UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-06367
Gabelli Equity Series Funds, Inc.
--------------------------------------------
(Exact name of registrant as specified in charter)
One Corporate Center
Rye, NY 10580-1422
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(Address of principal executive offices) (Zip code)
Bruce N. Alpert
Gabelli Funds, LLC
One Corporate Center
Rye, NY 10580-1422
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(Name and address of agent for service)
Registrant's telephone number, including area code: 800-422-3554
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Date of fiscal year end: September 30, 2004
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Date of reporting period: March 31, 2004
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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 Report to Shareholders is attached herewith.
THE GABELLI SMALL CAP GROWTH FUND
SEMI-ANNUAL REPORT (B)
MARCH 31, 2004
TO OUR SHAREHOLDERS,
Small cap stocks continued to outperform during the six-month period
through March 31, 2004, with the Russell 2000 Index gaining 21.7% and outpacing
the 14.1% rise in the Standard & Poor's ("S&P") 500 Index and 11.7% rise in the
Dow Jones Industrial Average by a substantial margin. The Gabelli Small Cap
Growth Fund gained 20.8% during the trailing six-month period.
Enclosed is the portfolio of investments and financial statements as of
March 31, 2004.
COMPARATIVE RESULTS
- --------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS THROUGH MARCH 31, 2004 (A)
-------------------------------------------------
SINCE
QUARTER 1 YEAR 3 YEAR 5 YEAR 10 YEAR INCEPTION (C)
------- ------ ------ ------ ------- -------------
Gabelli Small Cap Growth Fund Class AAA .... 5.19% 52.43% 13.28% 14.34% 13.37% 15.68%
Russell 2000 Index ......................... 6.26% 63.83% 10.90% 9.66% 10.44% 11.56%
Value Line Composite Index ................. 5.29% 64.58% 13.20% 12.53% 13.71% 13.99%
Class A .................................... 5.23% 52.49% 13.29% 14.35% 13.37% 15.69%
(0.81)%(d) 43.71%(d) 11.07%(d) 13.00%(d) 12.71%(d) 15.14%(d)
Class B .................................... 5.02% 52.19% 13.22% 14.30% 13.35% 15.67%
0.02%(e) 50.95%(e) 13.03%(e) 14.23%(e) 13.35%(e) 15.67%(e)
Class C .................................... 5.02% 52.19% 13.22% 14.30% 13.35% 15.67%
4.02%(e) 51.94%(e) 13.22%(e) 14.30%(e) 13.35%(e) 15.67%(e)
(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
Russell 2000 and Value Line Composite Indices are unmanaged indicators of
stock market performance. Current performance may be lower or higher than
the performance data presented. Visit www.gabelli.com for performance
information as of the most recent month-end. Investors should consider the
investment objectives, risks and charges and expenses of the Fund before
investing. The prospectus contains more complete information about this and
other matters and should be read carefully before investing. 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 December
31, 2003. The actual performance for the Class A Shares, Class B Shares and
Class C Shares would have been lower due to the additional expenses
associated with these classes of shares.
(b) The Fund's fiscal year ends September 30.
(c) From commencement of investment operations on October 22, 1991.
(d) Includes the effect of the maximum 5.75% sales charge at the beginning of
the period.
(e) 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 small capitalization securities involves special challenges
because these securities may trade less frequently and experience more abrupt
price movements than large capitalization securities.
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A description of the Funds' proxy voting policies and procedures is available
(i) without charge, upon request, by calling 800-GABELLI (800-422-3554); (ii)
by writing to The Gabelli Funds at One Corporate Center, Rye, NY 10580; and
(iii) on the Securities and Exchange Commission's website at www.sec.gov.
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THE GABELLI SMALL CAP GROWTH FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- ------
COMMON STOCKS -- 97.3%
AEROSPACE -- 0.5%
25,000 Herley Industries Inc.+ ...........$ 499,141 $ 472,000
145,000 Titan Corp.+ ...................... 3,067,175 2,927,550
------------ ------------
3,566,316 3,399,550
------------ ------------
AGRICULTURE -- 0.7%
140,000 AGCO Corp.+ ....................... 2,449,262 2,899,400
1,200 Cadiz Inc.+ ....................... 4,500 8,580
100,000 Sylvan Inc.+ ...................... 1,093,323 1,204,000
------------ ------------
3,547,085 4,111,980
------------ ------------
AUTOMOTIVE -- 0.4%
90,000 Monaco Coach Corp.+ ............... 2,008,410 2,412,000
3,000 Oshkosh Truck Corp. ............... 89,796 167,100
------------ ------------
2,098,206 2,579,100
------------ ------------
AUTOMOTIVE: PARTS AND ACCESSORIES -- 4.7%
3,816 Aftermarket Technology Corp.+ ..... 47,013 56,057
1,000 American Axle & Manufacturing
Holdings Inc.+ .................. 24,350 36,850
40,000 BorgWarner Inc. ................... 1,650,298 3,393,200
90,000 Exide Technologies+ ............... 54,188 1,710
40,000 Federal-Mogul Corp.+ .............. 79,500 14,400
310,000 GenCorp Inc. ...................... 2,892,672 3,357,300
200,000 Midas Inc.+ ....................... 2,538,716 3,890,000
235,000 Modine Manufacturing Co. .......... 5,682,804 6,124,100
7,875 Monro Muffler Brake Inc.+ ......... 52,860 196,796
3,000 Pep Boys - Manny,
Moe & Jack ...................... 22,503 83,250
2,000 Puradyn Filter
Technologies Inc.+ .............. 5,025 4,280
153,500 Raytech Corp.+ .................... 494,691 442,080
195,000 Scheib (Earl) Inc.+ ............... 1,314,528 560,625
180,000 Standard Motor Products Inc. ...... 2,739,913 2,822,400
30,000 Strattec Security Corp.+ .......... 1,111,807 1,904,400
15,000 Superior Industries
International Inc. .............. 412,318 531,600
375,000 Tenneco Automotive Inc.+ .......... 831,890 4,758,750
28,000 Thor Industries Inc. .............. 259,454 752,080
160,000 TransPro Inc.+ .................... 1,390,729 800,000
------------ ------------
21,605,259 29,729,878
------------ ------------
AVIATION: PARTS AND SERVICES -- 3.4%
25,000 AAR Corp.+ ........................ 302,990 307,000
95,000 Aviall Inc.+ ...................... 818,019 1,444,000
17,000 Barnes Group Inc. ................. 293,350 474,130
86,300 Curtiss-Wright Corp. .............. 1,113,575 4,044,881
34,200 Curtiss-Wright Corp., Cl. B ....... 956,620 1,561,914
7,500 Ducommun Inc.+ .................... 80,125 175,275
16,000 EDO Corp. ......................... 328,407 385,280
30,000 Embraer-Empresa Brasileira
de Aeronautica, S.A., ADR ....... 508,773 963,000
190,000 Fairchild Corp., Cl. A+ ........... 1,171,384 946,200
MARKET
SHARES COST VALUE
------ ---- ------
9,000 Gamesa Corporacion
Tecnologica, S.A. ...............$ 165,313 $ 368,631
430,000 Kaman Corp., Cl. A ................ 6,855,690 6,419,900
118,000 Moog Inc., Cl. A+ ................. 1,096,860 4,026,160
8,000 Woodward Governor Co. ............. 347,309 509,920
------------ ------------
14,038,415 21,626,291
------------ ------------
BROADCASTING -- 4.5%
120,000 Acme Communications Inc.+ ......... 968,947 941,400
24,100 Beasley Broadcast Group
Inc., Cl. A+ .................... 271,741 424,160
200,000 Crown Media Holdings Inc.,
Cl. A+ .......................... 1,440,936 1,618,000
3,333 CTN Media Group Inc.+ (b) ...... 16,800 0
422,500 Granite Broadcasting Corp.+ ....... 1,722,038 705,575
400,000 Gray Television Inc. .............. 4,147,023 5,848,000
33,300 Gray Television Inc., Cl. A ....... 493,240 471,195
48,000 Hearst-Argyle Television Inc.+ .... 425,523 1,290,720
183,900 Liberty Corp. ..................... 5,983,141 8,509,053
10,000 Nexstar Broadcasting Group
Inc., Cl. A+ .................... 116,050 116,900
250,000 Paxson Communications
Corp.+ .......................... 2,343,488 975,000
112,000 Salem Communications Corp.,
Cl. A+ .......................... 1,803,159 3,066,560
150,000 Sinclair Broadcast Group
Inc.,
Cl. A+ .......................... 1,677,557 1,875,000
62,000 Spanish Broadcasting System
Inc., Cl. A+ .................... 541,076 647,900
110,000 Young Broadcasting Inc.,
Cl. A+ .......................... 1,812,595 1,991,000
------------ ------------
23,763,314 28,480,463
------------ ------------
BUILDING AND CONSTRUCTION -- 0.4%
10,000 Cavco Industries Inc.+ ............ 368,850 368,500
100,000 Fleetwood Enterprises Inc.+ ....... 1,053,302 1,228,000
12,000 Florida Rock Industries Inc. ...... 103,533 505,800
25,000 Huttig Building Products Inc.+ .... 90,165 125,000
4,000 Universal Forest Products Inc. .... 49,375 123,440
------------ ------------
1,665,225 2,350,740
------------ ------------
BUSINESS SERVICES -- 2.3%
5,000 BrandPartners Group Inc.+ ......... 4,850 3,400
610,400 Career Blazers Inc. (b) ........... 236,019 107,125
6,000 Carlisle Holdings Ltd.+ ........... 30,250 39,000
1,000 CheckFree Corp.+ .................. 9,040 29,460
30,000 Donnelley (R.H.) Corp.+ ........... 408,350 1,401,000
200,000 Edgewater Technology Inc.+ ........ 802,829 1,450,000
14,000 Fisher Scientific
International Inc.+ ............. 323,617 770,560
20,000 Genuity Inc., Cl. A+ (b) .......... 1,620 0
140,000 GP Strategies Corp.+ .............. 546,300 964,600
See accompanying notes to financial statements.
2
THE GABELLI SMALL CAP GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) -- MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- ------
COMMON STOCKS (CONTINUED)
BUSINESS SERVICES (CONTINUED)
80,000 Industrial Distribution
Group Inc.+ .....................$ 224,062 $ 653,600
58,000 Interactive Data Corp.+ ........... 499,811 1,031,240
18,000 Interep National Radio
Sales Inc., Cl. A+ .............. 72,100 34,200
13,000 Landauer Inc. ..................... 234,859 546,000
5,000 MDC Partners Inc.+ ................ 15,450 78,500
103,000 Nashua Corp.+ ..................... 939,467 883,740
60,000 National Processing Inc.+ ......... 575,323 1,140,000
15,000 New England Business
Service Inc. .................... 270,375 507,750
65,000 Paxar Corp.+ ...................... 662,313 958,750
6,000 Princeton Video Image Inc.+ ....... 35,250 6
2,000 Protection One Inc.+ .............. 3,720 760
81,300 Sohgo Security Services
Co. Ltd. ........................ 1,033,410 1,133,910
110,000 Stamps.com Inc.+ .................. 302,148 658,900
4,000 StarTek Inc. ...................... 75,725 145,360
53,000 The Brink's Co. ................... 1,092,906 1,461,740
95,000 Trans-Lux Corp. (a) ............... 781,543 744,800
------------ ------------
9,181,337 14,744,401
------------ ------------
CABLE -- 2.4%
230,000 Adelphia Communications
Corp., Cl. A+ ................... 29,650 190,900
575,000 Cablevision Systems Corp.,
Cl. A+ .......................... 3,365,084 13,156,000
15,100 Lin TV Corp., Cl. A+ .............. 333,812 359,531
1,600 Outdoor Channel
Holdings Inc.+ .................. 44,765 63,000
148,823 UnitedGlobalCom Inc., Cl. A+ ...... 1,141,414 1,263,507
------------ ------------
4,914,725 15,032,938
------------ ------------
COMMUNICATIONS EQUIPMENT -- 0.6%
90,000 Andrew Corp.+ ..................... 533,824 1,575,000
109,500 Communications Systems Inc. ....... 659,500 955,935
260,900 Sycamore Networks Inc.+ ........... 778,040 1,064,472
------------ ------------
1,971,364 3,595,407
------------ ------------
COMPUTER SOFTWARE AND SERVICES -- 1.3%
90,000 Ascential Software Corp.+ ......... 1,061,665 1,972,800
21,450 Global Sources Ltd.+ .............. 364,342 264,693
50,000 Jupitermedia Corp.+ ............... 435,800 574,500
200 Macromedia Inc.+ .................. 2,370 4,014
1,500 MarketWatch.com Inc.+ ............. 18,312 20,910
15,187 MKS Instruments Inc.+ ............. 284,328 364,640
220,000 OpenTV Corp.+ ..................... 1,189,078 710,600
8,000 Phoenix Technologies Ltd.+ ........ 55,157 43,120
550 SafeNet Inc.+ ..................... 14,425 20,647
800,000 StorageNetworks Inc. Escrow+ ...... 0 24,000
350,000 Tyler Technologies Inc.+ .......... 1,343,893 3,398,500
MARKET
SHARES COST VALUE
------ ---- ------
114,000 VitalWorks Inc.+ ..................$ 561,118 $ 427,500
190,000 Xanser Corp.+ ..................... 667,708 484,500
------------ ------------
5,998,196 8,310,424
------------ ------------
CONSUMER PRODUCTS -- 4.2%
3,500 Action Performance
Companies Inc. .................. 16,187 53,445
21,500 Adams Golf Inc.+ .................. 63,940 27,520
5,250 Alberto-Culver Co. ................ 169,298 230,317
25,000 Ashworth Inc.+ .................... 107,281 217,500
33,500 Chofu Seisakusho Co. Ltd. ......... 484,644 695,535
25,000 Church & Dwight Co. Inc. .......... 354,732 1,082,750
15,000 Coachmen Industries Inc. .......... 117,198 250,200
3,075 Del Laboratories Inc.+ ............ 88,290 102,090
46,000 Department 56 Inc.+ ............... 542,911 679,880
8,000 Elizabeth Arden Inc.+ ............. 109,500 168,960
2,000 Genlyte Group Inc.+ ............... 8,580 112,080
2,000 Harley-Davidson Inc. .............. 4,713 106,680
200,000 Hartmarx Corp.+ ................... 967,321 1,200,000
74,400 Jacuzzi Brands Inc.+ .............. 477,471 697,872
42,500 Levcor International Inc.+ ........ 86,759 119,000
4,000 Madden (Steven) Ltd.+ ............. 30,540 79,840
235,000 Marine Products Corp. ............. 227,767 3,287,650
57,000 National Presto Industries Inc. ... 2,034,955 2,209,320
3,000 Nature's Sunshine
Products Inc. ................... 36,938 44,520
25,000 Rayovac Corp.+ .................... 327,512 715,000
80,000 Revlon Inc., Cl. A+ ............... 344,837 221,600
3,000 Scotts Co., Cl. A+ ................ 61,223 192,450
140,000 Skyline Corp. ..................... 4,450,174 5,399,800
14,000 Stewart Enterprises Inc.,
Cl. A+ .......................... 65,467 101,780
84,425 Syratech Corp.+ ................... 15,626 29,549
17,000 WD-40 Co. ......................... 470,278 595,000
701,000 Weider Nutrition
International Inc.+ ............. 1,989,410 3,322,740
180,000 Wolverine World Wide Inc. ......... 2,359,687 4,343,400
------------ ------------
16,013,239 26,286,478
------------ ------------
CONSUMER SERVICES -- 2.4%
30,000 Bowlin Travel Centers Inc.+ ....... 22,612 59,250
5,600 Collectors Universe Inc.+ ......... 21,494 69,658
100,000 InterActiveCorp.+ ................. 1,068,180 3,159,000
40,000 Loewen Group Inc.+ (b) ............ 60,400 0
16,000 Martha Stewart Living
Omnimedia Inc., Cl. A+ .......... 167,206 176,000
20,000 Response USA Inc.+ ................ 16,500 91
220,000 Rollins Inc. ...................... 2,856,358 5,669,400
120,300 Roto-Rooter Inc. .................. 4,028,096 6,081,165
5,000 TiVo Inc.+ ........................ 42,288 44,450
------------ ------------
8,283,134 15,259,014
------------ ------------
DIVERSIFIED INDUSTRIAL -- 9.8%
175,000 Acuity Brands Inc. ................ 2,351,391 4,179,000
43,000 Amatsuji Steel Ball
Mfg. Co., Ltd. .................. 357,633 495,987
See accompanying notes to financial statements.
3
THE GABELLI SMALL CAP GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) -- MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- ------
COMMON STOCKS (CONTINUED)
DIVERSIFIED INDUSTRIAL (CONTINUED)
100,000 Ampco-Pittsburgh Corp. ............$ 972,481 $ 1,291,000
6,000 Anixter International Inc.+ ....... 57,120 169,500
215,000 Baldor Electric Co. ............... 4,198,556 4,940,700
150,000 Crane Co. ......................... 3,282,255 4,950,000
5,000 ESCO Technologies Inc.+ ........... 166,379 230,600
55,200 Gardner Denver Inc.+ .............. 866,999 1,494,816
118,000 GATX Corp. ........................ 3,360,089 2,616,060
160,100 Greif Inc., Cl. A ................. 3,139,843 5,593,894
1,000 Greif Inc., Cl. B ................. 29,800 35,525
26,000 Harbor Global Co. Ltd.+ ........... 63,215 266,500
5,000 Insteel Industries Inc.+ .......... 4,250 8,750
66,000 Katy Industries Inc.+ ............. 546,731 395,340
220,300 Lamson & Sessions Co.+ ............ 1,280,436 1,244,695
74,000 Lindsay Manufacturing Co. ......... 746,915 1,781,920
209,000 MagneTek Inc.+ .................... 1,627,959 1,580,040
38,000 Matthews International Corp.,
Cl. A ........................... 884,314 1,261,600
260,000 Myers Industries Inc. ............. 2,633,153 3,198,000
40,000 Mykrolis Corp.+ ................... 507,507 570,400
610,400 Noel Group Inc.+ (b) .............. 55,045 117,685
84,500 Oil-Dri Corporation of America .... 878,811 1,394,250
15,000 Olin Corp. ........................ 232,292 267,750
256,200 Park-Ohio Holdings Corp.+ ......... 1,675,272 2,359,602
49,999 Precision Castparts Corp. ......... 1,702,840 2,201,470
40,000 Roper Industries Inc. ............. 1,533,092 1,930,000
280,000 Sensient Technologies Corp. ....... 5,652,884 5,227,600
10,000 Sonoco Products Co. ............... 231,715 242,800
65,000 Standex International Corp. ....... 1,318,407 1,755,000
15,500 Tech/Ops Sevcon Inc. .............. 108,753 101,525
296,000 Thomas Industries Inc. ............ 4,161,994 9,324,000
50,500 Tredegar Corp. .................... 679,193 738,815
25,666 WHX Corp.+ ........................ 338,289 75,972
------------ ------------
45,645,613 62,040,796
------------ ------------
EDUCATIONAL SERVICES -- 0.1%
10,000 Career Education Corp.+ ........... 341,000 566,400
3,000 School Specialty Inc.+ ............ 71,820 106,710
------------ ------------
412,820 673,110
------------ ------------
ELECTRONICS -- 2.0%
204,600 CTS Corp. ......................... 2,145,753 2,667,984
22,000 Fargo Electronics+ ................ 132,607 248,600
28,000 Lowrance Electronics Inc.+ ........ 74,921 611,240
85,000 Park Electrochemical Corp. ........ 1,949,368 2,150,500
300,000 Thomas & Betts Corp. .............. 5,553,334 6,546,000
40,000 Zoran Corp.+ ...................... 327,565 694,400
------------ ------------
10,183,548 12,918,724
------------ ------------
ENERGY AND UTILITIES -- 5.0%
20,000 AGL Resources Inc. ................ 366,515 580,400
133,500 Aquila Inc.+ ...................... 365,838 628,785
6,400 BIW Ltd. .......................... 94,562 125,440
MARKET
SHARES COST VALUE
------ ---- ------
95,000 Callon Petroleum Co.+ .............$ 939,533 $ 992,750
142,000 CH Energy Group Inc. .............. 5,982,836 6,970,780
10,000 Chesapeake Utilities Corp. ........ 187,062 256,200
140,000 CMS Energy Corp.+ ................. 843,947 1,253,000
23,000 Connecticut Water Service Inc. .... 464,832 650,900
125,000 Duquesne Light Holdings Inc. ...... 1,769,535 2,437,500
150,000 El Paso Electric Co.+ ............. 1,983,209 2,076,000
66,666 Florida Public Utilities Co. ...... 792,692 1,366,653
44,399 Middlesex Water Co. ............... 768,686 919,059
1,500 Neg Micon A/S+ .................... 26,992 23,893
15,000 Nicor Inc. ........................ 320,259 528,450
15,000 Nordex AG+ ........................ 32,726 17,881
2,000 PetroQuest Energy Inc.+ ........... 5,250 7,140
285,000 RPC Inc. .......................... 954,877 3,174,900
30,000 SEMCO Energy Inc. ................. 213,250 169,800
48,000 SJW Corp. ......................... 1,557,739 1,663,680
48,159 Southern Union Co.+ ............... 685,594 912,613
112,000 Southwest Gas Corp. ............... 1,959,693 2,620,800
10,000 Tesoro Petroleum Corp.+ ........... 140,933 187,900
4,000 Toreador Resources Corp.+ ......... 15,250 19,760
10,000 Vestas Wind Systems A/S ........... 89,988 160,112
7,000 W-H Energy Services Inc.+ ......... 148,589 101,290
195,000 Westar Energy Inc. ................ 3,220,179 4,087,200
------------ ------------
23,930,566 31,932,886
------------ ------------
ENTERTAINMENT -- 2.2%
20,000 Canterbury Park
Holding Corp. ................... 215,807 382,000
150,000 Dover Motorsports Inc. ............ 821,068 577,500
62,000 Fisher Communications Inc.+ ....... 3,732,125 3,022,500
151,000 GC Companies Inc.+ ................ 164,590 70,215
545,000 Gemstar-TV Guide
International Inc.+ ............. 3,198,164 3,656,950
500 Integrity Media Inc.+ ............. 3,550 3,170
16,000 International Speedway
Corp., Cl. A .................... 515,479 752,000
2,500 International Speedway
Corp., Cl. B .................... 45,000 116,375
30,000 Liberty Media Corp., Cl. A+ ....... 314,245 328,500
20,000 Loews Cineplex
Entertainment Corp.+ (b) ........ 20,008 40
10,000 Metromedia International
Group Inc.+ ..................... 6,700 3,400
460,800 Six Flags Inc.+ ................... 2,557,476 3,617,280
56,700 Topps Co. Inc. .................... 323,892 541,485
75,000 World Wrestling
Entertainment Inc. .............. 904,287 1,083,750
------------ ------------
12,822,391 14,155,165
------------ ------------
ENVIRONMENTAL SERVICES -- 1.3%
240,000 Allied Waste Industries Inc.+ ..... 2,348,086 3,194,400
30,000 Catalytica Energy
Systems Inc.+ ................... 278,599 107,100
See accompanying notes to financial statements.
4
THE GABELLI SMALL CAP GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) -- MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- ------
COMMON STOCKS (CONTINUED)
ENVIRONMENTAL SERVICES (CONTINUED)
175,000 Republic Services Inc. ............$ 2,490,315 $ 4,737,250
70,000 Trojan Technologies Inc.+ ......... 392,797 450,067
------------ ------------
5,509,797 8,488,817
------------ ------------
EQUIPMENT AND SUPPLIES -- 11.9%
228,000 AMETEK Inc. ....................... 1,341,318 5,845,920
415,000 Baldwin Technology Co. Inc.,
Cl. A+ .......................... 1,322,609 1,203,500
120,000 Belden Inc. ....................... 2,301,081 2,276,400
12,000 C&D Technologies Inc. ............. 235,930 200,520
50,000 Capstone Turbine Corp.+ ........... 103,400 123,500
153,000 CIRCOR International Inc. ......... 1,903,630 3,457,800
217,000 CLARCOR Inc. ...................... 2,669,871 9,580,550
236,800 Core Molding
Technologies Inc.+ .............. 411,233 959,040
200,000 Crown Holdings Inc.+ .............. 807,766 1,864,000
65,000 Cuno Inc.+ ........................ 1,119,768 2,917,200
1,500 Danaher Corp. ..................... 51,159 140,055
70,000 Donaldson Co. Inc. ................ 807,585 1,857,100
449,600 Fedders Corp. ..................... 2,046,808 2,567,216
200,000 Flowserve Corp.+ .................. 3,249,824 4,190,000
92,000 Franklin Electric Co. Inc. ........ 1,491,155 5,858,560
40,000 General Magnaplate Corp.+ (b) ..... 83,762 60,000
110,000 Gerber Scientific Inc.+ ........... 1,188,241 748,000
80,275 Gorman-Rupp Co. ................... 1,956,309 2,079,123
97,500 Graco Inc. ........................ 984,351 2,838,225
42,000 GrafTech International Ltd.+ ...... 574,742 627,900
2,000 Hughes Supply Inc. ................ 28,473 104,800
40,000 IDEX Corp. ........................ 556,738 1,739,200
22,000 Imagistics International Inc.+ .... 423,317 969,100
500,000 Interpump Group SpA ............... 1,946,509 2,199,720
3,000 Jarden Corp.+ ..................... 12,770 106,530
10,000 K-Tron International Inc.+ ........ 74,932 215,500
30,000 Littelfuse Inc.+ .................. 551,467 1,116,000
58,000 Lufkin Industries Inc. ............ 1,104,055 1,818,300
62,700 Maezawa Kyuso Industries
Co. Ltd. ........................ 402,043 712,370
20,000 Met-Pro Corp. ..................... 192,469 336,000
1,000 Middleby Corp. .................... 37,310 45,680
12,000 Mueller Industries Inc.+ .......... 309,156 407,880
4,500 Plantronics Inc.+ ................. 56,548 164,745
30,000 Robbins & Myers Inc. .............. 564,553 646,500
40,500 Sequa Corp., Cl. A+ ............... 1,502,140 2,000,700
80,000 Sequa Corp., Cl. B+ ............... 3,631,578 4,304,000
90,000 SL Industries Inc.+ ............... 1,047,851 877,500
3,000 Smith (A.O.) Corp. ................ 49,213 86,850
15,000 Smith (A.O.) Corp., Cl. A ......... 336,569 434,250
5,000 Teleflex Inc. ..................... 76,167 246,150
48,000 Tennant Co. ....................... 1,556,465 1,904,160
5,000 Valmont Industries Inc. ........... 40,625 99,900
7,875 Watsco Inc., Cl. B ................ 23,627 231,446
MARKET
SHARES COST VALUE
------ ---- ------
210,000 Watts Water Technologies
Inc., Cl. A .....................$ 3,577,612 $ 4,911,900
15,000 Wolverine Tube Inc.+ .............. 150,915 125,850
------------ ------------
42,903,644 75,199,640
------------ ------------
FINANCIAL SERVICES -- 3.5%
12,036 Alleghany Corp.+ .................. 2,223,427 2,976,503
40,000 Argonaut Group Inc.+ .............. 867,813 761,200
66,000 Bankgesellschaft Berlin AG+ ....... 1,280,794 154,103
135,300 BKF Capital Group Inc. ............ 2,463,405 3,490,740
330,000 CNA Surety Corp.+ ................. 3,652,439 3,646,500
4,000 Crazy Woman Creek
Bancorp Inc. .................... 51,340 70,000
60,000 Danielson Holding Corp.+ .......... 241,212 558,600
3,000 Federal Agricultural
Mortgage Corp., Cl. C+ .......... 24,000 78,630
22,000 First Republic Bank ............... 636,067 848,320
75,000 Flushing Financial Corp. .......... 1,037,207 1,357,500
62,000 Hibernia Corp., Cl. A ............. 827,787 1,456,380
28,100 J Net Enterprises Inc.+ ........... 28,752 39,621
1,500 LandAmerica Financial
Group Inc. ...................... 18,263 67,890
1,000 Leucadia National Corp. ........... 24,354 53,280
118,000 Midland Co. ....................... 896,759 2,944,100
1,500 NetBank Inc. ...................... 6,000 18,315
1,000 Republic Bancshares Inc. .......... 12,523 30,032
35,000 Riggs National Corp. .............. 563,309 602,350
32,000 Sterling Bancorp .................. 670,453 932,800
50,000 Wilmington Trust Corp. ............ 1,574,410 1,868,500
------------ ------------
17,100,314 21,955,364
------------ ------------
FOOD AND BEVERAGE -- 5.3%
26,000 Boston Beer Co. Inc., Cl. A+ ...... 384,207 478,920
24,000 Brown-Forman Corp., Cl. A ......... 665,535 1,212,000
7,500 Cheesecake Factory Inc.+ .......... 37,036 345,975
30,000 Corn Products International
Inc. ............................ 932,328 1,200,000
87,000 Del Monte Foods Co.+ .............. 872,203 978,750
85,000 Denny's Corp.+ .................... 132,580 181,900
2,500 Farmer Brothers Co. ............... 389,323 900,000
235,000 Flowers Foods Inc. ................ 2,883,841 6,166,400
500 Genesee Corp., Cl. A+ ............. 0 1,800
21,500 Genesee Corp., Cl. B+ ............. 49,823 77,400
701,500 Grupo Continental SA+ ............. 1,058,724 1,350,246
10,000 Hain Celestial Group Inc.+ ........ 184,774 220,900
110,000 International Multifoods
Corp.+ .......................... 2,224,489 2,719,200
65,000 Interstate Bakeries Corp. ......... 865,132 739,050
7,000 J & J Snack Foods Corp.+ .......... 116,286 316,260
212,000 Kikkoman Corp. .................... 1,388,604 1,764,714
14,500 MGP Ingredients Inc. .............. 208,250 368,880
33,000 Mondavi (Robert) Corp.,
Cl. A+ .......................... 1,048,679 1,247,730
See accompanying notes to financial statements.
5
THE GABELLI SMALL CAP GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) -- MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- ------
COMMON STOCKS (CONTINUED)
FOOD AND BEVERAGE (CONTINUED)
5,000 Northland Cranberries Inc.,
Cl. A+ ..........................$ 4,200 $ 4,350
4,000 Omni Nutraceuticals Inc.+ ......... 13,563 14
125,000 PepsiAmericas Inc. ................ 1,612,693 2,552,500
60,000 Ralcorp Holdings Inc.+ ............ 911,931 1,825,800
70,000 Smucker (J.M.) Co. ................ 1,627,033 3,694,600
100,000 The Steak n Shake Co.+ ............ 1,088,229 1,925,000
5,000 Todhunter International Inc.+ ..... 51,750 60,000
37,727 Tootsie Roll Industries Inc. ...... 596,834 1,379,293
60,000 Triarc Companies Inc. ............. 429,705 656,400
120,000 Triarc Companies Inc., Cl. B ...... 1,025,442 1,315,200
------------ ------------
20,803,194 33,683,282
------------ ------------
HEALTH CARE -- 5.5%
20,000 ArthroCare Corp.+ ................. 398,949 462,200
7,000 Bio-Rad Laboratories Inc.,
Cl. A+ .......................... 257,683 394,590
1,000 Biomet Inc. ....................... 30,350 38,360
10,000 Biosite Inc.+ ..................... 253,600 319,700
4,600 Bruker BioSciences Corp.+ ......... 18,009 23,046
15,000 CNS Inc. .......................... 173,385 161,100
1,000 CONMED Corp.+ ..................... 15,430 29,540
10,000 Corixa Corp.+ ..................... 196,695 64,028
81,420 Del Global Technologies
Corp.+ .......................... 258,928 164,469
3,000 Digene Corp.+ ..................... 24,000 103,080
5,000 Edwards Lifesciences
Corp.+ .......................... 165,250 159,750
1,050 Enzo Biochem Inc.+ ................ 13,097 17,672
40,000 Exactech Inc.+ .................... 572,732 736,000
27,000 Henry Schein Inc.+ ................ 946,831 1,928,340
20,000 ICU Medical Inc.+ ................. 675,580 607,400
133,500 INAMED Corp.+ ..................... 2,304,490 7,112,880
2,000 Integra LifeSciences Holdings+ .... 43,600 61,240
55,000 Interpore International Inc.+ ..... 674,197 790,900
35,000 Inverness Medical
Innovations Inc.+ ............... 638,388 640,500
29,000 Invitrogen Corp.+ ................. 1,514,135 2,079,010
15,700 Lifecore Biomedical Inc.+ ......... 108,622 117,750
15,000 Nabi Biopharmaceuticals+ .......... 105,625 233,250
1,300 Nobel Biocare Holding AG .......... 100,171 178,553
30,000 Orthodontic Centers of
America Inc.+ ................... 234,149 237,000
29,000 Orthofix International NV+ ........ 937,100 1,433,760
2,000 OrthoLogic Corp.+ ................. 6,750 15,500
2,000 Osteotech Inc.+ ................... 14,420 12,900
31,500 Owens & Minor Inc. ................ 605,454 796,950
51,000 Penwest Pharmaceuticals Co.+ ...... 368,867 745,110
43,000 Priority Healthcare Corp.,
Cl. B+ .......................... 862,278 915,470
MARKET
SHARES COST VALUE
------ ---- ------
10,000 Regeneration Technologies
Inc.+ ...........................$ 102,308 $ 113,500
40,000 Schick Technologies Inc.+ ......... 319,003 402,000
900,000 Snia SpA .......................... 418,887 309,681
86,000 Sola International Inc.+ .......... 1,116,692 1,999,500
1,976,000 Sorin SPA+ ........................ 6,713,174 5,475,803
2,500 Straumann Holding AG - Reg ........ 224,697 432,174
1,000 Stryker Corp. ..................... 65,440 88,530
185,000 Sybron Dental Specialties
Inc.+ ........................... 3,427,065 5,041,250
10,000 Thoratec Corp.+ ................... 133,425 124,900
300,000 Twinlab Corp.+ .................... 783,952 11,400
75,000 Women First HealthCare Inc.+ ...... 97,658 13,500
1,000 Wright Medical Group Inc.+ ........ 16,460 30,700
5,100 Young Innovations Inc. ............ 128,516 178,959
------------ ------------
26,066,042 34,801,945
------------ ------------
HOME FURNISHINGS -- 0.2%
16,000 Bassett Furniture
Industries Inc. ................. 286,154 317,280
4,000 Bed Bath & Beyond Inc.+ ........... 11,125 167,040
15,000 Foamex International Inc.+ ........ 127,458 50,100
30,000 La-Z-Boy Inc. ..................... 250,200 652,800
70,000 Oneida Ltd. ....................... 732,976 171,500
------------ ------------
1,407,913 1,358,720
------------ ------------
HOTELS AND GAMING -- 4.7%
165,000 Aztar Corp.+ ...................... 1,292,912 4,044,150
140,300 Boca Resorts Inc., Cl. A+ ......... 1,850,748 2,448,235
12,000 Boyd Gaming Corp. ................. 90,225 274,680
140,000 Caesars Entertainment Inc.+ ....... 1,276,659 1,825,600
46,000 Churchill Downs Inc. .............. 1,237,574 1,783,880
104,000 Dover Downs Gaming &
Entertainment Inc. .............. 1,038,939 1,113,840
160,000 Gaylord Entertainment Co.+ ........ 4,578,906 4,944,000
5,000 Jury's Doyle Hotel Group plc ...... 27,762 60,216
58,000 Kerzner International Ltd+ ........ 1,195,218 2,572,300
380,000 La Quinta Corp.+ .................. 975,912 2,865,200
74,000 Lakes Entertainment Inc.+ ......... 771,260 1,881,080
375,000 Magna Entertainment Corp.,
Cl. A+ .......................... 2,445,344 2,257,500
55,000 Penn National Gaming Inc.+ ........ 263,646 1,582,350
90,000 Pinnacle Entertainment Inc.+ ...... 705,885 1,242,000
3,000 Station Casinos Inc. .............. 13,350 132,510
35,000 Trump Hotels & Casino
Resorts Inc.+ ................... 273,418 84,000
70,000 Wyndham International Inc.,
Cl. A+ .......................... 153,945 70,000
22,000 Wynn Resorts Ltd.+ ................ 311,744 770,000
20,000 Youbet.com Inc.+ .................. 51,494 72,800
------------ ------------
18,554,941 30,024,341
------------ ------------
See accompanying notes to financial statements.
6
THE GABELLI SMALL CAP GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) -- MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- ------
COMMON STOCKS (CONTINUED)
METALS AND MINING -- 0.4%
142,115 Kinross Gold Corp.+ ...............$ 984,488 $ 1,041,703
10,000 Meridian Gold Inc.+ ............... 75,630 122,000
70,000 Placer Dome Inc. .................. 653,970 1,257,900
190,000 Royal Oak Mines Inc.+ ............. 322,487 950
26,148 Stillwater Mining Co.+ ............ 362,121 410,524
------------ ------------
2,398,696 2,833,077
------------ ------------
MUTUAL FUNDS -- 0.4%
60,000 Central Europe and Russia
Fund Inc. ....................... 970,809 1,470,000
36,266 France Growth Fund Inc.+ .......... 347,117 275,622
36,700 Germany Fund Inc. ................. 386,832 254,698
25,000 Italy Fund Inc. Escrow (b) ........ 0 0
60,000 New Germany Fund Inc. ............. 699,559 442,200
11,000 Spain Fund Inc. ................... 103,029 112,420
------------ ------------
2,507,346 2,554,940
------------ ------------
PAPER AND FOREST PRODUCTS -- 0.3%
40,000 Packaging Dynamics Corp. .......... 296,567 530,400
27,000 Schweitzer-Manduit
International Inc. .............. 651,602 872,100
24,000 Wausau-Mosinee Paper Corp. ........ 280,862 338,160
------------ ------------
1,229,031 1,740,660
------------ ------------
PUBLISHING -- 4.6%
307,237 Independent News & Media plc ...... 431,671 743,796
10,000 Journal Communications
Inc., Cl. A ..................... 190,482 200,000
120,000 Journal Register Co.+ ............. 1,938,438 2,508,000
14,000 Lee Enterprises Inc. .............. 330,830 632,520
53,500 McClatchy Co., Cl. A .............. 1,588,435 3,800,640
69,000 Media General Inc., Cl. A ......... 1,910,905 4,642,320
28,000 Meredith Corp. .................... 500,908 1,415,680
1,125,000 Penton Media Inc.+ ................ 1,738,342 810,000
400,000 PRIMEDIA Inc.+ .................... 1,290,397 1,080,000
130,000 Pulitzer Inc. ..................... 4,366,943 6,272,500
235,800 Thomas Nelson Inc. ................ 2,404,880 6,418,476
4,000 Value Line Inc. ................... 162,772 210,920
12,000 Wiley (John) & Sons Inc.,
Cl. B ........................... 46,500 360,000
------------ ------------
16,901,503 29,094,852
------------ ------------
REAL ESTATE -- 1.3%
75,000 Catellus Development Corp. ........ 1,206,158 1,950,750
158,500 Griffin Land & Nurseries Inc.+ .... 1,919,832 4,025,900
10,000 Gyrodyne Company of
America Inc.+ ................... 151,452 274,950
396 HomeFed Corp.+ .................... 10,969 13,701
25,000 Malan Realty Investors Inc. ....... 235,660 125,750
110,000 Morguard Corp. .................... 1,392,683 1,987,826
------------ ------------
4,916,754 8,378,877
------------ ------------
MARKET
SHARES COST VALUE
------ ---- ------
RETAIL -- 2.8%
35,000 Aaron Rents Inc. ..................$ 344,877 $ 871,150
97,500 Aaron Rents Inc., Cl. A ........... 524,217 2,120,625
28,000 Big 5 Sporting Goods Corp.+ ....... 507,360 707,000
100,000 Burlington Coat Factory
Warehouse Corp. ................. 1,080,937 1,980,000
10,000 Casey's General Stores Inc. ....... 155,152 166,000
31,500 Coldwater Creek Inc.+ ............. 239,553 671,580
40,000 CSK Auto Corp.+ ................... 743,652 724,400
175,000 Ingles Markets Inc., Cl. A ........ 2,176,507 1,873,725
12,300 Movado Group Inc. ................. 340,162 368,262
130,000 Neiman Marcus Group Inc.,
Cl. B ........................... 4,106,529 6,519,500
3,000 The Sports Authority Inc.+ ........ 18,395 120,240
40,000 Weis Markets Inc. ................. 1,174,744 1,350,000
------------ ------------
11,412,085 17,472,482
------------ ------------
SATELLITE -- 0.4%
20,000 Pegasus Communications
Corp.+ .......................... 477,724 766,800
100,000 Sirius Satellite Radio Inc.+ ...... 279,419 340,000
40,000 XM Satellite Radio Holdings
Inc., Cl. A+ .................... 370,830 1,120,000
------------ ------------
1,127,973 2,226,800
------------ ------------
SPECIALTY CHEMICALS -- 4.5%
35,000 Airgas Inc. ....................... 211,400 745,500
30,000 Albemarle Corp. ................... 654,490 870,000
55,000 Arch Chemicals Inc. ............... 1,161,735 1,552,650
10,000 Cytec Industries Inc.+ ............ 278,296 355,700
9,000 Dionex Corp.+ ..................... 270,000 475,200
150,000 Ferro Corp. ....................... 3,405,165 3,922,500
130,000 Fuller (H.B.) Co. ................. 2,306,337 3,697,200
50,000 Great Lakes Chemical Corp. ........ 1,247,733 1,192,500
450,000 Hercules Inc.+ .................... 4,361,521 5,166,000
1,500 IMC Global Inc. ................... 10,470 21,450
155,000 MacDermid Inc. .................... 2,646,555 5,454,450
180,000 Material Sciences Corp.+ .......... 1,696,183 1,980,000
130,000 Omnova Solutions Inc.+ ............ 810,622 682,500
50,000 Penford Corp. ..................... 539,601 833,000
10,000 Quaker Chemical Corp. ............. 181,138 254,000
55,000 Schulman (A.) Inc. ................ 643,350 1,080,750
------------ ------------
20,424,596 28,283,400
------------ ------------
TELECOMMUNICATIONS -- 1.0%
9,200 Atlantic Tele-Network Inc. ........ 92,644 286,580
190,000 Cincinnati Bell Inc.+ ............. 475,442 773,300
20,000 Citizens Communications Co.+ ...... 195,332 258,800
79,460 Commonwealth Telephone
Enterprises Inc.+ ............... 1,517,147 3,258,655
6,795 Community Service
Communications Inc.+ ............ 0 13,930
46,950 D&E Communications Inc. ........... 605,207 656,830
See accompanying notes to financial statements.
7
THE GABELLI SMALL CAP GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) -- MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- ------
COMMON STOCKS (CONTINUED)
TELECOMMUNICATIONS (CONTINUED)
65,000 McLeodUSA Inc., Cl.A,
Escrow+ (b) .....................$ 0 $ 0
277 NTL Inc.+ ......................... 8,407 16,468
2,000 RCN Corp.+ ........................ 9,221 580
25,000 Rogers Communications Inc.,
Cl. B ........................... 226,378 467,250
20,000 Shenandoah
Telecommunications Co. .......... 296,543 457,000
2,500 Telewest Communications
plc, ADR+ ....................... 8,875 15,000
53,000 Winstar Communications Inc.+ ...... 133 106
------------ ------------
3,435,329 6,204,499
------------ ------------
TRANSPORTATION -- 0.1%
95,000 Grupo TMM SA de CV,
Cl. A, ADR+ ..................... 863,299 263,150
2,000 Irish Continental Group plc ....... 18,082 29,957
50,000 OMI Corp.+ ........................ 313,120 572,000
5,100 Providence & Worcester
Railroad Co. .................... 42,979 48,450
------------ ------------
1,237,480 913,557
------------ ------------
WIRELESS COMMUNICATIONS -- 2.1%
6,000 Airgate Pcs Inc (New)+ ............ 137,880 89,994
50,000 Centennial Communications
Corp.+ .......................... 545,692 338,000
11 Microcell Telecommunications
Inc., Cl. B+ .................... 77 209
5,000 Nextel Communications Inc.,
Cl. A+ .......................... 35,338 123,650
75,000 Price Communications Corp.+ ....... 914,718 1,176,750
56,000 Rogers Wireless
Communications Inc.,
Cl. B+ .......................... 806,844 1,481,200
55,000 Rural Cellular Corp., Cl. A+ ...... 374,090 526,350
25,000 Triton PCS Holdings Inc.,
Cl. A+ .......................... 388,518 137,250
10,000 Ubiquitel Inc.+ ................... 42,850 35,290
71,000 Vimpel-Communications, ADR+ ....... 1,836,938 7,383,290
80,000 Western Wireless Corp., Cl. A+ .... 279,042 1,869,600
------------ ------------
5,361,987 13,161,583
------------ ------------
TOTAL COMMON STOCKS ............... 412,939,378 615,604,181
------------ ------------
PREFERRED STOCKS -- 1.9%
BROADCASTING -- 0.3%
1,063 Granite Broadcasting Corp.,
12.750% Pfd.+ ................... 439,683 574,020
100 Gray Television Inc.,
8.000% Cv. Pfd.,
Ser. C (b)(d) ................... 1,000,000 1,020,000
MARKET
SHARES COST VALUE
------ ---- ------
1,131 PTV Inc., 10.000% Pfd.,
Ser. A+ .........................$ 0 $ 6,079
------------ ------------
1,439,683 1,600,099
------------ ------------
BUSINESS SERVICES -- 0.3%
20,787 Interep National Radio Sales Inc.,
4.000% Cv. Pfd.,
Ser. A (b)(d) ................... 2,080,000 2,120,240
------------ ------------
DIVERSIFIED INDUSTRIAL -- 0.1%
WHX Corp.,
58,000 6.500% Cv. Pfd., Ser. A+ ........ 463,067 435,000
39,400 $3.75 Cv. Pfd., Ser. B+ ......... 191,751 278,558
------------ ------------
654,818 713,558
------------ ------------
PUBLISHING -- 0.8%
160,000 News Corp. Ltd., Pfd., ADR ........ 941,920 5,073,600
------------ ------------
TELECOMMUNICATIONS -- 0.4%
13,000 Andrew Corp.,
7.750% Cv. Pfd., Ser. D ......... 633,275 2,691,000
------------ ------------
TOTAL PREFERRED STOCKS ............ 5,749,696 12,198,497
------------ ------------
RIGHTS -- 0.0%
WIRELESS COMMUNICATIONS -- 0.0%
11 Microcell Telecommunications
Inc. Rights+ .................... 0 5
------------ ------------
WARRANTS -- 0.1%
BUSINESS SERVICES -- 0.1%
250,000 GP Strategies Corp.,
Expire 08/14/08+ (b) ............ 637,065 637,065
125,000 Interep National Radio
Sales Inc.+ (b) ................. 0 0
------------ ------------
637,065 637,065
------------ ------------
COMPUTER SOFTWARE AND SERVICES -- 0.0%
430 Anacomp Inc., Cl. B,
Expire 12/10/06+ ................ 0 97
------------ ------------
HEALTH CARE -- 0.0%
14,424 Del Global Technologies Corp.,
Expire 03/28/08+ ................ 24,809 5,192
------------ ------------
TELECOMMUNICATIONS -- 0.0%
86 NTL Inc., Expire 01/13/11+ ........ 124 710
------------ ------------
WIRELESS COMMUNICATIONS -- 0.0%
1,387 Microcell Telecommunications Inc.,
Cl. A, Expire 05/01/05+ ......... 1,991 6,322
2,312 Microcell Telecommunications Inc.,
Cl. B, Expire 05/01/08+ ......... 3,553 12,314
------------ ------------
5,544 18,636
------------ ------------
TOTAL WARRANTS .................... 667,542 661,700
------------ ------------
See accompanying notes to financial statements.
8
THE GABELLI SMALL CAP GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) -- MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT COST VALUE
--------- ---- ------
CORPORATE BONDS -- 0.3%
AUTOMOTIVE: PARTS AND ACCESSORIES -- 0.1%
$ 800,000 Exide Corp., Sub. Deb. Cv.,
2.900%, 12/15/05+ (c)(d) ........$ 6,000 $ 12,480
600,000 GenCorp Inc., Sub. Deb. Cv.,
5.750%, 04/15/07 ................ 565,676 610,500
------------ ------------
571,676 622,980
------------ ------------
BUILDING AND CONSTRUCTION -- 0.0%
100,000 Foster Wheeler Ltd.,
Sub. Deb. Cv.,
6.500%, 06/01/07 ................ 36,294 63,125
------------ ------------
BUSINESS SERVICES -- 0.2%
2,000,000 GP Strategies Corp.,
Sub. Deb.,
6.000%, 08/14/08 (b) ............ 1,419,208 1,418,062
------------ ------------
COMPUTER SOFTWARE AND SERVICES -- 0.0%
300,000 Exodus Communications Inc.,
Sub. Deb. Cv.,
5.250%, 02/15/08+ (c) ........... 1,185 1,125
------------ ------------
ENERGY AND UTILITIES -- 0.0%
200,000 Friede Goldman Halter Inc.,
Sub. Deb. Cv.,
4.500%, 09/15/04+ (c) ........... 26,000 17,500
100,000 Ogden Corp., Sub. Deb. Cv.,
6.000%, 06/01/49+ (c) ........... 99,535 0
------------ ------------
125,535 17,500
------------ ------------
HEALTH CARE -- 0.0%
28,847 Del Global Technologies Corp.,
6.000%, 03/28/07 (b) ............ 28,847 21,636
10,000 Inhale Therapeutic Systems,
Sub. Deb. Cv.,
6.750%, 10/13/06 (d) ............ 6,952 14,824
------------ ------------
35,799 36,460
------------ ------------
PRINCIPAL MARKET
AMOUNT COST VALUE
--------- ---- ------
TELECOMMUNICATIONS -- 0.0%
$ 400,000 Williams Comm Group Inc.,
Escrow,
10.875%, 10/01/09 (c) ...........$ 0 $ 0
200,000 XO Communications Inc.,
Sub. Deb. Cv.,
5.750%, 01/15/09+ (c)(d) ........ 375 500
------------ ------------
375 500
------------ ------------
TOTAL CORPORATE BONDS ............. 2,190,072 2,159,752
------------ ------------
TOTAL
INVESTMENTS -- 99.6% ............$421,546,688 630,624,135
============
OTHER ASSETS AND LIABILITIES (NET) -- 0.4% ......... 2,315,081
------------
NET ASSETS -- 100.0% ...............................$632,939,216
============
- ----------------
For Federal tax purposes:
Aggregate cost .....................................$421,546,688
============
Gross unrealized appreciation ......................$228,009,637
Gross unrealized depreciation ...................... (18,932,190)
------------
Net unrealized appreciation ........................$209,077,447
============
- ----------------
(a) Security considered an affiliated holding because the Fund owns at least
5% of the outstanding shares.
(b) Security fair valued under procedures established by the Board of
Directors. The procedures may include reviewing available financial
information about the company and reviewing valuation of comparable
securities and other factors on a regular basis. The aggregate value
of such securities is $5,501,813 or 0.87% of net assets.
(c) Security is in default.
(d) 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 March
31, 2004, the market value of Rule 144A securities amounted to $3,168,044
or 0.50% of total net assets.
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
ADR - American Depository Receipt.
See accompanying notes to financial statements.
9
THE GABELLI SMALL CAP GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
ASSETS:
Investments, at value (Cost $421,546,688) .. $630,624,135
Cash ....................................... 1,314,227
Dividends and interest receivable .......... 1,324,872
Receivable for investments sold ............ 899,862
Receivable for capital shares sold ......... 568,017
Other assets ............................... 20,412
------------
TOTAL ASSETS ............................... 634,751,525
------------
LIABILITIES:
Payable for investments purchased .......... 769,128
Payable for capital shares redeemed ........ 58,692
Payable for investment advisory fees ....... 529,914
Payable for distribution fees .............. 132,486
Payable for shareholder communication fees . 88,269
Payable for shareholder services fees ...... 138,637
Other accrued expenses ..................... 95,183
------------
TOTAL LIABILITIES .......................... 1,812,309
------------
NET ASSETS applicable to 24,568,979
shares outstanding ....................... $632,939,216
============
NET ASSETS CONSIST OF:
Capital stock, at par value ................ $ 24,569
Additional paid-in capital ................. 411,475,079
Accumulated net investment income .......... 27,445
Accumulated net realized gain on investments
and foreign currency transactions ........ 12,332,969
Net unrealized appreciation on investments
and foreign currency transactions ........ 209,079,154
------------
NET ASSETS ................................. $632,939,216
============
SHARES OF CAPITAL STOCK:
CLASS AAA:
Net asset value, offering and redemption price
per share ($632,900,635 / 24,567,481 shares
outstanding; 200,000,000 shares authorized
of $0.001 par value) ..................... $25.76
======
CLASS A:
Net asset value and redemption price per share
($23,854 / 926 shares outstanding; 50,000,000
shares authorized of $0.001 par value) ... $25.77
======
Maximum sales charge 5.75%
======
Maximum offering price per share (NAV / 0.9425,
based on maximum sales charge of 5.75% of
the offering price at March 31, 2004) .... $27.34
======
CLASS B:
Net asset value and offering price per share
($13,677 / 531 shares outstanding; 50,000,000
shares authorized of $0.001 par value) ... $25.72(a)
======
CLASS C:
Net asset value and offering price per share
($1,050 / 41 shares outstanding; 50,000,000
shares authorized of $0.001 par value) ... $25.72(a)
======
- -----------
(a) Redemption price varies based on length of time held.
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends (net of foreign taxes of $13,143) $ 4,314,410
Interest ................................... 137,911
------------
TOTAL INVESTMENT INCOME .................... 4,452,321
------------
EXPENSES:
Investment advisory fees ................... 3,040,554
Distribution fees .......................... 760,149
Shareholder services fees .................. 290,439
Custodian fees ............................. 52,233
Shareholder communications expenses ........ 72,612
Registration fees .......................... 32,337
Legal and audit fees ....................... 26,885
Directors' fees ............................ 22,566
Interest expense ........................... 22,954
Miscellaneous expenses ..................... 38,549
------------
TOTAL EXPENSES ............................. 4,359,278
------------
NET INVESTMENT INCOME ...................... 93,043
------------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS AND FOREIGN CURRENCY
TRANSACTIONS:
Net realized gain on investments and foreign
currency transactions .................... 16,152,777
Net change in unrealized appreciation/
depreciation on investments and foreign
currency transactions .................... 95,600,338
------------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS AND FOREIGN CURRENCY
TRANSACTIONS ............................. 111,753,115
------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS .......................... $111,846,158
============
See accompanying notes to financial statements.
10
THE GABELLI SMALL CAP GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS ENDED
MARCH 31, 2004 YEAR ENDED
(UNAUDITED) SEPTEMBER 30, 2003
---------------- ------------------
OPERATIONS:
Net investment income/(loss) ....................... $ 93,043 $ (1,046,497)
Net realized gain on investments and
foreign currency transactions .................... 16,152,777 5,606,020
Net change in unrealized appreciation/depreciation
on investments and foreign
currency transactions ............................ 95,600,338 112,208,652
------------- -------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 111,846,158 116,768,175
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net realized short-term gain on investments ........ (2,246,976) (300,296)
Net realized long-term gain on investments ......... (2,105,462) (6,071,352)
------------- -------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS ................ (4,352,438) (6,371,648)
------------- -------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares issued:
Class AAA ........................................ 81,335,568 131,697,417
Class A .......................................... 23,621 --
Class B .......................................... 13,500 --
Class C .......................................... 1,000 --
------------- -------------
81,373,689 131,697,417
------------- -------------
Proceeds from reinvestment of dividends:
Class AAA ........................................ 4,162,298 6,099,180
Class A .......................................... -- --
Class B .......................................... -- --
Class C .......................................... -- --
------------- -------------
4,162,298 6,099,180
------------- -------------
Cost of shares redeemed:
Class AAA ........................................ (100,487,017) (136,212,243)
Class A .......................................... -- --
Class B .......................................... -- --
Class C .......................................... -- --
------------- -------------
(100,487,017) (136,212,243)
------------- -------------
Net increase/(decrease) in net assets
from capital share transactions .................. (14,951,030) 1,584,354
------------- -------------
NET INCREASE IN NET ASSETS ......................... 92,542,690 111,980,881
NET ASSETS:
Beginning of period ................................ 540,396,526 428,415,645
------------- -------------
End of period (including undistributed net
investment income of $27,445 and $0,
respectively) .................................... $ 632,939,216 $ 540,396,526
============= =============
See accompanying notes to financial statements.
11
THE GABELLI SMALL CAP GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
1. ORGANIZATION. The Gabelli Small Cap Growth Fund (the "Fund") is a series of
Gabelli Equity Series Funds, Inc. (the "Corporation"), which was organized on
July 25, 1991 as a Maryland corporation. The Fund is a diversified, open-end
management investment company registered under the Investment Company Act of
1940, as amended (the "1940 Act"), and one of three separately managed
portfolios (collectively, the "Portfolios") of the Corporation, each with four
separate classes of shares known as Class AAA, Class A, Class B and Class C. The
Fund's primary objective is capital appreciation. The Fund commenced investment
operations on October 22, 1991.
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. All other portfolio securities for which
over-the-counter 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 that day, then the security is valued at the closing bid price. 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 are valued at the latest average of the bid and asked prices
obtained from a pricing service approved by the Board of Directors, or a dealer
maintaining an active market in those securities. 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
12
THE GABELLI SMALL CAP GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
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 March 31, 2004, 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 March 31, 2004, there were no 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. At March 31, 2004,
there were no open forward foreign exchange contracts.
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
13
THE GABELLI SMALL CAP GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
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 distributions and
capital gain distributions are determined in accordance with income tax
regulations which may differ from accounting principles generally accepted in
the United States.
For fiscal year ended September 30, 2003, the tax character of distributions
paid does not materially differ from the amounts recorded in accordance with
accounting principles generally accepted in the United States.
For the fiscal year ended September 30, 2003, reclassifications were made to
decrease accumulated net investment loss for $984,787 and decrease accumulated
net realized gain on investments for $974,892, with an offsetting adjustment to
additional paid-in capital.
EXPENSES. Certain administrative expenses are common to, and allocated among,
the Portfolios. Such allocations are made on the basis of each Portfolio's
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. As a result, a Federal income tax provision is not required.
As of September 30, 2003, the components of accumulated earnings/losses on a tax
basis were as follows:
Undistributed ordinary income
(inclusive of short-term capital gains) .... $ 2,330,289
Undistributed long-term capital gains ........ 1,965,427
Post-October losses .......................... (710)
Net unrealized appreciation .................. 109,715,730
Other temporary differences .................. (64,888)
------------
Total accumulated earnings ................. $113,945,848
============
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.
The difference between book and tax basis undistributed ordinary income is
primarily due to the continued accrual of defaulted interest for tax purposes
which has been written down for book purposes.
14
THE GABELLI SMALL CAP GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
The difference between book and tax basis unrealized appreciation is primarily
due to deferral of losses from wash sales for tax purposes.
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 six months ended March 31, 2004, the Fund incurred distribution
costs payable to Gabelli & Company, Inc., an affiliate of the Adviser, of
$760,131 and $3 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 $12 and $3, 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 six months
ended March 31, 2004, other than short term securities, aggregated $28,674,414
and $46,351,065, respectively.
6. TRANSACTIONS WITH AFFILIATES. During the six months ended March 31, 2004, the
Fund paid brokerage commissions of $84,800 to Gabelli & Company, Inc. During the
six months ended March 31, 2004, Gabelli & Company, Inc. received $155 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 Advisory Agreement between the Fund and the Adviser. During the
six months ended March 31, 2004, the Fund reimbursed the Adviser $17,400 in
connection with the cost of computing the Fund's net asset value.
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.
The average daily amount of borrowings within the six months ended March 31,
2004 was $2,219,295 with a related weighted average interest rate of 1.78%. The
maximum amount borrowed at any time during the six months ended March 31, 2004
was $9,451,000.
15
THE GABELLI SMALL CAP GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
8. CAPITAL STOCK TRANSACTIONS. Transactions in shares of capital stock were as
follows:
SIX MONTHS ENDED
MARCH 31, 2004 PERIOD ENDED
(UNAUDITED) SEPTEMBER 30, 2003
------------------------------- -------------------------------
SHARES AMOUNT SHARES AMOUNT
------------ ------------- ------------ -------------
CLASS AAA
Shares sold ................................ 3,321,697 $ 81,335,568 6,936,908 $ 131,697,417
Shares issued upon reinvestment of dividends 172,209 4,162,298 338,280 6,099,180
Shares redeemed ............................ (4,082,819) (100,487,017) (7,267,158) (136,212,243)
------------ ------------- ------------ -------------
Net increase/decrease in Class AAA shares .. (588,913) $ (14,989,151) 8,030 $ 1,584,354
============ ============= ============ =============
CLASS A
Shares sold ................................ 926 $ 23,621 -- --
------------ ------------- ------------ -------------
Net increase in Class A shares ............. 926 $ 23,621 -- --
============ ============= ============ =============
CLASS B
Shares sold ................................ 531 $ 13,500 -- --
------------ ------------- ------------ -------------
Net increase in Class B shares ............. 531 $ 13,500 -- --
============ ============= ============ =============
CLASS C
Shares sold ................................ 41 $ 1,000 -- --
------------ ------------- ------------ -------------
Net increase in Class C shares ............. 41 $ 1,000 -- --
============ ============= ============ =============
9. TRANSACTIONS IN SECURITIES OF AFFILIATED ISSUERS. The 1940 Act defines
affiliated issuers as those in which the Fund's holdings of an issuer represent
5% or more of the outstanding voting securities of the issuer. A summary of the
Fund's transactions in the securities of these issuers during the six months
ended March 31, 2004, is set forth below:
PERCENT
SHARES VALUE AT OWNED
BEGINNING PURCHASED ENDING DIVIDEND MARCH 31, OF SHARES
SHARES (SOLD) SHARES INCOME 2004 OUTSTANDING
--------- --------- ------ -------- --------- -----------
Trans-Lux Corp. ... 95,000 0 95,000 $6,650 $744,800 9.76%
------ - ------ ------ -------- -----
16
THE GABELLI SMALL CAP 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 Net Asset
Period Value, Net Unrealized from Net Realized Value,
Ended Beginning Investment Gain/(Loss) on Investment Investment Gain on Total End of Total
September 30 of Period Income/(Loss) Investments Operations Income Investments Distributions Period Return+
- ------------ --------- ------------- -------------- ---------- ---------- ----------- ------------- --------- -------
CLASS AAA
2004(c) $21.48 $ 0.00* $4.45 $4.45 -- $(0.17) $(0.17) $25.76 20.84%
2003 17.04 (0.05) 4.74 4.69 -- (0.25) (0.25) 21.48 27.84
2002 17.13 (0.04) 0.31 0.27 $(0.01) (0.35) (0.36) 17.04 1.39
2001 23.60 0.06 (1.75) (1.69) (0.05) (4.73) (4.78) 17.13 (7.47)
2000 21.84 0.06 4.16 4.22 -- (2.46) (2.46) 23.60 21.00
1999 18.81 (0.07) 3.63 3.56 -- (0.53) (0.53) 21.84 19.24
CLASS A
2004(a)(c) $24.49 $(0.00)* $1.28 $1.28 -- -- -- $25.77 5.23%
CLASS B
2004(a)(c) $24.49 $ 0.00* $1.23 $1.23 -- -- -- $25.72 5.02%
CLASS C
2004(a)(c) $24.49 $(0.03) $1.26 $1.23 -- -- -- $25.72 5.02%
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
------------------------------------------------
Net Assets
Period End of Net Portfolio
Ended Period Investment Operating Turnover
September 30 (in 000's) Income/(Loss) Expenses Rate
- ------------ ---------- ------------- ---------- ---------
CLASS AAA
2004(c) $632,900 0.03%(b) 1.44%(b) 5%
2003 540,397 (0.22) 1.45 4
2002 428,416 (0.22) 1.45 10
2001 372,865 0.30 1.45 17
2000 366,459 0.26 1.49 47
1999 305,403 (0.34) 1.56(d) 24
CLASS A
2004(a)(c) $ 24 (0.02)%(b) 1.44%(b) 5%
CLASS B
2004(a)(c) $ 14 0.26%(b) 2.19%(b) 5%
CLASS C
2004(a)(c) $ 1 (0.60)%(b) 2.19%(b) 5%
- --------------
+ 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 the commencement of offering Class A, Class B and Class C Shares on
December 31, 2003.
(b) Annualized.
(c) For the period ending March 31, 2004, unaudited.
(d) The Fund incurred interest expense during the fiscal year ended September
30, 1999. If interest expense had not been incurred, the ratio of operating
expenses to average net assets would have been 1.53%.
* Amount is less than $0.005 per share.
See accompanying notes to financial statements.
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). INVESTORS SHOULD
CONSIDER THE INVESTMENT OBJECTIVES, RISKS AND CHARGES AND EXPENSES OF THE
FUND BEFORE INVESTING. THE PROSPECTUS CONTAINS MORE COMPLETE INFORMATION
ABOUT THIS AND OTHER MATTERS AND SHOULD BE READ CAREFULLY BEFORE INVESTING.
Gabelli Equity Series Funds, Inc.
THE GABELLI SMALL CAP 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 Karl Otto Pohl
CHAIRMAN AND CHIEF FORMER PRESIDENT
INVESTMENT OFFICER DEUTSCHE BUNDESBANK
GABELLI ASSET MANAGEMENT INC.
Anthony J. Colavita Anthony R. Pustorino
ATTORNEY-AT-LAW CERTIFIED PUBLIC ACCOUNTANT
ANTHONY J. COLAVITA, P.C. PROFESSOR EMERITUS
PACE UNIVERSITY
Vincent D. Enright Anthonie C. van Ekris
FORMER SENIOR VICE PRESIDENT MANAGING DIRECTOR
AND CHIEF FINANCIAL OFFICER BALMAC INTERNATIONAL, INC.
KEYSPAN ENERGY CORP.
John D. Gabelli Salvatore J. Zizza
SENIOR VICE PRESIDENT CHAIRMAN
GABELLI & COMPANY, INC. HALLMARK ELECTRICAL
SUPPLIES CORP.
Robert J. Morrissey
ATTORNEY-AT-LAW
MORRISSEY, HAWKINS & LYNCH
OFFICERS
Bruce N. Alpert James E. McKee
PRESIDENT AND TREASURER 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 Small Cap Growth Fund. It is not authorized for distribution to
prospective investors unless preceded or accompanied by an effective prospectus.
- --------------------------------------------------------------------------------
GAB443Q104SR
[GRAPHIC OMITTED]
PICTURE OF MARIO GABELLI
THE
GABELLI
SMALL CAP
GROWTH
FUND
SEMI-ANNUAL REPORT
MARCH 31, 2004
THE GABELLI EQUITY INCOME FUND
SEMI-ANNUAL REPORT (B)
MARCH 31, 2004
TO OUR SHAREHOLDERS,
Higher yielding equities held up well as stocks retreated in March and the
Gabelli Equity Income Fund posted a 16.2% gain during the six-month period ended
March 31, 2004, compared with a 14.1% gain by the Standard & Poor's ("S&P") 500
Index during the same period.
Enclosed is the portfolio of investments and financial statements as of
March 31, 2004.
COMPARATIVE RESULTS
- -----------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS THROUGH MARCH 31, 2004 (A)(B)
----------------------------------------------------
SINCE
QUARTER 1 YEAR 3 YEAR 5 YEAR 10 YEAR INCEPTION (C)
------- ------ ------ ------ ------- -------------
Gabelli Equity Income Fund Class AAA ..... 2.81% 36.40% 7.29% 8.31% 12.69% 12.39%
S&P 500 Index ............................ 1.69% 35.10% 0.63% (1.20)% 11.68% 10.61%
Nasdaq Composite Index ................... (0.46)% 48.69% 2.71% (4.12)% 10.37% 10.51%
Lipper Equity Income Fund Avg. ........... 2.22% 35.78% 2.68% 3.30% 10.25% 10.17%
Class A .................................. 2.74% 36.32% 7.27% 8.30% 12.69% 12.38%
(3.16)%(d) 28.46%(d) 5.17%(d) 7.01%(d) 12.01%(d) 11.84%(d)
Class B .................................. 2.56% 36.07% 7.21% 8.26% 12.67% 12.37%
(2.44)%(e) 34.44%(e) 6.95%(e) 8.16%(e) 12.67%(e) 12.37%(e)
Class C .................................. 2.62% 36.15% 7.23% 8.27% 12.67% 12.37%
1.62%(e) 35.83%(e) 7.23%(e) 8.27%(e) 12.67%(e) 12.37%(e)
(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
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 December 31, 2003. The actual performance for the Class A
Shares, Class B Shares and Class C Shares would have been lower due to the
additional expenses associated with these classes of shares. The S&P 500
Index and the Nasdaq Composite Index are unmanaged indicators of stock
market performance, while the Lipper Average reflects the average
performance of mutual funds classified in this particular category. Current
performance may be lower or higher than the performance data presented.
Visit www.gabelli.com for performance information as of the most recent
month-end. Investors should consider the investment objectives, risks and
charges and expenses of the Fund before investing. The prospectus contains
more complete information about this and other matters and should be read
carefully before investing. Performance for periods less than one year is
not annualized.
(b) The Fund's fiscal year ends September 30.
(c) From commencement of investment operations on January 2, 1992.
(d) Includes the effect of the maximum 5.75% sales charge at the beginning of
the period.
(e) 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.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
A description of the Funds' proxy voting policies and procedures is available
(i) without charge, upon request, by calling 800-GABELLI (800-422-3554); (ii)
by writing to The Gabelli Funds at One Corporate Center, Rye, NY 10580; and
(iii) on the Securities and Exchange Commission's website at www.sec.gov.
- --------------------------------------------------------------------------------
THE GABELLI EQUITY INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- ------
COMMON STOCKS -- 84.6%
AEROSPACE -- 1.5%
32,000 Boeing Co. .............$ 1,082,148 $ 1,314,240
5,000 Lockheed Martin Corp. .. 104,386 228,200
7,000 Northrop Grumman Corp. . 431,350 688,940
10,000 Raytheon Co. ........... 279,250 313,400
2,000 Rockwell Automation Inc. 25,686 69,340
2,000 Rockwell Collins Inc. .. 15,844 63,220
105,000 Titan Corp.+ ........... 2,287,350 2,119,950
------------ ------------
4,226,014 4,797,290
------------ ------------
AUTOMOTIVE -- 0.2%
4,500 Ford Motor Co. ......... 67,417 61,065
14,239 General Motors Corp. ... 538,747 670,657
------------ ------------
606,164 731,722
------------ ------------
AUTOMOTIVE: PARTS AND ACCESSORIES -- 2.6%
2,000 ArvinMeritor Inc. ...... 28,890 39,660
89,000 Dana Corp. ............. 1,252,433 1,767,540
6,400 Ethyl Corp.+ ........... 24,700 126,784
40,000 GenCorp Inc. ........... 342,710 433,200
125,000 Genuine Parts Co. ...... 3,542,196 4,090,000
5,000 Johnson Controls Inc. .. 127,000 295,750
60,000 Modine Manufacturing Co. 1,160,998 1,563,600
3,000 Pep Boys - Manny,
Moe & Jack ........... 27,885 83,250
------------ ------------
6,506,812 8,399,784
------------ ------------
AVIATION: PARTS AND SERVICES -- 0.8%
20,000 Barnes Group Inc. ...... 365,934 557,800
17,000 Curtiss-Wright Corp. ... 121,681 796,790
12,096 Curtiss-Wright Corp.,
Cl. B ................ 272,014 552,424
8,000 United Technologies
Corp. ................ 281,946 690,400
------------ ------------
1,041,575 2,597,414
------------ ------------
BROADCASTING -- 0.0%
20,000 Granite Broadcasting
Corp.+ ............... 106,004 33,400
------------ ------------
BUSINESS SERVICES -- 0.5%
4,000 Automatic Data
Processing Inc. ...... 126,808 168,000
6,000 Donnelley (R.H.) Corp.+ 68,850 280,200
500 Imation Corp. .......... 7,150 18,810
2,500 Landauer Inc. .......... 60,337 105,000
5,000 National Processing
Inc.+ ................ 77,065 95,000
26,000 New England Business
Service Inc. ......... 494,245 880,100
------------ ------------
834,455 1,547,110
------------ ------------
CABLE -- 0.1%
10,000 Comcast Corp., Cl. A+ .. 344,305 287,400
------------ ------------
COMMUNICATIONS EQUIPMENT -- 0.8%
45,000 Corning Inc.+ .......... 352,463 503,100
115,000 Motorola Inc. .......... 1,200,428 2,024,000
------------ ------------
1,552,891 2,527,100
------------ ------------
MARKET
SHARES COST VALUE
------ ---- ------
COMPUTER HARDWARE -- 0.1%
300 International Business
Machines Corp. .......$ 3,810 $ 27,552
13,000 Xerox Corp.+ ........... 126,343 189,410
------------ ------------
130,153 216,962
------------ ------------
COMPUTER SOFTWARE AND SERVICES -- 0.3%
10,000 Electronic Data
Systems Corp. ........ 172,160 193,500
35,000 EMC Corp.+ ............. 331,520 476,350
15,000 PeopleSoft Inc.+ ....... 253,867 277,350
154 Telecom Italia
Media SpA+ ........... 205 74
------------ ------------
757,752 947,274
------------ ------------
CONSUMER PRODUCTS -- 6.0%
35,000 Altria Group Inc. ...... 1,051,855 1,905,750
1,000 Clorox Co. ............. 33,050 48,910
95,000 Eastman Kodak Co. ...... 2,653,246 2,486,150
44,000 Energizer Holdings
Inc.+ ................ 1,104,727 2,054,360
74,000 Gallaher Group
plc, ADR ............. 1,600,863 3,554,220
42,000 Gillette Co. ........... 1,233,027 1,642,200
70,000 Maytag Corp. ........... 1,736,480 2,209,900
36,000 National Presto
Industries Inc. ...... 1,245,262 1,395,360
19,000 Procter & Gamble Co. ... 1,393,252 1,992,720
13,000 Rothmans Inc. .......... 237,941 338,786
26,000 Unilever NV, ADR ....... 1,542,066 1,805,440
------------ ------------
13,831,769 19,433,796
------------ ------------
CONSUMER SERVICES -- 0.3%
35,000 Rollins Inc. ........... 454,969 901,950
------------ ------------
DIVERSIFIED INDUSTRIAL -- 3.7%
5,000 3M Co. ................. 213,645 409,350
22,000 Acuity Brands Inc. ..... 342,224 525,360
30,000 Cooper Industries Ltd.,
Cl. A ................ 1,194,666 1,715,400
22,000 GATX Corp. ............. 559,803 487,740
115,000 General Electric Co. ... 2,904,598 3,509,800
5,000 Harbor Global Co. Ltd.+ 24,172 51,250
100,000 Honeywell International
Inc. ................. 2,429,693 3,385,000
47,000 Sensient Technologies
Corp. ................ 953,833 877,490
22,000 Thomas Industries Inc. . 250,524 693,000
4,000 Trinity Industries Inc. 82,100 111,200
10,000 Tyco International Ltd. 128,601 286,500
------------ ------------
9,083,859 12,052,090
------------ ------------
ELECTRONICS -- 1.8%
20,000 Intel Corp. ............ 370,400 544,000
125,000 Texas Instruments Inc. . 2,489,961 3,652,500
20,000 Thermo Electron Corp.+ . 424,925 565,600
50,000 Thomas & Betts Corp. ... 881,146 1,091,000
------------ ------------
4,166,432 5,853,100
------------ ------------
ENERGY AND UTILITIES: ELECTRIC -- 3.5%
80,000 AES Corp.+ ............. 268,400 682,400
12,000 American Electric Power
Co. Inc. ............. 310,790 395,040
See accompanying notes to financial statements.
2
THE GABELLI EQUITY INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- ------
COMMON STOCKS (CONTINUED) ENERGY AND
UTILITIES: ELECTRIC (CONTINUED)
81,000 Cinergy Corp. ..........$ 2,478,068 $ 3,312,090
17,000 DTE Energy Co. ......... 740,420 699,550
100,000 El Paso Electric Co.+ .. 790,289 1,384,000
20,000 FPL Group Inc. ......... 1,172,448 1,337,000
35,000 Great Plains
Energy Inc. .......... 748,610 1,182,650
90,000 Northeast Utilities .... 1,660,471 1,678,500
8,000 UIL Holdings Corp. ..... 290,482 385,360
10,000 Unisource Energy Corp. . 244,500 245,700
------------ ------------
8,704,478 11,302,290
------------ ------------
ENERGY AND UTILITIES: INTEGRATED -- 9.4%
38,000 Allegheny Energy Inc.+ . 318,325 520,980
110,000 Aquila Inc.+ ........... 317,164 518,100
44,000 BP plc, ADR ............ 1,030,210 2,252,800
42,000 Burlington
Resources Inc. ....... 1,618,222 2,672,460
44,000 CH Energy Group Inc. ... 1,809,289 2,159,960
70,000 Constellation Energy
Group Inc. ........... 1,664,815 2,796,500
1,000 Dominion Resources
Inc. ................. 48,852 64,300
100,000 Duke Energy Corp. ...... 1,795,444 2,260,000
180,000 Duquesne Light
Holdings Inc. ........ 2,955,682 3,510,000
135,000 El Paso Corp. .......... 1,263,718 959,850
150,000 Energy East Corp. ...... 3,071,332 3,804,000
29,000 Eni SpA ................ 304,221 583,036
40,000 NSTAR .................. 1,282,183 2,028,800
2,000 OGE Energy Corp. ....... 47,090 52,880
50,000 Progress Energy Inc. ... 2,144,038 2,354,000
15,000 Progress Energy Inc.,
CVO+ ................. 7,800 4,650
4,000 Public Service Enterprise
Group Inc. ........... 131,300 187,920
12,000 Scottish Power
plc, ADR ............. 314,381 340,320
55,000 TECO Energy Inc. ....... 754,173 804,650
27,000 TXU Corp. .............. 548,964 773,820
95,000 Westar Energy Inc. ..... 1,388,045 1,991,200
------------ ------------
22,815,248 30,640,226
------------ ------------
ENERGY AND UTILITIES: NATURAL GAS -- 2.2%
33,400 AGL Resources Inc. ..... 640,619 969,268
25,000 Atmos Energy Corp. ..... 570,313 639,250
25,000 National Fuel Gas Co. .. 519,678 615,000
30,000 ONEOK Inc. ............. 477,001 676,500
3,000 Peoples Energy Corp. ... 103,188 133,950
12,000 Piedmont Natural
Gas Co. Inc. ......... 394,017 506,640
18,000 SEMCO Energy Inc. ...... 160,883 101,880
63,282 Southern Union Co.+ .... 904,305 1,199,194
100,000 Southwest Gas Corp. .... 1,777,547 2,340,000
------------ ------------
5,547,551 7,181,682
------------ ------------
ENERGY AND UTILITIES: OIL -- 6.1%
41,000 ChevronTexaco Corp. .... 1,927,546 3,598,980
58,000 ConocoPhillips ......... 3,187,718 4,048,980
15,000 Devon Energy Corp. ..... 692,247 872,250
MARKET
SHARES COST VALUE
------ ---- ------
123,000 Exxon Mobil Corp. ......$ 3,351,043 $ 5,115,570
18,000 Kerr-McGee Corp. ....... 778,337 927,000
95,000 Royal Dutch
Petroleum Co. ........ 4,155,263 4,520,100
8,759 Total SA, ADR .......... 299,550 805,828
------------ ------------
14,391,704 19,888,708
------------ ------------
ENERGY AND UTILITIES: SERVICES -- 0.4%
14,000 Halliburton Co. ........ 158,327 425,460
12,000 Schlumberger Ltd. ...... 547,706 766,200
------------ ------------
706,033 1,191,660
------------ ------------
ENERGY AND UTILITIES: WATER -- 0.1%
18,750 Aqua America Inc. ...... 230,874 406,500
------------ ------------
ENTERTAINMENT -- 1.3%
17,000 Fox Entertainment Group Inc.,
Cl. A+ ............... 372,969 460,700
105,000 The Walt Disney Co. .... 1,745,083 2,623,950
60,000 Time Warner Inc.+ ...... 784,500 1,011,600
3,000 Viacom Inc., Cl. A ..... 68,550 118,620
------------ ------------
2,971,102 4,214,870
------------ ------------
ENVIRONMENTAL SERVICES -- 0.3%
30,000 Waste Management Inc. .. 543,511 905,400
------------ ------------
EQUIPMENT AND SUPPLIES -- 1.1%
3,000 Caterpillar Inc. ....... 35,181 237,210
28,000 Deere & Co. ............ 567,189 1,940,680
11,000 Imagistics International
Inc.+ ................ 212,935 484,550
3,000 Ingersoll-Rand Co.,
Cl. A ................ 125,173 202,950
1,500 Minerals Technologies
Inc. ................. 37,938 85,650
2,000 Parker Hannifin Corp. .. 77,350 113,000
16,000 Smith (A.O.) Corp. ..... 343,317 463,200
------------ ------------
1,399,083 3,527,240
------------ ------------
FINANCIAL SERVICES -- 15.4%
8,000 Aegon NV, ADR .......... 96,311 102,800
7,262 Alleghany Corp.+ ....... 1,311,997 1,795,991
5,000 Allstate Corp. ......... 177,405 227,300
73,500 American Express Co. ... 2,595,280 3,810,975
12,000 American International
Group Inc. ........... 705,110 856,200
39,000 Argonaut Group Inc.+ ... 789,154 742,170
5,000 Banco Popular
Espanol SA ........... 185,939 292,600
18,000 Banco Santander Central
Hispano SA, ADR ...... 64,963 197,640
2,000 Banco Santander
Chile, ADR ........... 29,250 53,800
8,500 Bank of America Corp. .. 158,255 688,330
44,000 Bank of New York
Co. Inc. ............. 1,423,658 1,386,000
19,000 Bank One Corp. ......... 660,767 1,035,880
30,000 Bankgesellschaft
Berlin AG+ ........... 201,349 70,047
8,000 Banque Nationale
de Paris ............. 296,835 488,903
2,000 Bear Stearns
Companies Inc. ....... 129,100 175,360
29,000 Citigroup Inc. ......... 1,061,657 1,499,300
39,000 Commerzbank AG, ADR .... 834,873 660,434
See accompanying notes to financial statements.
3
THE GABELLI EQUITY INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- ------
COMMON STOCKS (CONTINUED)
FINANCIAL SERVICES (CONTINUED)
35,000 Deutsche Bank AG, ADR ..$ 1,966,015 $ 2,921,800
2,000 Dun and Bradstreet
Corp.+ .............. 20,476 107,000
3,500 Fannie Mae ............. 204,581 260,225
16,000 Fidelity Southern Corp. 153,870 236,160
80,000 FleetBoston Financial
Corp. ................ 1,785,143 3,592,000
1,000 H&R Block Inc. ......... 15,746 51,030
25,000 Huntington
Bancshares Inc. ...... 407,250 554,750
40,000 John Hancock Financial
Services Inc. ........ 1,152,176 1,747,600
47,000 JP Morgan Chase & Co. .. 1,463,953 1,971,650
30,000 KeyCorp ................ 891,394 908,700
11,322 Leucadia National Corp. 372,160 603,236
55,000 Mellon Financial Corp. . 1,528,208 1,720,950
10,000 Merrill Lynch &
Co. Inc. ............. 362,400 595,600
100,000 MONY Group Inc.+ ....... 3,097,944 3,144,000
4,000 Moody's Corp. .......... 64,841 283,200
3,000 Municipal Mortgage &
Equity, LLC .......... 60,488 77,040
6,000 Northern Trust Corp. ... 60,300 279,540
50,000 Phoenix Companies Inc. . 650,511 670,500
47,000 PNC Financial Services
Group ................ 1,985,813 2,604,740
20,000 Schwab (Charles) Corp. . 270,593 232,200
40,000 St. Paul Companies Inc. 1,590,526 1,600,400
90,000 Sterling Bancorp ....... 1,456,020 2,623,500
12,000 SunTrust Banks Inc. .... 251,737 836,520
10,000 T. Rowe Price Group Inc. 340,140 538,300
4,000 Travelers Property Casualty
Corp., Cl. A ......... 64,200 68,600
57,000 Unitrin Inc. ........... 1,772,978 2,445,300
25,000 Wachovia Corp. ......... 735,625 1,175,000
45,000 Waddell & Reed Financial
Inc., Cl. A .......... 816,259 1,103,400
75,000 Wilmington Trust Corp. . 2,342,833 2,802,750
------------ ------------
36,606,083 49,839,421
------------ ------------
FOOD AND BEVERAGE -- 5.3%
45,000 Allied Domecq plc, ADR . 937,266 1,516,050
32,000 Cadbury Schweppes
plc, ADR ............. 700,693 1,028,800
35,000 Campbell Soup Co. ...... 794,372 954,450
40,000 Coca-Cola Amatil
Ltd., ADR ............ 246,845 416,540
33,000 Coca-Cola Co. .......... 1,523,535 1,659,900
10,000 Corn Products
International Inc. ... 260,071 400,000
55,330 Del Monte Foods Co.+ ... 485,759 622,463
50,000 Diageo plc, ADR ........ 1,987,727 2,644,000
12,000 Fomento Economico Mexicano
SA de CV, ADR ........ 416,490 591,240
25,000 General Mills Inc. ..... 1,158,300 1,167,000
64,000 Heinz (H.J.) Co. ....... 2,169,869 2,386,560
3,000 Hershey Foods Corp. .... 164,533 248,550
15,000 Kellogg Co. ............ 416,864 588,600
MARKET
SHARES COST VALUE
------ ---- ------
3,000 Mondavi (Robert) Corp.,
Cl. A+ ...............$ 62,180 $ 113,430
10,000 Nestle SA .............. 2,083,075 2,549,631
12,515 Tootsie Roll
Industries Inc. ....... 339,643 457,530
------------ ------------
13,747,222 17,344,744
------------ ------------
HEALTH CARE -- 7.9%
5,000 Abbott Laboratories .... 181,280 205,500
3,000 Aventis SA, ADR ........ 149,527 230,700
42,000 Baxter International
Inc. ................. 1,140,398 1,297,380
16,000 Becton, Dickinson
and Co. .............. 491,573 775,680
105,000 Bristol-Myers
Squibb Co. ........... 2,778,533 2,544,150
68,000 Eli Lilly & Co. ........ 3,976,966 4,549,200
11,276 GlaxoSmithKline
plc, ADR ............. 515,984 450,476
10,000 Henry Schein Inc.+ ..... 422,723 714,200
5,000 Interpore International
Inc.+ ................ 37,780 71,900
30,000 Johnson & Johnson ...... 1,383,959 1,521,600
6,030 Medco Health
Solutions Inc.+ ...... 134,931 205,020
60,000 Merck & Co. Inc. ....... 2,940,176 2,651,400
3,000 Orthofix International
NV+ .................. 84,894 148,320
245,000 Pfizer Inc. ............ 7,775,358 8,587,250
102,000 Schering-Plough Corp. .. 1,847,226 1,654,440
5,000 Tenet Healthcare Corp.+ 58,560 55,800
2,000 Zimmer Holdings Inc.+ .. 103,551 147,560
------------ ------------
24,023,419 25,810,576
------------ ------------
HOTELS AND GAMING -- 0.4%
35,000 Starwood Hotels & Resorts
Worldwide Inc. ....... 868,448 1,417,500
------------ ------------
METALS AND MINING -- 2.0%
75,000 Fording Canadian Coal
Trust (Toronto) ...... 1,496,486 3,022,256
55,875 Freeport-McMoRan Copper
& Gold Inc., Cl. B ... 1,202,109 2,184,154
25,000 Newmont Mining Corp. ... 650,026 1,165,750
------------ ------------
3,348,621 6,372,160
------------ ------------
PAPER AND FOREST PRODUCTS -- 0.1%
11,000 Pactiv Corp.+ .......... 174,996 244,750
------------ ------------
PUBLISHING -- 2.1%
25,000 Dow Jones & Co. Inc. ... 1,104,769 1,197,750
10,000 Knight-Ridder Inc. ..... 662,210 732,500
1,500 McClatchy Co., Cl. A ... 85,925 106,560
10,000 McGraw-Hill
Companies Inc. ....... 502,221 761,400
3,008 News Corp. Ltd., ADR ... 70,880 108,228
90,000 Reader's Digest
Association Inc. ..... 1,224,956 1,267,200
406 Seat Pagine
Gialle SpA+ .......... 1,350 397
35,000 Tribune Co. ............ 1,679,207 1,765,400
1,200 Washington Post Co.,
Cl. B ................ 700,030 1,061,292
------------ ------------
6,031,548 7,000,727
------------ ------------
See accompanying notes to financial statements.
4
THE GABELLI EQUITY INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- ------
COMMON STOCKS (CONTINUED)
RETAIL -- 0.7%
25,000 Albertson's Inc. .......$ 540,435 $ 553,750
2,500 Griffin Land &
Nurseries Inc.+ ...... 11,716 63,500
47,300 Safeway Inc.+ .......... 932,752 973,434
2,000 Sears, Roebuck & Co. ... 51,241 85,920
6,000 The Home Depot Inc. .... 127,998 224,160
10,000 Weis Markets Inc. ...... 300,480 337,500
------------ ------------
1,964,622 2,238,264
------------ ------------
SATELLITE -- 0.2%
36,000 DIRECTV Group Inc.+ .... 429,789 553,680
------------ ------------
SPECIALTY CHEMICALS -- 1.5%
20,000 Albemarle Corp. ........ 434,626 580,000
1,200 Celenese AG+ ........... 16,129 48,720
8,611 Dow Chemical Co. ....... 303,693 346,851
10,000 E.I. du Pont de Nemours
and Co. .............. 421,563 422,200
6,000 Ferro Corp. ............ 135,135 156,900
25,000 Great Lakes Chemical
Corp. ................ 609,306 596,250
70,000 Monsanto Co. ........... 1,160,200 2,566,900
20,000 Omnova Solutions Inc.+ . 155,815 105,000
4,000 Quaker Chemical Corp. .. 79,615 101,600
------------ ------------
3,316,082 4,924,421
------------ ------------
TELECOMMUNICATIONS -- 4.6%
10,000 ALLTEL Corp. ........... 492,835 498,900
33,000 AT&T Corp. ............. 933,765 645,810
52,800 BCE Inc. ............... 1,130,618 1,110,384
26,000 BellSouth Corp. ........ 689,187 719,940
300,000 BT Group plc ........... 1,251,761 975,905
30,000 BT Group plc, ADR ...... 1,006,938 1,001,700
30,000 Cable & Wireless
plc, ADR ............. 185,030 213,600
180,000 Cincinnati Bell Inc.+ .. 1,319,847 732,600
15,000 Citizens Communications
Co.+ ................. 172,500 194,100
12,000 Deutsche Telekom
AG, ADR+ ............. 194,878 216,480
12,000 France Telecom SA, ADR . 347,118 307,680
300,000 Qwest Communications
International Inc.+ .. 1,256,877 1,293,000
76,000 SBC Communications Inc. 2,325,426 1,865,040
40,000 Sprint Corp. - FON Group 569,646 737,200
3,300 Telecom Italia SpA, ADR+ 31,072 104,214
7,880 Telefonica SA, ADR ..... 86,776 358,855
12,000 TELUS Corp. ............ 192,898 212,745
100,000 Verizon Communications
Inc. ................ 3,769,983 3,654,000
------------ ------------
15,957,155 14,842,153
------------ ------------
WIRELESS COMMUNICATIONS -- 1.3%
200,000 AT&T Wireless
Services Inc.+ ....... 2,374,904 2,722,000
300,000 mm02 plc+ .............. 336,932 554,116
20,000 mm02 plc, ADR+ ......... 199,884 373,000
50,000 Sprint Corp. -
PCS Group+ ........... 364,715 460,000
------------ ------------
3,276,435 4,109,116
------------ ------------
TOTAL COMMON STOCKS .... 210,697,158 274,282,480
------------ ------------
MARKET
SHARES COST VALUE
------ ---- ------
PREFERRED STOCKS -- 5.6%
AUTOMOTIVE -- 0.1%
1,000 Ford Motor Co. Capital Trust II,
6.500% Cv. Pfd. ......$ 45,215 $ 53,050
General Motors Corp.,
9,000 5.250% Cv. Pfd.,
Ser. B ............... 228,000 229,500
4,000 4.500% Cv. Pfd.,
Ser. A ............... 100,000 104,960
------------ ------------
373,215 387,510
------------ ------------
AVIATION: PARTS AND SERVICES -- 0.1%
7,000 Coltec Capital Trust,
5.250% Cv. Pfd. ...... 281,500 315,000
------------ ------------
BROADCASTING -- 2.3%
55,000 CVC Equity Securities Trust I,
6.500% Cv. Pfd. ...... 1,377,226 1,344,200
2,619 Granite Broadcasting Corp.,
12.750% Pfd.+ ........ 1,488,446 1,414,260
100 Gray Television Inc.,
8.000% Cv. Pfd.,
Ser. C (b)(c) ........ 1,000,000 1,020,000
46,100 Rainbow Equity Securities
Trust II,
6.250% Cv. Pfd. ...... 801,487 1,164,025
50,000 Sinclair Broadcast Group Inc.,
6.000% Cv. Pfd.,
Ser. D ............... 2,340,625 2,325,000
------------ ------------
7,007,784 7,267,485
------------ ------------
COMMUNICATIONS EQUIPMENT -- 0.4%
1,100 Lucent Technologies Capital
Trust I,
7.750% Cv. Pfd. ...... 759,000 1,392,820
------------ ------------
DIVERSIFIED INDUSTRIAL -- 0.1%
26,200 WHX Corp.,
$3.75 Cv. Pfd.,
Ser. B+ .............. 177,129 185,234
------------ ------------
ENTERTAINMENT -- 0.0%
3,000 Metromedia International
Group Inc.,
7.250% Cv. Pfd.+ ..... 5,310 30,000
------------ ------------
EQUIPMENT AND SUPPLIES -- 0.4%
13,800 Sequa Corp.,
$5.00 Cv. Pfd. ....... 1,063,415 1,269,600
------------ ------------
HEALTH CARE -- 0.0%
300 Bio-Rad Laboratories Inc.,
Cl. B+ ............... 11,100 16,911
------------ ------------
PUBLISHING -- 0.1%
5,730 News Corp. Ltd.,
Pfd., ADR ............ 152,085 181,698
------------ ------------
SPECIALTY CHEMICALS -- 0.0%
5,000 Hercules Trust I,
9.420% Pfd. .......... 111,930 125,500
------------ ------------
See accompanying notes to financial statements.
5
THE GABELLI EQUITY INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- ------
PREFERRED STOCKS (CONTINUED)
TELECOMMUNICATIONS -- 2.1%
33,000 Cincinnati Bell Inc.,
6.750% Cv. Pfd.,
Ser. B ...............$ 918,894 $ 1,493,250
40,000 Citizens Communications Co.,
5.000% Cv. Pfd. ...... 1,869,091 2,084,000
32,000 CSC Holdings Inc.,
11.125% Cv. Pfd.,
Ser. M ............... 1,335,000 3,340,800
------------ ------------
4,122,985 6,918,050
------------ ------------
TOTAL PREFERRED STOCKS . 14,065,453 18,089,808
------------ ------------
WARRANTS -- 0.2%
BUSINESS SERVICES -- 0.2%
250,000 GP Strategies Corp.,
Expire 08/14/08+ (c) . 637,065 637,065
------------ ------------
PRINCIPAL
AMOUNT
----------
CORPORATE BONDS -- 3.6%
AUTOMOTIVE: PARTS AND ACCESSORIES -- 0.7%
$1,400,000 GenCorp Inc., Sub. Deb. Cv.,
5.750%, 04/15/07 ..... 1,328,191 1,424,500
800,000 Standard Motor Products Inc.,
Sub. Deb. Cv.,
6.750%, 07/15/09 ..... 649,088 788,000
100,000 Tenneco Automotive Inc.,
11.625%, 10/15/09 .... 62,922 108,750
------------ ------------
2,040,201 2,321,250
------------ ------------
BUSINESS SERVICES -- 0.4%
100,000 BBN Corp., Sub. Deb. Cv.,
6.000%,
04/01/12+ (a)(c) ..... 97,499 0
2,000,000 GP Strategies Corp.,
Sub. Deb.,
6.000%, 08/14/08 (c) . 1,419,208 1,418,062
------------ ------------
1,516,707 1,418,062
------------ ------------
CABLE -- 0.4%
1,500,000 Charter Communications Inc., Cv.,
4.750%, 06/01/06 ..... 988,829 1,425,000
------------ ------------
ELECTRONICS -- 1.1%
1,800,000 Agere Systems Inc.,
Sub. Deb. Cv.,
6.500%, 12/15/09 ..... 1,659,339 2,553,750
1,100,000 Oak Industries Inc.,
Sub. Deb. Cv.,
4.875%, 03/01/08 ..... 800,547 1,123,375
------------ ------------
2,459,886 3,677,125
------------ ------------
ENERGY AND UTILITIES -- 0.3%
1,400,000 Mirant Corp., Sub. Deb. Cv.,
2.500%,
06/15/21+ (a) ........ 1,040,353 812,000
------------ ------------
PRINCIPAL MARKET
AMOUNT COST VALUE
--------- ---- ------
FOOD AND BEVERAGE -- 0.0%
$ 100,000 Parmalat Capital, Cv.,
1.000%,
12/31/05 (a) .........$ 117,309 $ 13,026
100,000 Parmalat Netherlands BV, Cv.,
0.875%, 06/30/21 (a) . 110,542 18,618
------------ ------------
227,851 31,644
------------ ------------
HEALTH CARE -- 0.7%
2,000,000 IVAX Corp., Sub. Deb. Cv.,
5.500%, 05/15/07 ..... 1,814,491 2,052,500
200,000 Twin Laboratories Inc.,
Sub. Deb. Cv.,
10.250%, 05/15/06 (a) 98,105 47,000
------------ ------------
1,912,596 2,099,500
------------ ------------
TELECOMMUNICATIONS -- 0.0%
200,000 Williams Comm Group Inc.,
Escrow, Zero Coupon,
10/01/09 (a)(c) ...... 0 0
------------ ------------
TOTAL CORPORATE BONDS 10,186,423 11,784,581
------------ ------------
U.S. GOVERNMENT OBLIGATIONS -- 5.6%
18,032,000 U.S. Treasury Bills,
0.850% to 0.990%++,
04/01/04 to 09/09/04 . 18,015,595 18,015,689
------------ ------------
TOTAL
INVESTMENTS -- 99.6% $253,601,694 322,809,623
============
OTHER ASSETS AND LIABILITIES
(NET) -- 0.4% ....................... 1,265,707
------------
NET ASSETS -- 100.0% .................$324,075,330
============
- -----------------
For Federal tax purposes:
Aggregate cost .......................$253,601,694
============
Gross unrealized appreciation ........$ 74,001,012
Gross unrealized depreciation ........ (4,793,083)
------------
Net unrealized appreciation ..........$ 69,207,929
============
- -----------------
(a) Security in default.
(b) 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 March
31, 2004, the market value of Rule 144A securities amounted to $1,020,000
or 0.31% of total net assets.
(c) Securities fair valued under procedures established by the Board of
Directors. The procedures may include reviewing available financial
information about the company and reviewing valuation of comparable
securities and other factors on a regular basis. The aggregate value of
such securities is $3,075,127 or 0.95% of net assets.
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
ADR - American Depository Receipt.
CVO - Contingent Value Obligation.
See accompanying notes to financial statements.
6
THE GABELLI EQUITY INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
ASSETS:
Investments, at value (Cost $253,601,694) .. $ 322,809,623
Cash ....................................... 595
Dividends and interest receivable .......... 980,595
Receivable for capital shares sold ......... 814,386
Other assets ............................... 10,360
-------------
TOTAL ASSETS ............................... 324,615,559
-------------
LIABILITIES:
Payable for capital shares redeemed ........ 30,440
Payable for investment advisory fees ....... 272,939
Payable for distribution fees .............. 68,233
Payable for shareholder communication fees . 24,004
Payable for shareholder services fees ...... 30,908
Other accrued expenses ..................... 113,705
-------------
TOTAL LIABILITIES .......................... 540,229
-------------
NET ASSETS applicable to 19,329,024
shares outstanding ....................... $ 324,075,330
=============
NET ASSETS CONSIST OF:
Capital stock, at par value ................ $ 19,329
Additional paid-in capital ................. 255,308,641
Accumulated net investment loss ............ (411,349)
Accumulated net realized loss on investments
and foreign currency transactions ........ (49,378)
Net unrealized appreciation on investments
and foreign currency transactions ........ 69,208,087
-------------
NET ASSETS ................................. $ 324,075,330
=============
SHARES OF CAPITAL STOCK:
CLASS AAA:
Net asset value, offering and redemption price per
share ($324,072,070 / 19,328,830 shares
outstanding; 200,000,000 shares
authorized of $0.001 par value) .......... $16.77
======
CLASS A:
Net asset value and redemption price per share
($1,027 / 61 shares outstanding; 50,000,000
shares authorized of $0.001 par value) ... $16.76
======
Maximum sales charge ....................... 5.75%
======
Maximum offering price per share (NAV / 0.9425,
based on maximum sales charge of 5.75% of
the offering price at March 31, 2004) .... $17.78
======
CLASS B:
Net asset value and offering price per share
($1,026 / 61 shares outstanding; 50,000,000
shares authorized of $0.001 par value) ... $16.73(a)
======
CLASS C:
Net asset value and offering price per share
($1,207 / 72 shares outstanding; 50,000,000
shares authorized of $0.001 par value) ... $16.74(a)
======
- ---------------
(a) Redemption price varies based on length of time held.
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends (net of foreign taxes of $34,519) $ 3,914,708
Interest .................................. 549,870
-----------
TOTAL INVESTMENT INCOME ................... 4,464,578
-----------
EXPENSES:
Investment advisory fees .................. 1,490,211
Distribution fees ......................... 372,553
Shareholder services fees ................. 141,148
Custodian fees ............................ 43,329
Shareholder communications expenses ....... 43,020
Registration fees ......................... 40,061
Legal and audit fees ...................... 37,103
Directors' fees ........................... 11,074
Interest expense .......................... 1,352
Miscellaneous expenses .................... 28,604
-----------
TOTAL EXPENSES ............................ 2,208,455
-----------
NET INVESTMENT INCOME ..................... 2,256,123
-----------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS AND FOREIGN CURRENCY
TRANSACTIONS:
Net realized gain on investments and
foreign currency transactions ........... 1,706,133
Net change in unrealized appreciation/
depreciation on investments and foreign
currency transactions ................... 38,653,672
-----------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS AND FOREIGN CURRENCY
TRANSACTIONS ............................ 40,359,805
-----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ......................... $42,615,928
===========
See accompanying notes to financial statements.
7
THE GABELLI EQUITY INCOME FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS ENDED
MARCH 31, 2004 YEAR ENDED
(UNAUDITED) SEPTEMBER 30, 2003
---------------- ------------------
OPERATIONS:
Net investment income .............................. $ 2,256,123 $ 4,932,398
Net realized gain/loss on investments and
foreign currency transactions .................... 1,706,133 (1,080,553)
Net change in unrealized appreciation/depreciation
on investments and foreign
currency transactions ............................ 38,653,672 47,288,390
------------- -------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 42,615,928 51,140,235
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income
Class AAA ........................................ (3,339,935) (4,398,932)
Class A .......................................... (6) --
Class B .......................................... (6) --
Class C .......................................... (6) --
------------- -------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS ................ (3,339,953) (4,398,932)
------------- -------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares issued:
Class AAA ........................................ 61,528,022 197,502,549
Class A .......................................... 1,000 --
Class B .......................................... 1,000 --
Class C .......................................... 1,183 --
------------- -------------
61,531,205 197,502,549
------------- -------------
Proceeds from reinvestment of dividends:
Class AAA ........................................ 3,067,476 4,080,708
Class A .......................................... 6 --
Class B .......................................... 6 --
Class C .......................................... 6 --
------------- -------------
3,067,494 4,080,708
------------- -------------
Cost of shares redeemed
Class AAA ........................................ (41,576,501) (149,485,117)
Class A .......................................... -- --
Class B .......................................... -- --
Class C .......................................... -- --
------------- -------------
(41,576,501) (149,485,117)
------------- -------------
Net increase in net assets from
capital share transactions ....................... 23,022,198 52,098,140
------------- -------------
NET INCREASE IN NET ASSETS ......................... 62,298,173 98,839,443
NET ASSETS:
Beginning of period ................................ 261,777,157 162,937,714
------------- -------------
End of period (including undistributed
net investment income of
$0 and $672,481, respectively) ................... $ 324,075,330 $ 261,777,157
============= =============
See accompanying notes to financial statements.
8
THE GABELLI EQUITY INCOME FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
1. ORGANIZATION. The Gabelli Equity Income Fund (the "Fund") is a series of
Gabelli Equity Series Funds, Inc. (the "Corporation"), which was organized on
July 25, 1991 as a Maryland corporation. The Fund is a diversified, open-end
management investment company registered under the Investment Company Act of
1940, as amended (the "1940 Act"), and one of three separately managed
portfolios (collectively, the "Portfolios") of the Corporation, each with four
separate classes of shares known as Class AAA, Class A, Class B and Class C. The
Fund's primary objective is to seek a high level of total return with an
emphasis on income. The Fund commenced investment operations on January 2, 1992.
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. All other portfolio securities for which
over-the-counter 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 that day, then the security is valued at the closing bid price. 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 are valued at the latest average of the bid and asked prices
obtained from a pricing service approved by the Board of Directors, or a dealer
maintaining an active market in those securities. 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
9
THE GABELLI EQUITY INCOME FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
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 March 31, 2004, 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 March 31, 2004, 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. At March 31, 2004,
there were no open forward foreign exchange contracts.
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 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
10
THE GABELLI EQUITY INCOME FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
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 distributions and
long-term capital gain distributions are determined in accordance with income
tax regulations which may differ from accounting principles generally accepted
in the United States.
For the fiscal year ended September 30, 2003, the tax character of distributions
paid does not materially differ from accounting principles generally accepted in
the United States.
For the fiscal year ended September 30, 2003, reclassifications were made to
increase accumulated net investment income for $118,559 and increase accumulated
net realized loss on investments for $111,659, with an offsetting adjustment to
additional paid-in capital.
EXPENSES. Certain administrative expenses are common to, and allocated among,
the Portfolios. Such allocations are made on the basis of each Portfolio's
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. As a result, a Federal income tax provision is not required.
As of September 30, 2003, the components of accumulated earnings/losses on a tax
basis were as follows:
Undistributed ordinary income ........... $ 714,701
Post-October losses ..................... (249,013)
Capital loss carryforward ............... (478,901)
Net unrealized appreciation ............. 29,520,445
Other temporary differences ............. (35,847)
-----------
Total accumulated earnings .............. $29,471,385
===========
The Fund has a capital loss carryforward for Federal income tax purposes at
September 30, 2003 of $478,901 which is available through 2011.
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.
11
THE GABELLI EQUITY INCOME FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
The difference between book and tax basis undistributed ordinary income is
primarily due to the accrual of defaulted interest for tax purposes.
The difference between book and tax basis unrealized appreciation is primarily
due to deferral of losses from wash sales for tax purposes.
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 six months ended March 31, 2004, the Fund incurred distribution
costs payable to Gabelli & Company, Inc., an affiliate of the Adviser, of
$372,547 and $1 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 $2 and $3, 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 six months
ended March 31, 2004, other than short term securities, aggregated $21,837,838
and $8,942,532, respectively.
6. TRANSACTIONS WITH AFFILIATES. During the six months ended March 31, 2004, the
Fund paid brokerage commissions of $44,384 to Gabelli & Company, Inc. and its
affiliates.
The cost of calculating the Fund's net asset value per share is a Fund expense
pursuant to the Advisory Agreement between the Fund and the Adviser. During the
six months ended March 31, 2004, the Fund reimbursed the Adviser $17,400 in
connection with the cost of computing the Fund's net asset value.
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 against the line of credit during
the six months ended March 31, 2004.
12
THE GABELLI EQUITY INCOME FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
8. CAPITAL STOCK TRANSACTIONS. Transactions in shares of capital stock were as
follows:
SIX MONTHS ENDED
MARCH 31, 2004 YEAR ENDED
(UNAUDITED) SEPTEMBER 30, 2003
-------------------------------- --------------------------------
SHARES AMOUNT SHARES AMOUNT
------------- ------------- ------------- -------------
CLASS AAA
Shares sold ................................ 3,791,428 $ 61,528,022 14,773,776 $ 197,502,549
Shares issued upon reinvestment of dividends 189,235 3,067,476 292,370 4,080,708
Shares redeemed ............................ (2,581,249) (41,576,501) (10,797,815) (149,485,117)
------------- ------------- ------------- -------------
Net increase in Class AAA shares ........... 1,399,414 $ 23,018,997 4,268,331 $ 52,098,140
============= ============= ============= =============
CLASS A
Shares sold ................................ 61 $ 1,000 -- --
Shares issued upon reinvestment of dividends -- 6 -- --
------------- ------------- ------------- -------------
Net increase in Class A shares ............. 61 $ 1,006 -- --
============= ============= ============= =============
CLASS B
Shares sold ................................ 61 $ 1,000 -- --
Shares issued upon reinvestment of dividends -- 6 -- --
------------- ------------- ------------- -------------
Net increase in Class B shares ............. 61 $ 1,006 -- --
============= ============= ============= =============
CLASS C
Shares sold ................................ 72 $ 1,183 -- --
Shares issued upon reinvestment of dividends -- 6 -- --
------------- ------------- ------------- -------------
Net increase in Class C shares ............. 72 $ 1,189 -- --
============= ============= ============= =============
13
THE GABELLI EQUITY INCOME 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 Net Asset
Period Value, Net Unrealized from Net Realized Value,
Ended Beginning Investment Gain/(Loss) on Investment Investment Gain on Total End of Total
September 30 of Period Income/(Loss) Investments Operations Income Investments Distributions Period Return+
- ------------ ---------- ------------- -------------- ---------- ---------- ----------- ------------- ---------- -------
CLASS AAA
2004(c) $14.60 $0.12 $ 2.23 $ 2.35 $(0.18) -- $(0.18) $16.77 16.15%
2003 11.93 0.28 2.64 2.92 (0.25) -- (0.25) 14.60 24.59
2002 13.88 0.23 (1.79) (1.56) (0.23) $(0.16) (0.39) 11.93 (11.58)
2001 16.35 0.25 (0.28) (0.03) (0.36) (2.08) (2.44) 13.88 (0.43)
2000 17.58 0.46 0.81 1.27 (0.36) (2.14) (2.50) 16.35 8.41
1999 15.97 0.23 2.82 3.05 (0.22) (1.22) (1.44) 17.58 19.82
CLASS A
2004(a)(c) $16.40 $0.05 $0.40 $0.45 $(0.09) -- $(0.09) $16.76 2.74%
CLASS B
2004(a)(c) $16.40 $0.02 $0.40 $0.42 $(0.09) -- $(0.09) $16.73 2.56%
CLASS C
2004(a)(c) $16.40 $0.04 $0.39 $0.43 $(0.09) -- $(0.09) $16.74 2.62%
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
-------------------------------------------------------
Net
Net Assets Investment Operating
Period End of Income/(Loss) Expenses to Portfolio
Ended Period to Average Net Average Net Turnover
September 30 (in 000's) Assets Assets Rate
- ------------ ---------- ------------- ------------ ----------
CLASS AAA
2004(c) $324,075 1.51%(b) 1.48%(b) 3%
2003 261,777 2.09 1.49 27
2002 162,938 1.75 1.50 12
2001 121,499 1.65 1.55 41
2000 89,164 2.85 1.66(d) 33
1999 92,111 1.32 1.60 39
CLASS A
2004(a)(c) $ 1 1.29%(b) 1.48%(b) 3%
CLASS B
2004(a)(c) $ 1 0.64%(b) 2.23%(b) 3%
CLASS C
2004(a)(c) $ 1 0.84%(b) 2.23%(b) 3%
- --------------------
+ 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 the commencement of offering Class A, Class B and Class C Shares on
December 31, 2003.
(b) Annualized.
(c) For the period ending March 31, 2004, unaudited.
(d) The Fund incurred interest expense during the year ended September 30, 2000.
If interest expense had not been incurred, the ratio of operating expenses
to average net assets would have been 1.61%.
See accompanying notes to financial statements.
14
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). INVESTORS SHOULD
CONSIDER THE INVESTMENT OBJECTIVES, RISKS AND CHARGES AND EXPENSES OF THE
FUND BEFORE INVESTING. THE PROSPECTUS CONTAINS MORE COMPLETE INFORMATION
ABOUT THIS AND OTHER MATTERS AND SHOULD BE READ CAREFULLY BEFORE INVESTING.
Gabelli Equity Series Funds, Inc.
THE GABELLI EQUITY INCOME 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 Karl Otto Pohl
CHAIRMAN AND CHIEF FORMER PRESIDENT
INVESTMENT OFFICER DEUTSCHE BUNDESBANK
GABELLI ASSET MANAGEMENT INC.
Anthony J. Colavita Anthony R. Pustorino
ATTORNEY-AT-LAW CERTIFIED PUBLIC ACCOUNTANT
ANTHONY J. COLAVITA, P.C. PROFESSOR EMERITUS
PACE UNIVERSITY
Vincent D. Enright Anthonie C. van Ekris
FORMER SENIOR VICE PRESIDENT MANAGING DIRECTOR
AND CHIEF FINANCIAL OFFICER BALMAC INTERNATIONAL, INC.
KEYSPAN ENERGY CORP.
John D. Gabelli Salvatore J. Zizza
SENIOR VICE PRESIDENT CHAIRMAN
GABELLI & COMPANY, INC. HALLMARK ELECTRICAL
SUPPLIES CORP.
Robert J. Morrissey
ATTORNEY-AT-LAW
MORRISSEY, HAWKINS & LYNCH
OFFICERS
Bruce N. Alpert James E. McKee
PRESIDENT AND TREASURER 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 Equity Income Fund. It is not authorized for distribution to prospective
investors unless preceded or accompanied by an effective prospectus.
- --------------------------------------------------------------------------------
GAB444Q104SR
[GRAPHIC OMITTED]
PICTURE OF MARIO GABELLI
THE
GABELLI
EQUITY
INCOME
FUND
SEMI-ANNUAL REPORT
MARCH 31, 2004
THE GABELLI WOODLAND SMALL CAP VALUE FUND
SEMI-ANNUAL REPORT (B)
MARCH 31, 2004
TO OUR SHAREHOLDERS,
During the first quarter of 2004, the Gabelli Woodland Small Cap Value
Fund (the "Fund") rose 5.2% while the Russell 2000 Index rose 6.3%. For the
one-year period ended March 31, 2004, the Fund was up 38.0% versus a gain of
63.8% for the Russell 2000 Index.
Enclosed is the portfolio of investments and financial statements as of
March 31, 2004.
COMPARATIVE RESULTS
- ----------------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS -- MARCH 31, 2004 (A)
--------------------------------------------
CLASS AAA SHARES CLASS A SHARES CLASS B SHARES CLASS C SHARES
---------------- -------------- -------------- --------------
First Quarter .......... 5.15% 5.15% 5.56% 4.92%
(0.86)%(c) 1.42%(d) 4.09%(d)
One Year ............... 37.99% 37.88% 38.75% 37.01%
29.97%(c) 33.75%(d) 36.01%(d)
Since Inception (e) .... 26.95% 26.85% 27.65% 26.05%
19.56%(c) 23.65%(d) 26.05%(d)
- ----------------------------------------------------------------------------------------
(a) Total returns and average annual returns reflect changes in share price
and reinvestment of dividends and are net of expenses. Returns represent
past performance and do not guarantee future results. Investment returns
and the principal value of an investment will fluctuate. When shares are
redeemed, they may be worth more or less than their original cost. The
Russell 2000 Index is an unmanaged indicator of stock market performance.
Dividends are considered reinvested. The Adviser reimbursed expenses to
limit the expense ratio. Had such limitation not been in place, returns
would have been lower. Current performance may be lower or higher than the
performance data presented. Visit www.gabelli.com to obtain performance
information as of the most recent month-end. Investors should consider the
investment objectives, risks and charges and expenses of the Fund before
investing. The prospectus contains more complete information about this
and other matters and should be read carefully before investing.
(b) The Fund's fiscal year ends September 30.
(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.
(e) Total returns from commencement of investment operations on December 31,
2002.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
A description of the Funds' proxy voting policies and procedures is available
(i) without charge, upon request, by calling 800-GABELLI (800-422-3554); (ii)
by writing to The Gabelli Funds at One Corporate Center, Rye, NY 10580; and
(iii) on the Securities and Exchange Commission's website at www.sec.gov.
- --------------------------------------------------------------------------------
THE GABELLI WOODLAND SMALL CAP VALUE FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- ------
COMMON STOCKS -- 97.1%
AEROSPACE -- 1.9%
980 Alliant Techsystems Inc.+ ..... $ 50,450 $ 53,312
---------- ----------
AGRICULTURE -- 0.6%
730 Delta & Pine Land Co. ......... 17,562 18,213
---------- ----------
AUTOMOTIVE: PARTS AND ACCESSORIES -- 2.5%
880 American Axle & Manufacturing
Holdings Inc.+ .............. 30,207 32,428
1,310 TBC Corp.+ .................... 31,046 38,475
---------- ----------
61,253 70,903
---------- ----------
BUSINESS SERVICES -- 8.7%
1,720 Acxiom Corp.+ ................. 28,377 37,771
3,540 Bowne & Co. Inc. .............. 44,917 60,534
4,290 Danka Business Systems
plc, ADR+ ................... 16,870 18,280
1,510 Hon Industries Inc. ........... 48,842 56,111
2,760 The Brink's Co. ............... 45,955 76,121
---------- ----------
184,961 248,817
---------- ----------
COMPUTER SOFTWARE AND SERVICES -- 4.8%
110 Harland Co., John H. .......... 3,261 3,423
2,932 Intergraph Corp.+ ............. 68,424 70,896
2,410 Plato Learning Inc.+ .......... 21,311 24,317
5,110 Stellent Inc.+ ................ 43,981 38,171
---------- ----------
136,977 136,807
---------- ----------
CONSUMER PRODUCTS -- 10.7%
1,410 Alberto-Culver Co. ............ 49,205 61,857
2,190 Brunswick Corp. ............... 57,611 89,418
810 Church & Dwight Co. Inc. ...... 27,029 35,081
3,380 CNS Inc. ...................... 36,624 36,301
1,000 Jarden Corp.+ ................. 25,501 35,510
3,060 ValueVision Media Inc.,
Cl. A+ ...................... 49,659 46,971
---------- ----------
245,629 305,138
---------- ----------
CONSUMER SERVICES -- 2.1%
4,020 Insurance Auto Auctions Inc.+ . 52,567 58,411
---------- ----------
DIVERSIFIED INDUSTRIAL -- 15.0%
1,560 Albany International Corp.,
Cl. A ....................... 43,843 41,949
5,940 Apogee Enterprises Inc. ....... 64,432 73,240
860 Carlisle Companies Inc. ....... 42,116 48,719
1,780 Griffon Corp.+ ................ 30,061 38,448
3,100 Material Sciences Corp.+ ...... 31,940 34,100
910 Matthews International Corp.,
Cl. A ....................... 28,666 30,212
1,730 Pentair Inc. .................. 70,835 102,070
1,620 Texas Industries Inc. ......... 38,961 58,563
---------- ----------
350,854 427,301
---------- ----------
MARKET
SHARES COST VALUE
------ ---- ------
EDUCATIONAL SERVICES -- 1.2%
1,380 Concorde Career Colleges Inc.+ $ 35,521 $ 33,120
---------- ----------
ELECTRONICS -- 1.4%
1,090 Wilson Greatbatch
Technologies Inc.+ .......... 41,648 39,545
---------- ----------
ENERGY AND UTILITIES -- 4.5%
2,590 ALLETE Inc. ................... 69,003 90,883
3,470 Key Energy Services Inc.+ ..... 35,774 38,170
---------- ----------
104,777 129,053
---------- ----------
ENTERTAINMENT -- 1.5%
4,510 Topps Co. Inc. ................ 41,559 43,070
---------- ----------
EQUIPMENT AND SUPPLIES -- 4.4%
1,890 Tennant Co. ................... 69,246 74,976
820 Toro Co. ...................... 39,774 50,840
---------- ----------
109,020 125,816
---------- ----------
FINANCIAL SERVICES -- 2.9%
1,620 TCF Financial Corp. ........... 68,759 82,733
---------- ----------
FOOD AND BEVERAGE -- 9.4%
1,570 Darden Restaurants Inc. ....... 31,324 38,920
5,480 Del Monte Foods Co.+ .......... 49,974 61,650
1,420 Ionics Inc.+ .................. 38,015 40,328
1,830 PepsiAmericas Inc. ............ 27,333 37,369
2,630 Triarc Companies Inc. ......... 22,893 28,772
5,580 Triarc Companies Inc., Cl. B .. 56,832 61,157
---------- ----------
226,371 268,196
---------- ----------
HEALTH CARE -- 10.0%
2,680 Apogent Technologies Inc.+ .... 54,791 82,222
1,130 Cytyc Corp.+ .................. 14,607 25,143
1,520 Laboratory Corporation of
America Holdings+ ........... 47,701 59,660
2,870 Lifecore Biomedical Inc.+ ..... 22,990 21,525
1,160 NeighborCare Inc.+ ............ 25,104 28,130
1,990 SurModics Inc.+ ............... 43,921 39,621
710 Techne Corp.+ ................. 25,384 28,975
---------- ----------
234,498 285,276
---------- ----------
HOTELS AND GAMING -- 4.2%
2,890 Gaylord Entertainment Co.+ .... 69,346 89,301
1,980 Vail Resorts Inc.+ ............ 32,764 31,205
---------- ----------
102,110 120,506
---------- ----------
PUBLISHING -- 3.0%
2,720 Hollinger International Inc. .. 36,007 53,856
1,570 Journal Communications Inc.,
Cl. A ....................... 29,546 31,400
---------- ----------
65,553 85,256
---------- ----------
See accompanying notes to financial statements.
2
THE GABELLI WOODLAND SMALL CAP VALUE FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) -- MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- ------
COMMON STOCKS (CONTINUED)
RETAIL -- 5.7%
2,540 Cole National Corp.+ .......... $ 33,018 $ 56,058
2,530 Office Depot Inc.+ ............ 37,463 47,615
1,452 The Sports Authority Inc.+ .... 42,755 58,196
---------- ----------
113,236 161,869
---------- ----------
SPECIALTY CHEMICALS -- 2.6%
1,150 Cytec Industries Inc.+ ........ 40,794 40,906
1,180 Fuller (H.B.) Co. ............. 28,457 33,559
---------- ----------
69,251 74,465
---------- ----------
TOTAL COMMON STOCKS ........... 2,312,556 2,767,807
---------- ----------
PRINCIPAL MARKET
AMOUNT COST VALUE
------ ---- ------
SHORT TERM OBLIGATIONS -- 2.8%
U.S. TREASURY BILLS -- 2.8%
$81,000 U.S. Treasury Bill,
0.973%++, 09/02/04 .......... $ 80,669 $ 80,670
---------- ----------
TOTAL INVESTMENTS -- 99.9% .... $2,393,225 2,848,477
==========
OTHER ASSETS AND LIABILITIES (NET) -- 0.1% . 1,510
----------
NET ASSETS -- 100.0% ....................... $2,849,987
==========
- ----------------
For Federal tax purposes:
Aggregate cost ............................. $2,393,225
==========
Gross unrealized appreciation .............. $ 477,795
Gross unrealized depreciation .............. (22,543)
----------
Net unrealized appreciation ................ $ 455,252
==========
- ----------------
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
ADR - American Depository Receipt.
See accompanying notes to financial statements.
3
THE GABELLI WOODLAND SMALL CAP VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
ASSETS:
Investments, at value (Cost $2,393,225) .... $2,848,477
Cash ....................................... 46,613
Dividends and interest receivable .......... 286
Receivable from Adviser .................... 4,334
Receivable for investments sold ............ 356
Other assets ............................... 1,310
----------
TOTAL ASSETS ............................... 2,901,376
----------
LIABILITIES:
Payable for investments purchased .......... 9,646
Payable for distribution fees .............. 648
Payable for shareholder communication fees . 109
Payable for shareholder services fees ...... 2,158
Other accrued expenses ..................... 38,828
----------
TOTAL LIABILITIES .......................... 51,389
----------
NET ASSETS applicable to 225,190
shares outstanding ....................... $2,849,987
==========
NET ASSETS CONSIST OF:
Capital stock, at par value ................ $ 225
Additional paid-in capital ................. 2,223,925
Accumulated net investment loss ............ (15,924)
Accumulated net realized gain on investments
and foreign currency transactions ........ 186,509
Net unrealized appreciation on investments
and foreign currency transactions ........ 455,252
----------
NET ASSETS ................................. $2,849,987
==========
SHARES OF CAPITAL STOCK:
CLASS AAA:
Net asset value, offering and redemption price
per share ($2,758,304 / 217,909 shares
outstanding; 150,000,000 shares authorized
of $0.001 par value) ...................... $12.66
======
CLASS A:
Net asset value and redemption price per share
($19,424 / 1,535 shares outstanding;
50,000,000 shares authorized of $0.001
par value) ................................ $12.65
======
Maximum sales charge ........................ 5.75%
======
Maximum offering price per share (NAV / 0.9425,
based on maximum sales charge of 5.75% of
the offering price at March 31, 2004) ..... $13.42
======
CLASS B:
Net asset value and offering price per share
($128 / 10 shares outstanding; 50,000,000
shares authorized of $0.001 par value) .... $12.73(a)
======
CLASS C:
Net asset value and offering price per share
($72,131 / 5,736 shares outstanding;
50,000,000 shares authorized of $0.001
par value) ................................ $12.57(a)
======
STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends .......................................... $ 11,209
Interest ........................................... 338
--------
TOTAL INVESTMENT INCOME ............................ 11,547
--------
EXPENSES:
Investment advisory fees ........................... 13,513
Distribution fees .................................. 3,790
Amortization of offering expenses .................. 14,820
Shareholder services fees .......................... 7,516
Custodian fees ..................................... 17,200
Shareholder communications expenses ................ 10,319
Registration fees .................................. 14,888
Legal and audit fees ............................... 14,995
Directors' fees .................................... 97
Interest expenses .................................. 109
Miscellaneous expenses ............................. 3,217
--------
TOTAL EXPENSES BEFORE FEES WAIVED AND
EXPENSES REIMBURSED BY MANAGER ................... 100,464
--------
FEES WAIVED AND EXPENSES REIMBURSED
BY MANAGER ....................................... (72,993)
--------
TOTAL EXPENSES -- NET .............................. 27,471
--------
NET INVESTMENT LOSS ................................ (15,924)
--------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain on investments and foreign
currency transactions ............................ 202,974
Net change in unrealized appreciation/(depreciation)
on investments and foreign currency
transactions ..................................... 295,755
--------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS ................ 498,729
--------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS .................................. $482,805
========
- ----------------
(a) Redemption price varies based on length of time held.
See accompanying notes to financial statements.
4
THE GABELLI WOODLAND SMALL CAP VALUE FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS ENDED
MARCH 31, 2004 PERIOD ENDED
(UNAUDITED) SEPTEMBER 30, 2003*
---------------- -------------------
OPERATIONS:
Net investment loss ................................ $ (15,924) $ (9,414)
Net realized gain/loss on investments and foreign
currency transactions ............................ 202,974 (586)
Net change in unrealized appreciation/(depreciation)
on investments and foreign
currency transactions ............................ 295,755 159,497
----------- -----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 482,805 149,497
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net realized short-term gain on investments ........ (7,367) --
----------- -----------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS ................ (7,367) --
----------- -----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares issued:
Class AAA ........................................ 601,534 2,835,643
Class A .......................................... 14,841 2,926
Class B .......................................... -- 100
Class C .......................................... -- 113,807
----------- -----------
616,375 2,952,476
----------- -----------
Proceeds from reinvestment of dividends:
Class AAA ........................................ 6,880 --
Class A .......................................... 29 --
Class B .......................................... -- --
Class C .......................................... 362 --
----------- -----------
7,271 --
----------- -----------
Cost of shares redeemed
Class AAA ........................................ (628,056) (656,918)
Class A .......................................... -- --
Class B .......................................... -- --
Class C .......................................... (66,096) --
----------- -----------
(694,152) (656,918)
----------- -----------
Net increase/(decrease) in net assets from
capital share transactions ...................... (70,506) 2,295,558
----------- -----------
NET INCREASE IN NET ASSETS ......................... 404,932 2,445,055
NET ASSETS:
Beginning of period ................................ 2,445,055 --
----------- -----------
End of period ...................................... $ 2,849,987 $ 2,445,055
=========== ===========
- -------------------
* For the period December 31, 2002 (commencement of operations) through
September 30, 2003.
See accompanying notes to financial statements.
5
THE GABELLI WOODLAND SMALL CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
1. ORGANIZATION. The Gabelli Woodland Small Cap Value Fund (the "Fund") is a
series of Gabelli Equity Series Funds, Inc. (the "Corporation"), which was
organized on July 25, 1991 as a Maryland corporation. The Fund is a diversified,
open-end management investment company registered under the Investment Company
Act of 1940, as amended (the "1940 Act"), and one of three separately managed
portfolios (collectively, the "Portfolios") of the Corporation, each with four
separate classes of shares known as Class AAA, Class A, Class B and Class C. The
Fund's primary objective is capital appreciation. The Fund commenced investment
operations on December 31, 2002.
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. All other portfolio securities for which
over-the-counter 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 that day, then the security is valued at the closing bid price. 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 are valued at the latest average of the bid and asked prices
obtained from a pricing service approved by the Board of Directors, or a dealer
maintaining an active market in those securities. 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
6
THE GABELLI WOODLAND SMALL CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
commenced with respect to the seller of the security, realization of the
collateral by the Fund may be delayed or limited. At March 31, 2004, there were
no repurchase agreements.
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.
OFFERING COSTS. The Fund incurred offering costs of $59,443. At March 31, 2004,
the remaining balance of prepaid offering costs was $0. The offering costs were
amortized on a straight-line basis over twelve months starting from the date of
commencement of operations.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders are recorded on the ex-dividend date. Income distributions and
capital gain distributions are determined in accordance with income tax
regulations which may differ from accounting principles generally accepted in
the United States.
There were no distributions paid during the fiscal period ended September 30,
2003.
For the fiscal period ended September 30, 2003, reclassifications were made to
decrease accumulated net investment loss for $9,414 and increase accumulated net
realized loss on investments for $8,512, with an offsetting adjustment to
additional paid-in capital.
For the fiscal period ended September 30, 2003, the tax character of
distributions does not materially differ from the amounts recorded in accordance
with accounting principles generally accepted in the United States.
EXPENSES. Certain administrative expenses are common to, and allocated among,
the Portfolios. Such allocations are made on the basis of each Portfolio's
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. As a result, a Federal income tax provision is not required.
As of September 30, 2003, the components of accumulated earnings/(losses) on a
tax basis were as follows:
Net unrealized appreciation ............... $150,399
--------
Total accumulated earnings .............. $150,399
========
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.
The difference between book and tax basis unrealized appreciation is primarily
due to deferral of losses from wash sales for tax purposes.
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 waive its fees and reimburse expenses of the Fund to the extent
necessary to maintain the annualized total operating expenses at 2.00%, 2.00%,
2.75% and
7
THE GABELLI WOODLAND SMALL CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
2.75% of average daily net assets for Class AAA, Class A, Class B and Class C
Shares, respectively. For the six months ended March 31, 2004, the Adviser
reimbursed the Fund in the amount of $72,993. For the fiscal period ended
September 30, 2003, the Adviser reimbursed the Fund in the amount of $124,599.
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 2.00% of average daily
net assets.
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 six months
ended March 31, 2004, the Class AAA shares incurred distribution costs payable
to Gabelli & Company, Inc., an affiliate of the Adviser, of $3,228, or 0.25% of
average daily net assets, the annual limitation under the Plan. Such payments
are accrued daily and paid monthly.
For the six months ended March 31, 2004, the Class A Shares incurred
distribution costs payable to Gabelli & Company, Inc., an affiliate of
the Adviser, of $12 or 0.25% of average daily net assets. Such payments are
accrued daily and paid monthly.
For the six months ended March 31, 2004, the Class B Shares incurred
distribution costs payable to Gabelli & Company, Inc., an affiliate of the
Adviser, of $1 or 1.00% of average daily net assets. Such payments are accrued
daily and paid monthly.
For the six months ended March 31, 2004, the Class C Shares incurred
distribution costs payable to Gabelli & Company, Inc., an affiliate of the
Adviser, of $549 or 1.00% of average daily net assets. Such payments are accrued
daily and paid monthly.
5. PORTFOLIO SECURITIES. Purchases and sales of securities for the six months
ended March 31, 2004, other than short term securities, aggregated $1,041,681
and $968,219, respectively.
6. TRANSACTIONS WITH AFFILIATES. During the six months ended March 31, 2004, the
Fund paid brokerage commissions of $79 to Gabelli & Company, Inc. and its
affiliates.
7. CAPITAL STOCK TRANSACTIONS. Transactions in shares of capital stock were as
follows:
SIX MONTHS ENDED
MARCH 31, 2004 PERIOD ENDED
(UNAUDITED) SEPTEMBER 30, 2003
---------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ----------- ----------- -----------
CLASS AAA
Shares sold ................................ 49,727 $ 601,534 283,812 $ 2,835,643
Shares issued upon reinvestment of dividends 579 6,880 -- --
Shares redeemed ............................ (52,077) (628,056) (64,132) (656,918)
----------- ----------- ----------- -----------
Net increase/(decrease) in Class AAA shares (1,771) $ (19,642) 219,680 $ 2,178,725
=========== =========== =========== ===========
CLASS A
Shares sold ................................ 1,218 $ 14,841 315 $ 2,926
Shares issued upon reinvestment of dividends 2 29 -- --
----------- ----------- ----------- -----------
Net increase in Class A shares ............. 1,220 $ 14,870 315 $ 2,926
=========== =========== =========== ===========
CLASS B
Shares sold ................................ -- -- 10 $ 100
----------- ----------- ----------- -----------
Net increase in Class B shares ............. -- -- 10 $ 100
=========== =========== =========== ===========
CLASS C
Shares sold ................................ -- -- 11,206 $ 113,807
Shares issued upon reinvestment of dividends 31 $ 362 -- --
Shares redeemed ............................ (5,501) (66,096) -- --
----------- ----------- ----------- -----------
Net increase/(decrease) in Class C shares .. (5,470) $ (65,734) 11,206 $ 113,807
=========== =========== =========== ===========
8
THE GABELLI WOODLAND SMALL CAP VALUE 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 Net Asset
Period Value, Net Unrealized from Realized Value,
Ended Beginning Investment Gain/(Loss) on Investment Gain on Total End of Total
September 30 of Period Income/(Loss) Investments Operations Investments Distributions Period Return+
- ------------ --------- ------------- -------------- ---------- ----------- ------------- --------- -------
CLASS AAA
2004(d) $10.58 $(0.07) $2.18 $2.11 $(0.03) $(0.03) $12.66 19.99%
2003(e) 10.00(a) (0.07) 0.65 0.58 -- -- 10.58 5.80
CLASS A
2004(d) $10.57 $(0.08) $2.19 $2.11 $(0.03) $(0.03) $12.65 20.01%
2003(e) 10.00(a) (0.07) 0.64 0.57 -- -- 10.57 5.70
CLASS B
2004(d) $10.59 $(0.01) $2.18 $2.17 $(0.03) $(0.03) $12.73 20.54%
2003(e) 10.00(a) (0.12) 0.71 0.59 -- -- 10.59 5.90
CLASS C
2004(d) $10.55 $(0.11) $2.16 $2.05 $(0.03) $(0.03) $12.57 19.48%
2003(e) 10.00(a) (0.11) 0.66 0.55 -- -- 10.55 5.50
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
------------------------------------------------------------------------------------------------
Net Operating
Net Assets Investment Expenses Expenses Expenses
Period End of Income/(Loss) Net of Before Ratio Portfolio
Ended Period to Average Net Waivers/ Waivers/ (Net of Turnover
September 30 (in 000's) Assets(b) Reimbursements(b) Reimbursements(b)(c) Interest)(b) Rate
- ------------ ---------- -------------- ----------------- -------------------- ------------ ---------
CLASS AAA
2004(d) $2,758 (1.15)% 2.01% 7.41% 2.00%(f) 39%
2003(e) 2,323 (0.97) 2.00 15.05 2.00 39
CLASS A
2004(d) $ 19 (1.30)% 2.01% 7.41% 2.00%(f) 39%
2003(e) 3 (0.97) 2.00 15.05 2.00 39
CLASS B
2004(d) $ 0.1 (0.20)% 2.76% 8.16% 2.75%(f) 39%
2003(e) 0.1 (1.72) 2.75 15.80 2.00 39
CLASS C
2004(d) $ 72 (1.88)% 2.76% 8.16% 2.75%(f) 39%
2003(e) 118 (1.72) 2.75 15.80 2.00 39
- --------------------------
+ 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) As of December 31, 2002 (commencement of operations).
(b) Annualized.
(c) During the period, certain fees were voluntarily reduced and/or reimbursed.
If such fee reductions and/or reimbursements had not occurred, the ratio
would have been as shown.
(d) For the period ending March 31, 2004, unaudited.
(e) For the nine months ended September 30, 2003.
(f) The Fund incurred interest expense during the period ended March 31, 2004.
See accompanying notes to financial statements.
9
- --------------------------------------------------------------------------------
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). INVESTORS SHOULD
CONSIDER THE INVESTMENT OBJECTIVES, RISKS AND CHARGES AND EXPENSES OF THE
FUND BEFORE INVESTING. THE PROSPECTUS CONTAINS MORE COMPLETE INFORMATION
ABOUT THIS AND OTHER MATTERS AND SHOULD BE READ CAREFULLY BEFORE INVESTING.
Gabelli Equity Series Funds, Inc.
THE GABELLI WOODLAND SMALL CAP VALUE 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 Karl Otto Pohl
CHAIRMAN AND CHIEF FORMER PRESIDENT
INVESTMENT OFFICER DEUTSCHE BUNDESBANK
GABELLI ASSET MANAGEMENT INC.
Anthony J. Colavita Anthony R. Pustorino
ATTORNEY-AT-LAW CERTIFIED PUBLIC ACCOUNTANT
ANTHONY J. COLAVITA, P.C. PROFESSOR EMERITUS
PACE UNIVERSITY
Vincent D. Enright Anthonie C. van Ekris
FORMER SENIOR VICE PRESIDENT MANAGING DIRECTOR
AND CHIEF FINANCIAL OFFICER BALMAC INTERNATIONAL, INC.
KEYSPAN ENERGY CORP.
John D. Gabelli Salvatore J. Zizza
SENIOR VICE PRESIDENT CHAIRMAN
GABELLI & COMPANY, INC. HALLMARK ELECTRICAL
SUPPLIES CORP.
Robert J. Morrissey
ATTORNEY-AT-LAW
MORRISSEY, HAWKINS & LYNCH
OFFICERS AND PORTFOLIO MANAGER
Elizabeth M. Lilly, CFA Bruce N. Alpert
PORTFOLIO MANAGER PRESIDENT AND TREASURER
James E. McKee
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 Woodland Small Cap Value Fund. It is not authorized for distribution to
prospective investors unless preceded or accompanied by an effective prospectus.
- --------------------------------------------------------------------------------
GAB840Q104SR
[GRAPHIC OMITTED]
PICTURE OF MARIO GABELLI
THE
GABELLI
WOODLAND
SMALL CAP
VALUE
FUND
SEMI-ANNUAL REPORT
MARCH 31, 2004
ITEM 2. CODE OF ETHICS.
Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. [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.
The Board of Directors has a Nominating Committee comprised of two
"non-interested" (as such term is defined by the Investment Company Act of 1940,
as amended) Directors, namely Anthony J. Colavita and Robert J. Morrisey. The
Nominating Committee is responsible for identifying individuals believed to be
qualified to become Board members in the event that a position is vacated or
created. The Nominating Committee will consider Director candidates recommended
by shareholders. In considering candidates submitted by shareholders, the
Nominating Committee will take into consideration the needs of the Board of
Directors, the qualifications of the candidate and the interests of
shareholders. The Nominating Committee may also take into consideration the
number of shares held by the recommending shareholder and the length of time
that such shares have been held. To have a candidate considered by the
Nominating Committee, a shareholder must submit the recommendation in writing
and must include the following information:
o The name of the shareholder and evidence of the person's ownership of
shares of the Company, including the number of shares owned and the
length of time of ownership;
o The name of the candidate, the candidate's resume or a listing of his or
her qualifications to be a Director of the Company and the person's
consent to be named as a Director if selected by the Nominating
Committee and nominated by the Board of Directors; and
o If requested by the Nominating Committee, a completed and signed
directors questionnaire.
The shareholder recommendation and information described above must be sent to
the Company's Secretary c/o Gabelli Funds, LLC, James E. McKee and must be
received by the Secretary no less than 120 days prior to the anniversary date of
the Company's most recent annual meeting of shareholders or, if the meeting has
moved by more than 30 days, a reasonable amount of time before the meeting.
The Nominating Committee believes that the minimum qualifications for serving as
a Director of the Company are that the individual demonstrate, by significant
accomplishment in his or her field, an ability to make a meaningful contribution
to the Board of Directors' oversight of the business and affairs of the Company
and have an impeccable record and reputation for honest and ethical conduct in
both his or her professional and personal activities. In addition, the
Nominating Committee examines a candidate's specific experiences and skills,
time availability in light of other commitments, potential conflicts of interest
and independence from management and the Fund. The Nominating Committee also
seeks to have the Board of Directors represent a diversity of backgrounds and
experience.
The Company's Nominating Committee has not adopted a charter. In the event that
a charter is adopted in the future, it will be available at that time on the
Company's website (www.gabelli.com).
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) Not applicable.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and
Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.
(a)(3) Not yet effective.
(b) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and
Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(registrant) Gabelli Equity Series Funds, Inc.
--------------------------------------------------------------------
By (Signature and Title)* /s/ Bruce N. Alpert
-----------------------------------------------------
Bruce N. Alpert, Principal Executive Officer
Date 6/8/2004
---------------------------------------------------------------------------
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 &
Principal Financial Officer
Date 6/8/2004
---------------------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.