UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-01311
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The Gabelli Mathers Fund
--------------------------------------------------------
(Exact name of registrant as specified in charter)
One Corporate Center
Rye, New York 10580-1422
--------------------------------------------------------
(Address of principal executive offices) (Zip code)
Bruce N. Alpert
Gabelli Funds, LLC
One Corporate Center
Rye, New York 10580-1422
--------------------------------------------------------
(Name and address of agent for service)
registrant's telephone number, including area code: 1-800-422-3554
---------------
Date of fiscal year end: December 31
------------
Date of reporting period: December 31, 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.
[GRAPHIC OMITTED]
THE
GABELLI
MATHERS
FUND
ANNUAL REPORT
DECEMBER 31, 2004
THE GABELLI MATHERS 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 the factors that affected the
performance during the past year.
Sincerely yours,
/s/ Bruce N. Alpert
Bruce N. Alpert
Executive Vice President
February 23, 2005
PERFORMANCE DISCUSSION
The Fund's portfolio remained conservatively invested at year end, with a gross
stock exposure of 22.4% of assets, comprised of 10.7% longs and 11.7% shorts,
with the remainder in cash, awaiting lower risk entry points to initiate new and
larger capital commitments. This compares to a 10.3% gross stock exposure at
year-end 2003, comprised of 6.4% long and 3.9% short individual securities. Both
the long stock segment of the portfolio and the fixed income portion, which was
limited to short-term U.S. Treasury bills and U.S. Treasury collateralized
repurchase agreements, added to the Fund's total return in 2004. The short
equity segment had a negative return and was the primary factor, along with
negative real short-term interest rates, for the Fund's 2004 performance.
During the year, a portion of the Fund's common stock segment was invested in
takeover-target companies subject to friendly, all cash tender or merger offers
from acquiring companies. The Fund purchased these event-driven stocks after the
deals were publicly announced, generally by financially strong, strategic
buyers. Deal arbitrage stocks typically earn relatively attractive annualized
returns, but are held for short time periods resulting in a disproportionately
high portfolio turnover rate, which can be misleading. This occurs when the
Fund's fixed income position is a relatively high proportion of assets and has a
maturity of less than one year, while the percent invested in stocks is low.
GROWTH OF $10,000 INVESTMENT IN GABELLI MATHERS FUND (Log Scale)
[GRAPHIC OMITTED]
PLOT POINTS FOLLOW:
Gabelli Mathers Fund S&P 500 Index
65 10,000 10,000
10,585 10,389
12,122 10,768
66 13,090 10,473
12,738 10,028
11,164 9,141
12,632 9,685
67 17,013 10,964
19,767 11,104
22,744 11,937
24,332 12,007
68 20,818 11,319
26,189 12,592
29,709 13,080
30,868 13,335
69 31,932 13,134
29,260 12,739
28,771 12,239
29,016 12,200
70 28,163 11,990
21,699 9,828
24,698 11,490
29,588 12,688
71 34,885 13,918
34,292 13,942
34,322 13,860
35,455 14,504
72 41,224 15,338
43,701 15,439
40,153 16,043
41,173 17,256
73 34,564 16,414
29,152 15,467
34,457 16,212
25,877 14,731
74 26,617 14,315
22,659 13,233
17,871 9,904
17,957 10,832
75 24,869 13,317
30,432 15,363
26,625 13,681
28,201 14,863
76 34,507 17,088
35,908 17,513
36,608 17,848
40,716 18,408
77 40,573 17,039
43,535 17,589
41,881 17,093
46,496 17,071
78 47,979 16,231
53,463 17,612
57,008 19,139
53,496 18,194
79 59,691 19,482
66,305 20,012
72,683 21,522
78,404 21,550
80 72,343 20,671
88,989 23,443
100,567 26,069
109,990 28,535
81 118,261 28,911
112,277 28,244
95,110 25,357
101,473 27,135
82 88,281 25,173
85,421 25,017
101,753 27,884
116,548 32,942
83 123,518 36,252
139,600 40,280
137,688 40,224
135,388 40,360
84 126,209 39,444
120,794 38,427
128,912 42,146
131,890 42,888
85 141,636 46,838
152,840 50,281
144,449 48,219
168,124 56,518
86 190,686 64,492
193,566 68,291
183,849 63,531
191,625 67,095
87 234,473 81,420
239,045 85,507
250,495 91,151
243,431 70,614
88 256,723 74,632
275,566 79,603
272,535 79,866
276,841 82,310
'89 291,209 88,137
294,238 95,911
294,767 106,173
305,644 108,360
'90 310,901 105,099
325,203 111,709
327,935 96,372
337,510 105,007
'91 349,256 120,243
353,307 119,966
362,352 126,277
369,381 136,922
'92 360,812 133,471
365,719 136,007
373,070 140,292
380,867 147,334
'93 378,086 153,758
383,682 154,496
375,318 158,482
389,017 162,159
'94 378,708 156,013
370,717 156,668
377,687 164,314
366,092 164,281
'95 375,281 180,265
390,404 197,445
397,978 213,122
391,770 225,952
'96 386,363 238,085
380,104 248,775
393,484 256,462
391,477 277,826
'97 390,890 285,272
390,890 335,108
399,138 360,175
403,249 370,512
'98 400,144 422,198
392,741 436,130
394,901 392,735
382,225 476,899
'99 386,468 500,696
388,400 536,045
393,605 502,542
404,074 577,321
'00 410,504 590,541
411,858 574,833
415,581 569,257
424,366 524,741
'01 434,931 462,507
436,340 489,563
433,875 417,647
442,406 462,376
'02 440,600 463,671
399,429 401,539
391,122 332,153
390,400 360,187
'03 388,955 348,841
387,511 402,528
385,344 413,195
382,816 463,522
'04 380,288 471,355
379,927 479,463
379,565 470,497
378,843 513,924
PERCENT AVERAGE ANNUAL RETURNS *
1 YR 5 YRS 10 YRS 20 YRS 30 YRS 39 YRS**
----- ----- ------ ------ ------ --------
GABELLI MATHERS FUND (1.04) (1.28) 0.35 5.42 10.70 9.67
Standard & Poor's 500 10.88 (2.30) 12.07 13.22 13.73 10.52
* All periods ended 12/31/04. Average annual returns reflect changes in share
price and reinvestment of dividends and are net of expenses. Returns
represent past performance and do not guarantee future results. Investment
returns and the principal value of an investment will fluctuate. When
shares are redeemed they may be worth more or less than their original
cost. Current performance may be lower or higher than the performance data
presented. Please visit www.gabelli.com to obtain performance information
as of the most recent month end. The Standard & Poor's 500 is an unmanaged
indicator of stock market performance. Investors should consider the
investment objectives, risks, 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.
** From commencement of investment operations on August 19, 1965. To obtain a
copy of the Fund's prospectus, please contact Gabelli Funds at One
Corporate Center, Rye, NY 10580-1422, by calling 800-GABELLI (800-422-3554)
or visit our website www.gabelli.com.
2
THE GABELLI MATHERS 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*
- --------------------------------------------------------------------------------
THE GABELLI MATHERS FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Gabelli Mathers $1,000.00 $ 997.10 1.70% $8.53
HYPOTHETICAL 5% RETURN
Gabelli Mathers $1,000.00 $1,016.59 1.70% $8.62
* 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 tables which
present portfolio holdings as a percent of total net assets are provided in
compliance with such requirement.
THE GABELLI MATHERS FUND -
LONG POSITIONS PERCENT
U.S. Government Obligations .................... 87.2
Entertainment .................................. 3.0
Repurchase Agreements .......................... 2.6
Broadcasting ................................... 1.8
Computer Software and Services ................. 1.6
Energy and Utilities ........................... 1.4
Financial Services ............................. 0.8
Health Care .................................... 0.7
Environmental Services ......................... 0.5
Telecommunications ............................. 0.5
Food and Beverage .............................. 0.3
Equipment ...................................... 0.1
THE GABELLI MATHERS FUND -
SHORT POSITIONS PERCENT
Consumer Products .............................. (3.4)
Retail ......................................... (2.4)
Exchange Traded Funds .......................... (1.5)
Equipment ...................................... (1.3)
Restaurants .................................... (1.0)
Automotive ..................................... (0.7)
Home Furnishings ............................... (0.7)
Entertainment .................................. (0.4)
Metals and Mining .............................. (0.4)
THE FUND FILES 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 WAS
FILED FOR THE QUARTER ENDED SEPTEMBER 30, 2004. SHAREHOLDERS MAY OBTAIN THIS
INFORMATION AT WWW.GABELLI.COM OR BY CALLING THE FUND AT 800-GABELLI
(800-422-3554). THE FUND'S FORM N-Q IS 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.
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 MATHERS FUND
SCHEDULE OF INVESTMENTS -- DECEMBER 31, 2004
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- -------
COMMON STOCKS -- 10.7%
BROADCASTING -- 1.8%
50,000 Liberty Media Corp., Cl. A+ ............$ 434,141 $ 549,000
4,000 Liberty Media International Inc., Cl. A+ 142,331 184,920
----------- -----------
576,472 733,920
----------- -----------
COMPUTER SOFTWARE AND SERVICES -- 1.6%
10,000 CACI International Inc., Cl. A+ ........ 409,791 681,300
----------- -----------
ENERGY AND UTILITIES -- 1.4%
500 Anadarko Petroleum Corp. ............... 22,080 32,405
500 Cinergy Corp. .......................... 18,045 20,815
1,000 Duquesne Light Holdings Inc. ........... 15,295 18,850
500 Murphy Oil Corp. ....................... 29,891 40,225
15,000 Unisource Energy Corp. ................. 369,917 361,650
3,000 Veolia Environnement, ADR .............. 101,550 109,350
----------- -----------
556,778 583,295
----------- -----------
ENTERTAINMENT -- 3.0%
6,000 Gemstar-TV Guide
International Inc.+ ................... 35,273 35,520
100,000 Metro-Goldwyn-Mayer Inc.+ .............. 1,205,468 1,188,000
----------- -----------
1,240,741 1,223,520
----------- -----------
ENVIRONMENTAL SERVICES -- 0.5%
7,000 Waste Management Inc. .................. 209,383 209,580
----------- -----------
EQUIPMENT -- 0.1%
2,500 Ultratech Inc.+ ........................ 44,996 47,125
----------- -----------
FINANCIAL SERVICES -- 0.8%
15,000 New York Community Bancorp Inc. ........ 274,039 308,550
1,000 Onyx Acceptance Corp. .................. 27,230 27,960
----------- -----------
301,269 336,510
----------- -----------
FOOD AND BEVERAGE -- 0.3%
500 Dreyer's Grand Ice Cream
Holdings Inc., Cl. A .................. 39,595 40,215
4,000 Hain Celestial Group Inc.+ ............. 68,261 82,680
----------- -----------
107,856 122,895
----------- -----------
HEALTH CARE -- 0.7%
1,500 Abbott Laboratories .................... 69,119 69,975
6,000 Baxter International Inc. .............. 198,326 207,240
----------- -----------
267,445 277,215
----------- -----------
MARKET
SHARES COST VALUE
------ ---- -------
TELECOMMUNICATIONS -- 0.5%
35,000 ADC Telecommunications Inc.+ ...........$ 93,379 $ 93,800
1,000 BellSouth Corp. ........................ 24,080 27,790
1,000 SBC Communications Inc. ................ 22,310 25,770
1,000 Verizon Communications Inc. 32,920 40,510
----------- -----------
172,689 187,870
----------- -----------
TOTAL COMMON STOCKS 3,887,420 4,403,230
----------- -----------
PRINCIPAL
AMOUNT
---------
U.S. GOVERNMENT OBLIGATIONS -- 87.2%
$36,000,000 U.S. Treasury Bills,
1.964%++, 01/06/05 (a) ................ 35,990,325 35,990,325
----------- -----------
REPURCHASE AGREEMENTS -- 2.6%
1,077,859 State Street Bank & Trust Co.,
1.500%, dated 12/31/2004,
due 01/03/05, proceeds at
maturity, $1,077,994 (b) .............. 1,077,859 1,077,859
----------- -----------
TOTAL
INVESTMENTS -- 100.5% ................$40,955,604 41,471,414
=========== ===========
OTHER ASSETS AND LIABILITIES (NET) -- (0.5)% ...... (213,575)
------------
NET ASSETS -- 100.0% .............................. $41,257,839
===========
SECURITIES SOLD SHORT -- (11.8)%
MARKET
SHARES PROCEEDS VALUE
------ -------- -------
COMMON STOCKS -- (11.8)%
AUTOMOTIVE -- (0.7)%
20,000 Ford Motor Co. .........................$ 295,041 $ 292,800
----------- -----------
CONSUMER PRODUCTS -- (3.4)%
6,000 Harley-Davidson Inc. ................... 348,694 364,500
15,000 Polaris Industries Inc.................. 587,733 1,020,300
----------- -----------
936,427 1,384,800
----------- -----------
ENTERTAINMENT -- (0.4)%
3,000 Carnival Corp. ......................... 137,442 172,890
----------- -----------
EQUIPMENT -- (1.3)%
4,000 Black & Decker Corp. ................... 263,933 353,320
2,000 Toro Co. ............................... 137,195 162,700
----------- -----------
401,128 516,020
----------- -----------
See accompanying notes to financial statements.
5
THE GABELLI MATHERS FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- DECEMBER 31, 2004
- --------------------------------------------------------------------------------
MARKET
SHARES PROCEEDS VALUE
------ -------- -------
SECURITIES SOLD SHORT (CONTINUED)
COMMON STOCKS
EXCHANGE TRADED FUNDS -- (1.5)%
5,000 Standard & Poor's Depository Receipts $ 603,836 $ 604,350
----------- -----------
HOME FURNISHINGS -- (0.7)%
4,000 Ethan Allen Interiors Inc. ............. 157,125 160,080
9,000 La-Z-Boy Inc. .......................... 187,298 138,330
----------- -----------
344,423 298,410
----------- -----------
METALS AND MINING -- (0.4)%
10,000 AK Steel Holding Corp. ................. 145,497 144,700
----------- -----------
RESTAURANTS -- (1.0)%
6,000 Cheesecake Factory Inc. ................ 147,592 194,820
5,000 McDonald's Corp. ....................... 125,858 160,300
1,000 Starbucks Corp. ........................ 47,182 62,360
----------- -----------
320,632 417,480
----------- -----------
RETAIL -- (2.4)%
3,000 Kohl's Corp. ........................... 142,901 147,510
5,000 The Home Depot Inc. .................... 161,867 213,700
12,000 Tiffany & Co. .......................... 349,888 383,640
8,000 Zale Corp. ............................. 213,939 238,960
----------- -----------
868,595 983,810
----------- -----------
TOTAL SECURITIES
SOLD SHORT ..........................$ 4,053,021 $ 4,815,260
=========== ===========
- ----------------
For Federal tax purposes:
Aggregate cost .................................... $40,955,604
===========
Gross unrealized appreciation ..................... $ 541,545
Gross unrealized depreciation ..................... (25,735)
-----------
Net unrealized appreciation (depreciation) ........ $ 515,810
===========
- ----------------
(a) At December 31, 2004, $24,997,000 of the principal amount
was pledged as collateral for securities sold short.
(b) Collateralized by U.S. Treasury Bond, 5.250%, due 02/15/29,
market value $1,101,790.
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
See accompanying notes to financial statements.
6
THE GABELLI MATHERS FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2004
- --------------------------------------------------------------------------------
ASSETS:
Investments, at value (Cost $40,955,604) $41,471,414
Deposit at brokers ...................... 4,618,833
Dividends and interest receivable ....... 3,173
Receivable for fund shares sold ......... 526
Receivable for investments sold ......... 248,266
Other assets ............................ 3,691
-----------
TOTAL ASSETS ............................ 46,345,903
-----------
LIABILITIES:
Securities sold short (proceeds $4,053,021) 4,815,260
Payable for investments purchased ....... 154,044
Dividends payable on securities sold short 3,799
Payable for investment advisory fees .... 35,175
Payable for distribution fees ........... 8,794
Other accrued expenses and liabilities .. 70,992
-----------
TOTAL LIABILITIES ....................... 5,088,064
-----------
NET ASSETS applicable to 3,933,803
shares outstanding .................... $41,257,839
===========
NET ASSETS CONSIST OF:
Shares of beneficial interest, at
$1.00 par value ....................... $ 3,933,803
Additional paid-in capital .............. 58,816,367
Accumulated net realized loss on investments
and securities sold short ............. (21,245,902)
Net unrealized depreciation on
securities sold short ................. (762,239)
Net unrealized appreciation on investments 515,810
-----------
NET ASSETS .............................. $41,257,839
===========
NET ASSET VALUE, offering and redemption price
per share ($41,257,839 / 3,933,803 shares
outstanding; 100,000,000 shares authorized) $10.49
======
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2004
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends (net of foreign taxes of $959) $ 34,010
Interest ................................ 533,169
Other income ............................ 45,259
-----------
TOTAL INVESTMENT INCOME ................. 612,438
-----------
EXPENSES:
Investment advisory fees ................ 477,238
Distribution fees ....................... 119,309
Dividends on securities sold short ...... 61,857
Trustees' fees .......................... 59,500
Shareholder services fees ............... 46,984
Shareholder communications expenses ..... 41,682
Legal and audit fees .................... 35,307
Custodian fees .......................... 26,693
Registration fees ....................... 16,275
Miscellaneous expenses .................. 20,545
-----------
TOTAL EXPENSES .......................... 905,390
-----------
NET INVESTMENT LOSS ..................... (292,952)
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND SECURITIES SOLD SHORT:
Net realized gain on investments ........ 300,236
Net realized loss on securities sold short (575,794)
Net change in unrealized appreciation/
depreciation on investments and
securities sold short ................. 1,130
-----------
NET REALIZED AND UNREALIZED LOSS ON
INVESTMENTS AND SECURITIES SOLD SHORT.. (274,428)
-----------
NET DECREASE IN NET ASSETS RESULTING
FROM OPERATIONS ....................... $(567,380)
===========
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, 2004 DECEMBER 31, 2003
----------------- -----------------
OPERATIONS:
Net investment loss .......................................................... $ (292,952) $ (456,610)
Net realized gain (loss) on investments ...................................... 300,236 (132,253)
Net realized loss on securities sold short ................................... (575,794) (537,948)
Net change in unrealized appreciation/depreciation on investments and
securities sold short ...................................................... 1,130 (356,240)
------------ ------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ......................... (567,380) (1,483,051)
------------ ------------
SHARES OF BENEFICIAL INTEREST TRANSACTIONS:
Net decrease in net assets from shares of beneficial interest transactions ... (19,020,306) (18,498,603)
------------ ------------
NET DECREASE IN NET ASSETS ................................................... (19,587,686) (19,981,654)
NET ASSETS:
Beginning of period .......................................................... 60,845,525 80,827,179
------------ ------------
End of period ................................................................ $ 41,257,839 $ 60,845,525
============ ============
See accompanying notes to financial statements.
7
THE GABELLI MATHERS FUND
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. ORGANIZATION. The Gabelli Mathers Fund (the "Fund") was organized on June 17,
1999 as a Delaware statutory trust. The Fund commenced investment operations on
October 1, 1999 as the successor to the Mathers Fund, Inc. (the "Mathers Fund")
which was organized on March 31, 1965 as a Maryland corporation. The Mathers
Fund commenced investment operations on August 19, 1965. The Fund is a
diversified, open-end management investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act"). The Fund's primary
objective is long-term capital appreciation.
2. SIGNIFICANT ACCOUNTING POLICIES. The preparation of financial statements in
accordance with U.S. generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results could differ from
those estimates. The following is a summary of significant accounting policies
followed by the Fund in the preparation of its financial statements.
SECURITY VALUATION. Portfolio securities listed or traded on a nationally
recognized securities exchange or traded in the U.S. over-the-counter market for
which market quotations are readily available are valued at the last quoted sale
price or a market's official closing price as of the close of business on the
day the securities are being valued. If there were no sales that day, the
security is valued at the average of the closing bid and asked prices or, if
there were no asked prices quoted on that day, then the security is valued at
the closing bid price on that day. If no bid or asked prices are quoted on such
day, the security is valued at the most recently available price or, if the
Board of Trustees (the "Board") so determines, by such other method as the Board
shall determine in good faith, to reflect its fair market value. Portfolio
securities traded on more than one national securities exchange or market are
valued according to the broadest and most representative market, as determined
by Gabelli Funds, LLC (the "Adviser").
Portfolio securities primarily traded on foreign markets are generally valued at
the preceding closing values of such securities on their respective exchanges or
if after the close 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.
8
THE GABELLI MATHERS FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements with
primary government securities dealers recognized by the Federal Reserve Board,
with member banks of the Federal Reserve System or with other brokers or dealers
that meet credit guidelines established by the Adviser and reviewed by the
Board. Under the terms of a typical repurchase agreement, the Fund takes
possession of an underlying debt obligation subject to an obligation of the
seller to repurchase, and the Fund to resell, the obligation at an agreed-upon
price and time, thereby determining the yield during the Fund's holding period.
The Fund will always receive and maintain securities as collateral whose market
value, including accrued interest, will be at least equal to 102% of the dollar
amount invested by the Fund in each agreement. The Fund will make payment for
such securities only upon physical delivery or upon evidence of book entry
transfer of the collateral to the account of the custodian. To the extent that
any repurchase transaction exceeds one business day, the value of the collateral
is marked-to-market on a daily basis to maintain the adequacy of the collateral.
If the seller defaults and the value of the collateral declines or if bankruptcy
proceedings are commenced with respect to the seller of the security,
realization of the collateral by the Fund may be delayed or limited.
FUTURES CONTRACTS. The Fund may engage in futures contracts for the purpose of
hedging against changes in the value of its portfolio securities and in the
value of securities it intends to purchase. Upon entering into a futures
contract, the Fund is required to deposit with the broker an amount of cash or
cash equivalents equal to a certain percentage of the contract amount. This is
known as the "initial margin." Subsequent payments ("variation margin") are made
or received by the Fund each day, depending on the daily fluctuation in the
value of the contract. The daily changes in the contract are included in
unrealized gains or losses. The Fund recognizes a realized gain or loss when the
contract is closed. At December 31, 2004, there were no open futures contracts.
There are several risks in connection with the use of futures contracts as a
hedging device. The change in value of futures contracts primarily corresponds
with the value of their underlying instruments, which may not correlate with the
change in value of the hedged investments. In addition, there is the risk that
the Fund may not be able to enter into a closing transaction because of an
illiquid secondary market.
SECURITIES SOLD SHORT. A short sale involves selling a security which the Fund
does not own. The proceeds received for short sales are recorded as liabilities
and the Fund records an unrealized gain or loss to the extent of the difference
between the proceeds received and the value of the open short position on the
day of determination. The Fund records a realized gain or loss when the short
position is closed out. By entering into a short sale, the Fund bears the market
risk of an unfavorable change in the price of the security sold short. Dividends
on short sales are recorded as an expense by the Fund on the ex-dividend date
and interest expense is recorded on the accrual basis. Securities sold short at
December 31, 2004 are reflected in the Schedule of Investments.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME. Securities transactions are
accounted for on the trade date with realized gain or loss on investments
determined by using the identified cost method. Interest income (including
amortization of premium and accretion of discount) is recorded as earned.
Dividend income is recorded on the ex-dividend date.
9
THE GABELLI MATHERS FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
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.
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.
No distributions were made in the fiscal years ended December 31, 2004 and 2003.
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 by $292,952 and to decrease accumulated net
realized loss on investments by $22,226,886, 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.
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 ................................. $(21,245,902)
Net unrealized appreciation/(depreciation) of investments.. 515,810
Net unrealized appreciation/(depreciation) of securities
sold short .............................................. (762,239)
------------
Total accumulated loss .................................... $(21,492,331)
============
The Fund has a net capital loss carryforward for Federal income tax purposes at
December 31, 2004 of $21,245,902. This capital loss carryforward is available to
reduce future required distributions of net capital gains to shareholders.
$22,226,886 of the loss carryforward expired in 2004; $7,869,968 is available
through 2006; $12,430,175 is available through 2010; $670,201 is available
through 2011; and $275,558 is available through 2012.
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.
10
THE GABELLI MATHERS FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
4. DISTRIBUTION PLAN. The Fund's Board has adopted a distribution plan (the
"Plan") pursuant to Rule 12b-1 under the 1940 Act. For the year ended December
31, 2004, the Fund incurred distribution costs payable to Gabelli & Company,
Inc., an affiliate of the Adviser, of $119,309, or 0.25% of average daily net
assets, the annual limitation under the Plan. Such payments are accrued daily
and paid monthly.
5. PORTFOLIO SECURITIES. Purchases and proceeds from the sales of securities for
the year ended December 31, 2004, other than short term securities, aggregated
$6,325,877 and $5,382,191, respectively.
6. TRANSACTIONS WITH AFFILIATES. During the year ended December 31, 2004, the
Fund paid brokerage commissions of $8,800 to Gabelli & Company, Inc.
The cost of calculating the Fund's net asset value per share is a Fund expense
pursuant to the Advisory Agreement between the Fund and the Adviser. During the
year ended December 31, 2004, the Fund reimbursed the Adviser $8,700 in
connection with the cost of computing the Fund's net asset value, which is
included in miscellaneous expenses in the Statement of Operations.
7. SHARES OF BENEFICIAL INTEREST. Transactions in shares of beneficial interest
were as follows:
YEAR ENDED YEAR ENDED
DECEMBER 31, 2004 DECEMBER 31, 2003
-------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
Shares sold ....... 239,007 $ 2,532,625 271,933 $ 2,922,779
Shares redeemed ...(2,043,820) (21,552,931) (2,007,763) (21,421,382)
---------- ------------ --------- ------------
Net decrease ...(1,804,813) $(19,020,306) (1,735,830) $(18,498,603)
========== ============ ========= ============
The Fund imposed a redemption fee of 2.00% on shares that are purchased on or
after November 1, 2004, 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 is retained by the Fund.
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.
8. OTHER MATTERS. The Adviser and/or affiliates have received subpoenas from the
Attorney General of the State of New York and the SEC requesting information on
mutual fund shares trading practices. Gabelli Asset Management Inc. is
responding to these requests. The Fund does not believe that these matters will
have a material adverse effect on the Fund's financial position or the results
of its operations.
9. INDEMNIFICATIONS. The Fund enters into contracts that contain a variety of
indemnifications. The Fund's maximum exposure under these arrangements is
unknown. However, the Fund has not had prior claims or losses pursuant to these
contracts and expects the risk of loss to be remote.
11
THE GABELLI MATHERS FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
10. FINANCIAL HIGHLIGHTS. Selected data for a share of beneficial interest
outstanding throughout each period:
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------
2004 2003 2002 2001 2000
------ ------ ------ ------ ------
OPERATING PERFORMANCE:
Net asset value, beginning of period .......... $ 10.60 $ 10.81 $ 12.25 $ 12.05 $ 11.94
------- -------- ------- ------- -------
Net investment income (loss) .................. (0.06) (0.07) (0.00)(a) 0.30 0.49
Net realized and unrealized
gain/(loss) on investments .................. (0.05) (0.14) (1.44) 0.21 0.11
------- -------- ------- ------- -------
Total from investment operations .............. (0.11) (0.21) (1.44) 0.51 0.60
------- -------- ------- ------- -------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income ......................... -- -- -- (0.31) (0.49)
------- -------- ------- ------- -------
Total distributions ........................... -- -- -- (0.31) (0.49)
------- -------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD ................ $ 10.49 $ 10.60 $ 10.81 $ 12.25 $ 12.05
======= ======== ======= ======= =======
Total return+ ................................. (1.04)% (1.94)% (11.76)% 4.25% 5.02%
======= ======== ======= ======= =======
RATIOS TO AVERAGE NET ASSETS
AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) .......... $41,258 $60,846 $80,827 $97,893 $99,855
Ratio of net investment income
to average net assets ....................... (0.61)% (0.61)% (0.00)% 2.45% 3.79%
Ratio of operating expenses
to average net assets ....................... 1.77% 1.67% 1.63% 1.35% 1.34%
Portfolio turnover rate ....................... 176% 244% 776% 1013% 977%
- ----------
+ 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.
(a) Amount is less than $0.005 per share.
12
THE GABELLI MATHERS FUND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
To the Shareholders and Board of Trustees of
The Gabelli Mathers Fund
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of the Gabelli Mathers 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 five years in
the period then ended. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
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 or by other
appropriate auditing procedures where replies from brokers were not received. 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 Mathers 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 five years in
the period then ended, in conformity with U.S. generally accepted accounting
principles.
/s/ ERNST & YOUNG LLP
New York, New York
February 11, 2005
13
THE GABELLI MATHERS 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 Fund's Trustees and is available,
without charge, upon request, by calling 800-GABELLI (800-422-3554) or by
writing to The Gabelli Mathers Fund at One Corporate Center, Rye, NY 10580-1422.
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 5
- -------------- ------------ ---------------- ---------------------- ------------------
INTERESTED TRUSTEES:3
- --------------------
MARIO J. GABELLI, CFA Since 1999 24 Chairman of the Board, Chief Executive Director of Morgan Group
Trustee and Chairman Officer of Gabelli Asset Management Inc. and Holdings, Inc.
Age: 62 Chief Investment Officer of Gabelli Funds, (holding company)
LLC and 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 Management Inc. (investment
Age: 75 bank); Former President of the management); Chairman,
Deutsche Bundesbank and Chairman of its Incentive Capital and Incentive
Central Bank Council (1980-1991) Asset Management (Zurich);
Director at Sal Oppenheim
Jr. & Cie, Zurich
HENRY G. VAN Since 1976 4 Senior Vice President of Gabelli Asset --
DER EB, CFA 4 Management Inc. as of August 2004;
Trustee, President and President and CEO of Gabelli Mathers
Chief Executive Officer Fund since 1999; Senior Vice President and
Age: 59 Portfolio Manager of Gabelli Funds, LLC
and GAMCO Investors, Inc. since 1999;
Prior to October 1999, Chairman and Chief
Executive Officer of Mathers Fund, Inc. and
President of Mathers and Company, Inc.;
Chairman of Ned Davis Research Funds
NON-INTERESTED TRUSTEES:
- ------------------------
E. VAL CERUTTI Since 2001 7 Chief Executive Officer of Cerutti Director of Lynch
Trustee Consultants, Inc.; Former President Corporation (diversified
Age: 65 and Chief Operating Officer of Stella manufacturing)
D'oro Biscuit Company(through 1992);
Adviser, Iona College School of Business
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 Corporation
Trustee Financial Officer of KeySpan Energy (biopharmaceutical company)
Age: 61 Corporation
ANTHONY R. PUSTORINO Since 1999 17 Certified Public Accountant; Professor Director of Lynch
Trustee Emeritus, Pace University Corporation (diversified
Age: 79 manufacturing)
WERNER J. ROEDER, MD Since 1999 26 Medical Director of Lawrence --
Trustee Hospital and practicing private physician
Age: 64
ANTHONIE C. VAN EKRIS Since 1999 20 Managing Director of BALMAC Director of Aurado
Trustee International, Inc. (commodities) Energy, Inc.
Age: 70 (oil and gas operations)
14
THE GABELLI MATHERS FUND
ADDITIONAL FUND INFORMATION (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
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 5
- -------------- ------------ ---------------- ---------------------- ------------------
OFFICERS:
- ---------
BRUCE N. ALPERT Since 1999 -- Executive Vice President and Chief Operating --
Executive Vice President Officer of Gabelli Funds, LLC since 1988 and
and Treasurer an officer of all mutual funds advised by
Age: 53 Gabelli Funds, LLC and its affiliates.
Director and President of Gabelli Advisers, Inc.
EDITH L. COOK 4 Since 1984 -- Vice President of The Gabelli Mathers Fund since 1999. --
Vice President Prior to October 1999, Vice President and
Age: 63 Treasurer of Mathers Fund, Inc. and Vice
President of Mathers and Company, Inc.
HEIDI M. KOONTZ 4 Since 1995 -- Vice President of The Gabelli Mathers Fund since--
Vice President 1999. Prior to October 1999, Vice President of
Age: 36 Mathers Fund, Inc.
JAMES E. MCKEE Since 1999 -- Vice President, General Counsel and Secretary --
Vice President and of Gabelli Asset Management Inc. since 1999
Secretary and GAMCO Investors, Inc. since 1993; Secretary
Age: 41 of all mutual funds advised by Gabelli Advisers,
Inc. and Gabelli Funds, LLC
ANNE E. MORRISSY, CFA 4 Since 1987 -- Executive Vice President of The Gabelli Mathers Fund --
Executive Vice President and Vice President of Gabelli Asset Management Inc.
Age: 43 since 1999. Prior to October 1999, Executive Vice
President, Secretary and Director of Mathers
Fund, Inc. and Vice President of Mathers and
Company, Inc.
PETER GOLDSTEIN Since 2004 -- Director of Regulatory Affairs at Gabelli Asset --
Chief Compliance Officer Management Inc. since February 2004; Vice President
Age: 51 of Goldman Sachs Asset Management from November 2000
through January 2004; Deputy General Counsel at
Gabelli Asset Management Inc. from February 1998
through November 2000
- ----------
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 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, Pohl and Van der Eb are each considered an
"interested person" because of their affiliation with Gabelli Funds, LLC
which acts as the Fund's investment adviser.
4 Address: 2801 Lakeside Drive, Suite 201, Bannockburn, IL 60015.
5 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.
15
THE GABELLI MATHERS FUND
One Corporate Center
Rye, New York 10580-1422
800-GABELLI
800-422-3554
FAX: 914-921-5118
WEBSITE: WWW.GABELLI.COM
E-MAIL: INFO@GABELLI.COM
Net Asset Value available daily by calling
800-GABELLI after 6:00 P.M.
BOARD OF TRUSTEES
Mario J. Gabelli, CFA Anthony R. Pustorino
CHAIRMAN AND CHIEF CERTIFIED PUBLIC ACCOUNTANT
INVESTMENT OFFICER PROFESSOR EMERITUS,
GABELLI ASSET MANAGEMENT INC. PACE UNIVERSITY
E. Val Cerutti Werner J. Roeder, MD
CHIEF EXECUTIVE OFFICER MEDICAL DIRECTOR
CERUTTI CONSULTANTS, INC. LAWRENCE HOSPITAL
Anthony J. Colavita Henry G. Van der Eb, CFA
ATTORNEY-AT-LAW PRESIDENT AND CHIEF
ANTHONY J. COLAVITA, P.C. EXECUTIVE OFFICER
THE GABELLI MATHERS FUND
Vincent D. Enright
FORMER SENIOR VICE PRESIDENT Anthonie C. van Ekris
AND CHIEF FINANCIAL OFFICER MANAGING DIRECTOR
KEYSPAN ENERGY CORP. BALMAC INTERNATIONAL, INC.
Karl Otto Pohl
FORMER PRESIDENT
DEUTSCHE BUNDESBANK
OFFICERS AND PORTFOLIO MANAGER
Henry G. Van der Eb, CFA Anne E. Morrissy, CFA
PRESIDENT AND EXECUTIVE VICE PRESIDENT
PORTFOLIO MANAGER
Heidi M. Koontz
Bruce N. Alpert VICE PRESIDENT
EXECUTIVE VICE PRESIDENT
AND TREASURER Edith L. Cook
VICE PRESIDENT
James E. McKee
VICE PRESIDENT Peter Goldstein
AND 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 Mathers Fund. It is not authorized for distribution to prospective
investors unless preceded or accompanied by an effective prospectus.
- --------------------------------------------------------------------------------
GAB1726Q404SR
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 Anthony R. Pustorino 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 $26,200 in
2004 and $24,500 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 $3,250
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 $62,250 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. 0000935069-04-000473).
(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 Mathers Fund
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By (Signature and Title)* /s/ Henry G. Van der Eb
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Henry G. Van der Eb, Chief 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/ Henry G. Van der Eb
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Henry G. Van der Eb, Chief Executive Officer
Date March 9, 2005
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By (Signature and Title)* /s/ Bruce N. Alpert
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Bruce N. Alpert, Treasurer and
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.