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 811-04494
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The Gabelli Asset Fund
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(Exact name of registrant as specified in charter)
One Corporate Center
Rye, New York 10580-1422
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(Address of principal executive offices) (Zip code)
Bruce N. Alpert
Gabelli Funds, LLC
One Corporate Center
Rye, New York 10580-1422
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(Name and address of agent for service)
registrant's telephone number, including area code: 1-800-422-3554
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Date of fiscal year end: December 31
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Date of reporting period: June 30, 2005
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
The Report to Shareholders is attached herewith.
THE GABELLI ASSET FUND
SEMI-ANNUAL REPORT
JUNE 30, 2005
TO OUR SHAREHOLDERS,
During the second quarter of 2005, the Gabelli Asset Fund (the "Fund")
rose 2.0%, while the Standard & Poor's ("S&P") 500 Index rose 1.4% and the Dow
Jones Industrials Average declined 1.6%. For the six month period ended June 30,
2005, the Fund was up 1.5% versus declines of 0.8% and 3.5% for the S&P 500
Index and the Dow Jones Industrial Average, respectively.
Enclosed are the financial statements and the investment portfolio as of
June 30, 2005.
COMPARATIVE RESULTS
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AVERAGE ANNUAL RETURNS THROUGH JUNE 30, 2005 (A)
Since
Year to Inception
Quarter Date 1 Year 3 Year 5 Year 10 Year 15 Year (3/3/86)
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GABELLI ASSET FUND CLASS AAA ... 2.01% 1.45% 12.59% 12.33% 5.63% 12.80% 12.78% 14.10%
S&P 500 Index .................. 1.37 (0.81) 6.32 8.28 (2.37) 9.94 10.64 11.59
Dow Jones Industrial Average ...(1.62) (3.50) 0.83 5.99 1.76 10.65 11.42 12.66
Nasdaq Composite Index ......... 2.89 (5.45) 0.45 12.02 (12.31) 8.22 10.46 9.44
Class A ........................ 2.02 1.43 12.59 12.33 5.62 12.80 12.77 14.10
(3.85)(b) (4.42)(b) 6.12(b) 10.13(b) 4.38(b) 12.13(b) 12.33(b) 13.74(b)
Class B ........................ 1.84 1.09 11.86 11.92 5.40 12.68 12.69 14.04
(3.16)(c) (3.91)(c) 6.86(c) 11.12(c) 5.07(c) 12.68(c) 12.69(c) 14.04(c)
Class C ........................ 1.81 1.07 11.77 11.91 5.39 12.67 12.69 14.03
0.81(c) 0.07(c) 10.77(c) 11.91(c) 5.39(c) 12.67(c) 12.69(c) 14.03(c)
(a) 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. THE DOW JONES INDUSTRIAL
AVERAGE IS AN UNMANAGED INDEX OF 30 LARGE CAPITALIZATION STOCKS. THE S&P 500
INDEX AND THE NASDAQ COMPOSITE INDEX ARE UNMANAGED INDICATORS OF STOCK
MARKET PERFORMANCE. DIVIDENDS ARE REINVESTED EXCEPT FOR THE NASDAQ COMPOSITE
INDEX.
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 B
SHARES AND CLASS C SHARES WOULD HAVE BEEN LOWER DUE TO THE ADDITIONAL
EXPENSES ASSOCIATED WITH THESE CLASSES OF SHARES.
(b) INCLUDES THE EFFECT OF THE MAXIMUM 5.75% SALES CHARGE AT THE BEGINNING OF
THE PERIOD.
(c) INCLUDES THE EFFECT OF THE APPLICABLE CONTINGENT DEFERRED SALES CHARGE AT
THE END OF THE PERIOD SHOWN FOR CLASS B AND CLASS C SHARES, RESPECTIVELY.
CLASS B SHARES ARE NOT AVAILABLE FOR NEW PURCHASES.
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We have separated the portfolio manager's commentary from the financial
statements and investment portfolio due to 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.
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THE GABELLI ASSET FUND
DISCLOSURE OF FUND EXPENSES (UNAUDITED)
For the Six Month Period from January 1, 2005 through June 30, 2005
EXPENSE TABLE
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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 June 30, 2005.
Beginning Ending Annualized Expenses
Account Value Account Value Expense Paid During
01/01/05 06/30/05 Ratio Period*
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GABELLI ASSET FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Class AAA $1,000.00 $1,014.50 1.37% $ 6.84
Class A $1,000.00 $1,014.30 1.38% $ 6.89
Class B $1,000.00 $1,010.90 2.02% $10.07
Class C $1,000.00 $1,010.70 2.13% $10.62
HYPOTHETICAL 5% RETURN
Class AAA $1,000.00 $1,018.00 1.37% $ 6.85
Class A $1,000.00 $1,017.95 1.38% $ 6.90
Class B $1,000.00 $1,014.78 2.02% $10.09
Class C $1,000.00 $1,014.23 2.13% $10.64
* 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 ASSET FUND
Food and Beverage .................................. 9.2%
Publishing ......................................... 7.5%
Telecommunications ................................. 7.4%
Energy and Utilities ............................... 7.3%
Entertainment ...................................... 6.6%
Cable and Satellite ................................ 5.6%
Consumer Products .................................. 5.4%
Diversified Industrial ............................. 5.4%
Financial Services ................................. 4.9%
Equipment and Supplies ............................. 4.7%
Automotive: Parts and Accessories .................. 3.6%
Retail ............................................. 3.6%
Health Care ........................................ 3.3%
Hotels and Gaming .................................. 2.9%
Aviation: Parts and Services ....................... 2.6%
U.S. Government Obligations ........................ 2.6%
Real Estate ........................................ 1.7%
Communications Equipment ........................... 1.6%
Specialty Chemicals ................................ 1.6%
Machinery .......................................... 1.5%
Metals and Mining .................................. 1.4%
Consumer Services .................................. 1.3%
Business Services .................................. 1.2%
Environmental Services ............................. 1.2%
Electronics ........................................ 0.9%
Broadcasting ....................................... 0.9%
Automotive ......................................... 0.9%
Agriculture ........................................ 0.9%
Wireless Communications ............................ 0.8%
Aerospace .......................................... 0.7%
Manufactured Housing and
Recreational Vehicles ........................... 0.3%
Computer Software and Services ..................... 0.3%
Closed-End Funds ................................... 0.1%
Transportation ..................................... 0.1%
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100.0%
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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 LAST OF WHICH WAS
FILED FOR THE QUARTER ENDING MARCH 31, 2005. 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 without charge, upon
request, (i) 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 ASSET FUND
SCHEDULE OF INVESTMENTS -- JUNE 30, 2005 (UNAUDITED)
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MARKET
SHARES COST VALUE
------ ---- ------
COMMON STOCKS -- 96.8%
AEROSPACE -- 0.5%
70,000 Boeing Co. ..............$ 2,424,385 $ 4,620,000
15,300 Herley Industries Inc.+.. 292,591 279,072
38,000 Lockheed Martin Corp. ... 1,122,900 2,465,060
80,000 Northrop Grumman Corp. .. 2,800,483 4,420,000
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6,640,359 11,784,132
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AGRICULTURE -- 0.9%
800,000 Archer-Daniels-Midland Co. 11,113,508 17,104,000
15,000 Delta & Pine Land Co. ... 260,292 375,900
40,529 Monsanto Co. ............ 647,781 2,548,058
10,000 Mosaic Co.+ ............. 139,584 155,600
1,000 Potash Corp. of
Saskatchewan Inc. ..... 41,185 95,580
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12,202,350 20,279,138
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AUTOMOTIVE -- 0.9%
505,000 Navistar International
Corp.+ ................. 9,152,535 16,160,000
45,000 PACCAR Inc. ............. 522,021 3,060,000
25,000 Volkswagen AG ........... 1,044,095 1,144,202
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10,718,651 20,364,202
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AUTOMOTIVE: PARTS AND ACCESSORIES -- 3.5%
110,000 BorgWarner Inc. ......... 2,079,060 5,903,700
244,000 CLARCOR Inc. ............ 1,741,943 7,137,000
560,000 Dana Corp. .............. 8,510,245 8,405,600
210,000 Federal-Mogul Corp.+ .... 467,782 180,600
520,000 Genuine Parts Co. ....... 12,888,512 21,366,800
202,000 Johnson Controls Inc. ... 4,510,844 11,378,660
170,000 Midas Inc.+ ............. 2,224,151 3,910,000
300,000 Modine Manufacturing Co. 7,078,060 9,768,000
240,000 Scheib (Earl) Inc.+ ..... 1,528,668 822,000
205,000 Standard Motor
Products Inc. .......... 3,007,686 2,706,000
70,000 Superior Industries
International Inc. .... 1,762,639 1,659,000
270,000 Tenneco Automotive Inc.+ 1,590,927 4,492,800
100,000 TransPro Inc.+ .......... 788,321 629,000
60,000 TRW Automotive
Holdings Corp.+ ....... 1,513,505 1,470,600
-------------- --------------
49,692,343 79,829,760
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AVIATION: PARTS AND SERVICES -- 2.6%
75,000 Aviall Inc.+ ............ 750,124 2,369,250
279,000 Curtiss-Wright Corp. .... 3,507,603 15,052,050
230,300 Fairchild Corp., Cl. A+ . 1,402,678 658,658
610,000 GenCorp Inc.+ ........... 2,283,855 11,748,600
110,000 Kaman Corp., Cl. A ...... 1,534,269 1,984,400
170,000 Precision Castparts Corp. 4,207,013 13,243,000
109,000 Sequa Corp., Cl. A+ ..... 4,666,598 7,212,530
105,000 Sequa Corp., Cl. B+ ..... 5,381,629 6,987,750
-------------- --------------
23,733,769 59,256,238
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MARKET
SHARES COST VALUE
------ ---- ------
BROADCASTING -- 0.9%
10,000 Cogeco Inc. .............$ 194,764 $ 219,230
20,000 Corus Entertainment Inc.,
Cl. B ................. 64,982 510,937
80,000 Fisher Communications
Inc.+ .................. 4,393,988 3,783,200
166,000 Granite Broadcasting
Corp.+ ................. 69,153 36,520
310,000 Gray Television Inc. .... 3,936,811 3,738,600
10,000 Gray Television Inc.,
Cl. A .................. 109,420 113,000
170,000 Liberty Corp. ........... 6,268,553 6,257,700
170,000 Lin TV Corp., Cl. A+ .... 3,455,864 2,361,300
65,000 Paxson Communications
Corp.+ ................ 362,660 39,000
10,000 Sinclair Broadcast
Group Inc., Cl. A ...... 87,440 90,800
400,000 Television Broadcasts Ltd. 1,815,551 2,259,683
240,000 Young Broadcasting Inc.,
Cl. A+ ................ 4,594,131 996,000
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25,353,317 20,405,970
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BUSINESS SERVICES -- 1.1%
470,000 Cendant Corp. ........... 4,520,414 10,513,900
45,000 ChoicePoint Inc.+ ....... 1,609,312 1,802,250
200,000 Ecolab Inc. ............. 1,876,865 6,472,000
10,000 Imation Corp. ........... 203,344 387,900
65,000 Landauer Inc. ........... 402,818 3,374,150
119,000 Nashua Corp.+ ........... 1,745,996 1,124,550
-------------- --------------
10,358,749 23,674,750
-------------- --------------
CABLE AND SATELLITE -- 5.6%
2,010,000 Cablevision Systems Corp.,
Cl. A+ ................ 20,604,961 64,722,000
285,000 Comcast Corp., Cl. A+ ... 7,845,919 8,749,500
40,000 Comcast Corp., Cl. A,
Special+ .............. 306,462 1,198,000
275,000 DIRECTV Group Inc.+ ..... 5,438,062 4,262,500
85,000 EchoStar Communications
Corp., Cl. A .......... 2,566,961 2,562,750
320,097 Liberty Global Inc.,
Cl. A+ ................. 6,249,884 14,938,922
776,550 Rogers Communications Inc.,
Cl. B, New York ....... 7,666,353 25,532,964
10,000 Rogers Communications Inc.,
Cl. B, Toronto ........ 77,553 328,110
60,000 Shaw Communications Inc.,
Cl. B ................. 164,952 1,248,776
80,000 Shaw Communications Inc.,
Cl. B, Non-Voting ..... 312,647 1,661,600
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51,233,754 125,205,122
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CLOSED-END FUNDS -- 0.1%
80,001 Royce Value Trust Inc. .. 953,886 1,510,419
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See accompanying notes to financial statements.
4
THE GABELLI ASSET FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- JUNE 30, 2005 (UNAUDITED)
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MARKET
SHARES COST VALUE
------ ---- ------
COMMON STOCKS (CONTINUED)
COMMUNICATIONS EQUIPMENT -- 1.4%
40,000 Agere Systems Inc.+ .....$ 1,165,194 $ 480,000
80,000 Andrew Corp.+ ........... 404,601 1,020,800
600,000 Corning Inc.+ ........... 4,374,877 9,972,000
800,000 Lucent Technologies
Inc.+ ................. 4,465,766 2,328,000
300,000 Motorola Inc. ........... 2,779,293 5,478,000
235,000 Nortel Networks Corp.+ .. 1,163,604 613,350
400,000 Thomas & Betts Corp.+ ... 7,934,757 11,296,000
-------------- --------------
22,288,092 31,188,150
-------------- --------------
COMPUTER HARDWARE -- 0.0%
35,000 Maxtor Corp.+ ........... 268,370 182,000
-------------- --------------
COMPUTER SOFTWARE AND SERVICES -- 0.3%
50,000 Ask Jeeves Inc.+ ........ 1,587,500 1,509,500
10,000 Computer Associates
International Inc. .... 145,700 274,800
45,000 Jupitermedia Corp.+ ..... 206,008 770,850
26,026 Telecom Italia
Media SpA+ ............ 26,184 12,535
120,000 Yahoo! Inc.+ ............ 4,103,063 4,158,000
-------------- --------------
6,068,455 6,725,685
-------------- --------------
CONSUMER PRODUCTS -- 5.4%
40,500 Alberto-Culver Co. ...... 1,073,604 1,754,865
12,000 Altria Group Inc. ....... 360,636 775,920
11,000 Christian Dior SA ....... 307,335 853,281
285,000 Church & Dwight
Co. Inc. .............. 1,872,507 10,317,000
30,000 Clorox Co. .............. 1,637,346 1,671,600
4,000 Colgate-Palmolive Co. ... 198,100 199,640
60,000 Department 56 Inc.+ ..... 651,832 615,000
40,000 Eastman Kodak Co. ....... 950,513 1,074,000
295,000 Energizer Holdings
Inc.+ ................. 5,163,232 18,340,150
110,000 Fortune Brands Inc. ..... 2,536,232 9,768,000
290,000 Gallaher Group plc, ADR . 4,661,436 17,197,000
240,000 Gillette Co. ............ 7,715,142 12,151,200
3,000 Givaudan SA ............. 1,028,013 1,745,220
38,000 Harley-Davidson Inc. .... 95,713 1,884,800
140,000 Mattel Inc. ............. 2,240,356 2,562,000
85,000 Maytag Corp. ............ 1,462,547 1,331,100
60,000 National Presto
Industries Inc. ....... 2,010,969 2,644,200
370,000 Procter & Gamble Co. .... 12,802,755 19,517,500
40,000 Reckitt Benckiser plc ... 1,262,953 1,178,937
1,000,000 Swedish Match AB ........ 10,327,823 11,360,945
10,000 Syratech Corp.+ ......... 2,000 750
210,000 Wolverine World
Wide Inc. ............. 1,953,224 5,042,100
-------------- --------------
60,314,268 121,985,208
-------------- --------------
CONSUMER SERVICES -- 1.3%
1,600 eBay Inc.+ .............. 24,652 52,816
830,000 IAC/InterActiveCorp+ .... 6,466,832 19,961,500
445,000 Rollins Inc. ............ 3,437,602 8,917,800
-------------- --------------
9,929,086 28,932,116
-------------- --------------
MARKET
SHARES COST VALUE
------ ---- ------
DIVERSIFIED INDUSTRIAL -- 5.4%
144,000 Acuity Brands Inc. ......$ 2,344,464 $ 3,699,360
5,000 Anixter International
Inc.+ ................. 45,044 185,850
220,000 Cooper Industries Ltd.,
Cl. A ................. 10,003,207 14,058,000
425,000 Crane Co. ............... 6,646,604 11,177,500
75,000 Gardner Denver Inc.+ .... 1,136,775 2,631,000
260,000 GATX Corp. .............. 5,898,347 8,970,000
240,000 Greif Inc., Cl. A ....... 5,453,716 14,664,000
30,000 Harbor Global Co.
Ltd.+ ................. 52,965 266,250
425,000 Honeywell International
Inc. .................. 13,730,962 15,567,750
300,000 ITT Industries Inc. ..... 9,410,611 29,289,000
150,000 Katy Industries Inc.+ ... 1,369,925 480,000
320,000 Lamson & Sessions Co.+ .. 1,748,797 3,782,400
40,000 MagneTek Inc.+ .......... 309,670 102,800
247,500 Myers Industries Inc. ... 1,557,014 3,093,750
51,000 Pentair Inc. ............ 730,157 2,183,310
80,000 Smiths Group plc ........ 880,176 1,317,256
165,000 Thomas Industries Inc. .. 2,343,187 6,593,400
75,000 Trinity Industries Inc. . 931,715 2,402,250
38,000 Tyco International Ltd. . 519,098 1,109,600
-------------- --------------
65,112,434 121,573,476
-------------- --------------
ELECTRONICS -- 0.9%
3,000 Hitachi Ltd., ADR ....... 172,200 181,860
13,000 Kyocera Corp., ADR ...... 448,062 997,100
25,000 Molex Inc., Cl. A ....... 719,620 587,000
46,000 Samsung Electronics Co.
Ltd., GDR (a) ......... 8,616,601 10,993,710
70,000 Sony Corp., ADR ......... 2,348,050 2,410,800
205,000 Texas Instruments Inc. .. 5,187,155 5,754,350
-------------- --------------
17,491,688 20,924,820
-------------- --------------
ENERGY AND UTILITIES -- 7.3%
110,000 AES Corp.+ .............. 434,151 1,801,800
45,000 AGL Resources Inc. ...... 753,776 1,739,250
150,000 Allegheny Energy Inc.+ .. 1,510,942 3,783,000
250,000 BP plc, ADR ............. 7,151,966 15,595,000
250,000 Burlington Resources
Inc. .................. 4,842,969 13,810,000
25,000 CH Energy Group Inc. .... 1,040,745 1,215,750
330,000 Chevron Corp. ........... 9,189,420 18,453,600
15,000 Cinergy Corp. ........... 624,298 672,300
200,000 ConocoPhillips .......... 5,957,785 11,498,000
20,000 Constellation
Energy Group .......... 484,262 1,153,800
124,000 Devon Energy Corp. ...... 1,695,494 6,284,320
70,000 DPL Inc. ................ 1,408,409 1,921,500
20,000 DTE Energy Co. .......... 832,127 935,400
285,000 Duke Energy Corp. ....... 5,229,750 8,473,050
110,000 Duquesne Light
Holdings Inc. ......... 1,579,788 2,054,800
30,000 Edison International .... 510,000 1,216,500
300,000 El Paso Corp. ........... 2,466,808 3,456,000
285,000 El Paso Electric Co.+ ... 3,296,727 5,828,250
150,000 Energy East Corp. ....... 3,072,447 4,347,000
110,000 EOG Resources Inc. ...... 503,773 6,248,000
See accompanying notes to financial statements.
5
THE GABELLI ASSET FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- JUNE 30, 2005 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- ------
COMMON STOCKS (CONTINUED)
ENERGY AND UTILITIES (CONTINUED)
340,000 Exxon Mobil Corp. .......$ 8,166,149 $ 19,539,800
14,000 FPL Group Inc. .......... 401,591 588,840
40,625 GlobalSantaFe Corp. ..... 1,058,988 1,657,500
10,000 Halliburton Co. ......... 104,525 478,200
66,358 Kerr-McGee Corp. ........ 3,801,084 5,063,779
150,000 Mirant Corp.+ ........... 433,546 76,800
22,086 NiSource Inc. ........... 475,953 546,187
190,000 Northeast Utilities ..... 3,643,888 3,963,400
2,000 NSTAR ................... 57,578 61,660
1,000 PetroChina Co.
Ltd., ADR ............. 61,027 73,450
100,000 Progress Energy
Inc., CVO+ ............ 52,000 13,500
25,000 Royal Dutch
Petroleum Co. ......... 1,443,475 1,622,500
66,000 SJW Corp. ............... 2,151,408 3,102,660
310,000 Southwest Gas Corp. ..... 5,639,091 7,908,100
40,000 TXU Corp. ............... 653,428 3,323,600
10,000 UIL Holdings Corp. ...... 426,389 538,100
80,000 Unocal Corp. ............ 5,045,185 5,204,000
5,000 Xcel Energy Inc. ........ 91,090 97,600
-------------- --------------
86,292,032 164,346,996
-------------- --------------
ENTERTAINMENT -- 6.6%
19,406 EMI Group plc ........... 75,408 88,315
195,000 EMI Group plc, ADR ...... 1,693,472 1,775,592
200,000 GC Companies Inc.+ (b) .. 218,000 172,000
600,000 Gemstar-TV Guide
International Inc.+ ... 2,634,671 2,154,000
165,000 Grupo Televisa SA, ADR .. 4,491,076 10,244,850
4,650,000 Liberty Media Corp.,
Cl. A+ ................ 11,718,968 47,383,500
100,000 Rank Group plc .......... 495,376 481,966
20,000 Regal Entertainment Group,
Cl. A ................. 290,903 377,600
220,000 Six Flags Inc.+ ......... 1,256,629 1,023,000
610,000 The Walt Disney Co. ..... 13,794,410 15,359,800
1,500,000 Time Warner Inc.+ ....... 20,133,908 25,065,000
835,000 Viacom Inc., Cl. A ...... 20,051,192 26,903,700
560,000 Vivendi Universal
SA, ADR ............... 11,703,949 17,544,800
60,000 World Wrestling
Entertainment Inc. .... 612,234 685,200
-------------- --------------
89,170,196 149,259,323
-------------- --------------
ENVIRONMENTAL SERVICES -- 1.2%
310,000 Allied Waste
Industries Inc.+ ...... 2,735,889 2,458,300
300,000 Republic Services Inc. .. 3,560,581 10,803,000
450,000 Waste Management Inc. ... 8,677,342 12,753,000
-------------- --------------
14,973,812 26,014,300
-------------- --------------
EQUIPMENT AND SUPPLIES -- 4.7%
515,000 AMETEK Inc. ............. 2,984,324 21,552,750
3,000 Amphenol Corp.,
Cl. A ................. 23,162 120,510
106,000 CIRCOR International
Inc. .................. 932,373 2,615,020
175,000 Crown Holdings Inc.+ .... 788,952 2,490,250
MARKET
SHARES COST VALUE
------ ---- ------
155,000 CTS Corp. ...............$ 815,744 $ 1,904,950
4,000 Danaher Corp. ........... 70,641 209,360
404,000 Donaldson Co. Inc. ...... 1,542,170 12,253,320
320,000 Fedders Corp. ........... 1,366,274 704,000
415,000 Flowserve Corp.+ ........ 5,764,416 12,557,900
179,800 Gerber Scientific
Inc.+ ................. 1,712,068 1,251,408
195,000 GrafTech International
Ltd.+ ................. 2,594,065 838,500
560,000 IDEX Corp. .............. 3,178,528 21,621,600
2,000 Imagistics International
Inc.+ ................. 39,950 56,000
12,000 Ingersoll-Rand Co. Ltd.,
Cl. A ................. 501,720 856,200
320,000 Interpump Group SpA ..... 1,257,628 2,054,360
200,000 Lufkin Industries Inc. .. 1,810,811 7,196,000
18,000 Manitowoc Co. Inc. ...... 131,305 738,360
35,900 Met-Pro Corp. ........... 321,984 544,603
10,000 Sealed Air Corp.+ ....... 168,679 497,900
30,000 Valmont Industries Inc. . 242,908 774,000
435,000 Watts Water Technologies
Inc., Cl. A ........... 5,006,660 14,568,150
120,000 Weir Group plc .......... 504,947 694,462
-------------- --------------
31,759,309 106,099,603
-------------- --------------
FINANCIAL SERVICES -- 4.9%
15,000 Alleghany Corp.+ ........ 2,667,117 4,455,000
1,000 Allstate Corp. .......... 23,675 59,750
420,000 American Express Co. .... 11,018,431 22,356,600
55,000 Argonaut Group Inc.+ .... 1,333,591 1,269,950
15,000 Bank of America Corp. ... 282,955 684,150
59,000 Bank of New York
Co. Inc. .............. 2,033,306 1,698,020
220 Berkshire Hathaway Inc.,
Cl. A+ ................ 874,549 18,370,000
49,000 BKF Capital Group Inc. .. 913,937 1,857,590
7,500 Calamos Asset
Management Inc.,
Cl. A ................. 135,000 204,300
100,000 Citigroup Inc. .......... 4,878,675 4,623,000
35,000 Commerzbank AG .......... 624,519 760,704
110,000 Commerzbank AG, ADR ..... 2,308,920 2,398,429
155,000 Deutsche Bank AG, ADR ... 7,004,175 12,074,500
30,000 H&R Block Inc. .......... 720,982 1,750,500
26,400 JPMorgan Chase & Co. .... 535,615 932,448
6,000 Lehman Brothers
Holdings Inc. ......... 54,150 595,680
42,000 Leucadia National Corp. . 721,175 1,622,460
120,000 Mellon Financial Corp. .. 4,103,608 3,442,800
23,000 Merrill Lynch & Co. Inc. 948,745 1,265,230
38,000 Metris Companies Inc.+ .. 347,786 549,480
385,000 Midland Co. ............. 1,978,452 13,548,150
150,000 Phoenix Companies Inc. .. 2,222,423 1,785,000
30,000 PNC Financial Services
Group Inc. ............ 1,456,850 1,633,800
2,500 Prudential Financial Inc. 68,750 164,150
45,000 St. Paul Travelers
Companies Inc. ........ 1,732,956 1,778,850
See accompanying notes to financial statements.
6
THE GABELLI ASSET FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- JUNE 30, 2005 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- ------
COMMON STOCKS (CONTINUED)
FINANCIAL SERVICES (CONTINUED)
85,000 State Street Corp. ......$ 661,975 $ 4,101,250
20,000 SunTrust Banks Inc. ..... 424,879 1,444,800
30,000 T. Rowe Price Group Inc. 1,012,984 1,878,000
20,000 Unitrin Inc. ............ 522,263 982,000
8,500 Value Line Inc. ......... 136,515 333,625
120,000 Waddell & Reed
Financial Inc., Cl. A . 2,417,804 2,220,000
-------------- --------------
54,166,762 110,840,216
-------------- --------------
FOOD AND BEVERAGE -- 9.2%
100,000 Allied Domecq plc, ADR .. 3,343,214 4,847,000
345,000 Brown-Forman Corp.,
Cl. A ................. 8,539,615 22,080,000
50,000 Cadbury Schweppes
plc, ADR .............. 1,431,856 1,916,500
125,000 Campbell Soup Co. ....... 3,400,652 3,846,250
115,000 Coca-Cola Co. ........... 3,674,139 4,801,250
50,000 Coca-Cola
Enterprises Inc. ...... 984,289 1,100,500
11,000 Coca-Cola Hellenic
Bottling Co. SA ....... 268,442 299,750
450,000 Corn Products
International Inc. .... 5,622,183 10,692,000
240,000 Del Monte Foods Co.+ .... 2,271,807 2,584,800
318,000 Diageo plc, ADR ......... 11,903,832 18,857,400
70,000 Farmer Brothers Co. ..... 943,094 1,558,200
270,000 Flowers Foods Inc. ...... 2,549,594 9,547,200
3,000 Fomento Economico
Mexicano SA
de CV, ADR ............ 162,855 178,710
330,000 General Mills Inc. ...... 11,000,292 15,440,700
70,000 Groupe Danone ........... 5,997,841 6,158,482
1,267,800 Grupo Bimbo SA de CV,
Cl. A ................. 2,247,680 3,651,002
10,000 Hain Celestial .
Group Inc.+ ........... 141,134 195,000
200,000 Heinz (H.J.) Co. ........ 7,241,965 7,084,000
65,000 Hershey Co. ............. 1,230,126 4,036,500
190,000 Kellogg Co. ............. 4,933,145 8,443,600
95,000 Kerry Group plc,
Cl. A ................. 1,122,284 2,371,723
33,000 LVMH Moet Hennessy
Louis Vuitton SA ...... 1,150,670 2,551,855
9,000 Nestle SA ............... 1,868,526 2,303,550
930,000 PepsiAmericas Inc. ...... 12,115,884 23,863,800
355,000 PepsiCo Inc. ............ 9,198,266 19,145,150
155,000 Ralcorp Holdings Inc. ... 2,450,803 6,378,250
20,000 Smucker (J.M.) Co. ...... 547,733 938,800
153,512 Tootsie Roll
Industries Inc. ....... 2,005,311 4,490,226
255,000 Wrigley (Wm.) Jr. Co. ... 7,899,994 17,554,200
-------------- --------------
116,247,226 206,916,398
-------------- --------------
HEALTH CARE -- 3.3%
44,000 Amgen Inc.+ ............. 203,194 2,660,240
3,000 ArthroCare Corp.+ ....... 34,530 104,820
44,000 Biogen Idec Inc.+ ....... 409,921 1,515,800
4,000 Biomet Inc. ............. 120,840 138,560
MARKET
SHARES COST VALUE
------ ---- ------
165,000 Bristol-Myers
Squibb Co. ............$ 4,554,461 $ 4,121,700
100,000 Chemed Corp. ............ 1,543,198 4,088,000
40,000 Chiron Corp.+ ........... 550,315 1,395,600
10,000 CONMED Corp.+ ........... 285,880 307,700
5,500 DENTSPLY
International Inc. .... 209,434 297,000
77,000 Eli Lilly & Co. ......... 4,641,754 4,289,670
35,000 Exactech Inc.+ .......... 543,108 459,550
40,000 Henry Schein Inc.+ ...... 1,091,829 1,660,800
10,000 Hospira Inc.+ ........... 327,120 390,000
57,000 INAMED Corp.+ ........... 2,501,578 3,817,290
1,000 Integra LifeSciences
Holdings+ ............. 19,480 29,200
22,900 Inverness Medical
Innovations Inc.+ ..... 389,103 625,170
47,000 Invitrogen Corp.+ ....... 2,392,068 3,914,630
70,000 Johnson & Johnson ....... 1,140,150 4,550,000
118,000 Medco Health
Solutions Inc.+ ....... 3,613,701 6,296,480
155,000 Merck & Co. Inc. ........ 4,827,898 4,774,000
2,000 Nobel Biocare
Holding AG ............ 285,863 405,774
15,000 Orthofix
International NV+ ..... 501,240 645,600
4,000 OrthoLogic Corp.+ ....... 13,880 15,480
32,000 Patterson Companies
Inc.+ ................. 702,130 1,442,560
440,000 Pfizer Inc. ............. 7,544,903 12,135,200
10,000 Renal Care Group Inc.+ .. 461,700 461,000
135,000 Schering-Plough Corp. ... 2,580,980 2,573,100
2,000 Stryker Corp. ........... 65,440 95,120
150,000 Sybron Dental
Specialties Inc.+ ..... 2,817,765 5,643,000
30,000 Thoratec Corp.+ ......... 369,898 460,200
35,000 William Demant
Holding A/S+ .......... 1,644,239 1,742,283
70,000 Women First
HealthCare Inc.+ ...... 124,375 81
1,000 Wright Medical
Group Inc.+ ........... 16,460 26,700
55,000 Wyeth ................... 2,169,854 2,447,500
1,000 Young Innovations Inc. .. 30,000 37,330
-------------- --------------
48,728,289 73,567,138
-------------- --------------
HOTELS AND GAMING -- 2.9%
105,000 Aztar Corp.+ ............ 1,386,304 3,596,250
365,000 Gaylord
Entertainment Co.+ .... 9,694,168 16,968,850
80,000 GTECH Holdings Corp. .... 404,713 2,339,200
40,958 Harrah's
Entertainment Inc. .... 914,704 2,951,843
2,982,300 Hilton Group plc ........ 11,032,184 15,295,420
670,000 Hilton Hotels Corp. ..... 7,609,745 15,979,500
21,500 Kerzner
International Ltd.+ ... 968,335 1,224,425
10,000 Las Vegas Sands Corp.+ .. 367,933 357,500
50,000 MGM Mirage+ ............. 619,881 1,979,000
10,000 Pinnacle
Entertainment Inc.+ ... 176,000 195,600
90,000 Starwood Hotels & Resorts
Worldwide Inc. ........ 2,370,235 5,271,300
-------------- --------------
35,544,202 66,158,888
-------------- --------------
See accompanying notes to financial statements.
7
THE GABELLI ASSET FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- JUNE 30, 2005 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- ------
COMMON STOCKS (CONTINUED)
MACHINERY -- 1.5%
70,000 Caterpillar Inc. ........$ 927,858 $ 6,671,700
3,000 CNH Global NV ........... 51,178 56,670
400,000 Deere & Co. ............. 6,703,065 26,196,000
-------------- --------------
7,682,101 32,924,370
-------------- --------------
MANUFACTURED HOUSING AND
RECREATIONAL VEHICLES -- 0.3%
85,000 Cavalier Homes Inc.+ .... 433,518 422,450
32,200 Cavco Industries Inc.+ .. 609,204 907,396
110,000 Champion Enterprises
Inc.+ ................. 1,051,665 1,093,400
23,000 Coachmen Industries
Inc. .................. 342,994 288,190
130,000 Fleetwood Enterprises
Inc.+ ................. 1,522,019 1,319,500
78,000 Huttig Building
Products Inc.+ ........ 237,592 850,980
12,500 Nobility Homes Inc. ..... 260,493 340,625
20,000 Palm Harbor Homes Inc.+ . 346,431 376,600
56,000 Skyline Corp. ........... 2,190,001 2,236,080
11,000 Southern Energy
Homes Inc.+ ........... 43,900 63,140
-------------- --------------
7,037,817 7,898,361
-------------- --------------
METALS AND MINING -- 1.4%
45,000 Alcoa Inc. .............. 1,224,220 1,175,850
17,000 Arizona Star Resource
Corp.+ ................ 68,679 59,664
255,000 Barrick Gold Corp. ...... 3,244,173 6,382,650
12,525 Freeport-McMoRan Copper
& Gold Inc., Cl. B .... 272,500 468,936
10,000 Inco Ltd. ............... 380,400 377,500
35,000 Ivanhoe Mines Ltd.+ ..... 262,890 271,950
50,000 Kinross Gold Corp.+ ..... 359,224 305,000
515,000 Newmont Mining Corp. .... 9,699,426 20,100,450
170,000 Placer Dome Inc. ........ 1,576,429 2,614,600
-------------- --------------
17,087,941 31,756,600
-------------- --------------
PUBLISHING -- 7.5%
225,000 Belo Corp., Cl. A ....... 4,060,533 5,393,250
22,000 Dow Jones & Co. Inc. .... 1,000,419 779,900
30,000 EMAP plc ................ 362,733 418,182
1,000 Knight-Ridder Inc. ...... 64,330 61,340
38,000 Lee Enterprises Inc. .... 875,843 1,523,420
60,000 McClatchy Co., Cl. A .... 1,240,718 3,926,400
280,000 McGraw-Hill
Companies Inc. ........ 2,576,918 12,390,000
370,000 Media General Inc.,
Cl. A ................. 10,364,815 23,961,200
80,000 Meredith Corp. .......... 1,650,283 3,924,800
135,000 New York Times Co.,
Cl. A ................. 1,230,827 4,205,250
4,835,000 News Corp., Cl. A ....... 36,360,879 78,230,300
24,000 News Corp., Cl. B ....... 227,345 404,640
700,000 PRIMEDIA Inc.+ .......... 2,895,356 2,835,000
250,000 Reader's Digest
Association Inc. ...... 4,550,868 4,125,000
248,000 Scripps (E.W.) Co.,
Cl. A ................. 7,804,764 12,102,400
68,614 Seat Pagine Gialle SpA+ . 172,632 28,646
MARKET
SHARES COST VALUE
------ ---- ------
120,000 Thomas Nelson Inc. ......$ 1,535,734 $ 2,611,200
300,000 Tribune Co. ............. 10,512,771 10,554,000
20,000 VNU NV .................. 588,850 558,366
-------------- --------------
88,076,618 168,033,294
-------------- --------------
REAL ESTATE -- 1.7%
210,000 Catellus Development
Corp. ................. 2,626,263 6,888,000
120,082 Florida East Coast
Industries Inc. ....... 1,856,261 5,199,551
100,000 Griffin Land &
Nurseries Inc.+ ....... 1,372,091 2,463,000
289,000 St. Joe Co. ............. 2,202,187 23,565,060
-------------- --------------
8,056,802 38,115,611
-------------- --------------
RETAIL -- 3.6%
40,000 Aaron Rents Inc. ........ 82,258 995,600
60,750 Aaron Rents Inc.,
Cl. A ................. 287,231 1,382,062
180,000 Albertson's Inc. ........ 3,825,784 3,722,400
400,000 AutoNation Inc.+ ........ 3,907,791 8,208,000
136,000 Burlington Coat Factory
Warehouse Corp. ....... 1,575,031 5,799,040
20,250 Coldwater Creek Inc.+ ... 50,700 504,428
10,000 Costco Wholesale Corp. .. 438,400 448,200
1,000 CSK Auto Corp.+ ......... 17,480 16,680
118,000 Kroger Co.+ ............. 693,975 2,245,540
1,000 May Department
Stores Co. ............ 34,740 40,160
600,000 Neiman Marcus Group Inc.,
Cl. B ................. 14,559,676 58,020,000
10,000 Safeway Inc. ............ 224,866 225,900
-------------- --------------
25,697,932 81,608,010
-------------- --------------
SPECIALTY CHEMICALS -- 1.6%
30,000 E.I. du Pont de
Nemours and Co. ....... 1,440,029 1,290,300
470,000 Ferro Corp. ............. 7,741,054 9,334,200
105,000 Fuller (H.B.) Co. ....... 1,723,277 3,576,300
130,000 General Chemical
Group Inc.+ ............ 502,184 2,600
80,000 Great Lakes Chemical Corp. 2,037,115 2,517,600
310,000 Hercules Inc.+ .......... 4,915,696 4,386,500
38,000 International Flavors &
Fragrances Inc. ....... 737,444 1,376,360
160,000 Material Sciences Corp.+ 1,390,040 2,329,600
650,000 Omnova Solutions Inc.+ .. 2,051,888 3,029,000
350,000 Sensient
Technologies Corp. .... 6,822,605 7,213,500
-------------- --------------
29,361,332 35,055,960
-------------- --------------
TELECOMMUNICATIONS -- 7.4%
50,000 ALLTEL Corp. ............ 1,721,807 3,114,000
150,000 AT&T Corp. .............. 3,383,786 2,856,000
14,000 Brasil Telecom Participacoes
SA, ADR ............... 810,959 505,400
260,000 BT Group plc ............ 1,015,869 1,071,435
See accompanying notes to financial statements.
8
THE GABELLI ASSET FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- JUNE 30, 2005 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- ------
COMMON STOCKS (CONTINUED)
TELECOMMUNICATIONS (CONTINUED)
30,000 BT Group plc, ADR .......$ 1,082,623 $ 1,248,000
420,000 CenturyTel Inc. ......... 5,063,376 14,544,600
600,000 Cincinnati Bell Inc.+ ... 3,839,116 2,580,000
270,000 Citizens
Communications Co. .... 2,699,385 3,628,800
300,000 Commonwealth Telephone
Enterprises Inc. ...... 5,360,976 12,573,000
80,000 Deutsche Telekom AG, ADR 1,229,873 1,473,600
35,000 France Telecom SA, ADR .. 683,989 1,019,900
2,750,000 Qwest Communications
International Inc.+ ... 10,590,300 10,202,500
160,000 SBC Communications Inc. . 5,329,234 3,800,000
940,000 Sprint Corp. ............ 15,654,834 23,584,600
10,000 Swisscom AG, ADR ........ 292,659 326,200
75,403 Tele Norte Leste
Participacoes SA, ADR . 1,032,454 1,255,460
4,525,935 Telecom Italia SpA ...... 2,556,989 14,130,881
288,000 Telecom Italia SpA, ADR . 1,964,639 9,017,280
98,800 Telefonica SA, ADR ...... 3,375,329 4,831,320
10,400 Telefonica SA, BDR ...... 119,280 169,696
40,000 Telefonos de Mexico SA
de CV, Cl. L, ADR ..... 171,746 755,600
592,000 Telephone & Data
Systems Inc. .......... 12,078,671 24,159,520
592,000 Telephone & Data
Systems Inc., Special . 11,149,542 22,697,280
205,000 Verizon
Communications Inc. ... 6,515,429 7,082,750
-------------- --------------
97,722,865 166,627,822
-------------- --------------
TRANSPORTATION -- 0.1%
85,000 AMR Corp.+ .............. 1,245,603 1,029,350
55,000 Grupo TMM SA, Cl. A, ADR+ 396,879 165,000
4,000 Kansas City Southern+ ... 7,317 80,720
4,000 Providence & Worcester
Railroad Co. .......... 44,669 56,560
-------------- --------------
1,694,468 1,331,630
-------------- --------------
WIRELESS COMMUNICATIONS -- 0.8%
65,000 America Movil SA de CV,
Cl. L, ADR ............ 1,117,669 3,874,650
90,000 Nextel Communications
Inc.,
Cl. A+ ................ 857,210 2,907,900
70,000 Nextel Partners Inc.,
Cl. A+ ................ 691,833 1,761,900
1,700,000 O2 plc+ ................. 1,875,000 4,150,018
72,000 Price Communications
Corp.+ ................ 1,120,226 1,245,600
10,019 Tele Centro Oeste Celular
Participacoes SA, ADR . 30,034 100,891
776 Tele Leste Celular
Participacoes SA, ADR+ 20,757 6,169
MARKET
SHARES COST VALUE
------ ---- ------
1,350 Tele Norte Celular
Participacoes SA, ADR+ $ 20,857 $ 8,573
3,375 Telemig Celular
Participacoes SA, ADR . 97,539 110,194
33,764 Telesp Celular
Participacoes SA, ADR+ 602,880 144,172
4,175 Telesp Celular
Participacoes SA, Pfd.+ 66,025 17,738
13,001 Tim Participacoes SA, ADR 157,722 205,416
67,400 United States Cellular
Corp.+ ................ 2,808,008 3,365,956
12,000 Vodafone Group plc, ADR . 237,532 291,840
-------------- --------------
9,703,292 18,191,017
-------------- --------------
TOTAL COMMON STOCKS ..... 1,141,362,567 2,178,566,723
-------------- --------------
PREFERRED STOCKS -- 0.2%
AEROSPACE -- 0.2%
29,500 Northrop Grumman Corp.,
7.000% Cv. Pfd.,
Ser. B ................ 3,437,340 3,687,500
-------------- --------------
PRINCIPAL
AMOUNT
------
CONVERTIBLE CORPORATE BONDS -- 0.4%
AUTOMOTIVE: PARTS AND ACCESSORIES -- 0.1%
$1,500,000 Pep Boys - Manny,
Moe & Jack, Cv.,
4.250%, 06/01/07 ...... 1,494,248 1,455,000
1,000,000 Standard Motor Products Inc.,
Sub. Deb. Cv.,
6.750%, 07/15/09 ...... 927,728 950,000
-------------- --------------
2,421,976 2,405,000
-------------- --------------
AVIATION: PARTS AND SERVICES -- 0.0%
500,000 GenCorp Inc.,
Sub. Deb. Cv.,
5.750%, 04/15/07 ...... 503,497 553,750
-------------- --------------
BUSINESS SERVICES -- 0.1%
1,000,000 Trans-Lux Corp.,
Sub. Deb. Cv.,
7.500%, 12/01/06 ...... 1,002,498 998,750
-------------- --------------
CABLE AND SATELLITE -- 0.0%
500,000 Charter Communications Inc., Cv.,
4.750%, 06/01/06 ...... 365,070 500,000
-------------- --------------
COMMUNICATIONS EQUIPMENT -- 0.2%
2,000,000 Agere Systems Inc.,
Sub. Deb. Cv.,
6.500%, 12/15/09 ...... 1,927,746 2,025,000
1,100,000 Nortel Networks Corp., Cv.,
4.250%, 09/01/08 ...... 1,063,606 1,031,250
1,000,000 TriQuint Semiconductor Inc.,
Sub. Deb. Cv.,
4.000%, 03/01/07 ...... 975,672 976,250
-------------- --------------
3,967,024 4,032,500
-------------- --------------
See accompanying notes to financial statements.
9
THE GABELLI ASSET FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- JUNE 30, 2005 (UNAUDITED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT COST VALUE
--------- ---- -------
CONVERTIBLE CORPORATE BONDS (CONTINUED)
ELECTRONICS -- 0.0%
$ 500,000 Oak Industries Inc.,
Sub. Deb. Cv.,
4.875%, 03/01/08 ......$ 382,795 $ 537,500
-------------- --------------
METALS AND MINING -- 0.0%
100,000 Inco Ltd., Cv.,
Zero Coupon, 03/29/21 . 99,752 101,000
-------------- --------------
TOTAL CONVERTIBLE
CORPORATE BONDS ....... 8,742,612 9,128,500
-------------- --------------
SHORT-TERM OBLIGATIONS -- 2.6%
U.S. GOVERNMENT OBLIGATIONS -- 2.6%
59,504,000 U.S. Treasury Bills,
2.681% to 3.221%++,
07/07/05 to 10/20/05 .. 59,159,593 59,155,003
-------------- --------------
TOTAL SHORT-TERM
OBLIGATIONS ........... 59,159,593 59,155,003
-------------- --------------
SHARES
------
WARRANTS -- 0.0%
COMMUNICATIONS EQUIPMENT -- 0.0%
1,097 Lucent Technologies Inc.,
expire 12/10/07+ ...... 1,821 844
-------------- --------------
TOTAL
INVESTMENTS --
100.0% ................$1,212,703,933 2,250,538,570
==============
OTHER ASSETS AND LIABILITIES
(NET) -- 0.0% ........................ (976,081)
--------------
NET ASSETS -- 100.0% ................... $2,249,562,489
==============
- ----------------
(a) 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 June 30,
2005, the Rule 144A securities are considered liquid and the market value
amounted to $10,993,710 or 0.5% of total net assets.
(b) Security fair valued under procedures established by the Board of Trustees.
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 June 30, 2005, the market value of fair
valued securities amounted to $172,000 or 0.01% of total net assets.
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
ADR American Depository Receipt
BDR Brazilian Depository Receipt
CVO Contingent Value Obligation
GDR Global Depository Receipt
See accompanying notes to financial statements.
10
THE GABELLI ASSET FUND
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2005 (UNAUDITED)
- --------------------------------------------------------------------------------
ASSETS:
Investments, at value (cost $1,212,703,933) ............ $ 2,250,538,570
Cash ................................................... 29,297
Dividends and interest receivable ...................... 1,928,602
Receivable for Fund shares sold ........................ 547,549
Other assets ........................................... 34,079
---------------
TOTAL ASSETS ........................................... 2,253,078,097
---------------
LIABILITIES:
Payable for investment advisory fees ................... 1,846,177
Payable for Fund shares redeemed ....................... 502,039
Payable for shareholder services fees .................. 488,975
Payable for distribution fees .......................... 462,018
Payable for shareholder communications fees ............ 129,088
Other accrued expenses ................................. 87,311
---------------
TOTAL LIABILITIES ...................................... 3,515,608
---------------
NET ASSETS applicable to 53,497,723
shares outstanding ................................... $ 2,249,562,489
===============
NET ASSETS CONSIST OF:
Paid-in capital ........................................ $ 1,181,606,436
Accumulated net investment income ...................... 6,560,949
Accumulated net realized gain on investments
and foreign currency transactions .................... 23,561,910
Net unrealized appreciation on investments ............. 1,037,834,637
Net unrealized depreciation on foreign
currency translations ................................ (1,443)
---------------
NET ASSETS ............................................. $ 2,249,562,489
===============
SHARES OF BENEFICIAL INTEREST:
CLASS AAA:
Net Asset Value, offering and redemption
price per share ($2,247,724,888 / 53,453,764
shares outstanding; unlimited number of
no par value shares authorized) ...................... $42.05
======
CLASS A:
Net Asset Value and redemption price per share
($1,016,063 / 24,202 shares outstanding;
unlimited number of no par value
shares authorized) ................................... $41.98
======
Maximum offering price per share (NAV / 0.9425,
based on maximum sales charge of 5.75%
of the offering price) ............................... $44.54
======
CLASS B:
Net Asset Value and offering price per share
($1,165 / 28 shares outstanding;
unlimited number of no par value
shares authorized) ................................... $41.61(a)
======
CLASS C:
Net Asset Value and offering price per share
($820,373 / 19,729 shares outstanding;
unlimited number of no par value
shares authorized) ................................... $41.58(a)
======
- -----------------------
(a) Redemption price varies based on length of time held.
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2005 (UNAUDITED)
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends (net of foreign taxes of $500,288) ............. $ 20,637,913
Interest ................................................. 918,104
------------
TOTAL INVESTMENT INCOME .................................. 21,556,017
------------
EXPENSES:
Investment advisory fees ................................. 10,957,802
Distribution fees -- Class AAA ........................... 2,738,084
Distribution fees -- Class A ............................. 695
Distribution fees -- Class B ............................. 6
Distribution fees -- Class C ............................. 2,680
Shareholder services fees ................................ 720,080
Shareholder communications expenses ...................... 201,315
Custodian fees ........................................... 182,906
Legal and audit fees ..................................... 39,463
Trustees' fees ........................................... 27,548
Registration expenses .................................... 24,778
Miscellaneous expenses ................................... 95,775
------------
TOTAL EXPENSES ........................................... 14,991,132
Less: Custodian fee credits .............................. (3,038)
------------
NET EXPENSES ............................................. 14,988,094
------------
NET INVESTMENT INCOME .................................... 6,567,923
------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN CURRENCY:
Net realized gain on investments ......................... 30,140,053
Net realized loss on foreign
currency transactions .................................. (34,677)
Net change in unrealized appreciation /
depreciation on investments and
foreign currency translations .......................... (4,054,768)
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY ....................... 26,050,608
------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ........................................ $ 32,618,531
============
See accompanying notes to financial statements.
11
THE GABELLI ASSET FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS ENDED
JUNE 30, 2005 YEAR ENDED
(UNAUDITED) DECEMBER 31, 2004
--------------- -----------------
OPERATIONS:
Net investment income ............................................ $ 6,567,923 $ 1,298,661
Net realized gain on investments and foreign currency transactions 30,105,376 40,917,931
Net change in unrealized appreciation/depreciation on investments
and foreign currency translations .............................. (4,054,768) 276,438,154
--------------- ---------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............. 32,618,531 318,654,746
--------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income
Class AAA ...................................................... -- (1,324,870)
Class A ........................................................ -- (693)
Class B ........................................................ -- --
Class C ........................................................ -- (143)
--------------- ---------------
-- (1,325,706)
--------------- ---------------
Net realized gain on investments
Class AAA ...................................................... -- (40,218,795)
Class A ........................................................ -- (6,345)
Class B ........................................................ -- (21)
Class C ........................................................ -- (6,372)
--------------- ---------------
-- (40,231,533)
--------------- ---------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS .............................. -- (41,557,239)
--------------- ---------------
CAPITAL SHARE TRANSACTIONS:
Class AAA ...................................................... (949,713) (19,448,643)
Class A ........................................................ 653,329 325,037
Class B ........................................................ -- --
Class C ........................................................ 458,856 329,814
--------------- ---------------
Net increase (decrease) in net assets from shares of
beneficial interest transactions ............................... 162,472 (18,793,792)
--------------- ---------------
REDEMPTION FEES .................................................. 30,920 16,237
--------------- ---------------
NET INCREASE IN NET ASSETS ....................................... 32,811,923 258,319,952
NET ASSETS:
Beginning of period .............................................. 2,216,750,566 1,958,430,614
--------------- ---------------
End of period (including undistributed net investment income of
$6,560,949 and $0, respectively) ............................... $ 2,249,562,489 $ 2,216,750,566
=============== ===============
See accompanying notes to financial statements.
12
THE GABELLI ASSET FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
1. ORGANIZATION. The Gabelli Asset Fund (the "Fund") was organized on November
25, 1985 as a Massachusetts business trust. The Fund is a diversified, open-end
management investment company registered under the Investment Company Act of
1940, as amended (the "1940 Act"). The Fund's primary objective is growth of
capital. The Fund commenced investment operations on March 3, 1986.
2. SIGNIFICANT ACCOUNTING POLICIES. The preparation of financial statements in
accordance with U.S. generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results could differ from
those estimates. The following is a summary of significant accounting policies
followed by the Fund in the preparation of its financial statements.
SECURITY VALUATION. Portfolio securities listed or traded on a nationally
recognized securities exchange or traded in the U.S. over-the-counter market for
which market quotations are readily available are valued at the last quoted sale
price or a market's official closing price as of the close of business on the
day the securities are being valued. If there were no sales that day, the
security is valued at the average of the closing bid and asked prices or, if
there were no asked prices quoted on that day, then the security is valued at
the closing bid price on that day. If no bid or asked prices are quoted on such
day, the security is valued at the most recently available price or, if the
Board of Trustees (the "Board") so determines, by such other method as the Board
shall determine in good faith, to reflect its fair market value. Portfolio
securities traded on more than one national securities exchange or market are
valued according to the broadest and most representative market, as determined
by Gabelli Funds, LLC (the "Adviser").
Portfolio securities primarily traded on foreign markets are generally valued at
the preceding closing values of such securities on their respective exchanges or
if after the close of the foreign markets, but prior to the close of business on
the day the securities are being valued, market conditions change significantly,
certain foreign securities may be fair valued pursuant to procedures established
by the Board. Debt instruments that are not credit impaired with remaining
maturities of 60 days or less are valued at amortized cost, unless the Board
determines such amount does not reflect the securities' fair value, in which
case these securities will be valued at their fair value as determined by the
Board. Debt instruments having a maturity greater than 60 days for which market
quotations are readily available are valued at the latest average of the bid and
asked prices. If there were no asked prices quoted on such day, the security is
valued using the closing bid price. Futures contracts are valued at the closing
settlement price of the exchange or board of trade on which the applicable
contract is traded.
Securities and assets for which market quotations are not readily available are
valued at their fair value as determined in good faith under procedures
established by and under the general supervision of the Board. Fair valuation
methodologies and procedures may include, but are not limited to: analysis and
review of available financial and non-financial information about the company;
comparisons to the valuation and changes in valuation of similar securities,
including a comparison of foreign securities to the equivalent U.S. dollar value
ADR securities at the close of the U.S. exchange; and evaluation of any other
information that could be indicative of the value of the security.
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
13
THE GABELLI ASSET FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
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 June 30, 2005, there were no open forward foreign exchange
contracts.
FOREIGN CURRENCY TRANSLATIONS. 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.
14
THE GABELLI ASSET FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
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 gain amounts 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.
For the year ended December 31, 2004, reclassifications were made to decrease
accumulated net investment income by $144,838 and to decrease accumulated net
realized loss on investments and foreign currency transactions by $144,838.
The tax character of distributions paid during the fiscal year ended December
31, 2004 was as follows:
YEAR ENDED
DECEMBER 31, 2004
-----------------
DISTRIBUTIONS PAID FROM:
Ordinary income
(inclusive of short term capital gains) ......... $ 3,054,945
Net long term capital gains ........................ 38,502,294
-----------
Total distributions paid ........................... $41,557,239
===========
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.
As of December 31, 2004, the components of accumulated earnings/(losses) on a
tax basis were as follows:
Accumulated net realized capital gains ........... $ 34,782
Net unrealized appreciation ...................... 1,035,299,957
Net unrealized appreciation on
foreign currency transactions .................. 2,783
--------------
Total accumulated gain ........................... $1,035,337,522
==============
The following summarizes the tax cost of investments and related unrealized
appreciation/depreciation at June 30, 2005:
GROSS GROSS NET UNREALIZED
UNREALIZED UNREALIZED APPRECIATION/
COST APPRECIATION DEPRECIATION (DEPRECIATION)
---- ------------ ------------ --------------
Investments ...... $1,219,001,284 $1,068,125,001 $(36,587,715) $1,031,537,286
15
THE GABELLI ASSET FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
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 its average daily net assets. In
accordance with the Advisory Agreement, the Adviser provides a continuous
investment program for the Fund's portfolio, oversees the administration of all
aspects of the Fund's business and affairs and pays the compensation of all
Officers and Trustees of the Fund who are the Adviser's affiliates.
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.
5. PORTFOLIO SECURITIES. Purchases and proceeds from the sales of securities for
the six months ended June 30, 2005, other than short term securities, aggregated
$68,789,543 and $56,384,114, respectively.
6. TRANSACTIONS WITH AFFILIATES. During the six months ended June 30, 2005, the
Fund paid brokerage commissions of $133,147 to Gabelli & Company. During the six
months ended June 30, 2005, Gabelli & Company informed the Fund that it received
$3,406 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 June 30, 2005, the Fund reimbursed the Adviser $22,500 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 June 30, 2005, there were no
borrowings from the line of credit.
8. SHARES OF BENEFICIAL INTEREST. 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 and automatically convert to Class A Shares after
eight years from the original purchase. The applicable CDSC is equal to a
declining percentage of the lesser of the net asset value per share at the date
of original purchase or at the date of redemption, based on the length of time
held. Class C Shares are subject to a 1% CDSC for one year after purchase. As of
July 27, 2004, Class B Shares are available only through exchange of Class B
Shares of other Funds distributed by Gabelli & Company. The Board has approved
Class I Shares which have not been publicly offered.
Effective June 15, 2005, the Fund imposed a redemption fee of 2.00% on Class
AAA, Class A, Class B and Class C Shares that are redeemed or exchanged on or
before the seventh day after the date of a purchase. (Prior to June 15, 2005,
the Fund imposed a redemption fee on shares that were redeemed or exchanged
16
THE GABELLI ASSET FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
within the sixtieth day after the date of a purchase.) The redemption fee is
deducted from the proceeds otherwise payable to the redeeming shareholders and
is retained by the Fund. The redemption fees retained by the Fund during the six
months ended June 30, 2005 amounted to $30,920.
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 to implement such systems.
Transactions in shares of beneficial interest were as follows:
SIX MONTHS ENDED
JUNE 30, 2005 YEAR ENDED
(UNAUDITED) DECEMBER 31, 2004
---------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------- ---------- -------------
CLASS AAA CLASS AAA
---------------------------- ---------------------------
Shares sold ........................................ 3,575,937 $ 146,465,407 7,073,000 $ 266,326,783
Shares issued upon reinvestment of dividends ....... -- -- 952,780 39,435,639
Shares redeemed .................................... (3,580,007) (147,415,120) (8,572,029) (325,211,065)
---------- ------------- ---------- -------------
Net decrease ..................................... (4,070) $ (949,713) (546,249) $ (19,448,643)
========== ============= ========== =============
CLASS A CLASS A
---------------------------- ---------------------------
Shares sold ........................................ 16,960 $ 702,497 8,269 $ 317,999
Shares issued upon reinvestment of dividends ....... -- -- 170 7,038
Shares redeemed .................................... (1,225) (49,168) -- --
---------- ------------- ---------- -------------
Net increase ..................................... 15,735 $ 653,329 8,439 $ 325,037
========== ============= ========== =============
CLASS B CLASS B
---------------------------- ---------------------------
Shares sold ........................................ -- $ -- -- $ --
Shares issued upon reinvestment of dividends ....... -- -- -- --
Shares redeemed .................................... -- -- -- --
---------- ------------- ---------- -------------
Net increase ..................................... -- $ -- -- $ --
========== ============= ========== =============
CLASS C CLASS C
---------------------------- ---------------------------
Shares sold ........................................ 11,242 $ 458,856 9,071 $ 354,240
Shares issued upon reinvestment of dividends ....... -- -- 156 6,395
Shares redeemed .................................... -- -- (767) (30,821)
---------- ------------- ---------- -------------
Net increase ..................................... 11,242 $ 458,856 8,460 $ 329,814
========== ============= ========== =============
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 for documents and
testimony. 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.
17
THE GABELLI ASSET FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period:
INCOME
FROM INVESTMENT OPERATIONS DISTRIBUTIONS
---------------------------------------------- --------------------------------------
Net
Net Asset Realized and Total Net
Period Value, Net Unrealized from Net Realized
Ended Beginning Investment Gain/(Loss) on Investment Investment Gain on Total
December 31 of Period Income/(Loss)(c) Investments Operations Income Investment Distributions
- ----------- --------- ---------------- -------------- ---------- ---------- ---------- -------------
CLASS AAA
2005 (e) $41.45 $ 0.12 $ 0.48 $ 0.60 -- -- --
2004 36.26 0.02 5.96 5.98 $(0.03) $(0.76) $(0.79)
2003 28.25 0.04 8.60 8.64 (0.03) (0.60) (0.63)
2002 32.97 0.02 (4.72) (4.70) (0.02) (0.00)(a) (0.02)
2001 33.90 (0.00)(a) 0.05 0.05 -- (0.98) (0.98)
2000 40.84 0.31 (1.37) (1.06) (0.31) (5.57) (5.88)
CLASS A
2005 (e) $41.39 $ 0.15 $ 0.44 $ 0.59 -- -- --
2004 (b) 36.26 0.03 5.94 5.97 $(0.08) $(0.76) $(0.84)
CLASS B
2005 (e) $41.16 $(0.02) $ 0.47 $ 0.45 -- -- --
2004 (b) 36.26 (0.25) 5.91 5.66 -- $(0.76) $(0.76)
CLASS C
2005 (e) $41.14 $ 0.00(a) $ 0.44 $ 0.44 -- -- --
2004 (b) 36.26 (0.26) 5.92 5.66 $(0.02) $(0.76) $(0.78)
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
--------------------------------------------------------
Net Asset Net Assets Net
Period Value, End of Investment Portfolio
Ended Redemption End of Total Period Income/ Operating Turnover
December 31 Fees(c) Period Return+ (in 000's) (Loss) Expenses(d) Rate
- ----------- ---------- -------- ------- ---------- --------- ----------- ---------
CLASS AAA
2005 (e) $0.00(a) $42.05 1.5% $2,247,725 0.60%(f) 1.37%(f) 3%
2004 0.00(a) 41.45 16.5 2,216,050 0.06 1.38 7
2003 -- 36.26 30.6 1,958,431 0.11 1.38 7
2002 -- 28.25 (14.3) 1,501,420 0.04 1.38 8
2001 -- 32.97 0.2 1,911,007 (0.00) 1.36 15
2000 -- 33.90 (2.4) 1,906,095 0.77 1.36 48
CLASS A
2005 (e) $0.00(a) $41.98 1.4% $ 1,016 0.74%(f) 1.38%(f) 3%
2004 (b) 0.00(a) 41.39 16.5 351 0.07 1.40 7
CLASS B
2005 (e) $0.00(a) $41.61 1.1% $ 1 (0.10)%(f) 2.02%(f) 3%
2004 (b) 0.00(a) 41.16 15.6 1 (0.67) 2.07 7
CLASS C
2005 (e) $0.00(a) $41.58 1.1% $ 820 0.02%(f) 2.13%(f) 3%
2004 (b) 0.00(a) 41.14 15.6 349 (0.68) 2.15 7
- ----------------
+ 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) Amount represents less than $0.005 per share.
(b) Class A, Class B and Class C Shares were initially offered on December 31,
2003.
(c) Per share amounts have been calculated using the average shares outstanding
method.
(d) The ratios do not include a reduction of expenses for custodian fee credits
on cash balances maintained with the custodian. For the six months ended
June 30, 2005, the effect of the custodian fee credits was minimal.
(e) For the six months ended June 30, 2005, unaudited.
(f) Annualized.
See accompanying notes to financial statements.
18
THE GABELLI ASSET FUND
BOARD CONSIDERATION AND RE-APPROVAL OF MANAGEMENT AGREEMENT (UNAUDITED)
At its meeting on February 16, 2005, the Board of Trustees ("Board") of the Fund
approved the continuation of the investment advisory agreement with the Adviser
for the Fund on the basis of the recommendation by the trustees (the
"independent trustees") who are not "interested persons" of the Fund. The
following paragraphs summarize the material information and factors considered
by the independent trustees as well as their conclusions relative to such
factors.
NATURE, EXTENT AND QUALITY OF SERVICES. The independent trustees 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
trustees noted the experience, length of service and reputation of the portfolio
manager.
INVESTMENT PERFORMANCE. The independent trustees reviewed the short, medium and
long-term performance of the Fund against a peer group of multi-cap and core
value funds. The trustees noted that the Fund's performance was in or near the
top 25% of the funds in its category for all relevant periods.
PROFITABILITY. The independent trustees reviewed summary data regarding the
profitability of the Fund to the Adviser both with an administrative overhead
charge and without such a charge. The trustees 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 trustees discussed the major elements of the
Adviser's cost structure and the relationship of those elements to potential
economies of scale. The independent trustees 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 beyond its previous largest aggregate asset value.
SHARING OF ECONOMIES OF SCALE. The independent trustees 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 trustees 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 multi-cap and core value
funds and noted that the Adviser's management fee includes substantially all
administrative services of the Fund as well as investment advisory services. The
trustees noted that the Fund's expense ratios were above and the Fund's size was
below average within this group. The trustees also noted that the management fee
structure was the same as that in effect for most of the Gabelli funds. The
trustees did not compare the management fee to the fee for other types of
accounts managed by the Adviser.
CONCLUSIONS. The independent trustees concluded that the Fund enjoyed highly
experienced portfolio management services, good ancillary services and an
excellent performance record. The independent trustees 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 trustees 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 trustees determined
to recommend continuation of the investment management agreement to the full
Board of Trustees.
19
THE GABELLI ASSET FUND
One Corporate Center
Rye, New York 10580-1422
800-GABELLI
800-422-3554
FAX: 914-921-5118
WEBSITE: WWW.GABELLI.COM
E-MAIL: INFO@GABELLI.COM
Net Asset Value available daily by calling
800-GABELLI after 6:00 P.M.
BOARD OF TRUSTEES
Mario J. Gabelli, CFA Anthony R. Pustorino
CHAIRMAN AND CHIEF CERTIFIED PUBLIC ACCOUNTANT
EXECUTIVE OFFICER PROFESSOR EMERITUS
GABELLI ASSET MANAGEMENT INC. PACE UNIVERSITY
Anthony J. Colavita Werner J. Roeder, MD
ATTORNEY-AT-LAW MEDICAL DIRECTOR
ANTHONY J. COLAVITA, P.C. LAWRENCE HOSPITAL
James P. Conn Anthonie C. van Ekris
FORMER CHIEF INVESTMENT OFFICER MANAGING DIRECTOR
FINANCIAL SECURITY ASSURANCE BALMAC INTERNATIONAL, INC.
HOLDINGS LTD.
Salvatore J. Zizza
John D. Gabelli CHAIRMAN
SENIOR VICE PRESIDENT HALLMARK ELECTRICAL SUPPLIES
GABELLI & COMPANY, INC. CORP.
Karl Otto Pohl
FORMER PRESIDENT
DEUTSCHE BUNDESBANK
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 Asset Fund. It is not authorized for distribution to prospective
investors unless preceded or accompanied by an effective prospectus.
- --------------------------------------------------------------------------------
GAB405Q205SR
[GRAPHIC OMITTED]
PICTURE OF MARIO GABELLI
THE
GABELLI
ASSET
FUND
SEMI-ANNUAL REPORT
JUNE 30, 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.
There have been no material changes to the procedures by which the shareholders
may recommend nominees to the registrant's Board of Trustees, where those
changes were implemented after the registrant last provided disclosure in
response to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A (17 CFR
240.14a-101), or this Item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within
90 days of the filing date of the report that includes the disclosure
required by this paragraph, based on their evaluation of these
controls and procedures required by Rule 30a-3(b) under the 1940 Act
(17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the
Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or
240.15d-15(b)).
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act
(17 CFR 270.30a-3(d)) that occurred during the registrant's second
fiscal quarter of the period covered by this report that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) 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) The Gabelli Asset Fund
--------------------------------------------------------------------
By (Signature and Title)* /s/ Bruce N. Alpert
-------------------------------------------------------
Bruce N. Alpert, Principal Executive Officer
Date September 7, 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 &
Principal Financial Officer
Date September 7, 2005
----------------------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.