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 811-04719 ----------- The Gabelli Westwood Funds ---------------------------------------------- (Exact name of registrant as specified in charter) One Corporate Center Rye, NY 10580-1422 ---------------------------------------------- (Address of principal executive offices) (Zip code) Bruce N. Alpert Gabelli Funds, LLC One Corporate Center Rye, NY 10580-1422 ---------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: 800-422-3554 -------------- Date of fiscal year end: September 30 -------------- Date of reporting period: September 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 WESTWOOD FUNDS EQUITY FUND BALANCED FUND INTERMEDIATE BOND FUND SMALLCAP EQUITY FUND REALTY FUND MIGHTY MITES(SM) FUND ANNUAL REPORT SEPTEMBER 30, 2004 THE GABELLI WESTWOOD FUNDS ========================== EQUITY FUND SMALLCAP EQUITY FUND BALANCED FUND REALTY FUND INTERMEDIATE BOND FUND MIGHTY MITES(SM) FUND CLASS AAA SHARES CLASS A SHARES - --------------------------------------------------------- --------------------------------------------------------- Average Annual Returns -- September 30, 2004 (a)(e) Average Annual Returns -- September 30, 2004 (a)(b)(e) Since Since 1 Year 5 Year 10 Year Inception 1 Year 5 Year 10 Year Inception ------------------------------------- ------------------------------------------ Equity ............. 18.08% 3.20% 11.91% 11.49% 13.00% 2.09% 11.14% 11.04% Balanced ........... 11.28 4.65 10.47 10.34 6.56 3.55 9.75 9.69 Intermediate Bond .. 1.95 6.47 6.64 6.32 (2.22) 5.54 6.18 5.96 SmallCap Equity .... 11.00 (5.51) -- 4.88 6.46 (6.34) -- 4.22 Realty ............. 22.47 17.60 -- 9.58 17.27 16.45 -- 8.82 Mighty Mites(SM) ... 13.55 10.99 -- 13.06 8.76 9.93 -- 12.21 CLASS B SHARES CLASS C SHARES - --------------------------------------------------------- --------------------------------------------------------- Average Annual Returns -- September 30, 2004 (a)(c)(e) Average Annual Returns -- September 30, 2004 (a)(d)(e) Since Since 1 Year 5 Year 10 Year Inception 1 Year 5 Year 10 Year Inception ------------------------------------- ------------------------------------------ Equity ............. 12.20% 2.49% 11.46% 11.21% 16.11% 2.65% 11.45% 11.21% Balanced ........... 5.41 3.94 10.05 9.92 9.48 4.22 10.11 9.96 Intermediate Bond .. (3.72) 5.70 6.34 6.08 0.46 6.00 6.41 6.14 SmallCap Equity .... 5.34 (6.16) -- 4.54 9.31 (5.70) -- 4.74 Realty ............. 16.83 17.17 -- 9.36 20.71 17.40 -- 9.45 Mighty Mites(SM) ... 7.69 10.31 -- 12.63 11.74 10.48 -- 12.65 <FN> (a) TOTAL RETURNS AND AVERAGE ANNUAL RETURNS REFLECT CHANGES IN SHARE PRICE AND REINVESTMENT OF DIVIDENDS AND ARE NET OF EXPENSES. OF COURSE, RETURNS REPRESENT PAST PERFORMANCE AND DO NOT GUARANTEE FUTURE RESULTS. INVESTMENT RETURNS AND THE PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE. WHEN SHARES ARE REDEEMED THEY MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA PRESENTED. VISIT WWW.GABELLI.COM FOR PERFORMANCE INFORMATION AS OF THE MOST RECENT MONTH-END. INVESTORS SHOULD CONSIDER THE INVESTMENT OBJECTIVES, RISKS AND CHARGES AND EXPENSES OF THE FUND CAREFULLY BEFORE INVESTING. THE PROSPECTUS CONTAINS MORE COMPLETE INFORMATION ABOUT THIS AND OTHER MATTERS AND SHOULD BE READ CAREFULLY BEFORE INVESTING. (b) INCLUDES THE EFFECT OF THE MAXIMUM 4.0% SALES CHARGE AT THE BEGINNING OF THE PERIOD. (c) INCLUDES THE EFFECT OF THE APPLICABLE CONTINGENT DEFERRED SALES CHARGE UPON REDEMPTION OF CLASS B SHARES WITHIN 72 MONTHS. (d) INCLUDES THE EFFECT OF THE APPLICABLE CONTINGENT DEFERRED SALES CHARGE UPON REDEMPTION OF CLASS C SHARES WITHIN 12 MONTHS. (e) THE PERFORMANCE OF THE CLASS AAA SHARES IS USED TO CALCULATE PERFORMANCE FOR THE PERIODS PRIOR TO THE ISSUANCE OF CLASS A SHARES, CLASS B SHARES AND CLASS C SHARES. THE PERFORMANCE FOR THE CLASS B SHARES AND CLASS C SHARES WOULD HAVE BEEN LOWER DUE TO THE ADDITIONAL EXPENSES ASSOCIATED WITH THESE CLASSES OF SHARES. THE INCEPTION DATES FOR THE CLASS AAA SHARES AND THE INITIAL ISSUANCE DATES FOR THE CLASS A SHARES, CLASS B SHARES AND CLASS C SHARES AFTER WHICH SHARES REMAINED CONTINUOUSLY OUTSTANDING ARE LISTED BELOW. </FN> Class AAA Shares Class A Shares Class B Shares Class C Shares ---------------- --------------- -------------- -------------- Equity ..................... 01/02/87 01/28/94 03/27/01 02/13/01 Balanced ................... 10/01/91 04/06/93 03/27/01 09/25/01 Intermediate Bond .......... 10/01/91 07/26/01 03/27/01 10/22/01 SmallCap Equity ............ 04/15/97 11/26/01 03/27/01 11/26/01 Realty ..................... 09/30/97 05/09/01 11/26/01 11/26/01 Mighty Mites(SM) ............. 05/11/98 11/26/01 06/06/01 08/03/01 1 EQUITY FUND PERFORMANCE DISCUSSION For the twelve months ended September 30, 2004, the Equity Fund's Class AAA Shares posted a return of 18.08% versus a 16.41% for the average Large-Cap Value fund tracked by Lipper Inc. The Fund ranked in the top quartile of this Lipper fund peer group. The Standard & Poor's (S&P) 500 Index returned 13.86% during the past twelve months, trailing the Fund by approximately 4%. After an 8.3% third quarter Gross Domestic Product (GDP) reading and accelerated growth in corporate earnings, large cap equities concluded the 2003 calendar year with exceptional performance. Subsequently, however, uncertainty has concerned investors with an early identification of the policy differences of the Presidential nominees, a continuation of violence in Iraq, and three consecutive 25 basis point increases in the Fed Funds rate. Combining these factors with sharp energy price increases, rational investors began to factor into equity prices a slower growth rate in both GDP and corporate profits. From mid-March through September, the return of the S&P 500 Index was nearly zero while the Fund returned over 4%. The S&P 500 Index declined 1.87% in the final three months of the period as the Fund increased slightly below 1%. Several factors contributing to the strong performance of the Fund during the fiscal year and to its outperformance of the S&P 500 Index were: o An overweight position in top performing Energy stocks such as integrated oil companies ChevronTexaco, ConocoPhillips, and Exxon Mobil as well as independent exploration & production companies Apache and Burlington Resources. o An underweight position in Health Care and Consumer Discretionary sectors. o Stock selection in Technology (Apple in particular). o Exposure to the strength in metal prices spurred by Chinese demand in the past year (Alcoa). Stock selection in the Health Care, Consumer Discretionary and Utilities sectors were a negative factor that overall had very little impact. Stocks contributing the least to performance were Merck, LeapFrog, St. Paul's and Wyeth. - ----------------------------------------------------------------------------------------------------------------- AVERAGE ANNUAL RETURNS THROUGH SEPTEMBER 30, 2004* -------------------------------------------------- SINCE INCEPTION 6 MONTHS 1 YEAR 3 YEAR 5 YEAR 10 YEAR 15 YEAR (1/2/87) -------- ------ ------ ------ ------- ------- -------- EQUITY FUND CLASS AAA ............ 3.79% 18.08% 4.86% 3.20% 11.91% 10.55% 11.49% S&P 500 Index .................... (0.18) 13.86 4.04 (1.31) 11.08 10.42 11.59 Lipper Large-Cap Value Average ... 0.52 16.41 4.62 2.50 10.06 9.82 10.57 <FN> * 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 S&P 500 INDEX IS AN UNMANAGED INDICATOR OF STOCK MARKET PERFORMANCE, WHILE THE LIPPER AVERAGE REFLECTS THE AVERAGE PERFORMANCE OF MUTUAL FUNDS CLASSIFIED IN THIS PARTICULAR CATEGORY. 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 CAREFULLY BEFORE INVESTING. THE PROSPECTUS CONTAINS MORE COMPLETE INFORMATION ABOUT THIS AND OTHER MATTERS AND SHOULD BE READ CAREFULLY BEFORE INVESTING. PERFORMANCE RETURNS FOR PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED. SEE PAGE 1 FOR FURTHER DETAILS ABOUT ADDITIONAL CLASSES OF SHARES. </FN> - ----------------------------------------------------------------------------------------------------------------- 2 COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE EQUITY FUND CLASS AAA AND S&P 500 INDEX - -------------------------------------------------------------------------------- Average Annual Total Return* - -------------------------------------------------------------------------------- 1 Year 5 Year 10 Year Life of Fund - -------------------------------------------------------------------------------- Class AAA 18.08% 3.20% 11.91% 11.49% - -------------------------------------------------------------------------------- EDGAR REPRESENTATION OF DATA USED IN PRINTED GRAPHIC [GRAPHIC OMITTED] Equity Fund (Class AAA) S&P 500 Index 1/2/87 $10,000 $10,000 9/87 $13,148 $13,585 9/88 $11,779 $11,902 9/89 $15,323 $15,823 9/90 $13,700 $14,361 9/91 $16,386 $18,826 9/92 $17,068 $20,905 9/93 $20,509 $23,616 9/94 $22,384 $24,485 9/95 $28,170 $31,760 9/96 $35,742 $38,213 9/97 $49,899 $53,663 9/98 $49,185 $58,536 9/99 $58,909 $74,803 9/00 $70,273 $84,729 9/01 $59,809 $62,183 9/02 $50,754 $49,454 9/03 $58,413 $61,506 9/04 $68,974 $70,030 * PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. The performance tables and graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. BALANCED FUND PERFORMANCE DISCUSSION For the twelve months ended September 30, 2004, the Balanced Fund's Class AAA Shares posted a return of 11.28% versus a return of 9.20% for the average balanced fund tracked by Lipper Inc. Within that peer group, the Fund ranked in the top 20% for the fiscal year and the top 18% for the five year period ended September 30, 2004. The Fund also exceeded a common balanced benchmark comprised of 60% S&P 500 Index and 40% Lehman Brothers Government/Corporate Bond Index that returned 9.65%. The Fund is designed to provide exposure to equities with reduced overall risk (volatility) through investment in short-to-intermediate fixed income securities. With that fixed income maturity proviso, factors affecting the performance discussed above for the Equity Fund and the following discussion for Intermediate Bond Fund, also apply to their respective components in the Balanced Fund. 3 - ----------------------------------------------------------------------------------------------------------------- AVERAGE ANNUAL RETURNS THROUGH SEPTEMBER 30, 2004* -------------------------------------------------- SINCE INCEPTION 6 MONTHS 1 YEAR 3 YEAR 5 YEAR 10 YEAR (10/1/91) -------- ------ ------ ------ ------- --------- BALANCED FUND CLASS AAA ................ 2.44% 11.28% 5.52% 4.65% 10.47% 10.34% 60% S&P 500 Index & 40% Lehman Bros. Gov't./Corporate Bond Index .... 0.00 9.65 4.95 2.31 9.75 9.37 Lipper Balanced Fund Average ........... (0.70) 9.20 4.45 2.35 8.34 9.41 <FN> * 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 S&P 500 INDEX IS AN UNMANAGED INDICATOR OF STOCK MARKET PERFORMANCE AND THE LEHMAN GOVERNMENT/CORPORATE BOND INDEX IS A MARKET VALUE-WEIGHTED INDEX THAT TRACKS THE TOTAL RETURN PERFORMANCE OF FIXED-RATE, PUBLICLY PLACED, DOLLAR-DENOMINATED OBLIGATIONS. 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 CAREFULLY BEFORE INVESTING. THE PROSPECTUS CONTAINS MORE COMPLETE INFORMATION ABOUT THIS AND OTHER MATTERS AND SHOULD BE READ CAREFULLY BEFORE INVESTING. PERFORMANCE RETURNS FOR PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED. SEE PAGE 1 FOR FURTHER DETAILS ABOUT ADDITIONAL CLASSES OF SHARES. - ----------------------------------------------------------------------------------------------------------------- </FN> COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE BALANCED FUND CLASS AAA COMPOSITE OF 60% THE S&P 500 INDEX AND 40% THE LEHMAN BROTHERS GOVERNMENT/CORPORATE BOND INDEX - -------------------------------------------------------------------------------- Average Annual Total Return* - -------------------------------------------------------------------------------- 1 Year 5 Year 10 Year Life of Fund - -------------------------------------------------------------------------------- Class AAA 11.28% 4.65% 10.47% 10.34% - -------------------------------------------------------------------------------- EDGAR REPRESENTATION OF DATA USED IN PRINTED GRAPHIC [GRAPHIC OMITTED] 60% S&P 500 and 40% Lehman Bros. Balanced Fund (Class AAA) Gov't./Corp. Bond Index 10/1/91 $10,000 $10,000 9/92 $10,797 $11,192 9/93 $12,622 $12,575 9/94 $13,291 $12,644 9/95 $16,212 $15,624 9/96 $19,297 $17,810 9/97 $24,762 $22,814 9/98 $25,460 $25,229 9/99 $28,658 $29,272 9/00 $32,495 $32,392 9/01 $30,620 $28,926 9/02 $29,062 $26,439 9/03 $32,325 $30,994 9/04 $35,956 $33,984 * PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. The performance tables and graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 4 INTERMEDIATE BOND FUND PERFORMANCE DISCUSSION For the twelve months ended September 30, 2004, the Intermediate Bond Fund's Class AAA Shares returned 1.95% versus a return of 3.23% for the average intermediate bond fund tracked by Lipper Inc. The Lehman Brothers Government/Corporate Bond Index returned 3.33% for the same period. Treasury yields again ended the fiscal year below 5%; however, the yield curve flattened to reflect Federal Fund increases in the shorter maturities. The 30-year bond yield was essentially unchanged in comparison to one year earlier; yields increased an average of 1.00% on notes maturing in less than three years, while Treasury bill yields increased 75 basis points in step with Federal Reserve actions. Although the twelve-month average yield was 4.30% on the 10-year Treasury note, which serves as a benchmark for longer mortgage rates, it was exceptionally volatile. In March it rallied to 3.70%, in June it spiked to 4.89%, and then it rallied to end the year at 4.12%. During the closing six months the Lehman Index returned only 0.27%. For the year, spread sectors (those priced at a spread above similar maturity Treasury yields) outperformed the Treasury sector of the investment grade bond market. Securitized sectors (MBS -- backed by residential mortgages, CMBS -- backed by commercial mortgages, and ABS -- backed by credit cards, auto, home equity and manufactured housing loans) lagged the credit sectors: Utility, Industrial, Financial Institutions, and Non-Corporate. The longer duration investment grade corporate market benefited from a search for yield by investors. Utility and Financial Institutions were the top performing sectors, and long corporate bonds led all other maturity groups. During the fiscal year, the Fund maintained an underweight in long-duration securities and an overweight in higher rated corporate notes, both of which dampened performance. Fund relative performance was positively affected by holdings in CMBS and MBS, both of which outperformed the Lehman Brothers Government/Corporate Bond Index and U.S. Governments. Within the U.S. Treasury sector, maturity selection and an underweight position both benefited the Fund. - ----------------------------------------------------------------------------------------------------------------- AVERAGE ANNUAL RETURNS THROUGH SEPTEMBER 30, 2004* -------------------------------------------------- SINCE INCEPTION 6 MONTHS 1 YEAR 3 YEAR 5 YEAR 10 YEAR (10/1/91) -------- ------ ------ ------ ------- --------- INTERMEDIATE BOND FUND CLASS AAA ....... (0.02)% 1.95% 4.50% 6.47% 6.64% 6.32% Lehman Bros. Gov't./Corporate Bond Index ........................... 0.27 3.33 6.32 7.74 7.76 7.48 Lipper Int. Investment Grade Debt Fund Average ......................... 0.41 3.23 5.14 6.62 6.85 6.90 <FN> * 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 LEHMAN GOVERNMENT/CORPORATE BOND INDEX IS A MARKET VALUE-WEIGHTED INDEX THAT TRACKS THE PERFORMANCE OF FIXED-RATE, PUBLICLY PLACED, DOLLAR-DENOMINATED OBLIGATIONS, 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 CAREFULLY BEFORE INVESTING. THE PROSPECTUS CONTAINS MORE COMPLETE INFORMATION ABOUT THIS AND OTHER MATTERS AND SHOULD BE READ CAREFULLY BEFORE INVESTING. PERFORMANCE RETURNS FOR PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED. SEE PAGE 1 FOR FURTHER DETAILS ABOUT ADDITIONAL CLASSES OF SHARES. - ----------------------------------------------------------------------------------------------------------------- </FN> 5 COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE INTERMEDIATE BOND FUND CLASS AAA AND THE LEHMAN BROTHERS GOVERNMENT/CORPORATE BOND INDEX - -------------------------------------------------------------------------------- Average Annual Total Return* - -------------------------------------------------------------------------------- 1 Year 5 Year 10 Year Life of Fund - -------------------------------------------------------------------------------- Class AAA 1.95% 6.47% 6.64% 6.32% - -------------------------------------------------------------------------------- EDGAR REPRESENTATION OF DATA USED IN PRINTED GRAPHIC [GRAPHIC OMITTED] Intermediate Bond Fund Lehman Bros. Gov't./ (Class AAA) Corp. Bond Index 10/1/91 $10,000 $10,000 9/92 $11,186 $11,323 9/93 $12,331 $12,618 9/94 $11,658 $12,096 9/95 $12,956 $13,832 9/96 $13,539 $14,454 9/97 $15,077 $15,842 9/98 $16,612 $17,876 9/99 $16,218 $17,586 9/00 $17,256 $18,772 9/01 $19,442 $21,244 9/02 $21,172 $23,200 9/03 $21,772 $24,711 9/04 $22,194 $25,534 * PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. The performance tables and graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. SMALLCAP EQUITY FUND PERFORMANCE DISCUSSION For the twelve months ended September 30, 2004, the Small Cap Equity Fund's Class AAA Shares produced a return of 11.00%, versus a 9.15% return for the Lipper Small Cap Growth Fund Average and an 18.77% return for the Russell 2000 Index. The Russell 2000 Index exceeded the S&P 500 Index by almost 5% during the past twelve months. Although the Fund did not exceed the Russell 2000 Index for the fiscal year as a whole, during the challenging market period since March, it outperformed by 680 basis points (6.80% excess return). For the fiscal year, the Fund ranked in the top 41% of its Lipper peer group; for the closing three months the Fund ranked in the top 1%. As in the larger cap index, the small cap Energy sector produced stellar returns over 70%. Materials and Processing followed with a 45% return, but Technology finished last for the fiscal year down 5%. Positive factors for fiscal year Fund performance relative to the Russell 2000 Index included: (1) an overweight position in Energy as well as stock selection that produced performance above 90%, and (2) superior stock selection in both Financial Services and Consumer Discretionary sectors. The major negatives were stock selection in Health Care and Technology combined with an overweight in Technology. Top performing stocks included Ceradyne Inc. (Basic Materials), crude oil producer Quicksilver Resources, Inc., computer software company SS&C Technologies Inc., machinery company Middleby Corp., and Shuffle Master Inc. (Consumer Discretionary). The following bottom performers were all sold during the year: health care company Merit Medical Systems, telecommunications-related companies Comtech Telecommunications Corp. (Technology) and CalAmp Corp. (Producer Durables), and semi-conductor-related companies OmniVision Technologies (Technology) and August Technology Corp. (Producer Durables). 6 - ----------------------------------------------------------------------------------------------------------------- AVERAGE ANNUAL RETURNS THROUGH SEPTEMBER 30, 2004* -------------------------------------------------- SINCE INCEPTION 6 MONTHS 1 YEAR 3 YEAR 5 YEAR (4/15/97) -------- ------ ------ ------ --------- SMALLCAP EQUITY FUND CLASS AAA ............. 4.37% 11.00% 0.82% (5.51)% 4.88% Russell 2000 Index ......................... (2.40) 18.77 13.71 7.41 8.61 Russell 2000 Growth Index .................. (5.92) 11.92 9.09 (0.68) 4.04 Lipper Small-Cap Growth Average ............ (6.57) 9.15 6.70 1.71 7.33 <FN> * 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 INDEX IS AN UNMANAGED INDICATOR OF STOCK MARKET PERFORMANCE, WHILE THE LIPPER AVERAGE REFLECTS THE AVERAGE PERFORMANCE OF MUTUAL FUNDS CLASSIFIED IN THIS PARTICULAR CATEGORY. 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 CAREFULLY BEFORE INVESTING. THE PROSPECTUS CONTAINS MORE COMPLETE INFORMATION ABOUT THIS AND OTHER MATTERS AND SHOULD BE READ CAREFULLY BEFORE INVESTING. PERFORMANCE RETURNS FOR PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED. SEE PAGE 1 FOR FURTHER DETAILS ABOUT ADDITIONAL CLASSES OF SHARES. - ----------------------------------------------------------------------------------------------------------------- </FN> COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE SMALLCAP EQUITY FUND CLASS AAA, THE RUSSELL 2000 INDEX AND THE RUSSELL 2000 GROWTH INDEX - -------------------------------------------------------------------------------- Average Annual Total Return* - -------------------------------------------------------------------------------- 1 Year 3 Year 5 Year Life of Fund - -------------------------------------------------------------------------------- Class AAA 11.00% 0.82% (5.51)% 4.88% - -------------------------------------------------------------------------------- EDGAR REPRESENTATION OF DATA USED IN PRINTED GRAPHIC [GRAPHIC OMITTED] SmallCap Equity Fund Russell 2000 Russell 2000 Growth (Class AAA) Index Index 4/15/97 $10,000 $10,000 $10,000 9/30/97 $14,480 $13,410 $13,942 9/30/98 $11,923 $10,859 $10,480 9/30/99 $18,950 $12,930 $13,900 9/30/00 $24,512 $15,955 $18,024 9/30/01 $13,930 $12,571 $10,348 9/30/02 $11,777 $11,402 $8,468 9/30/03 $12,861 $15,563 $12,001 9/30/04 $14,276 $18,484 $13,432 * PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. The performance tables and graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. REALTY FUND PERFORMANCE DISCUSSION For the twelve months ended September 30, 2004, the Realty Fund's Class AAA Shares produced a return of 22.47% and the National Association of Real Estate Investment Trusts (NAREIT) Index gained 25.59%. The average return of realty funds tracked by Lipper Inc. was 25.05%. 7 For a second consecutive year the Real Estate Investment Trust (REIT) asset class extended its stellar performance, topping both the S&P 500 Index and the Russell 2000 Index. Led by Outlet Center and Regional Mall properties, all but two sectors of the NAREIT beat the S&P 500 Index and six sectors finished the fiscal year above the Russell 2000 Index. Income contributed one-quarter of the NAREIT Index return. On September 30, 2004, the dividend yield of the Index was 5.12%. Positively contributing factors to Fund performance included: o Security selection in Apartments, Diversified, Lodging/Resorts, Manufactured Homes, Self Storage and Shopping Centers sectors. o Exposure to commodities during a period in which returns on hard assets significantly exceeded those on equities and bonds. o Increased commitment to Apartments and an underweight in Health Care stocks. Detracting from relative Fund performance were overweight positions in Mortgage and Industrial REIT sectors combined with security selection in the Specialty sector. In this very strong period for REITs, only two holdings negatively contributed to performance - Apartment Investment & Management and mortgage REIT Friedman, Billings, Ramsey Group Inc. Among positive contributors, regional mall owner Simon Property Group produced a total return of over 25% and contributed 1% to the return of the RealtyFund.Other strong performing securities included Vornado Realty Trust (diversified) and General Growth Properties Inc. (regional mall), followed by commodity-related Plum Creek Timber Co. Inc. (REIT) and Rayonier Inc. (REIT), and office REITs Alexandria Real Estate Equities Inc. and Boston Properties Inc. - ----------------------------------------------------------------------------------------------------------------- AVERAGE ANNUAL RETURNS THROUGH SEPTEMBER 30, 2004* -------------------------------------------------- SINCE INCEPTION 6 MONTHS 1 YEAR 3 YEAR 5 YEAR (9/30/97) -------- ------ ------ ------ --------- REALTY FUND CLASS AAA ...................... 0.81% 22.47% 17.38% 17.60% 9.58% NAREIT Composite REIT Index ................ 1.04 25.59 20.35 18.80 9.17 Lipper Real Estate Fund Average ............ 1.80 25.05 19.51 17.98 9.14 <FN> * 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 NAREIT INDEX IS AN UNMANAGED INDICATOR OF REITS 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 CAREFULLY BEFORE INVESTING. THE PROSPECTUS CONTAINS MORE COMPLETE INFORMATION ABOUT THIS AND OTHER MATTERS AND SHOULD BE READ CAREFULLY BEFORE INVESTING. PERFORMANCE RETURNS FOR PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED. SEE PAGE 1 FOR FURTHER DETAILS ABOUT ADDITIONAL CLASSES OF SHARES. - ----------------------------------------------------------------------------------------------------------------- </FN> 8 COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE REALTY FUND CLASS AAA, THE RUSSELL 2000 INDEX AND THE NATIONAL ASSOCIATION OF REITS COMPOSITE REIT INDEX - -------------------------------------------------------------------------------- Average Annual Total Return* - -------------------------------------------------------------------------------- 1 Year 3 Year 5 Year Life of Fund - -------------------------------------------------------------------------------- Class AAA 22.47% 17.38% 17.60% 9.58% - -------------------------------------------------------------------------------- EDGAR REPRESENTATION OF DATA USED IN PRINTED GRAPHIC [GRAPHIC OMITTED] Realty Fund (Class AAA) Russell 2000 Index NARIT Composite REIT Index 9/30/97 $10,000 $10,000 $10,000 9/30/98 $8,950 $8,098 $8,540 9/30/99 $8,442 $9,642 $7,810 9/30/00 $10,541 $11,898 $9,327 9/30/01 $11,741 $9,374 $10,602 9/30/02 $12,622 $8,502 $11,633 9/30/03 $15,503 $11,606 $14,718 9/30/04 $18,986 $13,784 $18,483 * PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. The performance tables and graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. MIGHTY MITES(SM) FUND PERFORMANCE DISCUSSION Micro cap stocks underperformed large cap stocks, as measured by the S&P 500 Index, in the third quarter, perhaps in response to Federal Reserve interest rate hikes. Historically, small company stocks have lagged during periods when liquidity is being drained from the financial system. However, we believe the Fed is simply raising artificially low short-term interest rates up to more normalized levels and that this should not present a financial problem for small companies. In general, investor anxiety over record high oil prices and uncertainty created by the close presidential election took a toll on stocks. The Fund closed the quarter with a 2.5% loss versus the Russell 2000 Index's 2.9% decline. During the last twelve months, the Fund gained 13.55% compared to the Russell 2000 Index's 18.77% advance over the same period. As could be expected with record high energy prices, energy sector holdings such as Petroleum Development Corp., Stolt Offshore and RPC were among our best performers during the trailing twelve months. Homebuilders and building supplies companies such as Nobility Homes, Southern Energy Homes, Cavalier and Cavco also performed well during the fiscal year, as the new housing market remained strong. In general, our industrial holdings also contributed to returns as Lamson & Sessions and Baldwin Technology appreciated considerably during the past twelve months. Small group broadcasters such as Paxson Communications, Young Broadcasting and Acme Communications continued to disappoint as advertising spending remained soft. Other laggards included medical device maker BioLase Technology and aircraft parts supplier Fairchild Corp. 9 - ----------------------------------------------------------------------------------------------------------------- AVERAGE ANNUAL RETURNS THROUGH SEPTEMBER 30, 2004* -------------------------------------------------- SINCE INCEPTION 6 MONTHS 1 YEAR 3 YEAR 5 YEAR (5/11/98) -------- ------ ------ ------ --------- MIGHTY MITES(SM) FUND CLASS AAA ........... (1.12)% 13.55% 12.11% 10.99% 13.06% Russell 2000 Index ........................ (2.40) 18.77 13.71 7.41 4.27 Lipper Small-Cap Value Average ............ 0.88 23.87 17.04 14.28 7.57 <FN> * 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 INDEX IS AN UNMANAGED INDICATOR OF STOCK MARKET PERFORMANCE, WHILE THE LIPPER AVERAGE REFLECTS THE AVERAGE PERFORMANCE OF MUTUAL FUNDS CLASSIFIED IN THIS PARTICULAR CATEGORY. CURRENT PERFORMANCE MAY BE HIGHER OR LOWER THAN THE PERFORMANCE DATA PRESENTED. VISIT WWW.GABELLI.COM FOR MORE RECENT PERFORMANCE INFORMATION. INVESTORS SHOULD CONSIDER THE INVESTMENT OBJECTIVES, RISKS AND CHARGES AND EXPENSES OF THE FUND CAREFULLY BEFORE INVESTING. THE PROSPECTUS CONTAINS MORE COMPLETE INFORMATION ABOUT THIS AND OTHER MATTERS AND SHOULD BE READ CAREFULLY BEFORE INVESTING. PERFORMANCE RETURNS FOR PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED. SEE PAGE 1 FOR FURTHER DETAILS ABOUT ADDITIONAL CLASSES OF SHARES. - ----------------------------------------------------------------------------------------------------------------- </FN> COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE MIGHTY MITES(SM) FUND CLASS AAA AND THE RUSSELL 2000 INDEX - -------------------------------------------------------------------------------- Average Annual Total Return* - -------------------------------------------------------------------------------- 1 Year 3 Year 5 Year Life of Fund - -------------------------------------------------------------------------------- Class AAA 13.55% 12.11% 10.99% 13.06% - -------------------------------------------------------------------------------- EDGAR REPRESENTATION OF DATA USED IN PRINTED GRAPHIC [GRAPHIC OMITTED] Mighty Mites(SM) Fund (Class AAA) Russell 2000 Index 5/11/98 $10,000 $10,000 9/30/98 $9,700 $7,660 9/30/99 $13,018 $9,121 9/30/00 $16,010 $11,254 9/30/01 $15,567 $8,867 9/30/02 $16,128 $8,042 9/30/03 $19,314 $10,978 9/30/04 $21,915 $13,039 * PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. The performance tables and graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 10 THE GABELLI WESTWOOD FUNDS DISCLOSURE OF FUND EXPENSES (UNAUDITED) For the Six Month Period from April 1, 2004 through September 30, 2004 EXPENSE TABLE ================================================================================ We believe it is important for you to understand the impact of fees and expenses regarding your investment. All mutual funds have operating expenses. As a shareholder of a fund, you incur ongoing costs, which include costs for portfolio management, administrative services, and shareholder reports (like this one), among others. Operating expenses, which are deducted from a fund's gross income, directly reduce the investment return of the fund. When a fund's expenses are expressed as a percentage of its average net assets, this figure is known as the expense ratio. The following examples are intended to help you understand the ongoing fees (in dollars) of investing in your Fund and to compare these costs with those of other mutual funds. The examples are based on an investment of $1,000 made at the beginning of the period shown and held for the entire period. The Expense Table below illustrates your Fund's costs in two ways: ACTUAL FUND RETURN: This section helps you to estimate the actual expenses that you paid over the period after any fee waivers and expense reimbursements. The "Ending Account Value" shown is derived from the Fund's ACTUAL return, and the "Expenses Paid During Period" shows the dollar amount that would have been paid by an investor who started with $1,000 in the Fund. You may use this information, together with the amount you invested, to estimate the expenses that you paid over the period. To do so, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number given for your Fund under the heading "Expenses Paid During Period." HYPOTHETICAL 5% RETURN: This section is intended to help you compare your Fund's costs with those of other mutual funds. It assumes that the Fund had a return of 5% before expenses during the period shown, but that the expense ratio is unchanged. In this case -- because the return used is NOT the Fund's actual return -- the results do not apply to your investment. This example is useful in making comparisons because the Securities and Exchange Commission requires all mutual funds to calculate expenses based on a 5% return. You can assess your Fund's costs by comparing this hypothetical example with the hypothetical examples that appear in shareholder reports of other funds. Please note that the expenses shown in the table are meant to highlight and help you compare your ongoing costs only and do not reflect any transactional costs such as sales charges (loads), and redemption fees, which are described in the Prospectus. If these costs were applied to your account, your costs would be higher. The "Annualized Expense Ratio" represents the actual expenses for the period and may be different from the expense ratio in the Financial Highlights which is for the year ended September 30, 2004. Beginning Ending Annualized Expenses Account Value Account Value Expense Paid During 4/1/04 9/30/04 Ratio Period* - -------------------------------------------------------------------------------- EQUITY FUND - -------------------------------------------------------------------------------- Actual Fund Return Class AAA $1,000.00 $1,037.90 1.47% $ 7.49 Class A $1,000.00 $1,036.90 1.72% $ 8.76 Class B $1,000.00 $1,034.80 2.22% $11.29 Class C $1,000.00 $1,034.70 2.22% $11.29 Hypothetical 5% Return Class AAA $1,000.00 $1,017.65 1.47% $ 7.41 Class A $1,000.00 $1,016.40 1.72% $ 8.67 Class B $1,000.00 $1,013.90 2.22% $11.18 Class C $1,000.00 $1,013.90 2.22% $11.18 11 THE GABELLI WESTWOOD FUNDS DISCLOSURE OF FUND EXPENSES (CONTINUED) (UNAUDITED) For the Six Month Period from April 1, 2004 through September 30, 2004 EXPENSE TABLE ================================================================================ Beginning Ending Annualized Expenses Account Value Account Value Expense Paid During 4/1/04 9/30/04 Ratio Period* - -------------------------------------------------------------------------------- BALANCED FUND - -------------------------------------------------------------------------------- Actual Fund Return Class AAA $1,000.00 $1,024.00 1.22% $ 6.17 Class A $1,000.00 $1,023.40 1.47% $ 7.44 Class B $1,000.00 $1,020.40 1.97% $ 9.95 Class C $1,000.00 $1,020.40 1.97% $ 9.95 Hypothetical 5% Return Class AAA $1,000.00 $1,018.90 1.22% $ 6.16 Class A $1,000.00 $1,017.65 1.47% $ 7.41 Class B $1,000.00 $1,015.15 1.97% $ 9.92 Class C $1,000.00 $1,015.15 1.97% $ 9.92 - -------------------------------------------------------------------------------- INTERMEDIATE BOND FUND - -------------------------------------------------------------------------------- Actual Fund Return Class AAA $1,000.00 $ 999.80 1.00% $ 5.00 Class A $1,000.00 $ 999.20 1.10% $ 5.50 Class B $1,000.00 $ 996.00 1.75% $ 8.73 Class C $1,000.00 $1,011.40 1.75% $ 8.80 Hypothetical 5% Return Class AAA $1,000.00 $1,020.00 1.00% $5.05 Class A $1,000.00 $1,019.50 1.10% $5.55 Class B $1,000.00 $1,016.25 1.75% $8.82 Class C $1,000.00 $1,016.25 1.75% $8.82 - -------------------------------------------------------------------------------- SMALLCAP EQUITY FUND - -------------------------------------------------------------------------------- Actual Fund Return Class AAA $1,000.00 $1,043.70 1.50% $7.66 Class A $1,000.00 $1,042.50 1.75% $8.94 Class B $1,000.00 $1,039.90 2.25% $11.47 Class C $1,000.00 $1,040.50 2.25% $11.48 Hypothetical 5% Return Class AAA $1,000.00 $1,017.50 1.50% $7.57 Class A $1,000.00 $1,016.25 1.75% $8.82 Class B $1,000.00 $1,013.75 2.25% $11.33 Class C $1,000.00 $1,013.75 2.25% $11.33 Beginning Ending Annualized Expenses Account Value Account Value Expense Paid During 4/1/04 9/30/04 Ratio Period* - -------------------------------------------------------------------------------- THE REALTY FUND - -------------------------------------------------------------------------------- Actual Fund Return Class AAA $1,000.00 $1,008.10 1.50% $7.53 Class A $1,000.00 $1,007.20 1.75% $8.78 Class B $1,000.00 $1,005.60 2.25% $11.28 Class C $1,000.00 $1,004.70 2.25% $11.28 Hypothetical 5% Return Class AAA $1,000.00 $1,017.50 1.50% $7.57 Class A $1,000.00 $1,016.25 1.75% $8.82 Class B $1,000.00 $1,013.75 2.25% $11.33 Class C $1,000.00 $1,013.75 2.25% $11.33 - -------------------------------------------------------------------------------- MIGHTY MITES(SM) FUND - -------------------------------------------------------------------------------- Actual Fund Return Class AAA $1,000.00 $988.80 1.50% $7.46 Class A $1,000.00 $987.60 1.75% $8.70 Class B $1,000.00 $984.70 2.25% $11.16 Class C $1,000.00 $985.30 2.25% $11.17 Hypothetical 5% Return Class AAA $1,000.00 $1,017.50 1.50% $7.57 Class A $1,000.00 $1,016.25 1.75% $8.82 Class B $1,000.00 $1,013.75 2.25% $11.33 Class C $1,000.00 $1,013.75 2.25% $11.33 * Expenses are equal to the Fund's annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, then divided by 366. - -------------------------------------------------------------------------------- We have separated the portfolio manager's commentary from the financial statements and investment portfolio due to new corporate governance regulations stipulated by the Sarbanes-Oxley Act of 2002. We have done this to ensure that the content of the portfolio manager's commentary is unrestricted. The financial statements and investment portfolio are mailed separately from the commentary. Both the commentary and the financial statements, including the portfolio of investments, will be available on our website at www.gabelli.com/funds. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 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 without charge (i) 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. - -------------------------------------------------------------------------------- 12 SUMMARY OF PORTFOLIO HOLDINGS (UNAUDITED) The SEC adopted a requirement that all Funds present their categories of portfolio holdings in a table, chart or graph format in their annual and semi-annual shareholder reports, whether or not a schedule of investments is utilized. The following tables which present portfolio holdings as a percent of total net assets are provided in compliance with such requirement. - -------------------------------------------------------------------------------- EQUITY FUND - -------------------------------------------------------------------------------- Financial Services ................................................. 18.1% Energy and Utilities: Integrated ................................... 9.0% Energy and Utilities: Oil .......................................... 7.6% Telecommunications ................................................. 6.5% Metals and Mining .................................................. 5.4% Energy and Utilities: Natural Gas .................................. 5.2% Aerospace .......................................................... 5.1% Diversified Industrial ............................................. 5.1% Paper and Forest Products .......................................... 4.9% Health Care ........................................................ 4.2% Consumer Products .................................................. 3.7% Food and Beverage .................................................. 3.6% Hotels and Gaming .................................................. 2.7% Aviation: Parts and Services ....................................... 2.5% Computer Hardware .................................................. 2.5% Computer Software and Services ..................................... 2.5% Communications Equipment ........................................... 1.6% Cable .............................................................. 1.3% Energy and Utilities: Water ........................................ 1.3% Retail ............................................................. 1.3% Specialty Chemicals ................................................ 1.3% Transportation ..................................................... 1.3% Real Estate ........................................................ 1.2% Electronics ........................................................ 0.6% Other Assets and Liabilities (Net) ................................. 1.5% ------ 100.0% ====== - -------------------------------------------------------------------------------- BALANCED FUND - -------------------------------------------------------------------------------- U.S. Government Agency Obligations ................................. 16.7% Financial Services ................................................. 13.9% U.S. Government Obligations ........................................ 11.5% Energy and Utilities: Integrated ................................... 6.3% Energy and Utilities: Oil .......................................... 5.3% Telecommunications ................................................. 4.1% Diversified Industrial ............................................. 3.6% Consumer Products .................................................. 3.4% Metals and Mining .................................................. 2.9% Food and Beverage .................................................. 2.8% Aerospace .......................................................... 2.7% Computer Hardware .................................................. 2.7% Paper and Forest Products .......................................... 2.7% Real Estate ........................................................ 2.7% Retail ............................................................. 2.7% Energy and Utilities: Natural Gas .................................. 2.2% Transportation ..................................................... 2.2% Foreign Government Bonds ........................................... 1.5% Hotels and Gaming .................................................. 1.5% Health Care ........................................................ 1.4% Aviation: Parts and Services ....................................... 1.3% Broadcasting ....................................................... 0.7% Cable .............................................................. 0.7% Communications Equipment ........................................... 0.7% Specialty Chemicals ................................................ 0.7% Asset Backed Securities ............................................ 0.6% Other Assets and Liabilities (Net) ................................. 2.5% ------ 100.0% ====== - -------------------------------------------------------------------------------- INTERMEDIATE BOND FUND - -------------------------------------------------------------------------------- Corporate Bonds .................................................... 42.3% U.S. Government Agency Obligations ................................. 31.7% U.S. Government Obligations ........................................ 16.4% Foreign Government Bonds ........................................... 5.1% Asset Backed Securities ............................................ 2.4% Other Assets and Liabilities (Net) ................................. 2.1% ------ 100.0% ====== - -------------------------------------------------------------------------------- SMALLCAP EQUITY FUND - -------------------------------------------------------------------------------- Financial Services ................................................. 16.5% Energy and Utilities ............................................... 11.1% Real Estate ........................................................ 8.4% Diversified Industrial ............................................. 6.3% Retail ............................................................. 5.0% Computer Software and Services ..................................... 4.9% Paper and Forest Products .......................................... 4.3% Transportation ..................................................... 4.3% Aerospace .......................................................... 4.2% Equipment and Supplies ............................................. 4.2% Food and Beverage .................................................. 4.2% Health Care ........................................................ 4.1% Hotels and Gaming .................................................. 3.9% Metals and Mining .................................................. 3.2% Electronics ........................................................ 2.9% Consumer Products .................................................. 2.3% Specialty Chemicals ................................................ 2.1% Aviation: Parts and Services ....................................... 1.9% Educational Services ............................................... 1.4% Automotive ......................................................... 1.1% Publishing ......................................................... 1.0% Other Assets and Liabilities (Net) ................................. 2.7% ------ 100.0% ====== 13 - -------------------------------------------------------------------------------- REALTY FUND - -------------------------------------------------------------------------------- Shopping Centers ................................................... 24.8% Office Property .................................................... 18.0% Apartments ......................................................... 16.1% Diversified Property ............................................... 13.6% Industrial Property ................................................ 6.0% Health Care ........................................................ 3.9% Hotels ............................................................. 3.8% Public Storage ..................................................... 3.3% Paper and Forest Products .......................................... 2.9% Manufactured Housing ............................................... 1.4% Transportation ..................................................... 1.0% Financial Services ................................................. 0.9% Other Assets and Liabilities (Net) ................................. 4.3% ------ 100.0% ====== - -------------------------------------------------------------------------------- MIGHTY MITES(SM) FUND - -------------------------------------------------------------------------------- Health Care ........................................................ 12.6% Manufactured Housing and Recreational Vehicles ........................................... 11.8% Financial Services ................................................. 10.7% Automotive: Parts and Accessories .................................. 6.8% Equipment and Supplies ............................................. 6.6% Consumer Products .................................................. 5.7% Broadcasting ....................................................... 5.0% Diversified Industrial ............................................. 4.8% Business Services .................................................. 3.5% Energy and Utilities: Natural Gas .................................. 3.2% Entertainment ...................................................... 2.9% Real Estate ........................................................ 2.8% Computer Software and Services ..................................... 2.7% Telecommunications ................................................. 2.4% Food and Beverage .................................................. 2.2% Aviation: Parts and Services ....................................... 2.0% Energy and Utilities: Integrated ................................... 1.8% Energy and Utilities: Electric ..................................... 1.6% Energy and Utilities: Water ........................................ 1.3% Publishing ......................................................... 1.3% Specialty Chemicals ................................................ 1.3% Electronics ........................................................ 1.0% Energy and Utilities: Services ..................................... 1.0% Educational Services ............................................... 0.7% Hotels and Gaming .................................................. 0.7% U.S. Government Obligations ........................................ 0.7% Retail ............................................................. 0.5% Building and Construction .......................................... 0.4% Environmental Services ............................................. 0.4% Paper and Forest Products .......................................... 0.4% Transportation ..................................................... 0.3% Cable .............................................................. 0.2% Closed-End Funds ................................................... 0.2% Communications Equipment ........................................... 0.2% Consumer Services .................................................. 0.1% Wireless Communications ............................................ 0.1% Metals and Mining .................................................. 0.0% Other Assets and Liabilities (Net) ................................. 0.1% ------ 100.0% ====== THE FUNDS FILE A COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS WITH THE SEC FOR THE FIRST AND THIRD QUARTERS OF EACH FISCAL YEAR ON FORM N-Q, THE FIRST OF WHICH WILL BE FILED FOR THE QUARTER ENDING DECEMBER 31, 2004. SHAREHOLDERS MAY OBTAIN THIS INFORMATION AT WWW.GABELLI.COM OR BY CALLING THE FUND AT 800-GABELLI(800-422-3554). THE FUNDS' FORM N-Q WILL BE AVAILABLE ON THE SEC'S WEBSITE AT WWW.SEC.GOV AND MAY ALSO BE REVIEWED AND COPIED AT THE COMMISSION'S PUBLIC REFERENCE ROOM IN WASHINGTON, DC. INFORMATION ON THE OPERATION OF THE PUBLIC REFERENCE ROOM MAY BE OBTAINED BY CALLING 1-800-SEC-0330. 14 THE GABELLI WESTWOOD EQUITY FUND SCHEDULE OF INVESTMENTS -- SEPTEMBER 30, 2004 ================================================================================ MARKET SHARES COST VALUE ------ ---- ------ COMMON STOCKS -- 98.5% AEROSPACE -- 5.1% 89,100 Boeing Co. ......................... $ 3,238,818 $ 4,599,342 83,900 Lockheed Martin Corp. .............. 4,363,687 4,679,942 ------------ ------------ 7,602,505 9,279,284 ------------ ------------ AVIATION: PARTS AND SERVICES -- 2.5% 49,800 United Technologies Corp. .......... 2,959,866 4,650,324 ------------ ------------ CABLE -- 1.3% 82,600 Comcast Corp., Cl. A, Special+ ..... 2,315,970 2,306,192 ------------ ------------ COMMUNICATIONS EQUIPMENT -- 1.6% 158,100 Motorola Inc. ...................... 2,974,522 2,852,124 ------------ ------------ COMPUTER HARDWARE -- 2.5% 52,400 International Business Machines Corp. 4,366,414 4,492,776 ------------ ------------ COMPUTER SOFTWARE AND SERVICES -- 2.5% 162,500 Microsoft Corp. .................... 4,399,679 4,493,125 ------------ ------------ CONSUMER PRODUCTS -- 3.7% 46,600 Altria Group Inc. .................. 1,952,041 2,192,064 84,400 Procter & Gamble Co. ............... 3,751,062 4,567,728 ------------ ------------ 5,703,103 6,759,792 ------------ ------------ DIVERSIFIED INDUSTRIAL -- 5.1% 73,600 Eaton Corp. ........................ 3,896,066 4,666,976 138,800 General Electric Co. ............... 3,964,243 4,660,904 ------------ ------------ 7,860,309 9,327,880 ------------ ------------ ELECTRONICS -- 0.6% 26,500 Hubbell Inc., Cl. B ................ 1,081,577 1,187,995 ------------ ------------ ENERGY AND UTILITIES: INTEGRATED -- 9.0% 122,200 Burlington Resources Inc. .......... 3,142,474 4,985,760 58,300 ConocoPhillips ..................... 3,478,925 4,830,155 37,100 Entergy Corp. ...................... 2,188,506 2,248,631 104,360 Progress Energy Inc. ............... 4,455,811 4,418,602 ------------ ------------ 13,265,716 16,483,148 ------------ ------------ ENERGY AND UTILITIES: NATURAL GAS -- 5.2% 97,606 Apache Corp. ....................... 2,659,057 4,891,037 52,700 Nabors Industries Ltd.+ ............ 1,976,380 2,495,345 65,500 XTO Energy Inc. .................... 1,738,960 2,127,440 ------------ ------------ 6,374,397 9,513,822 ------------ ------------ ENERGY AND UTILITIES: OIL -- 7.6% 97,400 ChevronTexaco Corp. ................ 4,304,830 5,224,536 103,900 Exxon Mobil Corp. .................. 4,165,414 5,021,487 41,900 Murphy Oil Corp. ................... 2,037,871 3,635,663 ------------ ------------ 10,508,115 13,881,686 ------------ ------------ ENERGY AND UTILITIES: WATER -- 1.3% 110,475 Aqua America Inc. .................. 2,134,859 2,442,602 ------------ ------------ FINANCIAL SERVICES -- 18.1% 88,200 American Express Co. ............... 3,242,376 4,538,772 102,500 Bank of America Corp. .............. 2,580,600 4,441,325 47,800 Bear Stearns Companies Inc. ........ 3,055,785 4,596,926 104,233 Citigroup Inc. ..................... 4,335,874 4,598,760 61,000 Eaton Vance Corp. .................. 2,124,229 2,463,790 59,984 JPMorgan Chase & Co. ............... 1,852,195 2,383,164 68,000 Lehman Brothers Holdings Inc. ...... 4,967,577 5,420,960 99,300 Prudential Financial Inc. .......... 3,215,364 4,671,072 ------------ ------------ 25,374,000 33,114,769 ------------ ------------ MARKET SHARES COST VALUE ------ ---- ------ FOOD AND BEVERAGE -- 3.6% 84,800 ConAgra Foods Inc. ................. $ 2,041,164 $ 2,180,208 75,500 Dean Foods Co.+ .................... 2,364,415 2,266,510 49,100 General Mills Inc. ................. 2,259,940 2,204,590 ------------ ------------ 6,665,519 6,651,308 ------------ ------------ HEALTH CARE -- 4.2% 91,100 Merck & Co. Inc. ................... 3,982,772 3,006,300 153,000 Pfizer Inc. ........................ 4,778,684 4,681,800 ------------ ------------ 8,761,456 7,688,100 ------------ ------------ HOTELS AND GAMING -- 2.7% 107,700 Starwood Hotels & Resorts Worldwide Inc. ..................... 3,701,854 4,999,434 ------------ ------------ METALS AND MINING -- 5.4% 149,800 Alcoa Inc. ......................... 4,580,578 5,031,782 53,400 Phelps Dodge Corp. ................. 4,300,674 4,914,402 ------------ ------------ 8,881,252 9,946,184 ------------ ------------ PAPER AND FOREST PRODUCTS -- 4.9% 107,500 International Paper Co. ............ 4,396,079 4,344,075 51,828 Rayonier Inc. ...................... 2,046,158 2,344,699 34,800 Temple-Inland Inc. ................. 1,966,753 2,336,820 ------------ ------------ 8,408,990 9,025,594 ------------ ------------ REAL ESTATE -- 1.2% 41,700 Simon Property Group Inc. .......... 1,550,863 2,236,371 ------------ ------------ RETAIL -- 1.3% 103,400 Limited Brands Inc. ................ 2,170,495 2,304,786 ------------ ------------ SPECIALTY CHEMICALS -- 1.3% 54,000 E.I. du Pont de Nemours and Co. .... 2,346,874 2,311,200 ------------ ------------ TELECOMMUNICATIONS -- 6.5% 42,600 ALLTEL Corp. ....................... 2,274,340 2,339,166 49,900 Harris Corp. ....................... 1,805,339 2,741,506 87,300 SBC Communications Inc. ............ 2,194,253 2,265,435 72,700 Univision Communications Inc.+ ..... 2,541,455 2,298,047 56,304 Verizon Communications Inc. ........ 1,956,590 2,217,252 ------------ ------------ 10,771,977 11,861,406 ------------ ------------ TRANSPORTATION -- 1.3% 62,400 Burlington Northern Santa Fe Corp. . 2,048,703 2,390,544 ------------ ------------ TOTAL COMMON STOCKS ................ 152,229,015 180,200,446 ------------ ------------ TOTAL INVESTMENTS -- 98.5% ......... $152,229,015 180,200,446 ============ OTHER ASSETS AND LIABILITIES (NET) -- 1.5% ........ 2,724,127 ------------ NET ASSETS -- 100.0% .............................. $182,924,573 ============ - ------------------ For Federal tax purposes: Aggregate cost .................................... $153,092,672 ============ Gross unrealized appreciation ..................... $ 29,698,513 Gross unrealized depreciation ..................... (2,590,739) ------------ Net unrealized appreciation (depreciation) ........ $ 27,107,774 ============ - ------------------ + Non-income producing security. See accompanying notes to financial statements. 15 THE GABELLI WESTWOOD BALANCED FUND SCHEDULE OF INVESTMENTS -- SEPTEMBER 30, 2004 ================================================================================ MARKET SHARES COST VALUE ------ ---- ------ COMMON STOCKS -- 56.5% AEROSPACE -- 2.7% 38,200 Boeing Co. ......................... $ 1,257,356 $ 1,971,884 34,600 Lockheed Martin Corp. .............. 1,777,503 1,929,988 ------------ ------------ 3,034,859 3,901,872 ------------ ------------ AVIATION: PARTS AND SERVICES -- 1.3% 20,500 United Technologies Corp. .......... 1,092,342 1,914,290 ------------ ------------ BROADCASTING -- 0.7% 30,400 Univision Communications Inc.+ ..... 1,066,032 960,944 ------------ ------------ CABLE -- 0.7% 36,100 Comcast Corp., Cl. A Special+ ...... 1,008,278 1,007,912 ------------ ------------ COMMUNICATIONS EQUIPMENT -- 0.7% 55,300 Motorola Inc. ...................... 1,016,696 997,612 ------------ ------------ COMPUTER HARDWARE -- 1.3% 21,800 International Business Machines Corp. ..................... 1,614,298 1,869,132 ------------ ------------ CONSUMER PRODUCTS -- 3.4% 20,700 Altria Group Inc. .................. 850,952 973,728 67,600 Microsoft Corp. .................... 1,832,418 1,869,140 38,100 Procter & Gamble Co. ............... 1,719,645 2,061,972 ------------ ------------ 4,403,015 4,904,840 ------------ ------------ DIVERSIFIED INDUSTRIAL -- 2.7% 30,400 Eaton Corp. ........................ 1,765,473 1,927,664 57,300 General Electric Co. ............... 1,539,478 1,924,134 ------------ ------------ 3,304,951 3,851,798 ------------ ------------ ENERGY AND UTILITIES: INTEGRATED -- 6.3% 50,400 Burlington Resources Inc. .......... 1,292,612 2,056,320 24,100 ConocoPhillips ..................... 1,430,237 1,996,685 16,000 Entergy Corp. ...................... 943,839 969,760 45,000 Kinder Morgan Energy Partners LP ...................... 1,811,147 2,107,800 44,349 Progress Energy Inc. ............... 1,859,632 1,877,737 ------------ ------------ 7,337,467 9,008,302 ------------ ------------ ENERGY AND UTILITIES: NATURAL GAS -- 2.2% 40,980 Apache Corp. ....................... 1,072,978 2,053,508 21,800 Nabors Industries Ltd.+ ............ 819,812 1,032,230 ------------ ------------ 1,892,790 3,085,738 ------------ ------------ ENERGY AND UTILITIES: OIL -- 4.8% 40,200 ChevronTexaco Corp. ................ 1,617,870 2,156,328 45,800 Exxon Mobil Corp. .................. 1,672,061 2,213,514 18,000 Murphy Oil Corp. ................... 830,220 1,561,860 27,500 XTO Energy Inc. .................... 728,903 893,200 ------------ ------------ 4,849,054 6,824,902 ------------ ------------ FINANCIAL SERVICES -- 11.1% 39,100 American Express Co. ............... 1,426,330 2,012,086 43,000 Bank of America Corp. .............. 1,207,841 1,863,190 20,100 Bear Stearns Companies Inc. ........ 1,303,420 1,933,017 MARKET SHARES COST VALUE ------ ---- ------ 42,933 Citigroup Inc. ..................... $ 1,539,996 $ 1,894,204 15,900 Comerica Inc. ...................... 958,312 943,665 24,800 Eaton Vance Corp. .................. 862,915 1,001,672 52,596 JPMorgan Chase & Co. ............... 1,834,878 2,089,639 28,100 Lehman Brothers Holdings Inc. ...... 2,044,134 2,240,132 41,000 Prudential Financial Inc. .......... 1,296,001 1,928,640 ------------ ------------ 12,473,827 15,906,245 ------------ ------------ FOOD AND BEVERAGE -- 2.1% 39,800 ConAgra Foods Inc. ................. 965,658 1,023,258 34,100 Dean Foods Co.+ .................... 1,061,014 1,023,682 23,000 General Mills Inc. ................. 1,056,755 1,032,700 ------------ ------------ 3,083,427 3,079,640 ------------ ------------ HEALTH CARE -- 1.4% 64,100 Pfizer Inc. ........................ 1,895,526 1,961,460 ------------ ------------ HOTELS AND GAMING -- 1.5% 45,200 Starwood Hotels & Resorts Worldwide Inc. ................... 1,546,536 2,098,184 ------------ ------------ METALS AND MINING -- 2.9% 61,700 Alcoa Inc. ......................... 1,649,729 2,072,503 22,400 Phelps Dodge Corp. ................. 1,800,946 2,061,472 ------------ ------------ 3,450,675 4,133,975 ------------ ------------ PAPER AND FOREST PRODUCTS -- 2.7% 49,400 International Paper Co. ............ 1,882,577 1,996,254 21,378 Rayonier Inc. ...................... 853,384 967,141 14,100 Temple-Inland Inc. ................. 796,874 946,815 ------------ ------------ 3,532,835 3,910,210 ------------ ------------ REAL ESTATE -- 1.4% 27,400 ProLogis ........................... 667,467 965,576 18,400 Simon Property Group Inc. .......... 653,575 986,792 ------------ ------------ 1,321,042 1,952,368 ------------ ------------ RETAIL -- 0.7% 43,300 Limited Brands Inc. ................ 909,432 965,157 ------------ ------------ SPECIALTY CHEMICALS -- 0.7% 23,200 E.I. du Pont de Nemours and Co. .... 991,586 992,960 ------------ ------------ TELECOMMUNICATIONS -- 3.0% 18,200 ALLTEL Corp. ....................... 971,509 999,362 21,700 Harris Corp. ....................... 789,074 1,192,198 39,400 SBC Communications Inc. ............ 1,004,678 1,022,430 26,738 Verizon Communications Inc. ........ 888,867 1,052,942 ------------ ------------ 3,654,128 4,266,932 ------------ ------------ TRANSPORTATION -- 2.2% 28,200 Burlington Northern Santa Fe Corp. ................... 922,696 1,080,342 125,700 Top Tankers Inc.+ .................. 1,387,093 2,009,943 ------------ ------------ 2,309,789 3,090,285 ------------ ------------ TOTAL COMMON STOCKS ................ 65,788,585 80,684,758 ------------ ------------ See accompanying notes to financial statements. 16 THE GABELLI WESTWOOD BALANCED FUND SCHEDULE OF INVESTMENTS (CONTINUED) -- SEPTEMBER 30, 2004 ================================================================================ PRINCIPAL MARKET AMOUNT COST VALUE --------- ---- ------ ASSET BACKED SECURITIES -- 0.6% $ 825,000 GS Mortgage Securities Corp. II, 97-GL Cl. A2D, 6.940%, 07/13/30 ................. $ 832,890 $ 896,156 ------------ ------------ CORPORATE BONDS -- 10.7% COMPUTER HARDWARE -- 1.4% 750,000 Hewlett-Packard Co., 3.625%, 03/15/08 ................. 748,362 753,054 1,250,000 IBM Corp., 4.875%, 10/01/06 ................. 1,279,583 1,298,224 ------------ ------------ 2,027,945 2,051,278 ------------ ------------ DIVERSIFIED INDUSTRIAL -- 0.9% 1,200,000 General Electric Co., 5.000%, 02/01/13 ................. 1,215,171 1,236,222 ------------ ------------ ENERGY AND UTILITIES: OIL -- 0.5% 750,000 Occidental Petroleum, 4.250%, 03/15/10 ................. 757,709 754,786 ------------ ------------ FINANCIAL SERVICES -- 2.8% 1,325,000 Bank of America Corp., 5.875%, 02/15/09 ................. 1,338,734 1,435,889 1,125,000 Citigroup Inc., 6.500%, 01/18/11 ................. 1,256,491 1,263,796 1,225,000 Goldman Sachs Group Inc., 6.650%, 05/15/09 ................. 1,217,275 1,365,536 ------------ ------------ 3,812,500 4,065,221 ------------ ------------ FOOD AND BEVERAGE -- 0.7% 950,000 Anheuser-Busch Cos. Inc., 4.375%, 01/15/13 ................. 933,872 943,432 ------------ ------------ REAL ESTATE -- 1.3% 1,600,000 Archstone-Smith Trust, 7.200%, 03/01/13 ................. 1,551,925 1,801,632 ------------ ------------ RETAIL -- 2.0% 1,275,000 Neiman Marcus Group Inc., 6.650%, 06/01/08 ................. 1,274,356 1,394,659 1,250,000 Wal-Mart Stores,, 6.875%, 08/10/09 ................. 1,318,049 1,419,116 ------------ ------------ 2,592,405 2,813,775 ------------ ------------ TELECOMMUNICATIONS -- 1.1% 1,460,000 Verizon Communications, Deb., 6.460%, 04/15/08 ................. 1,468,005 1,601,211 ------------ ------------ TOTAL CORPORATE BONDS .............. 14,359,532 15,267,557 ------------ ------------ FOREIGN GOVERNMENT BONDS -- 1.5% 1,000,000 Canadian Government Global Bond, 6.750%, 08/28/06 ................. 1,020,917 1,074,568 1,000,000 Republic of Italy Global Bond, 2.500%, 03/31/06 ................. 999,525 999,027 ------------ ------------ TOTAL FOREIGN GOVERNMENT BONDS ................. 2,020,442 2,073,595 ------------ ------------ PRINCIPAL MARKET AMOUNT COST VALUE --------- ---- ------ U.S. GOVERNMENT AGENCY OBLIGATIONS -- 16.7% FEDERAL HOME LOAN BANK -- 1.4% $2,000,000 3.250%, 08/15/05 ................. $ 2,029,528 $ 2,016,636 ------------ ------------ FEDERAL HOME LOAN MORTGAGE CORP. -- 6.3% 2,000,000 3.500%, 09/15/07 ................. 2,019,645 2,022,290 750,000 6.625%, 09/15/09 ................. 850,683 846,914 600,000 4.750%, 12/08/10 ................. 598,978 605,073 2,000,000 Zero Coupon, 10/26/04 ............ 1,997,861 1,997,618 1,500,000 Zero Coupon, 11/15/04 ............ 1,496,850 1,496,850 2,000,000 Zero Coupon, 02/22/05 ............ 1,984,320 1,984,520 ------------ ------------ 8,948,337 8,953,265 ------------ ------------ FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 9.0% 2,000,000 2.000%, 01/15/06 ................. 1,986,892 1,988,278 1,000,000 2.625%, 11/15/06 ................. 997,316 995,895 1,250,000 7.125%, 03/15/07 ................. 1,310,733 1,371,902 1,200,000 6.000%, 05/15/11 ................. 1,204,111 1,326,947 900,000 6.000%, 01/18/12 ................. 891,714 909,324 750,000 4.375%, 03/15/13 ................. 737,561 747,174 1,625,000 Zero Coupon, 10/18/04 ............ 1,623,834 1,623,684 1,000,000 Zero Coupon, 12/08/04 ............ 996,827 996,609 1,200,000 Zero Coupon, 01/10/05 ............ 1,193,889 1,193,519 1,750,000 Zero Coupon, 02/09/05 ............ 1,738,028 1,737,678 ------------ ------------ 12,680,905 12,891,010 ------------ ------------ TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS ............... 23,658,770 23,860,911 ------------ ------------ U.S. GOVERNMENT OBLIGATIONS -- 11.5% U.S. TREASURY BILLS -- 1.9% 2,750,000 U.S. Treasury Bill, 1.800%++, 02/03/05 ............... 2,732,954 2,732,804 ------------ ------------ U.S. TREASURY BONDS -- 0.9% 1,000,000 7.250%, 05/15/16 ................. 1,236,348 1,259,141 ------------ ------------ U.S. TREASURY NOTES -- 8.7% 2,750,000 1.625%, 10/31/05 ................. 2,733,308 2,733,673 2,000,000 5.750%, 11/15/05 ................. 2,032,777 2,077,814 2,725,000 3.500%, 11/15/06 ................. 2,728,350 2,773,647 2,500,000 6.125%, 08/15/07 ................. 2,706,364 2,724,903 2,000,000 4.750%, 05/15/14 ................. 2,016,297 2,100,002 ------------ ------------ 12,217,096 12,410,039 ------------ ------------ TOTAL U.S. GOVERNMENT OBLIGATIONS ...................... 16,186,398 16,401,984 ------------ ------------ TOTAL INVESTMENTS -- 97.5% ......... $122,846,617 139,184,961 ============ OTHER ASSETS AND LIABILITIES (NET) -- 2.5% ........ 3,522,309 ------------ NET ASSETS -- 100.0% .............................. $142,707,270 ============ - ---------------- For Federal tax purposes: Aggregate cost .................................... $123,049,351 ============ Gross unrealized appreciation ..................... $ 16,561,900 Gross unrealized depreciation ..................... (426,290) ------------ Net unrealized appreciation (depreciation) ........ $ 16,135,610 ============ - ---------------- + Non-income producing security. ++ Represents annualized yield at date of purchase. See accompanying notes to financial statements. 17 THE GABELLI WESTWOOD INTERMEDIATE BOND FUND SCHEDULE OF INVESTMENTS -- SEPTEMBER 30, 2004 ================================================================================ PRINCIPAL MARKET AMOUNT COST VALUE --------- ---- ------ ASSET BACKED SECURITIES -- 2.4% $225,000 GS Mortgage Securities Corp. II, 97-GL Cl. A2D, 6.940%, 07/13/30 ................. $ 231,476 $ 244,406 ----------- ----------- CORPORATE BONDS -- 42.3% COMPUTER HARDWARE -- 5.8% 325,000 Hewlett-Packard Co., 3.625%, 03/15/08 ................. 325,969 326,323 250,000 IBM Corp., 4.875%, 10/01/06 ................. 256,427 259,645 ----------- ----------- 582,396 585,968 ----------- ----------- DIVERSIFIED INDUSTRIAL -- 2.6% 250,000 General Electric Co., 5.000%, 02/01/13 ................. 253,160 257,546 ----------- ----------- ENERGY AND UTILITIES: OIL -- 5.7% 125,000 BP Capital Markets plc, 4.000%, 04/29/05 ................. 125,845 126,251 225,000 ChevronTexaco Corp., 3.375%, 02/15/08 ................. 226,198 225,790 225,000 Occidental Petroleum, 4.250%, 03/15/10 ................. 225,000 226,436 ----------- ----------- 577,043 578,477 ----------- ----------- FINANCIAL SERVICES -- 17.1% 300,000 Bank of America Corp., 5.875%, 02/15/09 ................. 310,230 325,107 100,000 Bayerische Landesbank, 4.125%, 01/14/05 ................. 100,273 100,539 225,000 Citigroup Inc., 6.500%, 01/18/11 ................. 250,878 252,759 300,000 Goldman Sachs Group Inc., 6.650%, 05/15/09 ................. 311,282 334,417 200,000 International Bank for Reconstruction & Development, 8.625%, 10/15/16 ................. 246,912 272,162 175,000 Merrill Lynch & Co., 5.000%, 02/03/14 ................. 174,587 175,570 275,000 Toyota Motor Credit Corp., 2.875%, 08/01/08 ................. 272,305 268,999 ----------- ----------- 1,666,467 1,729,553 ----------- ----------- FOOD AND BEVERAGE -- 2.5% 250,000 Anheuser-Busch Cos. Inc., 4.375%, 01/15/13 ................. 245,766 248,272 ----------- ----------- REAL ESTATE -- 1.7% 150,000 Archstone-Smith Trust, 7.200%, 03/01/13 ................. 145,853 168,903 ----------- ----------- PRINCIPAL MARKET AMOUNT COST VALUE --------- ---- ------ RETAIL -- 5.5% $300,000 Neiman Marcus Group Inc., 6.650%, 06/01/08 ................. $ 315,222 $ 328,155 200,000 Wal-Mart Stores, 6.875%, 08/10/09 ................. 210,888 227,059 ----------- ----------- 526,110 555,214 ----------- ----------- TELECOMMUNICATIONS -- 1.4% 125,000 Verizon Communications, Deb., 6.460%, 04/15/08 ................. 126,458 137,090 ----------- TOTAL CORPORATE BONDS ............. 4,123,253 4,261,023 ----------- ----------- FOREIGN GOVERNMENT BONDS -- 5.1% 175,000 Canadian Government Global Bond, 6.750%, 08/28/06 ................. 175,807 188,049 325,000 Republic of Italy Global Bond, 2.500%, 03/31/06 ................. 325,385 324,684 ----------- ----------- TOTAL FOREIGN GOVERNMENT BONDS ................. 501,192 512,733 ----------- ----------- U.S. GOVERNMENT AGENCY OBLIGATIONS -- 31.7% FEDERAL HOME LOAN BANK -- 1.5% 150,000 3.250%, 08/15/05 ................. 152,055 151,248 ----------- ----------- FEDERAL HOME LOAN MORTGAGE CORP. -- 5.0% 150,000 4.500%, 01/15/14 ................. 148,969 149,539 200,000 Zero Coupon, 10/26/04 ............ 199,786 199,762 160,000 Zero Coupon, 11/15/04 ............ 159,664 159,643 ----------- ----------- 508,419 508,944 ----------- ----------- FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 20.5% 300,000 2.000%, 01/15/06 ................. 297,993 298,242 175,000 2.625%, 11/15/06 ................. 174,530 174,281 225,000 6.000%, 05/15/11 ................. 244,412 248,802 150,000 6.000%, 01/18/12 ................. 148,619 151,554 250,000 4.375%, 03/15/13 ................. 248,088 249,058 400,000 Zero Coupon, 10/18/04 ............ 399,713 399,676 300,000 Zero Coupon, 01/10/05 ............ 298,472 298,380 250,000 Zero Coupon, 02/09/05 ............ 248,290 248,240 ----------- ----------- 2,060,117 2,068,233 ----------- ----------- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 4.7% 26,007 GNMA, Pool #580871, 6.500%, 12/15/31 ................. 26,103 27,479 203,259 GNMA, Pool #562288, 6.000%, 12/15/33 ................. 207,903 211,108 228,223 GNMA, Pool #604970, 5.500%, 01/15/34 ................. 231,431 232,611 ----------- ----------- 465,437 471,198 ----------- ----------- TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS ............... 3,186,028 3,199,623 ----------- ----------- See accompanying notes to financial statements. 18 THE GABELLI WESTWOOD INTERMEDIATE BOND FUND SCHEDULE OF INVESTMENTS (CONTINUED) -- SEPTEMBER 30, 2004 ================================================================================ PRINCIPAL MARKET AMOUNT COST VALUE --------- ---- ------ U.S. GOVERNMENT OBLIGATIONS -- 16.4% U.S. TREASURY BILLS -- 2.5% $250,000 U.S. Treasury Bill, 1.820%++, 02/03/05 ............... $ 248,429 $ 248,437 ----------- ----------- U.S. TREASURY BONDS -- 9.4% 225,000 7.250%, 05/15/16 ................. 274,578 283,307 250,000 7.125%, 02/15/23 ................. 312,725 318,809 300,000 6.125%, 11/15/27 ................. 309,170 348,375 ----------- ----------- 896,473 950,491 ----------- ----------- U.S. TREASURY NOTES -- 4.5% 250,000 1.625%, 10/31/05 ................. 248,422 248,516 200,000 4.750%, 05/15/14 ................. 202,457 210,000 ----------- ----------- 450,879 458,516 ----------- ----------- TOTAL U.S. GOVERNMENT OBLIGATIONS ........... 1,595,781 1,657,444 ----------- ----------- MARKET SHARES COST VALUE ------ ---- ------ WARRANTS -- 0.0% ENERGY AND UTILITIES -- 0.0% 8 Forman Petroleum Corp., Series A, expires 01/14/07+ (a)(b) ......... $ 0 $ 0 25 Forman Petroleum Corp., Series B, expires 01/14/07+ (a)(b) ......... 0 1 25 Forman Petroleum Corp., Series C, expires 01/14/07+ (a)(b) ......... 0 0 25 Forman Petroleum Corp., Series D, expires 01/14/07+ (a)(b) ......... 0 0 ----------- ----------- 0 1 ----------- ----------- TOTAL WARRANTS ..................... 0 1 ----------- ----------- TOTAL INVESTMENTS -- 97.9% ......... $ 9,637,730 9,875,230 =========== OTHER ASSETS AND LIABILITIES (NET) -- 2.1% ........ 209,266 ----------- NET ASSETS -- 100.0% .............................. $10,084,496 =========== - ----------------- For Federal tax purposes: Aggregate cost .................................. $ 9,654,934 =========== Gross unrealized appreciation ................... $ 245,680 Gross unrealized depreciation ................... (25,384) ----------- Net unrealized appreciation (depreciation) ...... $ 220,296 =========== - ----------------- (a) Securities fair valued under procedures established by the Board of Trustees. (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 September 30, 2004, the market value of Rule 144A securities amounted to $1 or 0.00% of total net assets. + Non-income producing security. ++ Represents annualized yield at date of purchase. See accompanying notes to financial statements. 19 THE GABELLI WESTWOOD SMALLCAP EQUITY FUND SCHEDULE OF INVESTMENTS -- SEPTEMBER 30, 2004 ================================================================================ MARKET SHARES COST VALUE ------ ---- ------ COMMON STOCKS -- 97.3% AEROSPACE -- 4.2% 4,300 Alliant Techsystems Inc.+ .......... $ 266,861 $ 260,150 6,700 DRS Technologies Inc.+ ............. 217,634 250,848 ----------- ----------- 484,495 510,998 ----------- ----------- AUTOMOTIVE -- 1.1% 1,800 Cummins Inc. ....................... 116,032 133,002 ----------- ----------- AVIATION: PARTS AND SERVICES -- 1.9% 6,600 Moog Inc., Cl. A+ .................. 236,815 239,580 ----------- ----------- COMPUTER SOFTWARE AND SERVICES -- 4.9% 7,000 Anteon International Corp.+ ........ 203,023 256,550 7,700 Hyperion Solutions Corp.+ .......... 302,280 261,723 3,800 SI International Inc.+ ............. 83,030 83,258 ----------- ----------- 588,333 601,531 ----------- ----------- CONSUMER PRODUCTS -- 2.3% 8,300 Deckers Outdoor Corp.+ ............. 211,104 282,200 ----------- ----------- DIVERSIFIED INDUSTRIAL -- 6.3% 7,100 Ameron International Corp. ......... 234,601 233,590 3,400 Briggs & Stratton Corp. ............ 240,086 276,080 6,000 Kennametal Inc. .................... 263,725 270,900 ----------- ----------- 738,412 780,570 ----------- ----------- EDUCATIONAL SERVICES -- 1.4% 15,000 Educate Inc.+ ...................... 165,000 176,850 ----------- ----------- ELECTRONICS -- 2.9% 4,100 Cymer Inc.+ ........................ 123,541 117,506 8,800 Fairchild Semiconductor International Inc.+ .............. 129,060 124,696 7,800 MKS Instruments Inc.+ .............. 126,943 119,496 ----------- ----------- 379,544 361,698 ----------- ----------- ENERGY AND UTILITIES -- 11.1% 4,200 Houston Exploration Co.+ ........... 175,596 249,270 9,200 ONEOK Inc. ......................... 200,115 239,384 7,800 Quicksilver Resources Inc.+ ........ 163,458 254,826 3,700 SJW Corp. .......................... 122,170 122,174 11,900 Westar Energy Inc. ................. 235,081 240,380 8,300 Whiting Petroleum Corp.+ ........... 208,356 252,320 ----------- ----------- 1,104,776 1,358,354 ----------- ----------- EQUIPMENT AND SUPPLIES -- 4.2% 11,200 Greenbrier Companies Inc. .......... 233,079 268,800 4,600 Middleby Corp. ..................... 246,783 242,190 ----------- ----------- 479,862 510,990 ----------- ----------- FINANCIAL SERVICES-- 16.5% 13,700 BankAtlantic Bancorp Inc., Cl. A ... 239,956 250,984 9,200 BKF Capital Group Inc. ............. 258,501 269,560 6,800 Cathay General Bancorp ............. 226,656 252,892 6,000 Corus Bankshares Inc. .............. 243,061 258,780 7,000 Montpelier Re Holdings Ltd. ........ 247,244 256,760 5,900 Piper Jaffray Companies Inc.+ ...... 262,779 233,581 7,900 Provident Bankshares Corp. ......... 249,259 265,045 4,200 Triad Guaranty Inc.+ ............... 227,530 233,016 ----------- ----------- 1,954,986 2,020,618 ----------- ----------- FOOD AND BEVERAGE -- 4.2% 5,600 Corn Products International Inc. ... 253,088 258,160 6,000 J & J Snack Foods Corp.+ ........... 231,139 257,280 ----------- ----------- 484,227 515,440 ----------- ----------- MARKET SHARES COST VALUE ------ ---- ------ HEALTH CARE -- 4.1% 8,200 Sybron Dental Specialties Inc.+ .... $ 229,678 $ 243,458 7,600 Triad Hospitals Inc.+ .............. 263,086 261,744 ----------- ----------- 492,764 505,202 ----------- ----------- HOTELS AND GAMING -- 3.9% 13,200 Boca Resorts Inc., Cl. A+ .......... 247,821 245,124 11,900 Marcus Corp. ....................... 201,168 231,693 ----------- ----------- 448,989 476,817 ----------- ----------- METALS AND MINING -- 3.2% 5,600 Compass Minerals International Inc. 124,042 124,320 9,200 Massey Energy Co. .................. 245,501 266,156 ----------- ----------- 369,543 390,476 ----------- ----------- PAPER AND FOREST PRODUCTS -- 4.3% 16,700 Longview Fibre Co. ................. 222,629 254,675 16,200 Wausau-Mosinee Paper Corp. ......... 260,702 269,730 ----------- ----------- 483,331 524,405 ----------- ----------- PUBLISHING -- 1.0% 6,500 Thomas Nelson Inc. ................. 135,124 127,075 ----------- ----------- REAL ESTATE -- 8.4% 3,800 EastGroup Properties Inc. .......... 125,005 126,160 5,100 Getty Realty Corp. ................. 123,589 133,722 4,300 Heritage Property Investment Trust . 118,591 125,431 4,700 LaSalle Hotel Properties ........... 117,955 129,720 6,000 Lexington Corporate Properties Trust 118,932 130,260 4,800 Ramco-Gershenson Properties Trust .. 119,185 129,984 8,500 Universal Health Realty Income Trust 241,138 257,550 ----------- ----------- 964,395 1,032,827 ----------- ----------- RETAIL -- 5.0% 4,200 Aeropostale Inc.+ .................. 108,842 110,040 4,400 Helen of Troy Ltd.+ ................ 131,439 119,768 3,300 Kellwood Co. ....................... 141,803 120,285 4,700 Neiman Marcus Group Inc., Cl. A .... 255,207 270,250 ----------- ----------- 637,291 620,343 ----------- ----------- SPECIALTY CHEMICALS -- 2.1% 5,200 Cytec Industries Inc. .............. 231,343 254,540 ----------- ----------- TRANSPORTATION -- 4.3% 14,100 SCS Transportation Inc.+ ........... 294,195 267,054 16,000 Top Tankers Inc.+ .................. 185,832 255,840 ----------- ----------- 480,027 522,894 ----------- ----------- TOTAL COMMON STOCKS 11,186,393 11,946,410 ----------- ----------- TOTAL INVESTMENTS -- 97.3% $11,186,393 11,946,410 =========== OTHER ASSETS AND LIABILITIES (NET) -- 2.7% ....... 329,187 ----------- NET ASSETS -- 100.0% ............................. $12,275,597 =========== - ----------------- For Federal tax purposes: Aggregate cost ................................... $11,191,439 =========== Gross unrealized appreciation .................... $ 932,351 Gross unrealized depreciation .................... (177,380) ----------- Net unrealized appreciation (depreciation) ....... $ 754,971 =========== - ----------------- + Non-income producing security. See accompanying notes to financial statements. 20 THE GABELLI WESTWOOD REALTY FUND SCHEDULE OF INVESTMENTS -- SEPTEMBER 30, 2004 ================================================================================ MARKET SHARES COST VALUE ------ ---- ------ COMMON STOCKS -- 95.7% APARTMENTS -- 16.1% 4,800 Apartment Investment & Management Co., Cl. A ............ $ 172,336 $ 166,944 10,282 Archstone-Smith Trust .............. 249,073 325,322 3,000 Avalonbay Communities Inc. ......... 137,908 180,660 4,600 BRE Properties Inc., Cl. A ......... 147,463 176,410 4,900 Camden Property Trust .............. 172,240 226,380 13,100 Equity Residential ................. 352,284 406,100 4,400 Gables Residential Trust ........... 144,892 150,260 3,500 Home Properties Inc. ............... 111,614 138,460 3,900 Mid-America Apartment Communities Inc. ................. 94,290 151,905 8,400 Post Properties Inc. ............... 216,333 251,160 6,100 Summit Properties Inc. ............. 136,794 165,005 15,600 United Dominion Realty Trust Inc. .. 250,837 309,348 ----------- ----------- 2,186,064 2,647,954 ----------- ----------- DIVERSIFIED PROPERTY -- 13.6% 12,368 Catellus Development Corp. ......... 290,890 327,876 3,600 Colonial Properties Trust .......... 110,439 144,792 11,866 Duke Realty Corp. .................. 306,612 393,951 7,800 First Potomac Realty Trust ......... 157,370 161,148 6,000 Getty Realty Corp. ................. 115,085 157,320 7,700 Lexington Corporate Properties Trust 126,927 167,167 7,800 Liberty Property Trust ............. 237,814 310,752 4,100 Tejon Ranch Co.+ ................... 129,440 154,365 6,800 Vornado Realty Trust ............... 279,444 426,224 ----------- ----------- 1,754,021 2,243,595 ----------- ----------- FINANCIAL SERVICES -- 0.9% 10,400 American Financial Realty Trust .... 137,201 146,744 ----------- ----------- HEALTH CARE -- 3.9% 12,500 Health Care Property Investors Inc. 228,207 325,000 4,000 Healthcare Realty Trust Inc. ....... 149,100 156,160 5,200 Universal Health Realty Income Trust 139,379 157,560 ----------- ----------- 516,686 638,720 ----------- ----------- HOTELS -- 3.8% 5,400 Hospitality Properties Trust ....... 188,865 229,446 6,000 LaSalle Hotel Properties ........... 117,668 165,600 5,000 Starwood Hotels & Resorts Worldwide Inc. ................... 121,927 232,100 ----------- ----------- 428,460 627,146 ----------- ----------- INDUSTRIAL PROPERTY -- 6.0% 6,500 AMB Property Corp. ................. 202,465 240,630 4,400 CenterPoint Properties Trust ....... 124,221 191,752 4,700 EastGroup Properties Inc. .......... 162,258 156,040 11,500 ProLogis ........................... 307,468 405,260 ----------- ----------- 796,412 993,682 ----------- ----------- MANUFACTURED HOUSING -- 1.4% 6,800 Manufactured Home Communities Inc. . 210,287 226,032 ----------- ----------- OFFICE PROPERTY -- 18.0% 2,700 Alexandria Real Estate Equities Inc. 114,541 177,444 4,700 Arden Realty Inc. .................. 110,822 153,126 6,300 Boston Properties Inc. ............. 259,649 348,957 MARKET SHARES COST VALUE ------ ---- ------ 5,300 Brandywine Realty Trust ............ $ 115,781 $ 150,944 4,800 CarrAmerica Realty Corp. ........... 135,124 156,960 6,500 Corporate Office Properties Trust .. 90,081 166,530 7,200 Cousins Properties Inc. ............ 185,830 247,032 8,900 Crescent Real Estate Equities Co. .. 142,556 140,086 6,700 CRT Properties Inc. ................ 153,564 143,715 16,384 Equity Office Properties Trust ..... 452,791 446,464 6,500 Highwoods Properties Inc. .......... 142,854 159,965 5,200 Mack-Cali Realty Corp. ............. 161,467 230,360 8,800 Maguire Properties Inc. ............ 220,102 213,928 6,300 Prentiss Properties Trust .......... 175,851 226,800 ----------- ----------- 2,461,013 2,962,311 ----------- ----------- PAPER AND FOREST PRODUCTS -- 2.9% 4,700 Plum Creek Timber Co. Inc. ......... 111,488 164,641 7,088 Rayonier Inc. ...................... 280,269 320,661 ----------- ----------- 391,757 485,302 ----------- ----------- PUBLIC STORAGE -- 3.3% 12,100 Extra Space Storage Inc. ........... 151,450 154,275 4,700 Public Storage Inc. ................ 166,969 232,885 3,900 Sovran Self Storage Inc. ........... 108,431 152,802 ----------- ----------- 426,850 539,962 ----------- ----------- SHOPPING CENTERS -- 24.8% 2,700 CBL & Associates Properties Inc. ... 99,366 164,565 2,300 Chelsea Property Group Inc. ........ 84,108 154,330 8,281 Developers Diversified Realty Corp. 199,602 324,201 15,100 General Growth Properties Inc. ..... 341,512 468,100 5,500 Heritage Property Investment Trust . 157,310 160,435 6,450 Kimco Realty Corp. ................. 224,601 330,885 3,300 Macerich Co. ....................... 95,874 175,857 4,800 Mills Corp. ........................ 166,973 248,976 3,200 Pan Pacific Retail Properties Inc. . 102,263 173,120 5,900 Ramco-Gershenson Properties Trust .. 117,383 159,772 5,300 Realty Income Corp. ................ 217,278 238,659 6,900 Regency Centers Corp. .............. 217,280 320,781 10,200 Simon Property Group Inc. .......... 349,344 547,026 9,100 Taubman Centers Inc. ............... 187,933 235,053 11,875 Weingarten Realty Investors ........ 292,029 391,994 ----------- ----------- 2,852,856 4,093,754 ----------- ----------- TRANSPORTATION -- 1.0% 4,800 Alexander & Baldwin Inc. ........... 158,118 162,912 ----------- ----------- TOTAL COMMON STOCKS ................ 12,319,725 15,768,114 ----------- ----------- TOTAL INVESTMENTS -- 95.7% ......... $12,319,725 15,768,114 =========== OTHER ASSETS AND LIABILITIES (NET) -- 4.3% ....... 715,642 ----------- NET ASSETS -- 100.0% ............................. $16,483,756 =========== - ---------------- For Federal tax purposes: Aggregate cost ................................... $12,344,357 =========== Gross unrealized appreciation .................... $ 3,484,820 Gross unrealized depreciation .................... (61,063) ----------- Net unrealized appreciation (depreciation) ....... $ 3,423,757 =========== - ---------------- + Non-income producing security. See accompanying notes to financial statements. 21 THE GABELLI WESTWOOD MIGHTY MITES(SM) FUND SCHEDULE OF INVESTMENTS -- SEPTEMBER 30, 2004 ================================================================================ MARKET SHARES COST VALUE ------ ---- ------ COMMON STOCKS -- 96.6% AUTOMOTIVE: PARTS AND ACCESSORIES -- 6.0% 89,800 Midas Inc.+ ........................ $ 1,189,581 $ 1,454,760 1,000 Puradyn Filter Technologies Inc.+ .. 2,400 1,110 50,000 Scheib (Earl) Inc.+ ................ 243,865 160,000 44,000 Standard Motor Products Inc. ....... 501,854 664,840 159,000 TransPro Inc.+ ..................... 730,359 826,005 ----------- ----------- 2,668,059 3,106,715 ----------- ----------- AVIATION: PARTS AND SERVICES -- 2.0% 2,500 Aviall Inc.+ ....................... 30,525 51,000 15,300 CPI Aerostructures Inc.+ ........... 159,639 139,230 2,000 Curtiss-Wright Corp., Cl. B ........ 43,050 108,200 145,000 Fairchild Corp., Cl. A+ ............ 739,108 577,100 12,000 Kaman Corp., Cl. A ................. 155,265 143,280 ----------- ----------- 1,127,587 1,018,810 ----------- ----------- BROADCASTING -- 4.6% 60,000 Acme Communications Inc.+ .......... 364,898 357,000 27,500 Beasley Broadcast Group Inc., Cl. A+ ........................... 297,335 431,750 71,500 Crown Media Holdings Inc., Cl. A+ .. 532,715 597,025 10,000 Granite Broadcasting Corp.+ ........ 26,500 2,300 32,000 Gray Television Inc. ............... 341,199 380,800 79,000 Paxson Communications Corp.+ ....... 308,699 106,650 7,000 Salem Communications Corp., Cl. A+ ........................... 126,904 177,240 30,000 Young Broadcasting Inc., Cl. A+ .... 288,879 326,100 ----------- ----------- 2,287,129 2,378,865 ----------- ----------- BUILDING AND CONSTRUCTION -- 0.4% 10,907 Homasote Co.+ ...................... 85,994 70,895 5,000 Huttig Building Products Inc.+ ..... 17,126 45,250 4,900 Monarch Cement Co. ................. 100,506 106,943 ----------- ----------- 203,626 223,088 ----------- ----------- BUSINESS SERVICES -- 2.5% 28,000 ANC Rental Corp.+ .................. 840 3 3,500 Chemed Corp. ....................... 126,696 195,090 80,100 Edgewater Technology Inc.+ ......... 308,396 396,495 20,000 Information Resources Inc.+ ........ 32,400 54,400 43,500 Nashua Corp.+ ...................... 284,304 480,675 804 National Stock Yards Co.+ .......... 80,700 109,746 10,000 PubliCard Inc.+ .................... 14,435 340 1,000 StarTek Inc. ....................... 17,895 31,360 ----------- ----------- 865,666 1,268,109 ----------- ----------- CABLE -- 0.2% 90,000 Adelphia Communications Corp., Cl. A+ ........................... 15,750 33,300 2,500 Outdoor Channel Holdings Inc.+ ..... 24,825 38,750 ----------- ----------- 40,575 72,050 ----------- ----------- CLOSED-END FUNDS -- 0.2% 11,500 MVC Capital Inc.+ .................. 102,707 107,755 ----------- ----------- MARKET SHARES COST VALUE ------ ---- ------ COMMUNICATIONS EQUIPMENT -- 0.2% 3,000 Andrew Corp.+ ...................... $ 10,240 $ 36,720 10,000 Communications Systems Inc. ........ 84,990 83,200 ----------- ----------- 95,230 119,920 ----------- ----------- COMPUTER SOFTWARE AND SERVICES -- 2.7% 25,000 Citadel Security Software Inc.+ .... 98,139 62,250 23,881 Gemplus International SA+ .......... 10,945 44,787 3,000 iVillage Inc.+ ..................... 2,520 18,000 32,000 Mobius Management Systems Inc.+ .................... 269,741 289,600 480,000 Net Perceptions Inc.+ .............. 196,704 355,200 850,000 StorageNetworks Inc. Escrow+ ....... 0 25,500 57,000 Tyler Technologies Inc.+ ........... 223,611 503,880 34,000 Vitria Technology Inc.+ ............ 207,797 105,740 ----------- ----------- 1,009,457 1,404,957 ----------- ----------- CONSUMER PRODUCTS -- 5.7% 68,000 Adams Golf Inc.+ ................... 115,878 74,800 9,300 American Locker Group Inc.+ ........ 114,326 99,510 30,000 CNS Inc. ........................... 338,378 330,000 16,000 Ducati Motor Holding SpA, ADR+ ..... 243,605 211,200 13,000 Enesco Group Inc.+ ................. 146,486 89,050 6,000 Levcor International Inc.+ ......... 20,802 13,500 4,000 Marine Products Corp. .............. 6,145 72,000 24,000 Marzotto SpA ....................... 187,093 347,563 3,000 National Presto Industries Inc. .... 90,585 125,460 41,530 Syratech Corp.+ (a) ................ 10,383 11,005 22,000 Water Pik Technologies Inc.+ ....... 187,874 327,800 268,000 Weider Nutrition International Inc.+ 498,691 1,219,400 ----------- ----------- 1,960,246 2,921,288 ----------- ----------- CONSUMER SERVICES -- 0.1% 3,000 Collectors Universe Inc.+ .......... 10,620 43,740 ----------- ----------- DIVERSIFIED INDUSTRIAL -- 4.5% 10,200 Ampco-Pittsburgh Corp. ............. 118,479 135,252 101,500 Harbor Global Co. Ltd.+ ............ 504,865 1,015,000 64,000 Katy Industries Inc.+ .............. 306,659 340,480 35,000 Lamson & Sessions Co.+ ............. 154,961 318,500 2,000 Lindsay Manufacturing Co. .......... 39,765 53,660 2,000 Oregon Steel Mills Inc.+ ........... 17,104 33,260 34,000 Pinguely-Haulotte .................. 181,849 224,231 11,750 RWC Inc.+ .......................... 281,315 76,963 22,000 Tech/Ops Sevcon Inc. ............... 122,265 130,680 4,000 WHX Corp.+ ......................... 8,915 4,360 ----------- ----------- 1,736,177 2,332,386 ----------- ----------- EDUCATIONAL SERVICES -- 0.7% 21,000 Concorde Career Colleges Inc.+ ..... 460,200 322,770 5,600 Lab-Volt Systems Inc.+ ............. 31,800 53,200 5,000 ProsoftTraining+ ................... 11,220 1,850 ----------- ----------- 503,220 377,820 ----------- ----------- See accompanying notes to financial statements. 22 THE GABELLI WESTWOOD MIGHTY MITES(SM) FUND SCHEDULE OF INVESTMENTS (CONTINUED) -- SEPTEMBER 30, 2004 ================================================================================ MARKET SHARES COST VALUE ------ ---- ------ COMMON STOCKS (CONTINUED) ELECTRONICS -- 1.0% 25,000 CTS Corp. .......................... $ 201,432 $ 315,000 1,000 Fargo Electronics+ ................. 5,641 9,690 11,500 George Risk Industries Inc. ........ 52,760 71,013 2,000 Lowrance Electronics Inc. .......... 8,860 49,040 5,000 Zoran Corp.+ ....................... 32,186 78,600 ----------- ----------- 300,879 523,343 ----------- ----------- ENERGY AND UTILITIES: ELECTRIC -- 1.6% 40,000 British Energy PLC+ ................ 3,200 10,314 19,200 Green Mountain Power Corp. ......... 404,356 500,160 12,000 Unitil Corp. ....................... 309,066 324,060 ----------- ----------- 716,622 834,534 ----------- ----------- ENERGY AND UTILITIES: INTEGRATED -- 1.8% 30,000 Aquila Inc.+ ....................... 86,160 93,600 3,000 Empire District Electric Co. ....... 68,400 61,650 21,300 Florida Public Utilities Co. ....... 276,065 365,295 10,000 MGE Energy Inc. .................... 317,483 318,200 800 Pardee Resources Co. Inc.+ (a) ..... 72,100 78,600 95,200 Progress Energy Inc., CVO+ ......... 10,472 15,232 ----------- ----------- 830,680 932,577 ----------- ----------- ENERGY AND UTILITIES: NATURAL GAS -- 3.2% 3,000 Cascade Natural Gas Corp. .......... 60,917 63,690 13,100 Chesapeake Utilities Corp. ......... 290,761 328,810 17,014 Corning Natural Gas Corp.+ ......... 281,284 174,394 31,200 Petrocorp Escrow Shares+ ........... 0 1,872 11,000 Petroleum Development Corp.+ ....... 177,402 482,020 17,000 RGC Resources Inc. ................. 364,576 400,843 4,000 South Jersey Industries Inc. ....... 142,589 191,000 ----------- ----------- 1,317,529 1,642,629 ----------- ----------- ENERGY AND UTILITIES: SERVICES -- 1.0% 1,000 KFx Inc.+ .......................... 7,920 7,710 19 Petroleum Geo-Services ASA, ADR+ ........................ 14,592 927 22,000 RPC Inc. ........................... 276,941 393,360 26,000 Stolt Offshore SA, ADR+ ............ 78,040 126,880 ----------- ----------- 377,493 528,877 ----------- ----------- ENERGY AND UTILITIES: WATER -- 1.3% 5,000 Artesian Resources Corp., Cl. A .... 80,521 135,900 1,500 BIW Ltd. ........................... 27,265 28,110 2,500 California Water Service Group ..... 55,552 73,425 1,000 Consolidated Water Co. Ltd. ........ 7,500 23,581 11,000 Middlesex Water Co. ................ 188,416 197,120 6,000 SJW Corp. .......................... 140,427 198,120 ----------- ----------- 499,681 656,256 ----------- ----------- ENTERTAINMENT -- 2.9% 10,500 Canterbury Park Holding Corp. ...... 95,240 165,900 30,000 Dover Motorsports Inc. ............. 146,431 128,700 MARKET SHARES COST VALUE ------ ---- ------ 12,500 Fisher Communications Inc.+ ........ $ 568,502 $ 600,000 45,000 GC Companies Inc.+ ................. 67,956 38,700 32,000 Jetix Europe NV+ ................... 219,780 537,341 2,500 LodgeNet Entertainment Corp.+ ...... 27,500 33,000 ----------- ----------- 1,125,409 1,503,641 ----------- ----------- ENVIRONMENTAL SERVICES -- 0.4% 25,000 Trojan Technologies Inc.+ .......... 144,102 208,802 ----------- ----------- EQUIPMENT AND SUPPLIES -- 6.6% 180,000 Baldwin Technology Co. Inc., Cl. A+ 339,712 504,000 15,000 Capstone Turbine Corp.+ ............ 27,450 22,950 100,000 Core Molding Technologies Inc.+ .... 230,767 267,000 7,000 Eastern Co. ........................ 115,764 113,750 114,700 Fedders Corp. ...................... 839,326 469,123 10,000 Gerber Scientific Inc.+ ............ 33,933 65,900 10,000 Gildemeister AG+ ................... 75,736 74,893 63,000 Maezawa Kyuso Industries Co. Ltd. .. 340,143 814,544 9,800 Mine Safety Appliances Co. ......... 262,315 399,056 57,000 Raytech Corp.+ ..................... 184,407 103,170 165,000 Selas Corp. of America+ ............ 515,927 330,825 15,400 SL Industries Inc.+ ................ 107,010 169,400 1,000 SRS Labs Inc.+ ..................... 5,500 5,320 1,100 Watts Water Technologies Inc., Cl. A ............................ 16,825 29,535 ----------- ----------- 3,094,815 3,369,466 ----------- ----------- FINANCIAL SERVICES -- 10.7% 24,000 Berkshire Bancorp Inc. ............. 284,643 394,800 15,900 BKF Capital Group Inc. ............. 375,063 465,870 11,000 Crazy Woman Creek Bancorp Inc.+ .................... 143,391 206,250 747 Danielson Holding Corp.+ ........... 2,531 4,549 5,500 Fidelity Southern Corp. ............ 44,340 83,820 37,000 Flushing Financial Corp. ........... 556,101 703,370 28,000 Fulton Financial Corp. ............. 226,712 599,200 10 Guaranty Corp., Cl. A+ ............. 137,500 161,000 420,000 J Net Enterprises Inc.+ ............ 462,378 1,113,000 32,000 Ladenburg Thalmann Financial Services Inc.+ ................... 31,550 16,000 7,500 Northrim BanCorp Inc. .............. 157,685 163,875 6,390 Parish National Bank of Bogalusa+ .. 234,127 341,865 7,000 Patriot National Bancorp ........... 104,908 97,755 2,500 PennFed Financial Services Inc. .... 86,387 76,025 12,500 Seacoast Banking Corp. of Florida .. 240,300 267,000 3,500 Sunwest Bank+ ...................... 324,002 341,250 17,000 SWS Group Inc. ..................... 303,857 273,360 15,700 Synergy Financial Group Inc. ....... 160,223 165,792 500 TIB Financial Corp. ................ 7,780 11,125 ----------- ----------- 3,883,478 5,485,906 ----------- ----------- FOOD AND BEVERAGE -- 2.2% 14,000 Boston Beer Co. Inc., Cl. A+ ....... 207,587 352,800 4,000 Genesee Corp., Cl. A+ .............. 13,980 8,000 See accompanying notes to financial statements. 23 THE GABELLI WESTWOOD MIGHTY MITES(SM) FUND SCHEDULE OF INVESTMENTS (CONTINUED) -- SEPTEMBER 30, 2004 ================================================================================ MARKET SHARES COST VALUE ------ ---- ------ COMMON STOCKS (CONTINUED) FOOD AND BEVERAGE (CONTINUED) 30,100 Genesee Corp., Cl. B+ .............. $ 55,564 $ 60,200 3,000 J & J Snack Foods Corp.+ ........... 88,065 128,640 11,000 Lifeway Foods Inc.+ ................ 78,614 115,280 35,000 MGP Ingredients Inc. ............... 168,688 347,200 20,000 Northland Cranberries Inc., Cl. A+ . 15,400 15,500 1,000 Poore Brothers Inc.+ ............... 2,660 2,750 8,500 Scheid Vineyards Inc., Cl. A+ ...... 47,912 44,192 5,000 Todhunter International Inc.+ ...... 53,388 60,800 ----------- ----------- 731,858 1,135,362 ----------- ----------- HEALTH CARE -- 12.6% 17,400 Arkopharma ......................... 248,814 360,902 100,000 BioLase Technology Inc. ............ 1,184,099 816,000 9,000 Biosite Inc.+ ...................... 276,270 440,640 16,000 Boiron SA .......................... 257,514 437,185 7,000 Bruker BioSciences Corp.+ .......... 27,970 24,220 75,000 Cholestech Corp.+ .................. 570,157 507,000 100,000 Del Global Technologies Corp.+ ..... 215,065 270,000 15,100 Exactech Inc.+ ..................... 233,128 308,795 4,000 ICU Medical Inc.+ .................. 127,860 104,160 20,000 Innova LifeSciences Corp.+ ......... 15,567 22,125 139,300 Lifecore Biomedical Inc.+ .......... 1,010,063 975,100 19,000 Neogen Corp.+ ...................... 215,983 371,070 2,500 NMT Medical Inc.+ .................. 7,858 9,750 10,000 NWH Inc. ........................... 192,040 176,790 4,000 Orthofix International NV+ ......... 108,404 137,400 41,000 Regeneration Technologies Inc.+ .... 370,154 328,820 32,000 Schick Technologies Inc.+ .......... 253,601 350,400 18,000 Thoratec Corp.+ .................... 222,997 173,160 2,000 Tutogen Medical Inc.+ .............. 10,180 5,980 140,000 VitalWorks Inc.+ ................... 733,119 522,200 6,000 Women First HealthCare Inc.+ ....... 4,875 18 5,000 Young Innovations Inc. ............. 135,280 165,000 ----------- ----------- 6,420,998 6,506,715 ----------- ----------- HOTELS AND GAMING -- 0.7% 8,000 Boca Resorts Inc., Cl. A+ .......... 111,402 148,560 12,000 Dover Downs Gaming & Entertainment Inc. ............... 113,503 123,480 29 Fair Grounds Corp.+ ................ 177,460 36,033 2,000 Florida Gaming Corp.+ .............. 6,950 20,020 ----------- ----------- 409,315 328,093 ----------- ----------- MANUFACTURED HOUSING AND RECREATIONAL VEHICLES -- 11.8% 100,000 Cavalier Homes Inc.+ ............... 547,235 565,000 50,000 Cavco Industries Inc.+ ............. 1,862,984 1,888,500 16,800 Nobility Homes Inc. ................ 263,254 393,120 19,000 Palm Harbor Homes Inc.+ ............ 388,657 320,150 55,000 Skyline Corp. ...................... 1,832,704 2,202,750 160,000 Southern Energy Homes Inc.+ ........ 594,482 707,200 ----------- ----------- 5,489,316 6,076,720 ----------- ----------- MARKET SHARES COST VALUE ------ ---- ------ METALS AND MINING -- 0.0% 615,000 Royal Oak Mines Inc.+ .............. $ 2,314 $ 8,610 ----------- ----------- PAPER AND FOREST PRODUCTS -- 0.4% 15,000 Packaging Dynamics Corp. ........... 111,035 214,500 ----------- ----------- PUBLISHING -- 1.3% 100,000 PRIMEDIA Inc.+ ..................... 190,965 235,000 15,400 Thomas Nelson Inc. ................. 160,813 301,070 5,500 William H. Sadlier Inc.+ ........... 154,564 149,188 ----------- ----------- 506,342 685,258 ----------- ----------- REAL ESTATE -- 2.8% 12,000 Biloxi Marsh Lands Corp. ........... 93,653 468,000 28,000 Calcasieu Real Estate & Oil Co. Inc. 177,625 226,100 5,000 Capital Properties Inc., Cl. A ..... 73,300 73,875 50 Case Pomeroy & Co. Inc., Cl. A ..... 58,825 64,125 50 Case Pomeroy & Co. Inc., Cl. B ..... 58,825 51,250 500 Consolidated-Tomoka Land Co. ....... 10,520 17,390 14,000 Griffin Land & Nurseries Inc.+ ..... 268,252 336,000 5,500 Gyrodyne Company of America Inc.+ .................... 88,163 198,000 2,508 Royalty Ll+ ........................ 0 0 ----------- ----------- 829,163 1,434,740 ----------- ----------- RETAIL -- 0.5% 1,200 Bowlin Travel Centers Inc.+ ........ 1,800 2,190 4,000 CoolBrands International Inc.+ ..... 5,397 29,236 1,000 Gander Mountain Co.+ ............... 22,110 20,015 12,000 Movado Group Inc. .................. 171,186 204,000 8,000 Sport Supply Group Inc.+ ........... 10,250 11,800 ----------- ----------- 210,743 267,241 ----------- ----------- SPECIALTY CHEMICALS -- 1.3% 267,226 General Chemical Group Inc.+ ....... 59,859 10,689 1,000 KMG Chemicals Inc. ................. 3,270 3,690 23,000 Material Sciences Corp.+ ........... 250,259 310,270 59,000 Omnova Solutions Inc.+ ............. 327,675 355,770 ----------- ----------- 641,063 680,419 ----------- ----------- TELECOMMUNICATIONS -- 2.3% 1,000 Ambient Corp.+ ..................... 280 195 32,540 ATX Communications Inc.+ ........... 68,495 2,278 25,896 D&E Communications Inc. ............ 290,401 297,804 13,000 HickoryTech Corp. .................. 154,118 150,813 80 Horizon Telecom Inc., Cl. A+ (a) ... 9,250 7,331 339 Horizon Telecom Inc., Cl. B+ (a) ... 39,073 31,064 1,500 Lexcom Inc., Cl. B+ ................ 86,355 63,187 18,876 New Ulm Telecom Inc. ............... 182,554 172,715 922 NTL Inc.+ .......................... 31,540 57,229 10,000 PNV Inc.+ .......................... 3 17 6,600 Shenandoah Telecommunications Co. ........... 101,736 169,026 10,000 Stratos International Inc.+ ........ 38,124 44,600 1,000 SureWest Communications ............ 26,664 28,670 See accompanying notes to financial statements. 24 THE GABELLI WESTWOOD MIGHTY MITES(SM) FUND SCHEDULE OF INVESTMENTS (CONTINUED) -- SEPTEMBER 30, 2004 ================================================================================ MARKET SHARES COST VALUE ------ ---- ------ COMMON STOCKS (CONTINUED) TELECOMMUNICATIONS (CONTINUED) 50,000 Sycamore Networks Inc.+ ............ $ 164,231 $ 189,000 ----------- ----------- 1,192,824 1,213,929 ----------- ----------- TRANSPORTATION -- 0.3% 5,000 Old Dominion Freight Line Inc.+ .... 105,770 144,050 ----------- ----------- WIRELESS COMMUNICATIONS -- 0.1% 9,000 Rural Cellular Corp., Cl. A+ ....... 7,830 62,010 ----------- ----------- TOTAL COMMON STOCKS ................ 41,559,558 49,819,181 ----------- ----------- PREFERRED STOCKS -- 1.4% AUTOMOTIVE: PARTS AND ACCESSORIES -- 0.8% 21,000 Jungheinrich AG Pfd. ............... 170,463 412,358 ----------- ----------- BROADCASTING -- 0.4% 532 Granite Broadcasting Corp., 12.750% Pfd.+ .................... 224,996 218,120 ----------- ----------- DIVERSIFIED INDUSTRIAL -- 0.2% 22,000 WHX Corp., $3.75 Cv. Pfd., Ser. B+ .......... 112,890 110,000 ----------- ----------- TOTAL PREFERRED STOCKS ............. 508,349 740,478 ----------- ----------- CONVERTIBLE PREFERRED STOCKS -- 1.1% BUSINESS SERVICES -- 1.0% 6,485 Interep National Radio Sales Inc., 4.000% Cv. Pfd., Ser. A (a)(b) ... 648,944 524,023 ----------- ----------- DIVERSIFIED INDUSTRIAL -- 0.1% 5,500 WHX Corp., 6.500% Cv. Pfd., Ser. A+ ......... 33,640 26,950 ----------- ----------- TOTAL CONVERTIBLE PREFERRED STOCKS ................. 682,584 550,973 ----------- ----------- WARRANTS -- 0.1% BUSINESS SERVICES -- 0.0% 1,666 Avalon Digital Marketing Systems Inc., expires 11/11/11+ (a) ...... 0 0 37,500 Interep National Radio Sales Inc., expires 05/06/07+ (a) ............ 0 0 ----------- ----------- 0 0 ----------- ----------- TELECOMMUNICATIONS -- 0.1% 2,000 Microcell Telecommunications Inc., Cl. A, expires 05/01/05+ ......... 1,000 25,444 3,333 Microcell Telecommunications Inc., Cl. B, expires 05/01/08+ ......... 2,766 40,821 ----------- ----------- 3,766 66,265 ----------- ----------- TOTAL WARRANTS ..................... 3,766 66,265 ----------- ----------- PRINCIPAL MARKET AMOUNT COST VALUE --------- ---- ------ U.S. GOVERNMENT OBLIGATIONS -- 0.7% U.S. TREASURY BILLS -- 0.7% $341,000 U.S. Treasury Bills, 1.502% to 1.600%++, 10/07/04 to 11/18/04 ............. $ 340,369 $ 340,369 ----------- ----------- TOTAL U.S. GOVERNMENT OBLIGATIONS ...................... 340,369 340,369 ----------- ----------- TOTAL INVESTMENTS -- 99.9% ......... $43,094,626 51,517,266 =========== OTHER ASSETS AND LIABILITIES (NET) -- 0.1% ....... 34,702 ----------- NET ASSETS -- 100.0% ............................. $51,551,968 =========== - --------------- For Federal tax purposes: Aggregate cost ................................... $43,106,923 =========== Gross unrealized appreciation .................... $11,865,369 Gross unrealized depreciation .................... (3,455,026) ----------- Net unrealized appreciation (depreciation) ....... $ 8,410,343 =========== - --------------- (a) Security fair valued under procedures established by the Board of Trustees. The aggregate value of fair valued securities is $652,023 or 1.26% of net assets. See Note 2 to the financial statements. (b) This security is restricted as to resale, but is convertible into registered common stock, and has been fair valued under procedures established by the Board of Trustees since its purchase on May 3, 2002. A dividend was paid in kind on May 1, 2003 of 236 shares and on May 3, 2004 of 249 shares. At September 30, 2004, the aggregate value of restricted securities is $524,023 or 1.02% of net assets.Details of the original acquisition are set forth below: 9/30/04 CARRYING ACQUISITION ACQUISITION ACQUISITION VALUE SHARES ISSUER DATE COST PER UNIT -------- ------ ------ ------ -------- 6,000 Interep National Radio Sales Inc., 4.000% Cv. Pfd., Ser. A .......... 5/3/02 $600,000 $80.8053 -------- + 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. 25 THE GABELLI WESTWOOD FUNDS STATEMENTS OF ASSETS AND LIABILITIES SEPTEMBER 30, 2004 ============================================================================================================================= EQUITY BALANCED INTERMEDIATE SMALLCAP FUND FUND BOND FUND EQUITY FUND ------------ ------------ ------------ ------------ ASSETS: Investments, at value (Cost $152,229,015, $122,846,617, $9,637,730, $11,186,393, $12,319,725 and $43,094,626, respectively) ................. $180,200,446 $139,184,961 $ 9,875,230 $ 11,946,410 Cash .............................................. 2,108,488 1,011,330 145,825 242,748 Dividends and interest receivable ................. 162,955 543,622 89,783 17,089 Receivable for Fund shares sold ................... 58,201 194,947 8,307 697 Receivable for investments sold ................... 1,195,129 2,238,653 -- 361,811 ------------ ------------ ----------- ------------ TOTAL ASSETS ...................................... 183,725,219 143,173,513 10,119,145 12,568,755 ------------ ------------ ----------- ------------ LIABILITIES: Dividends payable ................................. -- -- 3,084 -- Payable for Fund shares redeemed .................. 440,232 152,058 346 10,319 Payable for investments purchased ................. 45,050 108,633 -- 249,692 Payable for investment advisory fees .............. 150,071 87,207 2,856 5,810 Payable for distribution fees ..................... 38,308 30,759 2,347 2,557 Payable to custodian .............................. 5,603 123 1,158 3,222 Other accrued expenses ............................ 121,382 87,463 24,858 21,558 ------------ ------------ ----------- ------------ TOTAL LIABILITIES ................................. 800,646 466,243 34,649 293,158 ------------ ------------ ----------- ------------ NET ASSETS ........................................ $182,924,573 $142,707,270 $10,084,496 $ 12,275,597 ============ ============ =========== ============ NET ASSETS CONSIST OF: Shares of beneficial interest, at $0.001 par value ............................... $ 19,619 $ 12,439 $ 902 $ 1,351 Additional paid-in capital ........................ 183,619,598 129,938,774 9,774,777 22,824,778 Accumulated (distributions in excess of) net investment income (loss) ................... 936,755 -- (428) -- Accumulated net realized gain (loss)on investments (29,622,830) (3,582,287) 71,745 (11,310,549) Net unrealized appreciation on investments ........ 27,971,431 16,338,344 237,500 760,017 ------------ ------------ ----------- ------------ TOTAL NET ASSETS .................................. $182,924,573 $142,707,270 $10,084,496 $ 12,275,597 ============ ============ =========== ============ CLASS AAA: Total net assets .................................. $179,407,074 $136,399,797 $ 9,553,331 $ 12,105,416 ============ ============ =========== ============ Shares of beneficial interest outstanding ......... 19,239,972 11,887,419 854,493 1,332,536 ========== ========== ======= ========= NET ASSET VALUE, offering and redemption price per share ................................ $9.32 $11.47 $11.18 $9.08 ===== ====== ====== ===== CLASS A: Total net assets .................................. $3,328,361 $5,298,679 $75,233 $140,071 ========== ========== ======= ======== Shares of beneficial interest outstanding ......... 358,573 463,056 6,730 15,439 ======= ======= ===== ====== NET ASSET VALUE and redemption price per share ................................ $9.28 $11.44 $11.18 $9.07 ===== ====== ====== ===== Maximum sales charge .............................. 4.00% 4.00% 4.00% 4.00% ==== ==== ==== ==== Maximum offering price per share (NAV / 0.96, based on maximum sales charge of 4.00% of the offering price at September 30, 2004) .......... $9.67 $11.92 $11.65 $9.45 ===== ====== ====== ===== CLASS B: Total net assets .................................. $37,457 $162,718 $455,824 $20,130 ======= ======== ======== ======= Shares of beneficial interest outstanding ......... 4,067 14,230 40,789 2,271 ===== ====== ====== ===== NET ASSET VALUE and offering price per share ................................ $9.21(a) $11.43(a) $11.18(a) 8.86(a) ===== ====== ====== ==== CLASS C: Total net assets .................................. $151,681 $846,076 $108 $9,980 ======== ======== ==== ====== Shares of beneficial interest outstanding ......... 16,413 73,909 9.67 1,110 ====== ====== ==== ===== NET ASSET VALUE and offering price per share ...... $9.24(a) $11.45(a) $11.17(a) $8.99(a) ===== ====== ====== ===== THE GABELLI WESTWOOD FUNDS STATEMENTS OF ASSETS AND LIABILITIES SEPTEMBER 30, 2004 ======================================================================================= REALTY MIGHTY FUND MITES(SM) FUND ----------- --------------- ASSETS: Investments, at value (Cost $152,229,015, $122,846,617, $9,637,730, $11,186,393, $12,319,725 and $43,094,626, respectively) ................. $15,768,114 $51,517,266 Cash .............................................. 697,302 11,960 Dividends and interest receivable ................. 69,852 120,071 Receivable for Fund shares sold ................... 20,049 300 Receivable for investments sold ................... -- -- ----------- ----------- TOTAL ASSETS ...................................... 16,555,317 51,649,597 ----------- ----------- LIABILITIES: Dividends payable ................................. -- -- Payable for Fund shares redeemed .................. 36,227 24,123 Payable for investments purchased ................. -- -- Payable for investment advisory fees .............. 11,520 15,415 Payable for distribution fees ..................... 3,376 11,033 Payable to custodian .............................. 1,392 10,145 Other accrued expenses ............................ 19,046 36,913 ----------- ----------- TOTAL LIABILITIES ................................. 71,561 97,629 ----------- ----------- NET ASSETS ........................................ $16,483,756 $51,551,968 =========== =========== NET ASSETS CONSIST OF: Shares of beneficial interest, at $0.001 par value ............................... $ 1,167 $ 3,422 Additional paid-in capital ........................ 12,284,491 39,547,087 Accumulated (distributions in excess of) net investment income (loss) ................... -- 26,184 Accumulated net realized gain (loss)on investments 749,709 3,552,413 Net unrealized appreciation on investments ........ 3,448,389 8,422,862 ----------- ----------- TOTAL NET ASSETS .................................. $16,483,756 $51,551,968 =========== =========== CLASS AAA: Total net assets .................................. $16,472,112 $50,805,129 =========== =========== Shares of beneficial interest outstanding ......... 1,166,353 3,371,111 ========= ========= NET ASSET VALUE, offering and redemption price per share ................................ $14.12 $15.07 ====== ====== CLASS A: Total net assets .................................. $4,731 $38,898 ====== ======= Shares of beneficial interest outstanding ......... 330.1 2,580 ===== ===== NET ASSET VALUE and redemption price per share ................................ $14.33 $15.08 ====== ====== Maximum sales charge .............................. 4.00% 4.00% ==== ==== Maximum offering price per share (NAV / 0.96, based on maximum sales charge of 4.00% of the offering price at September 30, 2004) .......... $14.93 $15.71 ====== ====== CLASS B: Total net assets .................................. $1,715 $400,110 ====== ======== Shares of beneficial interest outstanding ......... 119.7 26,991 ===== ====== NET ASSET VALUE and offering price per share ................................ $14.33(a) $14.82(a) ====== ====== CLASS C: Total net assets .................................. $5,198 $307,831 ====== ======== Shares of beneficial interest outstanding ......... 354.67 20,847 ====== ====== NET ASSET VALUE and offering price per share ...... $14.66(a) $14.77(a) ====== ====== <FN> - -------------- (a) Redemption price varies based on length of time held. </FN> See accompanying notes to financial statements. 26 THE GABELLI WESTWOOD FUNDS STATEMENTS OF OPERATIONS FOR THE YEAR ENDED SEPTEMBER 30, 2004 ==================================================================================================================================== EQUITY BALANCED INTERMEDIATE SMALLCAP REALTY MIGHTY FUND FUND BOND FUND EQUITY FUND FUND MITES(SM) FUND ----------- ----------- ------------ ----------- ---------- -------------- INVESTMENT INCOME: Dividends (net of foreign taxes of $0, $0, $0, $0, $0 and $8,320, respectively) .... $ 4,903,121 $ 2,418,267 $ -- $ 50,811 $ 619,704 $ 719,294 Interest ................................... 262 2,207,500 426,838 -- -- 84,502 ----------- ----------- --------- ---------- ---------- ---------- TOTAL INVESTMENT INCOME .................... 4,903,383 4,625,767 426,838 50,811 619,704 803,796 ----------- ----------- --------- ---------- ---------- ---------- EXPENSES: Investment advisory fees ................... 2,049,320 1,106,180 64,453 131,731 154,339 617,438 Distribution fees -- Class AAA ............. 503,916 353,208 25,451 32,275 38,526 152,485 Distribution fees -- Class A ............... 15,770 26,083 335 622 85 186 Distribution fees -- Class B ............... 682 1,773 4,301 483 15 4,801 Distribution fees -- Class C ............... 1,435 8,137 360 903 48 2,326 Legal and audit fees ....................... 77,081 60,385 16,574 27,481 15,556 33,381 Custodian fees ............................. 51,621 25,696 8,164 23,504 9,214 40,466 Shareholder services fees .................. 209,745 115,901 17,980 15,273 14,895 74,462 Registration fees .......................... 40,133 42,528 42,083 36,205 41,272 40,284 Shareholder report expenses ................ 58,787 43,291 4,886 5,833 5,563 20,180 Trustee fees ............................... 10,975 7,789 561 604 806 3,226 Miscellaneous expenses ..................... 56,293 50,831 7,481 5,183 4,918 43,384 ----------- ----------- --------- ---------- ---------- ---------- TOTAL EXPENSES ............................. 3,075,758 1,841,802 192,629 280,097 285,237 1,032,619 ----------- ----------- --------- ---------- ---------- ---------- LESS: Expense reimbursements .................. -- -- (79,956) (79,469) (46,975) (101,024) Custodian fee credits ................... (9,194) (25,631) (1,660) (1,680) (6,664) -- ----------- ----------- --------- ---------- ---------- ---------- TOTAL REIMBURSEMENTS AND CREDITS ........ (9,194) (25,631) (81,616) (81,149) (53,639) (101,024) ----------- ----------- --------- ---------- ---------- ---------- TOTAL NET EXPENSES ...................... 3,066,564 1,816,171 111,013 198,948 231,598 931,595 ----------- ----------- --------- ---------- ---------- ---------- NET INVESTMENT INCOME (LOSS) ............... 1,836,819 2,809,596 315,825 (148,137) 388,106 (127,799) ----------- ----------- --------- ---------- ---------- ---------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY: Net realized gain on investments and foreign currency transactions ........... 12,951,512 5,341,452 89,104 2,782,169 1,063,262 3,983,019 Net change in unrealized appreciation/ depreciation on investments and foreign currency translations ........... 19,598,673 7,980,425 (240,477) (561,144) 1,402,579 2,813,159 ----------- ----------- --------- ---------- ---------- ---------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY ..... 32,550,185 13,321,877 (151,373) 2,221,025 2,465,841 6,796,178 NET INCREASE FROM PAYMENTS BY AFFILIATES AND NET GAINS (LOSSES) REALIZED ON THE DISPOSAL OF INVESTMENTS IN EXCESS OF RESTRICTIONS (SEE NOTE 6) ............................ -- -- -- -- -- -- ----------- ----------- --------- ---------- ---------- ---------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ......................... $34,387,004 $16,131,473 $ 164,452 $2,072,888 $2,853,947 $6,668,379 =========== =========== ========= ========== ========== ========== See accompanying notes to financial statements. 27 THE GABELLI WESTWOOD FUNDS STATEMENTS OF CHANGES IN NET ASSETS ================================================================================================================================== EQUITY FUND BALANCED FUND ----------- ------------- FOR THE YEAR ENDED SEPTEMBER 30, FOR THE YEAR ENDED SEPTEMBER 30, -------------------------------- -------------------------------- 2004 2003 2004 2003 ------------ ------------ ------------ ------------ OPERATIONS: Net investment income (loss) ........................... $ 1,836,819 $ 2,742,514 $ 2,809,596 $ 3,324,387 Net realized gain (loss) on investments ................ 12,951,512 (17,118,232) 5,341,452 (3,969,952) Net change in unrealized appreciation/depreciation on investments ...................................... 19,598,673 46,872,694 7,980,425 17,609,031 ------------ ------------ ------------ ------------ Net increase in net assets resulting from operations ... 34,387,004 32,496,976 16,131,473 16,963,466 ------------ ------------ ------------ ------------ DISTRIBUTIONS TO SHAREHOLDERS: Net investment income Class AAA ........................................... (2,610,574) (2,602,620) (2,712,732) (3,238,083) Class A ............................................. (33,292) (15,571) (88,575) (95,033) Class B ............................................. (658) (278) (2,302) (2,167) Class C ............................................. -- (2,736) (9,907) (5,249) ------------ ------------ ------------ ------------ Total distributions to shareholders .................... (2,644,524) (2,621,205) (2,813,516) (3,340,532) ------------ ------------ ------------ ------------ SHARES OF BENEFICIAL INTEREST TRANSACTIONS: Proceeds from shares issued Class AAA ........................................... 40,481,821 46,407,699 32,079,495 38,772,298 Class A ............................................. 739,947 1,345,854 346,618 935,819 Class B ............................................. 6,837 51,042 27,409 92,381 Class C ............................................. 10,387 863,444 919,608 706,432 ------------ ------------ ------------ ------------ 41,238,992 48,668,039 33,373,130 40,506,930 ------------ ------------ ------------ ------------ Proceeds from reinvestment of dividends Class AAA ........................................... 2,404,917 2,264,442 2,514,096 3,005,116 Class A ............................................. 32,283 14,299 72,907 78,353 Class B ............................................. 399 278 2,035 1,924 Class C ............................................. -- 2,735 6,158 2,797 ------------ ------------ ------------ ------------ 2,437,599 2,281,754 2,595,196 3,088,190 ------------ ------------ ------------ ------------ Cost of shares redeemed Class AAA ........................................... (116,358,886) (87,748,936) (63,378,286) (53,401,600) Class A ............................................. (841,291) (594,797) (646,777) (2,168,311) Class B ............................................. (53,946) (33,717) (66,789) (31,726) Class C ............................................. (9,276) (777,960) (608,535) (570,280) ------------ ------------ ------------ ------------ (117,263,399) (89,155,410) (64,700,387) (56,171,917) ------------ ------------ ------------ ------------ Net increase (decrease) in net assets from shares of beneficial interest transactions .................... (73,586,808) (38,205,617) (28,732,061) (12,576,797) ------------ ------------ ------------ ------------ Net increase (decrease) in net assets .................. (41,844,328) (8,329,846) (15,414,104) 1,046,137 ------------ ------------ ------------ ------------ REDEMPTION FEES: Redemption fees ........................................ 7,830 -- 2,085 -- ------------ ------------ ------------ ------------ Net increase (decrease) in net assets .................. (41,836,498) (8,329,846) (15,412,019) 1,046,137 NET ASSETS: Beginning of period .................................... 224,761,071 233,090,917 158,119,289 157,073,152 ------------ ------------ ------------ ------------ End of period .......................................... $182,924,573 $224,761,071 $142,707,270 $158,119,289 ============ ============ ============ ============ Undistributed net investment income .................... $ 936,755 $ 1,744,460 $ -- $ -- ============ ============ ============ ============ See accompanying notes to financial statements. 28 THE GABELLI WESTWOOD FUNDS STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) ================================================================================================================================== INTERMEDIATE BOND FUND SMALLCAP EQUITY FUND ---------------------- -------------------- FOR THE YEAR ENDED SEPTEMBER 30, FOR THE YEAR ENDED SEPTEMBER 30, -------------------------------- -------------------------------- 2004 2003 2004 2003 ----------- ------------ ----------- ------------ OPERATIONS: Net investment income (loss) ........................... $ 315,825 $ 392,973 $ (148,137) $ (167,046) Net realized gain (loss) on investments ................ 89,104 353,776 2,782,169 (610,797) Net change in unrealized appreciation/ depreciation on investments ......................... (240,477) (389,189) (561,144) 2,243,193 Net increase from payments by affiliates and net gains (losses) realized on the disposal of investments in excess of restrictions (See Note 6) ................. -- -- -- -- ----------- ------------ ----------- ------------ Net increase in net assets resulting from operations ... 164,452 357,560 2,072,888 1,465,350 ----------- ------------ ----------- ------------ DISTRIBUTIONS TO SHAREHOLDERS: Net investment income Class AAA ........................................... (302,691) (380,496) -- -- Class A ............................................. (2,749) (2,488) -- -- Class B ............................................. (9,589) (7,806) -- -- Class C ............................................. (796) (2,198) -- -- ----------- ------------ ----------- ------------ (315,825) (392,988) -- -- ----------- ------------ ----------- ------------ Net realized gain on investment transactions Class AAA ........................................... (12,960) -- -- -- Class A ............................................. (124) -- -- -- Class B ............................................. (478) -- -- -- Class C ............................................. (55) -- -- -- ----------- ------------ ----------- ------------ (13,617) -- -- -- ----------- ------------ ----------- ------------ Total distributions to shareholders .................... (329,442) (392,988) -- -- ----------- ------------ ----------- ------------ SHARES OF BENEFICIAL INTEREST TRANSACTIONS: Proceeds from shares issued Class AAA ........................................... 1,979,778 41,063,328 15,506,831 18,908,564 Class A ............................................. 2,800 170,010 15,000 33,727 Class B ............................................. 79,307 848,694 350 32,037 Class C ............................................. 2 1,308,262 -- 115,731 ----------- ------------ ----------- ------------ 2,061,887 43,390,294 15,522,181 19,090,059 ----------- ------------ ----------- ------------ Proceeds from reinvestment of dividends Class AAA ........................................... 279,339 328,481 -- -- Class A ............................................. 2,791 2,255 -- -- Class B ............................................. 4,539 4,411 -- -- Class C ............................................. 814 1,852 -- -- ----------- ------------ ----------- ------------ 287,483 336,999 -- -- ----------- ------------ ----------- ------------ Cost of shares redeemed Class AAA ........................................... (4,724,149) (44,340,287) (21,176,934) (20,860,519) Class A ............................................. (67,125) (93,540) -- -- Class B ............................................. (123,006) (577,839) (49,941) -- Class C ............................................. (45,792) (1,311,766) (101,961) -- ----------- ------------ ----------- ------------ (4,960,072) (46,323,432) (21,328,836) (20,860,519) ----------- ------------ ----------- ------------ Net increase (decrease) in net assets from shares of beneficial interest transactions .................... (2,610,702) (2,596,139) (5,806,655) (1,770,460) ----------- ------------ ----------- ------------ Net increase (decrease) in net assets .................. (2,775,692) (2,631,567) (3,733,767) (305,110) REDEMPTION FEES: Redemption fees ........................................ 194 -- 396 -- ----------- ------------ ----------- ------------ Net increase (decrease) in net assets .................. (2,775,498) (2,631,567) (3,733,371) (305,110) NET ASSETS: Beginning of period .................................... 12,859,994 15,491,561 16,008,968 16,314,078 ----------- ------------ ----------- ------------ End of period .......................................... $10,084,496 $ 12,859,994 $12,275,597 $ 16,008,968 =========== ============ =========== ============ Undistributed net investment income .................... $ 2,656 $ -- $ -- $ -- =========== ============ =========== ============ See accompanying notes to financial statements. 29 THE GABELLI WESTWOOD FUNDS STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) ================================================================================================================================== REALTY FUND MIGHTY MITES(SM) FUND ----------- --------------------- FOR THE YEAR ENDED SEPTEMBER 30, FOR THE YEAR ENDED SEPTEMBER 30, -------------------------------- -------------------------------- 2004 2003 2004 2003 ----------- ------------ ----------- ------------ OPERATIONS: Net investment income (loss) ........................... $ 388,106 $ 421,987 $ (127,799) $ (80,408) Net realized gain (loss) on investments and foreign currency transactions ............................... 1,063,262 45,727 3,983,019 658,859 Net change in unrealized appreciation/depreciation on investments and foreign currency translations .... 1,402,579 2,078,575 2,813,159 6,462,220 ----------- ----------- ------------ ------------ Net increase in net assets resulting from operations ... 2,853,947 2,546,289 6,668,379 7,040,671 ----------- ----------- ------------ ------------ DISTRIBUTIONS TO SHAREHOLDERS: Net investment income Class AAA ........................................... (387,478) (423,817) -- (86,465) Class A ............................................. (503) (143) -- (97) Class B ............................................. (32) (405) -- -- Class C ............................................. (93) (34) -- -- ----------- ----------- ------------ ------------ (388,106) (424,399) -- (86,562) ----------- ----------- ------------ ------------ Net realized gain on investment transactions Class AAA ........................................... (58,855) -- (661,777) (118,037) Class A ............................................. (76) -- (388) (82) Class B ............................................. (5) -- (5,992) (17) Class C ............................................. (14) -- (1,697) (257) ----------- ----------- ------------ ------------ (58,950) -- (669,854) (118,393) ----------- ----------- ------------ ------------ Total distributions to shareholders .................... (447,056) (424,399) (669,854) (204,955) ----------- ----------- ------------ ------------ SHARES OF BENEFICIAL INTEREST TRANSACTIONS: Proceeds from shares issued Class AAA ........................................... 6,942,146 11,175,605 52,277,745 40,071,725 Class A ............................................. 29,047 100,769 1,694 28,170 Class B ............................................. -- 35,053 10,286 546,036 Class C ............................................. -- 11,314 203,866 88,426 ----------- ----------- ------------ ------------ 6,971,193 11,322,741 52,493,591 40,734,357 ----------- ----------- ------------ ------------ Proceeds from reinvestment of dividends Class AAA ........................................... 407,356 381,961 577,769 186,652 Class A ............................................. 576 140 387 178 Class B ............................................. 34 403 5,990 16 Class C ............................................. 104 31 1,696 256 ----------- ----------- ------------ ------------ 408,070 382,535 585,842 187,102 ----------- ----------- ------------ ------------ Cost of shares redeemed Class AAA ........................................... (7,202,768) (8,875,621) (59,054,214) (27,082,367) Class A ............................................. (39,859) (96,437) -- -- Class B ............................................. -- (43,582) (192,800) (49,416) Class C ............................................. -- (7,289) (11,877) (60,346) ----------- ----------- ------------ ------------ (7,242,627) (9,022,929) (59,258,891) (27,192,129) ----------- ----------- ------------ ------------ Net increase (decrease) in net assets from shares of beneficial interest transactions .................... 136,636 2,682,347 (6,179,458) 13,729,330 ----------- ----------- ------------ ------------ Net increase (decrease) in net assets .................. 2,543,527 4,804,237 (180,933) 20,565,046 ----------- ----------- ------------ ------------ REDEMPTION FEES: Redemption fees ........................................ 984 -- 461 -- ----------- ----------- ------------ ------------ Net increase (decrease) in net assets .................. 2,544,511 4,804,237 (180,472) 20,565,046 NET ASSETS: Beginning of period .................................... 13,939,245 9,135,008 51,732,440 31,167,394 ----------- ----------- ------------ ------------ End of period .......................................... $16,483,756 $13,939,245 $ 51,551,968 $ 51,732,440 =========== =========== ============ ============ Undistributed net investment income .................... $ -- $ -- $ -- $ -- =========== =========== ============ ============ See accompanying notes to financial statements. 30 THE GABELLI WESTWOOD FUNDS NOTES TO FINANCIAL STATEMENTS ================================================================================ 1. ORGANIZATION. The Gabelli Westwood Funds (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as a diversified, open-end management investment company and currently consists of six active separate investment portfolios: Equity Fund, Balanced Fund, Intermediate Bond Fund, SmallCap Equity Fund, Realty Fund and Mighty Mites(SM) Fund (collectively, the "Funds"), each with four classes of shares known as the Class AAA Shares, Class A Shares, Class B Shares and Class C Shares. Each class of shares outstanding bears the same voting, dividend, liquidation and other rights and conditions, except that the expenses incurred in the distribution and marketing of such shares are different for each class. 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 the significant accounting policies followed by the Funds in the preparation of their 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 Advisers, Inc. (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 of the foreign markets, but prior to the close of business on the day the securities are being valued, 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 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. ACCOUNTING FOR REAL ESTATE INVESTMENT TRUSTS. The Funds own shares of Real Estate Investment Trusts ("REITS") which report information on the source of their distributions annually. Distributions received from REITS during the year which represent a return of capital are recorded as a reduction to the cost of the individual REIT. 31 THE GABELLI WESTWOOD FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) ================================================================================ FOREIGN CURRENCY TRANSLATION. The books and records of the Trust 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 translations. Net realized foreign currency gains and losses resulting from changes in exchange rates include foreign currency gains and losses between trade date and settlement date on investment securities transactions, foreign currency transactions and the difference between the amounts of interest and dividends recorded on the books of the Trust 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 from net investment income are declared and paid annually for the Equity, SmallCap Equity and Mighty Mites(SM) Funds, and quarterly for the Balanced and Realty Funds. The Intermediate Bond Fund declares dividends daily and pays those dividends monthly. Distributions of net realized gain on investments are normally declared and paid at least annually by each Fund. 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 that determined under U.S. generally accepted accounting principles. These differences are primarily due to differing treatments of income and gains on various investment securities held by the Funds, timing differences and differing characterization of distributions made by the Funds. For the year ended September 30, 2004, the following reclassifications were made to increase (decrease) such accounts with offsetting adjustments to additional paid-in-capital. These reclassifications related primarily to distributions from Real Estate Investment Trusts, net operating losses and nondeductible organizational costs. ACCUMULATED UNDISTRIBUTED ACCUMULATED REALIZED NET INVESTMENT INCOME (LOSS) GAIN (LOSS) ON INVESTMENTS ---------------------------- -------------------------- Equity Fund .......................... $ -- $ -- Balanced Fund ........................ 3,920 (3,602) Intermediate BondFund ................ 153 (153) SmallCap Equity Fund ................. (148,137) -- Realty Fund .......................... 58,950 (58,862) Mighty Mites(SM) Fund ................ 154,093 (154,093) 32 THE GABELLI WESTWOOD FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) ================================================================================ The tax character of distributions paid during the years ended September 30, 2004 and September 30, 2003 was as follows: EQUITY FUND BALANCED FUND INTERMEDIATE BOND FUND ------------------------ ------------------------ ------------------------ YEAR ENDED SEPTEMBER 30, YEAR ENDED SEPTEMBER 30, YEAR ENDED SEPTEMBER 30, ------------------------ ------------------------ ------------------------ 2004 2003 2004 2003 2004 2003 ---------- ---------- ---------- ---------- ---------- ---------- Ordinary income (inclusive of short-term capital gains) ..... $2,644,524 $2,621,205 $2,813,516 $3,340,532 $ 315,825 $ 392,988 Net long term capital gains ................... -- -- -- -- 13,617 -- ---------- ---------- ---------- ---------- ---------- ---------- Total distributions paid ...................... $2,644,524 $2,621,205 $2,813,516 $3,340,532 $ 329,442 $ 392,988 ========== ========== ========== ========== ========== ========== SMALLCAP EQUITY FUND REALTY FUND MIGHTY MITES(SM) FUND ------------------------ ------------------------ ------------------------ Ordinary income (inclusive of short-term capital gains) ..... -- -- $388,106 $424,399 $322,208 $101,542 Net long term capital gains ................... -- -- 58,950 -- 347,646 103,413 --------- --------- -------- -------- -------- -------- Total distributions paid ...................... -- -- $447,056 $424,399 $669,854 $204,955 ========= ========= ======== ======== ======== ======== PROVISION FOR INCOME TAXES. The Funds intend to continue to qualify as regulated investment companies under Subchapter M of the Internal Revenue Code of 1986, as amended. By so qualifying, the Funds will not be subject to federal income taxes to the extent that they distribute all of their taxable income for the fiscal year. As of September 30, 2004, the components of distributable accumulated earnings/(losses) on a tax basis were as follows: INTERMEDIATE SMALLCAP MIGHTY EQUITY BALANCED BOND EQUITY REALTY MITES(SM) FUND FUND FUND FUND FUND FUND ------------ ------------ ------------ ------------ ---------- ----------- Undistributed ordinary income ........... $ 936,755 -- $ 2,656 -- -- $ 911,803 Long-term capital gain .................. -- -- 88,949 -- $ 774,341 2,679,091 Capital loss carryforward ............... (28,759,173) $ (3,379,553) -- $(11,305,503) -- -- Unrealized appreciation/(depreciation) .. 27,107,774 16,135,610 220,296 754,971 3,423,757 8,410,565 ------------ ------------ -------- ------------ ---------- ----------- Total accumulated income/(loss) ......... $ (714,644) $ 12,756,057 $311,901 $(10,550,532) $4,198,098 $12,001,459 ============ ============ ======== ============ ========== =========== The difference between book and tax-basis unrealized appreciation/(depreciation) is attributable primarily to the tax basis deferral of losses on wash sales. Additionally, Mighty Mites(SM) has a basis adjustment due to an investment in a publicly traded limited partnership. DETERMINATION OF NET ASSET VALUE AND CALCULATION OF EXPENSES. Expenses directly attributable to a Fund are charged to that Fund. Other expenses are allocated proportionately among each Fund within the Trust in relation to the net assets of each Fund or on another reasonable basis. In calculating net asset value per share of each class, investment income, realized and unrealized gains and losses and expenses other than class specific expenses are allocated daily to each class of shares based upon the proportion of net assets of each class at the beginning of each day. Distribution expenses are solely borne by the class incurring the expense. CONCENTRATION RISK. The Realty Fund invests a substantial portion of its assets in REITS; therefore it may be more affected by economic developments in the real estate industry than would a general equity fund. 3. INVESTMENT ADVISORY AGREEMENTS. The Funds have entered into an investment advisory agreement (the "Advisory Agreement") with the Adviser which provides that the Funds will pay the Adviser a fee, computed daily and paid monthly, at the annual rate of 1.00% for the Equity, SmallCap Equity, Realty and Mighty Mites(SM) Funds, 0.75% for the Balanced Fund, and 0.60% for the Intermediate Bond Fund, of each Fund's average daily net assets. The Adviser has contractually agreed to waive its investment advisory fee and/or reimburse expenses to the Intermediate Bond, SmallCap Equity, Realty and Mighty 33 THE GABELLI WESTWOOD FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) ================================================================================ Mites(SM) Funds in the event annual expenses of such Funds exceed certain prescribed limits. Such fee waiver/reimbursement arrangement will continue until at least September 30, 2005. For the year ended September 30, 2004, the Adviser was entitled to fees of $2,049,320, $1,106,180, $64,453, $131,731, $154,339 and $617,438 for the Equity, Balanced, Intermediate Bond, SmallCap Equity, Realty and Mighty Mites(SM) Funds, respectively. For the year ended September 30, 2004, the Adviser waived fees or reimbursed expenses in the amounts of $79,956, $79,469, $46,975 and $101,024 and for the Intermediate Bond, SmallCap Equity, Realty and Mighty Mites(SM) Funds, respectively. The Intermediate Bond, SmallCap Equity, Realty and Mighty Mites(SM) Funds are 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 the applicable expense limitation for Class AAA of 1.00%, 1.50%, 1.50% and 1.50%, respectively and for Class A of 1.10%, 1.75%, 1.75% and 1.75%, respectively, and for Class B and Class C of 1.75%, 2.25%, 2.25% and 2.25%, respectively of average daily net assets, the annual limitation under the Advisory Agreement. As of September 30, 2004 the cumulative unreimbursed amounts which may be recovered by the Adviser within the next two fiscal years are $155,718, $155,031, $103,322 and $162,435 for the Intermediate Bond, SmallCap Equity, Realty and Mighty Mites(SM) Funds, respectively. The Funds, with the exception of the Mighty Mites(SM) Fund, have also entered into a sub-advisory agreement with Westwood Management Corp. (the "Sub-Adviser") whereby the Adviser pays the Sub-Adviser the greater of $150,000 per year on an aggregate basis for the Funds or a fee of 35% of net revenues to the Adviser from the Funds. For the year ended September 30, 2004, the Adviser informed the Funds that it paid collectively to the Sub-Adviser fees of $880,925 for the Equity, Balanced, Intermediate Bond, SmallCap Equity andRealty Funds. 4. DISTRIBUTION PLAN. The Funds' Board has adopted a distribution plan (the "Plan") for each class of shares pursuant to Rule 12b-1 under the 1940 Act for each of the classes of shares. Gabelli & Company, Inc. ("Gabelli & Company"), an affiliate of the Adviser, serves as distributor of the Funds. Under the Class AAA, A, B and C Share Plans, payments are authorized to Gabelli & Company at annual rates of 0.25%, 0.50% (for the Intermediate Bond Fund at an annual rate of 0.35%), 1.00% and 1.00%, respectively, of the average daily net assets of those classes, the annual limitations under each Plan. Such payments are accrued daily and paid monthly. 5. PORTFOLIO SECURITIES. Purchases and sales of securities for the year ended September 30, 2004, other than short- term securities, are as follows: PURCHASES SALES PURCHASES SALES (EXCLUDING U.S. (EXCLUDING U.S. OF U.S. OF U.S. GOVERNMENT) GOVERNMENT) GOVERNMENT GOVERNMENT SECURITIES SECURITIES SECURITIES SECURITIES -------------- --------------- ----------- ----------- Equity Fund ...................... $89,379,959 $164,839,209 -- -- Balanced Fund .................... 38,540,050 68,448,652 $33,045,657 $31,254,123 Intermediate Bond Fund ........... 1,153,455 905,637 2,009,868 5,684,064 SmallCap Equity Fund ............. 33,777,161 39,752,189 -- -- Realty Fund ...................... 4,823,706 4,152,614 -- -- Mighty Mites(SM) Fund ............ 31,754,175 18,692,774 -- -- 6. TRANSACTIONS WITH AFFILIATES. During the year ended September 30, 2004, the Mighty Mites(SM) Fund paid brokerage commissions of $57,464 to Gabelli & Company. Gabelli & Company has informed the Trust that it received commissions (sales charges and underwriting fees) from investors on sales or redemptions of Fund shares in the amount of $1,968. 34 THE GABELLI WESTWOOD FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) ================================================================================ The cost of calculating each Fund's net asset value per share is a Fund expense pursuant to the Investment Advisory Agreement between each Fund and Gabelli Advisers, Inc. (the "Adviser"). During the year ended September 30, 2004, the Equity, Balanced and Mighty Mites(SM) Funds reimbursed the Adviser $34,800 each in connection with the cost of computing such Fund's net asset value. A reimbursement was not sought during the fiscal year for theRealty Fund, IntermediateBondFund andSmallCap Equity Fund. SmallCap Equity Fund recorded a reimbursement from the Adviser during August 2004 in the amount of $51,180. This amount was paid in connection with losses incurred in the disposition of certain exchange traded funds which exceeded the Fund's investment restrictions. 7. FEDERAL INCOME TAX INFORMATION. The Equity Fund has capital loss carryforwards for Federal income tax purposes of $5,455,742, $21,893,758 and $1,409,672, available through September 2010, 2011 and 2012, respectively. The Balanced Fund has a capital loss carryforward for Federal income tax purposes of $3,379,553 available through September 2011. The SmallCap Equity Fund has capital loss carryforwards for Federal income tax purposes of $6,460,017 and $4,845,486 available through September 2010 and 2011, respectively. These loss carryforwards are available to reduce distributions of net capital gains to shareholders. During the fiscal year endedSeptember 30, 2004 the Balanced Fund, SmallCap Equity Fund and Realty Fund utilized capital loss carryforwards of $1,600,142, $2,385,162 and $202,902, respectively. Under the current tax law, capital losses related to securities and foreign currency realized after October 31 and prior to the Fund's fiscal year end may be deferred as occurring on the first day of the following year. For the fiscal year ended September 30, 2004 the Funds had no capital losses to defer. 8. OTHER MATTERS. On October 7, 2003, the Funds' 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 a subpoena and letters from the SEC requesting information about mutual fund trading practices and valuation of portfolio securities. The Adviser is responding to these requests. The Funds do not believe that these matters will have a material adverse effect on the Funds' financial position or the results of their operations. 9. INDEMNIFICATIONS. The Funds enter into contracts that contain a variety of indemnifications. The Funds' maximum exposure under these arrangements is unknown. However, the Funds have not had prior claims or losses pursuant to these contracts and expect the risk of loss to be remote. 10. SHARES OF BENEFICIAL INTEREST. The Funds offer four classes of shares -- Class AAA Shares, Class A Shares, Class B Shares, and Class C Shares. Class AAA Shares are offered through selected broker/dealers without a sales charge. Class A Shares are subject to a maximum front-end sales charge of 4.00%. Class B Shares are subject to a contingent deferred sales charge (CDSC) upon redemption within six years of purchase. The applicable CDSC is equal to a declining percentage of the lesser of the net asset value per share at the date of original purchase or at the date of redemption, based on the length of time held. Class C Shares are subject to a 1% CDSC for one year after purchase. As of July 27, 2004, ClassBShares are available only through exchange of Class BShares of other Funds distributed by Gabelli &Company. The Funds impose a redemption fee of 2.00% on Class AAA, Class A, Class B and Class C shares that are purchased on or after August 1, 2004 (July 1, 2004 with respect to the Mighty Mites(SM) Fund), and redeemed or exchanged within 60 days after the date of a purchase. The redemption fee is deducted from the proceeds otherwise payable to the redeeming shareholders and retained by the Funds. The redemption fees returned to the assets of the Funds during the year ended September 30, 2004 amounted to $7,830, $2,085, $194, $396, $984 and $461 for the Equity, Balanced, Intermediate Bond, SmallCap Equity, Realty and Mighty Mites(SM) Funds, respectively. 35 THE GABELLI WESTWOOD FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) ================================================================================ Transactions in shares of beneficial interest were as follows: EQUITY FUND BALANCED FUND ------------------------------- ---------------------------- YEAR ENDED SEPTEMBER 30, YEAR ENDED SEPTEMBER 30, ------------------------------- ---------------------------- 2004 2003 2004 2003 ----------- ----------- ---------- ---------- CLASS AAA Shares sold ............................................... 4,570,931 6,208,684 2,879,300 3,823,778 Shares issued upon reinvestment of dividends .............. 274,221 302,329 224,878 293,563 Shares redeemed ........................................... (13,328,863) (11,724,255) (5,716,541) (5,264,486) ----------- ----------- ---------- ---------- Net increase (decrease) in Class AAA shares ............. (8,483,711) (5,213,242) (2,612,363) (1,147,145) =========== =========== ========== ========== CLASS A Shares sold ............................................... 84,074 186,265 31,077 91,710 Shares issued upon reinvestment of dividends .............. 3,690 1,914 6,537 7,686 Shares redeemed ........................................... (96,075) (80,023) (58,193) (214,898) ----------- ----------- ---------- ---------- Net increase (decrease) in Class A shares ............... (8,311) 108,156 (20,579) (115,502) =========== =========== ========== ========== CLASS B Shares sold ............................................... 828 6,566 2,421 8,962 Shares issued upon reinvestment of dividends .............. 46 37 183 187 Shares redeemed ........................................... (6,196) (4,803) (5,950) (3,310) ----------- ----------- ---------- ---------- Net increase (decrease) in Class B shares ............... (5,322) 1,800 (3,346) 5,839 =========== =========== ========== ========== CLASS C Shares sold ............................................... 1,131 113,403 85,453 69,360 Shares issued upon reinvestment of dividends ............................................ -- 368 552 271 Shares redeemed ........................................... (1,094) (102,101) (55,549) (55,678) ----------- ----------- ---------- ---------- Net increase (decrease) in Class C shares ............... 37 11,670 30,456 13,953 =========== =========== ========== ========== INTERMEDIATE BOND FUND -------------------------- YEAR ENDED SEPTEMBER 30, -------------------------- 2004 2003 ---------- ---------- CLASS AAA Shares sold ............................................... 177,231 3,647,441 Shares issued upon reinvestment of dividends .............. 25,093 29,158 Shares redeemed ........................................... (424,556) (3,941,459) ---------- ---------- Net increase (decrease) in Class AAA shares ............. (222,232) (264,860) ========== ========== CLASS A Shares sold ............................................... 251 15,245 Shares issued upon reinvestment of dividends .............. 251 200 Shares redeemed ........................................... (5,990) (8,177) ---------- ---------- Net increase (decrease) in Class A shares ............... (5,488) 7,268 ========== ========== CLASS B Shares sold ............................................... 7,103 75,176 Shares issued upon reinvestment of dividends .............. 408 392 Shares redeemed ........................................... (11,118) (51,400) ---------- ---------- Net increase (decrease) in Class B shares ............... (3,607) 24,168 ========== ========== CLASS C Shares sold ............................................... -- 118,109 Shares issued upon reinvestment of dividends ............................................ 73 164 Shares redeemed ........................................... (4,146) (118,596) ---------- ---------- Net increase (decrease) in Class C shares ............... (4,073) (323) ========== ========== SMALLCAP EQUITY FUND REALTY FUND ------------------------------- ---------------------------- CLASS AAA Shares sold ............................................... 1,764,700 2,500,124 526,666 1,060,132 Shares issued upon reinvestment of dividends .............. -- -- 31,120 36,193 Shares redeemed ........................................... (2,354,722) (2,741,991) (564,612) (832,671) ----------- ----------- ---------- ---------- Net increase (decrease) in Class AAA shares ............. (590,022) (241,867) (6,826) 263,654 =========== =========== ========== ========== CLASS A Shares sold ............................................... 1,799 4,227 2,331 9,846 Shares issued upon reinvestment of dividends .............. -- -- 45 12 Shares redeemed ........................................... -- -- (2,910) (9,323) ----------- ----------- ---------- ---------- Net increase (decrease) in Class A shares ............... 1,799 4,227 (534) 535 =========== =========== ========== ========== CLASS B Shares sold ............................................... 41 3,889 -- 3,525 Shares issued upon reinvestment of dividends .............. -- -- 3 40 Shares redeemed ........................................... (5,827) -- -- (4,384) ----------- ----------- ---------- ---------- Net increase (decrease) in Class B shares ............... (5,786) 3,889 3 (819) =========== =========== ========== ========== CLASS C Shares sold ............................................... -- 13,643 -- 1,076 Shares issued upon reinvestment of dividends .............. -- -- 8 3 Shares redeemed ........................................... (12,543) -- -- (742) ----------- ----------- ---------- ---------- Net increase (decrease) in Class C shares ............... (12,543) 13,643 8 337 =========== =========== ========== ========== MIGHTY MITES(SM) FUND -------------------------- CLASS AAA Shares sold ............................................... 3,529,295 3,248,232 Shares issued upon reinvestment of dividends .............. 41,006 16,344 Shares redeemed ........................................... (4,006,222) (2,213,063) ---------- ---------- Net increase (decrease) in Class AAA shares ............. (435,921) 1,051,513 ========== ========== CLASS A Shares sold ............................................... 114 2,344 Shares issued upon reinvestment of dividends .............. 28 15 Shares redeemed ........................................... -- -- ---------- ---------- Net increase (decrease) in Class A shares ............... 142 2,359 ========== ========== CLASS B Shares sold ............................................... 718 42,229 Shares issued upon reinvestment of dividends .............. 430 1 Shares redeemed ........................................... (12,996) (3,737) ---------- ---------- Net increase (decrease) in Class B shares ............... (11,848) 38,493 ========== ========== CLASS C Shares sold ............................................... 14,145 7,086 Shares issued upon reinvestment of dividends .............. 122 23 Shares redeemed ........................................... (849) (5,007) ---------- ---------- Net increase (decrease) in Class C shares ............... 13,418 2,102 ========== ========== 36 THE GABELLI WESTWOOD FUNDS FINANCIAL HIGHLIGHTS ================================================================================ Selected data for a share of beneficial interest outstanding throughout each period: OPERATING PERFORMANCE DISTRIBUTIONS TO SHAREHOLDERS -------------------------------------------- -------------------------------------------- NET REALIZED NET ASSET NET AND TOTAL NET VALUE, INVESTMENT UNREALIZED GAIN FROM NET REALIZED PERIOD ENDED BEGINNING INCOME (LOSS) ON INVESTMENT INVESTMENT GAIN ON TOTAL SEPTEMBER 30 OF PERIOD (LOSS) INVESTMENTS OPERATIONS INCOME INVESTMENTS DISTRIBUTIONS - ------------ --------- ---------- --------------- ---------- ---------- ----------- ------------- EQUITY FUND CLASS AAA 2004 $7.99 $0.08(g) $1.36 $1.44 $(0.11) -- $(0.11) 2003 7.02 0.09(b) 0.96 1.05 (0.08) -- (0.08) 2002 8.32 0.07(b) (1.32) (1.25) (0.05) -- (0.05) 2001 11.12 0.04(b) (1.52) (1.48) (0.01) $(1.31) (1.32) 2000 10.46 (0.00)(b)(c) 1.86 1.86 (0.02) (1.18) (1.20) CLASS A 2004 $7.97 $0.05(g) $1.35 $1.40 $(0.09) -- $(0.09) 2003 6.99 0.07(b) 0.97 1.04 (0.06) -- (0.06) 2002 8.29 0.05(b) (1.32) (1.27) (0.03) -- (0.03) 2001 11.10 0.02(b) (1.52) (1.50) -- $(1.31) (1.31) 2000 10.46 (0.03)(b) 1.85 1.82 -- (1.18) (1.18) CLASS B 2004 $7.92 $0.02(g) $1.34 $1.36 $(0.07) -- $(0.07) 2003 6.97 0.04(b) 0.95 0.99 (0.04) -- (0.04) 2002 8.29 0.02(b) (1.32) (1.30) (0.02) -- (0.02) 2001(d) 9.65 (0.01)(b) (1.35) (1.36) -- -- -- CLASS C 2004 $7.89 $0.01(g) $1.34 $1.35 -- -- -- 2003 6.98 0.04(b) 0.96 1.00 $(0.09) -- $(0.09) 2002 8.28 0.01(b) (1.31) (1.30) -- -- -- 2001(e) 10.25 (0.01)(b) (1.96) (1.97) -- -- -- RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA -------------------------------------------------------------------- NET NET ASSETS, ASSET VALUE, END OF NET EXPENSES PORTFOLIO PERIOD ENDED REDEMPTION END OF TOTAL PERIOD INVESTMENT NET OF TURNOVER SEPTEMBER 30 FEES PERIOD RETURN+ (IN 000'S) INCOME (LOSS) WAIVERS(a) RATE - ------------ ---------- ------------ ------- ----------- ------------- ---------- --------- EQUITY FUND CLASS AAA 2004 $0.00(c)(g) $9.32 18.1% $179,407 0.90% 1.50% 44% 2003 -- 7.99 15.1 221,635 1.19 1.48 50 2002 -- 7.02 (15.1) 231,197 0.84 1.46 84 2001 -- 8.32 (14.9) 265,855 0.45 1.43 87 2000 -- 11.12 19.3 204,094 (0.00) 1.48 91 CLASS A 2004 $0.00(c)(g) $9.28 17.7% $3,328 0.61% 1.75% 44% 2003 -- 7.97 15.0 2,923 0.94 1.73 50 2002 -- 6.99 (15.4) 1,808 0.59 1.71 84 2001 -- 8.29 (15.1) 2,096 0.20 1.68 87 2000 -- 11.10 19.0 2,133 (0.25) 1.73 91 CLASS B 2004 $0.00(c)(g) $9.21 17.2% $38 0.21% 2.25% 44% 2003 -- 7.92 14.3 74 0.44 2.23 50 2002 -- 6.97 (15.7) 53 0.09 2.21 84 2001(d) -- 8.29 (14.1) 27 (.30)(f) 2.18(f) 87 CLASS C 2004 $0.00(c)(g) $9.24 17.1% $152 0.11% 2.25% 44% 2003 -- 7.89 14.4 129 0.44 2.23 50 2002 -- 6.98 (15.7) 33 0.09 2.21 84 2001(e) -- 8.28 (19.2) 4 (.30)(f) 2.18(f) 87 <FN> - -------------------------- + 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) The ratios do not include a reduction of expenses for custodian fee credits on cash balances maintained with the custodian. Including such custodian fee credits, the expense ratios would be 1.49% (Class AAA), 1.74% (Class A) and 2.24% (Class B and C) for the period ended September 30, 2004, 1.47% (Class AAA), 1.72% (Class A) and 2.22% (Class B and Class C) for 2003, 1.43% (Class AAA), 1.68% (Class A) and 2.18% (Class B and Class C) for 2002, 1.42% (Class AAA), 1.67% (Class A) and 2.17% (Class B and Class C) for 2001 and 1.47% (Class AAA) and 1.72% (Class A) for 2000. (b) Per share data is calculated using the average month-end shares method. (c) Amount represents less than $0.005 per share. (d) From March 27, 2001 through September 30, 2001, the period through which Class B Shares were continuously outstanding. (e) From February 13, 2001 through September 30, 2001, the period through which Class C Shares were continuously outstanding. (f) Annualized. (g) Per share data is calculated using the average shares method. </FN> See accompanying notes to financial statements. 37 THE GABELLI WESTWOOD FUNDS FINANCIAL HIGHLIGHTS ================================================================================ Selected data for a share of beneficial interest outstanding throughout each period: OPERATING PERFORMANCE DISTRIBUTIONS TO SHAREHOLDERS -------------------------------------------- -------------------------------------------- NET REALIZED NET ASSET AND TOTAL NET VALUE, NET UNREALIZED GAIN FROM NET REALIZED PERIOD ENDED BEGINNING INVESTMENT (LOSS) ON INVESTMENT INVESTMENT GAIN ON TOTAL SEPTEMBER 30 OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME INVESTMENTS DISTRIBUTIONS - ------------ --------- ---------- --------------- ---------- ---------- ----------- ------------- BALANCED FUND CLASS AAA 2004 $10.51 $0.21(g) $0.97 $1.18 $(0.22) -- $(0.22) 2003 9.65 0.21(b) 0.87 1.08 (0.22) -- (0.22) 2002 10.40 0.24(b) (0.75) (0.51) (0.24) $(0.00)(c) (0.24) 2001 12.40 0.26(b) (0.90) (0.64) (0.26) (1.10) (1.36) 2000 11.98 0.27(b) 1.23 1.50 (0.27) (0.81) (1.08) CLASS A 2004 $10.48 $0.18(g) $0.97 $1.15 $(0.19) -- $(0.19) 2003 9.62 0.19(b) 0.86 1.05 (0.19) -- (0.19) 2002 10.37 0.21(b) (0.75) (0.54) (0.21) $0.00(c) (0.21) 2001 12.36 0.23(b) (0.89) (0.66) (0.23) (1.10) (1.33) 2000 11.95 0.24(b) 1.22 1.46 (0.24) (0.81) (1.05) CLASS B 2004 $10.48 $0.13(g) $0.96 $1.09 $(0.14) -- $(0.14) 2003 9.63 0.14(b) 0.86 1.00 (0.15) -- (0.15) 2002 10.40 0.17(b) (0.77) (0.60) (0.17) $0.00(c) (0.17) 2001(d) 11.35 0.08(b) (0.95) (0.87) (0.08) -- (0.08) CLASS C 2004 $10.49 $0.13(g) $0.97 $1.10 $(0.14) -- $(0.14) 2003 9.62 0.14(b) 0.87 1.01 (0.14) -- (0.14) 2002 10.40 0.19(b) (0.79) (0.60) (0.18) $0.00(c) (0.18) 2001(e) 10.17 0.00(b)(c) 0.23 0.23 -- -- -- RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA -------------------------------------------------------------------- NET NET ASSETS, ASSET VALUE, END OF NET EXPENSES PORTFOLIO PERIOD ENDED REDEMPTION END OF TOTAL PERIOD INVESTMENT NET OF TURNOVER SEPTEMBER 30 FEES PERIOD RETURN+ (IN 000'S) INCOME (LOSS) WAIVERS(a) RATE - ------------ ---------- ------------ ------- ----------- ------------- ---------- --------- BALANCED FUND CLASS AAA 2004 $0.00(c)(g) $11.47 11.3% $136,400 1.92% 1.23% 41% 2003 -- 10.51 11.2 152,409 2.10 1.23 56 2002 -- 9.65 (5.1) 150,915 2.25 1.22 78 2001 -- 10.40 (5.8) 154,179 2.23 1.17 81 2000 -- 12.40 13.4 139,350 2.21 1.19 65 CLASS A 2004 $0.00(c)(g) $11.44 11.0% $5,298 1.66% 1.48% 41% 2003 -- 10.48 11.0 5,070 1.85 1.48 56 2002 -- 9.62 (5.4) 5,761 2.00 1.47 78 2001 -- 10.37 (6.0) 6,472 1.98 1.42 81 2000 -- 12.36 13.1 7,720 1.96 1.44 65 CLASS B 2004 $0.00(c)(g) $11.43 10.4% $163 1.18% 1.98% 41% 2003 -- 10.48 10.4 184 1.35 1.98 56 2002 -- 9.63 (5.9) 113 1.50 1.97 78 2001(d) -- 10.40 (7.7) 2 1.48(f) 1.92(f) 81 CLASS C 2004 $0.00(c)(g) $11.45 10.5% $846 1.19% 1.98% 41% 2003 -- 10.49 10.5 456 1.35 1.98 56 2002 -- 9.62 (5.9) 284 1.50 1.97 78 2001(e) -- 10.40 2.3 7 1.48(f) 1.92(f) 81 <FN> - -------------------------- + 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) The ratios do not include a reduction of expenses for custodian fee credits on cash balances maintained with the custodian. Including such custodian fee credits, the expense ratios would be 1.22% (Class AAA), 1.47% (Class A) and 1.97% (Class B and Class C) for the period ended September 30, 2004, 1.20% (Class AAA), 1.45% (Class A) and 1.95% (Class B and Class C) for 2003, 1.17% (Class AAA), 1.42% (Class A) and 1.92% (Class B and Class C) for 2002, 1.15% (Class AAA), 1.40% (Class A) and 1.90% (Class B and Class C) for 2001 and 1.17% (Class AAA) and 1.42% (Class A) for 2000. (b) Per share data is calculated using the average month-end shares method. (c) Amount represents less than $.005 per share. (d) From March 27, 2001 through September 30, 2001, the period through which Class B Shares were continuously outstanding. (e) From September 25, 2001 through September 30, 2001, the period through which Class C Shares were continuously outstanding. (f) Annualized. (g) Per share data is calculated using the average shares method. </FN> See accompanying notes to financial statements. 38 THE GABELLI WESTWOOD FUNDS FINANCIAL HIGHLIGHTS ================================================================================ Selected data for a share of beneficial interest outstanding throughout each period: OPERATING PERFORMANCE DISTRIBUTIONS TO SHAREHOLDERS -------------------------------------------- -------------------------------------------- NET REALIZED NET ASSET NET AND TOTAL NET VALUE, INVESTMENT UNREALIZED GAIN FROM NET REALIZED PERIOD ENDED BEGINNING INCOME (LOSS) ON INVESTMENT INVESTMENT GAIN ON TOTAL SEPTEMBER 30 OF PERIOD (LOSS) INVESTMENTS OPERATIONS INCOME INVESTMENTS DISTRIBUTIONS - ------------ --------- ---------- --------------- ---------- ---------- ----------- ------------- INTERMEDIATE BOND FUND CLASS AAA 2004 $11.31 $0.33(i) $(0.12) $0.21 $(0.33) $(0.01) $(0.34) 2003 11.30 0.31(c) -- 0.31 (0.30) -- (0.30) 2002 10.82 0.45(c) 0.48 0.93 (0.45) -- (0.45) 2001 10.08 0.51(c) 0.74 1.25 (0.51) -- (0.51) 2000 9.99 0.51 0.09 0.60 (0.51) -- (0.51) CLASS A 2004 $11.31 $0.32(i) $(0.12) $0.20 $(0.32) $(0.01) $(0.33) 2003 11.30 0.30(c) 0.01 0.31 (0.30) -- (0.30) 2002 10.82 0.44(c) 0.48 0.92 (0.44) -- (0.44) 2001(e) 10.55 0.09(c) 0.27 0.36 (0.09) -- (0.09) CLASS B 2004 $11.30 $0.25(i) $(0.11) $0.14 $(0.25) $(0.01) $(0.26) 2003 11.29 0.23(c) -- 0.23 (0.22) -- (0.22) 2002 10.82 0.37(c) 0.47 0.84 (0.37) -- (0.37) 2001(d) 10.53 0.22(c) 0.29 0.51 (0.22) -- (0.22) CLASS C(g) 2004 $11.30 $0.25(i) $(0.09) $0.16 $(0.28) $(0.01) $(0.29) 2003 11.29 0.22(c) 0.01 0.23 (0.22) -- (0.22) 2002(h) 10.84 0.35(c) 0.45 0.80 (0.35) -- (0.35) RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA ------------------------------------------------------------------------------- EXPENSES EXPENSES NET NET ASSETS, NET OF BEFORE ASSET VALUE, END OF NET WAIVERS/ WAIVERS/ PORTFOLIO PERIOD ENDED REDEMPTION END OF TOTAL PERIOD INVESTMENT REIMBURSE- REIMBURSE- TURNOVER SEPTEMBER 30 FEES PERIOD RETURN+ (IN 000'S) INCOME (LOSS) MENTS(a) MENTS(b) RATE - ------------ ---------- ------------ ------- ----------- ------------- ---------- ---------- --------- INTERMEDIATE BOND FUND CLASS AAA 2004 $0.00(i)(j) $11.18 2.0% $9,553 2.97% 1.02% 1.76% 32% 2003 -- 11.31 2.8 12,174 2.70 1.06 1.57 73 2002 -- 11.30 8.9 15,157 4.06 1.05 1.69 46 2001 -- 10.82 12.7 8,140 4.90 1.07 2.02 77 2000 -- 10.08 6.4 6,451 5.16 1.06 1.94 67 CLASS A 2004 $0.00(i)(j) $11.18 1.8% $75 2.88% 1.12% 1.86% 32% 2003 -- 11.31 2.8 138 2.60 1.16 1.67 73 2002 -- 11.30 8.8 56 3.96 1.15 1.79 46 2001(e) -- 10.82 3.4 93 4.80(f) 1.17(f) 2.12(f) 77 CLASS B 2004 $0.00(i)(j) $11.18 1.3% $456 2.23% 1.77% 2.51% 32% 2003 -- 11.30 2.1 502 1.95 1.81 2.32 73 2002 -- 11.29 8.0 229 3.31 1.80 2.44 46 2001(d) -- 10.82 4.9 23 4.15(f) 1.82(f) 2.77(f) 77 CLASS C(g) 2004 $0.00(i)(j) $11.17 1.5% $0 2.21% 1.77% 2.51% 32% 2003 -- 11.30 2.1 46 1.95 1.81 2.32 73 2002(h) -- 11.29 7.6 50 3.31(f) 1.80(f) 2.44(f) 46 <FN> - -------------------------- + 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) The ratios do not include a reduction of expenses for custodian fee credits on cash balances maintained with the custodian. Including such custodian fee credits, the expense ratios for the Intermediate Bond Fund Class AAA, Intermediate Bond Fund Class A, Intermediate Bond Fund Class B, and Intermediate Bond Fund Class C, would be 1.00%, 1.10%, 1.75% and 1.75%, respectively, for each period. (b) 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. (c) Per share data is calculated using the average month-end shares method. (d) From March 27, 2001 through September 30, 2001, the period through which Class B Shares were continuously outstanding. (e) From July 26, 2001 through September 30, 2001, the period through which Class A Shares were continuously outstanding. (f) Annualized. (g) Class C Shares were outstanding for the periods December 15, 2000 through December 18, 2000, March 21, 2001 through March 26, 2001 and July 18, 2001 through July 24, 2001. Financial Highlights for fiscal year 2001 are not presented for Class C Shares as the information is not considered meaningful. (h) From October 22, 2001 through September 30, 2002, the period through which Class C Shares were continuously outstanding. (i) Per share data is calculated using the average shares method. (j) Amount represents less than $0.005 per share. </FN> See accompanying notes to financial statements. 39 THE GABELLI WESTWOOD FUNDS FINANCIAL HIGHLIGHTS ================================================================================ Selected data for a share of beneficial interest outstanding throughout each period: OPERATING PERFORMANCE DISTRIBUTIONS TO SHAREHOLDERS -------------------------------------------- ------------------------------------------------------ NET REALIZED IN EXCESS NET ASSET NET AND TOTAL NET OF NET VALUE, INVESTMENT UNREALIZED GAIN FROM NET REALIZED REALIZED PERIOD ENDED BEGINNING INCOME (LOSS) ON INVESTMENT INVESTMENT GAIN ON GAIN ON TOTAL SEPTEMBER 30 OF PERIOD (LOSS) INVESTMENTS OPERATIONS INCOME INVESTMENTS INVESTMENTS DISTRIBUTIONS - ------------ --------- ---------- --------------- ---------- ---------- ----------- ----------- ------------- SMALLCAP EQUITY FUND CLASS AAA 2004 $8.18 $(0.10)(h) $1.00 $0.90 -- -- -- -- 2003 7.49 (0.08)(c) 0.77 0.69 -- -- -- -- 2002 8.86 (0.09)(c) (1.28) (1.37) -- -- -- -- 2001 22.10 (0.16)(c) (8.12) (8.28) -- $(4.53) $(0.43)(e) $(4.96) 2000 17.77 (0.27) 5.39 5.12 -- (0.79) -- (0.79) CLASS A 2004 $8.18 $(0.12)(h) $1.01 $0.89 -- -- -- -- 2003 7.51 (0.10)(c) 0.77 0.67 -- -- -- -- 2002(g) 9.91 (0.09)(c) (2.31) (2.40) -- -- -- -- CLASS B 2004 $8.03 $(0.17)(h) $1.00 $0.83 -- -- -- -- 2003 7.41 (0.13)(c) 0.75 0.62 -- -- -- -- 2002 8.83 (0.16)(c) (1.26) (1.42) -- -- -- -- 2001(d) 10.41 (0.10)(c) (1.48) (1.58) -- -- -- -- CLASS C 2004 $8.15 $(0.17)(h) $1.01 $0.84 -- -- -- -- 2003 7.47 (0.10)(c) 0.78 0.68 -- -- -- -- 2002(g) 9.91 (0.11)(c) (2.33) (2.44) -- -- -- -- RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA ------------------------------------------------------------------------------- NET NET EXPENSES EXPENSES ASSET ASSETS, NET OF BEFORE VALUE, END OF NET WAIVERS/ WAIVERS/ PORTFOLIO PERIOD ENDED REDEMPTION END OF TOTAL PERIOD INVESTMENT REIMBURSE- REIMBURSE- TURNOVER SEPTEMBER 30 FEES PERIOD RETURN+ (IN 000'S) INCOME (LOSS) MENTS(a) MENTS(b) RATE - ------------ ---------- -------- ------- ----------- ------------- ---------- ---------- --------- SMALLCAP EQUITY FUND CLASS AAA 2004 $0.00(h)(i) $9.08 11.0%(j) $12,106 (1.11)% 1.51% 2.12% 260% 2003 -- 8.18 9.2 15,721 (1.03) 1.53 1.99 329 2002 -- 7.49 (15.5) 16,212 (0.98) 1.56 1.76 202 2001 -- 8.86 (43.2) 21,768 (1.27) 1.59 1.74 184 2000 -- 22.10 29.4 34,911 (1.39) 1.58 1.63 218 CLASS A 2004 $0.00(h)(i) $9.07 10.9%(j) $140 (1.31)% 1.76% 2.37% 260% 2003 -- 8.18 8.9 112 1.28 1.78 2.24 329 2002(g) -- 7.51 (24.2) 71 (1.23)(f) 1.80(f) 2.01(f) 202 CLASS B 2004 $0.00(h)(i) $8.86 10.3%(j) $20 (1.93)% 2.26% 2.87% 260% 2003 -- 8.03 8.4 65 (1.78) 2.28 2.74 329 2002 -- 7.41 (16.1) 31 (1.73) 2.30 2.51 202 2001(d) -- 8.83 (15.2) 31 (2.02)(f) 2.34(f) 2.49(f) 184 CLASS C 2004 $0.00(h)(i) $8.99 10.3%(j) $10 (1.98)% 2.26% 2.87% 260% 2003 -- 8.15 9.1 111 (1.78) 2.28 2.74 329 2002(g) -- 7.47 (24.6) 0.1 (1.73)(f) 2.30(f) 2.51(f) 202 <FN> - -------------------------- + 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) The ratios do not include a reduction of expenses for custodian fee credits on cash balances maintained with the custodian. Including such custodian fee credits, the expense ratios for the SmallCap Equity Fund Class AAA, SmallCap Equity Fund Class A, SmallCap Equity Fund Class B, and SmallCap Equity Fund Class C would be 1.50%, 1.75%, 2.25% and 2.25%, respectively, for each period. (b) 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. (c) Per share data is calculated using the average month-end shares method. (d) From March 27, 2001 through September 30, 2001, the period through which Class B Shares were continuously outstanding. (e) Return of Capital. (f) Annualized. (g) From November 26, 2001 through September 30, 2002, the period through which Class A Shares and Class C Shares were continuously outstanding. (h) Per share data is calculated using the average shares method. (i) Amount represents less than $.005 per share. (j) Total return excluding the effect of the reimbursement from theFund's Adviser of $51,180 for the year ended September 30, 2004 was 10.6%, 10.5%, 10.0% and 9.9% for Class AAA, Class A, Class B andClass C, respectively. The Adviser fully reimbursed the Fund for a loss on a transaction exceeding the Fund's investment restrictions, which otherwise would have reduced total return by 0.4%, 0.4%, 0.3% and 0.4% for Class AAA, Class A,Class B andClass C,respectively. </FN> See accompanying notes to financial statements. 40 THE GABELLI WESTWOOD FUNDS FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- Selected data for a share of beneficial interest outstanding throughout each period: OPERATING PERFORMANCE DISTRIBUTIONS TO SHAREHOLDERS -------------------------------------------- ------------------------------------------ NET REALIZED NET ASSET AND TOTAL NET VALUE, NET UNREALIZED GAIN FROM NET REALIZED PERIOD ENDED BEGINNING INVESTMENT (LOSS) ON INVESTMENT INVESTMENT GAIN ON TOTAL SEPTEMBER 30 OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME INVESTMENTS DISTRIBUTIONS - ------------ --------- ---------- --------------- ---------- ---------- ----------- ------------- REALTY FUND CLASS AAA 2004 $11.87 $0.33(g) $2.30 $2.63 $(0.33) $(0.05) $(0.38) 2003 10.03 0.38(d) 1.85 2.23 (0.39) -- (0.39) 2002 9.76 0.43(d) 0.31 0.74 (0.47) -- (0.47) 2001 9.10 0.40(d) 0.62 1.02 (0.36) -- (0.36) 2000 7.61 0.38 1.46 1.84 (0.35) -- (0.35) CLASS A 2004 $12.00 $0.51(g) $2.12 $2.63 $(0.26) $(0.04) $(0.30) 2003 10.04 0.38(d) 1.85 2.23 (0.27) -- (0.27) 2002 9.76 0.41(d) 0.30 0.71 (0.43) -- (0.43) 2001(e) 9.24 0.02(d) 0.70 0.72 (0.20) -- (0.20) CLASS B 2004 $12.04 $0.25(g) $2.35 $2.60 $(0.27) $(0.04) $(0.31) 2003 10.07 0.27(d) 1.91 2.18 (0.21) -- (0.21) 2002(f) 9.90 0.36(d) 0.22 0.58 (0.41) -- (0.41) CLASS C 2004 $12.32 $0.24(g) $2.41 $2.65 $(0.27) $(0.04) $(0.31) 2003 10.26 0.32(d) 1.99 2.31 (0.25) -- (0.25) 2002(f) 9.90 0.09(d) 0.49 0.58 (0.22) -- (0.22) RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA ------------------------------------------------------------------------------- NET NET EXPENSES EXPENSES ASSET ASSETS, NET OF BEFORE VALUE, END OF NET WAIVERS/ WAIVERS/ PORTFOLIO PERIOD ENDED REDEMPTION END OF TOTAL PERIOD INVESTMENT REIMBURSE- REIMBURSE- TURNOVER SEPTEMBER 30 FEES PERIOD RETURN+ (IN 000'S) INCOME (LOSS) MENTS(a) MENTS(b) RATE - ------------ ---------- -------- ------- ----------- ------------- ---------- ---------- --------- REALTY FUND CLASS AAA 2004 $0.00(g)(h) $14.12 22.5% $16,472 2.51% 1.54% 1.85% 28% 2003 -- 11.87 22.8 13,923 3.70 1.56 2.05 33 2002 -- 10.03 7.5 9,122 4.42 1.59 2.61 47 2001 -- 9.76 11.4 3,526 4.27 1.64 4.51 64 2000 -- 9.10 24.9 2,845 4.52 1.73 4.14 74 CLASS A 2004 $0.00(g)(h) $14.33 22.2% $5 3.96% 1.79% 2.10% 28% 2003 -- 12.00 22.6 10 3.45 1.81 2.30 33 2002 -- 10.04 7.2 3 4.17 1.84 2.86 47 2001(e) -- 9.76 7.8 3 4.02(c) 1.90(c) 4.77(c) 64 CLASS B 2004 $0.00(g)(h) $14.33 21.8% $2 1.86% 2.29% 2.60% 28% 2003 -- 12.04 22.0 2 2.95 2.31 2.80 33 2002(f) -- 10.07 5.8 10 3.67(c) 2.34(c) 3.36(c) 47 CLASS C 2004 $0.00(g)(h) $14.66 21.7% $5 1.79% 2.29% 2.60% 28% 2003 -- 12.32 22.8 4 2.95 2.31 2.80 33 2002(f) -- 10.26 5.8 0.1 3.67(c) 2.34(c) 3.36(c) 47 <FN> - -------------------------- + 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) The ratios do not include a reduction of expenses for custodian fee credits on cash balances maintained with the custodian. Including such custodian fee credits, the expense ratios for the Realty Fund Class AAA, Realty Fund Class A, Realty Fund Class B and Realty Fund Class C would be 1.50%, 1.75%, 2.25% and 2.25%, respectively, for each period. (b) 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. (c) Annualized. (d) Per share data is calculated using the average month-end shares method. (e) From May 9, 2001 through September 30, 2001, the period through which Class A Shares were continuously outstanding. (f) From November 26, 2001 through September 30, 2002, the period through which Class B and C Shares were continuously outstanding. (g) Per share data is calculated using the average shares method. (h) Amount represents less than $.005 per share. </FN> See accompanying notes to financial statements. 41 THE GABELLI WESTWOOD FUNDS FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- Selected data for a share of beneficial interest outstanding throughout each period: OPERATING PERFORMANCE DISTRIBUTIONS TO SHAREHOLDERS -------------------------------------------- ------------------------------------------ NET REALIZED NET ASSET AND TOTAL NET VALUE, NET UNREALIZED GAIN FROM NET REALIZED PERIOD ENDED BEGINNING INVESTMENT (LOSS) ON INVESTMENT INVESTMENT GAIN ON TOTAL SEPTEMBER 30 OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME INVESTMENTS DISTRIBUTIONS - ------------ --------- ---------- --------------- ---------- ---------- ----------- ------------- MIGHTY MITES(SM) FUND CLASS AAA 2004 $13.42 $(0.03)(j) $1.84 $1.81 -- $(0.16) $(0.16) 2003 11.29 (0.03)(f) 2.25 2.22 $(0.04) (0.05) (0.09) 2002 10.99 0.03(f) 0.37 0.40 (0.10) -- (0.10) 2001 14.00 0.12(f) (0.59) (0.47) (0.08) (2.46) (2.54) 2000 12.91 0.05(f) 2.76 2.81 (0.10) (1.62) (1.72) CLASS A 2004 $13.46 $(0.06)(j) $1.84 $1.78 -- $(0.16) $(0.16) 2003 11.36 (0.05)(f) 2.26 2.21 $(0.06) (0.05) (0.11) 2002(i) 10.97 (0.01)(f) 0.40 0.39 -- -- -- 2001 14.00 0.09(f) (0.59) (0.50) (0.07) (2.46) (2.53) 2000(d) 13.48 0.00(e)(f) 0.52 0.52 -- -- -- CLASS B 2004 $13.30 $(0.14)(j) $1.82 $1.68 -- $(0.16) $(0.16) 2003 11.24 (0.11)(f) 2.22 2.11 -- (0.05) (0.05) 2002 10.96 (0.02)(f) 0.34 0.32 $(0.04) -- (0.04) 2001(g) 11.92 0.00(e)(f) (0.96) (0.96) -- -- -- CLASS C 2004 $13.25 $0.02(j) $1.66 $1.68 -- $(0.16) $(0.16) 2003 11.19 (0.12)(f) 2.23 2.11 -- (0.05) (0.05) 2002 10.98 (0.06)(f) 0.37 0.31 $(0.10) -- (0.10) 2001(h) 12.25 0.00(e)(f) (1.27) (1.27) -- -- -- RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA ------------------------------------------------------------------------------- NET NET EXPENSES EXPENSES ASSET ASSETS, NET OF BEFORE VALUE, END OF NET WAIVERS/ WAIVERS/ PORTFOLIO PERIOD ENDED REDEMPTION END OF TOTAL PERIOD INVESTMENT REIMBURSE- REIMBURSE- TURNOVER SEPTEMBER 30 FEES PERIOD RETURN+ (IN 000'S) INCOME (LOSS) MENTS(a) MENTS(b) RATE - ------------ ---------- -------- ------- ----------- ------------- ---------- ---------- --------- MIGHTY MITES(SM) FUND CLASS AAA 2004 $0.00(e)(j) $15.07 13.6% $50,805 (0.20)% 1.50% 1.66% 36% 2003 -- 13.42 19.8 51,138 (0.21) 1.50 1.66 14 2002 -- 11.29 3.6 31,103 0.27 1.50 1.78 18 2001 -- 10.99 (2.8) 17,404 0.98 1.52 2.20 66 2000 -- 14.00 23.0 15,165 0.38 1.50 2.01 66 CLASS A 2004 $0.00(e)(j) $15.08 13.3% $39 (0.42)% 1.75% 1.91% 36% 2003 -- 13.46 19.7 33 (0.46) 1.75 1.91 14 2002(i) -- 11.36 3.6 1 0.02 1.75 2.03 18 2001 -- 10.97 (3.1) 47 0.73 1.77 2.45 66 2000(d) -- 14.00 3.9 49 0.13(c) 1.75(c) 2.26(c) 66 CLASS B 2004 $0.00(e)(j) $14.82 12.7% $400 (0.95)% 2.25% 2.41% 36% 2003 -- 13.30 18.9 517 (0.96) 2.25 2.41 14 2002 -- 11.24 2.9 4 (0.48) 2.25 2.53 18 2001(g) -- 10.96 (8.1) 4 0.23(c) 2.27(c) 2.95(c) 66 CLASS C 2004 $0.00(e)(j ) $14.77 12.7% $308 (0.89)% 2.25% 2.41% 36% 2003 -- 13.25 19.0 99 (0.96) 2.25 2.41 14 2002 -- 11.19 2.8 59 (0.48) 2.25 2.53 18 2001(h) -- 10.98 (10.4) 19 0.23(c) 2.27(c) 2.95(c) 66 <FN> - -------------------------- + 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) The ratios do not include a reduction of expenses for custodian fee credits on cash balances maintained with the custodian. Including such custodian fee credits, the expense ratios for the Mighty Mites(SM) Fund Class AAA, Mighty Mites(SM) Fund Class A, Mighty Mites(SM) Fund Class B, and Mighty Mites(SM) Fund Class C would be 1.50%, 1.75%, 2.25% and 2.25%, respectively, for each period. (b) 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. (c) Annualized. (d) Period from June 15, 2000 (offering date of Class A) to September 30, 2000. (e) Amount represents less than $0.005 per share. (f) Per share data is calculated using the average month-end shares method. (g) From June 6, 2001 through September 30, 2001, the period through which Class B Shares were continuously outstanding. (h) From August 3, 2001 through September 30, 2001, the period through which Class C Shares were continuously outstanding. (i) From November 26, 2001 through September 30, 2002, the period through which Class A Shares were continuously outstanding. From October 1, 2001 through November 25, 2001, no Class A Shares were outstanding. (j) Per share data is calculated using the average shares method. </FN> See accompanying notes to financial statements. 42 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Trustees and Shareholders of The Gabelli Westwood Funds: In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of The Gabelli Westwood Equity Fund, The Gabelli Westwood Balanced Fund, The Gabelli Westwood Intermediate Bond Fund, The Gabelli Westwood SmallCap Equity Fund, The Gabelli Westwood Realty Fund, and The Gabelli Westwood Mighty Mites(SM) Fund (constituting The Gabelli Westwood Funds, hereafter referred to as the "Funds") at September 30, 2004, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period then ended and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Funds' management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at September 30, 2004 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. PRICEWATERHOUSECOOPERS LLP NEW YORK, NEW YORK NOVEMBER 16, 2004 - -------------------------------------------------------------------------------- 2004 TAX NOTICE TO SHAREHOLDERS (UNAUDITED) U.S. GOVERNMENT INCOME: The percentage of the ordinary income dividend paid by the Equity Fund, Balanced Fund, Intermediate Bond Fund, SmallCap Equity Fund, Realty Fund and Mighty Mites(SM) Fund (collectively, the "Funds") during fiscal 2004 which was derived from U.S. Treasury securities was 0%, 13.44%, 19.96%, 0%, 0% and 0%, respectively. Such income is exempt from state and local tax in all states. However, many states, including New York and California, allow a tax exemption for a portion of the income earned only if a mutual fund has invested at least 50% of its assets at the end of each quarter of the Fund's fiscal year in U.S. Government securities. The Funds did not meet this strict requirement in 2004. Due to the diversity in state and local tax law, it is recommended that you consult your personal tax advisor for the applicability of the information provided as to your specific situation. THE GABELLI WESTWOOD EQUITY FUND; THE GABELLI WESTWOOD REALTY FUND 100% of the ordinary income dividend qualifies for the dividend received deduction available to corporations and 100% and 14.59% of the ordinary income distribution was qualifying dividend income for the Equity Fund and Realty Fund, respectively. The Realty Fund paid to shareholders, on June 21, 2004, a long-term capital gain totaling $0.05, $0.04, $0.04 and $0.04 for Class AAA, Class A, Class B and Class C, respectively. THE GABELLI WESTWOOD BALANCED FUND 86.21% of the ordinary income dividend qualifies for the dividend received deduction available to corporations and 79.06% of the ordinary income distribution was qualifying dividend income. THE GABELLI WESTWOOD INTERMEDIATE BOND FUND None of the ordinary income dividend qualifies for the dividend received deduction available to corporations and none of the ordinary income distribution was qualifying dividend income. The Fund paid to shareholders, on December 22, 2003, a long-term capital gain totaling $0.01336 per share. THE GABELLI MIGHTY MITES(SM) FUND 62.44% of the ordinary income dividend qualifies for the dividend received deduction available to corporations. The Fund paid to shareholders, on December 22, 2003, a long-term capital gain totaling $0.082 per share. QUALIFIED DIVIDEND INCOME An estimate of qualified dividend income of $4,753,184, $2,224,375 and $56,635 was received by theEquity Fund, Balanced Fund and RealtyFund, respectively, through September 30, 2004 that qualifies for a reduced tax rate pursuant to the Jobs and Growth Tax Relief Reconciliation Act of 2003. - -------------------------------------------------------------------------------- 43 THE GABELLI WESTWOOD FUNDS ADDITIONAL FUND INFORMATION (UNAUDITED) - ------------------------------------------------------------------------------- The business and affairs of the Trust are managed under the direction of the Trust's Board of Trustees. Information pertaining to the Trustees and officers of the Trust is set forth below. The Trust's Statement of Additional Information includes additional information about The Gabelli Westwood Funds' Trustees and is available, without charge, upon request, by calling 1-800-GABELLI (1-800-422-3554) or by writing to The Gabelli Westwood Funds at One Corporate Center, Rye, NY 10580. TERM OF NUMBER OF NAME, POSITION(S) OFFICE AND FUNDS IN FUND ADDRESS 1 LENGTH OF COMPLEX OVERSEEN PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIPS AND AGE TIME SERVED 2 BY TRUSTEE DURING PAST FIVE YEARS HELD BY TRUSTEE 3 - ---------------- ------------- --------------- ---------------------- ------------------- INTERESTED TRUSTEES 4: - ---------------------- SUSAN M. BYRNE Since 1987 6 President and Chief Executive Officer of -- President and Chief Westwood Management Corporation Investment Officer since 1983 and Chairman and Chief Executive Age: 58 Officer of Westwood Holdings Group KARL OTTO POHL Since 1994 34 Member of the Shareholder Committee of Director of Gabelli Asset Trustee Sal Oppenheim Jr. & Cie (private investment Management Inc. (investment Age: 74 bank); Former President of the management); Chairman, Incentive Deutsche Bundesbank and Chairman of its Capital and Incentive Asset Central Bank Council (1980-1991) Management (Zurich); Director at Sal Oppenheim Jr. & Cie, Zurich NON-INTERESTED TRUSTEES: - ------------------------ ANTHONY J. COLAVITA Since 1994 36 President and Attorney at Law in the law -- Trustee firm of Anthony J. Colavita, P.C. Age: 68 JAMES P. CONN Since 1994 13 Former Managing Director and Chief Director of LaQuinta Trustee Investment Officer of Financial Security Corp. (hotels) and Age: 66 Assurance Holdings Ltd. (1992-1998) First Republic Bank WERNER J. ROEDER, M.D. Since 1994 26 Vice President/Medical Affairs, Lawrence -- Trustee Hospital Center and practicing private Age: 64 physician SALVATORE J. ZIZZA Since 2004 24 Chairman, Hallmark Electrical Suppliers Corp.; Director of Hollis Eden Trustee Former Executive Vice President of FMG Group Pharmaceuticals; Director of Age: 58 (OTC), a healthcare provider. Earl Scheib, Inc. (automotive services) OFFICERS: - --------- BRUCE N. ALPERT Since 1994 -- Director and President of Gabelli Advisers, Inc. -- Vice President Executive Vice President and Chief Operating and Treasurer Officer of Gabelli Funds, LLC since 1988 and an Age: 52 officer of all mutual funds advised by Gabelli Funds, LLC and its affiliates PATRICIA R. FRAZE Since 1990 -- Executive Vice President of Westwood -- Vice President Management Corporation and former fixed Age: 61 income analyst and portfolio manager JAMES E. MCKEE Since 1995 -- Vice President, General Counsel and Secretary of Gabelli -- Secretary Asset Management Inc. since 1999 and GAMCO Investors, Age: 41 Inc. since 1993; Secretary of all mutual funds advised by Gabelli Advisers, Inc. and Gabelli Funds, LLC <FN> - ----------------- 1 Address: One Corporate Center, Rye, NY 10580-1422, unless otherwise noted. Ms. Byrne's address is 300 Crescent Court, Suite 1300, Dallas, TX 75201. 2 Each Trustee will hold office for an indefinite term until the earliest of (i) the next meeting of shareholders if any, called for the purpose of considering the election or re-election of such Trustee and until the election and qualification of his or her successor, if any, elected at such meeting, or (ii) the date a Trustee resigns or retires, or a Trustee is removed by the Board of Trustees or shareholders, in accordance with the Company's Amended By-Laws and Amended and Restated Declaration of Trust. 3 This column includes only directorships of companies required to report to the SEC under the Securities and Exchange Act of 1934 (i.e. public companies) or other investment companies registered under the 1940 Act. 4 "Interested person" of the Company as defined in the Investment Company Act of 1940. Mr. Otto Pohl is considered an "interested person" because of his affiliation with the parent company of the Funds' investment adviser. Ms. Byrne is considered an "interested person" because of her affiliation with the Funds' investment sub-adviser. </FN> 44 THE GABELLI WESTWOOD FUNDS ========================== One Corporate Center Rye, New York 10580-1422 GENERAL AND ACCOUNT INFORMATION: 800-GABELLI [800-422-3554] fax: 914-921-5118 website: www.gabelli.com e-mail: info@gabelli.com Board of Trustees SUSAN M. BYRNE JAMES P. CONN CHAIRMAN AND CEO FORMER CHIEF INVESTMENT OFFICER WESTWOOD HOLDINGS FINANCIAL SECURITY ASSURANCE GROUP HOLDINGS LTD. KARL OTTO POHL WERNER J. ROEDER, MD FORMER PRESIDENT VICE PRESIDENT/MEDICAL AFFAIRS DEUTCHE BUNDESBANK LAWRENCE HOSPITAL CENTER ANTHONY J. COLAVITA SALVATORE J. ZIZZA ATTORNEY-AT-LAW CHAIRMAN ANTHONY J. COLAVITA, P.C. HALLMARK ELECTRICAL SUPPLIES CORP. Officers SUSAN M. BYRNE BRUCE N. ALPERT PRESIDENT AND CHIEF VICE PRESIDENT AND TREASURER INVESTMENT OFFICER JAMES E. McKEE PATRICIA R. FRAZE SECRETARY VICE PRESIDENT Investment Adviser ------------------ Gabelli Advisers, Inc. Investment Sub-Adviser ---------------------- Westwood Management Corporation Distributor ----------- Gabelli &Company, Inc. Custodian --------- The Bank of New York Legal Counsel ------------- Paul, Hastings, Janofsky & Walker LLP - -------------------------------------------------------------------------------- This report is submitted for the information of the shareholders of The Gabelli Westwood Funds. It is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. - -------------------------------------------------------------------------------- GABWWQ304SR ITEM 2. CODE OF ETHICS. (a) The registrant, as of the end of the period covered by this report, has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party. (c) There have been no amendments, during the period covered by this report, to a provision of the code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, and that relates to any element of the code of ethics description. (d) The registrant has not granted any waivers, including an implicit waiver, from a provision of the code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, that relates to one or more of the items set forth in paragraph (b) of this item's instructions. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. As of the end of the period covered by the report, the registrant's board of directors has determined that James P. Conn is qualified to serve as an audit committee financial expert serving on its audit committee and that he is "independent." ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Audit Fees - ---------- (a) The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the registrant's annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years are $134,100 in 2004 and $125,700 in 2003. Audit-Related Fees - ------------------ (b) The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant's financial statements and are not reported under paragraph (a) of this Item are $0 in 2004 and $0 in 2003. Tax Fees - -------- (c) The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning are $19,780 in 2004 and $19,500 in 2003. Tax fees represent tax compliance services provided in connection with the review of the Registrant's tax returns. All Other Fees - -------------- (d) The aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) of this Item are $0 for 2004 and $0 for 2003. (e)(1) Disclose the audit committee's pre-approval policies and procedures described in paragraph (c)(7) of Rule 2-01 of Regulation S-X. Pre-Approval Policies and Procedures. The Audit Committee ("Committee") of the registrant is responsible for pre-approving (i) all audit and permissible non-audit services to be provided by the independent auditors to the registrant and (ii) all permissible non-audit services to be provided by the independent auditors to Gabelli and any affiliate of Gabelli that provides services to the registrant (a "Covered Services Provider") if the independent auditors' engagement relates directly to the operations and financial reporting of the registrant. The Committee may delegate its responsibility to pre-approve any such audit and permissible non-audit services to the Chairperson of the Committee, and the Chairperson must report to the Committee, at its next regularly scheduled meeting after the Chairperson's pre-approval of such services, his or her decision(s). The Committee may also establish detailed pre-approval policies and procedures for pre-approval of such services in accordance with applicable laws, including the delegation of some or all of the Committee's pre-approval responsibilities to other persons (other than Gabelli or the registrant's officers). Pre-approval by the Committee of any permissible non-audit services is not required so long as: (i) the aggregate amount of all such permissible non-audit services provided to the registrant, Gabelli and any Covered Services Provider constitutes not more than 5% of the total amount of revenues paid by the registrant to its independent auditors during the fiscal year in which the permissible non-audit services are provided; (ii) the permissible non-audit services were not recognized by the registrant at the time of the engagement to be non-audit services; and (iii) such services are promptly brought to the attention of the Committee and approved by the Committee or the Chairperson prior to the completion of the audit. (e)(2) The percentage of services described in each of paragraphs (b) through (d) of this Item that were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X are as follows: (b) N/A (c) 100% (d) N/A (f) The percentage of hours expended on the principal accountant's engagement to audit the registrant's financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant's full-time, permanent employees was zero percent (0%). (g) The aggregate non-audit fees billed by the registrant's accountant for services rendered to the registrant, and rendered to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for each of the last two fiscal years of the registrant was $0 in 2004 and $0 in 2003. (h) The registrant's audit committee of the board of directors HAS considered whether the provision of non-audit services that were rendered to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant's independence. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable. ITEM 6. SCHEDULE OF INVESTMENTS. Not yet applicable. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not yet applicable. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. The Board of Trustees has a Nominating Committee comprised of three "non-interested" (as such term is defined by the Investment Company Act of 1940, as amended) Trustees, namely Anthony J. Colavita, James P. Conn 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 Trustee 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 Trust, 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 Trust 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 Trustees questionnaire. The shareholder recommendation and information described above must be sent to the Trust'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 Trust'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 Trust 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 Trust 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 Trust. The Nominating Committee also seeks to have the Board of Trustees represent a diversity of backgrounds and experience. The Trust's Nominating Committee has adopted a charter (the "Charter"), which was approved by the Board of Trustees on May 11, 2004. ITEM 11. CONTROLS AND PROCEDURES. (a) The registrant's principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the "1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)). (b) There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the registrant's 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 12. EXHIBITS. (a)(1) Code of ethics, that is the subject of disclosure required by Item 2, filed as exhibit (a)(1) to the Registrant's Form N-CSR, filed on December 8, 2003 (Accession No. 0000935069-03-001628). (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 Westwood Funds -------------------------------- By (Signature and Title)* /s/ Bruce N. Alpert ------------------------------------------------------- Bruce N. Alpert, Principal Executive Officer Date December 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 December 8, 2004 ---------------------------------------------------------------------------- * Print the name and title of each signing officer under his or her signature.