARATIVE RESULTS - -------------------------------------------------------------------------------- AVERAGE ANNUAL RETURNS THROUGH DECEMBER 31, 2003 (A) SINCE QUARTER 1 YEAR 3 YEAR 5 YEAR INCEPTION(B) ------- ------ ------ ------ ------------ Gabelli Global Opportunity Fund Class AAA ............................ 13.48% 37.40% (4.74)% 6.03% 7.13% MSCI AC World Free Index ................ 14.52% 34.63% (2.84)% 0.02% 1.08% Lipper Global Fund Average .............. 13.46% 32.09% (3.92)% 2.20% 1.65% Class A ................................. 13.47% 37.42% (4.69)% 6.07% 7.17% 6.99%(c) 29.52%(c) (6.56)%(c) 4.83%(c) 6.05%(c) Class B ................................. 13.21% 36.36% (5.40)% 5.56% 6.71% 8.66%(d) 31.81%(d) (6.06)%(d) 5.26%(d) 6.58%(d) Class C ................................. 13.46% 37.67% (4.53)% 6.17% 7.25% 12.55%(d) 36.75%(d) (4.53)%(d) 6.17%(d) 7.25%(d) (a) Returns represent past performance and do not guarantee future results. Total returns and average annual returns reflect changes in share price and reinvestment of dividends and are net of expenses. Investment returns and the principal value of an investment will fluctuate. When shares are redeemed, they may be worth more or less than their original cost. The Morgan Stanley Capital International (MSCI) All Country (AC) World Free Index is an unmanaged indicator of stock market performance, while the Lipper Average reflects the average performance of mutual funds classified in this particular category. Performance for periods less than one year is not annualized. Had the Adviser not reimbursed expenses of the Fund from 1999 to 2003, returns would have been lower. The Class AAA Shares' net asset values are used to calculate performance for the periods prior to the issuance of Class A Shares, Class B Shares and Class C Shares on March 12, 2000, August 16, 2000 and November 23, 2001, respectively. The actual performance for the Class B Shares and Class C Shares would have been lower due to the additional expenses associated with these Classes of shares. Investing in foreign securities involves risks not ordinarily associated with investments in domestic issues, including currency fluctuation, economic and political risks. Returns would have been lower had the Adviser not reimbursed certain expenses of the Fund. (b) From commencement of investment operations on May 11, 1998. (c) Includes the effect of the maximum 5.75% sales charge at the beginning of the period. (d) Includes the effect of the applicable contingent deferred sales charge at the end of the period shown for Class B and Class C Shares, respectively. Note: Investing in foreign securities involves risks not ordinarily associated with investments in domestic issues, including currency fluctuation, economic and political risks. - -------------------------------------------------------------------------------- 2 THE GABELLI GLOBAL OPPORTUNITY FUND PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2003 - -------------------------------------------------------------------------------- MARKET SHARES COST VALUE ------ ---- ------ COMMON STOCKS -- 94.7% AEROSPACE -- 2.0% 7,500 Lockheed Martin Corp. .............$ 184,317 $ 385,500 ----------- ----------- AVIATION: PARTS AND SERVICES -- 1.1% 4,700 Precision Castparts Corp. ............. 139,355 213,427 ----------- ----------- BROADCASTING -- 3.2% 15,000 Mediaset SpA ........ 144,234 178,229 5,000 RTL Group ........... 269,324 295,156 7,300 Young Broadcasting Inc., Cl. A+ ............ 262,800 146,292 ----------- ----------- 676,358 619,677 ----------- ----------- BUILDING AND CONSTRUCTION -- 2.6% 24,125 CRH plc ............. 337,473 494,489 ----------- ----------- CABLE -- 0.8% 7,000 Cablevision Systems Corp., Cl. A+ ............ 150,246 163,730 ----------- ----------- COMMUNICATIONS EQUIPMENT -- 4.1% 25 Faith Inc. .......... 122,134 221,610 54,000 Furukawa Electric Co. Ltd. .......... 228,325 179,379 4,000 L-3 Communications Holdings Inc.+ .... 170,294 205,440 46,000 Nortel Networks Corp.+ ............ 136,620 194,580 ----------- ----------- 657,373 801,009 ----------- ----------- CONSUMER PRODUCTS -- 7.9% 8,000 Christian Dior SA ... 361,416 484,662 15,000 Compagnie Financiere Richemont AG, Cl. A 286,849 360,218 27,000 Marzotto SpA ........ 184,410 306,849 2,000 Nintendo Co. Ltd. ... 344,434 186,620 15,000 Shiseido Co. Ltd. ... 161,833 182,374 ----------- ----------- 1,338,942 1,520,723 ----------- ----------- CONSUMER SERVICES -- 0.9% 5,375 InterActiveCorp.+ ... 60,271 182,374 ----------- ----------- ELECTRONICS -- 1.8% 2,000 Rohm Co. Ltd. ....... 445,272 234,394 30,000 Toshiba Corp. ....... 152,711 113,651 ----------- ----------- 597,983 348,045 ----------- ----------- ENERGY AND UTILITIES -- 0.4% 90,000 Nordex AG+ .......... 135,114 77,195 ----------- ----------- ENTERTAINMENT -- 7.0% 31,200 Liberty Media Corp., Cl. A+ ............ 509,325 370,968 60,000 Publishing & Broadcasting Ltd. . 329,659 565,991 10,000 Time Warner Inc.+ ... 139,930 179,900 10,000 Vivendi Universal SA, ADR+ .......... 530,500 242,800 ----------- ----------- 1,509,414 1,359,659 ----------- ----------- MARKET SHARES COST VALUE ------ ---- ------ ENVIRONMENTAL SERVICES -- 1.1% 15,000 Allied Waste Industries Inc.+ ..$ 137,550 $ 208,200 ----------- ----------- FINANCIAL SERVICES -- 9.4% 30,000 Bank of Ireland ..... 185,546 408,678 7,000 Citigroup Inc. ...... 270,158 339,780 5,000 Invik & Co. AB, Cl. B ............. 359,167 493,378 937 Leucadia National Corp. ............. 84,897 43,179 1,285 Muenchener Rueckversicherungs- Gesellschaft AG ... 324,290 155,795 70,000 Nikko Cordial Corp. . 657,130 389,941 ----------- ----------- 1,881,188 1,830,751 ----------- ----------- FOOD AND BEVERAGE -- 0.7% 20,000 Kikkoman Corp. ...... 134,586 142,204 ----------- ----------- HEALTH CARE -- 14.0% 8,208 GlaxoSmithKline plc . 245,936 188,078 13,600 Novartis AG ......... 534,476 617,457 8,000 Roche Holding AG .... 805,043 806,954 10,000 Sanofi-Synthelabo SA 438,858 753,027 9,000 Takeda Chemical Industries Ltd. ... 565,250 356,910 ----------- ----------- 2,589,563 2,722,426 ----------- ----------- METALS AND MINING -- 15.9% 17,726 Andsberg Ltd.+ ...... 8,277 19,677 17,726 Antofagasta plc ..... 106,047 334,776 65,000 Gold Fields Ltd., ADR ......... 282,317 906,100 10,000 Harmony Gold Mining Co. Ltd. .......... 56,555 162,547 51,000 Harmony Gold Mining Co. Ltd., ADR ............... 275,466 827,730 17,000 Newmont Mining Corp. 396,100 826,370 ----------- ----------- 1,124,762 3,077,200 ----------- ----------- PUBLISHING -- 1.4% 20,000 Arnoldo Mondadori Editore SpA ....... 157,737 179,364 36,100 Independent News & Media plc ......... 72,399 85,606 ----------- ----------- 230,136 264,970 ----------- ----------- TELECOMMUNICATIONS -- 11.8% 3,000 ALLTEL Corp. ........ 156,153 139,740 2,400 AT&T Corp. .......... 113,478 48,720 11,000 BCE Inc. ............ 600,675 245,960 19,500 BT Group plc ........ 217,302 65,714 13,180 Citizens Communications Co.+ .............. 187,974 163,696 4,783 Deutsche Telekom AG, ADR+ .......... 121,558 86,716 122 KDDI Corp. .......... 865,872 698,964 10,500 Rogers Communications Inc., Cl. B, ADR .. 170,881 173,250 See accompanying notes to financial statements. 3 THE GABELLI GLOBAL OPPORTUNITY FUND PORTFOLIO OF INVESTMENTS (CONTINUED) -- DECEMBER 31, 2003 - -------------------------------------------------------------------------------- MARKET SHARES COST VALUE ------ ---- ------ COMMON STOCKS (CONTINUED) TELECOMMUNICATIONS (CONTINUED) 9,000 Sprint Corp. - FON Group .........$ 338,757 $ 147,780 82,521 Telecom Italia SpA, RNC+ ......... 156,868 168,102 4,179 Telefonica SA, ADR .. 158,806 184,670 4,500 Verizon Communications Inc. .............. 273,319 157,860 ----------- ----------- 3,361,643 2,281,172 ----------- ----------- WIRELESS COMMUNICATIONS -- 8.6% 26,827 AT&T Wireless Services Inc.+ ............. 303,684 214,348 19,500 mm02 plc+ ........... 58,637 26,879 20,000 Nextel Communications Inc., Cl. A+ ............ 312,920 561,200 65 NTT DoCoMo Inc. ..... 143,179 147,383 14,000 Rural Cellular Corp., Cl. A+ ............ 587,677 111,300 12,500 Sprint Corp. - PCS Group+ ........ 255,561 70,250 2,300 Telephone & Data Systems Inc. ...... 86,665 143,865 3,000 United States Cellular Corp.+ ... 188,250 106,500 113,964 Vodafone Group plc .. 434,313 282,558 ----------- ----------- 2,370,886 1,664,283 ----------- ----------- TOTAL COMMON STOCKS . 17,617,160 18,357,034 ----------- ----------- PRINCIPAL MARKET AMOUNT COST VALUE --------- ---- ------ U.S. GOVERNMENT OBLIGATIONS -- 5.9% $1,139,000 U.S. Treasury Bills, 0.874% to 0.945%++, 01/02/04 to 03/25/04 ..........$ 1,137,305 $ 1,137,314 ----------- ----------- TOTAL INVESTMENTS -- 100.6% ............$18,754,465 19,494,348 =========== OTHER ASSETS AND LIABILITIES (NET) -- (0.6)% ............... (110,054) ----------- NET ASSETS -- 100.0% ............ $19,384,294 =========== - ---------------- For Federal tax purposes: Aggregate cost .................. $18,754,465 =========== Gross unrealized appreciation ... $ 4,676,889 Gross unrealized depreciation ... (3,937,006) ----------- Net unrealized appreciation ..... $ 739,883 =========== - ---------------- + Non-income producing security. ++ Represents annualized yield at date of purchase. ADR - American Depository Receipt. RNC - Non-Convertible Savings Shares. % OF MARKET MARKET GEOGRAPHIC DIVERSIFICATION VALUE VALUE - -------------------------- ------ ------- Europe ............................... 37.4% $ 7,297,029 North America ........................ 35.3% 6,881,522 Japan ................................ 14.7% 2,853,429 South Africa ......................... 9.7% 1,896,377 Asia/Pacific ......................... 2.9% 565,991 ------ ----------- 100.0% $19,494,348 ====== =========== See accompanying notes to financial statements. 4 THE GABELLI GLOBAL OPPORTUNITY FUND STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 2003 - -------------------------------------------------------------------------------- ASSETS: Investments, at value (Cost $18,754,465) ..................... $19,494,348 Dividends and reclaims receivable ........ 28,193 Receivable for Fund shares sold .......... 15,913 Other assets ............................. 2,362 ----------- TOTAL ASSETS ............................. 19,540,816 ----------- LIABILITIES: Cash and foreign currency due to custodian, at value (Cost $65,273) ................ 67,446 Payable for Fund shares redeemed ......... 1,171 Payable for investment advisory fees ..... 32,031 Payable for distribution fees ............ 3,947 Other accrued expenses ................... 51,927 ----------- TOTAL LIABILITIES ........................ 156,522 ----------- NET ASSETS applicable to 1,591,849 shares outstanding ..................... $19,384,294 =========== NET ASSETS CONSIST OF: Capital stock, at par value .............. $ 1,592 Additional paid-in capital ............... 25,457,437 Accumulated net realized loss on investments and foreign currency transactions ...... (6,815,688) Net unrealized appreciation on investments and foreign currency transactions ...... 740,953 ----------- TOTAL NET ASSETS ......................... $19,384,294 =========== SHARES OF CAPITAL STOCK: CLASS AAA: Net Asset Value, offering and redemption price per share ($19,304,832 (DIVIDE) 1,585,303 shares outstanding) .......... $12.18 ====== CLASS A: Net Asset Value and redemption price per share ($66,955 (DIVIDE) 5,504 shares outstanding) .............. $12.16 ====== Maximum offering price per share (NAV/ 0.9425, based on maximum sales charge of 5.75% of the offering price at December 31, 2003) ... $12.90 ====== CLASS B: Net Asset Value and offering price per share ($12,385 (DIVIDE) 1,032 shares outstanding) .............. $12.00(a) ====== CLASS C: Net Asset Value and offering price per share ($122 (DIVIDE) 10 shares outstanding) ........................... $12.39(a) ====== - --------------------- (a) Redemption price varies based on length of time held. STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2003 - -------------------------------------------------------------------------------- INVESTMENT INCOME: Dividends (net of foreign taxes of $7,918) $ 239,191 Interest .................................. 6,102 ----------- TOTAL INVESTMENT INCOME ................... 245,293 ----------- EXPENSES: Investment advisory fees .................. 156,395 Distribution fees ......................... 39,175 Shareholder communications expenses ....... 23,750 Shareholder services fees ................. 19,349 Legal and audit fees ...................... 15,109 Custodian fees ............................ 11,191 Registration fees ......................... 11,682 Interest expense .......................... 3,249 Organizational expenses ................... 2,627 Directors' fees ........................... 798 Miscellaneous expenses .................... 3,496 ----------- TOTAL EXPENSES ............................ 286,821 ----------- Expense reimbursement ..................... (48,447) ----------- TOTAL NET EXPENSES ........................ 238,374 ----------- NET INVESTMENT INCOME ..................... 6,919 ----------- NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS: Net realized loss on investments and foreign currency transactions ........... (1,774,107) Net change in unrealized appreciation/ depreciation on investments and foreign currency transactions ........... 6,914,033 NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS ................... 5,139,926 NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ......................... $ 5,146,845 =========== See accompanying notes to financial statements. 5 THE GABELLI GLOBAL OPPORTUNITY FUND STATEMENT OF CHANGES IN NET ASSETS - -------------------------------------------------------------------------------- YEAR ENDED YEAR ENDED DECEMBER 31, 2003 DECEMBER 31, 2002 ----------------- ----------------- OPERATIONS: Net investment income/(loss) ........................................ $ 6,919 $ (7,711) Net realized loss on investments and foreign currency transactions .. (1,774,107) (1,903,438) Net change in unrealized appreciation/depreciation on investments and foreign currency transactions ................................... 6,914,033 85,695 ------------ ------------ NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ..... 5,146,845 (1,825,454) ------------ ------------ DISTRIBUTIONS TO SHAREHOLDERS: Net investment income Class AAA ........................................................... (12,058) -- Class A ............................................................. (82) -- ------------ ------------ TOTAL DISTRIBUTIONS TO SHAREHOLDERS ................................. (12,140) -- ------------ ------------ CAPITAL SHARE TRANSACTIONS: Class AAA ........................................................... (863,362) (1,602,562) Class A ............................................................. 18,634 (3,515) Class B ............................................................. 62 535 Class C ............................................................. -- -- ------------ ------------ Net decrease in net assets from capital share transactions .......... (844,666) (1,605,542) ------------ ------------ REDEMPTION FEES: Redemption fees ..................................................... 48,655 -- ------------ ------------ NET INCREASE/(DECREASE) IN NET ASSETS ............................... 4,338,694 (3,430,996) NET ASSETS: Beginning of period ................................................. 15,045,600 18,476,596 ------------ ------------ End of period ....................................................... $ 19,384,294 $ 15,045,600 ============ ============ NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 1. ORGANIZATION. The Gabelli Global Opportunity Fund (the "Fund"), a series of Gabelli Global Series Funds, Inc. (the "Corporation"), was organized on July 16, 1993 as a Maryland corporation. The Fund is a non-diversified, open-end management investment company registered under the Investment Company Act of 1940, as amended (the "1940 Act"), and one of four separately managed portfolios (collectively, the "Portfolios") of the Corporation. The Fund's primary objective is capital appreciation. The Fund commenced investment operations on May 11, 1998. 2. SIGNIFICANT ACCOUNTING POLICIES. The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts and disclosures in the 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 so determines, by such other method as the Board of Directors shall determine in good faith, to 6 THE GABELLI GLOBAL OPPORTUNITY FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- 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 foreign markets are generally valued at the preceding closing values of such securities on their respective exchanges or if, after the close, market conditions change significantly, certain foreign securities may be fair valued pursuant to procedures established by the Board of Directors. Securities and assets for which market quotations are not readily available are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Board of Directors. Short term debt securities with remaining maturities of 60 days or less are valued at amortized cost, unless the Board of Directors determines such does not reflect the securities' fair value, in which case these securities will be valued at their fair value as determined by the Board of Directors. Debt instruments having a maturity greater than 60 days for which market quotations are readily available are valued at the latest average of the bid and asked prices. If there were no asked prices quoted on such day, the security is valued using the closing bid price. Options are valued at the last sale price on the exchange on which they are listed. If no sales of such options have taken place that day, they will be valued at the mean between their closing bid and asked prices. REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements with primary government securities dealers recognized by the Federal Reserve Board, with member banks of the Federal Reserve System or with other brokers or dealers that meet credit guidelines established by the Adviser and reviewed by the Board of Directors. Under the terms of a typical repurchase agreement, the Fund takes possession of an underlying debt obligation subject to an obligation of the seller to repurchase, and the Fund to resell, the obligation at an agreed-upon price and time, thereby determining the yield during the Fund's holding period. The Fund will always receive and maintain securities as collateral whose market value, including accrued interest, will be at least equal to 102% of the dollar amount invested by the Fund in each agreement. The Fund will make payment for such securities only upon physical delivery or upon evidence of book entry transfer of the collateral to the account of the custodian. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market on a daily basis to maintain the adequacy of the collateral. If the seller defaults and the value of the collateral declines or if bankruptcy proceedings are commenced with respect to the seller of the security, realization of the collateral by the Fund may be delayed or limited. At December 31, 2003, there were no repurchase agreements. FORWARD FOREIGN EXCHANGE CONTRACTS. The Fund may engage in forward foreign exchange contracts for hedging a specific transaction with respect to either the currency in which the transaction is denominated or another currency as deemed appropriate by the Adviser. Forward foreign exchange contracts are valued at the forward rate and are marked-to-market daily. The change in market value is included in unrealized appreciation/depreciation on investments and foreign currency transactions. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. The use of forward foreign exchange contracts does not eliminate fluctuations in the underlying prices of the Fund's portfolio securities, but it does establish a rate of exchange that can be achieved in the future. Although forward foreign exchange contracts limit the risk of loss due to a decline in the value of the hedged currency, they also limit any potential gain/(loss) that might result should the value of the currency increase. In addition, the Fund could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts. FOREIGN CURRENCY TRANSLATION. The books and records of the Fund are maintained in United States (U.S.) dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars at the exchange rates prevailing at the end of the period, and purchases and sales of investment securities, income 7 THE GABELLI GLOBAL OPPORTUNITY FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- and expenses are translated at the exchange rate prevailing on the respective dates of such transactions. Unrealized gains and losses, which 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 transactions. 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 trade date and subsequent sale trade date is included in realized gain/(loss) on investments. SECURITIES TRANSACTIONS AND INVESTMENT INCOME. Securities transactions are accounted for on the trade date with realized gain or loss on investments determined by using the identified cost method. Interest income (including amortization of premium and accretion of discount) is recorded as earned. Dividend income is recorded on the ex-dividend date. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders are recorded on the ex-dividend date. Income and long term capital gain distributions are determined in accordance with Federal income tax regulations which may differ from accounting principles generally accepted in the United States. For the year ended December 31, 2003, reclassifications were made to decrease accumulated net investment loss for $5,221 and to increase accumulated net realized loss on investments and foreign currency transactions for $1,984, with an offsetting adjustment to additional paid-in capital. The tax character of distributions paid during the fiscal year ended December 31, 2003 was $12,140 of ordinary income. No distributions were made in 2002. EXPENSES. Certain administrative expenses are common to, and allocated among, the Portfolios and then, among the Classes of Shares. Such allocations are made on the basis of each Portfolio's and Class' average net assets or other criteria directly affecting the expenses as determined by the Adviser. 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. It is the Fund's policy to comply with the requirements of the Internal Revenue 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. As of December 31, 2003, the components of accumulated earnings/(losses) on a tax basis were as follows: Accumulated capital loss carryforward ...... $(6,815,688) Net unrealized appreciation ................ 739,883 Net unrealized appreciation on foreign receivables and payables ................. 1,070 ----------- Total accumulated loss ..................... $(6,074,735) =========== Dividends and interest from non-U.S. sources received by the Fund are generally subject to non-U.S. withholding taxes at rates ranging up to 30%. Such withholding taxes may be reduced or eliminated under the terms of applicable U.S. income tax treaties, and the Fund intends to undertake any procedural steps required to claim the benefits of such treaties. If the value of more than 50% of the Fund's total assets at the close of any taxable year consists of stocks or securities of non-U.S. corporations, the Fund is permitted and may elect 8 THE GABELLI GLOBAL OPPORTUNITY FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- to treat any non-U.S. taxes paid by it as paid by its shareholders. The Fund has a net capital loss carryforward for Federal income tax purposes at December 31, 2003 of $6,815,688. This capital loss carryforward is available to reduce future distributions of net capital gains to shareholders. $3,134,793 of the loss carryforward is available through 2009; $1,904,804 is available through 2010; and $1,776,091 is available through 2011. 3. INVESTMENT ADVISORY AGREEMENT. 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 the Fund's 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 its affiliates. The Adviser has agreed to reimburse expenses of the Fund to the extent necessary to maintain the annualized total operating expenses of the Fund (exclusive of interest expense) at 1.50% of the value of the Fund's average daily net assets. For the year ended December 31, 2003, the Adviser reimbursed the Fund in the amount of $48,447. Beginning January 1, 2003 the Fund is obliged to repay the Adviser for a period of two fiscal years following the fiscal year in which the Adviser reimbursed the Fund only to the extent that the operating expenses of the Fund fall below 1.50% of average daily net assets. The cumulative amount which the Fund may repay the Adviser is $286,166. 4. DISTRIBUTION PLAN. The Fund's Board of Directors has adopted a distribution plan (the "Plan") for each class of shares pursuant to Rule 12b-1 under the 1940 Act. For the year ended December 31, 2003, the Fund incurred distribution costs payable to Gabelli & Company, Inc., an affiliate of the Adviser, of $38,978 and $95 for Class AAA and Class A, respectively, or 0.25% of average daily net assets, the annual limitation under each Plan. Class B and Class C Shares incurred distribution costs of $101 and $1, respectively, or 1.00% of average daily net assets, the annual limitation under each Plan. Such payments are accrued daily and paid monthly. 5. ORGANIZATIONAL EXPENSES. The organizational expenses of the Fund are being amortized on a straight-line basis over a period of 60 months. 6. PORTFOLIO SECURITIES. Purchases and sales of securities for the year ended December 31, 2003, other than short term securities, aggregated $1,995,388 and $3,098,217, respectively. 7. TRANSACTIONS WITH AFFILIATES. During the year ended December 31, 2003, the Fund paid brokerage commissions of $1,196 to Gabelli & Company, Inc. During the year ended December 31, 2003, Gabelli & Company, Inc. received $115 from investors representing commissions (sales charges and underwriting fees) of Fund shares. 8. LINE OF CREDIT. The Fund has access to an unsecured line of credit up to $25,000,000 from the custodian for temporary borrowing purposes. Borrowings under this arrangement bear interest at 0.75% above the Federal Funds rate on outstanding balances. There were no borrowings outstanding at December 31, 2003. The average daily amount of borrowings outstanding within the year ended December 31, 2003 was $99,988 with a related weighted average interest rate of 2.03%. The maximum amount borrowed at any time during the year ended December 31, 2003 was $883,000. 9. CAPITAL STOCK TRANSACTIONS. The Fund offers four classes of shares -- Class AAA Shares, Class A Shares, Class B Shares, and Class C Shares. Class AAA Shares are offered through selected broker/dealers with no sales charge. Class A Shares are subject to a maximum front-end sales charge of 5.75%. Class B Shares are subject to a contingent deferred sales charge (CDSC) upon redemption within six years of purchase. The applicable CDSC 9 THE GABELLI GLOBAL OPPORTUNITY FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- is equal to a declining percentage of the lesser of the net asset value per share at the date of original purchase or at the date of redemption, based on the length of time held. Class C Shares are subject to a 1% CDSC for two years after purchase (one year beginning May 1, 2004). The Fund imposes a redemption fee of 2.00% on Class AAA and Class A shares that are redeemed within sixty days of purchase. The redemption fee is deducted from the proceeds otherwise payable to the redeeming shareholders. The redemption fees returned to the assets of the Fund during the year ended December 31, 2003 amounted to $48,655. Transactions in shares of capital stock were as follows: YEAR ENDED YEAR ENDED DECEMBER 31, 2003 DECEMBER 31, 2002 ---------------------------- --------------------------- SHARES AMOUNT SHARES AMOUNT ---------- ---------- ---------- ---------- CLASS AAA CLASS AAA ---------------------------- --------------------------- Shares sold ........................................ 1,728,960 $ 15,428,214 4,157,271 $ 39,584,069 Shares issued upon reinvestment of dividends ....... 953 11,487 -- -- Shares redeemed .................................... (1,836,267) (16,303,063) (4,305,052) (41,186,631) ---------- ------------ ---------- ------------ Net decrease ....................................... (106,354) $ (863,362) (147,781) $ (1,602,562) ========== ============ ========== ============ CLASS A CLASS A ---------------------------- --------------------------- Shares sold ........................................ 2,462 $ 27,256 1,504 $ 13,508 Shares issued upon reinvestment of dividends ....... 6 80 -- -- Shares redeemed .................................... (1,068) (8,702) (1,887) (17,023) ---------- ------------ ---------- ------------ Net increase (decrease) ............................ 1,400 $ 18,634 (383) $ (3,515) ========== ============ ========== ============ CLASS B CLASS B ---------------------------- --------------------------- Shares sold ........................................ 46 $ 440 57 $ 535 Shares issued upon reinvestment of dividends ....... -- -- -- -- Shares redeemed .................................... (35) (378) -- -- ---------- ------------ ---------- ------------ Net increase ....................................... 11 $ 62 57 $ 535 ========== ============ ========== ============ CLASS C CLASS C ---------------------------- --------------------------- Shares sold ........................................ -- $ -- -- $ -- Shares issued upon reinvestment of dividends ....... -- -- -- -- Shares redeemed .................................... -- -- -- -- ---------- ------------ ---------- ------------ Net increase (decrease) ............................ -- $ -- -- $ -- ========== ============ ========== ============ 10. CHANGE IN FUND'S AUDITOR. On November 19, 2003, based on the recommendation of the Audit Committee of the Fund, the Board of Directors voted to appoint Ernst & Young LLP as the Fund's independent auditor for the current fiscal year ending December 31, 2003, replacing Grant Thornton LLP ("GT"). During the two most recent fiscal years, GT audit reports contained no adverse opinion or disclaimer of opinion; nor were the reports qualified or modified as to uncertainty, audit scope, or accounting principles. Further, there were no disagreements between the Fund and GT on accounting principles, financial statement disclosure or audit scope, which if not resolved to the satisfaction of GT would have caused it to make reference to the disagreements in connection with its report. 11. OTHER MATTERS. On October 7, 2003, the Fund's Adviser received a subpoena from the Attorney General of the State of New York requesting information on mutual fund shares trading practices. The Adviser is fully cooperating in responding to the request. The Fund does not believe that this matter will have a material adverse effect on the Fund's financial position or results of the operations. 10 THE GABELLI GLOBAL OPPORTUNITY FUND FINANCIAL HIGHLIGHTS Selected data for a share of capital stock outstanding throughout each period: INCOME FROM INVESTMENT OPERATIONS DISTRIBUTIONS ---------------------------------------------------- --------------------------------------- Net Net Asset Net Realized and Total Net Period Value, Investment Unrealized from Net Realized Ended Beginning Income Gain (Loss) on Investment Investment Gain on Total Redemption December 31 of Period (Loss) Investments Operations Income Investments Distributions Fees ----------- ----------- ---------- -------------- ---------- ---------- ----------- ------------- ---------- CLASS AAA 2003(i) $ 8.87 $ 0.00(h) $ 3.29 $ 3.29 $(0.01) -- $(0.01) $ 0.03 2002(i) 10.02 0.00(h) (1.15) (1.15) -- -- -- -- 2001(i) 14.24 0.13 (4.25) (4.12) (0.10) -- (0.10) -- 2000(i) 18.03 0.26 (2.72) (2.46) (0.29) $(1.04) (1.33) -- 1999 10.55 0.03 8.30 8.33 -- (0.85) (0.85) -- CLASS A 2003(i) 8.86 0.00(h) 3.28 3.28 (0.01) -- (0.01) 0.03 2002(i) 9.99 0.00(h) (1.13) (1.13) -- -- -- -- 2001(i) 14.21 0.13 (4.24) (4.11) (0.11) -- (0.11) -- 2000(a)(i) 19.77 0.27 (4.46) (4.19) (0.33) (1.04) (1.37) -- CLASS B 2003(i) 8.80 (0.07) 3.24 3.17 -- -- -- 0.03 2002(i) 10.00 (0.07) (1.13) (1.20) -- -- -- -- 2001(i) 14.22 0.07 (4.26) (4.19) (0.03) -- (0.03) -- 2000(a)(i) 19.77 0.17 (4.39) (4.22) (0.29) (1.04) (1.33) -- CLASS C(f) 2003(i) 9.00 (0.07) 3.43 3.36 -- -- -- 0.03 2002(i) 10.11 (0.07) (1.04) (1.11) -- -- -- -- 2001(g)(i) 10.15 0.07 (0.11) (0.04) -- -- -- -- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA -------------------------------------------------------------------------- Net Operating Operating Net Asset Net Assets Investment Expenses to Expenses to Period Value, End of Income (Loss) Average Net Average Net Portfolio Ended End of Total Period to Average Assets Before Assets Net of Turnover December 31 Period Return+ (in 000's) Net Assets Reimbursement(c) Reimbursement(d)(e) Rate ----------- ---------- ------- ---------- ------------ ---------------- ------------------- -------- CLASS AAA 2003(i) $12.18 37.4% $19,305 0.04% 1.83% 1.52% 13% 2002(i) 8.87 (11.5) 15,000 (0.05) 2.39 1.59 0 2001(i) 10.02 (28.9) 18,422 1.11 2.00 1.59 31 2000(i) 14.24 (13.5) 31,023 1.50 1.79 1.50 50 1999 18.03 79.2 26,779 0.36 1.97 1.03 49 CLASS A 2003(i) 12.16 37.4 67 0.04 1.83 1.52 13 2002(i) 8.86 (11.3) 36 (0.05) 2.39 1.59 0 2001(i) 9.99 (29.0) 45 1.11 2.00 1.59 31 2000(a)(i) 14.21 (21.2) 52 1.50(b) 1.79(b) 1.50(b) 50 CLASS B 2003(i) 12.00 36.4 12 (0.71) 2.58 2.27 13 2002(i) 8.80 (12.0) 9 (0.80) 3.14 2.34 0 2001(i) 10.00 (29.5) 10 0.36 2.75 2.34 31 2000(a)(i) 14.22 (21.3) 3 0.75(b) 2.54(b) 2.25(b) 50 CLASS C(f) 2003(i) 12.39 37.7 0.1 (0.71) 2.58 2.27 13 2002(i) 9.00 (11.0) 0.1 (0.80) 3.14 2.34 0 2001(g)(i) 10.11 (29.0) 0.1 0.36(b) 2.75(b) 2.34(b) 31 - ------------ + Total return represents aggregate total return of a hypothetical $1,000 investment at the beginning of the period and sold at the end of the period including reinvestment of dividends. Total return for the period of less than one year is not annualized. (a) From commencement of offering on March 1, 2000. (b) Annualized. (c) During the periods December 31, 2003, 2002, 2001, 2000 and 1999, the Adviser reimbursed certain expenses. If such expense reimbursement had not occurred, the ratio of operating expenses to average net assets would have been as shown. (d) The Fund incurred interest expense during the periods ended December 31, 2003, 2002 and 2001. If interest expense had not been incurred, the ratios of operating expenses to average net assets would have been 1.50%, 1.50%, 2.25% and 2.25% for Class AAA, Class A, Class B and Class C, respectively for each year. (e) The Fund incurred interest expense during the years ended December 31, 2000 and 1999. If interest expense had not been incurred, the ratios of operating expenses to average net assets net of reimbursement would have been 1.50% and 1.00%, respectively. (f) Class C shares were outstanding for the period October 27, 2000 through December 12, 2000 and for the period April 24, 2001 through May 10, 2001. Financial Highlights are not presented for Class C shares as the information for this period is not considered meaningful. (g) From November 23, 2001, the date shares were continuously outstanding. (h) Amount represents less than $0.005 per share. (i) Per share data is calculated using the average month-end shares method. See accompanying notes to financial statements. 11 THE GABELLI GLOBAL OPPORTUNITY FUND REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS - -------------------------------------------------------------------------------- Shareholders and Board of Directors of The Gabelli Global Opportunity Fund We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of The Gabelli Global Opportunity Fund (the "Fund"), a series of Gabelli Global Series Funds, Inc., as of December 31, 2003, and the related statement of operations, the statement of changes in net assets, and financial highlights for the year then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The statement of changes in net assets of the Fund for the year ended December 31, 2002 and the financial highlights for each of the four years in the period then ended were audited by other auditors whose report dated January 31, 2003, expressed an unqualified opinion on those financial statements and financial highlights. We conducted our audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of securities owned as of December 31, 2003, by correspondence with the Fund's custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of The Gabelli Global Opportunity Fund at December 31, 2003, the results of its operations, the changes in its net assets, and the financial highlights for the year then ended, in conformity with accounting principles generally accepted in the United States. /s/ ERNST & YOUNG LLP New York, New York February 10, 2004 - -------------------------------------------------------------------------------- 2003 TAX NOTICE TO SHAREHOLDERS (Unaudited) For the fiscal year ended December 31, 2003, the Fund paid to shareholders, on December 27, 2003, an ordinary income dividend (comprised of net investment income) totaling $0.0076 and $0.0149 per share for Class AAA and Class A, respectively. For the fiscal year ended December 31, 2003, 100% of the distribution qualifies for the dividend received deduction available to corporations, and 100% of the ordinary income distribution was qualifying dividend income. U.S. GOVERNMENT INCOME: The percentage of the ordinary income dividend paid by the Fund during fiscal year 2003 which was derived from U.S. Treasury securities was 2.51%. Such income is exempt from state and local tax in all states. However, many states, including New York and California, allow a tax exemption for a portion of the income earned only if a mutual fund has invested at least 50% of its assets at the end of each quarter of the Fund's fiscal year in U.S. Government securities. The Gabelli Global Opportunity Fund did not meet this strict requirement in 2003. Due to the diversity in state and local tax law, it is recommended that you consult your personal tax advisor as to the applicability of the information provided to your specific situation. - -------------------------------------------------------------------------------- 12 THE GABELLI GLOBAL OPPORTUNITY FUND ADDITIONAL FUND INFORMATION (UNAUDITED) - -------------------------------------------------------------------------------- The business and affairs of the Company are managed under the direction of the Company's Board of Directors. Information pertaining to the Directors and officers of the Company is set forth below. The Fund's Statement of Additional Information includes additional information about Gabelli Global Opportunity Fund's Directors and is available, without charge, upon request, by calling 800-GABELLI (800-422-3554) or by writing to Gabelli Global Opportunity Fund at One Corporate Center, Rye, NY 10580-1422. TERM OF NUMBER OF OFFICE AND FUNDS IN FUND NAME, POSITION(S) LENGTH OF COMPLEX ADDRESS 1 TIME OVERSEEN BY PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIPS AND AGE SERVED 2 DIRECTOR DURING PAST FIVE YEARS HELD BY DIRECTOR - ----------------- --------- -------------- ----------------------- ------------------- INTERESTED DIRECTORS 3: - -------------------- MARIO J. GABELLI Since 1993 24 Chairman of the Board and Chief Executive Director of Morgan Group Director and Officer of Gabelli Asset Management Inc. Holdings, Inc. (holding Chief Investment Officer and Chief Investment Officer of Gabelli Funds, company); Vice Chairman of Age: 61 LLC and GAMCO Investors, Inc.; Vice Chairman Lynch Corporation and Chief Executive Officer of Lynch Interactive (diversified manufacturing) Corporation (multimedia and services) JOHN D. GABELLI Since 1993 10 Senior Vice President of Gabelli & Company, Inc. -- Director Director of Gabelli Advisers, Inc. Age: 59 KARL OTTO POHL Since 1993 33 Member of the Shareholder Committee of Director of Gabelli Asset Director Sal Oppenheim Jr. & Cie (private investment Management Inc. (investment Age: 74 bank); Former President of the Deutsche management); Chairman, Bundesbank and Chairman of its Central Bank Incentive Capital and Council (1980-1991) Incentive Asset Management (Zurich); Director at Sal Oppenheim Jr. & Cie, Zurich NON-INTERESTED DIRECTORS: - ------------------------ E. VAL CERUTTI Since 2001 7 Chief Executive Officer of Cerutti Director of Lynch Director Consultants, Inc.; Former President Corporation (diversified Age: 64 and Chief Operating Officer of Stella manufacturing) D'oro Biscuit Company (through 1992); Adviser, Iona College School of Business ANTHONY J. COLAVITA Since 1993 35 President and Attorney at Law in the law firm -- Director of Anthony J. Colavita, P.C. Age: 68 ARTHUR V. FERRARA Since 2001 9 Formerly, Chairman of the Board and Chief Director of The Guardian Director Executive Officer of The Guardian Life Life Insurance Company of Age: 73 Insurance Company of America from America; and 25 mutual funds January 1993 to December 1995; President, within the Guardian Fund Chief Executive Officer and a Director prior Complex thereto WERNER J. ROEDER, MD Since 1993 26 Vice President/Medical Affairs of Lawrence -- Director Hospital Center and practicing private physician Age: 63 ANTHONIE C. VAN EKRIS Since 1993 20 Managing Director of BALMAC International, Director of Aurado Director Inc. (commodities) Exploration, Inc. (oil and Age: 69 gas operations) 13 THE GABELLI GLOBAL OPPORTUNITY FUND ADDITIONAL FUND INFORMATION (CONTINUED) (UNAUDITED) - -------------------------------------------------------------------------------- TERM OF NUMBER OF OFFICE AND FUNDS IN FUND NAME, POSITION(S) LENGTH OF COMPLEX ADDRESS 1 TIME OVERSEEN BY PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIPS AND AGE SERVED 2 DIRECTOR DURING PAST FIVE YEARS HELD BY DIRECTOR - ----------------- --------- -------------- ----------------------- ------------------- OFFICERS: - -------- BRUCE N. ALPERT Since 2003 -- Executive Vice President and Chief Operating -- President Officer of Gabelli Funds, LLC since 1988 and Age: 52 an officer of all mutual funds advised by Gabelli Funds, LLC and its affiliates. Director and President of Gabelli Advisers, Inc. JAMES E. MCKEE Since 1995 -- Vice President, General Counsel and Secretary -- Secretary of Gabelli Asset Management Inc. since 1999 Age: 40 and GAMCO Investors, Inc. since 1993; Secretary of all mutual funds advised by Gabelli Advisers, Inc. and Gabelli Funds, LLC - ------------------ 1 Address: One Corporate Center, Rye, NY 10580-1422, unless otherwise noted. 2 Each Director will hold office for an indefinite term until the earliest of (i) the next meeting of shareholders if any, called for the purpose of considering the election or re-election of such Director and until the election and qualification of his or her successor, if any, elected at such meeting, or (ii) the date a Director resigns or retires, or a Director is removed by the Board of Directors or shareholders, in accordance with the Company's By-Laws and Articles of Incorporation. 3 "Interested person" of the Company as defined in the Investment Company Act of 1940. Messrs. M. Gabelli, J. Gabelli and Pohl are each considered an "interested person" because of their affiliation with Gabelli Funds, LLC which acts as the Company's investment adviser. Mario J. Gabelli and John D. Gabelli are brothers. 14 - -------------------------------------------------------------------------------- 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, Gabelli Advisers, Inc. and Gabelli Fixed Income, LLC, which are affiliated with Gabelli Asset Management Inc. Gabelli Asset Management is a publicly-held company that has subsidiaries that provide investment advisory or brokerage services for a variety of clients. WHAT KIND OF NON-PUBLIC INFORMATION DO WE COLLECT ABOUT YOU IF YOU BECOME A GABELLI CUSTOMER? 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: o 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. o 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, and the deposits and withdrawals that you make. 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 web site, www.sec.gov. WHAT DO WE DO TO PROTECT YOUR PERSONAL INFORMATION? We restrict access to non-public personal information about you to the people who need to know that information in order to provide services to you or the Fund and to ensure that we are complying with the laws governing the securities business. We maintain physical, electronic, and procedural safeguards to keep your personal information confidential. - -------------------------------------------------------------------------------- Gabelli Global Series Funds, Inc. THE GABELLI GLOBAL OPPORTUNITY FUND One Corporate Center Rye, New York 10580-1422 800-GABELLI 800-422-3554 FAX: 914-921-5118 WEBSITE: WWW.GABELLI.COM E-MAIL: INFO@GABELLI.COM Net Asset Value available daily by calling 800-GABELLI after 6:00 P.M. BOARD OF DIRECTORS Mario J. Gabelli, CFA John D. Gabelli CHAIRMAN AND CHIEF SENIOR VICE PRESIDENT INVESTMENT OFFICER GABELLI & COMPANY, INC. GABELLI ASSET MANAGEMENT INC. E. Val Cerutti Karl Otto Pohl CHIEF EXECUTIVE OFFICER FORMER PRESIDENT CERUTTI CONSULTANTS, INC. DEUTSCHE BUNDESBANK Anthony J. Colavita Werner J. Roeder, MD ATTORNEY-AT-LAW VICE PRESIDENT/MEDICAL AFFAIRS ANTHONY J. COLAVITA, P.C. LAWRENCE HOSPITAL CENTER Arthur V. Ferrara Anthonie C. van Ekris FORMER CHAIRMAN AND MANAGING DIRECTOR CHIEF EXECUTIVE OFFICER BALMAC INTERNATIONAL, INC. GUARDIAN LIFE INSURANCE COMPANY OF AMERICA OFFICERS Bruce N. Alpert James E. McKee PRESIDENT SECRETARY DISTRIBUTOR Gabelli & Company, Inc. CUSTODIAN, TRANSFER AGENT AND DIVIDEND AGENT State Street Bank and Trust Company LEGAL COUNSEL Skadden, Arps, Slate, Meagher & Flom LLP - -------------------------------------------------------------------------------- This report is submitted for the general information of the shareholders of The Gabelli Global Opportunity Fund. It is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. - -------------------------------------------------------------------------------- GAB403Q403SR [GRAPHIC OMITTED] PICTURE OF MARIO GABELLI THE GABELLI GLOBAL OPPORTUNITY FUND ANNUAL REPORT DECEMBER 31, 2003 THE GABELLI GLOBAL TELECOMMUNICATIONS FUND ANNUAL REPORT DECEMBER 31, 2003 TO OUR SHAREHOLDERS, The Sarbanes-Oxley Act requires a Fund's principal executive and financial officers to certify the entire contents of the semi-annual and annual shareholder reports in a filing with the Securities and Exchange Commission on Form N-CSR. This certification would cover the portfolio manager's commentary and subjective opinions if they are attached to or a part of the financial statements. Many of these comments and opinions would be difficult or impossible to certify. Because we do not want our portfolio managers to eliminate their opinions and/or restrict their commentary to historical facts, we have separated their commentary from the financial statements and investment portfolio and have sent it to you separately. Both the commentary and the financial statements, including the portfolio of investments, will be available on our website at www.gabelli.com/funds. Enclosed are the audited financial statements and the investment portfolio as of December 31, 2003 with a description of the factors that affected the performance during the past year. PERFORMANCE DISCUSSION After three years of disappointing absolute and relative performance, global telecommunications stocks excelled in 2003. Beaten down telecommunications equipment manufacturers, wireless communications companies, and emerging market telcos were among the best performers. Buoyed by the strong showing of our portfolio holdings in these sectors, the Gabelli Global Telecommunications Fund gained 42.7% during 2003. Some of the most beaten down sectors of the telecommunications industry performed exceptionally well during 2003. Telecom equipment manufacturers such as Nortel Networks and Lucent Technologies, which had been given up for dead a year ago, more than doubled this year. Wireless communications companies large and small, including Nextel Communications, Canada's Rogers Wireless, Rural Cellular, and Western Wireless also qualified as comeback players of the year. The first page of our leaderboard read like a tour of emerging market nations, with Telecom Argentina, Philippine Long Distance, Thai Telephone & Television, and Tele Norte Leste providing the most generous returns. In general, with the exception of wireless communications stocks, domestic telecommunications companies underperformed. Sprint and BellSouth managed only modest gains, and SBC Communications, Verizon Communications, and AT&T declined. The superior performance of emerging market telecom companies reflects stronger growth in their less developed markets, less competition, and in many cases, less restrictive regulation. Sincerely yours, /s/ Bruce N. Alpert Bruce N. Alpert President February 24, 2004 COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE GABELLI GLOBAL TELECOMMUNICATIONS FUND CLASS AAA SHARES, THE SALOMON SMITH BARNEY GLOBAL TELECOMMUNICATIONS INDEX AND THE MSCI AC WORLD FREE INDEX [GRAPH OMITTED] PLOT POINTS FOLLOW: Gabelli Global Telecommunications Fund Salomon Smith Barney Global MSCI World Class AAA Telecommunications Index Free Index 11/1/93 10,000 10,000 10,000 12/93 10,300 10,045 9,993 12/94 9,919 9,555 10,496 12/95 11,530 10,794 12,538 12/96 12,568 12,307 14,193 12/97 16,573 15,011 16,322 12/98 22,332 21,611 19,908 12/99 40,258 37,986 25,247 12/00 30,564 21,208 21,728 12/01 24,228 14,937 18,271 12/02 17,061 10,720 14,803 12/03 24,351 15,029 19,929 Past performance is not predictive of future results. The performance tables and graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. COMPARATIVE RESULTS - -------------------------------------------------------------------------------- AVERAGE ANNUAL RETURNS THROUGH DECEMBER 31, 2003 (A) SINCE QUARTER 1 YEAR 3 YEAR 5 YEAR 10 YEAR INCEPTION (B) ------- ------ ------ ------ ------- ------------- Gabelli Global Telecommunications Fund Class AAA ............................. 14.16% 42.73% (7.30)% 1.74% 8.98% 9.14% Citigroup Global Telecommunications Index .............. 17.44% 40.20% (10.84)% (7.01)% 4.62% 4.59% MSCI AC World Free Index ................ 14.52% 34.63% (2.84)% 0.02% 7.15% 7.02% Class A ................................. 14.25% 42.73% (7.26)% 1.77% 8.99% 9.15% 7.67%(c) 34.52%(c) (9.07)%(c) 0.57%(c) 8.35%(c) 8.52%(c) Class B ................................. 13.89% 41.57% (8.98)% 1.22% 8.70% 8.86% 9.58%(d) 37.26%(d) (8.37)%(d) 1.05%(d) 8.70%(d) 8.86%(d) Class C ................................. 14.00% 41.61% (7.99)% 1.21% 8.69% 8.86% 13.14%(d) 40.75%(d) (7.99)%(d) 1.21%(d) 8.69%(d) 8.86%(d) (a) Returns represent past performance and do not guarantee future results. Total returns and average annual returns reflect changes in share price and reinvestment of dividends and are net of expenses. Investment returns and the principal value of an investment will fluctuate. When shares are redeemed, they may be worth more or less than their original cost. The Dow Jones Industrial Average is an unmanaged index of 30 large industrial stocks. The S&P 500 Index and the Nasdaq Composite Index are unmanaged indicators of stock market performance. Dividends are considered reinvested (except for the Nasdaq Composite Index). Performance for periods less than one year is not annualized. The Class A Shares' net asset values are used to calculate performance for the periods prior to the issuance of Class B Shares and Class C Shares on March 15, 2000. The actual performance for the Class B Shares and Class C Shares would have been lower due to the additional expenses associated with these classes of shares. (b) From commencement of investment operations on September 29, 1989. (c) Includes the effect of the maximum 5.5% sales charge at the beginning of the period. (d) Includes the effect of the applicable contingent deferred sales charge at the end of the period shown for Class B and Class C Shares, respectively. Note: Investing in foreign securities involves risks not ordinarily associated with investments in domestic issues, including currency fluctuation, economic and political risks. 2 THE GABELLI GLOBAL TELECOMMUNICATIONS FUND PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2003 - -------------------------------------------------------------------------------- MARKET SHARES COST VALUE ------ ---- ------ COMMON STOCKS -- 99.6% AEROSPACE -- 0.4% 15,000 Lockheed Martin Corp. .$ 342,310 $ 771,000 ------------ ------------ BROADCASTING -- 0.7% 23,566 CanWest Global Communications Corp.+ 322,321 251,920 35,434 CanWest Global Communications Corp., Cl. A+ .............. 407,389 378,676 1,400 Claxson Interactive Group Inc.+ ......... 2,240 4,270 8,000 Fisher Communications Inc.+ ............... 427,113 408,000 85,000 Paxson Communications Corp.+ .............. 560,226 327,250 2,000 TiVo Inc.+ ............ 11,105 14,800 ------------ ------------ 1,730,394 1,384,916 ------------ ------------ BUSINESS SERVICES -- 1.5% 9,000 Carlisle Holdings Ltd.+ 48,250 55,350 4,000 Convergys Corp.+ ...... 53,716 69,840 14,000 Donnelley (R.H.) Corp.+ 187,628 557,760 37,000 IDT Corp.+ ............ 328,471 819,550 35,000 IDT Corp., Cl. B+ ..... 248,267 809,550 59,500 Securicor plc ......... 0 101,455 15,000 TPG NV, ADR ........... 198,277 353,850 ------------ ------------ 1,064,609 2,767,355 ------------ ------------ CABLE -- 3.4% 80,000 Adelphia Communications Corp., Cl. A+ ....... 74,756 48,000 19,065 Austar United Communications Ltd.+ 41,202 5,890 30,000 Cablevision Systems Corp., Cl. A+ .............. 214,924 701,700 78,000 Charter Communications Inc., Cl. A+ .............. 424,723 313,560 85,000 Comcast Corp., Cl. A+ . 3,545,590 2,793,950 24,000 Comcast Corp., Cl. A, Special+ ............ 190,951 750,720 12,000 Cox Communications Inc., Cl. A+ .............. 405,692 413,400 18,000 Mediacom Communications Corp.+ .............. 189,315 156,060 131,627 UnitedGlobalCom Inc., Cl. A+ .............. 1,893,014 1,116,200 ------------ ------------ 6,980,167 6,299,480 ------------ ------------ COMMUNICATIONS EQUIPMENT -- 2.9% 12,000 Agere Systems Inc., Cl. B+ .............. 52,813 34,800 50,000 Andrew Corp.+ ......... 142,254 575,500 20,000 Champion Technology Holdings Ltd., ADR .. 90,098 21,252 MARKET SHARES COST VALUE ------ ---- ------ 25,000 Communications Systems Inc. ........$ 237,711 $ 200,250 1,200 Copper Mountain Networks Inc.+ ...... 11,954 12,924 3,200 Ericsson (L.M.) Telephone Co., Cl. B, ADR+ .... 40,907 56,640 95,000 Furukawa Electric Co. Ltd. ............ 1,005,090 315,573 100,000 GN Store Nord A/S+ .... 541,433 648,806 15,000 JDS Uniphase Corp.+ ... 87,702 54,750 1,000 L-3 Communications Holdings Inc.+ ...... 11,000 51,360 60,000 Lucent Technologies Inc.+ ............... 236,522 170,400 130,000 Motorola Inc. ......... 1,527,331 1,829,100 28,000 Nokia Corp., ADR ...... 67,091 476,000 45,000 Nortel Networks Corp.+ .............. 196,650 190,350 22,000 Scientific-Atlanta Inc. ................ 179,954 600,600 750 Siemens AG, ADR ....... 23,625 59,955 300,000 Time Engineering Berhad+ ............. 316,448 75,395 ------------ ------------ 4,768,583 5,373,655 ------------ ------------ COMPUTER SOFTWARE AND SERVICES -- 0.2% 2,000 America Online Latin America Inc., Cl. A+ 11,950 2,840 6,000 Covad Communications Group Inc.+ ......... 11,761 21,600 3,230 EarthLink Inc.+ ....... 45,250 32,300 1,000 Geoworks Corp.+ ....... 1,375 80 833 Korea Thrunet Co. Ltd., Cl. A + ............. 5,469 0 18,000 Net2Phone Inc.+ ....... 55,561 122,400 12,000 T-Online International AG+ ................. 75,660 155,903 5,852 Telecom Italia Media SpA+ .......... 4,669 2,909 1,000 Via Net.Works Inc.+ ... 2,625 1,710 ------------ ------------ 214,320 339,742 ------------ ------------ DIVERSIFIED INDUSTRIAL -- 1.4% 65,730 Bouygues SA ........... 1,766,673 2,298,228 50,000 Hutchison Whampoa Ltd. ........ 487,170 368,708 ------------ ------------ 2,253,843 2,666,936 ------------ ------------ ELECTRONICS -- 0.0% 1,407 Vishay Intertechnology Inc.+ ............... 33,108 32,220 ------------ ------------ ENERGY AND UTILITIES -- 0.7% 3,000 E.ON AG ............... 126,255 195,787 27,000 SCANA Corp. ........... 696,031 924,750 1,400 SJW Corp. ............. 137,163 124,950 ------------ ------------ 959,449 1,245,487 ------------ ------------ ENTERTAINMENT -- 5.5% 340,000 Gemstar-TV Guide International Inc.+ . 3,006,093 1,717,000 480,275 Liberty Media Corp., Cl. A+ .............. 2,609,476 5,710,470 See accompanying notes to financial statements. 3 THE GABELLI GLOBAL TELECOMMUNICATIONS FUND PORTFOLIO OF INVESTMENTS (CONTINUED) -- DECEMBER 31, 2003 - -------------------------------------------------------------------------------- MARKET SHARES COST VALUE ------ ---- ------ COMMON STOCKS (CONTINUED) ENTERTAINMENT (CONTINUED) 15,000 Metromedia International Group Inc.+ (d) .....$ 59,576 $ 2,250 30,000 Time Warner Inc.+ ..... 522,160 539,700 100,000 Vivendi Universal SA, ADR+ ............ 1,831,197 2,428,000 ------------ ------------ 8,028,502 10,397,420 ------------ ------------ EQUIPMENT AND SUPPLIES -- 0.2% 1,000 Amphenol Corp., Cl. A+ 16,369 63,930 15,000 ThyssenKrupp AG ....... 275,840 296,481 ------------ ------------ 292,209 360,411 ------------ ------------ PUBLISHING -- 0.3% 1,000 Media General Inc., Cl. A ............... 35,808 65,100 1,000 News Corp. Ltd., ADR .. 21,050 36,100 15,428 Seat Pagine Gialle SpA+ ......... 30,783 14,692 18,000 Telegraaf Holdingsmij - CVA ................. 372,785 408,451 ------------ ------------ 460,426 524,343 ------------ ------------ SATELLITE -- 3.2% 1,500 Asia Satellite Telecommunications Holdings Ltd., ADR .. 22,103 28,463 1,500 British Sky Broadcasting Group plc, ADR+ ..... 36,400 76,410 52,000 EchoStar Communications Corp., Cl. A+ ....... 401,987 1,768,000 123,482 Hughes Electronics Corp.+ .............. 2,728,681 2,043,634 45,000 Loral Space & Communications Ltd.+ ............... 7,650 14,175 1,000 Orbital Sciences Corp.+ .............. 8,862 12,020 75,000 PanAmSat Corp.+ ....... 1,708,588 1,617,000 10,500 Pegasus Communications Corp.+ .............. 136,892 294,840 8,000 PT Indosat Tbk, ADR ... 78,652 144,000 ------------ ------------ 5,129,815 5,998,542 ------------ ------------ TELECOMMUNICATIONS: BROADBAND -- 0.3% 3,000 Choice One Communications Inc.+ 1,050 2,160 6,720 Colt Telecom Group plc, ADR+ ........... 39,630 45,360 2,000 Davel Communications Inc.+ ............... 3,250 40 18,000 Golden Telecom Inc.+ .. 188,378 499,500 20,000 NorthPoint Communications Group Inc.+ ......... 11,250 12 521 NTL Europe Inc.+ ...... 24,310 5 12,000 PCCW Ltd.+ ............ 8,069 7,806 ------------ ------------ 275,937 554,883 ------------ ------------ TELECOMMUNICATIONS: LOCAL -- 21.2% 88,000 Aliant Inc. ........... 1,517,951 2,185,955 11,000 Allegiance Telecom Inc.+ ............... 1,100 385 57,000 ALLTEL Corp. .......... 2,539,839 2,655,060 MARKET SHARES COST VALUE ------ ---- ------ 15,200 Atlantic Tele- Network Inc. ........$ 129,263 $ 426,360 15,000 ATX Communications Inc.+ ............... 7,700 3,300 75,000 BellSouth Corp. ....... 2,045,678 2,122,500 12,000 Brasil Telecom Participacoes SA, ADR ............. 595,898 453,600 952 Brasil Telecom SA ..... 3 5 210,000 CenturyTel Inc. ....... 6,583,993 6,850,200 368,580 Cincinnati Bell Inc.+ ............... 3,301,969 1,861,329 330,000 Citizens Communications Co.+ ................ 3,119,612 4,098,600 91,870 Commonwealth Telephone Enterprises Inc.+ ... 2,001,864 3,468,092 50,060 D&E Communications Inc. ................ 624,913 726,371 10,000 E.Spire Communications Inc.+ ............... 50,000 5 170,000 First Pacific Co. Ltd.+ 92,079 37,006 20,000 First Pacific Co. Ltd., ADR+ .......... 30,144 21,768 22,422 McLeodUSA Inc., Cl. A+ .............. 78,431 33,184 220,000 Rogers Communications Inc., Cl. B, ADR .......... 2,519,347 3,630,000 100,000 SBC Communications Inc. ................ 3,636,937 2,607,000 5,500 Shenandoah Telecommunications Co. 138,825 281,930 25,693 Tele Norte Leste Participacoes SA, ADR ............. 368,347 396,443 217,000 Telecom Argentina Stet France Telecom SA, ADR+ .... 1,076,436 1,898,750 1,000,000 TelecomAsia Corp. Public Co. Ltd.+ ........... 687,194 181,715 55,000 Telefonica de Argentina SA, ADR+ ................ 349,798 458,150 6,000 Time Warner Telecom Inc., Cl. A+ .............. 4,800 60,780 146,000 Verizon Communications Inc. ................ 6,297,329 5,121,680 ------------ ------------ 37,799,450 39,580,168 ------------ ------------ TELECOMMUNICATIONS: LONG DISTANCE -- 5.6% 55,000 AT&T Corp. ............ 1,875,387 1,116,500 45,000 BT Group plc, ADR ..... 1,832,823 1,539,900 1,000 Call-Net Enterprises Inc.+ ............... 11,554 3,800 5,200 Embratel Participacoes SA, ADR ................. 505,937 86,372 80,000 General Communication Inc., Cl. A+ .............. 376,995 696,000 400 KDDI Corp. ............ 1,884,920 2,291,686 480,000 Qwest Communications International Inc.+ . 2,574,561 2,073,600 160,000 Sprint Corp. - FON Group ........... 3,268,330 2,627,200 190,680 WorldCom Inc. - MCI Group+ .......... 48,607 9,343 ------------ ------------ 12,379,114 10,444,401 ------------ ------------ TELECOMMUNICATIONS: NATIONAL -- 25.6% 500 Allstream Inc., Cl. A . 14,995 26,750 500 Avaya Inc.+ ........... 4,138 6,470 See accompanying notes to financial statements. 4 THE GABELLI GLOBAL TELECOMMUNICATIONS FUND PORTFOLIO OF INVESTMENTS (CONTINUED) -- DECEMBER 31, 2003 - -------------------------------------------------------------------------------- MARKET SHARES COST VALUE ------ ---- ------ COMMON STOCKS (CONTINUED) TELECOMMUNICATIONS: NATIONAL (CONTINUED) 165,000 BCE Inc. ..............$ 4,004,030 $ 3,689,400 43,797 Brasil Telecom SA ..... 474 231 17,415,054 Cable & Wireless Jamaica Ltd. ........ 406,745 235,889 35,000 Cable & Wireless plc .. 230,568 83,645 260,000 Cable & Wireless plc, ADR ............ 4,338,986 1,822,600 2,000 Cesky Telecom AS ...... 19,426 22,690 75,000 China Unicom Ltd., ADR 628,818 700,500 92,000 Compania de Telecomunicaciones de Chile SA, ADR ....... 1,314,863 1,375,400 325,000 Deutsche Telekom AG, ADR+ ............ 3,498,247 5,892,250 200,000 Elisa Oyj, Cl. A+ ..... 2,883,449 2,674,067 8,000 France Telecom SA, ADR ............. 252,124 228,720 5,507 Hellenic Telecommunications Organization SA ..... 86,065 72,797 37,000 Hellenic Telecommunications Organization SA, ADR 233,757 247,530 18,000 Hungarian Telephone & Cable Corp.+ ........ 139,278 177,480 57,000 KPN NV, ADR+ .......... 472,195 439,470 10,000 KT Corp., ADR ......... 183,666 190,700 500 Magyar Tavkozlesi Rt, ADR ............. 9,650 9,355 237 Nippon Telegraph & Telephone Corp. ..... 1,207,105 1,143,314 23,000 Nippon Telegraph & Telephone Corp., ADR 743,668 564,880 2,000 Pakistan Telecommunications Co. Ltd., GDR (a) ... 155,765 127,723 70,000 Philippine Long Distance Telephone Co., ADR+ . 1,295,872 1,219,400 68,000 Portugal Telecom SGPS SA, ADR ................. 277,645 681,360 18,360 PT Telekomunikasi Indonesia, ADR ................. 165,504 301,471 10,000 Rostelecom, ADR ....... 79,578 125,200 1,000,000 Singapore Telecommunications Ltd. ................ 905,459 1,154,095 134,000 Swisscom AG, ADR ...... 3,762,318 4,400,560 40,000 TDC A/S, ADR .......... 690,491 726,400 25,000 Telecom Corp. of New Zealand Ltd., ADR ... 515,375 706,250 577,652 Telecom Italia SpA+ ... 410,538 1,712,264 39,610 Telecom Italia SpA, ADR+ ........... 711,396 1,176,021 115,000 Telefonica SA, ADR .... 3,114,277 5,081,850 6,117 Telefonica SA, BDR .... 108,417 89,264 46,000 Telefonos de Mexico SA de CV, Cl. L, ADR ...... 535,716 1,519,380 46,604 Telekom Austria AG+ ... 347,582 576,084 304,000 Telekom Malaysia Berhad .............. 1,432,905 672,000 3,355,677 Telemar Norte Leste SA ............ 148,557 66,997 666,336 TeliaSonera AB ........ 2,961,330 3,482,028 MARKET SHARES COST VALUE ------ ---- ------ 2,400 Telstra Corp. Ltd., ADR ...........$ 47,304 $ 43,896 65,000 TELUS Corp. ........... 1,228,289 1,305,281 145,000 TELUS Corp., Non-Voting .......... 3,571,229 2,715,419 8,075 Thai Telephone & Telecom, GDR+ (a) ............ 100,542 3,068 185 Vodafone Holdings KK .. 348,343 495,428 ------------ ------------ 43,586,679 47,985,577 ------------ ------------ WIRELESS COMMUNICATIONS -- 26.5% 38,000 ABC Communications Holdings Ltd. ....... 19,234 1,860 95,000 America Movil SA de CV, Cl. L, ADR .......... 1,407,552 2,597,300 320,000 AT&T Wireless Services Inc.+ ............... 5,559,634 2,556,800 501 Celular CRT Participacoes SA .... 206 105 50,000 Centennial Communications Corp.+ .............. 586,225 263,000 80,000 China Mobile (Hong Kong) Ltd., ADR ........... 1,165,904 1,242,400 70,000 CP Pokphand Co. Ltd., ADR+ .......... 58,725 59,731 65,000 Dobson Communications Corp., Cl. A+ ....... 389,517 427,050 10,000 Easycall International Ltd.+ ............... 9,532 678 240,000 Europolitan Vodafone AB+ ................. 220,305 1,567,690 3,500 Grupo Iusacell SA de CV, ADR+ ................ 29,040 32,445 26,000 Himachal Futuristic (a) (d) .. 141,200 57,493 40,000 Leap Wireless International Inc.+ ............... 9,200 1,320 17 Microcell Telecommunications Inc., Cl. B+ ........ 11,313 226 500 Millicom International Cellular SA+ ................. 17,000 34,950 700,000 mm02 plc+ ............. 741,703 964,895 85,000 mm02 plc, ADR+ ........ 885,925 1,161,100 210,000 Nextel Communications Inc., Cl. A+ .............. 2,912,498 5,892,600 100,000 Nextel Partners Inc., Cl. A+ ........ 1,317,811 1,345,000 1,400 NTT DoCoMo Inc. ....... 4,021,583 3,174,396 23,000 Orange SA+ ............ 199,064 276,186 90,000 Price Communications Corp.+ .............. 1,357,786 1,235,700 119,700 Rogers Wireless Communications Inc., Cl. B+ .............. 1,676,523 2,561,580 45,000 Rural Cellular Corp., Cl. A+ .............. 493,830 357,750 90,000 SK Telecom Co. Ltd., ADR ........... 1,068,189 1,678,500 400,000 Sprint Corp. - PCS Group+ .......... 3,161,843 2,248,000 2,300 Tele Celular Sul Participacoes SA, ADR ............. 37,449 33,005 7,666 Tele Centro Oeste Celular Participacoes SA, ADR+ 22,224 75,510 460 Tele Leste Celular Participacoes SA, ADR+ 12,153 6,380 See accompanying notes to financial statements. 5 THE GABELLI GLOBAL TELECOMMUNICATIONS FUND PORTFOLIO OF INVESTMENTS (CONTINUED) -- DECEMBER 31, 2003 - -------------------------------------------------------------------------------- MARKET SHARES COST VALUE ------ ---- ------ COMMON STOCKS (CONTINUED) WIRELESS COMMUNICATIONS (CONTINUED) 1,150 Tele Nordeste Celular Participacoes SA, ADR .............$ 16,568 $ 32,131 460 Tele Norte Celular Participacoes SA, ADR+ 7,079 5,023 1,000,000 Telecom Italia Mobile SpA .......... 4,078,472 5,436,428 1,150 Telemig Celular Participacoes SA, ADR ............. 30,497 36,915 100,000 Telephone & Data Systems Inc. ........ 4,751,187 6,255,000 5,272,417 Telesp Celular Participacoes SA+ ................. 2,665 10,782 9,200 Telesp Celular Participacoes SA, ADR+ ............ 284,292 60,536 20,000 Total Access Communications plc+ . 126,250 36,200 6,000 Triton PCS Holdings Inc., Cl. A+ ............. 20,520 33,480 92,000 United States Cellular Corp.+ .............. 4,523,856 3,266,000 27,000 Vimpel-Communications, ADR+ ................ 539,267 1,984,500 50,000 Vodafone Group plc, ADR ............ 769,376 1,252,000 70,000 Western Wireless Corp., Cl. A+ .............. 247,556 1,285,200 ------------ ------------ 42,930,753 49,547,845 ------------ ------------ TOTAL COMMON STOCKS ... 169,229,668 186,274,381 ------------ ------------ PREFERRED STOCKS -- 0.6% PUBLISHING -- 0.4% 21,811 News Corp. Ltd., Pfd., ADR ........... 657,104 659,787 ------------ ------------ TELECOMMUNICATIONS: NATIONAL -- 0.2% 9,000 Philippine Long Distance Telephone Co., $3.50 Cv. Pfd., Ser. III ............ 418,475 428,400 ------------ ------------ WIRELESS COMMUNICATIONS -- 0.0% 19,593,149 Tele Sudeste Celular Participacoes SA, Pfd. ............ 118,824 44,959 197,928 Telesp Celular Participacoes SA, Pfd.+ ........... 40,512 520 ------------ ------------ 159,336 45,479 ------------ ------------ TOTAL PREFERRED STOCKS .............. 1,234,915 1,133,666 ------------ ------------ RIGHTS -- 0.0% TELECOMMUNICATIONS: LOCAL -- 0.0% 315,789 TelecomAsia Corp. plc Rights+ ......... 0 0 ------------ ------------ PRINCIPAL AMOUNT --------- CORPORATE BONDS -- 0.0% TELECOMMUNICATIONS: NATIONAL -- 0.0% $1,000,000 Winstar Communications Inc., 12.500%, 04/15/08+ (c) ....... 21,148 100 ------------ ------------ MARKET SHARES COST VALUE ------ ---- ------ WARRANTS -- 0.0% SATELLITE -- 0.0% 1,524 Orbital Sciences Corp. Warrants Expire 08/31/04+ ...........$ 0 $ 11,369 ------------ ------------ TOTAL INVESTMENTS -- 100.2% ..............$170,485,731 187,419,516 ============ OTHER ASSETS AND LIABILITIES (NET) -- (0.2)% .................. (368,154) ------------ NET ASSETS -- 100.0% ............... $187,051,362 ============ - ------------------ For Federal tax purposes: Aggregate cost ..................... $179,912,759 ============ Gross unrealized appreciation ...... $ 38,445,254 Gross unrealized depreciation ...... (30,943,357) ------------ Net unrealized appreciation ........ $ 7,501,897 ============ - ---------------- PRINCIPAL SETTLEMENT UNREALIZED AMOUNT DATE DEPRECIATION --------- ---------- ------------ FORWARD FOREIGN EXCHANGE CONTRACTS -- 0.0% $6,620,000(b) Deliver Hong Kong Dollars in exchange for USD 853,312 ............ 02/02/04 $ (5,116) ============ - --------------- (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 December 31, 2003, the market value of Rule 144A securities amounted to $188,284 or 0.1% of total net assets. (b) Principal amount denoted in Hong Kong Dollars. (c) Security is in default. (d) Security fair valued under procedures established by the Board of Directors. At December 31, 2003, the market value of fair valued securities amounted to $59,743 or 0.0% of total net assets. + Non-income producing security. USD - U.S. Dollars. ADR - American Depository Receipt. BDR - Brazilian Depository Receipt. GDR - Global Depository Receipt. % OF MARKET MARKET GEOGRAPHIC DIVERSIFICATION VALUE VALUE - -------------------------- ------ ------------ North America ......................... 57.6% $107,949,872 Europe ................................ 27.7% 51,845,284 Asia/Pacific .......................... 5.4% 10,212,254 Latin America ......................... 5.0% 9,426,829 Japan ................................. 4.3% 7,985,277 ------ ------------ 100.0% $187,419,516 ====== ============ See accompanying notes to financial statements. 6 THE GABELLI GLOBAL TELECOMMUNICATIONS FUND STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 2003 - -------------------------------------------------------------------------------- ASSETS: Investments, at value (Cost $170,485,731) ...... $ 187,419,516 Dividends, reclaims and interest receivable 210,134 Receivable for Fund shares sold ................ 138,768 Other assets ................................... 9,475 ------------- TOTAL ASSETS ................................... 187,777,893 ------------- LIABILITIES: Cash and foreign currency due to custodian, at value (Cost $143,797) ..................... 143,541 Payable for Fund shares redeemed ............... 190,840 Payable for investment advisory fees ........... 153,710 Payable for distribution fees .................. 38,986 Other accrued expenses ......................... 194,338 Net unrealized depreciation on forward foreign exchange contracts ................... 5,116 ------------- TOTAL LIABILITIES .............................. 726,531 ------------- NET ASSETS applicable to 13,330,829 shares outstanding ........................... $ 187,051,362 ============= NET ASSETS CONSIST OF: Capital stock, at par value .................... $ 13,331 Additional paid-in capital ..................... 234,684,832 Accumulated net realized loss on investments and foreign currency transactions ............ (64,576,293) Net unrealized appreciation on investments and foreign currency transactions ............ 16,929,492 ------------- TOTAL NET ASSETS ............................... $ 187,051,362 ============= SHARES OF CAPITAL STOCK: CLASS AAA: Net Asset Value, offering and redemption price per share ($185,719,107 (DIVIDE) 13,234,263 shares outstanding) .......................... $14.03 ====== CLASS A: Net Asset Value and redemption price per share ($420,759 (DIVIDE) 30,000 shares outstanding) $14.03 ====== Maximum offering price per share (NAV / 0.9425, based on maximum sales charge of 5.75% of the offering price at December 31, 2003) ..... $14.89 ====== CLASS B: Net Asset Value and offering price per share ($817,472 (DIVIDE) 59,694 shares outstanding) $13.69(a) ====== CLASS C: Net Asset Value and offering price per share ($94,024 (DIVIDE) 6,872 shares outstanding) .. $13.68(a) ====== - ---------------- (a) Redemption price varies based on length of time held. STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2003 - -------------------------------------------------------------------------------- INVESTMENT INCOME: Dividends (net of foreign taxes of $121,006) $ 2,002,039 Interest .................................... 20,819 ------------ TOTAL INVESTMENT INCOME ..................... 2,022,858 ------------ EXPENSES: Investment advisory fees .................... 1,633,836 Distribution fees ........................... 414,200 Shareholder services fees ................... 278,105 Shareholder communications expenses ......... 78,261 Custodian fees .............................. 76,083 Registration fees ........................... 49,193 Legal and audit fees ........................ 45,251 Interest expense ............................ 12,505 Directors' fees ............................. 11,690 Miscellaneous expenses ...................... 49,618 ------------ TOTAL EXPENSES .............................. 2,648,742 ------------ NET INVESTMENT LOSS ......................... (625,884) ------------ NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS: Net realized loss on investments and foreign currency transactions ............. (13,194,924) Net change in unrealized appreciation/ depreciation on investments and foreign currency transactions ......... 71,936,201 ------------ NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS ..................... 58,741,277 ------------ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ................. $ 58,115,393 ============ See accompanying notes to financial statements. 7 THE GABELLI GLOBAL TELECOMMUNICATIONS FUND STATEMENT OF CHANGES IN NET ASSETS - -------------------------------------------------------------------------------- YEAR ENDED YEAR ENDED DECEMBER 31, 2003 DECEMBER 31, 2002 ----------------- ----------------- OPERATIONS: Net investment loss .............................................. $ (625,884) $ (92,575) Net realized loss on investments and foreign currency transactions (13,194,924) (32,437,526) Net change in unrealized appreciation/depreciation on investments and foreign currency transactions .............................. 71,936,201 (41,026,848) ------------- ------------- NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS .. 58,115,393 (73,556,949) ------------- ------------- CAPITAL SHARE TRANSACTIONS: Class AAA ........................................................ (11,470,954) (21,313,637) Class A .......................................................... (102,311) 263,346 Class B .......................................................... (34,067) 221,596 Class C .......................................................... (191,699) 130,983 ------------- ------------- Net decrease in net assets from capital share transactions ....... (11,799,031) (20,697,712) ------------- ------------- NET INCREASE/(DECREASE) IN NET ASSETS ............................ 46,316,362 (94,254,661) ------------- ------------- REDEMPTION FEES: Redemption fees .................................................. 46,202 -- ------------- ------------- NET INCREASE/(DECREASE) IN NET ASSETS ............................ 46,362,564 (94,254,661) NET ASSETS: Beginning of period .............................................. 140,688,798 234,943,459 ------------- ------------- End of period .................................................... $ 187,051,362 $ 140,688,798 ============= ============= See accompanying notes to financial statements. 8 THE GABELLI GLOBAL TELECOMMUNICATIONS FUND NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 1. ORGANIZATION. The Gabelli Global Telecommunications Fund (the "Fund"), a series of Gabelli Global Series Funds, Inc. (the "Corporation"), was organized on July 16, 1993 as a Maryland corporation. The Fund is a non-diversified, open-end management investment company registered under the Investment Company Act of 1940, as amended (the "1940 Act"), and one of four separately managed portfolios (collectively, the "Portfolios") of the Corporation. The Fund's primary objective is capital appreciation. The Fund commenced investment operations on November 1, 1993. 2. SIGNIFICANT ACCOUNTING POLICIES. The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts and disclosures in the 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 so determines, by such other method as the Board of Directors 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 foreign markets are generally valued at the preceding closing values of such securities on their respective exchanges or if, after the close, market conditions change significantly, certain foreign securities may be fair valued pursuant to procedures established by the Board of Directors. Securities and assets for which market quotations are not readily available are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Board of Directors. Short term debt securities with remaining maturities of 60 days or less are valued at amortized cost, unless the Board of Directors determines such does not reflect the securities' fair value, in which case these securities will be valued at their fair value as determined by the Board of Directors. Debt instruments having a maturity greater than 60 days for which market quotations are readily available are valued at the latest average of the bid and asked prices. If there were no asked prices quoted on such day, the security is valued using the closing bid price. Options are valued at the last sale price on the exchange on which they are listed. If no sales of such options have taken place that day, they will be valued at the mean between their closing bid and asked prices. REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements with primary government securities dealers recognized by the Federal Reserve Board, with member banks of the Federal Reserve System or with other brokers or dealers that meet credit guidelines established by the Adviser and reviewed by the Board of Directors. Under the terms of a typical repurchase agreement, the Fund takes possession of an underlying debt obligation subject to an obligation of the seller to repurchase, and the Fund to resell, the obligation at an agreed-upon price and time, thereby determining the yield during the Fund's holding period. The Fund will always receive and maintain securities as collateral whose market value, including accrued interest, will be at least equal to 102% of the dollar amount invested by the Fund in each agreement. The Fund will make payment for such securities only upon physical delivery or upon evidence of book entry transfer of the collateral to the account of the custodian. To the extent that any repurchase transaction exceeds one business day, the value of the collateral 9 THE GABELLI GLOBAL TELECOMMUNICATIONS FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- is marked-to-market on a daily basis to maintain the adequacy of the collateral. If the seller defaults and the value of the collateral declines or if bankruptcy proceedings are commenced with respect to the seller of the security, realization of the collateral by the Fund may be delayed or limited. At December 31, 2003 there were no repurchase agreements. FUTURES CONTRACTS. The Fund may engage in futures contracts for the purpose of hedging against changes in the value of its portfolio securities and in the value of securities it intends to purchase. Upon entering into a futures contract, the Fund is required to deposit with the broker an amount of cash or cash equivalents equal to a certain percentage of the contract amount. This is known as the "initial margin". Subsequent payments ("variation margin") are made or received by the Fund each day, depending on the daily fluctuation of the value of the contract. The daily changes in the contract are included in unrealized gains or losses. The Fund recognizes a realized gain or loss when the contract is closed. At December 31, 2003, there were no open futures contracts. There are several risks in connection with the use of futures contracts as a hedging device. The change in value of futures contracts primarily corresponds with the value of their underlying instruments, which may not correlate with the change in value of the hedged investments. In addition, there is the risk that the Fund may not be able to enter into a closing transaction because of an illiquid secondary market. SECURITIES SOLD SHORT. A short sale involves selling a security which the Fund does not own. The proceeds received for 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 the 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. At December 31, 2003, there were no open short sales. FORWARD FOREIGN EXCHANGE CONTRACTS. The Fund may engage in forward foreign exchange contracts for hedging a specific transaction with respect to either the currency in which the transaction is denominated or another currency as deemed appropriate by the Adviser. Forward foreign exchange contracts are valued at the forward rate and are marked-to-market daily. The change in market value is included in unrealized appreciation/depreciation on investments and foreign currency transactions. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. The use of forward foreign exchange contracts does not eliminate fluctuations in the underlying prices of the Fund's portfolio securities, but it does establish a rate of exchange that can be achieved in the future. Although forward foreign exchange contracts limit the risk of loss due to a decline in the value of the hedged currency, they also limit any potential gain/(loss) that might result should the value of the currency increase. In addition, the Fund could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts. FOREIGN CURRENCY TRANSLATION. The books and records of the Fund are maintained in United States (U.S.) dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars at the exchange rates prevailing at the end of the period, and 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, which 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 transactions. 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 10 THE GABELLI GLOBAL TELECOMMUNICATIONS FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- 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 trade date and subsequent sale trade date is included in realized gain/(loss) on investments. CONCENTRATION RISK. 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 on the Fund's net asset value and magnified effect on the total return. SECURITIES TRANSACTIONS AND INVESTMENT INCOME. Securities transactions are accounted for on the trade date with realized gain or loss on investments determined by using the identified cost method. Interest income (including amortization of premium and accretion of discount) is recorded as earned. Dividend income is recorded on the ex-dividend date. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders are recorded on the ex-dividend date. Income and long term capital gain distributions are determined in accordance with Federal income tax regulations which may differ from accounting principles generally accepted in the United States. These differences are primarily due to differing treatments of income and gains on various investment securities held by the Fund, timing differences and differing characterization of distributions made by the Fund. For the year ended December 31, 2003, reclassifications were made to increase accumulated net investment loss for $540,921 and to decrease accumulated net realized loss on investments and foreign currency transactions for $82,360, with an offsetting adjustment to additional paid-in capital. EXPENSES. Certain administrative expenses are common to, and allocated among, the Portfolios and then, among the Classes of Shares. Such allocations are made on the basis of each Portfolio's and Class' average net assets or other criteria directly affecting the expenses as determined by the Adviser. 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. It is the Fund's policy to comply with the requirements of the Internal Revenue 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. Dividends and interest from non-U.S. sources received by the Fund are generally subject to non-U.S. withholding taxes at rates ranging up to 30%. Such withholding taxes may be reduced or eliminated under the terms of applicable U.S. income tax treaties, and the Fund intends to undertake any procedural steps required to claim the benefits of such treaties. If the value of more than 50% of the Fund's total assets at the close of any taxable year consists of stocks or securities of non-U.S. corporations, the Fund is permitted and may elect to treat any non-U.S. taxes paid by it as paid by its shareholders. As of December 31, 2003, the components of accumulated earnings/(losses) on a tax basis were as follows: Accumulated capital loss carryforward ........ $(55,149,265) Net unrealized appreciation .................. 7,501,897 Net unrealized appreciation on foreign receivables and payables ........... 567 ------------ Total accumulated loss ....................... $(47,646,801) ============ 11 THE GABELLI GLOBAL TELECOMMUNICATIONS FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- The Fund has a net capital loss carryforward for Federal income tax purposes at December 31, 2003 of $55,149,265. This capital loss carryforward is available to reduce future distributions of net capital gains to shareholders. $12,970,427 of the loss carryforward is available through 2009; $30,268,699 is available through 2010; and $11,910,139 is available through 2011. 3. INVESTMENT ADVISORY AGREEMENT. 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 the Fund's 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 its affiliates. 4. DISTRIBUTION PLAN. The Fund's Board of Directors has adopted a distribution plan (the "Plan") for each class of shares pursuant to Rule 12b-1 under the 1940 Act. For the year ended December 31, 2003, the Fund incurred distribution costs payable to Gabelli & Company, Inc., an affiliate of the Adviser, of $405,484 and $1,061 for Class AAA and Class A, respectively, or 0.25% of average daily net assets, the annual limitation under each Plan. Class B and Class C incurred distribution costs of $6,835 and $820, respectively, or 1.00% of average daily net assets, the annual limitation under each Plan. Such payments are accrued daily and paid monthly. 5. PORTFOLIO SECURITIES. Purchases and sales of securities for the year ended December 31, 2003, other than short term securities, aggregated $18,224,130 and $30,957,160, respectively. 6. TRANSACTIONS WITH AFFILIATES. During the year ended December 31, 2003, the Fund paid brokerage commissions of $87,463 to Gabelli & Company, Inc. During the year ended December 31, 2003, Gabelli & Company, Inc. received $273 from investors representing commissions (sales charges and underwriting fees) on sales of Fund shares. The cost of calculating the Fund's net asset value per share is a Fund expense pursuant to the Investment Advisory Agreement between the Fund and the Adviser. During fiscal 2003, the Fund reimbursed the Adviser $34,800 in connection with the cost of computing the Fund's net asset value, as included in miscellaneous expenses on the statement of operations. 7. LINE OF CREDIT. The Fund has access to an unsecured line of credit up to $25,000,000 from the custodian for temporary borrowing purposes. Borrowings under this arrangement bear interest at 0.75% above the Federal Funds rate on outstanding balances. There were no borrowings outstanding at December 31, 2003. The average daily amount of borrowings within the year ended December 31, 2003 was $415,400 with a related weighted average interest rate of 2.01%. The maximum amount borrowed at any time during the year ended December 31, 2003 was $5,564,000. 8. CAPITAL STOCK TRANSACTIONS. The Fund offers four classes of shares -- Class AAA Shares, Class A Shares, Class B Shares, and Class C Shares. Class AAA Shares are offered through selected broker/dealers and are no-load. Class A Shares are subject to a maximum front-end sales charge of 5.75%. Class B Shares are subject to a contingent deferred sales charge (CDSC) upon redemption within six years of purchase. The applicable CDSC is equal to a declining percentage of the lesser of the net asset value per share at the date of original purchase or 12 THE GABELLI GLOBAL TELECOMMUNICATIONS FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- at the date of redemption, based on the length of time held. Class C Shares are subject to a 1% CDSC for two years after purchase (one year beginning May 1, 2004). The Fund imposes a redemption fee of 2.00% on shares that are redeemed within sixty days of purchase. The redemption fee is deducted from the proceeds otherwise payable to the redeeming shareholders. The redemption fees returned to the assets of the Fund during the period ended December 31, 2003 amounted to $46,202. Transactions in shares of capital stock were as follows: YEAR ENDED YEAR ENDED DECEMBER 31, 2003 DECEMBER 31, 2002 ---------------------------- --------------------------- SHARES AMOUNT SHARES AMOUNT ---------- ------------ ---------- ------------ CLASS AAA CLASS AAA ---------------------------- --------------------------- Shares sold ........................................ 5,059,251 $ 54,011,099 7,007,076 $ 74,923,971 Shares issued upon reinvestment of dividends ....... -- -- -- -- Shares redeemed .................................... (6,005,228) (65,482,053) (9,581,271) (96,237,608) ---------- ------------ ---------- ------------ Net decrease ................................... (945,977) $(11,470,954) (2,574,195) $(21,313,637) ========== ============ ========== ============ CLASS A CLASS A ---------------------------- --------------------------- Shares sold ........................................ 6,584 $ 80,377 27,684 $ 317,194 Shares issued upon reinvestment of dividends ....... -- -- -- -- Shares redeemed .................................... (14,422) (182,688) (5,523) (53,848) ---------- ------------ ---------- ------------ Net increase/(decrease) ........................ (7,838) $ (102,311) 22,161 $ 263,346 ========== ============ ========== ============ CLASS B CLASS B ---------------------------- --------------------------- Shares sold ........................................ 1,991 $ 23,884 28,546 $ 337,501 Shares issued upon reinvestment of dividends ....... -- -- -- -- Shares redeemed .................................... (5,397) (57,951) (11,776) (115,905) ---------- ------------ ---------- ------------ Net increase/(decrease) ........................ (3,406) $ (34,067) 16,770 $ 221,596 ========== ============ ========== ============ CLASS C CLASS C ---------------------------- --------------------------- Shares sold ........................................ 2,913 $ 31,540 21,086 $ 212,000 Shares issued upon reinvestment of dividends ....... -- -- -- -- Shares redeemed .................................... (22,109) (223,239) (9,260) (81,017) ---------- ------------ ---------- ------------ Net increase/(decrease) ........................ (19,196) $ (191,699) 11,826 $ 130,983 ========== ============ ========== ============ 9. CHANGE IN FUND'S AUDITOR. On November 19, 2003, based on the recommendation of the Audit Committee of the Fund, the Board of Directors voted to appoint Ernst & Young LLP as the Fund's independent auditor for the current fiscal year ending December 31, 2003, replacing Grant Thornton LLP ("GT"). During the two most recent fiscal years, GT audit reports contained no adverse opinion or disclaimer of opinion; nor were the reports qualified or modified as to uncertainty, audit scope, or accounting principles. Further, there were no disagreements between the Fund and GT on accounting principles, financial statement disclosure or audit scope, which if not resolved to the satisfaction of GT would have caused it to make reference to the disagreements in connection with its report. 10. OTHER MATTERS. On October 7, 2003, the Fund's Adviser received a subpoena from the Attorney General of the State of New York requesting information on mutual fund shares trading practices. The Adviser is fully cooperating in responding to the request. The Fund does not believe that this matter will have a material adverse effect on the Fund's financial position or results of the operations. 13 THE GABELLI GLOBAL TELECOMMUNICATIONS FUND FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- Selected data for a share of capital stock outstanding throughout each period: INCOME FROM INVESTMENT OPERATIONS DISTRIBUTIONS ----------------------------------------------------- -------------------------------------- Net Net Asset Realized and Total Net Period Value, Net Unrealized from Net Realized Ended Beginning Investment Gain (Loss) on Investment Investment Gain on Total Redemption December 31, of Period Income (Loss) Investments Operations Income Investments Distributions Fees - ------------ --------- ------------- -------------- ---------- ---------- ----------- ------------- ---------- CLASS AAA 2003(e) $ 9.83 $(0.04) $ 4.24 $ 4.20 -- -- -- $0.00(b) 2002(e) 13.96 (0.01) (4.12) (4.13) -- -- -- -- 2001(e) 17.63 (0.07) (3.58) (3.65) -- $(0.02) $(0.02) -- 2000(e) 26.95 0.59 (7.13) (6.54) $(0.63) (2.15) (2.78) -- 1999 16.62 0.05 13.22 13.27 (0.05) (2.89) (2.94) -- CLASS A 2003(e) 9.83 (0.04) 4.24 4.20 -- -- -- 0.00(b) 2002(e) 13.95 (0.00)(b) (4.12) (4.12) -- -- -- -- 2001(e) 17.61 (0.06) (3.58) (3.64) -- (0.02) (0.02) -- 2000(a)(e) 28.51 0.60 (8.70) (8.10) (0.65) (2.15) (2.80) -- CLASS B 2003(e) 9.67 (0.13) 4.15 4.02 -- -- -- 0.00(b) 2002(e) 13.83 (0.08) (4.08) (4.16) -- -- -- -- 2001(e) 17.59 (0.17) (3.57) (3.74) -- (0.02) (0.02) -- 2000(a)(e) 28.51 0.44 (8.61) (8.17) (0.60) (2.15) (2.75) -- CLASS C 2003(e) 9.66 (0.16) 4.18 4.02 -- -- -- 0.00(b) 2002(e) 13.82 (0.08) (4.08) (4.16) -- -- -- -- 2001(e) 17.58 (0.17) (3.57) (3.74) -- (0.02) (0.02) -- 2000(a)(e) 28.51 0.45 (8.62) (8.17) (0.61) (2.15) (2.76) -- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA ---------------------------------------------------------- Net Net Asset Net Assets Investment Operating Period Value, End of Income (Loss) to Expenses to Portfolio Ended End of Total Period Average Net Average Net Turnover December 31, Period Return+ (in 000's) Assets Assets(c) Rate - ------------ -------- ------- ---------- ------------- -------------- --------- CLASS AAA 2003(e) $14.03 42.7% $185,719 (0.38)% 1.62% 11% 2002(e) 9.83 (29.6) 139,455 (0.05) 1.66 8 2001(e) 13.96 (20.7) 233,887 (0.45) 1.52 15 2000(e) 17.63 (24.1) 329,415 2.36 1.46 49 1999 26.95 80.3 460,483 0.28 1.48 60 CLASS A 2003(e) 14.03 42.7 421 (0.38) 1.62 11 2002(e) 9.83 (29.5) 372 (0.05) 1.66 8 2001(e) 13.95 (20.7) 219 (0.45) 1.52 15 2000(a)(e) 17.61 (28.2) 16 2.36(d) 1.46(d) 49 CLASS B 2003(e) 13.69 41.6 817 (1.13) 2.37 11 2002(e) 9.67 (30.1) 610 (0.80) 2.41 8 2001(e) 13.83 (21.3) 640 (1.20) 2.27 15 2000(a)(e) 17.59 (28.5) 128 1.61(d) 2.21(d) 49 CLASS C 2003(e) 13.68 41.6 94 (1.13) 2.37 11 2002(e) 9.66 (30.1) 252 (0.80) 2.41 8 2001(e) 13.82 (21.3) 196 (1.20) 2.27 15 2000(a)(e) 17.58 (28.5) 60 1.61(d) 2.21(d) 49 - ---------------- + Total return represents aggregate total return of a hypothetical $1,000 investment at the beginning of the period and sold at the end of the period including reinvestment of dividends. Total return for the period of less than one year is not annualized. (a) From commencement of offering on March 1, 2000. (b) Amount represents less than $0.005 per share. (c) The Fund incurred interest expense during the periods ended December 31, 2003 and 2002. If interest expense had not been incurred, the ratio of operating expenses to average net assets would have been 1.61% and 1.64% (Class AAA), 1.61% and 1.64% (Class A), 2.36% and 2.39% (Class B), and 2.36% and 2.39% (Class C), respectively. (d) Annualized. (e) Per share amounts calculated using the average month-end shares method. See accompanying notes to financial statements. 14 THE GABELLI GLOBAL TELECOMMUNICATIONS FUND REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS - -------------------------------------------------------------------------------- Shareholders and Board of Directors of The Gabelli Global Telecommunications Fund We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of The Gabelli Global Telecommunications Fund (the "Fund"), a series of Gabelli Global Series Funds, Inc., as of December 31, 2003, and the related statement of operations, the statement of changes in net assets, and financial highlights for the year then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The statement of changes in net assets of the Fund for the year ended December 31, 2002 and the financial highlights for each of the four years in the period then ended were audited by other auditors whose report dated January 31, 2003, expressed an unqualified opinion on those financial statements and financial highlights. We conducted our audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of securities owned as of December 31, 2003, by correspondence with the Fund's custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of The Gabelli Global Telecommunications Fund at December 31, 2003, the results of its operations, the changes in its net assets, and the financial highlights for the year then ended, in conformity with accounting principles generally accepted in the United States. /s/ ERNST & YOUNG LLP New York, New York February 10, 2004 THE GABELLI GLOBAL TELECOMMUNICATIONS FUND ADDITIONAL FUND INFORMATION (UNAUDITED) - -------------------------------------------------------------------------------- The business and affairs of the Company are managed under the direction of the Company's Board of Directors. Information pertaining to the Directors and officers of the Company is set forth below. The Fund's Statement of Additional Information includes additional information about Gabelli Global Series Funds, Inc. Directors and is available, without charge, upon request, by calling 800-GABELLI (800-422-3554) or by writing to Gabelli Global Series Funds, Inc. at One Corporate Center, Rye, NY 10580. TERM OF OFFICE NUMBER OF NAME, POSITION(S) AND LENGTH OF FUNDS IN FUND ADDRESS 1 TIME COMPLEX OVERSEEN PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIPS AND AGE SERVED 2 BY DIRECTOR DURING PAST FIVE YEARS HELD BY DIRECTOR - ----------------- -------------- ---------------- ----------------------- ------------------- INTERESTED DIRECTORS 3: - -------------------- MARIO J. GABELLI Since 1993 24 Chairman of the Board and Chief Executive Director of Morgan Group Director, Officer of Gabelli Asset Management Inc. and Holdings, Inc. (holding Chief Investment Officer Chief Investment Officer of Gabelli Funds, LLC company); Vice Chairman of Age: 61 and GAMCO Investors, Inc.; Vice Chairman and Lynch Corporation Chief Executive Officer of Lynch Interactive (diversified manufacturing) Corporation (multimedia and services) JOHN D. GABELLI Since 1993 10 Senior Vice President of Gabelli & Company, Inc. -- Director Director of Gabelli Advisers, Inc. Age: 59 KARL OTTO POHL Since 1993 33 Member of the Shareholder Committee of Director of Gabelli Asset Director Sal Oppenheim Jr. & Cie (private investment Management Inc. (investment Age: 74 bank); Former President of the Deutsche management); Chairman, Bundesbank and Chairman of its Central Bank Incentive Capital and Council (1980-1991) Incentive Asset Management (Zurich); Director at Sal Oppenheim Jr. & Cie, Zurich NON-INTERESTED DIRECTORS: - ------------------------ E. VAL CERUTTI Since 2001 7 Chief Executive Officer of Cerutti Consultants, Director of Lynch Corporation Director Inc.; Former President and Chief Operating (diversified manufacturing) Age: 64 Officer of Stella D'oro Biscuit Company (through 1992); Adviser, Iona College School of Business ANTHONY J. COLAVITA Since 1993 35 President and Attorney at Law in the law firm -- Director of Anthony J. Colavita, P.C. Age: 68 ARTHUR V. FERRARA Since 2001 9 Formerly, Chairman of the Board and Chief Director of The Guardian Life Director Executive Officer of The Guardian Life Insurance Company of America Age: 73 Insurance Company of America from January and 25 mutual funds within 1993 to December 1995; President, Chief the Guardian Fund Complex Executive Officer and a Director prior thereto WERNER J. ROEDER, MD Since 1993 26 Vice President/Medical Affairs, Lawrence -- Director Hospital Center and practicing private physician Age: 63 ANTHONIE C. VAN EKRIS Since 1993 20 Managing Director of BALMAC International, Inc. Director of Aurado Director (commodities) Exploration, Inc. Age: 69 (oil and gas operations) 16 THE GABELLI GLOBAL TELECOMMUNICATIONS FUND ADDITIONAL FUND INFORMATION (UNAUDITED) (CONTINUED) - -------------------------------------------------------------------------------- TERM OF OFFICE NUMBER OF NAME, POSITION(S) AND LENGTH OF FUNDS IN FUND ADDRESS 1 TIME COMPLEX OVERSEEN PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIPS AND AGE SERVED 2 BY DIRECTOR DURING PAST FIVE YEARS HELD BY DIRECTOR - ----------------- -------------- ---------------- ----------------------- ------------------- OFFICERS: - -------- BRUCE N. ALPERT Since 2003 -- Executive Vice President and Chief Operating Officer -- President of Gabelli Funds, LLC since 1988 and an officer of Age: 52 all mutual funds advised by Gabelli Funds, LLC and its affiliates. Director and President of Gabelli Advisers, Inc. JAMES E. MCKEE Since 1995 -- Vice President, General Counsel and Secretary of -- Secretary Gabelli Asset Management Inc. since 1999 and GAMCO Age: 40 Investors, Inc. since 1993; Secretary of all mutual funds advised by Gabelli Advisers, Inc. and Gabelli Funds, LLC - ---------------- 1 Address: One Corporate Center, Rye, NY 10580, unless otherwise noted. 2 Each Director will hold office for an indefinite term until the earliest of (i) the next meeting of shareholders if any, called for the purpose of considering the election or re-election of such Director and until the election and qualification of his or her successor, if any, elected at such meeting, or (ii) the date a Director resigns or retires, or a Director is removed by the Board of Directors or shareholders, in accordance with the Company's By-Laws and Articles of Incorporation. 3 "Interested person" of the Company as defined in the Investment Company Act of 1940. Messrs. M. Gabelli, J. Gabelli and Pohl are each considered an "interested person" because of their affiliation with Gabelli Funds, LLC which acts as the Company's investment adviser. Mario J. Gabelli and John D. Gabelli are brothers. 17 - -------------------------------------------------------------------------------- GABELLI FUNDS AND YOUR PERSONAL PRIVACY - -------------------------------------------------------------------------------- WHO ARE WE? The Gabelli Funds are investment companies registered with the Securities and Exchange Commission under the Investment Company Act of 1940. We are managed by Gabelli Funds LLC, Gabelli Advisers, Inc. and Gabelli Fixed Income, LLC, which are affiliated with Gabelli Asset Management Inc. Gabelli Asset Management is a publicly-held company that has subsidiaries that provide investment advisory or brokerage services for a variety of clients. WHAT KIND OF NON-PUBLIC INFORMATION DO WE COLLECT ABOUT YOU IF YOU BECOME A GABELLI CUSTOMER? 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: o 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. o 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, and the deposits and withdrawals that you make. 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 web site, www.sec.gov. WHAT DO WE DO TO PROTECT YOUR PERSONAL INFORMATION? We restrict access to non-public personal information about you to the people who need to know that information in order to provide services to you or the Fund and to ensure that we are complying with the laws governing the securities business. We maintain physical, electronic, and procedural safeguards to keep your personal information confidential. - -------------------------------------------------------------------------------- GABELLI FAMILY OF FUNDS VALUE ________________________________________ GABELLI ASSET FUND Seeks to invest primarily in a diversified portfolio of common stocks selling at significant discounts to their private market value. The Fund's primary objective is growth of capital. (MULTICLASS) PORTFOLIO MANAGER: MARIO J. GABELLI, CFA GABELLI BLUE CHIP VALUE FUND Seeks long term growth of capital through investment primarily in the common stocks of established companies which are temporarily out of favor. The fund's objective is to identify a catalyst or sequence of events that will return the company to a higher value. (MULTICLASS) PORTFOLIO MANAGER: BARBARA MARCIN, CFA GABELLI WESTWOOD EQUITY FUND Seeks to invest primarily in the common stock of well-seasoned companies that have recently reported positive earnings surprises and are trading below Westwood's proprietary growth rate estimates. The Fund's primary objective is capital appreciation. (MULTICLASS) PORTFOLIO MANAGER: SUSAN M. BYRNE FOCUSED VALUE ______________________________ GABELLI VALUE FUND Seeks to invest in securities of companies believed to be undervalued. The Fund's primary objective is long-term capital appreciation. (MULTICLASS) PORTFOLIO MANAGER: MARIO J. GABELLI, CFA SMALL CAP VALUE ____________________________ GABELLI SMALL CAP FUND Seeks to invest primarily in common stock of smaller companies (market capitalizations less than $1 billion) believed to have rapid revenue and earnings growth potential. The Fund's primary objective is capital appreciation. (MULTICLASS) PORTFOLIO MANAGER: MARIO J. GABELLI, CFA GABELLI WOODLAND SMALL CAP VALUE FUND Seeks to invest primarily in the common stocks of smaller companies (market capitalizations less than $1.5 billion) believed to be undervalued with shareholder oriented management teams that are employing strategies to grow the company's value. The Fund's primary objective is capital appreciation. (MULTICLASS) PORTFOLIO MANAGER: ELIZABETH M. LILLY, CFA GROWTH ______________________________________ GABELLI GROWTH FUND Seeks to invest primarily in large cap stocks believed to have favorable, yet undervalued, prospects for earnings growth. The Fund's primary objective is capital appreciation. (MULTICLASS) PORTFOLIO MANAGER: HOWARD F. WARD, CFA GABELLI INTERNATIONAL GROWTH FUND Seeks to invest in the equity securities of foreign issuers with long-term capital appreciation potential. The Fund offers investors global diversification. (MULTICLASS) PORTFOLIO MANAGER: CAESAR BRYAN AGGRESSIVE GROWTH _________________________ GABELLI GLOBAL GROWTH FUND Seeks capital appreciation through a disciplined investment program focusing on the globalization and interactivity of the world's marketplace. The Fund invests in companies at the forefront of accelerated growth. The Fund's primary objective is capital appreciation. (MULTICLASS) TEAM MANAGED MICRO-CAP ___________________________________ GABELLI WESTWOOD MIGHTY MITES(SM) FUND Seeks to invest in micro-cap companies that have market capitalizations of $300 million or less. The Fund's primary objective is long-term capital appreciation. (MULTICLASS) TEAM MANAGED EQUITY INCOME _______________________________ GABELLI EQUITY INCOME FUND Seeks to invest primarily in equity securities with above market average yields. The Fund pays monthly dividends and seeks a high level of total return with an emphasis on income. (MULTICLASS) PORTFOLIO MANAGER: MARIO J. GABELLI, CFA GABELLI WESTWOOD BALANCED FUND Seeks to invest in a balanced and diversified portfolio of stocks and bonds. The Fund's primary objective is both capital appreciation and current income. (MULTICLASS) CO-PORTFOLIO MANAGERS: SUSAN M. BYRNE MARK FREEMAN, CFA GABELLI WESTWOOD REALTY FUND Seeks to invest in securities that are primarily engaged in or related to the real estate industry. The Fund's primary objective is long-term capital appreciation. (MULTICLASS) PORTFOLIO MANAGER: SUSAN M. BYRNE SPECIALTY EQUITY ____________________________ GABELLI GLOBAL CONVERTIBLE SECURITIES FUND Seeks to invest principally in bonds and preferred stocks which are convertible into common stock of foreign and domestic companies. The Fund's primary objective is total return through a combination of current income and capital appreciation. (MULTICLASS) TEAM MANAGED GABELLI GLOBAL OPPORTUNITY FUND Seeks to invest in common stock of companies which have rapid growth in revenues and earnings and potential for above average capital appreciation or are undervalued. The Fund's primary objective is capital appreciation. (MULTICLASS) TEAM MANAGED SECTOR ______________________________________ GABELLI GLOBAL TELECOMMUNICATIONS FUND Seeks to invest in telecommunications companies throughout the world - targeting undervalued companies with strong earnings and cash flow dynamics. The Fund's primary objective is capital appreciation. (MULTICLASS) TEAM MANAGED GABELLI GOLD FUND Seeks to invest in a global portfolio of equity securities of gold mining and related companies. The Fund's objective is long-term capital appreciation. Investment in gold stocks is considered speculative and is affected by a variety of world-wide economic, financial and political factors. (MULTICLASS) PORTFOLIO MANAGER: CAESAR BRYAN GABELLI UTILITIES FUND Seeks to provide a high level of total return through a combination of capital appreciation and current income. (MULTICLASS) TEAM MANAGED MERGER AND ARBITRAGE _____________________ GABELLI ABC FUND Seeks to invest in securities with attractive opportunities for appreciation or investment income. The Fund's primary objective is total return in various market conditions without excessive risk of capital loss. (NO-LOAD) PORTFOLIO MANAGER: MARIO J. GABELLI, CFA CONTRARIAN_________________________________ Gabelli Mathers Fund Seeks long-term capital appreciation in various market conditions without excessive risk of capital loss. (CLASS AAA-NO-LOAD) PORTFOLIO MANAGER: HENRY VAN DER EB, CFA COMSTOCK CAPITAL VALUE FUND Seeks capital appreciation and current income. The Fund may use either long or short positions to achieve its objective. (MULTICLASS) PORTFOLIO MANAGER: MARTIN WEINER, CFA COMSTOCK STRATEGY FUND The Fund emphasizes investments in debt securities, which maximize total return in light of credit risk, interest rate risk, and the risk associated with the length of maturity of the debt instrument. (MULTICLASS) PORTFOLIO MANAGER: MARTIN WEINER, CFA QUANTITATIVE_________________________________ NED DAVIS RESEARCH ASSET ALLOCATION FUND Seeks to achieve returns greater then the weighted composite benchmark consisting of 60% in the S&P 500 Index and 40% in the Lehman Long Term U.S. Government Bond Index through a flexible asset allocation strategy. The Fund's primary objective is capital appreciation. (MULTICLASS) TEAM MANAGED SMALL CAP GROWTH __________________________ GABELLI WESTWOOD SMALLCAP EQUITY FUND Seeks to invest primarily in smaller capitalization equity securities - market caps of $1.5 billion or less. The Fund's primary objective is long-term capital appreciation. (MULTICLASS) CO-PORTFOLIO MANAGERS: CHRISTOPHER J. MACDONALD, CFA FIXED INCOME ________________________________ GABELLI WESTWOOD INTERMEDIATE BOND FUND Seeks to invest in a diversified portfolio of bonds with various maturities. The Fund's primary objective is total return. (MULTICLASS) PORTFOLIO MANAGER: MARK FREEMAN, CFA CASH MANAGEMENT-MONEY MARKET __________ GABELLI U.S. TREASURY MONEY MARKET FUND Seeks to invest exclusively in short-term U.S. Treasury securities. The Fund's primary objective is to provide high current income consistent with the preservation of principal and liquidity. (NO-LOAD) PORTFOLIO MANAGER: JUDITH A. RANERI THE TREASURER'S FUND Three money market portfolios designed to generate superior returns without compromising portfolio safety. U.S. Treasury Money Market seeks to invest in U.S. Treasury securities and repurchase agreements. Tax Exempt Money Market seeks to invest in municipal securities. Domestic Prime Money Market seeks to invest in prime quality, domestic money market instruments. (NO-LOAD) PORTFOLIO MANAGER: JUDITH A. RANERI THE GLOBAL FUNDS INVEST IN FOREIGN SECURITIES WHICH INVOLVE RISKS NOT ORDINARILY ASSOCIATED WITH INVESTMENTS IN DOMESTIC ISSUES, INCLUDING CURRENCY FLUCTUATION, ECONOMIC AND POLITICAL RISKS. AN INVESTMENT IN THE ABOVE MONEY MARKET FUNDS IS NEITHER INSURED NOR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY GOVERNMENT AGENCY. ALTHOUGH THE FUNDS SEEK TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUNDS. TO RECEIVE A PROSPECTUS, CALL 800-GABELLI (422-3554). THE PROSPECTUS GIVES A MORE COMPLETE DESCRIPTION OF THE FUND, INCLUDING FEES AND EXPENSES. READ THE PROSPECTUS CAREFULLY BEFORE YOU INVEST OR SEND MONEY. Gabelli Global Series Funds, Inc. THE GABELLI GLOBAL TELECOMMUNICATIONS FUND One Corporate Center Rye, New York 10580-1422 800-GABELLI 800-422-3554 FAX: 914-921-5118 WEBSITE: WWW.GABELLI.COM E-MAIL: INFO@GABELLI.COM Net Asset Value available daily by calling 800-GABELLI after 6:00 P.M. BOARD OF DIRECTORS Mario J. Gabelli, CFA John D. Gabelli CHAIRMAN AND CHIEF SENIOR VICE PRESIDENT INVESTMENT OFFICER GABELLI & COMPANY, INC. GABELLI ASSET MANAGEMENT INC. E. Val Cerutti Karl Otto Pohl CHIEF EXECUTIVE OFFICER FORMER PRESIDENT CERUTTI CONSULTANTS, INC. DEUTSCHE BUNDESBANK Anthony J. Colavita Werner J. Roeder, MD ATTORNEY-AT-LAW VICE PRESIDENT/MEDICAL AFFAIRS ANTHONY J. COLAVITA, P.C. LAWRENCE HOSPITAL CENTER Arthur V. Ferrara Anthonie C. van Ekris FORMER CHAIRMAN AND MANAGING DIRECTOR CHIEF EXECUTIVE OFFICER BALMAC INTERNATIONAL, INC. GUARDIAN LIFE INSURANCE COMPANY OF AMERICA OFFICERS Bruce N. Alpert James E. McKee PRESIDENT SECRETARY DISTRIBUTOR Gabelli & Company, Inc. CUSTODIAN, TRANSFER AGENT AND DIVIDEND AGENT State Street Bank and Trust Company LEGAL COUNSEL Skadden, Arps, Slate, Meagher & Flom LLP - -------------------------------------------------------------------------------- This report is submitted for the general information of the shareholders of The Gabelli Global Telecommunications Fund. It is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. - -------------------------------------------------------------------------------- GAB401Q403SR [GRAPHIC OMITTED] PICTURE OF MARIO GABELLI THE GABELLI GLOBAL TELECOMMUNICATIONS FUND ANNUAL REPORT DECEMBER 31, 2003 ITEM 2. CODE OF ETHICS. (a) The registrant, as of the end of the period covered by this report, has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party. (b) No response required. (c) There have been no amendments, during the period covered by this report, to a provision of the code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, and that relates to any element of the code of ethics description. (d) The registrant has not granted any waivers, including an implicit waiver, from a provision of the code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, that relates to one or more of the items set forth in paragraph (b) of this item's instructions. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. As of the end of the period covered by the report, the registrant's board of directors had not determined that it had a qualified audit committee financial expert serving on its audit committee. The registrant did, at its February 25, 2004 Board of Directors Meeting, determine that Salvatore J. Zizza is qualified to serve as an audit committee financial expert serving on its audit committee and that he is "independent," as defined by this Item 3. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. (a) AUDIT FEES: The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the registrant's annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years are $98,000 in 2003 and $117,075 in 2002. (b) AUDIT-RELATED FEES: The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant's financial statements and are not reported under paragraph (a) of this Item are $0 in 2003 and $0 in 2002. (c) TAX FEES: The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning are $13,600 in 2003 and $0 in 2002. Tax fees represent tax compliance services provided in connection with the review of the Registrant's tax returns. (d) ALL OTHER FEES: The aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) of this Item are $0 in 2003 and $0 in 2002. (e)(1) Disclose the audit committee's pre-approval policies and procedures described in paragraph (c)(7) of Rule 2-01 of Regulation S-X. Pre-Approval Policies and Procedures. The Audit Committee ("Committee") of the registrant is responsible for pre-approving (i) all audit and permissible non-audit services to be provided by the independent auditors to the registrant and (ii) all permissible non-audit services to be provided by the independent auditors to Gabelli and any affiliate of Gabelli that provides services to the registrant (a "Covered Services Provider") if the independent auditors' engagement relates directly to the operations and financial reporting of the registrant. The Committee may delegate its responsibility to pre-approve any such audit and permissible non-audit services to the Chairperson of the Committee, and the Chairperson must report to the Committee, at its next regularly scheduled meeting after the Chairperson's pre-approval of such services, his or her decision(s). The Committee may also establish detailed pre-approval policies and procedures for pre-approval of such services in accordance with applicable laws, including the delegation of some or all of the Committee's pre-approval responsibilities to other persons (other than Gabelli or the registrant's officers). Pre-approval by the Committee of any permissible non-audit services is not required so long as: (i) the aggregate amount of all such permissible non-audit services provided to the registrant, Gabelli and any Covered Services Provider constitutes not more than 5% of the total amount of revenues paid by the registrant to its independent auditors during the fiscal year in which the permissible non-audit services are provided; (ii) the permissible non-audit services were not recognized by the registrant at the time of the engagement to be non-audit services; and (iii) such services are promptly brought to the attention of the Committee and approved by the Committee or the Chairperson prior to the completion of the audit. (e)(2) The percentage of services described in each of paragraphs (b) through (d) of this Item that were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X are as follows: (b) N/A (c) 100% (d) N/A (f) The percentage of hours expended on the principal accountant's engagement to audit the registrant's financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant's full-time, permanent employees was zero percent (0%). (g) The aggregate non-audit fees billed by the registrant's accountant for services rendered to the registrant, and rendered to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for each of the last two fiscal years of the registrant was $72,600 in 2003 and $0 in 2002. (h) The registrant's audit committee of the board of directors HAS considered whether the provision of non-audit services that were rendered to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant's independence. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable. ITEM 6. [RESERVED] ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Not yet applicable. ITEM 10. 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 last fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 11. EXHIBITS. (a)(1) Code of ethics, or any amendment thereto, that is the subject of disclosure required by Item 2 is attached hereto. (a)(2) Certifications pursuant to Rule 30a-2(a) of the Investment Company Act of 1940, as amended, are attached hereto. (a)(3) Not applicable. (b) Certifications pursuant to Rule 30a-2(b) of the Investment Company Act of 1940, as amended, 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 Global Series Funds, Inc. -------------------------------------------------------------------- By (Signature and Title)* /s/ Bruce N. Alpert ------------------------------------------------------- Bruce N. Alpert, Principal Executive Officer Date March 9, 2004 --------------------------------------------------------------------------- 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 and Principal Financial Officer Date March 9, 2004 --------------------------------------------------------------------------- * Print the name and title of each signing officer under his or her signature.