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 811-09377
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The Gabelli Blue Chip Value Fund
(Exact name of registrant as specified in charter)
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One Corporate Center
Rye, New York 10580-1422
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(Address of principal executive offices) (Zip code)
Bruce N. Alpert
Gabelli Funds, LLC
One Corporate Center
Rye, New York 10580-1422
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(Name and address of agent for service)
registrant's telephone number, including area code: 1-800-422-3554
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Date of fiscal year end: December 31
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Date of reporting period: December 31, 2004
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
The Report to Shareholders is attached herewith.
[PHOTO OMITTED]
THE
GABELLI
BLUE CHIP VALUE
FUND
ANNUAL REPORT
DECEMBER 31, 2004
THE GABELLI BLUE CHIP VALUE FUND
ANNUAL REPORT
DECEMBER 31, 2004
TO OUR SHAREHOLDERS,
The Sarbanes-Oxley Act requires a Fund's principal executive and financial
officers to certify the entire contents of the semi-annual and annual
shareholder reports in a filing with the Securities and Exchange Commission on
Form N-CSR. This certification would cover the portfolio manager's commentary
and subjective opinions if they are attached to or a part of the financial
statements. Many of these comments and opinions would be difficult or impossible
to certify.
Because we do not want our portfolio managers to eliminate their opinions
and/or restrict their commentary to historical facts, we have separated their
commentary from the financial statements and investment portfolio and have sent
it to you separately. Both the commentary and the financial statements,
including the portfolio of investments, will be available on our website at
www.gabelli.com/funds.
Enclosed are the audited financial statements and the investment portfolio
as of December 31, 2004 with a description of factors that affected the
performance during the past year.
PERFORMANCE DISCUSSION
The Gabelli Blue Chip Value Fund rose 12.37% for the full year, narrowly
beating the Lipper Large Cap Value Fund average gain of 11.94% and the S&P 500
gain of 10.87% for 2004.
Macroeconomic factors sent mixed signals to equity investors in 2004. The
U.S. economy created 2.2 million jobs in 2004, almost rebuilding the 2.4 million
jobs lost over the three year period, 2001 to 2003, and the largest annual gain
since 1999. This job creation does not match the strongest we have had in past
recoveries, but it does create enough jobs to keep unemployment at the
relatively low level from which we started this recovery. Although some
commodity and industrial inputs such as oil and gas, chemicals and metals have
risen in price, we can see that there is little broad ability to pass on
pricing. At the same time, Alan Greenspan has begun a course of raising rates.
Despite the Federal Reserve raising rates five times in 2004, U.S. Treasury debt
yields closed out the year almost exactly where they began the year.
For the year, energy and utility stocks contributed the most to the Fund's
performance, with our stocks in these two sectors up more than 20%: Allegheny
Energy, Halliburton, AES, Noble Energy, Conoco Phillips, El Paso and Exxon
Mobil. Stocks of companies outside these sectors, which appreciated more than
20% during the year included Dow Chemical, Bank of America, General Electric and
The Walt Disney Company. On the negative side, three of our holdings that were
down more than 10% -- Merck, Pfizer and Texas Instruments.
Sincerely yours,
/s/ Bruce N. Alpert
-------------------
Bruce N. Alpert
President
February 23, 2005
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT
IN THE GABELLI BLUE CHIP VALUE FUND AND THE
S&P 500 INDEX
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA USED IN PRINTED GRAPHIC AS FOLLOWS:
Gabelli Blue Chip Fund S&P 500 Index
---------------------- -------------
8/26/99 $10,000 $10,000
12/31/99 11,778 10,834
12/31/00 13,083 9,848
12/31/01 11,543 8,678
12/31/02 7,890 6,761
12/31/03 11,361 8,700
12/31/04 12,767 9,645
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. The performance tables and
graph do not reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares.
COMPARATIVE RESULTS
- ------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS THROUGH DECEMBER 31, 2004 (a)
----------------------------------------------------
Since
Inception
QUARTER 1 YEAR 3 YEAR 5 YEAR (8/26/99)
- --------------------------------------------- ------------ ------------ ---------- ------------ -----------
GABELLI BLUE CHIP VALUE FUND CLASS AAA ..... 9.36% 12.37% 3.41% 1.62% 4.66%
S&P 500 Index .............................. 9.23 10.87 3.58 (2.30) (1.83)
Lipper Large-Cap Value Average ............. 8.97 11.94 4.70 3.35 1.67
Class A .................................... 9.40 12.51 3.45 1.65 4.69
3.12(b) 6.07(b) 1.44(b) 0.45(b) 3.54(b)
Class B .................................... 9.09 11.57 3.17 1.48 4.53
4.09(c) 6.57(c) 2.22(c) 1.08(c) 4.36(c)
Class C .................................... 9.09 11.57 3.17 1.48 4.53
8.09(c) 10.57(c) 3.17(c) 1.48(c) 4.53(c)
Class I .................................... 9.37 12.48 3.45 1.64 4.68
<FN>
(a) RETURNS REPRESENT PAST PERFORMANCE AND DO NOT GUARANTEE FUTURE RESULTS. TOTAL RETURNS AND AVERAGE ANNUAL
RETURNS REFLECT CHANGES IN SHARE PRICE AND REINVESTMENT OF DIVIDENDS AND ARE NET OF EXPENSES. INVESTMENT
RETURNS AND THE PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE. WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. DIVIDENDS ARE CONSIDERED REINVESTED. 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. THE CLASS AAA SHARES' NET ASSET VALUES ARE USED TO
CALCULATE PERFORMANCE FOR THE PERIODS PRIOR TO THE ISSUANCE OF CLASS A SHARES, CLASS B SHARES AND CLASS C
SHARES ON DECEMBER 31, 2003 AND THE CLASS I SHARES ON JULY 1, 2004. THE ACTUAL PERFORMANCE FOR THE CLASS B
SHARES AND CLASS C SHARES WOULD HAVE BEEN LOWER DUE TO THE ADDITIONAL EXPENSES ASSOCIATED WITH THESE
CLASSES OF SHARES. THE ACTUAL PERFORMANCE FOR THE CLASS I SHARES WOULD HAVE BEEN HIGHER DUE TO THE LOWER
EXPENSES RELATED TO THIS CLASS OF SHARES. 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.
(b) INCLUDES THE EFFECT OF THE MAXIMUM 5.75% SALES CHARGE AT THE BEGINNING OF THE PERIOD.
(c) INCLUDES THE EFFECT OF THE APPLICABLE CONTINGENT DEFERRED SALES CHARGE AT THE END OF THE PERIOD SHOWN FOR
CLASS B AND CLASS C SHARES, RESPECTIVELY.
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</FN>
2
THE GABELLI BLUE CHIP VALUE FUND
DISCLOSURE OF FUND EXPENSES (UNAUDITED)
For the Six Month Period from July 1, 2004 through December 31, 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 a fund. When a fund's
expenses are expressed as a percentage of its average net assets, this figure is
known as the expense ratio. The following examples are intended to help you
understand the ongoing costs (in dollars) of investing in your Fund and to
compare these costs with those of other mutual funds. The examples are based on
an investment of $1,000 made at the beginning of the period shown and held for
the entire period.
The Expense Table below illustrates your Fund's costs in two ways:
ACTUAL FUND RETURN: This section provides information about actual account
values and actual expenses. You may use this section to help you to estimate the
actual expenses that you paid over the period after any fee waivers and expense
reimbursements. The "Ending Account Value" shown is derived from the Fund's
ACTUAL return during the past six months, and the "Expenses Paid During Period"
shows the dollar amount that would have been paid by an investor who started
with $1,000 in the Fund. You may use this information, together with the amount
you invested, to estimate the expenses that you paid over the period.
To do so, simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
given for your Fund under the heading "Expenses Paid During Period" to estimate
the expenses you paid during this period.
HYPOTHETICAL 5% RETURN: This section provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio. It assumes a hypothetical annualized return of 5% before expenses during
the period shown. In this case -- because the hypothetical return used is NOT
the Fund's actual return -- the results do not apply to your investment and you
cannot use the hypothetical account value and expense to estimate the actual
ending account balance or expenses you paid for the period. This example is
useful in making comparisons of the ongoing costs of investing in the Fund and
other funds. To do so, compare this 5% hypothetical example with the 5%
hypothetical examples that appear in shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs such as sales
charges (loads), redemption fees, or exchange fees, if any, which are described
in the Prospectus. If these costs were applied to your account, your costs would
be higher. Therefore, the 5% hypothetical return is useful in comparing ongoing
costs only, and will not help you determine the relative total costs of owning
different funds. The "Annualized Expense Ratio" represents the actual expenses
for the last six months and may be different from the expense ratio in the
Financial Highlights which is for the year ended December 31, 2004.
Beginning Ending Annualized Expenses
Account Value Account Value Expense Paid During
7/1/04 12/31/04 Ratio Period*
- --------------------------------------------------------------------------------
GABELLI BLUE CHIP VALUE FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Class AAA $1,000.00 $1,075.70 1.84% $ 9.60
Class A $1,000.00 $1,076.10 1.84% $ 9.60
Class B $1,000.00 $1,072.00 2.59% $13.49
Class C $1,000.00 $1,072.00 2.59% $13.49
Class I $1,000.00 $1,076.80 1.59% $ 8.30
HYPOTHETICAL 5% RETURN
Class AAA $1,000.00 $1,015.89 1.84% $ 9.32
Class A $1,000.00 $1,015.89 1.84% $ 9.32
Class B $1,000.00 $1,012.12 2.59% $13.10
Class C $1,000.00 $1,012.12 2.59% $13.10
Class I $1,000.00 $1,017.14 1.59% $ 8.06
* Expenses are equal to the Fund's annualized expense ratio for the last six
months multiplied by the average account value over the period, multiplied by
the number of days in the most recent fiscal half-year, then divided by 366.
3
SUMMARY OF PORTFOLIO HOLDINGS (UNAUDITED)
Under SEC rules, all funds are required to include in their annual and
semi-annual shareholder reports a presentation of portfolio holdings in a table,
chart or graph by reasonably identifiable categories. The following table which
presents portfolio holdings as a percent of total net assets is provided in
compliance with such requirement.
GABELLI BLUE CHIP VALUE FUND
Financial Services ................................................... 20.9%
Energy and Utilities: Oil ............................................ 13.5%
Health Care .......................................................... 8.5%
Entertainment ........................................................ 7.7%
Diversified Industrial ............................................... 7.5%
Insurance ............................................................ 6.7%
Energy and Utilities: Electric ....................................... 6.0%
Business Services .................................................... 4.2%
Specialty Chemicals .................................................. 3.7%
Electronics .......................................................... 3.4%
Aerospace ............................................................ 2.9%
Computer Software and Services ....................................... 2.5%
Metals and Mining .................................................... 2.5%
Telecommunications ................................................... 2.3%
Computer Hardware .................................................... 2.1%
Paper and Forest Products ............................................ 1.5%
Retail ............................................................... 1.3%
Transportation ....................................................... 1.2%
Food and Beverage .................................................... 0.5%
Other Assets and Liabilities - Net ................................... 1.1%
------
100.0%
======
PROXY VOTING
The Fund files Form N-PX with its complete proxy voting record for the 12 months
ended June 30th, no later than August 31st of each year. A description of the
Fund's proxy voting policies and procedures are available (i) without charge,
upon request, by calling 800-GABELLI (800-422-3554); (ii) by writing to The
Gabelli Funds at One Corporate Center, Rye, NY 10580-1422; and (iii) by visiting
the Securities and Exchange Commission's website at www.sec.gov.
4
THE GABELLI BLUE CHIP VALUE FUND
SCHEDULE OF INVESTMENTS -- DECEMBER 31, 2004
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------- ----------- -----------
COMMON STOCKS -- 98.9%
AEROSPACE -- 2.9%
3,400 General Dynamics Corp. ... $ 257,419 $ 355,640
14,200 Northrop Grumman Corp. ... 638,018 771,912
----------- -----------
895,437 1,127,552
----------- -----------
BUSINESS SERVICES -- 4.2%
69,800 Cendant Corp. ............... 1,270,137 1,631,924
----------- -----------
COMPUTER HARDWARE -- 2.1%
38,094 Hewlett-Packard Co. ......... 808,011 798,831
----------- -----------
COMPUTER SOFTWARE AND SERVICES -- 2.5%
36,000 Microsoft Corp. ............. 921,682 961,560
----------- -----------
DIVERSIFIED INDUSTRIAL -- 7.5%
16,000 General Electric Co. ........ 500,900 584,000
35,000 Honeywell International Inc. 967,794 1,239,350
13,300 Ingersoll-Rand Co., Cl. A ... 709,986 1,067,990
----------- -----------
2,178,680 2,891,340
----------- -----------
ELECTRONICS -- 3.4%
34,000 Applied Materials Inc.+ ..... 540,810 581,400
29,300 Texas Instruments Inc. ...... 604,862 721,366
----------- -----------
1,145,672 1,302,766
----------- -----------
ENERGY AND UTILITIES: ELECTRIC -- 6.0%
127,100 AES Corp.+ .................. 845,116 1,737,457
28,000 Allegheny Energy Inc.+ ...... 300,714 551,880
----------- -----------
1,145,830 2,289,337
----------- -----------
ENERGY AND UTILITIES: OIL -- 13.5%
9,775 ConocoPhillips .............. 527,842 848,763
110,800 El Paso Corp. ............... 836,501 1,152,320
20,900 Exxon Mobil Corp. ........... 809,557 1,071,334
15,300 Halliburton Co. ............. 389,446 600,372
10,800 Marathon Oil Corp. .......... 283,695 406,188
11,400 Noble Corp.+ ................ 393,958 567,036
15,200 Pioneer Natural Resources Co. 451,136 533,520
----------- -----------
3,692,135 5,179,533
----------- -----------
ENTERTAINMENT -- 7.7%
45,000 Liberty Media Corp., Cl. A+ . 406,922 494,100
38,000 The Walt Disney Co. ......... 795,181 1,056,400
73,400 Time Warner Inc.+ ........... 1,129,809 1,426,896
----------- -----------
2,331,912 2,977,396
----------- -----------
FINANCIAL SERVICES -- 20.9%
11,200 American Express Co. ........ 493,564 631,344
18,400 Bank of America Corp. ....... 739,522 864,616
24,200 Citigroup Inc. .............. 1,100,099 1,165,956
20,200 Countrywide Financial Corp. . 502,171 747,602
37,600 JPMorgan Chase & Co. ........ 1,265,227 1,466,776
9,600 Lehman Brothers Holdings Inc. 670,337 839,808
18,700 Merrill Lynch & Co. Inc. .... 921,541 1,117,699
15,000 New York Community
Bancorp Inc. .............. 301,766 308,550
12,700 Sovereign Bancorp Inc. ...... 279,968 286,385
12,700 State Street Corp. .......... 572,440 623,824
----------- -----------
6,846,635 8,052,560
----------- -----------
MARKET
SHARES COST VALUE
------- ----------- -----------
FOOD AND BEVERAGE -- 0.5%
5,000 Coca-Cola Co. ............... $ 200,250 $ 208,150
----------- -----------
HEALTH CARE -- 8.5%
13,400 Baxter International Inc. ... 347,677 462,836
27,200 Merck & Co. Inc. ............ 1,133,655 874,208
26,100 Pfizer Inc. ................. 850,211 701,829
28,600 Wyeth ....................... 1,264,691 1,218,074
----------- -----------
3,596,234 3,256,947
----------- -----------
INSURANCE -- 6.7%
5,100 Everest Re Group Ltd. ....... 397,203 456,756
17,000 Hartford Financial Services
Group Inc. ................ 924,784 1,178,270
25,061 St. Paul Travelers
Companies Inc. ............ 941,452 929,012
----------- -----------
2,263,439 2,564,038
----------- -----------
METALS AND MINING -- 2.5%
30,400 Alcoa Inc. .................. 800,286 955,168
----------- -----------
PAPER AND FOREST PRODUCTS -- 1.5%
14,200 International Paper Co. ..... 547,107 596,400
----------- -----------
RETAIL -- 1.3%
8,000 Albertson's Inc. ............ 181,760 191,040
10,000 Tiffany & Co. ............... 301,000 319,700
----------- -----------
482,760 510,740
----------- -----------
SPECIALTY CHEMICALS -- 3.7%
28,400 Dow Chemical Co. ............ 1,091,003 1,406,084
----------- -----------
TELECOMMUNICATIONS -- 2.3%
15,100 SBC Communications Inc. ..... 377,035 389,127
12,200 Verizon Communications Inc. . 419,076 494,222
----------- -----------
796,111 883,349
----------- -----------
TRANSPORTATION -- 1.2%
6,700 Union Pacific Corp. ......... 410,635 450,575
----------- -----------
TOTAL COMMON STOCKS ......... 31,423,956 38,044,250
----------- -----------
WARRANTS -- 0.0%
TELECOMMUNICATIONS -- 0.0%
1,254 Lucent Technologies Inc.,
expires 12/10/07+ ......... 2,082 1,981
----------- -----------
TOTAL
INVESTMENTS -- 98.9% ...... $31,426,038 38,046,231
===========
OTHER ASSETS AND LIABILITIES (NET) -- 1.1% 405,745
-----------
NET ASSETS -- 100.0% ...................... $38,451,976
===========
- ----------
For Federal tax purposes:
Aggregate cost ............................ $32,507,175
===========
Gross unrealized appreciation ............. $ 7,096,360
Gross unrealized depreciation ............. (1,557,304)
-----------
Net unrealized appreciation (depreciation) $ 5,539,056
===========
- ----------
+ Non-income producing security.
See accompanying notes to financial statements.
5
THE GABELLI BLUE CHIP VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2004
- --------------------------------------------------------------------------------
ASSETS:
Investments, at value (cost $31,426,038) ................. $ 38,046,231
Cash ..................................................... 399,186
Dividends receivable ..................................... 58,262
Receivable for Fund shares sold .......................... 74,991
Other assets ............................................. 3,569
------------
TOTAL ASSETS ............................................. 38,582,239
------------
LIABILITIES:
Payable for Fund shares redeemed ......................... 28,273
Payable for investment advisory fees ..................... 32,469
Payable for distribution fees ............................ 8,118
Other accrued expenses ................................... 61,403
------------
TOTAL LIABILITIES ........................................ 130,263
------------
NET ASSETS applicable to 3,256,228
shares outstanding ..................................... $ 38,451,976
============
NET ASSETS CONSIST OF:
Shares of beneficial interest, at
$0.001 par value ....................................... $ 3,256
Additional paid-in capital ............................... 43,212,633
Accumulated net realized loss on investments ............. (11,384,106)
Net unrealized appreciation on investments ............... 6,620,193
------------
NET ASSETS ............................................... $ 38,451,976
============
SHARES OF BENEFICIAL INTEREST:
CLASS AAA:
Net Asset Value, offering and redemption price
per share ($38,447,542 / 3,255,852
shares outstanding) .................................... $11.81
======
CLASS A:
Net Asset Value and redemption price per share
($1,125 / 95.187 shares outstanding) ................. $11.82
======
Maximum offering price per share
(NAV / 0.9425, based on maximum sales
charge of 5.75% of the offering price) ................. $12.54
======
CLASS B:
Net Asset Value and offering price per share
($1,116 / 94.877 shares outstanding) ................. $11.76(a)
======
CLASS C:
Net Asset Value and offering price per share
($1,116 / 94.877 shares outstanding) ................. $11.76(a)
======
CLASS I:
Net Asset Value, offering and redemption price
per share ($1,077 / 91.333 shares outstanding) ....... $11.79
======
- ----------
(a) Redemption price varies based on the length of time held.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2004
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends ................................................ $ 889,089
Interest ................................................. 2,841
----------
TOTAL INVESTMENT INCOME .................................. 891,930
----------
EXPENSES:
Investment advisory fees ................................. 417,627
Distribution fees -- Class AAA ........................... 104,393
Distribution fees -- Class A ............................. 3
Distribution fees -- Class B ............................. 10
Distribution fees -- Class C ............................. 28
Shareholder communications expenses ...................... 72,920
Shareholders services fees ............................... 68,688
Registration fees ........................................ 39,402
Legal and audit fees ..................................... 31,268
Trustees' fees ........................................... 25,500
Interest expense ......................................... 5,398
Miscellaneous expenses ................................... 22,870
----------
TOTAL EXPENSES ........................................... 788,107
----------
NET INVESTMENT INCOME .................................... 103,823
----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments ......................... 4,236,236
Net change in unrealized appreciation/
depreciation on investments ............................ 191,519
----------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS ......................................... 4,427,755
----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ........................................ $4,531,578
==========
See accompanying notes to financial statements.
6
THE GABELLI BLUE CHIP VALUE FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, 2004 DECEMBER 31, 2003
----------------- -----------------
OPERATIONS:
Net investment income (loss) ..................................... $ 103,823 $ (55,506)
Net realized gain on investments ................................. 4,236,236 619,916
Net change in unrealized appreciation/depreciation on investments 191,519 13,782,148
------------ -----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............. 4,531,578 14,346,558
------------ -----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income
Class AAA ...................................................... (109,308) --
Class A ........................................................ (4) --
Class I ........................................................ (6) --
------------ -----------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS .............................. (109,318) --
------------ -----------
SHARES OF BENEFICIAL INTEREST TRANSACTIONS:
Class AAA ........................................................ (14,476,855) 10,241,167
Class A .......................................................... 3 1,000
Class B .......................................................... -- 1,000
Class C .......................................................... -- 1,000
Class I .......................................................... 1,005 --
------------ -----------
NET INCREASE (DECREASE) IN NET ASSETS FROM SHARES OF
BENEFICIAL INTEREST TRANSACTIONS ............................... (14,475,847) 10,244,167
------------ -----------
REDEMPTION FEES .................................................. 2,604 --
------------ -----------
NET INCREASE (DECREASE) IN NET ASSETS ............................ (10,050,983) 24,590,725
NET ASSETS:
Beginning of period .............................................. 48,502,959 23,912,234
------------ -----------
End of period .................................................... $ 38,451,976 $48,502,959
============ ===========
See accompanying notes to financial statements.
7
THE GABELLI BLUE CHIP VALUE FUND
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. ORGANIZATION. The Gabelli Blue Chip Value Fund (the "Fund") was organized on
May 13, 1999 as a Delaware statutory trust. The Fund is a diversified, open-end
management investment company registered under the Investment Company Act of
1940, as amended (the "1940 Act"). The Fund commenced operations on August 26,
1999. The Fund's primary objective is long-term growth of capital.
2. SIGNIFICANT ACCOUNTING POLICIES. The preparation of financial statements in
accordance with U.S. generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results could differ from
those estimates. The following is a summary of significant accounting policies
followed by the Fund in the preparation of its financial statements.
SECURITY VALUATION. Portfolio securities listed or traded on a nationally
recognized securities exchange or traded in the U.S. over-the-counter market for
which market quotations are readily available are valued at the last quoted sale
price or a market's official closing price as of the close of business on the
day the securities are being valued. If there were no sales that day, the
security is valued at the average of the closing bid and asked prices or, if
there were no asked prices quoted on that day, then the security is valued at
the closing bid price on that day. If no bid or asked prices are quoted on such
day, the security is valued at the most recently available price or, if the
Board of Trustees (the "Board") so determines, by such other method as the Board
shall determine in good faith, to reflect its fair market value. Portfolio
securities traded on more than one national securities exchange or market are
valued according to the broadest and most representative market, as determined
by Gabelli Funds, LLC (the "Adviser").
Portfolio securities primarily traded on foreign markets are generally valued at
the preceding closing values of such securities on their respective exchanges or
if after the close 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 amount 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.
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements with
primary government securities dealers recognized by the Federal Reserve Board,
with member banks of the Federal Reserve System or with other brokers or dealers
that meet credit guidelines established by the Adviser and reviewed by the
Board. Under the terms of a typical repurchase agreement, the Fund takes
possession of an underlying
8
THE GABELLI BLUE CHIP VALUE FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
debt obligation subject to an obligation of the seller to repurchase, and the
Fund to resell, the obligation at an agreed-upon price and time, thereby
determining the yield during the Fund's holding period. The Fund will always
receive and maintain securities as collateral whose market value, including
accrued interest, will be at least equal to 102% of the dollar amount invested
by the Fund in each agreement. The Fund will make payment for such securities
only upon physical delivery or upon evidence of book entry transfer of the
collateral to the account of the custodian. To the extent that any repurchase
transaction exceeds one business day, the value of the collateral is
marked-to-market on a daily basis to maintain the adequacy of the collateral. If
the seller defaults and the value of the collateral declines or if bankruptcy
proceedings are commenced with respect to the seller of the security,
realization of the collateral by the Fund may be delayed or limited.
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.
DETERMINATION OF NET ASSET VALUE AND CALCULATION OF EXPENSES. Certain
administrative expenses are common to, and allocated among, various affiliated
funds. Such allocations are made on the basis of each Fund's average net assets
or other criteria directly affecting the expenses as determined by the Adviser
pursuant to procedures established by the Board.
In calculating net asset value per share of each class, investment income,
realized and unrealized gains and losses, redemption fees and expenses other
than class specific expenses, are allocated daily to each class of shares based
on 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.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders are recorded on the ex-dividend date. Distributions to shareholders
are based on ordinary income and long-term capital gains as determined in
accordance with Federal income tax regulations, which may differ from income and
capital gains as 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 Fund, timing differences and
differing characterizations of distributions made by the Fund.
These book/tax differences are either temporary or permanent in nature.To the
extent these differences are permanent, adjustments are made to the appropriate
equity accounts in the period that the differences arise.
For the year ended December 31, 2004, reclassifications were made to decrease
accumulated net investment loss for $5,495, with an offsetting adjustment to
additional paid-in capital. These reclassifications have no impact on the net
asset value of the Fund and the calculation of net investment income per share
in the financial highlights excludes these adjustments.
The tax character of distributions of $109,318 paid during the year ended
December 31, 2004 was ordinary income. No distributions were paid during the
year ended December 31, 2003.
9
THE GABELLI BLUE CHIP VALUE FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
PROVISION FOR INCOME TAXES. The Fund intends to continue to qualify as a
regulated investment company under Subchapter M of the Internal Revenue Code of
1986, as amended (the "Code"). It is the Fund's policy to comply with the
requirements of the Code applicable to regulated investment companies and to
distribute substantially all of its net investment company taxable income and
net capital gains. Therefore, no provision for Federal income taxes is required.
As of December 31, 2004, the components of earnings/(losses) on a tax basis were
as follows:
Capital loss carryforward ................. $(10,302,969)
Net unrealized appreciation ............... 5,539,056
------------
Total accumulated loss .................... $ (4,763,913)
============
The Fund has a net capital loss carryforward for Federal income tax purposes at
December 31, 2004 of $10,302,969. This capital loss carryforward is available to
reduce future required distributions of net capital gains to shareholders.
$2,438,953 of the loss carryforward is available through 2009; and $7,864,016 is
available through 2010. For the year ended December 31, 2004, the Fund utilized
net capital loss carryforwards of $3,915,096.
3. INVESTMENT ADVISORY AGREEMENT. The Fund has entered into an investment
advisory agreement (the "Advisory Agreement") with the Adviser which provides
that the Fund will pay the Adviser a fee, computed daily and paid monthly, at
the annual rate of 1.00% of the value of the Fund's average daily net assets. In
accordance with the Advisory Agreement, the Adviser provides a continuous
investment program for the Fund's portfolio, oversees the administration of all
aspects of the Fund's business and affairs and pays the compensation of all
Officers and Trustees of the Fund who are its affiliates. The Adviser
contractually agreed to reimburse expenses of the Fund to the extent necessary
to maintain the annualized total operating expenses of the Fund at 2.00%, 2.00%,
2.75%, 2.75% and 1.75%, respectively, of Class AAA, Class A, Class B, Class C
and Class I Shares' average daily net assets. The Fund is obliged to repay the
Adviser for a period of two fiscal years following the fiscal year in which the
Adviser reimbursed the Fund only to the extent that the operating expenses of
the Fund fell below 2.00%, 2.00%, 2.75%, 2.75% and 1.75%, respectively, of
average daily net assets for Class AAA, Class A, Class B, Class C and Class I
Shares, respectively. There have been no expense reimbursements by the Adviser
in 2003 or 2004.
4. DISTRIBUTION PLAN. The Fund's Board has adopted a distribution plan (the
"Plan") for each class of shares (other than Class I) pursuant to Rule 12b-1
under the 1940 Act. Gabelli & Company, Inc. ("Gabelli & Company"), an affiliate
of the Adviser, serves as distributor of the Fund. Under the Class AAA, Class A,
Class B and Class C Share Plans, payments are authorized to Gabelli & Company at
annual rates of 0.25%, 0.25%, 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 proceeds from the sales of securities for
the year ended December 31, 2004, other than short term securities, aggregated
$10,865,739 and $25,514,461, respectively.
6. SHARES OF BENEFICIAL INTEREST. The Fund offers five classes of shares --
Class AAA Shares, Class A Shares, Class B Shares, Class C Shares and Class I
Shares. Class AAA Shares are offered only to investors who acquire them directly
from Gabelli & Company or through selected broker/dealers without a sales
charge. Class A Shares are subject to a maximum front-end sales charge of 5.75%.
Class B Shares are subject to a contingent deferred
10
THE GABELLI BLUE CHIP VALUE FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
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, Class B Shares are
available only through exchange of Class B Shares of other Funds distributed by
Gabelli & Company. Class I Shares are offered to institutional investors
(beginning July 1, 2004) that acquire the Fund directly through Gabelli &
Company.
Effective September 1, 2004 the Fund imposed a redemption fee of 2.00% on Class
AAA, Class A, Class B, Class C and Class I Shares that are redeemed or exchanged
within sixty days after the date of a purchase. The redemption fee is deducted
from the proceeds otherwise payable to the redeeming shareholders and is
retained by the Fund. The redemption fees retained by the Fund during the year
ended December 31, 2004 amounted to $2,604.
The redemption fee did not apply to shares purchased through programs that the
Adviser determined to have appropriate short-term trading policies in place.
Additionally, certain recordkeepers for qualified and non-qualified retirement
plans that could not collect the redemption fee at the participant level due to
systems limitations have received an extension until March 31, 2005 to implement
such systems.
Transactions in shares of beneficial interest were as follows:
YEAR ENDED YEAR ENDED
DECEMBER 31, 2004 DECEMBER 31, 2003
---------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
CLASS AAA CLASS AAA
---------------------------- ---------------------------
Shares sold ...................................... 1,272,742 $ 13,787,702 8,845,638 $ 77,513,568
Shares issued upon reinvestment of dividends ..... 8,992 106,195 -- --
Shares redeemed .................................. (2,629,087) (28,370,752) (7,507,239) (67,272,401)
---------- ------------ ---------- ------------
Net increase (decrease) ...................... (1,347,353) $(14,476,855) 1,338,399 $ 10,241,167
========== ============ ========== ============
CLASS A CLASS A*
---------------------------- ---------------------------
Shares sold ...................................... -- -- 95 $ 1,000
Shares issued upon reinvestment of dividends ..... 0** $ 3 -- --
---------- ------------ ---------- ------------
Net increase ................................. 0 $ 3 95 $ 1,000
========== ============ ========== ============
CLASS B CLASS B*
---------------------------- ---------------------------
Shares sold ...................................... -- -- 95 $ 1,000
---------- ------------ ---------- ------------
Net increase ................................. -- -- 95 $ 1,000
========== ============ ========== ============
CLASS C CLASS C*
---------------------------- ---------------------------
Shares sold ...................................... -- -- 95 $ 1,000
Shares redeemed .................................. -- -- -- --
---------- ------------ ---------- ------------
Net increase (decrease) ...................... -- -- 95 $ 1,000
========== ============ ========== ============
CLASS I*
----------------------------
Shares sold ...................................... 100 $ 1,100
Shares issued upon reinvestment of dividends ..... 1 6
Shares redeemed .................................. (10) (101)
---------- ------------
Net increase ................................. 91 $ 1,005
========== ============
<FN>
- ----------
* Commencement of share offering to the public on December 23, 2003. Class I Shares were first offered to the
public and initial shares were sold to Gabelli Asset Management Inc. on June 30, 2004.
** Shares rounded to less than 0.5 shares.
</FN>
11
THE GABELLI BLUE CHIP VALUE FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
7. TRANSACTIONS WITH AFFILIATES. During the year ended December 31, 2004, the
Fund paid brokerage commissions of $10,095 to Gabelli & Company.
The cost of calculating the Fund's net asset value per share is a Fund expense
pursuant to the Advisory Agreement between the Fund and the Adviser. During the
year ended December 31, 2004, the Fund reimbursed the Adviser $2,900 in
connection with the cost of computing the Fund's net asset value, which is
included in miscellaneous expenses in the Statement of Operations.
8. OTHER MATTERS. The Adviser and/or affiliates have received subpoenas from the
Attorney General of the State ofNew York and the SEC requesting information on
mutual fund shares trading practices. Gabelli Asset Management Inc., the
Adviser's parent company, is responding to these requests. TheFund does not
believe that these matters will have a material adverse effect on the Fund's
financial position or the results of its operations.
9. INDEMNIFICATIONS. The Fund enters into contracts that contain a variety of
indemnifications. The Fund's maximum exposure under these arrangements is
unknown. However, the Fund has not had prior claims or losses pursuant to these
contracts and expects the risk of loss to be remote.
12
THE GABELLI BLUE CHIP VALUE FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period:
INCOME
FROM INVESTMENT OPERATIONS DISTRIBUTIONS
---------------------------------------------------------- -----------------------------------------
Net
Net Asset Realized and Total Net
Period Value, Net Unrealized from Net Realized
Ended Beginning Investment Gain/(Loss) on Investment Investment Gain on Total
December 31 of Period Income/(Loss)(c) Investments Operations Income Investments Distributions
- ----------- --------- ---------------- -------------- ---------- ---------- ----------- -------------
CLASS AAA
2004 $10.54 $ 0.03 $ 1.27 $ 1.30 $(0.03) -- $(0.03)
2003 7.32 (0.01) 3.23 3.22 -- -- --
2002 10.71 (0.03) (3.36) (3.39) -- -- --
2001 12.17 (0.05) (1.38) (1.43) -- $(0.03) (0.03)
2000 11.65 (0.02) 1.31 1.29 -- (0.77) (0.77)
CLASS A(b)
2004 $10.54 $ 0.04 $ 1.28 $ 1.32 $(0.04) -- $(0.04)
CLASS B(b)
2004 $10.54 $(0.04) $ 1.26 $ 1.22 -- -- --
CLASS C(b)
2004 $10.54 $(0.08) $ 1.30 $ 1.22 -- -- --
CLASS I(e)
2004 $11.01 $ 0.05 $ 0.80 $ 0.85 $(0.07) -- $(0.07)
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
---------------------------------------------------------------------------------------
Net Asset Net Assets Net Operating Operating
Period Value, End of Investment Expenses Expenses Portfolio
Ended Redemption End of Total Period Income/ Net of Before Turnover
December 31 Fees(c) Period Return+ (in 000's) (Loss) Reimbursements(d) Reimbursements(d) Rate
- ----------- ---------- --------- ------- ----------- ---------- ----------------- ----------------- ---------
CLASS AAA
2004 $0.00(f) $11.81 12.4% $38,448 0.25% 1.89% 1.89% 26%
2003 -- 10.54 44.0 48,503 (0.12) 1.86 1.86 140
2002 -- 7.32 (31.7) 23,912 (0.40) 1.94 1.94 94
2001 -- 10.71 (11.8) 42,403 (0.36)(a) 1.75(a) 1.75(a) 92
2000 -- 12.17 11.1 25,692 (0.29) 2.25 2.00 107
CLASS A(b)
2004 $0.00(f) $11.82 12.5% $ 1 0.38% 1.89% 1.89% 26%
CLASS B(b)
2004 $0.00(f) $11.76 11.6% $ 1 (0.38)% 2.64% 2.64% 26%
CLASS C(b)
2004 $0.00(f) $11.76 11.6% $ 1 (0.71)% 2.64% 2.64% 26%
CLASS I(e)
2004 $0.00(f) $11.79 7.7% $ 1 0.81% 1.59%(h) 1.59%(h) 26%
<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 and does not reflect applicable sales charges. Total return
for less than one year is not annualized.
(a) Under an expense deferral agreement with the Adviser, the Fund repaid the Adviser $34,909 during 2001, representing
previous reimbursed expenses from the Adviser. During the period ended December 31, 2001, had such payment not been made,
the expense ratio would have been 1.68% and the net investment income ratio would have been (0.30)%.
(b) Class A, Class B and Class C Shares were outstanding within the period December 23, 2003 through December 31, 2003.
Financial Highlights are not presented for Class A, Class B and Class C Shares as the information for this period is not
considered meaningful.
(c) Per share data is calculated using the average shares outstanding method.
(d) The fund incurred interest expense for the year ended December 31, 2004. If interest expense had not been incurred, the
ratio of expenses to average net assets for Class AAA, Class A, Class B, Class C and Class I would have been 1.87%, 1.87%,
2.62%, 2.62% and 1.59%, respectively.
(e) From the commencement of offering Class I Shares on June 30, 2004.
(f) Amount represents less than $0.005 per share.
(h) Annualized.
</FN>
See accompanying notes to financial statements.
13
THE GABELLI BLUE CHIP VALUE FUND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
To the Shareholders and Board of Trustees of
The Gabelli Blue Chip Value Fund
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of The Gabelli Blue Chip Value Fund (the "Fund"),
as of December 31, 2004, and the related statement of operations for the year
then ended, the statement of changes in net assets for each of the two years in
the period then ended, and the financial highlights for each of the periods
indicated therein. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits 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 and financial highlights are free of material misstatement. An audit
includes consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the Fund's
internal control over financial reporting. Accordingly, we express no such
opinion. An audit also includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements and financial
highlights, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
Our procedures included confirmation of securities owned as of December 31,
2004, by correspondence with the Fund's custodian and brokers. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Gabelli Blue Chip Value Fund at December 31, 2004, the results of its operations
for the year then ended, the changes in its net assets for each of the two years
in the period then ended, and the financial highlights for each of the periods
indicated therein, in conformity with U.S. generally accepted accounting
principles.
/s/ ERNST & YOUNG
New York, New York
February 11, 2005
- --------------------------------------------------------------------------------
2004 TAX NOTICE TO SHAREHOLDERS (Unaudited)
For the fiscal year ended December 31, 2004, the Fund paid to shareholders,
an ordinary income dividend totaling $0.0336, $0.0386 and $0.0657 per share
for Class AAA, Class A and Class I, respectively. For the fiscal year ended
December 31, 2004, 100% of the ordinary income dividend qualifies for the
dividend received deduction available to corporations and 100% of the
ordinary income distributions was qualifying dividend income.
U.S. GOVERNMENT INCOME:
The percentage of the ordinary income dividend paid by the Fund during fiscal
year 2004 which was derived from U.S. Treasury securities was 0.32%. Such
income is exempt from state and local tax in all states. However, many
states, including New York and California, allow a tax exemption for a
portion of the income earned only if a mutual fund has invested at least 50%
of its assets at the end of each quarter of the Fund's fiscal year in U.S.
Government securities. The Gabelli Blue Chip Value Fund 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 as to the
applicability of the information provided to your specific situation.
- --------------------------------------------------------------------------------
14
THE GABELLI BLUE CHIP VALUE FUND
ADDITIONAL FUND INFORMATION (UNAUDITED)
- --------------------------------------------------------------------------------
The business and affairs of the Fund are managed under the direction of the
Fund's Board of Trustees. Information pertaining to the Trustees and officers of
the Fund is set forth below. The Fund's Statement of Additional Information
includes additional information about The Gabelli Blue Chip Value Fund Trustees
and is available, without charge, upon request, by calling 800-GABELLI
(800-422-3554) or by writing to The Gabelli Blue Chip Value Fund at One
Corporate Center, Rye, NY 10580-1422.
TERM OF NUMBER OF
OFFICE AND FUNDS IN FUND
NAME, POSITION(S) LENGTH OF COMPLEX
ADDRESS 1 TIME OVERSEEN BY PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIPS
AND AGE SERVED 2 TRUSTEE DURING PAST FIVE YEARS HELD BY TRUSTEE 4
- ----------------- ---------- ------------- --------------------------------------------- ----------------------------
INTERESTED TRUSTEES 3:
- ----------------------
MARIO J. GABELLI Since 1999 24 Chairman of the Board, Chief Executive Officer Director of Morgan Group
Trustee of Gabelli Asset Management Inc. and Chief Holdings, Inc. (holding
Age: 62 Investment Officer of Gabelli Funds, LLC and company)
GAMCO Investors, Inc.; Vice Chairman and Chief
Executive Officer of Lynch Interactive
Corporation (multimedia and services)
KARL OTTO POHL Since 1999 34 Member of the Shareholder Committee of Sal Director of Gabelli Asset
Trustee Oppenheim Jr. & Cie (private investment bank); Management Inc. (investment
Age: 75 Former President of the Deutsche Bundesbank management); Chairman,
and Chairman of its Central Bank Council Incentive Capital and
(1980-1991) Incentive Asset Management
(Zurich); Director at Sal
Oppenheim Jr. & Cie, Zurich
NON-INTERESTED TRUSTEES:
- ------------------------
ANTHONY J. COLAVITA Since 1999 36 President and Attorney at Law in the law firm --
Trustee of Anthony J. Colavita, P.C.
Age: 69
VINCENT D. ENRIGHT Since 1999 13 Former Senior Vice President and Chief Director of Aphton
Trustee Financial Officer of KeySpan Energy Corporation
Age: 61 Corporation (biopharmaceutical company)
MARY E. HAUCK Since 2000 6 Retired Senior Manager of the Gabelli O'Connor --
Trustee Fixed Income Mutual Funds Management Company
Age: 62
WERNER J. ROEDER, MD Since 1999 26 Medical Director of Lawrence Hospital and --
Trustee practicing private physician
Age: 64
OFFICERS:
- ---------
BRUCE N. ALPERT Since 2003 -- Executive Vice President and Chief Operating --
President andTreasurer Officer of Gabelli Funds, LLC since 1988 and
Age: 53 an officer of all mutual funds advised by
Gabelli Funds, LLC and its affiliates.
Director and President of Gabelli Advisers,
Inc.
JAMES E. MCKEE Since 1999 -- Vice President, General Counsel and Secretary --
Secretary of Gabelli Asset Management Inc. since 1999
Age: 41 and GAMCO Investors, Inc. since 1993;
Secretary of all mutual funds advised by
Gabelli Advisers, Inc. and Gabelli Funds, LLC
PETER GOLDSTEIN Since 2004 -- Director of Regulatory Affairs at Gabelli
Chief Compliance Officer Asset Management Inc. since February 2004;
Age: 51 Vice President of Goldman Sachs Asset
Management from November 2000 through January
2004; Deputy GeneralCounsel at Gabelli Asset
Management Inc. from February 1998 through
November 2000
<FN>
- ------------
1 Address: One Corporate Center, Rye, NY 10580-1422, unless otherwise noted.
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 Fund's By-Laws and Agreement and Declaration of Trust. Each officer
will hold office for an indefinite term until the date he or she resigns or retires or until his or her successor is elected and
qualified.
3 "Interested person" of the Fund as defined in the Investment Company Act of 1940. Messrs. Gabelli and Pohl are each considered
an "interested person" because of their affiliation with Gabelli Funds, LLC which acts as the Fund's investment adviser.
4 This column includes only directorships of companies required to report to the SEC under the Securities Exchange Act of 1934
(i.e. public companies) or other investment companies registered under the 1940 Act.
</FN>
15
THE GABELLI BLUE CHIP VALUE FUND
One Corporate Center
Rye, New York 10580-1422
800-GABELLI
800-422-3554
FAX: 914-921-5118
WEBSITE: WWW.GABELLI.COM
E-MAIL: INFO@GABELLI.COM
Net Asset Value available daily by calling
800-GABELLI after 6:00 P.M.
BOARD OF TRUSTEES
Mario J. Gabelli, CFA Mary E. Hauck
CHAIRMAN AND CHIEF (RETIRED) SENIOR PORTFOLIO MANAGER
INVESTMENT OFFICER GABELLI-O'CONNOR FIXED INCOME
GABELLI ASSET MANAGEMENT INC. MUTUAL FUND MANAGEMENT CO.
Anthony J. Colavita Karl Otto Pohl
ATTORNEY-AT-LAW FORMER PRESIDENT
ANTHONY J. COLAVITA, P.C. DEUTSCHE BUNDESBANK
Vincent D. Enright Werner J. Roeder, MD
FORMER SENIOR VICE PRESIDENT MEDICAL DIRECTOR
AND CHIEF FINANCIAL OFFICER LAWRENCE HOSPITAL
KEYSPAN ENERGY CORP.
OFFICERS AND PORTFOLIO MANAGER
Barbara G. Marcin, CFA Bruce N. Alpert
PORTFOLIO MANAGER PRESIDENT AND TREASURER
James E. McKee Peter Goldstein
SECRETARY CHIEF COMPLIANCE OFFICER
DISTRIBUTOR
Gabelli & Company, Inc.
CUSTODIAN, TRANSFER AGENT AND DIVIDEND AGENT
State Street Bank and Trust Company
LEGAL COUNSEL
Skadden, Arps, Slate, Meagher & Flom LLP
- --------------------------------------------------------------------------------
This report is submitted for the general information of the shareholders of The
Gabelli Blue Chip Value Fund. It is not authorized for distribution to
prospective investors unless preceded or accompanied by an effective prospectus.
- --------------------------------------------------------------------------------
GAB402Q404SR
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
Trustees has determined that Vincent D. Enright is qualified to serve as an
audit committee financial expert serving on its audit committee and that he is
"independent," as defined by Item 3 of Form N-CSR.
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 $20,300 in
2004 and $19,000 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 $3,600 in 2004 and $3,400
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
in 2004 and $0 in 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 the
Adviser, Gabelli Funds, LLC, and any affiliate of Gabelli Funds, LLC
("Gabelli") that provides services to the registrant (a "Covered
Services Provider") if the independent auditors' engagement related
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 the 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 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 $68,600 in 2004 and $62,400 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
Schedule of Investments in securities of unaffiliated issuers as of the close of
the reporting period is included as part of the report to shareholders filed
under Item 1 of this form.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which the shareholders
may recommend nominees to the registrant's board of directors, where those
changes were implemented after the registrant last provided disclosure in
response to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A (17 CFR
240.14a-101), or this Item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the "1940
Act") (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days
of the filing date of the report that includes the disclosure required
by this paragraph, based on their evaluation of these controls and
procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR
270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities
Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or
240.15d-15(b)).
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17
CFR 270.30a-3(d)) that occurred during the registrant's second fiscal
quarter of the period covered by this report that has materially
affected, or is reasonably likely to materially affect, the registrant's
internal control over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) 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
March 10, 2004 (Accession No. 0000935069-04-000488).
(a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and
Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.
(a)(3) Not applicable.
(b) Certifications pursuant to Rule 30a-2(b) under the 1940 Act and
Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(registrant) The Gabelli Blue Chip Value Fund
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By (Signature and Title)* /s/ Bruce N. Alpert
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Bruce N. Alpert, Principal Executive Officer
Date March 9, 2005
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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
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Bruce N. Alpert, Principal Executive Officer
& Principal Financial Officer
Date March 9, 2005
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* Print the name and title of each signing officer under his or her signature.