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 811-01311
The Gabelli Mathers Fund
--------------------------------------------------------
(Exact name of registrant as specified in charter)
One Corporate Center
Rye, New York 10580-1422
--------------------------------------------------------
(Address of principal executive offices) (Zip code)
Bruce N. Alpert
Gabelli Funds, LLC
One Corporate Center
Rye, New York 10580-1422
--------------------------------------------------------
(Name and address of agent for service)
registrant's telephone number, including area code: 1-800-422-3554
--------------
Date of fiscal year end: December 31, 2004
-----------------
Date of reporting period: June 30, 2004
-------------
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 MATHERS FUND
SEMI-ANNUAL REPORT
JUNE 30, 2004
TO OUR SHAREHOLDERS,
In our June 30, 2003 report, we noted a change in the way we provide the
portfolio manager's commentary to shareholders of our Funds. Our shareholder
reports have typically contained commentary on each portfolio manager's
assessment of the stock market, individual stocks and how economic events affect
their thinking in managing a specific Fund. We have always provided details
about performance and presented returns, both good and bad, hopefully in a clear
and concise fashion. These comments have been included as part of each Fund's
quarterly, semi-annual, and annual financial statements.
The Sarbanes-Oxley Act's corporate governance regulations require a Fund's
principal executive and financial officers to certify the entire contents of the
semi-annual and annual shareholder reports in a filing with the Securities and
Exchange Commission on Form N-CSR. This certification covers the portfolio
manager's commentary and subjective opinions if they are attached to or a part
of the financial statements.
Rather than ask our portfolio managers to eliminate their opinions and/or
restrict their commentary to historical facts only, we separated their
commentary from the financial statements and investment portfolio and sent it to
you separately during our December 31, 2003 mailing. We continue to mail the
portfolio manager's commentary separately from the investment portfolio to
ensure that its content is complete and unrestricted. Both the commentary and
the financial statements, including the portfolio of investments, are also
available on our website at www.gabelli.com/funds.
We trust that you understand that our approach is an unintended
consequence of the ever-increasing regulatory requirements affecting public
companies generally. We hope the specific certification requirements of these
regulations will be modified as they relate to mutual funds, since investment
companies have different corporate structures and objectives than other public
companies.
Sincerely yours,
/s/Bruce N. Alpert
Bruce N. Alpert
Chief Operating Officer
Gabelli Funds
August 10, 2004
- --------------------------------------------------------------------------------
A description of the Fund's proxy voting policies and procedures and how the
Fund voted proxies relating to portfolio securities during the most recent
12-month period ended June 30, 2004 are 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 10580-1422; and (iii) on the Securities
and Exchange Commission's website at www.sec.gov.
- --------------------------------------------------------------------------------
THE GABELLI MATHERS FUND
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------- ---- -------
COMMON STOCKS -- 4.6%
BROADCASTING -- 0.6%
15,000 Liberty Media Corp., Cl. A+ ......... $ 135,270 $ 134,850
4,000 Liberty Media International
Inc., Cl. A+ ...................... 142,331 148,400
----------- -----------
277,601 283,250
----------- -----------
BUSINESS SERVICES -- 0.0%
500 Kroll Inc.+ ......................... 18,430 18,440
----------- -----------
COMPUTER SOFTWARE AND SERVICES -- 0.4%
5,000 CACI International Inc., Cl. A+ ..... 189,189 202,200
----------- -----------
ENERGY AND UTILITIES -- 1.1%
500 Anadarko Petroleum Corp. ............ 22,080 29,300
500 Cinergy Corp. ....................... 18,045 19,000
1,000 Duquesne Light Holdings Inc. ........ 15,295 19,310
500 Murphy Oil Corp. .................... 29,891 36,850
15,000 Unisource Energy Corp. .............. 369,917 372,750
----------- -----------
455,228 477,210
----------- -----------
ENTERTAINMENT -- 1.1%
40,000 Metro-Goldwyn-Mayer Inc.+ ........... 494,071 484,000
----------- -----------
FINANCIAL SERVICES -- 0.2%
500 MONY Group Inc. ..................... 16,635 15,650
1,000 Quaker City Bancorp Inc. ............ 54,390 54,940
----------- -----------
71,025 70,590
----------- -----------
FOOD AND BEVERAGE -- 0.2%
500 Dreyer's Grand Ice Cream
Holdings Inc., Cl. A .............. 39,595 39,545
2,000 Hain Celestial Group Inc.+ .......... 36,041 36,200
----------- -----------
75,636 75,745
----------- -----------
HEALTH CARE -- 0.4%
5,000 CIMA Labs Inc.+ ..................... 165,053 168,650
----------- -----------
HOTELS AND GAMING -- 0.1%
500 Mandalay Resort Group ............... 34,035 34,320
----------- -----------
RETAIL -- 0.1%
3,000 Cole National Corp.+ ................ 66,180 70,050
----------- -----------
SATELLITE -- 0.0%
500 PanAmSat Corp.+ ..................... 11,635 11,610
----------- -----------
TELECOMMUNICATIONS -- 0.2%
1,000 BellSouth Corp. ..................... 24,080 26,220
1,000 SBC Communications Inc. ............. 22,310 24,250
1,000 Verizon Communications Inc. ......... 32,920 36,190
----------- -----------
79,310 86,660
----------- -----------
WIRELESS COMMUNICATIONS -- 0.2%
5,000 AT&T Wireless Services Inc.+ ........ 70,320 71,600
----------- -----------
TOTAL COMMON STOCKS ................. 2,007,713 2,054,325
----------- -----------
PRINCIPAL
AMOUNT
---------
U.S. GOVERNMENT OBLIGATIONS -- 91.5%
$41,000,000 U.S. Treasury Bill,
0.943%++, 07/01/04 (a) ............ 41,000,000 41,000,000
----------- -----------
PRINCIPAL MARKET
AMOUNT COST VALUE
--------- ---- -------
REPURCHASE AGREEMENTS -- 4.3%
$ 1,950,105 State Street Bank & Trust Co.,
1.180%, dated 06/30/04,
due 07/01/04, proceeds at
maturity, $1,950,168 (b) .......... $ 1,950,105 $ 1,950,105
----------- -----------
TOTAL INVESTMENTS -- 100.4% ......... $44,957,818 45,004,429
===========
OTHER ASSETS AND LIABILITIES (NET) -- (0.4)% (179,805)
-----------
NET ASSETS -- 100.0% $44,824,624
===========
SECURITIES SOLD SHORT -- (7.4)%
SHARES PROCEEDS
------- --------
COMMON STOCKS -- (7.4)%
AUTOMOTIVE -- (0.2)%
6,000 Ford Motor Co. ...................... $ 90,878 $ 93,900
----------- -----------
CONSUMER PRODUCTS -- (1.4)%
13,500 Polaris Industries Inc. ............. 484,964 648,000
----------- -----------
DIVERSIFIED -- (1.3)%
5,000 Standard & Poor's
Depository Receipts ............... 564,802 572,650
----------- -----------
ELECTRONICS -- (0.2)%
2,000 Semiconductor HOLDRs Trust .......... 74,765 75,540
----------- -----------
ENTERTAINMENT -- (0.6)%
6,000 Carnival Corp. ...................... 233,538 282,000
----------- -----------
FINANCIAL SERVICES -- (0.1)%
500 Fannie Mae .......................... 38,895 35,680
----------- -----------
HOME FURNISHINGS -- (0.7)%
4,000 Ethan Allen Interiors Inc. .......... 157,125 143,640
9,000 La-Z-Boy Inc. ....................... 187,298 161,820
----------- -----------
344,423 305,460
----------- -----------
RESTAURANTS -- (0.6)%
3,000 Cheesecake Factory Inc.+ ............ 108,342 119,370
5,000 McDonald's Corp. .................... 125,858 130,000
----------- -----------
234,200 249,370
----------- -----------
RETAIL -- (2.3)%
4,000 Gap Inc. ............................ 79,766 97,000
2,000 Kohl's Corp.+ ....................... 95,259 84,560
11,000 May Department Stores Co. ........... 310,069 302,390
5,000 The Home Depot Inc. ................. 161,867 176,000
6,000 Tiffany & Co. ....................... 167,392 221,100
6,000 Zale Corp.+ ......................... 153,454 163,560
----------- -----------
967,808 1,044,610
----------- -----------
TOTAL SECURITIES
SOLD SHORT ........................ $ 3,034,272 $ 3,307,210
=========== ===========
- ----------------
For Federal tax purposes:
Aggregate cost ................................... $44,957,818
===========
Gross unrealized appreciation .................... $ 58,163
Gross unrealized depreciation .................... (11,552)
-----------
Net unrealized appreciation/(depreciation) ....... $ 46,611
===========
- ----------------
(a) At June 30, 2004, $25,000,000 of the principal amount was pledged as
collateral for securities sold short.
(b) Collateralized by U.S. Treasury Bond, 8.000%, due 11/15/21, market value
$1,989,621.
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
See accompanying notes to financial statements.
2
THE GABELLI MATHERS FUND
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
ASSETS:
Investments, at value (cost $44,957,818) .................... $ 45,004,429
Deposit at brokers .......................................... 3,301,213
Dividends and interest receivable ........................... 1,176
Receivable for investments sold ............................. 44,000
Other assets ................................................ 2,237
------------
TOTAL ASSETS ................................................ 48,353,055
------------
LIABILITIES:
Securities sold short (proceeds $3,034,272) ................. 3,307,210
Payable for investments purchased ........................... 75,005
Dividends payable on securities sold short ................. 2,810
Payable for investment advisory fees ........................ 36,951
Payable for distribution fees .............................. 9,238
Other accrued expenses and liabilities ...................... 97,217
------------
TOTAL LIABILITIES ........................................... 3,528,431
------------
NET ASSETS applicable to 4,261,993
shares outstanding ........................................ $ 44,824,624
============
NET ASSETS CONSIST OF:
Shares of beneficial interest, $1.00 par value .............. $ 4,261,993
Additional paid-in capital .................................. 84,458,493
Accumulated net investment loss ............................. (250,241)
Accumulated net realized loss on investments
and securities sold short ................................. (43,419,294)
Net unrealized depreciation on securities
sold short ................................................ (272,938)
Net unrealized appreciation on investments .................. 46,611
------------
NET ASSETS .................................................. $ 44,824,624
============
NET ASSET VALUE, offering and redemption price
per share ($44,824,624 / 4,261,993 shares
outstanding;100,000,000 shares authorized) ................ $10.52
======
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends ...................................................... $ 16,102
Interest ....................................................... 227,946
Other income ................................................... 10,178
---------
TOTAL INVESTMENT INCOME ........................................ 254,226
---------
EXPENSES:
Investment advisory fees ....................................... 260,508
Distribution fees .............................................. 65,127
Trustees' fees ................................................. 29,135
Dividends on securities sold short ............................. 28,539
Shareholder services fees ...................................... 24,289
Custodian fees ................................................. 23,336
Shareholder communications expenses ............................ 23,150
Legal and audit fees ........................................... 15,950
Registration fees .............................................. 10,396
Miscellaneous expenses ......................................... 24,037
---------
TOTAL EXPENSES ................................................. 504,467
---------
NET INVESTMENT LOSS ............................................ (250,241)
---------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND SECURITIES SOLD SHORT:
Net realized gain on investments ............................... 124,473
Net realized loss on securities sold short ..................... (346,537)
Net change in unrealized appreciation/
depreciation on investments and
securities sold short ........................................ 21,232
---------
NET REALIZED AND UNREALIZED LOSS ON
INVESTMENTS AND SECURITIES SOLD SHORT ........................ (200,832)
---------
NET DECREASE IN NET ASSETS RESULTING
FROM OPERATIONS .............................................. $(451,073)
=========
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS ENDED
JUNE 30, 2004 YEAR ENDED
(UNAUDITED) DECEMBER 31, 2003
---------------- ------------------
OPERATIONS:
Net investment loss ........................................................ $ (250,241) $ (456,610)
Net realized gain (loss) on investments .................................... 124,473 (132,253)
Net realized loss on securities sold short ................................. (346,537) (537,948)
Net change in unrealized appreciation/depreciation on investments and
securities sold short .................................................... 21,232 (356,240)
------------ ------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ....................... (451,073) (1,483,051)
------------ ------------
SHARES OF BENEFICIAL INTEREST TRANSACTIONS:
Net decrease in net assets from shares of beneficial interest transactions . (15,569,828) (18,498,603)
------------ ------------
NET DECREASE IN NET ASSETS ................................................. (16,020,901) (19,981,654)
NET ASSETS:
Beginning of period ........................................................ 60,845,525 80,827,179
------------ ------------
End of period .............................................................. $ 44,824,624 $ 60,845,525
============ ============
See accompanying notes to financial statements.
3
THE GABELLI MATHERS FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
1. ORGANIZATION. The Gabelli Mathers Fund (the "Fund") was organized on June 17,
1999 as a Delaware statutory trust. The Fund commenced investment operations on
October 1, 1999 as the successor to the Mathers Fund, Inc. (the "Mathers Fund")
which was organized on March 31, 1965 as a Maryland corporation. The Mathers
Fund commenced investment operations on August 19, 1965. The Fund is a
diversified, open-end management investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act"). The Fund's primary
objective is long-term capital appreciation.
2. SIGNIFICANT ACCOUNTING POLICIES. The preparation of financial statements in
accordance with U.S. generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results could differ from
those estimates. The following is a summary of significant accounting policies
followed by the Fund in the preparation of its financial statements.
SECURITY VALUATION. Portfolio securities listed or traded on a nationally
recognized securities exchange or traded in the U.S. over-the-counter market for
which market quotations are readily available are valued at the last quoted sale
price or a market's official closing price as of the close of business on the
day the securities are being valued. If there were no sales that day, the
security is valued at the average of the closing bid and asked prices or, if
there were no asked prices quoted on that day, then the security is valued at
the closing bid price on that day. If no bid or asked prices are quoted on such
day, the security is valued at the most recently available price or, if the
Board of Trustees (the "Board") so determines, by such other method as the Board
shall determine in good faith, to reflect its fair market value. Portfolio
securities traded on more than one national securities exchange or market are
valued according to the broadest and most representative market, as determined
by Gabelli Funds, LLC (the "Adviser").
Portfolio securities primarily traded on 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.
Debt instruments that are not credit impaired with remaining maturities of 60
days or less are valued at amortized cost, unless the Board 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. Debt instruments having a
maturity greater than 60 days for which market quotations are readily available
are valued at the latest average of the bid and asked prices. If there were no
asked prices quoted on such day, the security is valued using the closing bid
price. Futures contracts are valued at the official closing settlement price of
the exchange or board of trade on which the applicable contract is traded.
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. Fair valuation
methodologies and procedures may include, but are not limited to: analysis and
review of available financial and non-financial information about the company;
comparisons to the valuation and changes in valuation of similar securities,
including a comparison of foreign securities to the equivalent U.S. dollar value
ADR securities at the close of the U.S. exchange; and evaluation of any other
information that could be indicative of the value of the security.
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. 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
4
THE GABELLI MATHERS FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
agreed-upon price and time, thereby determining the yield during the Fund's
holding period. The Fund will always receive and maintain securities as
collateral whose market value, including accrued interest, will be at least
equal to 102% of the dollar amount invested by the Fund in each agreement. The
Fund will make payment for such securities only upon physical delivery or upon
evidence of book entry transfer of the collateral to the account of the
custodian. To the extent that any repurchase transaction exceeds one business
day, the value of the collateral is marked-to-market on a daily basis to
maintain the adequacy of the collateral. If the seller defaults and the value of
the collateral declines or if bankruptcy proceedings are commenced with respect
to the seller of the security, realization of the collateral by the Fund may be
delayed or limited.
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 in 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 June 30, 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.
SECURITIES SOLD SHORT. A short sale involves selling a security which the Fund
does not own. The proceeds received for short sales are recorded as liabilities
and the Fund records an unrealized gain or loss to the extent of the difference
between the proceeds received and the value of the open short position on the
day of determination. The Fund records a realized gain or loss when the short
position is closed out. By entering into a short sale, the Fund bears the market
risk of an unfavorable change in price of the security sold short. Dividends on
short sales are recorded as an expense by the Fund on the ex-dividend date and
interest expense is recorded on the accrual basis. Securities sold short at June
30, 2004 are reflected in the Portfolio of 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 generally accepted accounting principles in
the United States. These differences are primarily due to differing treatments
of income and gains on various investment securities held by the Fund, timing
differences and differing characterization of distributions made by the Fund.
No distributions were made in the six months ended June 30, 2004 and the fiscal
year ended December 31, 2003.
For the year ended December 31, 2003, reclassifications were made to decrease
accumulated net investment loss for $456,610 and to decrease accumulated net
realized loss on investments for $4,819,701, with an offsetting adjustment to
additional paid-in capital.
5
THE GABELLI MATHERS FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
PROVISION FOR INCOME TAXES. The Fund intends to continue to qualify as a
regulated investment company under Subchapter M of the Internal Revenue Code of
1986, as amended (the "Code"). As a result, a Federal income tax provision is
not required.
As of December 31, 2003, the components of accumulated earnings/(losses) on a
tax basis were as follows:
Accumulated capital loss carryforward ..... $(43,197,230)
Net unrealized appreciation/(depreciation)
of investments .......................... 143,125
Net unrealized appreciation/(depreciation)
of securities sold short ................ (390,684)
------------
Total accumulated loss .................... $(43,444,789)
============
The Fund has a net capital loss carryforward for Federal income tax purposes at
December 31, 2003 of $43,197,230. This capital loss carryforward is available to
reduce future distributions of net capital gains to shareholders. $22,226,886 of
the loss carryforward is available through 2004; $7,869,968 is available through
2006; $12,430,175 is available through 2010; and $670,201 is available through
2011.
3. INVESTMENT ADVISORY AGREEMENT. The Fund has entered into an Investment
Advisory Agreement (the "Advisory Agreement") with the Adviser which provides
that the Fund will pay the Adviser a fee, computed daily and paid monthly, at
the annual rate of 1.00% of the value of the Fund's average 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 Trustees of the Fund who are its affiliates.
4. DISTRIBUTION PLAN. On October 1, 1999, the Fund's Board adopted a
distribution plan (the "Plan") pursuant to Rule 12b-1 under the 1940 Act. For
the six months ended June 30, 2004, the Fund incurred distribution costs payable
to Gabelli & Company, Inc., an affiliate of the Adviser, of $65,127, or 0.25% of
average daily net assets, the annual limitation under the Plan. Such payments
are accrued daily and paid monthly.
5. PORTFOLIO SECURITIES. Purchases and proceeds from the sales of securities for
the six months ended June 30, 2004, other than short term securities, aggregated
$3,261,314 and $4,402,071, respectively.
6. TRANSACTIONS WITH AFFILIATES. During the six months ended June 30, 2004, the
Fund paid brokerage commissions of $50 to Gabelli & Company, Inc.
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 June 30, 2004, the Fund reimbursed the Adviser $8,700 in
connection with the cost of computing the Fund's net asset value, which is
included in miscellaneous expenses in the Statement of Operations.
7. SHARES OF BENEFICIAL INTEREST. Transactions in shares of beneficial interest
were as follows:
SIX MONTHS ENDED
JUNE 30, 2004 YEAR ENDED
(UNAUDITED) DECEMBER 31, 2003
------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
Shares sold ......... 222,718 $ 2,361,582 271,933 $ 2,922,779
Shares redeemed ..... (1,699,341) (17,931,411) (2,007,763) (21,421,382)
---------- ------------ ---------- ------------
Net decrease .... (1,476,623) $(15,569,828) (1,735,830) $(18,498,603)
========== ============ ========== ============
6
THE GABELLI MATHERS FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
8. OTHER MATTERS. On October 7, 2003, the Fund's Adviser received a subpoena
from the Attorney General of the State of New York requesting information on
mutual fund shares trading practices. The Adviser has also received requests for
information from the SEC regarding mutual fund trading practices and valuation
of portfolio securities. The Adviser has responded to the requests. The Fund
does not believe that these matters will have a material adverse effect on the
Fund's financial position or the results of its operations.
9. INDEMNIFICATIONS. The Fund enters into contracts that contain a variety of
indemnifications. The Fund's maximum exposure under these arrangements is
unknown. However, the Fund has not had prior claims or losses pursuant to these
contracts and expects the risk of loss to be remote.
10. FINANCIAL HIGHLIGHTS. Selected data for a share of beneficial interest
outstanding throughout each period:
SIX MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 2004 -----------------------------------------------------------
(UNAUDITED) 2003 2002 2001 2000 1999(A)
------- ------- -------- ------- ------- -------
OPERATING PERFORMANCE:
Net asset value, beginning of period ... $ 10.60 $ 10.81 $ 12.25 $ 12.05 $ 11.94 $ 11.73
------- ------- -------- ------- ------- --------
Net investment income (loss) ........... (0.05) (0.07) (0.00)(b) 0.30 0.49 0.46
Net realized and unrealized
gain/(loss) on investments ........... (0.03) (0.14) (1.44) 0.21 0.11 0.21
------- ------- -------- ------- ------- --------
Total from investment operations ....... (0.08) (0.21) (1.44) 0.51 0.60 0.67
------- ------- -------- ------- ------- --------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income .................. -- -- -- (0.31) (0.49) (0.46)
------- ------- -------- ------- ------- --------
Total distributions .................... -- -- -- (0.31) (0.49) (0.46)
------- ------- -------- ------- ------- --------
NET ASSET VALUE, END OF PERIOD ......... $ 10.52 $ 10.60 $ 10.81 $ 12.25 $ 12.05 $ 11.94
======= ======= ======== ======= ======= ========
Total return+ .......................... (0.75)% (1.94)% (11.76)% 4.25% 5.02% 5.73%
======= ======= ======== ======= ======= ========
RATIOS TO AVERAGE NET ASSETS
AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) ... $44,825 $60,846 $ 80,827 $97,893 $99,855 $104,693
Ratio of net investment income
to average net assets ................ (0.96)%(c) (0.61)% (0.00)% 2.45% 3.79% 3.50%
Ratio of operating expenses
to average net assets ................ 1.94%(c) 1.67% 1.63% 1.35% 1.34% 1.24%
Portfolio turnover rate ................ 139% 244% 776% 1013% 977% 922%
- --------------------------------------------------------------------------------
+ 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) Gabelli Funds, LLC became the sole investment adviser of the Fund on October
1, 1999.
(b) Amount is less than $0.005 per share.
(c) Annualized.
See accompanying notes to financial statements.
7
THE GABELLI MATHERS 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 TRUSTEES
Mario J. Gabelli, CFA Anthony R. Pustorino
CHAIRMAN AND CHIEF CERTIFIED PUBLIC ACCOUNTANT
INVESTMENT OFFICER PROFESSOR, PACE UNIVERSITY
GABELLI ASSET MANAGEMENT INC.
E. Val Cerutti Werner J. Roeder, MD
CHIEF EXECUTIVE OFFICER VICE PRESIDENT/MEDICAL AFFAIRS
CERUTTI CONSULTANTS, INC. LAWRENCE HOSPITAL CENTER
Anthony J. Colavita Henry G. Van der Eb, CFA
ATTORNEY-AT-LAW PRESIDENT AND CHIEF
ANTHONY J. COLAVITA, P.C. EXECUTIVE OFFICER
THE GABELLI MATHERS FUND
Vincent D. Enright Anthonie C. van Ekris
FORMER SENIOR VICE PRESIDENT MANAGING DIRECTOR
AND CHIEF FINANCIAL OFFICER BALMAC INTERNATIONAL, INC.
KEYSPAN ENERGY CORP.
Karl Otto Pohl
FORMER PRESIDENT
DEUTSCHE BUNDESBANK
OFFICERS AND PORTFOLIO MANAGER
Henry G. Van der Eb, CFA Anne E. Morrissy, CFA
PRESIDENT AND EXECUTIVE VICE PRESIDENT
PORTFOLIO MANAGER
Bruce N. Alpert James E. McKee
EXECUTIVE VICE PRESIDENT VICE PRESIDENT
AND TREASURER AND SECRETARY
Heidi M. Stubner Edith L. Cook
VICE PRESIDENT VICE PRESIDENT
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 Mathers Fund. It is not authorized for distribution to prospective
investors unless preceded or accompanied by an effective prospectus.
- --------------------------------------------------------------------------------
[MARIO GABELLI PHOTO OMITTED]
THE
GABELLI
MATHERS
FUND
SEMI-ANNUAL REPORT
JUNE 30, 2004
GAB1726Q204SR
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. SCHEDULE OF INVESTMENTS
Not applicable.
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 Trustees has a Nominating Committee comprised of two
"non-interested" (as such term is defined by the Investment Company Act of 1940,
as amended) Trustees, namely Anthony J. Colavita, and Werner J. Roeder. 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 Trustees candidates recommended
by shareholders. In considering candidates submitted by shareholders, the
Nominating Committee will take into consideration the needs of the Board of
Trustees, 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 Fund, 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 Trustee of the Fund and the person's
consent to be named as a Trustee if selected by the Nominating
Committee and nominated by the Board of Trustees; 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 Fund'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
Fund'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 Trustee of the Fund are that the individual demonstrate, by significant
accomplishment in his or her field, an ability to make a meaningful contribution
to the Board of Trustees' oversight of the business and affairs of the Fund 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 Trustees represent a diversity of backgrounds and
experience.
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 applicable.
(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) The Gabelli Mathers Fund
-------------------------------------------------------------------
By (Signature and Title)* /s/ BRUCE N. ALPERT
-------------------------------------------------------
Bruce N. Alpert, Principal Executive Officer
Date September 7, 2004
----------------------------------------------------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ BRUCE N. ALPERT
-------------------------------------------------------
Bruce N. Alpert, Principal Executive Officer and
Principal Financial Officer
Date September 7, 2004
----------------------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.