UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-06367 --------- Gabelli Equity Series Funds, Inc. -------------------------------------------------- (Exact name of registrant as specified in charter) One Corporate Center Rye, 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: September 30 ------------ Date of reporting period: March 31, 2005 -------------- Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507. ITEM 1. REPORTS TO STOCKHOLDERS. The Report to Shareholders is attached herewith. THE GABELLI SMALL CAP GROWTH FUND SEMI-ANNUAL REPORT (A) MARCH 31, 2005 TO OUR SHAREHOLDERS, Small cap stocks continued to outperform during the six-month period through March 31, 2005, although they lost momentum in the first quarter of 2005. For the six month period ended March 31, 2005 The Russell 2000 Index gained 8.00%, outperforming the 6.88% rise in the Standard & Poor's ("S&P") 500 Index and the 5.56% rise in the Dow Jones Industrial Average. The Gabelli Small Cap Growth Fund gained 12.97% during the trailing six-month period. COMPARATIVE RESULTS - ------------------------------------------------------------------------------------------------------------------- AVERAGE ANNUAL RETURNS THROUGH MARCH 31, 2005 (UNAUDITED) (A)(B) Since Inception Quarter 1 Year 3 Year 5 Year 10 Year (10/22/91) --------------------------------------------------------------------- GABELLI SMALL CAP GROWTH FUND CLASS AAA ............................... (1.89)% 13.50% 12.60% 11.78% 13.91% 15.52% Russell 2000 Index ........................ (5.34) 5.41 8.05 4.01 10.43 11.09 Value Line Composite Index ................ (3.27) 7.70 9.83 10.22 13.66 13.51 Class A ................................... (1.89) 13.50 12.61 11.78 13.91 15.52 (7.54)(c) 6.87(c) 10.40(c) 10.46(c) 13.24(c) 15.02(c) Class B ................................... (2.08) 12.66 12.26 11.57 13.81 15.44 (6.97)(d) 7.66(d) 11.46(d) 11.32(d) 13.81(d) 15.44(d) Class C ................................... (2.04) 12.66 12.26 11.57 13.81 15.44 (3.02)(d) 11.66(d) 12.26(d) 11.57(d) 13.81(d) 15.44(d) (a) THE FUND'S FISCAL YEAR ENDS SEPTEMBER 30. (b) RETURNS REPRESENT PAST PERFORMANCE AND DO NOT GUARANTEE FUTURE RESULTS. TOTAL RETURNS AND AVERAGE ANNUAL RETURNS REFLECT CHANGES IN SHARE PRICES 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. PERFORMANCE RETURNS FOR PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED. 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. INVESTING IN SMALL CAPITALIZATION SECURITIES INVOLVES SPECIAL CHALLENGES BECAUSE THESE SECURITIES MAY TRADE LESS FREQUENTLY AND EXPERIENCE MORE ABRUPT PRICE MOVEMENTS THAN LARGE CAPITALIZATION SECURITIES. THE CLASS AAA SHARES' NET ASSET VALUES ARE USED TO CALCULATE PERFORMANCE FOR THE PERIODS PRIOR TO THE ISSUANCE OF CLASS A SHARES, CLASS B SHARES AND CLASS C SHARES ON DECEMBER 31, 2003. THE ACTUAL PERFORMANCE FOR THE CLASS A SHARES, CLASS B SHARES AND CLASS C SHARES WOULD HAVE BEEN LOWER DUE TO THE ADDITIONAL EXPENSES ASSOCIATED WITH THESE CLASSES OF SHARES. THE RUSSELL 2000 INDEX AND THE VALUE LINE COMPOSITE INDEX ARE UNMANAGED INDICATORS OF STOCK MARKET PERFORMANCE. DIVIDENDS ARE CONSIDERED REINVESTED. (c) INCLUDES THE EFFECT OF THE MAXIMUM 5.75% SALES CHARGE AT THE BEGINNING OF THE PERIOD. (d) INCLUDES THE EFFECT OF THE APPLICABLE CONTINGENT DEFERRED SALES CHARGE AT THE END OF THE PERIOD SHOWN FOR CLASS B AND CLASS C SHARES, RESPECTIVELY. CLASS B SHARES ARE NOT AVAILABLE FOR NEW PURCHASES. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- We have separated the portfolio manager's commentary from the financial statements and investment portfolio due to new corporate governance regulations stipulated by the Sarbanes-Oxley Act of 2002. We have done this to ensure that the content of the portfolio manager's commentary is unrestricted. The financial statements and investment portfolio are mailed separately. Both the commentary and the financial statements, including the portfolio of investments, will be available on our website at www.gabelli.com/funds. - -------------------------------------------------------------------------------- THE GABELLI SMALL CAP GROWTH FUND DISCLOSURE OF FUND EXPENSES (UNAUDITED) For the Six Month Period from October 1, 2004 through March 31, 2005 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 six months ended March 31, 2005. Beginning Ending Annualized Expenses Account Value Account Value Expense Paid During 10/01/04 03/31/05 Ratio Period* - -------------------------------------------------------------------------------- GABELLI SMALL CAP GROWTH FUND - -------------------------------------------------------------------------------- ACTUAL FUND RETURN Class AAA $1,000.00 $1,129.70 1.40% $ 7.43 Class A $1,000.00 $1,129.70 1.44% $ 7.65 Class B $1,000.00 $1,125.70 2.17% $11.50 Class C $1,000.00 $1,125.70 2.20% $11.66 HYPOTHETICAL 5% RETURN Class AAA $1,000.00 $1,017.95 1.40% $ 7.04 Class A $1,000.00 $1,017.75 1.44% $ 7.24 Class B $1,000.00 $1,014.11 2.17% $10.90 Class C $1,000.00 $1,013.96 2.20% $11.05 * 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 365. 2 SUMMARY OF PORTFOLIO HOLDINGS (UNAUDITED) The following table presents portfolio holdings as a percent of total net assets. THE GABELLI SMALL CAP GROWTH FUND Equipment and Supplies ............................ 12.3% Diversified Industrial ............................ 9.9% Health Care ....................................... 7.8% Energy and Utilities .............................. 5.4% Hotels and Gaming ................................. 5.3% Specialty Chemicals ............................... 4.8% Financial Services ................................ 4.1% Food and Beverage ................................. 4.1% Publishing ........................................ 4.0% Retail ............................................ 3.7% Broadcasting ...................................... 3.7% Automotive: Parts and Accessories ................. 3.5% Consumer Products ................................. 3.5% Aviation: Parts and Services ...................... 3.4% Business Services ................................. 2.8% Cable ............................................. 2.6% Communications Equipment .......................... 2.0% Entertainment ..................................... 2.0% Manufactured Housing and Recreational Vehicles .......................... 1.9% Wireless Communications ........................... 1.7% Consumer Services ................................. 1.3% Telecommunications ................................ 1.2% Real Estate ....................................... 1.2% Computer Software and Services .................... 1.2% Environmental Services ............................ 1.1% Electronics ....................................... 1.0% U.S. Treasury Bills ............................... 1.0% Transportation .................................... 0.8% Closed-End Funds .................................. 0.5% Paper and Forest Products ......................... 0.4% Metals and Mining ................................. 0.4% Satellite ......................................... 0.4% Automotive ........................................ 0.3% Aerospace ......................................... 0.2% Building and Construction ......................... 0.2% Home Furnishings .................................. 0.1% Other Assets and Liabilities -- Net ............... 0.2% ------ 100.0% ====== 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 ENDING DECEMBER 31, 2004. SHAREHOLDERS MAY OBTAIN THIS INFORMATION AT WWW.GABELLI.COM OR BY CALLING THE FUND AT 800-GABELLI (800-422-3554). THE 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. 3 THE GABELLI SMALL CAP GROWTH FUND SCHEDULE OF INVESTMENTS -- MARCH 31, 2005 (UNAUDITED) - -------------------------------------------------------------------------------- MARKET SHARES COST VALUE ------ ---- ------ COMMON STOCKS -- 98.1% AEROSPACE -- 0.2% 54,000 Herley Industries Inc.+ ..............$ 1,060,983 $ 923,940 10,000 Titan Corp.+ ......... 133,666 181,600 ------------ ------------ 1,194,649 1,105,540 ------------ ------------ AGRICULTURE -- 0.0% 1,200 Cadiz Inc.+ .......... 4,500 18,480 1,500 Mosaic Co.+ .......... 10,470 25,590 ------------ ------------ 14,970 44,070 ------------ ------------ AUTOMOTIVE -- 0.3% 70,000 Adesa Inc. ........... 1,211,384 1,635,200 3,000 Oshkosh Truck Corp. .. 89,796 245,970 ------------ ------------ 1,301,180 1,881,170 ------------ ------------ AUTOMOTIVE: PARTS AND ACCESSORIES -- 3.5% 3,816 Aftermarket Technology Corp.+ ............. 47,013 62,964 78,000 BorgWarner Inc. ...... 1,609,455 3,797,040 485 Exide Technologies+ .. 3,751 6,256 40,000 Federal-Mogul Corp.+ . 79,500 13,600 200,000 Midas Inc.+ .......... 2,538,716 4,566,000 210,000 Modine Manufacturing Co. ................ 5,112,442 6,159,300 7,875 Monro Muffler Brake Inc.+ ........ 52,860 203,254 8,300 Pep Boys - Manny, Moe & Jack .. 101,098 145,914 3,000 Puradyn Filter Technologies Inc.+ . 7,205 2,820 170,000 Raytech Corp.+ ....... 523,981 249,050 195,000 Scheib (Earl) Inc.+ .. 1,314,528 638,625 170,000 Standard Motor Products Inc. ...... 2,539,350 1,989,000 27,000 Strattec Security Corp.+ ............. 1,058,830 1,446,660 6,000 Superior Industries International Inc. . 167,156 158,460 230,000 Tenneco Automotive Inc.+ ............. 480,700 2,865,800 28,000 Thor Industries Inc. . 259,454 837,480 160,000 TransPro Inc.+ ....... 1,390,729 1,040,000 ------------ ------------ 17,286,768 24,182,223 ------------ ------------ AVIATION: PARTS AND SERVICES -- 3.4% 25,000 AAR Corp.+ ........... 302,990 340,000 10,000 Astronics Corp.+ ..... 48,990 69,800 77,000 Aviall Inc.+ ......... 566,047 2,156,000 14,000 Barnes Group Inc. .... 233,341 380,380 27,000 Curtiss-Wright Corp. . 540,651 1,539,000 34,200 Curtiss-Wright Corp., Cl. B .............. 956,620 1,928,880 7,500 Ducommun Inc.+ ....... 80,125 150,000 16,000 EDO Corp. ............ 328,407 480,800 30,000 Embraer-Empresa Brasileira de Aeronautica SA, ADR ............ 508,773 939,000 195,400 Fairchild Corp., Cl. A+ ............. 1,193,712 605,740 MARKET SHARES COST VALUE ------ ---- ------- 25,000 Gamesa Corporacion Tecnologica SA .....$ 153,032 $ 332,175 240,000 GenCorp Inc. ......... 2,275,688 4,800,000 430,000 Kaman Corp., Cl. A ... 6,855,690 5,353,500 80,000 Moog Inc., Cl. A+ .... 758,069 3,616,000 8,000 Woodward Governor Co. 347,309 573,600 ------------ ------------ 15,149,444 23,264,875 ------------ ------------ BROADCASTING -- 3.5% 120,000 Acme Communications Inc.+ .............. 968,947 632,400 24,100 Beasley Broadcast Group Inc., Cl. A+ ............. 271,741 428,498 2,000 Cogeco Inc. .......... 39,014 38,439 257,000 Crown Media Holdings Inc., Cl. A+ ............. 1,887,214 2,315,570 3,333 CTN Media Group Inc.+ (b) .......... 16,800 3 340,000 Granite Broadcasting Corp.+ 803,365 102,000 390,000 Gray Television Inc. . 4,022,232 5,643,300 38,300 Gray Television Inc., Cl. A .............. 563,192 500,773 48,000 Hearst-Argyle Television Inc. .... 425,523 1,224,000 183,900 Liberty Corp. ........ 5,983,141 7,457,145 20,000 Nexstar Broadcasting Group Inc., Cl. A+ . 216,125 141,000 125,000 Paxson Communications Corp.+ ............. 1,066,479 86,250 94,650 Salem Communications Corp., Cl. A+ ...... 1,412,784 1,949,790 200,000 Sinclair Broadcast Group Inc., Cl. A .. 2,156,325 1,606,000 57,000 Spanish Broadcasting System Inc., Cl. A+ 508,514 584,820 120,000 Young Broadcasting Inc., Cl. A+ ............. 1,919,959 1,036,800 ------------ ------------ 22,261,355 23,746,788 ------------ ------------ BUILDING AND CONSTRUCTION -- 0.2% 12,000 Florida Rock Industries Inc. .... 103,533 705,840 25,000 Huttig Building Products Inc.+ ..... 90,165 273,250 1,000 Universal Forest Products Inc. ...... 12,125 38,850 ------------ ------------ 205,823 1,017,940 ------------ ------------ BUSINESS SERVICES -- 2.4% 120,000 AMICAS Inc.+ ......... 583,918 441,600 5,000 BrandPartners Group Inc.+ ........ 4,850 4,750 610,400 Career Blazers Inc.+ (b) .......... 236,019 107,125 6,000 Carlisle Holdings Ltd. ...... 30,250 39,783 1,000 CheckFree Corp.+ ..... 9,040 40,760 22,000 Donnelley (R.H.) Corp.+ ............. 296,898 1,277,980 200,000 Edgewater Technology Inc.+ ... 802,829 836,000 80,000 GP Strategies Corp.+ . 259,209 573,600 See accompanying notes to financial statements. 4 THE GABELLI SMALL CAP GROWTH FUND SCHEDULE OF INVESTMENTS (CONTINUED) -- MARCH 31, 2005 (UNAUDITED) - -------------------------------------------------------------------------------- MARKET SHARES COST VALUE ------ ---- ------- COMMON STOCKS (CONTINUED) BUSINESS SERVICES (CONTINUED) 80,000 Industrial Distribution Group Inc.+ ........$ 224,062 $ 716,000 60,000 Interactive Data Corp.+ ........ 534,171 1,245,000 13,000 Landauer Inc. ........ 234,859 618,020 4,000 MDC Partners Inc., Cl. A+ ............. 12,360 38,040 166,000 Nashua Corp.+ ........ 1,597,567 1,444,200 100,000 Paxar Corp.+ ......... 1,199,175 2,134,000 40 Protection One Inc.+ . 3,720 1,120 80,000 Sohgo Security Services Co. Ltd. ........... 1,016,197 1,151,170 25,000 Stamps.com Inc.+ ..... 137,340 415,000 2,000 StarTek Inc. ......... 36,208 33,600 53,000 The Brink's Co. ...... 1,092,906 1,833,800 100,000 Trans-Lux Corp. (a) .. 821,193 705,000 130,000 UNOVA Inc.+ .......... 2,457,802 2,684,500 ------------ ------------ 11,590,573 16,341,048 ------------ ------------ CABLE -- 2.6% 230,000 Adelphia Communications Corp., Cl. A+ ...... 29,650 55,200 510,000 Cablevision Systems Corp., Cl. A+ ............. 3,013,883 14,305,500 90,000 Lin TV Corp., Cl. A+ . 1,847,503 1,523,700 4,000 Outdoor Channel Holdings Inc.+ ..... 44,765 57,000 160,823 UnitedGlobalCom Inc., Cl. A+ ............. 1,258,279 1,521,386 ------------ ------------ 6,194,080 17,462,786 ------------ ------------ CLOSED-END FUNDS -- 0.5% 60,000 Central Europe and Russia Fund Inc. .......... 920,409 1,812,600 36,700 Germany Fund Inc. .... 386,832 295,435 45,500 MVC Capital Inc. ..... 418,996 422,240 55,000 New Germany Fund Inc. 646,003 502,700 11,000 Spain Fund Inc. ...... 103,029 125,510 ------------ ------------ 2,475,269 3,158,485 ------------ ------------ COMMUNICATIONS EQUIPMENT -- 2.0% 149,838 Andrew Corp.+ ........ 633,275 1,754,603 130,000 Communications Systems Inc. ....... 840,303 1,482,000 260,900 Sycamore Networks Inc.+ .............. 778,040 928,804 290,000 Thomas & Betts Corp.+ ............. 5,352,259 9,367,000 ------------ ------------ 7,603,877 13,532,407 ------------ ------------ COMPUTER SOFTWARE AND SERVICES -- 1.2% 105,000 Ascential Software Corp.+ ............. 1,272,815 1,945,650 70,000 Borland Software Corp.+ ............. 594,300 568,400 80,200 FalconStor Software Inc.+ .............. 571,737 478,794 20,900 Global Sources Ltd.+ . 306,293 224,675 50,000 Jupitermedia Corp.+ .. 435,800 775,500 MARKET SHARES COST VALUE ------ ---- ------- 200 Macromedia Inc.+ .....$ 2,371 $ 6,700 15,187 MKS Instruments Inc.+ 284,328 241,170 170,000 OpenTV Corp., Cl. A+ . 915,188 482,800 8,000 Phoenix Technologies Ltd.+ . 55,158 76,160 550 SafeNet Inc.+ ........ 14,425 16,120 800,000 StorageNetworks Inc. Escrow+ ............ 0 24,000 360,000 Tyler Technologies Inc.+ .............. 1,411,950 2,739,600 210,000 Xanser Corp.+ ........ 728,537 672,000 ------------ ------------ 6,592,902 8,251,569 ------------ ------------ CONSUMER PRODUCTS -- 3.5% 3,500 Action Performance Companies Inc. ..... 16,187 46,305 27,000 Adams Golf Inc.+ ..... 71,200 39,150 5,250 Alberto-Culver Co. ... 169,298 251,265 17,000 Ashworth Inc.+ ....... 73,937 193,630 33,500 Chofu Seisakusho Co. Ltd. ........... 484,644 738,856 37,500 Church & Dwight Co. Inc. ........... 354,732 1,330,125 35,000 Coachmen Industries Inc. .... 436,787 476,000 44,000 Department 56 Inc.+ .. 514,126 768,240 6,000 Elizabeth Arden Inc.+ .............. 82,125 142,440 2,000 Genlyte Group Inc.+ .. 8,580 179,940 2,000 Harley-Davidson Inc. . 4,713 115,520 180,000 Hartmarx Corp.+ ...... 830,789 1,717,200 74,400 Jacuzzi Brands Inc.+ . 477,471 726,144 40,000 Levcor International Inc.+ .............. 80,931 82,000 4,000 Madden (Steven) Ltd.+ 30,540 66,760 293,250 Marine Products Corp. 195,039 4,929,532 52,000 National Presto Industries Inc. .... 1,811,655 2,095,600 3,000 Nature's Sunshine Products Inc. ...... 36,938 51,510 5,000 Rayovac Corp.+ ....... 57,290 208,000 90,000 Revlon Inc., Cl. A+ .. 311,417 259,200 3,000 Scotts Miracle-Gro Co., Cl. A+ ............. 61,223 210,690 14,000 Stewart Enterprises Inc., Cl. A+ ............. 65,467 86,100 87,425 Syratech Corp.+ ...... 17,426 5,683 300,000 TL Administration Corp.+ ............. 783,952 6,000 10,000 Water Pik Technologies Inc.+ . 186,626 197,000 17,000 WD-40 Co. ............ 470,278 552,330 695,000 Weider Nutrition International Inc.+ 1,856,521 4,232,550 190,000 Wolverine World Wide Inc. .......... 1,734,450 4,071,700 ------------ ------------ 11,224,342 23,779,470 ------------ ------------ CONSUMER SERVICES -- 1.3% 30,000 Bowlin Travel Centers Inc.+ ...... 22,611 58,950 2,500 Collectors Universe Inc.+ ..... 8,720 47,900 4,000 eLong Inc., ADR+ ..... 48,416 36,000 95,000 IAC/InterActiveCorp+ . 1,015,587 2,115,650 See accompanying notes to financial statements. 5 THE GABELLI SMALL CAP GROWTH FUND SCHEDULE OF INVESTMENTS (CONTINUED) -- MARCH 31, 2005 (UNAUDITED) - -------------------------------------------------------------------------------- MARKET SHARES COST VALUE ------ ---- ------- COMMON STOCKS (CONTINUED) CONSUMER SERVICES (CONTINUED) 16,000 Martha Stewart Living Omnimedia Inc., Cl. A+ .............$ 167,206 $ 361,440 20,000 Response USA Inc.+ ... 16,500 51 321,000 Rollins Inc. ......... 2,775,718 5,970,600 10,000 TiVo Inc.+ ........... 74,563 51,700 ------------ ------------ 4,129,321 8,642,291 ------------ ------------ DIVERSIFIED INDUSTRIAL -- 9.8% 173,000 Acuity Brands Inc. ... 2,323,864 4,671,000 43,000 Amatsuji Steel Ball Mfg. Co. Ltd. ...... 357,633 553,390 100,000 Ampco-Pittsburgh Corp. .............. 972,481 1,353,000 6,000 Anixter International Inc.+ .............. 57,120 216,900 150,000 Baldor Electric Co. .. 2,965,923 3,871,500 150,000 Crane Co. ............ 3,282,255 4,318,500 3,000 ESCO Technologies Inc.+ .............. 99,827 241,050 803 Foster Wheeler Ltd.+ . 3,183 13,972 6,000 Gardner Denver Inc.+ . 103,046 237,060 157,000 Greif Inc., Cl. A .... 3,103,009 10,939,760 1,000 Greif Inc., Cl. B .... 29,800 64,400 130,000 Griffon Corp.+ ....... 3,309,402 2,783,300 26,000 Harbor Global Co. Ltd.+ .............. 63,215 232,050 5,000 Insteel Industries Inc.+ .............. 4,250 75,100 67,500 Katy Industries Inc.+ .............. 554,531 256,500 222,000 Lamson & Sessions Co.+ ............... 1,295,821 2,208,900 70,000 Lindsay Manufacturing Co. .. 708,238 1,335,600 190,000 MagneTek Inc.+ ....... 1,406,274 1,012,700 37,000 Matthews International Corp., Cl. A .............. 861,644 1,212,120 275,000 Myers Industries Inc. ............... 2,505,876 3,880,250 80,000 Mykrolis Corp.+ ...... 921,166 1,144,000 130,000 National Patent Development Corp.+ . 86,241 370,500 610,400 Noel Group Inc.+ (b) . 55,045 117,685 80,000 Oil-Dri Corporation of America ......... 810,055 1,480,000 15,000 Olin Corp. ........... 232,292 334,500 215,000 Park-Ohio Holdings Corp.+ ............. 1,149,135 4,029,100 50,000 Precision Castparts Corp. .............. 1,702,840 3,850,500 16,000 Roper Industries Inc. 620,029 1,048,000 25,000 Sonoco Products Co. .. 669,340 721,250 63,000 Standex International Corp. .............. 1,253,307 1,719,900 21,000 Tech/Ops Sevcon Inc. . 142,728 133,980 296,000 Thomas Industries Inc. ............... 4,161,994 11,733,440 50,000 Tredegar Corp. ....... 671,722 843,000 ------------ ------------ 36,483,286 67,002,907 ------------ ------------ EDUCATIONAL SERVICES -- 0.0% 2,000 Career Education Corp.+ ............. 61,350 68,520 3,000 School Specialty Inc.+ .............. 71,820 117,480 ------------ ------------ 133,170 186,000 ------------ ------------ MARKET SHARES COST VALUE ------ ---- ------- ELECTRONICS -- 1.0% 175,000 California Micro Devices Corp.+ .....$ 1,436,412 $ 883,750 204,600 CTS Corp. ............ 2,145,753 2,659,800 20,000 Fargo Electronics+ ... 118,826 293,400 55,000 KEMET Corp.+ ......... 566,815 426,250 22,000 Lowrance Electronics Inc. ............... 58,991 534,820 80,000 Park Electrochemical Corp. .............. 1,821,898 1,620,800 10,000 Trident Microsystems Inc.+ .............. 119,857 176,800 20,000 Wilson Greatbatch Technologies Inc.+ . 487,480 364,800 20,000 Zoran Corp.+ ......... 121,523 207,000 ------------ ------------ 6,877,555 7,167,420 ------------ ------------ ENERGY AND UTILITIES -- 5.4% 7,000 AGL Resources Inc. ... 117,975 244,510 380,000 Aquila Inc.+ ......... 1,290,571 1,455,400 6,400 BIW Ltd. ............. 94,562 130,880 95,000 Callon Petroleum Co.+ 939,533 1,476,300 142,000 CH Energy Group Inc. . 5,982,836 6,489,400 12,000 Chesapeake Utilities Corp. .... 236,752 319,200 125,000 CMS Energy Corp.+ .... 747,044 1,630,000 23,000 Connecticut Water Service Inc. ....... 464,832 573,620 120,000 Duquesne Light Holdings Inc. ...... 1,663,452 2,150,400 150,000 El Paso Electric Co.+ 1,983,209 2,850,000 20,000 Environmental Power Corp.+ ............. 110,000 104,000 66,000 Florida Public Utilities Co. ...... 784,438 1,240,800 44,399 Middlesex Water Co. .. 768,686 805,842 10,000 Nicor Inc. ........... 221,003 370,900 15,000 Nordex AG+ ........... 32,726 8,750 2,000 PetroQuest Energy Inc.+ ....... 5,250 13,280 436,500 RPC Inc. ............. 1,028,612 6,630,435 25,000 SEMCO Energy Inc. .... 164,830 143,750 48,000 SJW Corp. ............ 1,557,739 1,686,240 50,000 Southern Union Co.+ .. 682,575 1,255,500 112,000 Southwest Gas Corp. .. 1,959,693 2,705,920 10,000 Tesoro Corp.+ ........ 140,934 370,200 4,000 Toreador Resources Corp.+ ............. 15,250 72,600 10,000 Vestas Wind Systems A/S+ ............... 89,988 144,416 7,000 W-H Energy Services Inc.+ .............. 148,589 167,510 170,000 Westar Energy Inc. ... 2,801,066 3,678,800 ------------ ------------ 24,032,145 36,718,653 ------------ ------------ ENTERTAINMENT -- 2.0% 20,000 Canterbury Park Holding Corp. ...... 215,807 347,800 200,000 Dover Motorsports Inc. ............... 1,098,503 1,010,000 78,000 Fisher Communications Inc.+ .............. 4,537,195 4,033,380 151,000 GC Companies Inc.+ ... 164,590 129,860 580,000 Gemstar-TV Guide International Inc.+ 3,375,386 2,523,000 See accompanying notes to financial statements. 6 THE GABELLI SMALL CAP GROWTH FUND SCHEDULE OF INVESTMENTS (CONTINUED) -- MARCH 31, 2005 (UNAUDITED) - -------------------------------------------------------------------------------- MARKET SHARES COST VALUE ------ ---- ------- COMMON STOCKS (CONTINUED) ENTERTAINMENT (CONTINUED) 16,000 International Speedway Corp., Cl. A .......$ 515,479 $ 868,000 2,500 International Speedway Corp., Cl. B ....... 45,000 135,000 5,000 Liberty Media Corp., Cl. A+ ............. 43,533 51,850 10,000 Metromedia International Group Inc.+ ........ 6,700 15,400 340,000 Six Flags Inc.+ ...... 1,716,559 1,400,800 150,100 Topps Co. Inc. ....... 1,215,701 1,382,421 70,000 World Wrestling Entertainment Inc. . 837,190 840,000 38,000 WPT Enterprises Inc.+ .............. 298,988 710,600 ------------ ------------ 14,070,631 13,448,111 ------------ ------------ ENVIRONMENTAL SERVICES -- 1.1% 225,000 Allied Waste Industries Inc.+ ... 2,183,048 1,644,750 30,000 Catalytica Energy Systems Inc.+ ...... 278,600 61,500 175,000 Republic Services Inc. ............... 2,490,315 5,859,000 ------------ ------------ 4,951,963 7,565,250 ------------ ------------ EQUIPMENT AND SUPPLIES -- 12.3% 175,000 AMETEK Inc. .......... 1,043,631 7,043,750 425,000 Baldwin Technology Co. Inc., Cl. A+ ............. 1,353,684 1,020,000 94,500 Belden CDT Inc. ...... 1,748,174 2,098,845 12,000 C&D Technologies Inc. ............... 235,930 120,600 50,000 Capstone Turbine Corp.+ ............. 103,400 77,500 203,000 CIRCOR International Inc. ............... 3,121,895 5,003,950 212,000 CLARCOR Inc. ......... 2,615,605 11,015,520 236,800 Core Molding Technologies Inc.+ . 411,233 1,181,632 200,000 Crown Holdings Inc.+ . 807,766 3,112,000 60,000 CUNO Inc.+ ........... 1,049,568 3,083,400 2,500 Danaher Corp. ........ 42,633 133,525 66,000 Donaldson Co. Inc. ... 761,576 2,130,480 450,000 Fedders Corp. ........ 2,048,076 1,251,000 185,000 Flowserve Corp.+ ..... 3,024,886 4,785,950 177,000 Franklin Electric Co. Inc. ........... 1,436,452 6,678,210 40,000 General Magnaplate Corp.+ (b) ......... 83,762 60,000 150,000 Gerber Scientific Inc.+ .............. 1,456,281 1,092,000 100,343 Gorman-Rupp Co. ...... 1,956,301 2,153,361 84,000 Graco Inc. ........... 928,834 3,390,240 42,000 GrafTech International Ltd.+ .............. 574,742 238,980 4,000 Hughes Supply Inc. ... 28,473 119,000 60,000 IDEX Corp. ........... 556,738 2,421,000 20,000 Imagistics International Inc.+ 387,725 698,600 160,000 Interpump Group SpA .. 628,395 850,369 3,000 Jarden Corp.+ ........ 12,770 137,640 10,000 K-Tron International Inc.+ .............. 74,932 304,400 18,600 L.S. Starrett Co., Cl. A .............. 369,831 360,840 MARKET SHARES COST VALUE ------ ---- ------- 28,000 Littelfuse Inc.+ .....$ 538,592 $ 802,200 55,000 Lufkin Industries Inc. 1,054,290 2,655,950 55,000 Maezawa Kyuso Industries Co. Ltd. 359,609 835,540 20,000 Met-Pro Corp. ........ 192,469 274,000 1,000 Middleby Corp. ....... 37,310 49,400 19,000 Mueller Industries Inc. ............... 577,116 534,850 4,500 Plantronics Inc. ..... 56,548 171,360 50,000 Robbins & Myers Inc. . 1,023,975 1,100,500 40,500 Sequa Corp., Cl. A+ .. 1,502,140 2,099,925 80,000 Sequa Corp., Cl. B+ .. 3,631,577 4,200,000 92,000 SL Industries Inc.+ .. 1,070,831 1,285,240 2,000 Smith (A.O.) Corp. ... 32,662 57,740 15,000 Smith (A.O.) Corp., Cl. A .............. 336,569 433,050 5,000 Teleflex Inc. ........ 76,167 255,900 48,000 Tennant Co. .......... 1,556,465 1,857,120 5,000 Valmont Industries Inc. .... 40,625 111,600 7,875 Watsco Inc., Cl. B ... 23,627 332,719 190,500 Watts Water Technologies Inc., Cl. A ........ 3,366,746 6,212,205 15,000 Wolverine Tube Inc.+ . 150,915 134,250 ------------ ------------ 42,491,526 83,966,341 ------------ ------------ FINANCIAL SERVICES -- 4.1% 11,220 Alleghany Corp.+ ..... 2,026,816 3,107,940 40,000 Argonaut Group Inc.+ . 867,813 848,800 66,000 Bankgesellschaft Berlin AG+ ......... 1,280,794 228,433 132,000 BKF Capital Group Inc. ......... 2,415,665 5,281,320 370,000 CNA Surety Corp.+ .... 4,080,505 5,032,000 4,000 Crazy Woman Creek Bancorp Inc. ....... 51,340 65,000 98,169 Danielson Holding Corp.+ ..... 271,171 1,693,415 36,500 Epoch Holding Corp.+ . 60,978 173,375 3,000 Federal Agricultural Mortgage Corp., Cl. C 24,000 52,470 33,000 First Republic Bank .. 636,067 1,068,210 94,100 Flushing Financial Corp. .............. 1,374,594 1,712,620 60,000 Hibernia Corp., Cl. A 812,399 1,920,600 40,500 LaBranche & Co. Inc.+ 369,344 376,650 1,000 LandAmerica Financial Group Inc. ......... 12,175 50,030 1,500 Leucadia National Corp. .............. 24,354 51,525 109,000 Midland Co. .......... 833,351 3,434,590 1,500 NetBank Inc. ......... 6,000 12,720 31,000 NewAlliance Bancshares Inc. .... 461,751 434,000 38,400 Sterling Bancorp ..... 670,453 931,968 8,600 SWS Group Inc. ....... 158,362 137,858 50,000 Wilmington Trust Corp. ........ 1,574,410 1,755,000 ------------ ------------ 18,012,342 28,368,524 ------------ ------------ FOOD AND BEVERAGE -- 4.1% 26,000 Boston Beer Co. Inc., Cl. A+ ............. 384,207 569,400 24,000 Brown-Forman Corp., Cl. A .............. 665,535 1,321,200 See accompanying notes to financial statements. 7 THE GABELLI SMALL CAP GROWTH FUND SCHEDULE OF INVESTMENTS (CONTINUED) -- MARCH 31, 2005 (UNAUDITED) - -------------------------------------------------------------------------------- MARKET SHARES COST VALUE ------ ---- ------- COMMON STOCKS (CONTINUED) FOOD AND BEVERAGE (CONTINUED) 11,250 Cheesecake Factory Inc.+ ......$ 37,036 $ 398,812 38,000 Corn Products International Inc. . 617,424 987,620 100,000 Del Monte Foods Co.+ . 997,536 1,085,000 85,000 Denny's Corp.+ ....... 132,580 403,750 25,000 Farmer Brothers Co. .. 389,323 598,750 200,000 Flowers Foods Inc. ... 2,462,671 5,642,000 500 Genesee Corp., Cl. A+ ............. 0 1,000 21,500 Genesee Corp., Cl. B+ ............. 32,823 43,000 701,500 Grupo Continental SA . 1,058,724 1,254,019 10,000 Hain Celestial Group Inc.+ ........ 184,774 186,400 6,000 J & J Snack Foods Corp. ........ 100,375 280,980 210,000 Kikkoman Corp. ....... 1,375,672 2,105,288 20,000 Meiji Seika Kaisha Ltd. 87,470 99,599 35,000 MGP Ingredients Inc. . 243,900 291,900 3,000 Nathan's Famous Inc.+ 23,305 25,350 5,000 Northland Cranberries Inc., Cl. A .............. 4,200 1,925 4,000 Omni Nutraceuticals Inc.+ .............. 13,563 7 35,000 PepsiAmericas Inc. ... 501,525 793,100 57,000 Ralcorp Holdings Inc. 862,281 2,698,950 70,000 Smucker (J.M.) Co. ... 1,627,033 3,521,000 100,000 The Steak n Shake Co.+ ......... 1,088,229 1,935,000 5,000 Todhunter International Inc.+ 51,750 65,250 38,858 Tootsie Roll Industries Inc. .... 596,821 1,165,733 60,000 Triarc Companies Inc., Cl. A .............. 429,705 852,000 120,000 Triarc Companies Inc., Cl. B .............. 1,025,442 1,659,600 ------------ ------------ 14,993,904 27,986,633 ------------ ------------ HEALTH CARE -- 7.8% 50,000 Align Technology Inc.+ .............. 444,171 312,000 2,000 AngioDynamics Inc.+ .. 21,200 36,600 55,000 ArthroCare Corp.+ .... 1,133,267 1,567,500 7,800 Bio-Rad Laboratories Inc., Cl. A+ ............. 309,943 379,938 1,000 Biomet Inc. .......... 30,350 36,300 10,000 Biosite Inc.+ ........ 253,600 520,300 9,000 Bruker BioSciences Corp.+ ............. 34,729 31,680 105,000 Chemed Corp. ......... 3,493,080 8,030,400 20,000 CNS Inc. ............. 229,587 356,000 20,000 CONMED Corp.+ ........ 580,028 602,400 7,000 Corixa Corp.+ ........ 129,195 21,490 82,000 Del Global Technologies Corp.+ 260,262 258,300 1,000 Digene Corp.+ ........ 8,000 20,750 115,000 Edwards Lifesciences Corp.+ ............. 4,076,298 4,970,300 1,102 Enzo Biochem Inc.+ ... 13,091 15,891 40,000 Exactech Inc.+ ....... 572,732 678,800 8,000 Fisher Scientific International Inc.+ 184,008 455,360 MARKET SHARES COST VALUE ------ ---- ------- 50,000 Henry Schein Inc.+ ...$ 879,631 $ 1,792,000 34,000 ICU Medical Inc.+ .... 1,015,386 1,207,000 123,000 INAMED Corp.+ ........ 2,193,017 8,595,240 2,000 Integra LifeSciences Holdings+ .......... 43,600 70,440 35,000 Inverness Medical Innovations Inc.+ .. 638,388 822,500 27,000 Invitrogen Corp.+ .... 1,389,635 1,868,400 59,500 Lifecore Biomedical Inc.+ .............. 442,549 1,057,315 15,000 Nabi Biopharmaceuticals+ 105,625 187,200 1,300 Nobel Biocare Holding AG ......... 100,171 273,630 4,100 NWH Inc. ............. 63,026 60,680 10,000 OCA Inc.+ ............ 75,721 42,500 34,000 Orthofix International NV+ .. 1,133,250 1,331,100 2,000 OrthoLogic Corp.+ .... 6,750 10,120 35,000 Owens & Minor Inc. ... 692,324 950,250 51,000 Penwest Pharmaceuticals Co.+ 368,867 630,360 10,000 Possis Medical Inc.+ . 112,049 83,700 43,000 Priority Healthcare Corp., Cl. B+ ............. 862,278 930,090 12,000 PSS World Medical Inc.+ 153,956 136,440 105,000 Regeneration Technologies Inc.+ . 1,047,404 1,082,550 44,000 Schick Technologies Inc.+ .............. 379,269 759,000 590,000 Snia SpA+ ............ 272,969 192,733 20,000 Sonic Innovations Inc.+ 92,523 111,600 1,880,000 Sorin SpA+ ........... 6,403,312 6,007,285 2,500 Straumann Holding AG . 224,697 541,365 4,200 Stryker Corp. ........ 162,570 187,362 155,000 Sybron Dental Specialties Inc.+ .. 2,964,637 5,564,500 41,000 Thoratec Corp.+ ...... 491,798 501,020 72,000 Women First HealthCare Inc.+ ... 91,845 72 1,000 Wright Medical Group Inc.+ ........ 16,460 24,000 5,100 Young Innovations Inc. ............... 128,516 186,915 ------------ ------------ 34,325,764 53,501,376 ------------ ------------ HOME FURNISHINGS -- 0.1% 15,000 Bassett Furniture Industries Inc. .... 262,461 295,500 4,000 Bed Bath & Beyond Inc.+ ....... 11,125 146,160 15,000 Foamex International Inc.+ 127,457 29,850 30,000 La-Z-Boy Inc. ........ 250,200 417,900 ------------ ------------ 651,243 889,410 ------------ ------------ HOTELS AND GAMING -- 5.3% 270,000 Aztar Corp.+ ......... 4,427,702 7,711,200 12,000 Boyd Gaming Corp. .... 90,225 625,800 90,000 Caesars Entertainment Inc.+ 903,190 1,781,100 50,000 Churchill Downs Inc. . 1,397,003 1,979,500 See accompanying notes to financial statements. 8 THE GABELLI SMALL CAP GROWTH FUND SCHEDULE OF INVESTMENTS (CONTINUED) -- MARCH 31, 2005 (UNAUDITED) - -------------------------------------------------------------------------------- MARKET SHARES COST VALUE ------ ---- ------- COMMON STOCKS (CONTINUED) HOTELS AND GAMING (CONTINUED) 80,000 Dover Downs Gaming & Entertainment Inc. .$ 796,488 $ 996,000 150,000 Gaylord Entertainment Co.+ . 4,244,031 6,060,000 5,000 Jury's Doyle Hotel Group plc .......... 27,762 75,833 60,000 Kerzner International Ltd.+ 1,415,009 3,673,800 370,000 La Quinta Corp.+ ..... 936,975 3,145,000 142,000 Lakes Entertainment Inc.+ 713,290 2,556,000 1,200 Las Vegas Sands Corp.+ ............. 34,800 54,000 355,000 Magna Entertainment Corp., Cl. A+ ............. 2,312,344 2,179,700 20,000 Marcus Corp. ......... 377,480 410,000 82,000 Penn National Gaming Inc.+ ....... 186,907 2,409,160 85,000 Pinnacle Entertainment Inc.+ 659,965 1,419,500 3,000 Station Casinos Inc. . 13,350 202,650 55,000 Wyndham International Inc., Cl. A+ ............. 120,095 44,000 16,000 Wynn Resorts Ltd.+ ... 231,002 1,083,840 20,000 Youbet.com Inc.+ ..... 51,494 117,200 ------------ ------------ 18,939,112 36,524,283 ------------ ------------ MANUFACTURED HOUSING AND RECREATIONAL VEHICLES -- 1.9% 58,000 Cavco Industries Inc.+ .............. 1,127,032 1,402,498 335,000 Champion Enterprises Inc.+ .............. 3,495,127 3,149,000 8,500 Drew Industries Inc.+ 296,303 320,025 205,000 Fleetwood Enterprises Inc.+ .............. 2,634,462 1,783,500 75,000 Monaco Coach Corp. ... 1,660,313 1,211,250 140,000 Skyline Corp. ........ 4,450,174 5,388,600 ------------ ------------ 13,663,411 13,254,873 ------------ ------------ METALS AND MINING -- 0.4% 2,000 Ivanhoe Mines Ltd.+ .. 13,255 14,940 142,115 Kinross Gold Corp.+ .. 984,488 852,690 10,000 Meridian Gold Inc.+ .. 75,630 168,400 70,000 Placer Dome Inc. ..... 653,970 1,135,400 190,000 Royal Oak Mines Inc.+ ........ 322,487 570 26,148 Stillwater Mining Co.+ ........ 362,121 257,558 ------------ ------------ 2,411,951 2,429,558 ------------ ------------ PAPER AND FOREST PRODUCTS -- 0.4% 40,000 Packaging Dynamics Corp. .............. 296,567 559,600 55,000 Pope & Talbot Inc. ... 942,815 966,900 18,000 Schweitzer-Mauduit International Inc. . 424,690 603,900 22,000 Wausau-Mosinee Paper Corp. ........ 255,362 311,080 ------------ ------------ 1,919,434 2,441,480 ------------ ------------ PUBLISHING -- 4.0% 307,237 Independent News & Media plc .......... 431,671 1,011,604 40,000 Journal Communications Inc., Cl. A .............. 759,162 662,000 110,000 Journal Register Co.+ ............... 1,779,817 1,837,000 11,000 Lee Enterprises Inc. . 261,685 477,400 MARKET SHARES COST VALUE ------ ---- ------- 53,000 McClatchy Co., Cl. A .$ 1,581,315 $ 3,930,480 67,000 Media General Inc., Cl. A .............. 1,841,424 4,143,950 28,000 Meredith Corp. ....... 500,908 1,309,000 310,000 News Corp., Cl. A .... 912,485 5,245,200 1,050,000 Penton Media Inc.+ ... 951,840 173,250 400,000 PRIMEDIA Inc.+ ....... 1,290,396 1,740,000 21,400 Pulitzer Inc. ........ 888,190 1,363,822 215,000 Thomas Nelson Inc. ... 2,192,528 5,084,750 4,000 Value Line Inc. ...... 162,772 156,000 12,000 Wiley (John) & Sons Inc., Cl. B .............. 46,500 426,240 ------------ ------------ 13,600,693 27,560,696 ------------ ------------ REAL ESTATE -- 1.2% 190 Case Pomeroy & Co. Inc., Cl. A .............. 222,300 242,250 17,000 Catellus Development Corp. .............. 298,821 453,050 170,000 Griffin Land & Nurseries Inc.+ .... 2,202,170 4,420,000 9,000 Gyrodyne Company of America Inc.+ ...... 135,071 386,910 20,000 Malan Realty Investors Inc. (b) . 149,429 83,800 110,000 Morguard Corp. ....... 1,392,683 2,773,415 ------------ ------------ 4,400,474 8,359,425 ------------ ------------ RETAIL -- 3.7% 20,000 Aaron Rents Inc. ..... 178,889 400,000 146,250 Aaron Rents Inc., Cl. A .............. 524,217 2,597,400 35,000 Big 5 Sporting Goods Corp. ........ 657,716 864,500 98,000 Burlington Coat Factory Warehouse Corp. .... 1,058,146 2,812,600 8,000 Casey's General Stores Inc. ........ 124,503 143,760 57,000 Coldwater Creek Inc.+ 183,710 1,053,360 6,000 CoolBrands International Inc.+ 41,632 44,391 80,000 CSK Auto Corp.+ ...... 1,331,224 1,412,000 4,000 Gander Mountain Co.+ . 66,680 52,400 175,000 Ingles Markets Inc., Cl. A .............. 2,176,506 2,331,000 35,000 Movado Group Inc. .... 515,027 647,500 130,000 Neiman Marcus Group Inc., Cl. B .............. 4,106,529 11,732,500 1,500 The Sports Authority . Inc.+ .............. 9,198 41,250 40,000 Weis Markets Inc. .... 1,174,744 1,474,800 ------------ ------------ 12,148,721 25,607,461 ------------ ------------ SATELLITE -- 0.4% 35,000 Pegasus Communications Corp., Cl. A+ ...... 365,574 464,800 150,000 Sirius Satellite Radio Inc.+ ........ 724,115 843,000 35,000 XM Satellite Radio Holdings Inc., Cl. A+ ............. 302,980 1,102,500 ------------ ------------ 1,392,669 2,410,300 ------------ ------------ See accompanying notes to financial statements. 9 THE GABELLI SMALL CAP GROWTH FUND SCHEDULE OF INVESTMENTS (CONTINUED) -- MARCH 31, 2005 (UNAUDITED) - -------------------------------------------------------------------------------- MARKET SHARES COST VALUE ------ ---- ------- COMMON STOCKS (CONTINUED) SPECIALTY CHEMICALS -- 4.8% 30,000 Airgas Inc. ..........$ 183,650 $ 716,700 48,000 Albemarle Corp. ...... 1,295,613 1,745,280 42,000 Arch Chemicals Inc. .. 905,730 1,195,740 10,000 Cytec Industries Inc. ............... 278,296 542,500 8,000 Dionex Corp.+ ........ 240,000 436,000 150,000 Ferro Corp. .......... 3,406,266 2,823,000 130,000 Fuller (H.B.) Co. .... 2,306,337 3,770,000 30,000 Great Lakes Chemical Corp. ..... 733,119 963,600 430,000 Hercules Inc.+ ....... 4,166,174 6,230,700 140,000 MacDermid Inc. ....... 2,361,630 4,550,000 170,000 Material Sciences Corp.+ ............. 1,589,043 2,286,500 130,000 Omnova Solutions Inc.+ .............. 810,622 698,100 50,000 Penford Corp. ........ 539,601 812,500 10,000 Quaker Chemical Corp. .............. 181,137 205,400 20,000 Schulman (A.) Inc. ... 240,000 348,400 270,000 Sensient Technologies Corp. . 5,449,105 5,821,200 ------------ ------------ 24,686,323 33,145,620 ------------ ------------ TELECOMMUNICATIONS -- 1.2% 9,200 Atlantic Tele- Network Inc. ....... 92,644 294,584 190,000 Cincinnati Bell Inc.+ 475,442 807,500 85,000 Commonwealth Telephone Enterprises Inc.+ .. 1,950,492 4,006,900 6,795 Community Service Communications Inc.+ 0 21,234 46,950 D&E Communications Inc. ............... 605,207 428,653 277 NTL Inc.+ ............ 8,407 17,637 80,525 Rogers Communications Inc., Cl. B .............. 762,545 2,193,501 20,000 Shenandoah Telecommunications Co. ................ 296,543 620,000 621 Telewest Global Inc.+ 8,867 11,048 53,000 Winstar Communications Inc.+ .............. 133 53 ------------ ------------ 4,200,280 8,401,110 ------------ ------------ TRANSPORTATION -- 0.8% 130,000 GATX Corp. ........... 3,650,103 4,314,700 97,500 Grupo TMM SA, Cl. A, ADR+ ............... 866,789 298,350 2,000 Irish Continental Group plc+ ......... 17,829 25,693 50,000 OMI Corp. ............ 313,120 957,500 5,100 Providence & Worcester Railroad Co. ....... 42,979 67,830 ------------ ------------ 4,890,820 5,664,073 ------------ ------------ WIRELESS COMMUNICATIONS -- 1.7% 17,220 Alamosa Holdings Inc.+ .............. 137,880 200,957 50,000 Centennial Communications Corp.+ ............. 545,692 542,500 3,000 Nextel Communications Inc., Cl. A+ ............. 15,360 85,260 MARKET SHARES COST VALUE ------ ---- ------- 72,000 Price Communications Corp.+ .............$ 905,273 $ 1,260,000 55,000 Rural Cellular Corp., Cl. A+ ............. 374,090 290,950 12,000 Triton PCS Holdings Inc., Cl. A+ ............. 93,020 26,640 5,000 UbiquiTel Inc.+ ...... 2,700 33,500 187,000 Vimpel-Communications, ADR+ ............... 1,608,309 6,436,540 70,000 Western Wireless Corp., Cl. A+ ............. 238,828 2,657,200 ------------ ------------ 3,921,152 11,533,547 ------------ ------------ TOTAL COMMON STOCKS .. 410,423,122 670,543,713 ------------ ------------ PREFERRED STOCKS -- 0.4% BROADCASTING -- 0.2% 1,063 Granite Broadcasting Corp., 12.750% Pfd.+ ...... 439,683 462,405 100 Gray Television Inc., 8.000% Cv. Pfd., Ser. C (b)(d)(e) ... 1,000,000 1,010,000 1,103 PTV Inc., 10.000% Pfd., Ser. A ............. 0 4,192 ------------ ------------ 1,439,683 1,476,597 ------------ ------------ BUSINESS SERVICES -- 0.1% 21,618 Interep National Radio Sales Inc., 4.000% Cv. Pfd., Ser. A (b)(d)(e) ... 2,163,147 647,809 ------------ ------------ DIVERSIFIED INDUSTRIAL -- 0.1% 151 Foster Wheeler Ltd., Pfd., Ser. B+ ...... 38,060 145,262 WHX Corp., 39,400 $3.75 Cv. Pfd., Ser. B+ ............ 191,751 108,350 58,000 6.500% Cv. Pfd., Ser. A+ ............ 463,067 159,500 ------------ ------------ 692,878 413,112 ------------ ------------ TOTAL PREFERRED STOCKS ............. 4,295,708 2,537,518 ------------ ------------ RIGHTS -- 0.0% AUTOMOTIVE: PARTS AND ACCESSORIES -- 0.0% 800,000 Exide Technologies Rights+ ............ 0 0 ------------ ------------ WARRANTS -- 0.1% AUTOMOTIVE: PARTS AND ACCESSORIES -- 0.0% 1,213 Exide Technologies, expires 05/05/11+ .. 2,247 2,183 ------------ ------------ BUSINESS SERVICES -- 0.1% 250,000 GP Strategies Corp., expires 08/14/08+ (b)(e) ... 637,065 653,341 125,000 Interep National Radio Sales Inc., expires 05/06/07+ (b)(d)(e) 0 0 ------------ ------------ 637,065 653,341 ------------ ------------ See accompanying notes to financial statements. 10 THE GABELLI SMALL CAP GROWTH FUND SCHEDULE OF INVESTMENTS (CONTINUED) -- MARCH 31, 2005 (UNAUDITED) - -------------------------------------------------------------------------------- MARKET SHARES COST VALUE ------ ---- ------- WARRANTS (CONTINUED) COMPUTER SOFTWARE AND SERVICES -- 0.0% 430 Anacomp Inc., Cl. B, expires 12/10/06+ ..$ 0 $ 26 ------------ ------------ DIVERSIFIED INDUSTRIAL -- 0.0% 379,703 National Patent Development Corp., expires 08/14/08+ (b)(e) ... 0 167,188 ------------ ------------ HEALTH CARE -- 0.0% 14,424 Del Global Technologies Corp., expires 03/28/08+ .. 24,809 21,636 ------------ ------------ TELECOMMUNICATIONS -- 0.0% 86 NTL Inc., expires 01/13/11+ .. 124 142 ------------ ------------ TOTAL WARRANTS ....... 664,245 844,516 ------------ ------------ PRINCIPAL AMOUNT ------ CORPORATE BONDS -- 0.2% AVIATION: PARTS AND SERVICES -- 0.0% $ 300,000 GenCorp Inc., Sub. Deb. Cv., 5.750%, 04/15/07 ........... 284,542 334,875 ------------ ------------ BUSINESS SERVICES -- 0.2% 2,000,000 GP Strategies Corp., Sub. Deb., 6.000%, 08/14/08 (b)(e) .... 1,508,123 1,336,122 ------------ ------------ COMPUTER SOFTWARE AND SERVICES -- 0.0% 300,000 Exodus Communications Inc., Sub. Deb. Cv., 5.250%, 02/15/08+ (b)(c) ... 1,185 0 ------------ ------------ HEALTH CARE -- 0.0% 28,848 Del Global Technologies Corp., 6.000%, 03/28/07 (b) ....... 28,848 21,636 ------------ ------------ TOTAL CORPORATE BONDS .............. 1,822,698 1,692,633 ------------ ------------ U.S. GOVERNMENT OBLIGATIONS -- 1.0% 7,002,000 U.S. Treasury Bills, 2.478% to 2.823%++, 04/07/05 to 07/07/05 ........... 6,966,929 6,967,711 ------------ ------------ TOTAL INVESTMENTS -- 99.8% ..............$424,172,702 682,586,091 ============ OTHER ASSETS AND LIABILITIES (NET) -- 0.2% ......... 1,277,165 ------------ NET ASSETS -- 100.0% ................$683,863,256 ============ - ---------------- For Federal tax purposes: Aggregate cost ......................$424,172,702 ============ Gross unrealized appreciation .......$285,032,225 Gross unrealized depreciation ....... (26,618,836) ------------ Net unrealized appreciation (depreciation) .....................$258,413,389 ============ - ---------------- (a) Security considered an affiliated holding because the Fund owns at least 5% of the outstanding shares. See Note 9. (b) Security fair valued under procedures established by the Board of Directors. The procedures may include reviewing available financial information about the company and reviewing valuation of comparable securities and other factors on a regular basis. At March 31, 2005, the market value of fair valued securities amounted to $4,204,709 or 0.6% of total net assets. (c) Security is in default. (d) Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At March 31, 2005, the market value of Rule 144A securities amounted to $1,657,809 or 0.2% of total net assets. (e) At March 31, 2005, the Fund held investments in restricted and illiquid securities that were valued under methods approved by the Board, as follows: ACQUISITION 03/31/05 SHARES/ CARRYING PRINCIPAL ACQUISITION ACQUISITION VALUE AMOUNT ISSUER DATE COST PER UNIT ------- ------ ---- ---- -------- $2,000,000 GP Strategies Corp., Sub. Deb., 6.000%, 08/14/08 ... 08/08/03 $1,362,935 $ 66.8061 250,000 GP Strategies Corp. warrants expire 08/14/08 .... 08/08/03 $ 637,065 $ 2.6134 100 Gray Television Inc., 8.000% Cv. Pfd., Ser. C ....... 04/22/02 $1,000,000 $10,100.0000 21,618 Interep National Radio Sales Inc., 4.000% Cv. Pfd., Ser. A ............. 05/03/02 $2,163,147 $ 29.9662 125,000 Interep National Radio Sales Inc. warrants expire 05/06/07 ........... 05/03/02 $ 0.00 $ 0.0000 379,703 National Patent Development Corp. warrants expire 08/14/08 ........... 11/24/04 $ 0.00 $ 0.4403 + Non-income producing security. ++ Represents annualized yield at date of purchase. ADR - American Depository Receipt. See accompanying notes to financial statements. 11 THE GABELLI SMALL CAP GROWTH FUND STATEMENT OF ASSETS AND LIABILITIES MARCH 31, 2005 (UNAUDITED) - -------------------------------------------------------------------------------- ASSETS: Investments, at value (cost $423,351,509) ........$681,881,091 Investments in affiliates, at value (cost $821,193) ................................ 705,000 Cash and foreign currency, at value (cost $12,263) ................................. 12,314 Dividends and interest receivable ................ 1,303,476 Receivable for investments sold .................. 593,030 Receivable for Fund shares sold .................. 398,176 Other assets ..................................... 18,783 ------------ TOTAL ASSETS ..................................... 684,911,870 ------------ LIABILITIES: Payable for investment advisory fees ............. 590,017 Payable for shareholder services fees ............ 159,065 Payable for distribution fees .................... 148,049 Payable for shareholder communication fees ....... 47,492 Payable for Fund shares redeemed ................. 42,806 Other accrued expenses ........................... 61,185 ------------ TOTAL LIABILITIES ................................ 1,048,614 ------------ NET ASSETS applicable to 24,355,609 shares outstanding .............................$683,863,256 ============ NET ASSETS CONSIST OF: Capital stock, at $0.001 par value ...............$ 24,355 Additional paid-in capital ....................... 407,168,845 Accumulated net investment loss .................. (38,598) Accumulated net realized gain on investments and foreign currency transactions .............. 18,295,108 Net unrealized appreciation on investments and foreign currency translations .............. 258,413,546 ------------ NET ASSETS .......................................$683,863,256 ============ SHARES OF CAPITAL STOCK: CLASS AAA: Net Asset Value, offering and redemption price per share ($682,215,193 / 24,296,619 shares outstanding; 150,000,000 shares authorized of $0.001 par value) ........................... $28.08 ====== CLASS A: Net Asset Value and redemption price per share ($727,609 / 25,902 shares outstanding; 50,000,000 shares authorized of $0.001 par value) ......... $28.09 ====== Maximum sales charge ............................. 5.75% ====== Maximum offering price per share (NAV / 0.9425, based on maximum sales charge of 5.75% of the offering price) ............................ $29.80 ====== CLASS B: Net Asset Value and offering price per share ($149,439 / 5,371 shares outstanding; 50,000,000 shares authorized of $0.001 par value) ......... $27.82(a) ====== CLASS C: Net Asset Value and offering price per share ($771,015 / 27,717 shares outstanding; 50,000,000 shares authorized of $0.001 par value) ......... $27.82(a) ====== - ------------- (a) Redemption price varies based on length of time held. STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED MARCH 31, 2005 (UNAUDITED) - -------------------------------------------------------------------------------- INVESTMENT INCOME: Dividends (net of foreign taxes of $9,989) $ 4,615,014 Interest ................................. 175,926 ------------ TOTAL INVESTMENT INCOME .................. 4,790,940 ------------ EXPENSES: Investment advisory fees ................. 3,369,222 Distribution fees -- Class AAA ........... 841,481 Distribution fees -- Class A ............. 336 Distribution fees -- Class B ............. 599 Distribution fees -- Class C ............. 1,356 Shareholder services fees ................ 252,012 Shareholder communications expenses ...... 92,521 Custodian fees ........................... 56,539 Legal and audit fees ..................... 26,403 Directors' fees .......................... 20,622 Registration fees ........................ 16,093 Miscellaneous expenses ................... 46,525 ------------ TOTAL EXPENSES ........................... 4,723,709 ------------ NET INVESTMENT INCOME .................... 67,231 ------------ NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY: Net realized gain on investments ......... 22,453,239 Net realized loss on foreign currency transactions .................. (750) Net change in unrealized appreciation/ depreciation on investments and foreign currency translations .................. 57,871,165 ------------ NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN CURRENCY ....... 80,323,654 ------------ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ........................ $ 80,390,885 ============ See accompanying notes to financial statements. 12 THE GABELLI SMALL CAP GROWTH FUND STATEMENT OF CHANGES IN NET ASSETS - -------------------------------------------------------------------------------- SIX MONTHS ENDED MARCH 31, 2005 YEAR ENDED (UNAUDITED) SEPTEMBER 30, 2004 ------------- ------------------ OPERATIONS: Net investment income (loss) ....................... $ 67,231 $ (923,061) Net realized gain on investments, futures contracts and foreign currency transactions ............... 22,452,489 27,631,501 Net change in unrealized appreciation/ depreciation on investments, futures contracts and foreign currency translations ...... 57,871,165 87,063,565 ------------- ------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 80,390,885 113,772,005 ------------- ------------- DISTRIBUTIONS TO SHAREHOLDERS: Net realized gains Class AAA ........................................ (27,271,924) (4,352,438) Class A .......................................... (6,636) -- Class B .......................................... (5,930) -- Class C .......................................... (5,584) -- ------------- ------------- TOTAL DISTRIBUTIONS TO SHAREHOLDERS ................ (27,290,074) (4,352,438) ------------- ------------- CAPITAL SHARE TRANSACTIONS: Class AAA ........................................ 8,764,738 (29,481,563) Class A .......................................... 665,919 57,577 Class B .......................................... 90,941 54,633 Class C .......................................... 746,804 24,010 ------------- ------------- NET INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL SHARE TRANSACTIONS ....................... 10,268,402 (29,345,343) ------------- ------------- REDEMPTION FEES .................................... 23,293 -- ------------- ------------- NET INCREASE IN NET ASSETS ......................... 63,392,506 80,074,224 NET ASSETS: Beginning of period ................................ 620,470,750 540,396,526 ------------- ------------- End of period ...................................... $ 683,863,256 $ 620,470,750 ============= ============= See accompanying notes to financial statements. 13 THE GABELLI SMALL CAP GROWTH FUND NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - -------------------------------------------------------------------------------- 1. ORGANIZATION. The Gabelli Small Cap Growth Fund (the "Fund") is a series of Gabelli Equity Series Funds, Inc. (the "Corporation"), which was organized on July 25, 1991 as a Maryland corporation. The Fund is a diversified, open-end management investment company registered under the Investment Company Act of 1940, as amended (the "1940 Act"), and one of three separately managed portfolios of the Corporation, with four separate classes of shares known as Class AAA, Class A, Class B and Class C. The Fund's primary objective is capital appreciation. The Fund commenced investment operations on October 22, 1991. 2. SIGNIFICANT ACCOUNTING POLICIES. The preparation of financial statements in accordance with 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 Directors (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. 14 THE GABELLI SMALL CAP GROWTH FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) - -------------------------------------------------------------------------------- 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 of the value of the contract. The daily changes in the contract are included in unrealized gains or losses. The Fund recognizes a realized gain or loss when the contract is closed. At March 31, 2005, 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 the value of futures contracts primarily corresponds with the value of their underlying instruments, which may not correlate with the change in value of the hedged investments. In addition, there is the risk that the Fund may not be able to enter into a closing transaction because of an illiquid secondary market. FORWARD FOREIGN EXCHANGE CONTRACTS. The Fund may engage in forward foreign exchange contracts for hedging a specific transaction with respect to either the currency in which the transaction is denominated or another currency as deemed appropriate by the Adviser. Forward foreign exchange contracts are valued at the forward rate and are marked-to-market daily. The change in market value is included in unrealized appreciation/depreciation on investments and foreign currency transactions. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. The use of forward foreign exchange contracts does not eliminate fluctuations in the underlying prices of the Fund's portfolio securities, but it does establish a rate of exchange that can be achieved in the future. Although forward foreign exchange contracts limit the risk of loss due to a decline in the value of the hedged currency, they also limit any potential gain that might result should the value of the currency increase. In addition, the Fund could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts. At March 31, 2005, there were no open forward foreign exchange contracts. 15 THE GABELLI SMALL CAP GROWTH FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) - -------------------------------------------------------------------------------- FOREIGN CURRENCY TRANSLATION. The books and records of the Fund are maintained in United States (U.S.) dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars at the exchange rates prevailing at the end of the period, and purchases and sales of investment securities, income and expenses are translated at the exchange rate prevailing on the respective dates of such transactions. Unrealized gains and losses, which result from changes in foreign exchange rates and/or changes in market prices of securities, have been included in unrealized appreciation/depreciation on investments and foreign currency translations. Net realized foreign currency gains and losses resulting from changes in exchange rates include foreign currency gains and losses between trade date and settlement date on investment securities transactions, foreign currency transactions and the difference between the amounts of interest and dividends recorded on the books of the Fund and the amounts actually received. The portion of foreign currency gains and losses related to fluctuation in exchange rates between the initial trade date and subsequent sale trade date is included in realized gain/(loss) on investments. FOREIGN SECURITIES. The Fund may directly purchase securities of foreign issuers. Investing in securities of foreign issuers involves special risks not typically associated with investing in securities of U.S. issuers. The risks include possible revaluation of currencies, the ability to repatriate funds, less complete financial information about companies and possible future adverse political and economic developments. Moreover, securities of many foreign issuers and their markets may be less liquid and their prices more volatile than those of securities of comparable U.S. issuers. 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 upon the proportion of net assets of each class at the beginning of each day. Distribution expenses are solely borne by the class incurring the expense. 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. 16 THE GABELLI SMALL CAP GROWTH FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) - -------------------------------------------------------------------------------- For the fiscal year ended September 30, 2004, reclassifications were made to decrease accumulated net investment loss by $882,830 and decrease accumulated net realized gain on investments by $679,000, with an offsetting adjustment to additional paid-in capital. For the fiscal years ended September 30, 2004 and 2003, the tax character of distributions is $2,246,976 of ordinary income and $2,105,462 of long-term capital gain and $300,296 of ordinary income and $6,071,352 of long-term capital gain, respectively. 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 policy of the Fund 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. Dividends and interest from non-U.S. sources received by the Fund are generally subject to non-U.S. withholding taxes at rates ranging up to 30%. Such withholding taxes may be reduced or eliminated under the terms of applicable U.S. income tax treaties, and the Fund intends to undertake any procedural steps required to claim the benefits of such treaties. The difference between book and tax basis undistributed ordinary income is primarily due to the continued accrual of defaulted interest for tax purposes which has been written down for book purposes. At September 30, 2004, the difference between book and tax basis unrealized appreciation is primarily due to deferral of losses from wash sales for tax purposes. As of September 30, 2004, the components of accumulated earnings/(losses) on a tax basis were as follows: Undistributed long-term capital gains .............. $ 25,399,703 Post-October deferred losses ....................... 2,189 Net unrealized appreciation ........................ 198,328,041 Other temporary differences ........................ (160,688) ------------ Total accumulated earnings ....................... $223,569,245 ============ 3. INVESTMENT ADVISORY AGREEMENTS. The Fund has entered into an investment advisory agreement (the "Advisory Agreement") with the Adviser which provides that the Fund will pay the Adviser a fee, computed daily and paid monthly, at the annual rate of 1.00% of the value of the Fund's average daily net assets. In accordance with the Advisory Agreement, the Adviser provides a continuous investment program for the Fund's portfolio, oversees the administration of all aspects of the Fund's business and affairs and pays the compensation of all Officers and Directors of the Fund who are affiliates of the Adviser. 4. DISTRIBUTION PLAN. The Fund's Board has adopted a distribution plan (the "Plan") for each class of shares 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. 17 THE GABELLI SMALL CAP GROWTH FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) - -------------------------------------------------------------------------------- 5. PORTFOLIO SECURITIES. Purchases and proceeds from the sales of securities for the six months ended March 31, 2005, other than short-term securities, aggregated $21,512,240 and $38,128,915, respectively. 6. TRANSACTIONS WITH AFFILIATES. During the six months ended March 31, 2005, the Fund paid brokerage commissions of $88,821 to Gabelli & Company. During the six months ended March 31, 2005, Gabelli & Company informed the Fund that it received $4,504 from investors representing commissions (sales charges and underwriting fees) on sales and redemptions of Fund shares. The cost of calculating the Fund's net asset value per share is a Fund expense pursuant to the Advisory Agreement between the Fund and the Adviser. During the six months ended March 31, 2005, the Fund reimbursed the Adviser $19,950 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. LINE OF CREDIT. The Fund has access to an unsecured line of credit of up to $25,000,000 from the custodian for temporary borrowing purposes. Borrowings under this arrangement bear interest at 0.75% above the Federal Funds rate on outstanding balances. At March 31, 2005, there were no borrowings outstanding from the line of credit. The average daily amount of borrowings outstanding from the line of credit within the six months ended March 31, 2005 was $321,623 with a related weighted average interest rate of 2.73%. The maximum amount borrowed at any time during the six months ended March 31, 2005 was $4,354,000. 8. CAPITAL STOCK TRANSACTIONS. The Fund offers four classes of shares -- Class AAA Shares, Class A Shares, Class B Shares, and Class C 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 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 the 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. The Fund imposes a redemption fee of 2.00% on Class AAA, Class A, Class B and Class C Shares that are redeemed or exchanged within 60 days after the date of a purchase. For Class AAA, Class A, Class B and Class C Shares, the 2.00% redemption fee applies to shares purchased on or after November 1, 2004. The redemption fee is deducted from the proceeds otherwise payable to the redeeming shareholders and retained by the Fund. The redemption fees retained by the Fund during the six months ended March 31, 2005 amounted to $23,293. The redemption fee does 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. 18 THE GABELLI SMALL CAP GROWTH FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) - -------------------------------------------------------------------------------- Transactions in shares of capital stock were as follows: SIX MONTHS ENDED MARCH 31, 2005 YEAR ENDED (UNAUDITED) SEPTEMBER 30, 2004 -------------------------- ------------------------- SHARES AMOUNT SHARES AMOUNT ---------- ------------- ---------- ------------- CLASS AAA CLASS AAA -------------------------- ------------------------- Shares sold ............................................. 3,044,258 $ 85,155,691 6,139,577 $ 153,305,617 Shares issued upon reinvestment of dividends ............ 930,960 25,964,511 172,209 4,162,298 Shares redeemed ......................................... (3,652,049) (102,355,464) (7,494,730) (186,949,478) ---------- ------------- ---------- ------------- Net increase / (decrease) ............................... 323,169 $ 8,764,738 (1,182,944) $ (29,481,563) ========== ============= ========== ============= CLASS A CLASS A -------------------------- ------------------------- Shares sold ............................................. 23,610 $ 664,621 2,253 $ 57,859 Shares issued upon reinvestment of dividends ............ 234 6,514 -- -- Shares redeemed ......................................... (184) (5,216) (11) (282) ---------- ------------- ---------- ------------- Net increase ............................................ 23,660 $ 665,919 2,242 $ 57,577 ========== ============= ========== ============= CLASS B CLASS B -------------------------- ------------------------- Shares sold ............................................. 3,028 $ 85,010 2,268 $ 58,160 Shares issued upon reinvestment of dividends ............ 214 5,931 -- -- Shares redeemed ......................................... -- -- (139) (3,527) ---------- ------------- ---------- ------------- Net increase ............................................ 3,242 $ 90,941 2,129 $ 54,633 ========== ============= ========== ============= CLASS C CLASS C -------------------------- ------------------------- Shares sold ............................................. 26,676 $ 743,954 937 $ 24,010 Shares issued upon reinvestment of dividends ............ 163 4,525 -- -- Shares redeemed ......................................... (59) (1,675) -- -- ---------- ------------- ---------- ------------- Net increase ............................................ 26,780 $ 746,804 937 $ 24,010 ========== ============= ========== ============= 9. TRANSACTIONS IN SECURITIES OF AFFILIATED ISSUERS. The 1940 Act defines affiliated issuers as those in which the Fund's holdings of an issuer represent 5% or more of the outstanding voting securities of the issuer. A summary of the Fund's transactions in the securities of these issuers during the six months ended March 31, 2005 is set forth below: NET CHANGE BEGINNING SHARES ENDING DIVIDEND IN UNREALIZED VALUE AT PERCENT OWNED OF SHARES PURCHASED (SOLD) SHARES INCOME APPRECIATION/DEPRECIATION MARCH 31, 2005 SHARES OUTSTANDING --------- ---------------- ------ -------- ------------------------- -------------- ------------------ Trans-Lux Corp. 100,000 0 100,000 $7,000 $62,000 $705,000 10.28% ------- - ------- ------ ------- -------- ------ 10. 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., the Adviser's parent company, 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. 11. 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. 19 THE GABELLI SMALL CAP GROWTH FUND FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- Selected data for a share of capital stock outstanding throughout each period: INCOME FROM INVESTMENT OPERATIONS DISTRIBUTIONS ---------------------------------------------------- -------------------------------------- Net Net Asset Net Realized and Total Net Period Value, Investment Unrealized from Net Realized Ended Beginning Income/ Gain/(Loss) on Investment Investment Gain on Total September 30 of Period (Loss)(e) Investments Operations Income Investments Distributions - ------------ --------- ---------- -------------- ---------- ---------- ----------- ------------- CLASS AAA 2005(d) $25.88 $ 0.00(c) $ 3.35 $ 3.35 -- $(1.15) $(1.15) 2004 21.48 (0.04) 4.61 4.57 -- (0.17) (0.17) 2003 17.04 (0.05) 4.74 4.69 -- (0.25) (0.25) 2002 17.13 (0.04) 0.31 0.27 $(0.01) (0.35) (0.36) 2001 23.60 0.06 (1.75) (1.69) (0.05) (4.73) (4.78) 2000 21.84 0.06 4.16 4.22 -- (2.46) (2.46) CLASS A 2005(d) $25.89 $ 0.04 $ 3.31 $ 3.35 -- $(1.15) $(1.15) 2004(a) 24.49 (0.06) 1.46 1.40 -- -- -- CLASS B 2005(d) $25.74 $(0.11) $ 3.34 $ 3.23 -- $(1.15) $(1.15) 2004(a) 24.49 (0.19) 1.44 1.25 -- -- -- CLASS C 2005(d) $25.74 $(0.07) $ 3.30 $ 3.23 -- $(1.15) $(1.15) 2004(a) 24.49 (0.20) 1.45 1.25 -- -- -- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA -------------------------------------------------- Net Asset Net Assets Period Value, End of Net Portfolio Ended Redemption End of Total Period Investment Operating Turnover September 30 Fees(e) Period Return+ (in 000's) Income/(Loss) Expenses Rate - ------------ ---------- ---------- ------- ----------- ------------- --------- ---------- CLASS AAA 2005(d) $0.00(c) $28.08 12.97% $682,215 0.02%(b) 1.40%(b) 3% 2004 -- 25.88 21.34 620,334 (0.15) 1.42 10 2003 -- 21.48 27.84 540,397 (0.22) 1.45 4 2002 -- 17.04 1.39 428,416 (0.22) 1.45 10 2001 -- 17.13 (7.47) 372,865 0.30 1.45 17 2000 -- 23.60 21.00 366,459 0.26 1.49 47 CLASS A 2005(d) $0.00(c) $28.09 12.97% $ 728 0.28%(b) 1.44%(b) 3% 2004(a) -- 25.89 5.72 58 (0.32)(b) 1.42(b) 10 CLASS B 2005(d) $0.00(c) $27.82 12.57% $ 149 (0.76)%(b) 2.17%(b) 3% 2004(a) -- 25.74 5.10 55 (1.02)(b) 2.17(b) 10 CLASS C 2005(d) $0.00(c) $27.82 12.57% $ 771 (0.49)%(b) 2.20%(b) 3% 2004(a) -- 25.74 5.10 24 (1.07)(b) 2.17(b) 10 - ----------------------- + 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 the period of less than one year is not annualized. (a) From the commencement of offering Class A, Class B and Class C Shares on December 31, 2003. (b) Annualized. (c) Amount represents less than $0.005 per share. (d) For the period ending March 31, 2005, unaudited. (e) Per share amounts have been calculated using the average shares outstanding method. See accompanying notes to financial statements. 20 THE GABELLI SMALL CAP GROWTH FUND BOARD CONSIDERATION AND RE-APPROVAL OF ADVISORY AGREEMENT (UNAUDITED) During the six months ended March 31, 2005, the Board of Directors of the Corporation approved the continuation of the investment advisory agreement with the Adviser for the Fund on the basis of the recommendation by the directors (the "independent directors") who are not "interested persons" of the Fund. The following paragraphs summarize the material information and factors considered by the independent directors as well as their conclusions relative to such factors. NATURE, EXTENT AND QUALITY OF SERVICES. The independent directors considered information regarding the portfolio manager, the depth of the analyst pool available to the Adviser and the portfolio manager, the scope of administrative, shareholder and other services supervised or provided by the Adviser and the absence of significant service problems reported to the Board. The independent directors noted the experience, length of service and reputation of the portfolio manager. INVESTMENT PERFORMANCE. The independent directors reviewed the short, medium and long-term performance of the Fund against a peer group of small cap value and small cap core funds. The directors noted that the Fund's performance was in or near the top 33% of the funds in its category for all relevant periods. PROFITABILITY. The independent directors reviewed summary data regarding the profitability of the Fund to the Adviser both with an administrative overhead charge and without such a charge. The directors also noted that a substantial portion of the Fund's portfolio transactions were executed by an affiliated broker, that the affiliated broker received distribution fees and minor amounts of sales commissions and that the Adviser received a moderate level of soft dollar research benefits through the Fund's portfolio brokerage. ECONOMIES OF SCALE. The independent directors discussed the major elements of the Adviser's cost structure and the relationship of those elements to potential economies of scale. The independent directors agreed that the Adviser should gather and provide them with information regarding possible ways of measuring potential economies of scale so that they would be in a position to review this potential issue in greater detail if the Fund continued to grow rapidly on an inflation-adjusted basis. SHARING OF ECONOMIES OF SCALE. The independent directors noted that the investment management fee schedule for the Fund does not take into account any potential economies of scale that may develop. SERVICE AND COST COMPARISONS. The independent directors compared the expense ratios of the investment management fee, other expenses and total expenses of the Fund to similar expense ratios of the peer group of small cap value and small cap core funds and noted that the Adviser's management fee includes substantially all administrative services of the Fund as well as investment advisory services. The directors noted that the Fund's expense ratios were at and the Fund's size was above average within this group. The directors also noted that the management fee structure was the same as that in effect for most of the Gabelli funds. The directors did not compare the management fee to the fee for other types of accounts managed by the Adviser. CONCLUSIONS. The independent directors concluded that the Fund enjoyed highly experienced portfolio management services, good ancillary services and an excellent performance record. The independent directors also concluded that the Fund's expense ratios and the profitability to the Adviser of managing the Fund were reasonable, particularly in light of the Fund's performance, and that economies of scale were not a significant factor in their thinking at this time. The directors did not view the potential profitability of ancillary services as material to their decision. On the basis of the foregoing and without assigning particular weight to any single conclusion, the independent directors determined to recommend continuation of the investment management agreement to the full Board of Directors. 21 - -------------------------------------------------------------------------------- GABELLI FUNDS AND YOUR PERSONAL PRIVACY - -------------------------------------------------------------------------------- WHO ARE WE? The Gabelli Funds are investment companies registered with the Securities and Exchange Commission under the Investment Company Act of 1940. We are managed by Gabelli Funds, LLC, Gabelli Advisers, Inc. and Gabelli Fixed Income, LLC, which are affiliated with Gabelli Asset Management Inc. Gabelli Asset Management is a publicly-held company that has subsidiaries that provide investment advisory or brokerage services for a variety of clients. WHAT KIND OF NON-PUBLIC INFORMATION DO WE COLLECT ABOUT YOU IF YOU BECOME A GABELLI CUSTOMER? If you apply to open an account directly with us, you will be giving us some non-public information about yourself. The non-public information we collect about you is: o INFORMATION YOU GIVE US ON YOUR APPLICATION FORM. This could include your name, address, telephone number, social security number, bank account number, and other information. o INFORMATION ABOUT YOUR TRANSACTIONS WITH US, ANY TRANSACTIONS WITH OUR AFFILIATES AND TRANSACTIONS WITH THE ENTITIES WE HIRE TO PROVIDE SERVICES TO YOU. This would include information about the shares that you buy or redeem, and the deposits and withdrawals that you make. If we hire someone else to provide services--like a transfer agent--we will also have information about the transactions that you conduct through them. WHAT INFORMATION DO WE DISCLOSE AND TO WHOM DO WE DISCLOSE IT? We do not disclose any non-public personal information about our customers or former customers to anyone, other than our affiliates, our service providers who need to know such information and as otherwise permitted by law. If you want to find out what the law permits, you can read the privacy rules adopted by the Securities and Exchange Commission. They are in volume 17 of the Code of Federal Regulations, Part 248. The Commission often posts information about its regulations on its web site, www.sec.gov. WHAT DO WE DO TO PROTECT YOUR PERSONAL INFORMATION? We restrict access to non-public personal information about you to the people who need to know that information in order to provide services to you or the Fund and to ensure that we are complying with the laws governing the securities business. We maintain physical, electronic, and procedural safeguards to keep your personal information confidential. - -------------------------------------------------------------------------------- GABELLI FAMILY OF FUNDS VALUE ________________________________________ GABELLI ASSET FUND Seeks to invest primarily in a diversified portfolio of common stocks selling at significant discounts to their private market value. The Fund's primary objective is growth of capital. (MULTICLASS) PORTFOLIO MANAGER: MARIO J. GABELLI, CFA GABELLI BLUE CHIP VALUE FUND Seeks long term growth of capital through investment primarily in the common stocks of established companies which are temporarily out of favor. The fund's objective is to identify a catalyst or sequence of events that will return the company to a higher value. (MULTICLASS) PORTFOLIO MANAGER: BARBARA MARCIN, CFA WESTWOOD EQUITY FUND Seeks to invest primarily in the common stock of well-seasoned companies that have recently reported positive earnings surprises and are trading below Westwood's proprietary growth rate estimates. The Fund's primary objective is capital appreciation. (MULTICLASS) PORTFOLIO MANAGER: SUSAN M. BYRNE FOCUSED VALUE ______________________________ GABELLI VALUE FUND Seeks to invest in securities of companies believed to be undervalued. The Fund's primary objective is long-term capital appreciation. (MULTICLASS) PORTFOLIO MANAGER: MARIO J. GABELLI, CFA SMALL CAP VALUE ____________________________ GABELLI SMALL CAP FUND Seeks to invest primarily in common stock of smaller companies (market capitalizations less than $1 billion) believed to have rapid revenue and earnings growth potential. The Fund's primary objective is capital appreciation. (MULTICLASS) PORTFOLIO MANAGER: MARIO J. GABELLI, CFA WESTWOOD SMALLCAP EQUITY FUND Seeks to invest primarily in smaller capitalization equity securities - market caps of $2.5 billion or less. The Fund's primary objective is long-term capital appreciation. (MULTICLASS) TEAM MANAGED GABELLI WOODLAND SMALL CAP VALUE FUND Seeks to invest primarily in the common stocks of smaller companies (market capitalizations less than $1.5 billion) believed to be undervalued with shareholder oriented management teams that are employing strategies to grow the company's value. The Fund's primary objective is capital appreciation. (MULTICLASS) PORTFOLIO MANAGER: ELIZABETH M. LILLY, CFA GROWTH ______________________________________ GABELLI GROWTH FUND Seeks to invest primarily in large cap stocks believed to have favorable, yet undervalued, prospects for earnings growth. The Fund's primary objective is capital appreciation. (MULTICLASS) PORTFOLIO MANAGER: HOWARD F. WARD, CFA GABELLI INTERNATIONAL GROWTH FUND Seeks to invest in the equity securities of foreign issuers with long-term capital appreciation potential. The Fund offers investors global diversification. (MULTICLASS) PORTFOLIO MANAGER: CAESAR BRYAN AGGRESSIVE GROWTH _________________________ GABELLI GLOBAL GROWTH FUND Seeks capital appreciation through a disciplined investment program focusing on the globalization and interactivity of the world's marketplace. The Fund invests in companies at the forefront of accelerated growth. The Fund's primary objective is capital appreciation. (MULTICLASS) TEAM MANAGED MICRO-CAP ___________________________________ WESTWOOD MIGHTY MITES(SM) FUND Seeks to invest in micro-cap companies that have market capitalizations of $300 million or less. The Fund's primary objective is long-term capital appreciation. (MULTICLASS) TEAM MANAGED EQUITY INCOME _______________________________ GABELLI EQUITY INCOME FUND Seeks to invest primarily in equity securities with above market average yields. The Fund pays monthly dividends and seeks a high level of total return with an emphasis on income. (MULTICLASS) PORTFOLIO MANAGER: MARIO J. GABELLI, CFA WESTWOOD BALANCED FUND Seeks to invest in a balanced and diversified portfolio of stocks and bonds. The Fund's primary objective is both capital appreciation and current income. (MULTICLASS) CO-PORTFOLIO MANAGERS: SUSAN M. BYRNE MARK FREEMAN, CFA WESTWOOD REALTY FUND Seeks to invest in securities that are primarily engaged in or related to the real estate industry. The Fund's primary objective is long-term capital appreciation. (MULTICLASS) PORTFOLIO MANAGER: SUSAN M. BYRNE SPECIALTY EQUITY ____________________________ GABELLI GLOBAL CONVERTIBLE SECURITIES FUND Seeks to invest principally in bonds and preferred stocks which are convertible into common stock of foreign and domestic companies. The Fund's primary objective is total return through a combination of current income and capital appreciation. (MULTICLASS) TEAM MANAGED GABELLI GLOBAL OPPORTUNITY FUND Seeks to invest in common stock of companies which have rapid growth in revenues and earnings and potential for above average capital appreciation or are undervalued. The Fund's primary objective is capital appreciation. (MULTICLASS) TEAM MANAGED SECTOR ______________________________________ GABELLI GLOBAL TELECOMMUNICATIONS FUND Seeks to invest in telecommunications companies throughout the world - targeting undervalued companies with strong earnings and cash flow dynamics. The Fund's primary objective is capital appreciation. (MULTICLASS) TEAM MANAGED GABELLI GOLD FUND Seeks to invest in a global portfolio of equity securities of gold mining and related companies. The Fund's objective is long-term capital appreciation. Investment in gold stocks is considered speculative and is affected by a variety of world-wide economic, financial and political factors. (MULTICLASS) PORTFOLIO MANAGER: CAESAR BRYAN GABELLI UTILITIES FUND Seeks to provide a high level of total return through a combination of capital appreciation and current income. (MULTICLASS) TEAM MANAGED MERGER AND ARBITRAGE _____________________ GABELLI ABC FUND Seeks to invest in securities with attractive opportunities for appreciation or investment income. The Fund's primary objective is total return in various market conditions without excessive risk of capital loss. (NO-LOAD) PORTFOLIO MANAGER: MARIO J. GABELLI, CFA CONTRARIAN_________________________________ Gabelli Mathers Fund Seeks long-term capital appreciation in various market conditions without excessive risk of capital loss. (CLASS AAA-NO-LOAD) PORTFOLIO MANAGER: HENRY VAN DER EB, CFA COMSTOCK CAPITAL VALUE FUND Seeks capital appreciation and current income. The Fund may use either long or short positions to achieve its objective. (MULTICLASS) PORTFOLIO MANAGER: MARTIN WEINER, CFA COMSTOCK STRATEGY FUND The Fund emphasizes investments in debt securities, which maximize total return in light of credit risk, interest rate risk, and the risk associated with the length of maturity of the debt instrument. (MULTICLASS) PORTFOLIO MANAGER: MARTIN WEINER, CFA QUANTITATIVE_________________________________ NED DAVIS RESEARCH ASSET ALLOCATION FUND Seeks to achieve returns greater then the weighted composite benchmark consisting of 60% in the S&P 500 Index and 40% in the Lehman Long Term U.S. Government Bond Index through a flexible asset allocation strategy. The Fund's primary objective is capital appreciation. (MULTICLASS) TEAM MANAGED FIXED INCOME ________________________________ WESTWOOD INTERMEDIATE BOND FUND Seeks to invest in a diversified portfolio of bonds with various maturities. The Fund's primary objective is total return. (MULTICLASS) PORTFOLIO MANAGER: MARK FREEMAN, CFA CASH MANAGEMENT-MONEY MARKET __________ GABELLI U.S. TREASURY MONEY MARKET FUND Seeks to invest exclusively in short-term U.S. Treasury securities. The Fund's primary objective is to provide high current income consistent with the preservation of principal and liquidity. (NO-LOAD) PORTFOLIO MANAGER: JUDITH A. RANERI THE TREASURER'S FUND Three money market portfolios designed to generate superior returns without compromising portfolio safety. U.S. Treasury Money Market seeks to invest in U.S. Treasury securities and repurchase agreements. Tax Exempt Money Market seeks to invest in municipal securities. Domestic Prime Money Market seeks to invest in prime quality, domestic money market instruments. (NO-LOAD) PORTFOLIO MANAGER: JUDITH A. RANERI THE GLOBAL FUNDS INVEST IN FOREIGN SECURITIES WHICH INVOLVE RISKS NOT ORDINARILY ASSOCIATED WITH INVESTMENTS IN DOMESTIC ISSUES, INCLUDING CURRENCY FLUCTUATION, ECONOMIC AND POLITICAL RISKS. AN INVESTMENT IN THE ABOVE MONEY MARKET FUNDS IS NEITHER INSURED NOR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY GOVERNMENT AGENCY. ALTHOUGH THE FUNDS SEEK TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUNDS. TO RECEIVE A PROSPECTUS, CALL 800-GABELLI (422-3554). INVESTORS SHOULD CONSIDER THE INVESTMENT OBJECTIVES, RISKS AND CHARGES AND EXPENSES OF THE FUND CAREFULLY BEFORE INVESTING. THE PROSPECTUS CONTAINS MORE COMPLETE INFORMATION ABOUT THIS AND OTHER MATTERS AND SHOULD BE READ CAREFULLY BEFORE INVESTING. Gabelli Equity Series Funds, Inc. THE GABELLI SMALL CAP GROWTH FUND One Corporate Center Rye, New York 10580-1422 800-GABELLI 800-422-3554 FAX: 914-921-5118 WEBSITE: WWW.GABELLI.COM E-MAIL: INFO@GABELLI.COM Net Asset Value available daily by calling 800-GABELLI after 6:00 P.M. BOARD OF DIRECTORS Mario J. Gabelli, CFA Karl Otto Pohl CHAIRMAN AND CHIEF FORMER PRESIDENT EXECUTIVE OFFICER DEUTSCHE BUNDESBANK GABELLI ASSET MANAGEMENT INC. Anthony J. Colavita Anthony R. Pustorino ATTORNEY-AT-LAW CERTIFIED PUBLIC ACCOUNTANT ANTHONY J. COLAVITA, P.C. PROFESSOR EMERITUS PACE UNIVERSITY Vincent D. Enright Anthonie C. van Ekris FORMER SENIOR VICE PRESIDENT MANAGING DIRECTOR AND CHIEF FINANCIAL OFFICER BALMAC INTERNATIONAL, INC. KEYSPAN ENERGY CORP. John D. Gabelli Salvatore J. Zizza SENIOR VICE PRESIDENT CHAIRMAN GABELLI & COMPANY, INC. HALLMARK ELECTRICAL SUPPLIES CORP. Robert J. Morrissey ATTORNEY-AT-LAW MORRISSEY, HAWKINS & LYNCH OFFICERS Bruce N. Alpert James E. McKee PRESIDENT AND TREASURER SECRETARY Peter D. Goldstein 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 Small Cap Growth Fund. It is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. - -------------------------------------------------------------------------------- GAB443Q105SR [GRAPHIC OMITTED] PICTURE OF MARIO GABELLI THE GABELLI SMALL CAP GROWTH FUND SEMI-ANNUAL REPORT MARCH 31, 2005 THE GABELLI EQUITY INCOME FUND SEMI-ANNUAL REPORT (A) MARCH 31, 2005 TO OUR SHAREHOLDERS, Higher yielding equities outperformed the broad based market indices for the six month period ending March 31, 2005. During the same six month period, the Gabelli Equity Income Fund returned 9.24% while the Standard & Poor's 500 Index, the Nasdaq Composite Index and the Lipper Equity Income Fund Average rose 6.88%, 5.40% and 8.34%, respectively. COMPARATIVE RESULTS - ------------------------------------------------------------------------------------------------------------------ AVERAGE ANNUAL RETURNS THROUGH MARCH 31, 2005 (UNAUDITED) (A)(B) Since Inception Quarter 1 Year 3 Year 5 Year 10 Year (1/2/92) -------------------------------------------------------------------- GABELLI EQUITY INCOME FUND CLASS AAA ...... 0.23% 10.17% 8.77% 7.98% 12.50% 12.22% S&P 500 Index ............................. (2.15) 6.69 2.74 (3.16) 10.79 10.31 Nasdaq Composite Index .................... (8.10) 0.25 2.71 (15.25) 9.36 9.70 Lipper Equity Income Fund Avg. ............ (0.42) 9.89 4.93 4.36 10.14 10.41 Class A ................................... 0.17 10.17 8.75 7.97 12.49 12.21 (5.60)(c) 3.85(c) 6.63(c) 6.69(c) 11.82(c) 11.71(c) Class B ................................... 0.00 9.35 8.42 7.77 12.39 12.14 (5.00)(d) 4.35(d) 7.56(d) 7.47(d) 12.39(d) 12.14(d) Class C ................................... 0.01 9.38 8.45 7.79 12.40 12.14 (0.99)(d) 8.38(d) 8.45(d) 7.79(d) 12.40(d) 12.14(d) (a) THE FUND'S FISCAL YEAR ENDS SEPTEMBER 30. (b) 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. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA PRESENTED. VISIT WWW.GABELLI.COM FOR PERFORMANCE INFORMATION AS OF THE MOST RECENT MONTH END. INVESTORS SHOULD CONSIDER THE INVESTMENT OBJECTIVES, RISKS AND CHARGES AND EXPENSES OF THE FUND BEFORE INVESTING. THE PROSPECTUS CONTAINS MORE COMPLETE INFORMATION ABOUT THIS AND OTHER MATTERS AND SHOULD BE READ CAREFULLY BEFORE INVESTING. PERFORMANCE 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. THE ACTUAL PERFORMANCE FOR THE CLASS A SHARES, CLASS B SHARES AND CLASS C SHARES WOULD HAVE BEEN LOWER DUE TO THE ADDITIONAL EXPENSES ASSOCIATED WITH THESE CLASSES OF SHARES. THE S&P 500 INDEX AND THE NASDAQ COMPOSITE INDEX ARE UNMANAGED INDICATORS OF STOCK MARKET PERFORMANCE, WHILE THE LIPPER AVERAGE REFLECTS THE AVERAGE PERFORMANCE OF MUTUAL FUNDS CLASSIFIED IN THIS PARTICULAR CATEGORY. DIVIDENDS ARE CONSIDERED REINVESTED EXCEPT FOR THE NASDAQ COMPOSITE INDEX. (c) INCLUDES THE EFFECT OF THE MAXIMUM 5.75% SALES CHARGE AT THE BEGINNING OF THE PERIOD. (d) INCLUDES THE EFFECT OF THE APPLICABLE CONTINGENT DEFERRED SALES CHARGE AT THE END OF THE PERIOD SHOWN FOR CLASS B AND CLASS C SHARES, RESPECTIVELY. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- We have separated the portfolio manager's commentary from the financial statements and investment portfolio due to new corporate governance regulations stipulated by the Sarbanes-Oxley Act of 2002. We have done this to ensure that the content of the portfolio manager's commentary is unrestricted. The financial statements and investment portfolio are mailed separately from the commentary. Both the commentary and the financial statements, including the portfolio of investments, will be available on our website at www.gabelli.com/funds. - -------------------------------------------------------------------------------- THE GABELLI EQUITY INCOME FUND DISCLOSURE OF FUND EXPENSES (UNAUDITED) For the Six Month Period from October 1, 2004 through March 31, 2005 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 six months ended March 31, 2005. Beginning Ending Annualized Expenses Account Value Account Value Expense Paid During 10/01/04 03/31/05 Ratio Period* - -------------------------------------------------------------------------------- GABELLI EQUITY INCOME FUND - -------------------------------------------------------------------------------- ACTUAL FUND RETURN Class AAA $1,000.00 $1,092.40 1.44% $ 7.51 Class A $1,000.00 $1,092.50 1.45% $ 7.56 Class B $1,000.00 $1,088.80 2.06% $10.73 Class C $1,000.00 $1,088.50 2.21% $11.51 HYPOTHETICAL 5% RETURN Class AAA $1,000.00 $1,017.75 1.44% $ 7.24 Class A $1,000.00 $1,017.70 1.45% $ 7.29 Class B $1,000.00 $1,014.66 2.06% $10.35 Class C $1,000.00 $1,013.91 2.21% $11.10 * 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 365. 2 SUMMARY OF PORTFOLIO HOLDINGS (UNAUDITED) The following table presents portfolio holdings as a percent of total net assets. THE GABELLI EQUITY INCOME FUND Financial Services ................................ 12.2% Energy and Utilities: Integrated .................. 8.5% Energy and Utilities: Oil ......................... 7.9% Consumer Products ................................. 7.4% Health Care ....................................... 7.1% Food and Beverage ................................. 7.1% Telecommunications ................................ 5.2% U.S. Treasury Bills ............................... 4.9% Hotels and Gaming ................................. 3.7% Specialty Chemicals ............................... 3.5% Diversified Industrial ............................ 3.3% Energy and Utilities: Electric .................... 2.9% Automotive: Parts and Accessories ................. 2.9% Publishing ........................................ 2.8% Communications Equipment .......................... 2.3% Equipment and Supplies ............................ 2.1% Energy and Utilities: Natural Gas ................. 1.9% Entertainment ..................................... 1.6% Retail ............................................ 1.6% Aviation: Parts and Services ...................... 1.5% Aerospace ......................................... 1.5% Electronics ....................................... 1.3% Metals and Mining ................................. 1.3% Cable and Satellite ............................... 1.1% Broadcasting ...................................... 0.9% Business Services ................................. 0.7% Machinery ......................................... 0.5% Environmental Services ............................ 0.4% Energy and Utilities: Services .................... 0.3% Manufactured Housing .............................. 0.3% Transportation .................................... 0.3% Computer Software and Services .................... 0.2% Consumer Services ................................. 0.2% Computer Hardware ................................. 0.1% Energy and Utilities: Water ....................... 0.1% Other Assets and Liabilities -- Net ............... 0.4% ------ 100.0% ====== 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 ENDING DECEMBER 31, 2004. SHAREHOLDERS MAY OBTAIN THIS INFORMATION AT WWW.GABELLI.COM OR BY CALLING THE FUND AT 800-GABELLI (800-422-3554). THE 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. 3 THE GABELLI EQUITY INCOME FUND SCHEDULE OF INVESTMENTS -- MARCH 31, 2005 (UNAUDITED) - -------------------------------------------------------------------------------- MARKET SHARES COST VALUE ------ ---- ------ COMMON STOCKS -- 89.7% AEROSPACE -- 1.5% 32,000 Boeing Co. ...........$ 1,082,148 $ 1,870,720 3,000 Lockheed Martin Corp. 71,025 183,180 12,000 Northrop Grumman Corp. 367,550 647,760 10,000 Raytheon Co. ......... 279,250 387,000 2,000 Rockwell Automation Inc. ............... 25,686 113,280 2,000 Rockwell Collins Inc. 15,843 95,180 95,000 Titan Corp.+ ......... 1,731,710 1,725,200 25,000 United Defense Industries Inc. .... 1,833,365 1,835,500 ------------ ------------ 5,406,577 6,857,820 ------------ ------------ AUTOMOTIVE: PARTS AND ACCESSORIES -- 2.2% 1,000 ArvinMeritor Inc. .... 10,488 15,470 100,000 Dana Corp. ........... 1,459,536 1,279,000 150,000 Genuine Parts Co. .... 4,633,678 6,523,500 4,000 Johnson Controls Inc. 101,475 223,040 60,000 Modine Manufacturing Co. ................ 1,160,998 1,759,800 3,000 Pep Boys - Manny, Moe & Jack .. 27,885 52,740 ------------ ------------ 7,394,060 9,853,550 ------------ ------------ AVIATION: PARTS AND SERVICES -- 0.7% 13,000 Barnes Group Inc. .... 245,002 353,210 11,000 Curtiss-Wright Corp. . 77,638 627,000 12,096 Curtiss-Wright Corp., Cl. B .............. 272,014 682,214 40,000 GenCorp Inc. ......... 342,710 800,000 8,000 United Technologies Corp. .............. 281,946 813,280 ------------ ------------ 1,219,310 3,275,704 ------------ ------------ BROADCASTING -- 0.0% 33,000 Granite Broadcasting Corp.+ ............. 13,715 9,900 ------------ ------------ BUSINESS SERVICES -- 0.2% 4,000 Automatic Data Processing Inc. .... 126,808 179,800 6,000 Donnelley (R.H.) Corp.+ ............. 68,850 348,540 500 Imation Corp. ........ 7,150 17,375 2,500 Landauer Inc. ........ 60,337 118,850 ------------ ------------ 263,145 664,565 ------------ ------------ CABLE AND SATELLITE -- 1.1% 89,002 Cablevision Systems Corp., Cl. A+ ............. 1,636,955 2,496,506 9,000 Comcast Corp., Cl. A+ ............. 275,105 304,020 36,000 DIRECTV Group Inc.+ .. 429,789 519,120 60,000 EchoStar Communications Corp., Cl. A ....... 1,837,193 1,755,000 ------------ ------------ 4,179,042 5,074,646 ------------ ------------ COMMUNICATIONS EQUIPMENT -- 1.0% 120,000 Corning Inc.+ ........ 1,285,395 1,335,600 115,000 Motorola Inc. ........ 1,077,984 1,721,550 50,000 Thomas & Betts Corp.+ 881,146 1,615,000 ------------ ------------ 3,244,525 4,672,150 ------------ ------------ MARKET SHARES COST VALUE ------ ---- ------ COMPUTER HARDWARE -- 0.1% 300 International Business Machines Corp. .....$ 3,810 $ 27,414 13,000 Xerox Corp.+ ......... 126,343 196,950 ------------ ------------ 130,153 224,364 ------------ ------------ COMPUTER SOFTWARE AND SERVICES -- 0.2% 2,000 EMC Corp.+ ........... 19,360 24,640 30,000 Microsoft Corp. ...... 782,100 725,100 10,000 SunGard Data Systems Inc.+ ...... 343,971 345,000 154 Telecom Italia Media SpA+ ......... 205 86 ------------ ------------ 1,145,636 1,094,826 ------------ ------------ CONSUMER PRODUCTS -- 7.4% 33,000 Altria Group Inc. .... 991,749 2,157,870 5,000 Clorox Co. ........... 262,246 314,950 38,000 Eastman Kodak Co. .... 890,357 1,236,900 40,000 Energizer Holdings Inc.+ ..... 997,527 2,392,000 94,700 Gallaher Group plc, ADR ........... 2,711,252 5,396,953 70,000 Gillette Co. ......... 2,704,031 3,533,600 31,100 National Presto Industries Inc. .... 1,036,492 1,253,330 10,000 Pactiv Corp.+ ........ 161,895 233,500 38,000 Procter & Gamble Co. . 1,393,252 2,014,000 10,000 Reckitt Benckiser plc ................ 313,364 317,856 26,000 Rothmans Inc. ........ 237,941 515,616 940,500 Swedish Match AB ..... 9,972,140 11,505,360 26,000 Unilever NV, ADR ..... 1,542,066 1,778,920 10,000 UST Inc. ............. 364,903 517,000 ------------ ------------ 23,579,215 33,167,855 ------------ ------------ CONSUMER SERVICES -- 0.2% 52,500 Rollins Inc. ......... 454,969 976,500 ------------ ------------ DIVERSIFIED INDUSTRIAL -- 3.3% 5,000 3M Co. ............... 213,645 428,450 22,000 Acuity Brands Inc. ... 342,225 594,000 35,000 Cooper Industries Ltd., Cl. A .............. 1,532,038 2,503,200 152,000 General Electric Co. . 4,229,926 5,481,120 5,000 Harbor Global Co. Ltd.+ .......... 24,172 44,625 120,000 Honeywell International Inc. . 3,109,683 4,465,200 22,000 Thomas Industries Inc. 250,524 872,080 4,000 Trinity Industries Inc. ............... 82,100 112,680 10,000 Tyco International Ltd. ............... 128,601 338,000 ------------ ------------ 9,912,914 14,839,355 ------------ ------------ ELECTRONICS -- 1.0% 10,000 Freescale Semiconductor Inc., Cl. B+ ............. 81,750 172,500 20,000 Intel Corp. .......... 370,400 464,600 140,000 Texas Instruments Inc. ............... 2,856,614 3,568,600 11,000 Thermo Electron Corp.+ ............. 217,973 278,190 ------------ ------------ 3,526,737 4,483,890 ------------ ------------ See accompanying notes to financial statements. 4 THE GABELLI EQUITY INCOME FUND SCHEDULE OF INVESTMENTS (CONTINUED) -- MARCH 31, 2005 (UNAUDITED) - -------------------------------------------------------------------------------- MARKET SHARES COST VALUE ------ ---- ------ COMMON STOCKS (CONTINUED) ENERGY AND UTILITIES: ELECTRIC -- 2.9% 80,000 AES Corp.+ ...........$ 268,400 $ 1,310,400 18,000 American Electric Power Co. Inc. ..... 515,300 613,080 81,000 Cinergy Corp. ........ 2,478,068 3,282,120 16,000 DTE Energy Co. ....... 695,800 727,680 95,000 El Paso Electric Co.+ ...... 746,352 1,805,000 56,000 FPL Group Inc. ....... 1,818,648 2,248,400 35,000 Great Plains Energy Inc. ........ 748,610 1,070,300 90,000 Northeast Utilities .. 1,660,471 1,734,300 7,000 UIL Holdings Corp. ... 245,744 354,550 ------------ ------------ 9,177,393 13,145,830 ------------ ------------ ENERGY AND UTILITIES: INTEGRATED -- 8.3% 42,000 Allegheny Energy Inc.+ ....... 395,405 867,720 180,000 Aquila Inc.+ ......... 483,805 689,400 44,000 BP plc, ADR .......... 1,030,211 2,745,600 84,000 Burlington Resources Inc. ..... 1,618,222 4,205,880 44,000 CH Energy Group Inc. . 1,809,289 2,010,800 70,000 Constellation Energy Group ....... 1,664,815 3,619,000 1,000 Dominion Resources Inc. ..... 48,852 74,430 100,000 Duke Energy Corp. .... 1,795,444 2,801,000 150,000 Duquesne Light Holdings Inc. ...... 2,318,392 2,688,000 150,000 El Paso Corp. ........ 1,419,618 1,587,000 150,000 Energy East Corp. .... 3,071,332 3,933,000 29,000 Eni SpA .............. 304,221 752,978 40,000 NSTAR ................ 1,282,183 2,172,000 10,000 OGE Energy Corp. ..... 249,538 269,500 80,000 Progress Energy Inc. . 3,424,284 3,356,000 15,000 Progress Energy Inc., CVO+ ......... 7,800 1,950 6,000 Public Service Enterprise Group Inc. ......... 235,600 326,340 12,000 Scottish Power plc, ADR ........... 314,381 374,400 50,000 TECO Energy Inc. ..... 645,886 784,000 26,500 TXU Corp. ............ 537,364 2,110,195 95,000 Westar Energy Inc. ... 1,388,045 2,055,800 ------------ ------------ 24,044,687 37,424,993 ------------ ------------ ENERGY AND UTILITIES: NATURAL GAS -- 1.9% 25,000 AGL Resources Inc. ... 488,941 873,250 26,000 Atmos Energy Corp. ... 599,725 702,000 25,000 National Fuel Gas Co. ............ 519,678 714,750 45,000 ONEOK Inc. ........... 796,167 1,386,900 5,000 Peoples Energy Corp. . 185,826 209,600 24,000 Piedmont Natural Gas Co. Inc. ....... 394,017 552,960 40,000 SEMCO Energy Inc. .... 282,604 230,000 63,000 Southern Union Co.+ .. 845,950 1,581,930 100,000 Southwest Gas Corp. .. 1,777,547 2,416,000 ------------ ------------ 5,890,455 8,667,390 ------------ ------------ MARKET SHARES COST VALUE ------ ---- ------ ENERGY AND UTILITIES: OIL -- 7.9% 5,000 Anadarko Petroleum Corp. ..............$ 340,506 $ 380,500 82,000 ChevronTexaco Corp. .. 1,927,546 4,781,420 58,000 ConocoPhillips ....... 3,187,718 6,254,720 11,000 Cooper Cameron Corp.+ ............. 630,760 629,310 30,000 Devon Energy Corp. ... 692,247 1,432,500 141,000 Exxon Mobil Corp. .... 4,214,795 8,403,600 19,000 Kerr-McGee Corp. ..... 839,167 1,488,270 4,000 Murphy Oil Corp. ..... 363,913 394,920 4,000 Occidental Petroleum Corp. .............. 286,930 284,680 6,000 PetroChina Co. Ltd., ADR .......... 378,267 379,320 30,000 Repsol YPF SA, ADR ... 631,290 796,500 114,000 Royal Dutch Petroleum Co. ...... 5,156,828 6,844,560 25,000 Statoil ASA, ADR ..... 327,939 428,500 8,759 Total SA, ADR ........ 299,550 1,026,818 32,500 Unocal Corp. ......... 1,853,776 2,004,925 ------------ ------------ 21,131,232 35,530,543 ------------ ------------ ENERGY AND UTILITIES: SERVICES -- 0.3% 14,000 Halliburton Co. ...... 158,327 605,500 12,000 Schlumberger Ltd. .... 547,706 845,760 ------------ ------------ 706,033 1,451,260 ------------ ------------ ENERGY AND UTILITIES: WATER -- 0.1% 18,750 Aqua America Inc. .... 230,874 456,750 ------------ ------------ ENTERTAINMENT -- 1.6% 140,000 The Walt Disney Co. .. 2,635,231 4,022,200 120,000 Time Warner Inc.+ .... 1,822,600 2,106,000 25,000 Viacom Inc., Cl. A ... 836,760 876,000 12,500 Vivendi Universal SA, ADR+ ........... 397,443 382,500 ------------ ------------ 5,692,034 7,386,700 ------------ ------------ ENVIRONMENTAL SERVICES -- 0.4% 60,000 Waste Management Inc. 1,436,232 1,731,000 ------------ ------------ EQUIPMENT AND SUPPLIES -- 2.1% 68,800 Flowserve Corp.+ ..... 1,734,142 1,779,856 11,000 Imagistics International Inc.+ .............. 212,935 384,230 3,000 Ingersoll-Rand Co. Ltd., Cl. A .............. 125,173 238,950 10,000 Masonite International Corp.+ ............. 329,973 348,000 1,500 Minerals Technologies Inc. ............... 37,938 98,670 30,000 Mueller Industries Inc. ............... 1,320,222 844,500 2,000 Parker Hannifin Corp. 77,350 121,840 14,000 Smith (A.O.) Corp. ... 298,250 404,180 1,000,000 Tomkins plc .......... 4,854,126 4,993,667 ------------ ------------ 8,990,109 9,213,893 ------------ ------------ FINANCIAL SERVICES -- 12.2% 7,140 Alleghany Corp.+ ..... 1,260,332 1,977,780 2,000 Allstate Corp. ....... 66,600 108,120 137,000 American Express Co. . 6,003,071 7,037,690 42,000 American International Group Inc. ......... 2,692,824 2,327,220 See accompanying notes to financial statements. 5 THE GABELLI EQUITY INCOME FUND SCHEDULE OF INVESTMENTS (CONTINUED) -- MARCH 31, 2005 (UNAUDITED) - -------------------------------------------------------------------------------- MARKET SHARES COST VALUE ------ ---- ------ COMMON STOCKS (CONTINUED) FINANCIAL SERVICES (CONTINUED) 39,000 Argonaut Group Inc.+ .$ 789,154 $ 827,580 5,000 Banco Popular Espanol SA ......... 185,939 323,425 18,000 Banco Santander Central Hispano SA, ADR .... 64,963 218,880 2,000 Banco Santander Chile SA, ADR ...... 29,250 66,260 100,000 Bank of America Corp. .............. 1,890,574 4,410,000 44,000 Bank of New York Co. Inc. ........... 1,423,658 1,278,200 30,000 Bankgesellschaft Berlin AG+ ......... 201,349 103,833 8,000 Banque Nationale de Paris SA ........ 296,835 566,740 2,000 Bear Stearns Companies Inc. ..... 129,100 199,800 114,000 Citigroup Inc. ....... 5,104,081 5,123,160 40,000 Commerzbank AG, ADR+ . 855,073 869,724 35,000 Deutsche Bank AG, ADR ............ 1,966,016 3,017,000 2,000 Dun and Bradstreet Corp.+ ............. 20,476 122,900 3,000 Fannie Mae ........... 173,213 163,350 16,000 Fidelity Southern Corp. ..... 153,870 268,800 1,000 Goldman Sachs Group Inc. ......... 111,410 109,990 25,000 H&R Block Inc. ....... 1,168,929 1,264,500 25,000 Huntington Bancshares Inc. .... 407,250 597,500 77,080 JPMorgan Chase & Co. . 2,311,310 2,666,968 20,000 KeyCorp .............. 599,947 649,000 16,500 Leucadia National Corp. .............. 361,227 566,775 2,000 Manulife Financial Corp. .............. 49,388 95,840 55,000 Mellon Financial Corp. .............. 1,528,208 1,569,700 10,000 Merrill Lynch & Co. Inc. ........... 362,400 566,000 4,000 Moody's Corp. ........ 64,841 323,440 3,000 Municipal Mortgage & Equity, LLC ........ 60,488 73,020 6,000 Northern Trust Corp. . 60,300 260,640 50,000 Phoenix Companies Inc. ..... 650,511 639,000 47,000 PNC Financial Services Group Inc. ......... 1,985,813 2,419,560 40,000 Popular Inc. ......... 1,042,464 972,800 6,000 Schwab (Charles) Corp. .............. 93,000 63,060 40,000 St. Paul Travelers Companies Inc. ..... 1,573,259 1,469,200 108,000 Sterling Bancorp ..... 1,456,020 2,621,160 12,000 SunTrust Banks Inc. .. 251,737 864,840 15,000 T. Rowe Price Group Inc. ......... 617,260 890,700 50,000 Unitrin Inc. ......... 1,507,811 2,270,000 15,000 Wachovia Corp. ....... 441,375 763,650 60,000 Waddell & Reed Financial Inc., Cl. A .............. 1,151,502 1,184,400 75,000 Wilmington Trust Corp. .............. 2,342,833 2,632,500 ------------ ------------ 43,505,661 54,544,705 ------------ ------------ MARKET SHARES COST VALUE ------ ---- ------ FOOD AND BEVERAGE -- 7.1% 80,800 Allied Domecq plc, ADR ...........$ 2,305,754 $ 3,286,136 5,800 Brown-Forman Corp., Cl. A .............. 320,925 319,290 44,000 Cadbury Schweppes plc, ADR ........... 1,139,439 1,790,800 35,000 Campbell Soup Co. .... 794,372 1,015,700 40,000 Coca-Cola Amatil Ltd., ADR .......... 246,845 530,964 62,000 Coca-Cola Co. ........ 2,748,595 2,583,540 2,000 Coca-Cola Femsa SA de CV, ADR ......... 52,945 48,340 20,000 Corn Products International Inc. . 260,071 519,800 50,000 Del Monte Foods Co.+ . 439,041 542,500 55,000 Diageo plc, ADR ...... 2,273,096 3,129,500 60,000 Dreyer's Grand Ice Cream Holdings Inc., Cl. A .............. 4,784,499 4,846,200 22,000 Fomento Economico Mexicano SA de CV, ADR ......... 888,268 1,178,100 90,000 General Mills Inc. ... 4,418,321 4,423,500 100,000 Heinz (H.J.) Co. ..... 3,520,318 3,684,000 4,000 Hershey Foods Corp. .. 120,014 241,840 13,000 Kellogg Co. .......... 368,299 562,510 10,000 Nestle SA ............ 2,083,075 2,736,090 12,889 Tootsie Roll Industries Inc. .... 339,630 386,682 ------------ ------------ 27,103,507 31,825,492 ------------ ------------ HEALTH CARE -- 7.1% 8,000 Abbott Laboratories .. 298,164 372,960 14,900 Accredo Health Inc.+ . 645,766 661,709 50,000 Baxter International Inc. . 1,430,911 1,699,000 16,000 Becton, Dickinson & Co. .............. 491,573 934,720 300 Bio-Rad Laboratories Inc., Cl. B+ ............. 11,100 14,737 100,000 Bristol-Myers Squibb Co. ......... 2,590,401 2,546,000 97,000 Eli Lilly & Co. ...... 5,659,927 5,053,700 11,276 GlaxoSmithKline plc, ADR ........... 515,984 517,794 10,000 Guidant Corp. ........ 712,074 739,000 25,000 Henry Schein Inc.+ ... 631,852 896,000 1,000 Hospira Inc.+ ........ 23,468 32,270 20,000 Johnson & Johnson .... 1,034,361 1,343,200 15,030 Medco Health Solutions Inc.+ .... 432,351 745,037 100,000 Merck & Co. Inc. ..... 4,180,182 3,237,000 1,000 Nobel Biocare Holding AG ......... 139,480 210,485 5,000 Orthofix International NV+ .. 162,394 195,750 345,000 Pfizer Inc. .......... 10,536,582 9,063,150 150,000 Schering-Plough Corp. .............. 2,779,186 2,722,500 50,000 Tenet Healthcare Corp.+ ............. 554,153 576,500 3,000 William Demant Holding A/S+ ....... 154,831 149,809 2,000 Zimmer Holdings Inc.+ 103,551 155,620 ------------ ------------ 33,088,291 31,866,941 ------------ ------------ HOTELS AND GAMING -- 3.7% 1,200,000 Hilton Group plc ..... 6,132,338 6,825,781 50,000 Hilton Hotels Corp. .. 867,453 1,117,500 See accompanying notes to financial statements. 6 THE GABELLI EQUITY INCOME FUND SCHEDULE OF INVESTMENTS (CONTINUED) -- MARCH 31, 2005 (UNAUDITED) - -------------------------------------------------------------------------------- MARKET SHARES COST VALUE ------ ---- ------ COMMON STOCKS (CONTINUED) HOTELS AND GAMING (CONTINUED) 100,000 Mandalay Resort Group ..............$ 6,985,454 $ 7,049,000 30,000 Starwood Hotels & Resorts Worldwide Inc. ..... 755,965 1,800,900 ------------ ------------ 14,741,210 16,793,181 ------------ ------------ MACHINERY -- 0.5% 3,000 Caterpillar Inc. ..... 35,181 274,320 28,000 Deere & Co. .......... 567,189 1,879,640 ------------ ------------ 602,370 2,153,960 ------------ ------------ MANUFACTURED HOUSING -- 0.3% 140,000 Champion Enterprises Inc.+ .. 1,413,577 1,316,000 ------------ ------------ METALS AND MINING -- 1.3% 17,500 Fording Canadian Coal Trust (Toronto) .... 349,181 1,603,889 55,875 Freeport-McMoRan Copper & Gold Inc., Cl. B . 1,202,110 2,213,209 42,500 Newmont Mining Corp. . 1,412,938 1,795,625 ------------ ------------ 2,964,229 5,612,723 ------------ ------------ PUBLISHING -- 2.8% 25,000 Dow Jones & Co. Inc. . 1,104,769 934,250 11,000 Knight-Ridder Inc. ... 725,310 739,750 4,000 McClatchy Co., Cl. A . 263,095 296,640 10,000 McGraw-Hill Companies Inc. ..... 502,221 872,500 50,800 News Corp., Cl. A .... 591,896 859,536 6,016 News Corp., Cl. B .... 70,881 105,942 50,000 Pulitzer Inc. ........ 3,189,640 3,186,500 100,000 Reader's Digest Association Inc. ... 1,360,932 1,731,000 3,000 Scripps (E.W.) Co., Cl. A .............. 142,245 146,250 406 Seat Pagine Gialle SpA ................ 1,350 169 60,000 Tribune Co. .......... 2,717,613 2,392,200 1,200 Washington Post Co., Cl. B .............. 700,030 1,072,800 ------------ ------------ 11,369,982 12,337,537 ------------ ------------ REAL ESTATE -- 0.0% 5,000 Griffin Land & Nurseries Inc.+ .... 71,716 130,000 ------------ ------------ RETAIL -- 1.6% 170,000 Albertson's Inc. ..... 3,875,352 3,510,500 2,000 Ingles Markets Inc., Cl. A .............. 25,480 26,640 2,800 Neiman Marcus Group Inc., Cl. B .............. 174,855 252,700 140,000 Safeway Inc.+ ........ 2,907,271 2,594,200 590 Sears Holdings Corp.+ ............. 51,241 78,570 6,000 The Home Depot Inc. .. 127,998 229,440 10,000 Weis Markets Inc. .... 300,480 368,700 ------------ ------------ 7,462,677 7,060,750 ------------ ------------ MARKET SHARES COST VALUE ------ ---- ------ SPECIALTY CHEMICALS -- 3.5% 20,000 Albemarle Corp. ......$ 434,626 $ 727,200 10,000 Dow Chemical Co. ..... 360,656 498,500 138,000 E.I. du Pont de Nemours and Co. ............ 6,614,436 7,071,120 60,100 Ferro Corp. .......... 1,226,288 1,131,082 15,000 Great Lakes Chemical Corp. ..... 351,191 481,800 67,000 Monsanto Co. ......... 1,125,554 4,321,500 6,000 NewMarket Corp.+ ..... 23,156 111,600 22,700 Omnova Solutions Inc.+ .............. 171,320 121,899 4,000 Quaker Chemical Corp. 79,615 82,160 50,000 Sensient Technologies Corp. . 1,039,860 1,078,000 ------------ ------------ 11,426,702 15,624,861 ------------ ------------ TELECOMMUNICATIONS -- 4.9% 8,000 ALLTEL Corp. ......... 414,045 438,800 100,000 AT&T Corp. ........... 2,178,783 1,875,000 63,900 BCE Inc. ............. 1,358,957 1,596,861 35,000 BellSouth Corp. ...... 934,347 920,150 300,000 BT Group plc ......... 1,251,761 1,165,032 30,000 BT Group plc, ADR .... 1,006,938 1,168,200 50,000 Cable & Wireless plc, ADR ........... 292,432 364,000 250,000 Cincinnati Bell Inc.+ 1,473,055 1,062,500 70,000 Citizens Communications Co. . 974,745 905,800 50,000 Deutsche Telekom AG, ADR+ ........... 875,541 998,000 12,000 France Telecom SA, ADR ................ 347,118 358,440 500,000 O2 plc+ .............. 536,816 1,126,764 420,000 Qwest Communications International Inc.+ 1,745,277 1,554,000 75,000 SBC Communications Inc. ............... 2,281,410 1,776,750 80,000 Sprint Corp. ......... 1,306,786 1,820,000 3,300 Telecom Italia SpA, ADR ........... 31,072 124,542 7,880 Telefonica SA, ADR ... 80,701 409,524 18,000 TELUS Corp. .......... 293,047 578,672 100,000 Verizon Communications Inc. 3,769,983 3,550,000 ------------ ------------ 21,152,814 21,793,035 ------------ ------------ TRANSPORTATION -- 0.3% 35,000 GATX Corp. ........... 880,178 1,161,650 ------------ ------------ TOTAL COMMON STOCKS .. 313,551,961 402,424,319 ------------ ------------ PREFERRED STOCKS -- 2.0% AUTOMOTIVE -- 0.0% 1,000 Ford Motor Co. Capital Trust II, 6.500% Cv. Pfd. .... 45,215 45,340 ------------ ------------ AVIATION: PARTS AND SERVICES -- 0.5% 7,000 Coltec Capital Trust, 5.250% Cv. Pfd. .... 281,500 348,250 20,000 Sequa Corp., $5.00 Cv. Pfd. ..... 1,658,167 1,870,000 ------------ ------------ 1,939,667 2,218,250 ------------ ------------ See accompanying notes to financial statements. 7 THE GABELLI EQUITY INCOME FUND SCHEDULE OF INVESTMENTS (CONTINUED) -- MARCH 31, 2005 (UNAUDITED) - -------------------------------------------------------------------------------- MARKET SHARES COST VALUE ------ ---- ------ PREFERRED STOCKS (CONTINUED) BROADCASTING -- 0.9% 2,000 Granite Broadcasting Corp., 12.750% Pfd.+ ......$ 1,185,500 $ 870,000 100 Gray Television Inc., 8.000% Cv. Pfd., Ser. C (b)(c)(d) ... 1,000,000 1,010,000 50,500 Sinclair Broadcast Group Inc., 6.000% Cv. Pfd., Ser. D ............. 2,362,125 2,114,688 ------------ ------------ 4,547,625 3,994,688 ------------ ------------ COMMUNICATIONS EQUIPMENT -- 0.3% 1,100 Lucent Technologies Capital Trust I, 7.750% Cv. Pfd. .... 759,000 1,111,000 ------------ ------------ DIVERSIFIED INDUSTRIAL -- 0.0% 26,200 WHX Corp., $3.75 Cv. Pfd., Ser. B+ ............ 177,129 72,050 ------------ ------------ ENTERTAINMENT -- 0.0% 3,000 Metromedia International Group Inc., 7.250% Cv. Pfd.+ ... 5,310 108,000 ------------ ------------ TELECOMMUNICATIONS -- 0.3% 33,000 Cincinnati Bell Inc., 6.750% Cv. Pfd., Ser. B ............. 918,893 1,405,800 ------------ ------------ TOTAL PREFERRED STOCKS ............. 8,392,839 8,955,128 ------------ ------------ WARRANTS -- 0.2% BUSINESS SERVICES -- 0.2% 250,000 GP Strategies Corp., expires 08/14/08+ (c)(d) ... 637,065 653,341 ------------ ------------ DIVERSIFIED INDUSTRIAL -- 0.0% 379,703 National Patent Development Corp., expires 08/14/08+ (c)(d) ... 0 167,188 ------------ ------------ TOTAL WARRANTS ....... 637,065 820,529 ------------ ------------ PRINCIPAL AMOUNT ------ CORPORATE BONDS -- 2.8% AUTOMOTIVE: PARTS AND ACCESSORIES -- 0.7% $ 2,500,000 Pep Boys - Manny, Moe & Jack, Cv., 4.250%, 06/01/07 ... 2,489,522 2,543,750 800,000 Standard Motor Products Inc., Sub. Deb. Cv., 6.750%, 07/15/09 ... 669,261 744,000 ------------ ------------ 3,158,783 3,287,750 ------------ ------------ AVIATION: PARTS AND SERVICES -- 0.3% 1,400,000 GenCorp Inc., Sub. Deb. Cv., 5.750%, 04/15/07 ... 1,349,330 1,562,750 ------------ ------------ BUSINESS SERVICES -- 0.3% 100,000 BBN Corp., Sub. Deb. Cv., 6.000%, 04/01/12+ (a)(c) ... 97,500 0 2,000,000 GP Strategies Corp., Sub. Deb., 6.000%, 08/14/08 (c)(d) .... 1,508,123 1,336,122 ------------ ------------ 1,605,623 1,336,122 ------------ ------------ COMMUNICATIONS EQUIPMENT -- 1.0% 2,500,000 Agere Systems Inc., Sub. Deb. Cv., 6.500%, 12/15/09 ... 2,408,666 2,571,875 2,000,000 Nortel Networks Corp., Cv., 4.250%, 09/01/08 ... 1,956,323 1,860,000 ------------ ------------ 4,364,989 4,431,875 ------------ ------------ PRINCIPAL MARKET AMOUNT COST VALUE --------- ---- ------ ELECTRONICS -- 0.3% $ 1,100,000 Oak Industries Inc., Sub. Deb. Cv., 4.875%, 03/01/08 ...$ 859,972 $ 1,144,000 ------------ ------------ ENERGY AND UTILITIES: INTEGRATED -- 0.2% 1,200,000 Mirant Corp., Deb. Cv., 2.500%, 06/15/21+ (a) ...... 886,921 948,000 ------------ ------------ HEALTH CARE -- 0.0% 200,000 Twin Laboratories Inc., Sub. Deb., 10.250%, 05/15/06+ (a) ...... 98,105 43,000 ------------ ------------ TOTAL CORPORATE BONDS .... 12,323,723 12,753,497 ------------ ------------ U.S. GOVERNMENT OBLIGATIONS -- 4.9% 21,946,000 U.S. Treasury Bills, 2.352% to 2.823%++, 04/07/05 to 07/07/05 ........... 21,876,741 21,876,723 ------------ ------------ TOTAL INVESTMENTS -- 99.6% ..............$356,782,329 446,830,196 ============ OTHER ASSETS AND LIABILITIES (NET) -- 0.4% ..................... 1,615,688 ------------ NET ASSETS -- 100.0% ................$448,445,884 ============ - ---------------- For Federal tax purposes: Aggregate cost ......................$356,782,329 ============ Gross unrealized appreciation .......$ 99,444,276 Gross unrealized depreciation ....... (9,396,409) ------------ Net unrealized appreciation (depreciation) ....................$ 90,047,867 ============ - ---------------- (a) Security in default. (b) Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At March 31, 2005, the Rule 144A securities are considered liquid and the market value amounted to $1,010,000 or 0.23% of total net assets. (c) Security fair valued under procedures established by the Board of Directors. The procedures may include reviewing available financial information about the company and reviewing valuation of comparable securities and other factors on a regular basis. At March 31, 2005, the market value of fair valued securities amounted to $3,166,651 or 0.71% of total net assets. (d) At March 31, 2005, the Fund held investments in restricted and illiquid securities that were valued under methods approved by the Board, as follows: ACQUISITION 03/31/05 SHARES/ CARRYING PRINCIPAL ACQUISITION ACQUISITION VALUE AMOUNT ISSUER DATE COST PER UNIT ------- ------ ---- ---- -------- $2,000,000 GP Strategies Corp., Sub. Deb., 6.000%, 08/14/08 ... 08/08/03 $1,362,935 $ 66.8061 250,000 GP Strategies Corp. warrants expire 08/14/08 .... 08/08/03 $ 637,065 $ 2.6134 100 Gray Television Inc., 8.000% Cv. Pfd., Ser. C ... 04/22/02 $1,000,000 $10,100.0000 379,703 National Patent Development Corp. warrants expire 08/14/08 ........... 11/24/04 $ 0.00 $ 0.4403 + Non-income producing security. ++ Represents annualized yield at date of purchase. ADR - American Depository Receipt. CVO - Contingent Value Obligation. See accompanying notes to financial statements. 8 THE GABELLI EQUITY INCOME FUND STATEMENT OF ASSETS AND LIABILITIES MARCH 31, 2005 (UNAUDITED) - -------------------------------------------------------------------------------- ASSETS: Investments, at value (cost $356,782,329) .......$446,830,196 Cash ............................................ 1,293 Receivable for Fund shares sold ................. 1,893,169 Dividends and interest receivable ............... 1,058,678 Other assets .................................... 10,623 ------------ TOTAL ASSETS .................................... 449,793,959 ------------ LIABILITIES: Payable for investments purchased ............... 479,558 Payable for investment advisory fees ............ 374,182 Payable for Fund shares redeemed ................ 196,617 Payable for shareholder services fees ........... 105,560 Payable for distribution fees ................... 94,049 Payable for shareholder communication fees ...... 51,649 Other accrued expenses .......................... 46,460 ------------ TOTAL LIABILITIES ............................... 1,348,075 ------------ NET ASSETS applicable to 25,207,121 shares outstanding ............................$448,445,884 ============ NET ASSETS CONSIST OF: Capital stock, at $0.001 par value ..............$ 25,207 Additional paid-in capital ...................... 357,922,413 Distributions in excess of net investment income ............................. (742,730) Accumulated net realized gain on investments and foreign currency transactions ............. 1,193,248 Net unrealized appreciation on investments and foreign currency translations ............. 90,047,746 ------------ NET ASSETS ......................................$448,445,884 ============ SHARES OF CAPITAL STOCK: CLASS AAA: Net Asset Value, offering and redemption price per share ($446,866,124 / 25,117,725 shares outstanding; 150,000,000 shares authorized of $0.001 par value) .......................... $17.79 ====== CLASS A: Net Asset Value and redemption price per share ($607,152 / 34,207 shares outstanding; 50,000,000 shares authorized of $0.001 par value) ........ $17.75 ====== Maximum sales charge ............................ 5.75% ====== Maximum offering price per share (NAV / .9425, based on maximum sales charge of 5.75% of the offering price) ........................... $18.83 ====== CLASS B: Net Asset Value and offering price per share ($2,555 / 144.95 shares outstanding; 50,000,000 shares authorized of $0.001 par value) ........ $17.63(a) ====== CLASS C: Net Asset Value and offering price per share ($970,053 / 55,044 shares outstanding; 50,000,000 shares authorized of $0.001 par value) ........ $17.62(a) ====== - ------------- (a) Redemption price varies based on length of time held. STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED MARCH 31, 2005 (UNAUDITED) - -------------------------------------------------------------------------------- INVESTMENT INCOME: Dividends (net of foreign taxes of $62,997) ................ $ 5,310,003 Interest ................................................... 647,544 ----------- TOTAL INVESTMENT INCOME .................................... 5,957,547 ----------- EXPENSES: Investment advisory fees ................................... 1,969,362 Distribution fees -- Class AAA ............................. 491,577 Distribution fees -- Class A ............................... 350 Distribution fees -- Class B ............................... 6 Distribution fees -- Class C ............................... 1,646 Shareholder services fees .................................. 175,355 Shareholder communications expenses ........................ 73,948 Custodian fees ............................................. 45,146 Legal and audit fees ....................................... 24,850 Registration fees .......................................... 12,645 Directors' fees ............................................ 11,338 Miscellaneous expenses ..................................... 32,872 ----------- TOTAL EXPENSES ............................................. 2,839,095 ----------- NET INVESTMENT INCOME ...................................... 3,118,452 ----------- NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS: Net realized gain on investments ........................... 3,491,127 Net realized gain on foreign currency transactions .................................... 41,822 Net change in unrealized appreciation/ depreciation on investments and foreign currency translations .................................... 26,465,432 ----------- NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN CURRENCY ......................... 29,998,381 ----------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .......................................... $33,116,833 =========== See accompanying notes to financial statements. 9 THE GABELLI EQUITY INCOME FUND STATEMENT OF CHANGES IN NET ASSETS - -------------------------------------------------------------------------------- SIX MONTHS ENDED MARCH 31, 2005 YEAR ENDED (UNAUDITED) SEPTEMBER 30, 2004 --------------- ------------------ OPERATIONS: Net investment income ............................................ $ 3,118,452 $ 4,536,567 Net realized gain on investments and foreign currency transactions 3,532,949 8,029,283 Net change in unrealized appreciation/depreciation on investments and foreign currency translations .............................. 26,465,432 33,027,899 ------------- ------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............. 33,116,833 45,593,749 ------------- ------------- DISTRIBUTIONS TO SHAREHOLDERS: Net investment income Class AAA ...................................................... (3,837,162) (5,229,584) Class A ........................................................ (3,393) (389) Class B ........................................................ (12) (13) Class C ........................................................ (3,983) (259) ------------- ------------- (3,844,550) (5,230,245) ------------- ------------- Net realized gains Class AAA ...................................................... (6,792,707) (1,806,422) Class A ........................................................ (4,991) (135) Class B ........................................................ (19) (4) Class C ........................................................ (4,541) (89) ------------- ------------- (6,802,258) (1,806,650) ------------- ------------- TOTAL DISTRIBUTIONS TO SHAREHOLDERS .............................. (10,646,808) (7,036,895) ------------- ------------- CAPITAL SHARE TRANSACTIONS: Class AAA ...................................................... 69,066,829 54,989,849 Class A ........................................................ 476,770 123,156 Class B ........................................................ 1,454 1,017 Class C ........................................................ 891,659 77,434 ------------- ------------- NET INCREASE IN NET ASSETS FROM CAPITAL SHARE TRANSACTIONS ....... 70,436,712 55,191,456 ------------- ------------- REDEMPTION FEES .................................................. 13,680 -- ------------- ------------- NET INCREASE IN NET ASSETS ....................................... 92,920,417 93,748,310 NET ASSETS: Beginning of period .............................................. 355,525,467 261,777,157 ------------- ------------- End of period .................................................... $ 448,445,884 $ 355,525,467 ============= ============= See accompanying notes to financial statements. 10 THE GABELLI EQUITY INCOME FUND NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - -------------------------------------------------------------------------------- 1. ORGANIZATION. The Gabelli Equity Income Fund (the "Fund") is a series of Gabelli Equity Series Funds, Inc. (the "Corporation"), which was organized on July 25, 1991 as a Maryland corporation. The Fund is a diversified, open-end management investment company registered under the Investment Company Act of 1940, as amended (the "1940 Act"), and one of three separately managed portfolios (collectively, the "Portfolios") of the Corporation, each with four separate classes of shares known as Class AAA, Class A, Class B and Class C. The Fund's primary objective is to seek a high level of total return with an emphasis on income. The Fund commenced investment operations on January 2, 1992. 2. SIGNIFICANT ACCOUNTING POLICIES. The preparation of financial statements in accordance with 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 Directors (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. 11 THE GABELLI EQUITY INCOME FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) - -------------------------------------------------------------------------------- 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 of the value of the contract. The daily changes in the contract are included in unrealized gains or losses. The Fund recognizes a realized gain or loss when the contract is closed. At March 31, 2005, 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 the value of futures contracts primarily corresponds with the value of their underlying instruments, which may not correlate with the change in value of the hedged investments. In addition, there is the risk that the Fund may not be able to enter into a closing transaction because of an illiquid secondary market. FORWARD FOREIGN EXCHANGE CONTRACTS. The Fund may engage in forward foreign exchange contracts for hedging a specific transaction with respect to either the currency in which the transaction is denominated or another currency as deemed appropriate by the Adviser. Forward foreign exchange contracts are valued at the forward rate and are marked-to-market daily. The change in market value is included in unrealized appreciation/depreciation on investments and foreign currency translations. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. The use of forward foreign exchange contracts does not eliminate fluctuations in the underlying prices of the Fund's portfolio securities, but it does establish a rate of exchange that can be achieved in the future. Although forward foreign exchange contracts limit the risk of loss due to a decline in the value of the hedged currency, they also limit any potential gain that might result should the value of the currency increase. In addition, the Fund could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts. At March 31, 2005, there were no open forward foreign exchange contracts. 12 THE GABELLI EQUITY INCOME FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) - -------------------------------------------------------------------------------- FOREIGN CURRENCY TRANSLATION. The books and records of the Fund are maintained in United States (U.S.) dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars at the exchange rates prevailing at the end of the period, and purchases and sales of investment securities, income and expenses are translated at the exchange rate prevailing on the respective dates of such transactions. Unrealized gains and losses, which result from changes in foreign exchange rates and/or changes in market prices of securities, have been included in unrealized appreciation/depreciation on investments and foreign currency translations. Net realized foreign currency gains and losses resulting from changes in exchange rates include foreign currency gains and losses between trade date and settlement date on investment securities transactions, foreign currency transactions and the difference between the amounts of interest and dividends recorded on the books of the Fund and the amounts actually received. The portion of foreign currency gains and losses related to fluctuation in exchange rates between the initial trade date and subsequent sale trade date is included in realized gain/(loss) on investments. FOREIGN SECURITIES. The Fund may directly purchase securities of foreign issuers. Investing in securities of foreign issuers involves special risks not typically associated with investing in securities of U.S. issuers. The risks include possible revaluation of currencies, the ability to repatriate funds, less complete financial information about companies and possible future adverse political and economic developments. Moreover, securities of many foreign issuers and their markets may be less liquid and their prices more volatile than those of securities of comparable U.S. issuers. 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 upon the proportion of net assets of each class at the beginning of each day. Distribution expenses are solely borne by the class incurring the expense. 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. 13 THE GABELLI EQUITY INCOME FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) - -------------------------------------------------------------------------------- For the fiscal year ended September 30, 2004 reclassifications were made to increase accumulated net investment income by $4,565 and decrease accumulated net realized gain on investments by $4,565. For the fiscal years ended September 30, 2004 and 2003, the tax character of distributions is all ordinary income. 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 policy of the Fund 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. Dividends and interest from non-U.S. sources received by the Fund are generally subject to non-U.S. withholding taxes at rates ranging up to 30%. Such withholding taxes may be reduced or eliminated under the terms of applicable U.S. income tax treaties, and the Fund intends to undertake any procedural steps required to claim the benefits of such treaties. At September 30, 2004, the difference between book and tax basis unrealized appreciation is primarily due to deferral of losses from wash sales for tax purposes. As of September 30, 2004, the components of accumulated earnings/(losses) on a tax basis were as follows: Undistributed ordinary income (inclusive of short-term capital gains) ..... $ 1,374,937 Undistributed long-term capital gains ......... 4,171,499 Net unrealized appreciation ................... 62,503,738 Other temporary differences ................... (21,935) ----------- Total accumulated earnings .................. $68,028,239 =========== During the fiscal year ended September 30, 2004, the Fund utilized capital loss carryforwards of $478,901. 3. INVESTMENT ADVISORY AGREEMENT. The Fund has entered into an investment advisory agreement (the "Advisory Agreement") with the Adviser which provides that the Fund will pay the Adviser a fee, computed daily and paid monthly, at the annual rate of 1.00% of the value of the Fund's average daily net assets. In accordance with the Advisory Agreement, the Adviser provides a continuous investment program for the Fund's portfolio, oversees the administration of all aspects of the Fund's business and affairs and pays the compensation of all Officers and Directors of the Fund who are affiliates of the Adviser. 4. DISTRIBUTION PLAN. The Fund's Board has adopted a distribution plan (the "Plan") for each class of shares 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. 14 THE GABELLI EQUITY INCOME FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) - -------------------------------------------------------------------------------- 5. PORTFOLIO SECURITIES. Purchases and proceeds from the sales of securities for the six months ended March 31, 2005, other than short term securities, aggregated $100,938,270 and $26,142,491, respectively. 6. TRANSACTIONS WITH AFFILIATES. During the six months ended March 31, 2005, the Fund paid brokerage commissions of $106,671 to Gabelli & Company. During the six months ended March 31, 2005, Gabelli & Company informed the Fund that it received $3,203 from investors representing commissions (sales charges and underwriting fees) on sales and redemptions of Fund shares. The cost of calculating the Fund's net asset value per share is a Fund expense pursuant to the Advisory Agreement between the Fund and the Adviser. During the six months ended March 31, 2005, the Fund reimbursed the Adviser $19,950 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. LINE OF CREDIT. The Fund has access to an unsecured line of credit of up to $25,000,000 from the custodian for temporary borrowing purposes. Borrowings under this arrangement bear interest at 0.75% above the Federal Funds rate on outstanding balances. During the six months ended March 31, 2005, there were no borrowings from the line of credit. 8. CAPITAL STOCK TRANSACTIONS. The Fund offers four classes of shares -- Class AAA Shares, Class A Shares, Class B Shares and Class C 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 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 the 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. The Fund imposes a redemption fee of 2.00% on Class AAA, Class A, Class B and Class C Shares that are redeemed or exchanged within 60 days after the date of a purchase. For Class AAA, Class A, Class B, and Class C Shares, the 2.00% redemption fee applies to shares purchased on or after November 1, 2004. The redemption fee is deducted from the proceeds otherwise payable to the redeeming shareholders and retained by the Fund. The redemption fees retained by the Fund during the six months ended March 31, 2005 amounted to $13,680. The redemption fee does 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. 15 THE GABELLI EQUITY INCOME FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) - -------------------------------------------------------------------------------- Transactions in shares of capital stock were as follows: SIX MONTHS ENDED MARCH 31, 2005 YEAR ENDED (UNAUDITED) SEPTEMBER 30, 2004 -------------------------- ------------------------- SHARES AMOUNT SHARES AMOUNT ---------- ------------- ---------- ------------- CLASS AAA CLASS AAA -------------------------- ------------------------- Shares sold ............................................ 5,711,600 $ 101,321,102 7,919,728 $ 130,184,333 Shares issued upon reinvestment of dividends ........... 552,509 9,802,211 393,424 6,453,128 Shares redeemed ........................................ (2,390,092) (42,056,484) (4,998,860) (81,647,612) ---------- ------------- ---------- ------------- Net increase ........................................... 3,874,017 $ 69,066,829 3,314,292 $ 54,989,849 ========== ============= ========== ============= CLASS A CLASS A -------------------------- ------------------------- Shares sold ............................................ 31,630 $ 560,853 7,383 $ 122,882 Shares issued upon reinvestment of dividends ........... 450 7,973 17 274 Shares redeemed ........................................ (5,273) (92,056) -- -- ---------- ------------- ---------- ------------- Net increase ........................................... 26,807 $ 476,770 7,400 $ 123,156 ========== ============= ========== ============= CLASS B CLASS B -------------------------- ------------------------- Shares sold ............................................ 81 $ 1,423 61 $ 1,000 Shares issued upon reinvestment of dividends ........... 2 31 1 17 Shares redeemed ........................................ -- -- -- -- ---------- ------------- ---------- ------------- Net increase ........................................... 83 $ 1,454 62 $ 1,017 ========== ============= ========== ============= CLASS C CLASS C -------------------------- ------------------------- Shares sold ............................................ 50,066 $ 887,702 4,732 $ 77,086 Shares issued upon reinvestment of dividends ........... 404 7,104 21 348 Shares redeemed ........................................ (179) (3,147) -- -- ---------- ------------- ---------- ------------- Net increase ........................................... 50,291 $ 891,659 4,753 $ 77,434 ========== ============= ========== ============= 9. 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., the Adviser's parent company, 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. 10. 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. 16 THE GABELLI EQUITY INCOME FUND FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- Selected data for a share of capital stock outstanding throughout each period: INCOME FROM INVESTMENT OPERATIONS DISTRIBUTIONS ---------------------------------------------------- -------------------------------------- Net Net Asset Net Realized and Total Net Period Value, Investment Unrealized from Net Realized Ended Beginning Income/ Gain/(Loss) on Investment Investment Gain on Total September 30 of Period (Loss)(f) Investments Operations Income Investments Distributions - ------------ --------- ---------- -------------- ---------- ---------- ----------- ------------- CLASS AAA 2005(e) $16.73 $0.14 $ 1.40 $ 1.54 $(0.17) $(0.31) $(0.48) 2004 14.60 0.23 2.26 2.49 (0.27) (0.09) (0.36) 2003 11.93 0.28 2.64 2.92 (0.25) -- (0.25) 2002 13.88 0.23 (1.79) (1.56) (0.23) (0.16) (0.39) 2001 16.35 0.25 (0.28) (0.03) (0.36) (2.08) (2.44) 2000 17.58 0.46 0.81 1.27 (0.36) (2.14) (2.50) CLASS A 2005(e) $16.72 $0.13 $ 1.41 $ 1.54 $(0.20) $(0.31) $(0.51) 2004(a) 16.40 0.16 0.43 0.59 (0.20) (0.07) (0.27) CLASS B 2005(e) $16.62 $0.08 $ 1.39 $ 1.47 $(0.15) $(0.31) $(0.46) 2004(a) 16.40 0.07 0.42 0.49 (0.20) (0.07) (0.27) CLASS C 2005(e) $16.64 $0.06 $ 1.41 $ 1.47 $(0.18) $(0.31) $(0.49) 2004(a) 16.40 0.08 0.43 0.51 (0.20) (0.07) (0.27) RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA ------------------------------------------------ Net Asset Net Assets Period Value, End of Net Portfolio Ended Redemption End of Total Period Investment Operating Turnover September 30 Fees(f) Period Return+ (in 000's) Income/(Loss) Expenses Rate - ------------ ---------- --------- ------- ---------- ------------- --------- --------- CLASS AAA 2005(e) $0.00(d) $17.79 9.24% $446,866 1.58%(b) 1.44%(b) 7% 2004 -- 16.73 17.13 355,321 1.42 1.49 12 2003 -- 14.60 24.59 261,777 2.09 1.49 27 2002 -- 11.93 (11.58) 162,938 1.75 1.50 12 2001 -- 13.88 (0.43) 121,499 1.65 1.55 41 2000 -- 16.35 8.41 89,164 2.85 1.66(c) 33 CLASS A 2005(e) $0.00(d) $17.75 9.25% $ 607 1.44%(b) 1.45%(b) 7% 2004(a) -- 16.72 3.62 124 1.33(b) 1.49(b) 12 CLASS B 2005(e) $0.00(d) $17.63 8.88% $ 3 0.87%(b) 2.06%(b) 7% 2004(a) -- 16.62 3.00 1 0.56(b) 2.24(b) 12 CLASS C 2005(e) $0.00(d) $17.62 8.85% $ 970 0.63%(b) 2.21%(b) 7% 2004(a) -- 16.64 3.13 79 0.62(b) 2.24(b) 12 - -------------------------- + 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 the period of less than one year is not annualized. (a) From the commencement of offering Class A, Class B and Class C Shares on December 31, 2003. (b) Annualized. (c) The Fund incurred interest expense during the year ended September 30, 2000. If interest expense had not been incurred, the ratio of operating expenses to average net assets would have been 1.61%. (d) Amount represents less than $0.005 per share. (e) For the period ending March 31, 2005, unaudited. (f) Per share amounts have been calculated using the average shares outstanding method. See accompanying notes to financial statements. 17 THE GABELLI EQUITY INCOME FUND BOARD CONSIDERATION AND RE-APPROVAL OF ADVISORY AGREEMENT (UNAUDITED) During the six months ended March 31, 2005, the Board of Directors of the Corporation approved the continuation of the investment advisory agreement with the Adviser for the Fund on the basis of the recommendation by the directors (the "independent directors") who are not "interested persons" of the Fund. The following paragraphs summarize the material information and factors considered by the independent directors as well as their conclusions relative to such factors. NATURE, EXTENT AND QUALITY OF SERVICES. The independent directors considered information regarding the portfolio manager, the depth of the analyst pool available to the Adviser and the portfolio manager, the scope of administrative, shareholder and other services supervised or provided by the Adviser and the absence of significant service problems reported to the Board. The independent directors noted the experience, length of service and reputation of the portfolio manager. INVESTMENT PERFORMANCE. The independent directors reviewed the short, medium and long-term performance of the Fund against a peer group of equity income funds. The directors noted that the Fund's performance was in or near the top 15% of the funds in its category for all relevant periods other than the one-year period, during which the Fund's performance was average. PROFITABILITY. The independent directors reviewed summary data regarding the profitability of the Fund to the Adviser both with an administrative overhead charge and without such a charge. The directors also noted that a substantial portion of the Fund's portfolio transactions were executed by an affiliated broker, that the affiliated broker received distribution fees and minor amounts of sales commissions and that the Adviser received a moderate level of soft dollar research benefits through the Fund's portfolio brokerage. ECONOMIES OF SCALE. The independent directors discussed the major elements of the Adviser's cost structure and the relationship of those elements to potential economies of scale. The independent directors agreed that the Adviser should gather and provide them with information regarding possible ways of measuring potential economies of scale so that they would be in a position to review this potential issue in greater detail if the Fund grew substantially on an inflation-adjusted basis. SHARING OF ECONOMIES OF SCALE. The independent directors noted that the investment management fee schedule for the Fund does not take into account any potential economies of scale that may develop. SERVICE AND COST COMPARISONS. The independent directors compared the expense ratios of the investment management fee, other expenses and total expenses of the Fund to similar expense ratios of the peer group of equity income funds and noted that the Adviser's management fee includes substantially all administrative services of the Fund as well as investment advisory services. The directors noted that the Fund's expense ratios were above and the Fund's size was below average within this group. The directors also noted that the management fee structure was the same as that in effect for most of the Gabelli funds. The directors did not compare the management fee to the fee for other types of accounts managed by the Adviser. CONCLUSIONS. The independent directors concluded that the Fund enjoyed highly experienced portfolio management services, good ancillary services and an excellent performance record. The independent directors also concluded that the Fund's expense ratios and the profitability to the Adviser of managing the Fund were reasonable, particularly in light of the Fund's performance, and that economies of scale were not a significant factor in their thinking at this time. The directors did not view the potential profitability of ancillary services as material to their decision. On the basis of the foregoing and without assigning particular weight to any single conclusion, the independent directors determined to recommend continuation of the investment management agreement to the full Board of Directors. 18 GABELLI FAMILY OF FUNDS VALUE ________________________________________ GABELLI ASSET FUND Seeks to invest primarily in a diversified portfolio of common stocks selling at significant discounts to their private market value. The Fund's primary objective is growth of capital. (MULTICLASS) PORTFOLIO MANAGER: MARIO J. GABELLI, CFA GABELLI BLUE CHIP VALUE FUND Seeks long term growth of capital through investment primarily in the common stocks of established companies which are temporarily out of favor. The fund's objective is to identify a catalyst or sequence of events that will return the company to a higher value. (MULTICLASS) PORTFOLIO MANAGER: BARBARA MARCIN, CFA WESTWOOD EQUITY FUND Seeks to invest primarily in the common stock of well-seasoned companies that have recently reported positive earnings surprises and are trading below Westwood's proprietary growth rate estimates. The Fund's primary objective is capital appreciation. (MULTICLASS) PORTFOLIO MANAGER: SUSAN M. BYRNE FOCUSED VALUE ______________________________ GABELLI VALUE FUND Seeks to invest in securities of companies believed to be undervalued. The Fund's primary objective is long-term capital appreciation. (MULTICLASS) PORTFOLIO MANAGER: MARIO J. GABELLI, CFA SMALL CAP VALUE ____________________________ GABELLI SMALL CAP FUND Seeks to invest primarily in common stock of smaller companies (market capitalizations less than $1 billion) believed to have rapid revenue and earnings growth potential. The Fund's primary objective is capital appreciation. (MULTICLASS) PORTFOLIO MANAGER: MARIO J. GABELLI, CFA WESTWOOD SMALLCAP EQUITY FUND Seeks to invest primarily in smaller capitalization equity securities - market caps of $2.5 billion or less. The Fund's primary objective is long-term capital appreciation. (MULTICLASS) TEAM MANAGED GABELLI WOODLAND SMALL CAP VALUE FUND Seeks to invest primarily in the common stocks of smaller companies (market capitalizations less than $1.5 billion) believed to be undervalued with shareholder oriented management teams that are employing strategies to grow the company's value. The Fund's primary objective is capital appreciation. (MULTICLASS) PORTFOLIO MANAGER: ELIZABETH M. LILLY, CFA GROWTH ______________________________________ GABELLI GROWTH FUND Seeks to invest primarily in large cap stocks believed to have favorable, yet undervalued, prospects for earnings growth. The Fund's primary objective is capital appreciation. (MULTICLASS) PORTFOLIO MANAGER: HOWARD F. WARD, CFA GABELLI INTERNATIONAL GROWTH FUND Seeks to invest in the equity securities of foreign issuers with long-term capital appreciation potential. The Fund offers investors global diversification. (MULTICLASS) PORTFOLIO MANAGER: CAESAR BRYAN AGGRESSIVE GROWTH _________________________ GABELLI GLOBAL GROWTH FUND Seeks capital appreciation through a disciplined investment program focusing on the globalization and interactivity of the world's marketplace. The Fund invests in companies at the forefront of accelerated growth. The Fund's primary objective is capital appreciation. (MULTICLASS) TEAM MANAGED MICRO-CAP ___________________________________ WESTWOOD MIGHTY MITES(SM) FUND Seeks to invest in micro-cap companies that have market capitalizations of $300 million or less. The Fund's primary objective is long-term capital appreciation. (MULTICLASS) TEAM MANAGED EQUITY INCOME _______________________________ GABELLI EQUITY INCOME FUND Seeks to invest primarily in equity securities with above market average yields. The Fund pays monthly dividends and seeks a high level of total return with an emphasis on income. (MULTICLASS) PORTFOLIO MANAGER: MARIO J. GABELLI, CFA WESTWOOD BALANCED FUND Seeks to invest in a balanced and diversified portfolio of stocks and bonds. The Fund's primary objective is both capital appreciation and current income. (MULTICLASS) CO-PORTFOLIO MANAGERS: SUSAN M. BYRNE MARK FREEMAN, CFA WESTWOOD REALTY FUND Seeks to invest in securities that are primarily engaged in or related to the real estate industry. The Fund's primary objective is long-term capital appreciation. (MULTICLASS) PORTFOLIO MANAGER: SUSAN M. BYRNE SPECIALTY EQUITY ____________________________ GABELLI GLOBAL CONVERTIBLE SECURITIES FUND Seeks to invest principally in bonds and preferred stocks which are convertible into common stock of foreign and domestic companies. The Fund's primary objective is total return through a combination of current income and capital appreciation. (MULTICLASS) TEAM MANAGED GABELLI GLOBAL OPPORTUNITY FUND Seeks to invest in common stock of companies which have rapid growth in revenues and earnings and potential for above average capital appreciation or are undervalued. The Fund's primary objective is capital appreciation. (MULTICLASS) TEAM MANAGED SECTOR ______________________________________ GABELLI GLOBAL TELECOMMUNICATIONS FUND Seeks to invest in telecommunications companies throughout the world - targeting undervalued companies with strong earnings and cash flow dynamics. The Fund's primary objective is capital appreciation. (MULTICLASS) TEAM MANAGED GABELLI GOLD FUND Seeks to invest in a global portfolio of equity securities of gold mining and related companies. The Fund's objective is long-term capital appreciation. Investment in gold stocks is considered speculative and is affected by a variety of world-wide economic, financial and political factors. (MULTICLASS) PORTFOLIO MANAGER: CAESAR BRYAN GABELLI UTILITIES FUND Seeks to provide a high level of total return through a combination of capital appreciation and current income. (MULTICLASS) TEAM MANAGED MERGER AND ARBITRAGE _____________________ GABELLI ABC FUND Seeks to invest in securities with attractive opportunities for appreciation or investment income. The Fund's primary objective is total return in various market conditions without excessive risk of capital loss. (NO-LOAD) PORTFOLIO MANAGER: MARIO J. GABELLI, CFA CONTRARIAN_________________________________ Gabelli Mathers Fund Seeks long-term capital appreciation in various market conditions without excessive risk of capital loss. (CLASS AAA-NO-LOAD) PORTFOLIO MANAGER: HENRY VAN DER EB, CFA COMSTOCK CAPITAL VALUE FUND Seeks capital appreciation and current income. The Fund may use either long or short positions to achieve its objective. (MULTICLASS) PORTFOLIO MANAGER: MARTIN WEINER, CFA COMSTOCK STRATEGY FUND The Fund emphasizes investments in debt securities, which maximize total return in light of credit risk, interest rate risk, and the risk associated with the length of maturity of the debt instrument. (MULTICLASS) PORTFOLIO MANAGER: MARTIN WEINER, CFA QUANTITATIVE_________________________________ NED DAVIS RESEARCH ASSET ALLOCATION FUND Seeks to achieve returns greater then the weighted composite benchmark consisting of 60% in the S&P 500 Index and 40% in the Lehman Long Term U.S. Government Bond Index through a flexible asset allocation strategy. The Fund's primary objective is capital appreciation. (MULTICLASS) TEAM MANAGED FIXED INCOME ________________________________ WESTWOOD INTERMEDIATE BOND FUND Seeks to invest in a diversified portfolio of bonds with various maturities. The Fund's primary objective is total return. (MULTICLASS) PORTFOLIO MANAGER: MARK FREEMAN, CFA CASH MANAGEMENT-MONEY MARKET __________ GABELLI U.S. TREASURY MONEY MARKET FUND Seeks to invest exclusively in short-term U.S. Treasury securities. The Fund's primary objective is to provide high current income consistent with the preservation of principal and liquidity. (NO-LOAD) PORTFOLIO MANAGER: JUDITH A. RANERI THE TREASURER'S FUND Three money market portfolios designed to generate superior returns without compromising portfolio safety. U.S. Treasury Money Market seeks to invest in U.S. Treasury securities and repurchase agreements. Tax Exempt Money Market seeks to invest in municipal securities. Domestic Prime Money Market seeks to invest in prime quality, domestic money market instruments. (NO-LOAD) PORTFOLIO MANAGER: JUDITH A. RANERI THE GLOBAL FUNDS INVEST IN FOREIGN SECURITIES WHICH INVOLVE RISKS NOT ORDINARILY ASSOCIATED WITH INVESTMENTS IN DOMESTIC ISSUES, INCLUDING CURRENCY FLUCTUATION, ECONOMIC AND POLITICAL RISKS. AN INVESTMENT IN THE ABOVE MONEY MARKET FUNDS IS NEITHER INSURED NOR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY GOVERNMENT AGENCY. ALTHOUGH THE FUNDS SEEK TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUNDS. TO RECEIVE A PROSPECTUS, CALL 800-GABELLI (422-3554). INVESTORS SHOULD CONSIDER THE INVESTMENT OBJECTIVES, RISKS AND CHARGES AND EXPENSES OF THE FUND CAREFULLY BEFORE INVESTING. THE PROSPECTUS CONTAINS MORE COMPLETE INFORMATION ABOUT THIS AND OTHER MATTERS AND SHOULD BE READ CAREFULLY BEFORE INVESTING. Gabelli Equity Series Funds, Inc. THE GABELLI EQUITY INCOME FUND One Corporate Center Rye, New York 10580-1422 800-GABELLI 800-422-3554 FAX: 914-921-5118 WEBSITE: WWW.GABELLI.COM E-MAIL: INFO@GABELLI.COM Net Asset Value available daily by calling 800-GABELLI after 6:00 P.M. BOARD OF DIRECTORS Mario J. Gabelli, CFA Karl Otto Pohl CHAIRMAN AND CHIEF FORMER PRESIDENT EXECUTIVE OFFICER DEUTSCHE BUNDESBANK GABELLI ASSET MANAGEMENT INC. Anthony J. Colavita Anthony R. Pustorino ATTORNEY-AT-LAW CERTIFIED PUBLIC ACCOUNTANT ANTHONY J. COLAVITA, P.C. PROFESSOR EMERITUS PACE UNIVERSITY Vincent D. Enright Anthonie C. van Ekris FORMER SENIOR VICE PRESIDENT MANAGING DIRECTOR AND CHIEF FINANCIAL OFFICER BALMAC INTERNATIONAL, INC. KEYSPAN ENERGY CORP. John D. Gabelli Salvatore J. Zizza SENIOR VICE PRESIDENT CHAIRMAN GABELLI & COMPANY, INC. HALLMARK ELECTRICAL SUPPLIES CORP. Robert J. Morrissey ATTORNEY-AT-LAW MORRISSEY, HAWKINS & LYNCH OFFICERS Bruce N. Alpert James E. McKee PRESIDENT AND TREASURER SECRETARY Peter D. Goldstein 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 Equity Income Fund. It is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. - -------------------------------------------------------------------------------- GAB444Q105SR [GRAPHIC OMITTED] PICTURE OF MARIO GABELLLI THE GABELLI EQUITY INCOME FUND SEMI-ANNUAL REPORT MARCH 31, 2005 THE GABELLI WOODLAND SMALL CAP VALUE FUND SEMI-ANNUAL REPORT (A) MARCH 31, 2005 TO OUR SHAREHOLDERS, The Gabelli Woodland Small Cap Value Fund (Fund) outperformed its small cap benchmark, the Russell 2000 Index, as well as the broad based market indices for the six month period ending March 31, 2005. During this period, the Fund rose 11.77% versus gains of 8.00% for the Russell 2000, 5.56% for the Standard & Poor's 500 Index and 10.12% for the Value Line Composite Index. COMPARATIVE RESULTS - -------------------------------------------------------------------------------- AVERAGE ANNUAL RETURNS THROUGH MARCH 31, 2005 (UNAUDITED) (A)(B) Since Inception Quarter 1 Year (12/31/02) - -------------------------------------------------------------------------------- GABELLI WOODLAND SMALL CAP VALUE FUND CLASS AAA ................ (1.53)% 12.92% 17.34% Russell 2000 Index .................... (5.34) 5.41 24.91 S&P 500 Index ......................... (2.15) 6.69 15.98 Value Line Composite Index ............ (3.27) 7.70 25.90 Class A Shares ........................ (1.60) 12.93 17.30 (7.26)(c) 6.45(c) 14.26(c) Class B Shares ........................ (1.14) 14.52 18.37 (6.09)(d) 9.52(d) 16.92(d) Class C Shares ........................ (1.69) 12.13 16.61 (2.68)(d) 11.13(d) 16.61(d) (a) THE FUND'S FISCAL YEAR ENDS SEPTEMBER 30. (b) 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. PERFORMANCE FOR PERIODS LESS THAN ONE YEAR IS NOT ANNUALIZED. 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. INVESTING IN SMALL CAPITALIZATION SECURITIES INVOLVES SPECIAL CHALLENGES BECAUSE THESE SECURITIES MAY TRADE LESS FREQUENTLY AND EXPERIENCE MORE ABRUPT PRICE MOVEMENTS THAN LARGE CAPITALIZATION SECURITIES. THE RUSSELL 2000 INDEX, THE S&P 500 INDEX, AND VALUE LINE COMPOSITE INDICES ARE UNMANAGED INDICATORS OF STOCK MARKET PERFORMANCE. (c) INCLUDES THE EFFECT OF THE MAXIMUM 5.75% SALES CHARGE AT THE BEGINNING OF THE PERIOD. (d) INCLUDES THE EFFECT OF THE APPLICABLE CONTINGENT DEFERRED SALES CHARGE AT THE END OF THE PERIOD SHOWN FOR CLASS B AND CLASS C SHARES, RESPECTIVELY. CLASS B SHARES ARE NOT AVAILABLE FOR NEW PURCHASES. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- We have separated the portfolio manager's commentary from the financial statements and investment portfolio due to new corporate governance regulations stipulated by the Sarbanes-Oxley Act of 2002. We have done this to ensure that the content of the portfolio manager's commentary is unrestricted. The financial statements and investment portfolio are mailed separately. Both the commentary and the financial statements, including the portfolio of investments, will be available on our website at www.gabelli.com/funds. - -------------------------------------------------------------------------------- THE GABELLI WOODLAND SMALL CAP VALUE FUND DISCLOSURE OF FUND EXPENSES (UNAUDITED) For the Six Month Period from October 1, 2004 through March 31, 2005 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 six months ended March 31, 2005. Beginning Ending Annualized Expenses Account Value Account Value Expense Paid During 10/01/04 03/31/05 Ratio Period* - -------------------------------------------------------------------------------- GABELLI WOODLAND SMALL CAP VALUE FUND - -------------------------------------------------------------------------------- ACTUAL FUND RETURN Class AAA $1,000.00 $1,117.70 2.00% $10.56 Class A $1,000.00 $1,116.90 2.00% $10.56 Class B $1,000.00 $1,123.20 2.75% $14.56 Class C $1,000.00 $1,113.30 2.75% $14.49 HYPOTHETICAL 5% RETURN Class AAA $1,000.00 $1,014.96 2.00% $10.05 Class A $1,000.00 $1,014.96 2.00% $10.05 Class B $1,000.00 $1,011.22 2.75% $13.79 Class C $1,000.00 $1,011.22 2.75% $13.79 * 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 365. 2 SUMMARY OF PORTFOLIO HOLDINGS (UNAUDITED) The following table presents portfolio holdings as a percent of total net assets. GABELLI WOODLAND SMALL CAP VALUE FUND Diversified Industrial ............................ 14.7% Health Care ....................................... 10.7% Consumer Products ................................. 10.3% Business Services ................................. 9.7% U.S. Treasury Bills ............................... 8.2% Food and Beverage ................................. 6.1% Computer Software and Services .................... 6.0% Financial Services ................................ 5.1% Hotels and Gaming ................................. 4.7% Equipment and Supplies ............................ 4.5% Consumer Services ................................. 3.1% Entertainment ..................................... 3.1% Specialty Chemicals ............................... 2.3% Retail ............................................ 2.3% Aerospace ......................................... 1.9% Publishing ........................................ 1.7% Transportation .................................... 1.6% Manufactured Housing and Recreational Vehicles .......................... 1.1% Energy and Utilities .............................. 1.0% Automotive: Parts and Accessories ................. 1.0% Agriculture ....................................... 0.6% Other Assets and Liabilities -- Net ............... 0.3% ------ 100.0% ====== 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 ENDING DECEMBER 31, 2004. SHAREHOLDERS MAY OBTAIN THIS INFORMATION AT WWW.GABELLI.COM OR BY CALLING THE FUND AT 800-GABELLI (800-422-3554). THE 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. 3 THE GABELLI WOODLAND SMALL CAP VALUE FUND SCHEDULE OF INVESTMENTS -- MARCH 31, 2005 (UNAUDITED) - -------------------------------------------------------------------------------- MARKET SHARES COST VALUE ------ ---- ------- COMMON STOCKS -- 91.5% AEROSPACE -- 1.9% 1,220 Alliant Techsystems Inc.+ ................$ 64,856 $ 87,169 ---------- ---------- AGRICULTURE -- 0.6% 940 Delta & Pine Land Co. .. 22,900 25,380 ---------- ---------- AUTOMOTIVE: PARTS AND ACCESSORIES -- 1.0% 1,480 Modine Manufacturing Co. .... 47,245 43,408 ---------- ---------- BUSINESS SERVICES -- 9.7% 2,180 Acxiom Corp. ........... 39,707 45,628 3,690 Adesa Inc. ............. 61,215 86,198 5,370 Bowne & Co. Inc. ....... 72,462 80,765 1,910 Fair Isaac Corp. ....... 58,085 65,780 1,960 HNI Corp. .............. 67,540 88,102 2,180 The Brink's Co. ........ 46,356 75,428 ---------- ---------- 345,365 441,901 ---------- ---------- COMPUTER SOFTWARE AND SERVICES -- 6.0% 1,290 Harland Co., John H. ... 39,565 44,324 4,347 Intergraph Corp.+ ...... 104,210 125,237 8,370 Stellent Inc.+ ......... 67,968 70,392 4,650 Tyler Technologies Inc.+ 41,365 35,387 ---------- ---------- 253,108 275,340 ---------- ---------- CONSUMER PRODUCTS -- 10.3% 1,740 Alberto-Culver Co. ..... 64,901 83,276 2,030 Brunswick Corp. ........ 62,258 95,106 1,825 Church & Dwight Co. Inc. ............. 45,865 64,733 8,230 CNS Inc. ............... 86,882 146,494 1,750 Jarden Corp.+ .......... 53,720 80,290 ---------- ---------- 313,626 469,899 ---------- ---------- CONSUMER SERVICES -- 3.1% 5,120 Insurance Auto Auctions Inc.+ ....... 71,500 142,592 ---------- ---------- DIVERSIFIED INDUSTRIAL -- 14.7% 1,970 Albany International Corp., Cl. A ................ 60,227 60,834 7,380 Apogee Enterprises Inc. 83,087 105,386 1,340 Carlisle Companies Inc. 71,331 93,492 2,000 EnPro Industries Inc.+ . 57,429 55,000 290 ESCO Technologies Inc.+ 16,175 23,301 3,060 Griffon Corp.+ ......... 58,653 65,515 4,530 Material Sciences Corp.+ 53,932 60,928 3,720 Pentair Inc. ........... 86,107 145,080 1,120 Texas Industries Inc. .. 34,690 60,200 ---------- ---------- 521,631 669,736 ---------- ---------- ENERGY AND UTILITIES -- 1.0% 1,096 ALLETE Inc. ............ 36,498 45,868 ---------- ---------- MARKET SHARES COST VALUE ------ ---- ------- ENTERTAINMENT -- 3.1% 14,790 Alloy Inc.+ ............$ 100,204 $ 86,965 5,890 Topps Co. Inc. ......... 54,952 54,247 ---------- ---------- 155,156 141,212 ---------- ---------- EQUIPMENT AND SUPPLIES -- 4.5% 2,440 Tennant Co. ............ 91,129 94,404 1,240 Toro Co. ............... 67,132 109,740 ---------- ---------- 158,261 204,144 ---------- ---------- FINANCIAL SERVICES -- 5.1% 3,850 BISYS Group Inc.+ ...... 58,075 60,368 4,310 NewAlliance Bancshares Inc. ...... 65,293 60,340 4,190 TCF Financial Corp. .... 97,435 113,758 ---------- ---------- 220,803 234,466 ---------- ---------- FOOD AND BEVERAGE -- 6.1% 7,370 Del Monte Foods Co.+ ... 70,561 79,965 2,350 PepsiAmericas Inc. ..... 38,339 53,251 3,490 Triarc Companies Inc., Cl. A ................ 33,480 49,558 7,070 Triarc Companies Inc., Cl. B ................ 74,524 97,778 ---------- ---------- 216,904 280,552 ---------- ---------- HEALTH CARE -- 10.7% 783 Fisher Scientific International Inc.+ .. 37,661 44,568 1,970 Laboratory Corporation of America Holdings+ .... 67,363 94,954 3,550 Lifecore Biomedical Inc.+ ................ 28,173 63,083 1,710 NeighborCare Inc.+ ..... 39,543 50,018 2,260 PolyMedica Corp. ....... 69,434 71,778 3,750 Possis Medical Inc.+ ... 47,140 31,388 2,530 SurModics Inc.+ ........ 58,387 80,732 2,100 West Pharmaceutical Services Inc. ........ 55,155 50,190 ---------- ---------- 402,856 486,711 ---------- ---------- HOTELS AND GAMING -- 4.7% 3,580 Gaylord Entertainment Co.+ ................. 93,954 144,632 2,810 Vail Resorts Inc.+ ..... 48,974 70,952 ---------- ---------- 142,928 215,584 ---------- ---------- MANUFACTURED HOUSING AND RECREATIONAL VEHICLES -- 1.1% 5,450 Champion Enterprises Inc.+ ................ 58,247 51,230 ---------- ---------- PUBLISHING -- 1.7% 3,340 Hollinger International Inc., Cl. A ................ 48,081 36,406 2,470 Journal Communications Inc., Cl. A ................ 45,303 40,878 ---------- ---------- 93,384 77,284 ---------- ---------- RETAIL -- 2.3% 2,410 Gander Mountain Co.+ ... 30,381 31,571 3,360 Office Depot Inc.+ ..... 51,497 74,525 ---------- ---------- 81,878 106,096 ---------- ---------- See accompanying notes to financial statements. 4 THE GABELLI WOODLAND SMALL CAP VALUE FUND SCHEDULE OF INVESTMENTS (CONTINUED) -- MARCH 31, 2005 (UNAUDITED) - -------------------------------------------------------------------------------- MARKET SHARES COST VALUE ------ ---- ------- COMMON STOCKS (CONTINUED) SPECIALTY CHEMICALS -- 2.3% 1,210 Cytec Industries Inc. ..$ 46,466 $ 65,643 1,400 Fuller (H.B.) Co. ...... 35,930 40,600 ---------- ---------- 82,396 106,243 ---------- ---------- TRANSPORTATION -- 1.6% 3,470 Laidlaw International Inc.+ ................ 58,362 72,176 ---------- ---------- TOTAL COMMON STOCKS .... 3,347,904 4,176,991 ---------- ---------- PRINCIPAL AMOUNT ------ U.S. GOVERNMENT OBLIGATIONS -- 8.2% $376,000 U.S. Treasury Bills, 2.454% to 2.823%++, 04/21/05 to 06/23/05 . 374,061 374,115 ---------- ---------- TOTAL INVESTMENTS -- 99.7% $3,721,965 4,551,106 ========== OTHER ASSETS AND LIABILITIES (NET) -- 0.3% ..................... 12,532 ---------- NET ASSETS -- 100.0% ............... $4,563,638 ========== - ---------------- For Federal tax purposes: Aggregate cost ..................... $3,721,965 ========== Gross unrealized appreciation ...... $ 904,116 Gross unrealized depreciation ...... (74,975) ---------- Net unrealized appreciation (depreciation) ................... $ 829,141 ========== - -------------- + Non-income producing security. ++ Represents annualized yield at date of purchase. See accompanying notes to financial statements. 5 THE GABELLI WOODLAND SMALL CAP VALUE FUND STATEMENT OF ASSETS AND LIABILITIES MARCH 31, 2005 (UNAUDITED) - -------------------------------------------------------------------------------- ASSETS: Investments, at value (cost $3,721,965) ............. $ 4,551,106 Cash ................................................ 34,689 Receivable from Adviser ............................. 3,275 Dividends receivable ................................ 506 Other assets ........................................ 1,110 ----------- TOTAL ASSETS ........................................ 4,590,686 ----------- LIABILITIES: Payable for shareholder communication fees ................................ 11,361 Payable for shareholder services fees ............... 3,913 Payable for distribution fees ....................... 1,011 Other accrued expenses .............................. 10,763 ----------- TOTAL LIABILITIES ................................... 27,048 ----------- NET ASSETS applicable to 336,532 shares outstanding ................................ $ 4,563,638 =========== NET ASSETS CONSIST OF: Capital stock, at $0.001 par value .................. $ 337 Additional paid-in capital .......................... 3,686,739 Accumulated net investment loss ..................... (4,946) Accumulated net realized gain on investments .................................... 52,367 Net unrealized appreciation on investments .................................... 829,141 ----------- NET ASSETS .......................................... $ 4,563,638 =========== SHARES OF CAPITAL STOCK: CLASS AAA: Net Asset Value, offering and redemption price per share ($4,442,950 / 327,579 shares outstanding; 100,000,000 shares authorized of $0.001 par value) ................................. $13.56 ====== CLASS A: Net Asset Value and redemption price per share ($74,877 / 5,524 shares outstanding; 50,000,000 shares authorized of $0.001 par value) ............ $13.55 ====== Maximum sales charge ................................ 5.75% ====== Maximum offering price per share (NAV / .9425, based on maximum sales charge of 5.75% of the offering price) ............................... $14.38 ====== CLASS B: Net Asset Value and offering price per share ($146 / 10.55 shares outstanding; 50,000,000 shares authorized of $0.001 par value) ............ $13.84(a) ====== CLASS C: Net Asset Value and offering price per share ($45,665 / 3,418 shares outstanding; 50,000,000 shares authorized of $0.001 par value) ............ $13.36(a) ====== - ----------------- (a) Redemption price varies based on length of time held. STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED MARCH 31, 2005 (UNAUDITED) - -------------------------------------------------------------------------------- INVESTMENT INCOME: Dividends ........................................ $ 34,800 Interest ......................................... 2,404 --------- TOTAL INVESTMENT INCOME .......................... 37,204 --------- EXPENSES: Investment advisory fees ......................... 20,978 Distribution fees -- Class AAA ................... 5,106 Distribution fees -- Class A ..................... 83 Distribution fees -- Class B ..................... 1 Distribution fees -- Class C ..................... 222 Legal and audit fees ............................. 12,112 Registration fees ................................ 10,032 Shareholder communications expenses .............. 9,296 Shareholder services fees ........................ 8,606 Custodian fees ................................... 4,563 Directors' fees .................................. 119 Miscellaneous expenses ........................... 2,583 --------- TOTAL EXPENSES BEFORE FEES WAIVED AND EXPENSES REIMBURSED BY ADVISER ................. 73,701 --------- FEES WAIVED AND EXPENSES REIMBURSED BY ADVISER ..................................... (31,551) --------- TOTAL EXPENSES -- NET ............................ 42,150 --------- NET INVESTMENT LOSS .............................. (4,946) --------- NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS: Net realized gain on investments ................. 73,584 Net change in unrealized appreciation/depreciation on investments ................................. 366,731 --------- NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS ................................. 440,315 --------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ................................ $ 435,369 ========= See accompanying notes to financial statements. 6 THE GABELLI WOODLAND SMALL CAP VALUE FUND STATEMENT OF CHANGES IN NET ASSETS - -------------------------------------------------------------------------------- SIX MONTHS ENDED MARCH 31, 2005 PERIOD ENDED (UNAUDITED) SEPTEMBER 30, 2004 ---------------- ------------------- OPERATIONS: Net investment loss ................................ $ (4,946) $ (33,845) Net realized gain on investments ................... 73,584 251,438 Net change in unrealized appreciation/ depreciation on investments ...................... 366,731 302,913 ----------- ----------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 435,369 520,506 ----------- ----------- DISTRIBUTIONS TO SHAREHOLDERS: Net realized gains Class AAA ........................................ (216,521) (6,975) Class A .......................................... (3,450) (29) Class B .......................................... (7) (1) Class C .......................................... (2,367) (362) ----------- ----------- TOTAL DISTRIBUTIONS TO SHAREHOLDERS ................ (222,345) (7,367) ----------- ----------- CAPITAL SHARE TRANSACTIONS: Class AAA ........................................ 847,669 573,650 Class A .......................................... 24,304 41,636 Class B .......................................... 8 -- Class C .......................................... 2,367 (97,250) ----------- ----------- NET INCREASE IN NET ASSETS FROM CAPITAL SHARE TRANSACTIONS ....................... 874,348 518,036 ----------- ----------- REDEMPTION FEES .................................... 36 -- ----------- ----------- NET INCREASE IN NET ASSETS ......................... 1,087,408 1,031,175 NET ASSETS: Beginning of period ................................ 3,476,230 2,445,055 ----------- ----------- End of period ...................................... $ 4,563,638 $ 3,476,230 =========== =========== See accompanying notes to financial statements. 7 THE GABELLI WOODLAND SMALL CAP VALUE FUND NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - -------------------------------------------------------------------------------- 1. ORGANIZATION. The Gabelli Woodland Small Cap Value Fund (the "Fund") is a series of Gabelli Equity Series Funds, Inc. (the "Corporation"), which was organized on July 25, 1991 as a Maryland corporation. The Fund is a non-diversified, open-end management investment company registered under the Investment Company Act of 1940, as amended (the "1940 Act"), and one of three separately managed portfolios (collectively, the "Portfolios") of the Corporation, each with four separate classes of shares known as Class AAA, Class A, Class B and Class C. The Fund's primary objective is capital appreciation. The Fund commenced investment operations on December 31, 2002. 2. SIGNIFICANT ACCOUNTING POLICIES. The preparation of financial statements in accordance with 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 Directors (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 WOODLAND SMALL CAP VALUE FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) - -------------------------------------------------------------------------------- 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. 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 upon the proportion of net assets of each class at the beginning of each day. Distribution expenses are solely borne by the class incurring the expense. 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 fiscal year ended September 30, 2004, reclassifications were made to decrease accumulated net investment loss by $33,845 and decrease accumulated net realized gain on investments by $33,845. For the fiscal year ended September 30, 2004, the tax character of distributions is all ordinary income. 9 THE GABELLI WOODLAND SMALL CAP VALUE FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) - -------------------------------------------------------------------------------- PROVISION FOR INCOME TAXES. The Fund intends to continue to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). It is the policy of the Fund 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. Dividends and interest from non-U.S. sources received by the Fund are generally subject to non-U.S. withholding taxes at rates ranging up to 30%. Such withholding taxes may be reduced or eliminated under the terms of applicable U.S. income tax treaties, and the Fund intends to undertake any procedural steps required to claim the benefits of such treaties. At September 30, 2004, the difference between book and tax basis unrealized appreciation is primarily due to deferral of losses from wash sales for tax purposes. As of September 30, 2004, the components of accumulated earnings/(losses) on a tax basis were as follows: Undistributed ordinary income (inclusive of short-term capital gains) ..... $188,894 Undistributed long-term capital gains ......... 17,752 Net unrealized appreciation ................... 456,892 -------- Total accumulated earnings .................. $663,538 ======== 3. INVESTMENT ADVISORY AGREEMENT. The Fund has entered into an investment advisory agreement (the "Advisory Agreement") with the Adviser which provides that the Fund will pay the Adviser a fee, computed daily and paid monthly, at the annual rate of 1.00% of the value of the Fund's average daily net assets. In accordance with the Advisory Agreement, the Adviser provides a continuous investment program for the Fund's portfolio, oversees the administration of all aspects of the Fund's business and affairs and pays the compensation of all Officers and Directors of the Fund who are affiliates of the Adviser. The Adviser has agreed to waive its fees and reimburse expenses of the Fund to the extent necessary to maintain the annualized total operating expenses at 2.00%, 2.00%, 2.75% and 2.75% of average daily net assets for Class AAA, Class A, Class B and Class C Shares, respectively. For the six months ended March 31, 2005, the Adviser reimbursed the Fund in the amount of $31,551. The Fund is obliged to repay the Adviser for a period of two fiscal years following the fiscal year in which the Adviser reimbursed the Fund only to the extent that the operating expenses of the Fund fall below 2.00%, 2.00%, 2.75% and 2.75% on an annualized basis of average daily net assets for Class AAA, Class A, Class B and Class C, respectively. The cumulative amount for which the Fund may repay the adviser is $271,168. 4. DISTRIBUTION PLAN. The Fund's Board has adopted a distribution plan (the "Plan") for each class of shares 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. 10 THE GABELLI WOODLAND SMALL CAP VALUE FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) - -------------------------------------------------------------------------------- 5. PORTFOLIO SECURITIES. Purchases and proceeds from sales of securities for the six months ended March 31, 2005, other than short-term securities, are $1,128,144 and $607,808, respectively. 6. TRANSACTIONS WITH AFFILIATES. During the six months ended March 31, 2005, the Fund paid brokerage commissions of $216 to Gabelli & Company. During the six months ended March 31, 2005, Gabelli & Company informed the Fund that it received $1,318 from investors representing commissions (sales charges and underwriting fees) on sales and redemptions of Fund shares. 7. LINE OF CREDIT. The Fund has access to an unsecured line of credit of up to $25,000,000 from the custodian for temporary borrowing purposes. Borrowings under this agreement bear interest at 0.75% above the Federal Funds rate on outstanding balances. During the six months ended March 31, 2005, there were no borrowings from the line of credit. 8. CAPITAL STOCK TRANSACTIONS. The Fund offers four classes of shares--Class AAA Shares, Class A Shares, Class B Shares and Class C 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 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 the 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. The Fund imposes a redemption fee of 2.00% on Class AAA, Class A, Class B and Class C Shares that are redeemed or exchanged within 60 days after the date of a purchase. For Class AAA, Class A, Class B and Class C Shares, the 2.00% redemption fee applies to shares purchased on or after November 1, 2004. The redemption fee is deducted from the proceeds otherwise payable to the redeeming shareholders and retained by the Fund. The redemption fees retained by the Fund during the six months ended March 31, 2005 amounted to $36. The redemption fee does 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 participant level due to systems limitations have received an extension until March 31, 2005 to implement such systems. 11 THE GABELLI WOODLAND SMALL CAP VALUE FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) - -------------------------------------------------------------------------------- Transactions in shares of capital stock were as follows: SIX MONTHS ENDED MARCH 31, 2005 YEAR ENDED (UNAUDITED) SEPTEMBER 30, 2004 ----------------------- ------------------------ SHARES AMOUNT SHARES AMOUNT ------- ----------- ------- ----------- CLASS AAA CLASS AAA ----------------------- ------------------------ Shares sold ..................... 76,011 $ 1,029,851 125,294 $ 1,550,393 Shares issued upon reinvestment of dividends ..... 15,770 212,423 579 6,880 Shares redeemed ................. (29,047) (394,605) (80,708) (983,623) ------- ----------- ------- ----------- Net increase .................... 62,734 $ 847,669 45,165 $ 573,650 ======= =========== ======= =========== CLASS A CLASS A ----------------------- ------------------------ Shares sold ..................... 1,585 $ 20,854 3,366 $ 41,607 Shares issued upon reinvestment of dividends ..... 256 3,450 2 29 Shares redeemed ................. -- -- -- -- ------- ----------- ------- ----------- Net increase .................... 1,841 $ 24,304 3,368 $ 41,636 ======= =========== ======= =========== CLASS B CLASS B ----------------------- ------------------------ Shares sold ..................... -- -- -- -- Shares issued upon reinvestment of dividends ..... 1 $ 8 -- -- Shares redeemed ................. -- -- -- -- ------- ----------- ------- ----------- Net increase .................... 1 $ 8 -- -- ======= =========== ======= =========== CLASS C CLASS C ----------------------- ------------------------ Shares sold ..................... -- -- 31 $ 362 Shares issued upon reinvestment of dividends ..... 178 $ 2,367 -- -- Shares redeemed ................. -- -- (7,997) (97,612) ------- ----------- ------- ----------- Net increase / (decrease) ....... 178 $ 2,367 (7,966) $ (97,250) ======= =========== ======= =========== 9. OTHER MATTERS. The Adviser and/or affiliates have received subpoenas from the Attorney General of the State of New York and SEC requesting information on mutual fund shares trading practices. Gabelli Asset Management Inc., the Adviser's parent company, 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. 10. 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 WOODLAND SMALL CAP VALUE FUND FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- Selected data for a share of capital stock outstanding throughout each period: INCOME FROM INVESTMENT OPERATIONS DISTRIBUTIONS --------------------------------------------------- --------------------------- Net Net Asset Net Realized and Total Net Period Value, Investment Unrealized from Realized Ended Beginning Income/ Gain/(Loss) on Investment Gain on Total Redemption September 30 of Period (Loss)(d) Investments Operations Investments Distributions Fees(d) - ------------ --------- ---------- -------------- ---------- ----------- ------------- ---------- CLASS AAA 2005(f) $12.79 $(0.02) $1.52 $1.50 $(0.73) $(0.73) $0.00(e) 2004 10.58 (0.14) 2.38 2.24 (0.03) (0.03) -- 2003(a) 10.00 (0.07) 0.65 0.58 -- -- -- CLASS A 2005(f) $12.79 $(0.01) $1.50 $1.49 $(0.73) $(0.73) $0.00(e) 2004 10.57 (0.14) 2.39 2.25 (0.03) (0.03) -- 2003(a) 10.00 (0.07) 0.64 0.57 -- -- -- CLASS B 2005(f) $12.98 $(0.08) $1.67 $1.59 $(0.73) $(0.73) $0.00(e) 2004 10.59 0.02 2.40 2.42 (0.03) (0.03) -- 2003(a) 10.00 (0.12) 0.71 0.59 -- -- -- CLASS C 2005(f) $12.66 $(0.07) $1.50 $1.43 $(0.73) $(0.73) $0.00(e) 2004 10.55 (0.23) 2.37 2.14 (0.03) (0.03) -- 2003(a) 10.00 (0.11) 0.66 0.55 -- -- -- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA ------------------------------------------------------------------------------------------- Net Asset Net Assets Expenses Expenses Period Value, End of Net Net of Before Portfolio Ended End of Total Period Investment Waivers/ Waivers/ Turnover September 30 Period Return+ (in 000's) Income/(Loss) Reimbursements Reimbursements(c) Rate - ------------ --------- ------- ----------- ------------- -------------- ----------------- ---------- CLASS AAA 2005(f) $13.56 11.77% $4,443 (0.23)%(b) 2.00%(b) 3.51%(b) 15% 2004 12.79 21.22 3,388 (1.14) 2.00 5.94 45 2003(a) 10.58 5.80 2,323 (0.97)(b) 2.00(b) 15.05(b) 39 CLASS A 2005(f) $13.55 11.69% $ 75 (0.19)%(b) 2.00%(b) 3.51%(b) 15% 2004 12.79 21.34 47 (1.16) 2.00 5.94 45 2003(a) 10.57 5.70 3 (0.97)(b) 2.00(b) 15.05(b) 39 CLASS B 2005(f) $13.84 12.32% $ 0.1 (1.12)%(b) 2.75%(b) 4.48%(b) 15% 2004 12.98 22.91 0.1 0.18 2.75 6.69 45 2003(a) 10.59 5.90 0.1 (1.72)(b) 2.75(b) 15.80(b) 39 CLASS C 2005(f) $13.36 11.33% $ 46 (0.99)%(b) 2.75%(b) 4.25%(b) 15% 2004 12.66 20.33 41 (1.88) 2.75 6.69 45 2003(a) 10.55 5.50 118 (1.72)(b) 2.75(b) 15.80(b) 39 - ------------------------ + Total return represents aggregate total return of a hypothetical $1,000 investment at the beginning of the period and sold at the end of the period including reinvestment of dividends and does not reflect applicable sales charges. Total return for the period of less than one year is not annualized. (a) From commencement of investment operations on December 31, 2002 through September 30, 2003. (b) Annualized. (c) During the period, expenses were voluntarily reduced and/or reimbursed. If such fee reductions and/or reimbursements had not occurred, the ratio would have been as shown. (d) Per share amounts have been calculated using the average shares outstanding method. (e) Amount represents less than $0.005 per share. (f) For the period ending March 31, 2005, unaudited. See accompanying notes to financial statements. 13 THE GABELLI WOODLAND SMALL CAP VALUE FUND BOARD CONSIDERATION AND RE-APPROVAL OF ADVISORY AGREEMENT (UNAUDITED) During the six months ended March 31, 2005, the Board of Directors of the Corporation approved the continuation of the investment advisory agreement with the Adviser for the Fund on the basis of the recommendation by the directors (the "independent directors") who are not "interested persons" of the Fund. The following paragraphs summarize the material information and factors considered by the independent directors as well as their conclusions relative to such factors. NATURE, EXTENT AND QUALITY OF SERVICES. The independent directors considered information regarding the portfolio manager, the depth of the analyst pool available to the Adviser and the portfolio manager, the scope of administrative, shareholder and other services supervised or provided by the Adviser and the absence of significant service problems reported to the Board. The independent directors noted the experience, length of service and reputation of the portfolio manager. INVESTMENT PERFORMANCE. The independent directors reviewed the short-term performance of the Fund since inception against a peer group of small cap value and core funds. The directors noted that the Fund's performance was near the top 33% of the funds in its category for the relevant period. PROFITABILITY. The independent directors reviewed summary data regarding the lack of profitability of the Fund to the Adviser both with an administrative overhead charge and without such a charge. The directors also noted that an affiliated broker of the Adviser received distribution fees and minor amounts of sales commissions and that the Adviser received a moderate level of soft dollar research benefits through the Fund's portfolio brokerage. ECONOMIES OF SCALE. The independent directors discussed the major elements of the Adviser's cost structure and the relationship of those elements to potential economies of scale. The independent directors agreed that economies of scale were not an issue for this small and slow-growing Fund that has been unprofitable to the Adviser. SHARING OF ECONOMIES OF SCALE. The independent directors noted that the investment management fee schedule for the Fund does not take into account any potential economies of scale that may develop or any losses or diminished profitability to the Adviser in prior years. SERVICE AND COST COMPARISONS. The independent directors compared the expense ratios of the investment management fee, other expenses and total expenses of the Fund to similar expense ratios of the peer group of small cap value and core funds and noted that the Adviser's management fee includes substantially all administrative services of the Fund as well as investment advisory services. The directors noted that the Fund's expense ratios after waivers were above and the Fund's size was far below average within this group and that the Adviser had been waiving substantial portions of its fees in order to make the Fund a more attractive investment. The directors also noted that the management fee structure before waivers was the same as that in effect for most of the Gabelli funds. The directors did not compare the management fee to the fee for other types of accounts managed by the Adviser. CONCLUSIONS. The independent directors concluded that the Fund enjoyed highly experienced portfolio management services, good ancillary services and an excellent performance record during its limited life. The independent directors also concluded that the Fund's expense ratios were reasonable in light of the lack of profitability to the Adviser of managing the Fund, and that economies of scale were not a factor in their thinking at this time. The directors did not view the potential profitability of ancillary services as material to their decision. On the basis of the foregoing and without assigning particular weight to any single conclusion, the independent directors determined to recommend continuation of the investment management agreement to the full Board of Directors. 14 GABELLI FAMILY OF FUNDS VALUE ________________________________________ GABELLI ASSET FUND Seeks to invest primarily in a diversified portfolio of common stocks selling at significant discounts to their private market value. The Fund's primary objective is growth of capital. (MULTICLASS) PORTFOLIO MANAGER: MARIO J. GABELLI, CFA GABELLI BLUE CHIP VALUE FUND Seeks long term growth of capital through investment primarily in the common stocks of established companies which are temporarily out of favor. The fund's objective is to identify a catalyst or sequence of events that will return the company to a higher value. (MULTICLASS) PORTFOLIO MANAGER: BARBARA MARCIN, CFA WESTWOOD EQUITY FUND Seeks to invest primarily in the common stock of well-seasoned companies that have recently reported positive earnings surprises and are trading below Westwood's proprietary growth rate estimates. The Fund's primary objective is capital appreciation. (MULTICLASS) PORTFOLIO MANAGER: SUSAN M. BYRNE FOCUSED VALUE ______________________________ GABELLI VALUE FUND Seeks to invest in securities of companies believed to be undervalued. The Fund's primary objective is long-term capital appreciation. (MULTICLASS) PORTFOLIO MANAGER: MARIO J. GABELLI, CFA SMALL CAP VALUE ____________________________ GABELLI SMALL CAP FUND Seeks to invest primarily in common stock of smaller companies (market capitalizations less than $1 billion) believed to have rapid revenue and earnings growth potential. The Fund's primary objective is capital appreciation. (MULTICLASS) PORTFOLIO MANAGER: MARIO J. GABELLI, CFA WESTWOOD SMALLCAP EQUITY FUND Seeks to invest primarily in smaller capitalization equity securities - market caps of $2.5 billion or less. The Fund's primary objective is long-term capital appreciation. (MULTICLASS) TEAM MANAGED GABELLI WOODLAND SMALL CAP VALUE FUND Seeks to invest primarily in the common stocks of smaller companies (market capitalizations less than $1.5 billion) believed to be undervalued with shareholder oriented management teams that are employing strategies to grow the company's value. The Fund's primary objective is capital appreciation. (MULTICLASS) PORTFOLIO MANAGER: ELIZABETH M. LILLY, CFA GROWTH ______________________________________ GABELLI GROWTH FUND Seeks to invest primarily in large cap stocks believed to have favorable, yet undervalued, prospects for earnings growth. The Fund's primary objective is capital appreciation. (MULTICLASS) PORTFOLIO MANAGER: HOWARD F. WARD, CFA GABELLI INTERNATIONAL GROWTH FUND Seeks to invest in the equity securities of foreign issuers with long-term capital appreciation potential. The Fund offers investors global diversification. (MULTICLASS) PORTFOLIO MANAGER: CAESAR BRYAN AGGRESSIVE GROWTH _________________________ GABELLI GLOBAL GROWTH FUND Seeks capital appreciation through a disciplined investment program focusing on the globalization and interactivity of the world's marketplace. The Fund invests in companies at the forefront of accelerated growth. The Fund's primary objective is capital appreciation. (MULTICLASS) TEAM MANAGED MICRO-CAP ___________________________________ WESTWOOD MIGHTY MITES(SM) FUND Seeks to invest in micro-cap companies that have market capitalizations of $300 million or less. The Fund's primary objective is long-term capital appreciation. (MULTICLASS) TEAM MANAGED EQUITY INCOME _______________________________ GABELLI EQUITY INCOME FUND Seeks to invest primarily in equity securities with above market average yields. The Fund pays monthly dividends and seeks a high level of total return with an emphasis on income. (MULTICLASS) PORTFOLIO MANAGER: MARIO J. GABELLI, CFA WESTWOOD BALANCED FUND Seeks to invest in a balanced and diversified portfolio of stocks and bonds. The Fund's primary objective is both capital appreciation and current income. (MULTICLASS) CO-PORTFOLIO MANAGERS: SUSAN M. BYRNE MARK FREEMAN, CFA WESTWOOD REALTY FUND Seeks to invest in securities that are primarily engaged in or related to the real estate industry. The Fund's primary objective is long-term capital appreciation. (MULTICLASS) PORTFOLIO MANAGER: SUSAN M. BYRNE SPECIALTY EQUITY ____________________________ GABELLI GLOBAL CONVERTIBLE SECURITIES FUND Seeks to invest principally in bonds and preferred stocks which are convertible into common stock of foreign and domestic companies. The Fund's primary objective is total return through a combination of current income and capital appreciation. (MULTICLASS) TEAM MANAGED GABELLI GLOBAL OPPORTUNITY FUND Seeks to invest in common stock of companies which have rapid growth in revenues and earnings and potential for above average capital appreciation or are undervalued. The Fund's primary objective is capital appreciation. (MULTICLASS) TEAM MANAGED SECTOR ______________________________________ GABELLI GLOBAL TELECOMMUNICATIONS FUND Seeks to invest in telecommunications companies throughout the world - targeting undervalued companies with strong earnings and cash flow dynamics. The Fund's primary objective is capital appreciation. (MULTICLASS) TEAM MANAGED GABELLI GOLD FUND Seeks to invest in a global portfolio of equity securities of gold mining and related companies. The Fund's objective is long-term capital appreciation. Investment in gold stocks is considered speculative and is affected by a variety of world-wide economic, financial and political factors. (MULTICLASS) PORTFOLIO MANAGER: CAESAR BRYAN GABELLI UTILITIES FUND Seeks to provide a high level of total return through a combination of capital appreciation and current income. (MULTICLASS) TEAM MANAGED MERGER AND ARBITRAGE _____________________ GABELLI ABC FUND Seeks to invest in securities with attractive opportunities for appreciation or investment income. The Fund's primary objective is total return in various market conditions without excessive risk of capital loss. (NO-LOAD) PORTFOLIO MANAGER: MARIO J. GABELLI, CFA CONTRARIAN_________________________________ Gabelli Mathers Fund Seeks long-term capital appreciation in various market conditions without excessive risk of capital loss. (CLASS AAA-NO-LOAD) PORTFOLIO MANAGER: HENRY VAN DER EB, CFA COMSTOCK CAPITAL VALUE FUND Seeks capital appreciation and current income. The Fund may use either long or short positions to achieve its objective. (MULTICLASS) PORTFOLIO MANAGER: MARTIN WEINER, CFA COMSTOCK STRATEGY FUND The Fund emphasizes investments in debt securities, which maximize total return in light of credit risk, interest rate risk, and the risk associated with the length of maturity of the debt instrument. (MULTICLASS) PORTFOLIO MANAGER: MARTIN WEINER, CFA QUANTITATIVE_________________________________ NED DAVIS RESEARCH ASSET ALLOCATION FUND Seeks to achieve returns greater then the weighted composite benchmark consisting of 60% in the S&P 500 Index and 40% in the Lehman Long Term U.S. Government Bond Index through a flexible asset allocation strategy. The Fund's primary objective is capital appreciation. (MULTICLASS) TEAM MANAGED FIXED INCOME ________________________________ WESTWOOD INTERMEDIATE BOND FUND Seeks to invest in a diversified portfolio of bonds with various maturities. The Fund's primary objective is total return. (MULTICLASS) PORTFOLIO MANAGER: MARK FREEMAN, CFA CASH MANAGEMENT-MONEY MARKET __________ GABELLI U.S. TREASURY MONEY MARKET FUND Seeks to invest exclusively in short-term U.S. Treasury securities. The Fund's primary objective is to provide high current income consistent with the preservation of principal and liquidity. (NO-LOAD) PORTFOLIO MANAGER: JUDITH A. RANERI THE TREASURER'S FUND Three money market portfolios designed to generate superior returns without compromising portfolio safety. U.S. Treasury Money Market seeks to invest in U.S. Treasury securities and repurchase agreements. Tax Exempt Money Market seeks to invest in municipal securities. Domestic Prime Money Market seeks to invest in prime quality, domestic money market instruments. (NO-LOAD) PORTFOLIO MANAGER: JUDITH A. RANERI THE GLOBAL FUNDS INVEST IN FOREIGN SECURITIES WHICH INVOLVE RISKS NOT ORDINARILY ASSOCIATED WITH INVESTMENTS IN DOMESTIC ISSUES, INCLUDING CURRENCY FLUCTUATION, ECONOMIC AND POLITICAL RISKS. AN INVESTMENT IN THE ABOVE MONEY MARKET FUNDS IS NEITHER INSURED NOR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY GOVERNMENT AGENCY. ALTHOUGH THE FUNDS SEEK TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUNDS. TO RECEIVE A PROSPECTUS, CALL 800-GABELLI (422-3554). INVESTORS SHOULD CONSIDER THE INVESTMENT OBJECTIVES, RISKS AND CHARGES AND EXPENSES OF THE FUND CAREFULLY BEFORE INVESTING. THE PROSPECTUS CONTAINS MORE COMPLETE INFORMATION ABOUT THIS AND OTHER MATTERS AND SHOULD BE READ CAREFULLY BEFORE INVESTING. Gabelli Equity Series Funds, Inc. THE GABELLI WOODLAND SMALL CAP VALUE FUND One Corporate Center Rye, New York 10580-1422 800-GABELLI 800-422-3554 FAX: 914-921-5118 WEBSITE: WWW.GABELLI.COM E-MAIL: INFO@GABELLI.COM Net Asset Value available daily by calling 800-GABELLI after 6:00 P.M. BOARD OF DIRECTORS Mario J. Gabelli, CFA Karl Otto Pohl CHAIRMAN AND CHIEF FORMER PRESIDENT EXECUTIVE OFFICER DEUTSCHE BUNDESBANK GABELLI ASSET MANAGEMENT INC. Anthony J. Colavita Anthony R. Pustorino ATTORNEY-AT-LAW CERTIFIED PUBLIC ACCOUNTANT ANTHONY J. COLAVITA, P.C. PROFESSOR EMERITUS PACE UNIVERSITY Vincent D. Enright Anthonie C. van Ekris FORMER SENIOR VICE PRESIDENT MANAGING DIRECTOR AND CHIEF FINANCIAL OFFICER BALMAC INTERNATIONAL, INC. KEYSPAN ENERGY CORP. John D. Gabelli Salvatore J. Zizza SENIOR VICE PRESIDENT CHAIRMAN GABELLI & COMPANY, INC. HALLMARK ELECTRICAL SUPPLIES CORP. Robert J. Morrissey ATTORNEY-AT-LAW MORRISSEY, HAWKINS & LYNCH OFFICERS AND PORTFOLIO MANAGER Elizabeth M. Lilly, CFA Bruce N. Alpert PORTFOLIO MANAGER PRESIDENT AND TREASURER James E. McKee Peter D. 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 Woodland Small Cap Value Fund. It is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. - -------------------------------------------------------------------------------- GAB840Q105SR [GRAPHIC OMITTED] PICTURE OF MARIO GABELLI THE GABELLI WOODLAND SMALL CAP VALUE FUND SEMI-ANNUAL REPORT MARCH 31, 2005 ITEM 2. CODE OF ETHICS. Not applicable. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not applicable. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable. ITEM 6. SCHEDULE OF INVESTMENTS 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. The Board of Directors has a Nominating Committee comprised of three "non-interested" (as such term is defined by the Investment Company Act of 1940, as amended) Directors, namely Anthony J. Colavita, Vincent D. Enright and Robert J. Morrisey. The Nominating Committee is responsible for identifying and recommending to the Board of Directors individuals believed to be qualified to become Board members in the event that a position is vacated or created. The Nominating Committee will consider Director candidates recommended by shareholders. In considering candidates submitted by shareholders, the Nominating Committee will take into consideration the needs of the Board of Directors, the qualifications of the candidate and the interests of shareholders. The Nominating Committee may also take into consideration the number of shares held by the recommending shareholder and the length of time that such shares have been held. To recommend a candidate for consideration by the Nominating Committee, a shareholder must submit the recommendation in writing and must include the following information: o The name of the shareholder and evidence of the person's ownership of shares of the Fund, including the number of shares owned and the length of time of ownership; o The name of the candidate, the candidate's resume or a listing of his or her qualifications to be a Director of the Fund and the person's consent to be named as a Director if selected by the Nominating Committee and nominated by the Board of Directors; and o If requested by the Nominating Committee, a completed and signed Directors questionnaire. The shareholder recommendation and information described above must be sent to the Fund's Secretary c/o Gabelli Funds, LLC, James E. McKee, and must be received by the Secretary no less than 120 days prior to the anniversary date of the Fund's most recent annual meeting of shareholders or, if the meeting has moved by more than 30 days, a reasonable amount of time before the meeting. The Nominating Committee believes that the minimum qualifications for serving as a Director of the Fund are that the individual demonstrate, by significant accomplishment in his or her field, an ability to make a meaningful contribution to the Board of Directors' oversight on the business and affairs of the Fund and have an impeccable record and reputation for honest and ethical conduct in both his or her professional and personal activities. In addition, the Nominating Committee examines a candidate's specific experiences and skills, time availability in light of other commitments, potential conflicts of interest and independence from management and the Fund. The Nominating Committee also seeks to have the Board of Directors represent a diversity of backgrounds and experience. The Board of Directors has adopted a Nominating Committee Charter. 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) Not applicable. (a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto. (a)(3) Not applicable. (b) Certifications pursuant to Rule 30a-2(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) Gabelli Equity Series Funds, Inc. ------------------------------------------------------------------- By (Signature and Title)* /s/ Bruce N. Alpert ------------------------------------------------------- Bruce N. Alpert, Principal Executive Officer Date June 6, 2005 ---------------------------------------------------------------------------- Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title)* /s/ Bruce N. Alpert ------------------------------------------------------- Bruce N. Alpert, Principal Executive Officer and Principal Financial Officer Date June 6, 2005 ---------------------------------------------------------------------------- * Print the name and title of each signing officer under his or her signature.