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 811-04873
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The Gabelli Growth Fund
--------------------------------------------
(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
--------------------------------------------
(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 GROWTH FUND
SEMI-ANNUAL REPORT
JUNE 30, 2005
TO OUR SHAREHOLDERS,
During the second quarter of 2005, the Gabelli Growth Fund (the "Fund")
rose 2.3%, while the Standard & Poor's ("S&P") 500 Index and the Russell 1000
Growth Index rose 1.4% and 2.5%, respectively. For the six month period ended
June 30, 2005, the Fund declined 0.2% versus declines of 0.8% and 1.7% for the
S&P 500 Index and the Russell 1000 Growth Index, respectively.
Enclosed are the financial statements and the investment portfolio as of
June 30, 2005.
COMPARATIVE RESULTS
- --------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS THROUGH JUNE 30, 2005 (A)
Since
Year to Inception
Quarter Date 1 Year 3 Year 5 Year 10 Year 15 Year (4/10/87)
- ---------------------------------------------------------------------------------------------------------------------
GABELLI GROWTH FUND CLASS AAA .. 2.32% (0.23)% 4.62% 7.07% (10.42)% 8.52% 9.22% 11.48%
S&P 500 Index .................. 1.37 (0.81) 6.32 8.28 (2.37) 9.94 10.64 10.41
Russell 1000 Growth Index ...... 2.46 (1.72) 1.68 7.26 (10.36) 7.40 N/A* N/A*
Class A ........................ 2.36 (0.23) 4.66 7.09 (10.39) 8.51 9.21 11.47
(3.52)(b) (5.95)(b) (1.36)(b) 4.98(b) (11.45)(b) 7.87(b) 8.78(b) 11.11(b)
Class B ........................ 2.14 (0.62) 3.83 6.67 (10.62) 8.40 9.13 11.41
(2.86)(c) (5.59)(c) (1.17)(c) 5.79(c) (10.98)(c) 8.40(c) 9.13(c) 11.41(c)
Class C ........................ 2.14 (0.62) 3.87 6.67 (10.62) 8.40 9.13 11.41
1.14(c) (1.61)(c) 2.87(c) 6.67(c) (10.62)(c) 8.40(c) 9.13(c) 11.41(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 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. THE S&P 500 INDEX AND THE
RUSSELL 1000 GROWTH INDEX ARE UNMANAGED INDICATORS OF STOCK MARKET
PERFORMANCE. DIVIDENDS ARE REINVESTED.
(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.
* THERE IS NO DATA AVAILABLE FOR THE RUSSELL 1000 GROWTH INDEX PRIOR TO
AUGUST 31, 1992.
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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.
- --------------------------------------------------------------------------------
THE GABELLI GROWTH 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 GROWTH FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Class AAA $1,000.00 $ 997.70 1.53% $ 7.58
Class A $1,000.00 $ 997.70 1.53% $ 7.58
Class B $1,000.00 $ 993.80 2.28% $11.27
Class C $1,000.00 $ 993.80 2.29% $11.32
HYPOTHETICAL 5% RETURN
Class AAA $1,000.00 $1,017.21 1.53% $ 7.65
Class A $1,000.00 $1,017.21 1.53% $ 7.65
Class B $1,000.00 $1,013.49 2.28% $11.38
Class C $1,000.00 $1,013.44 2.29% $11.43
* 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 GROWTH FUND
Industrial ........................................ 14.3%
Health Care Equipment & Services .................. 11.8%
Consumer Staples .................................. 11.1%
Energy ............................................ 8.9%
Retail ............................................ 8.6%
Pharmaceuticals & Biotechnology ................... 8.6%
Financial ......................................... 8.0%
Software and Services ............................. 7.3%
Semiconductors .................................... 7.3%
Media ............................................. 3.6%
Materials ......................................... 3.0%
U.S. Government Obligations ....................... 2.3%
Communications Equipment .......................... 2.1%
Computers & Peripheral ............................ 1.7%
Auto & Components ................................. 0.6%
Other Assets and Liabilities - Net ................ 0.8%
------
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 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 GROWTH FUND
SCHEDULE OF INVESTMENTS -- JUNE 30, 2005 (UNAUDITED)
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MARKET
SHARES COST VALUE
------ ---- -----
COMMON STOCKS -- 96.9%
CONSUMER DISCRETIONARY -- 12.8%
AUTO & COMPONENTS -- 0.6%
145,000 Harley-Davidson Inc. ...... $ 6,596,157 $ 7,192,000
--------------- --------------
MEDIA -- 3.6%
320,000 McGraw-Hill Companies Inc.. 7,684,823 14,160,000
590,000 News Corp., Cl. B ......... 11,170,696 9,947,400
1,310,000 Time Warner Inc.+ ......... 22,286,121 21,890,100
--------------- --------------
41,141,640 45,997,500
--------------- --------------
RETAIL -- 8.6%
350,000 Bed Bath & Beyond Inc.+ ... 12,844,089 14,623,000
125,000 Best Buy Co. Inc. ......... 6,764,011 8,568,750
245,000 Cheesecake Factory Inc.+ .. 5,881,024 8,508,850
470,000 Coach Inc.+ ............... 10,753,349 15,777,900
180,000 Costco Wholesale Corp. .... 7,597,403 8,067,600
220,000 eBay Inc.+ ................ 7,365,978 7,262,200
140,000 Starbucks Corp.+ .......... 3,512,917 7,232,400
245,000 Target Corp. .............. 9,903,021 13,330,450
316,577 The Home Depot Inc. ....... 8,747,621 12,314,846
443,400 Tiffany & Co. ............. 11,115,736 14,525,784
--------------- --------------
84,485,149 110,211,780
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TOTAL CONSUMER
DISCRETIONARY ........... 132,222,946 163,401,280
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CONSUMER STAPLES -- 11.1%
510,000 PepsiCo Inc. .............. 25,132,563 27,504,300
535,000 Procter & Gamble Co. ...... 28,823,553 28,221,250
455,000 Sysco Corp. ............... 13,275,943 16,466,450
400,000 Wal-Mart Stores Inc. ...... 21,862,499 19,280,000
655,000 Walgreen Co. .............. 20,624,303 30,123,450
170,000 Whole Foods Market Inc. ... 9,511,440 20,111,000
--------------- --------------
TOTAL CONSUMER
STAPLES 119,230,301 141,706,450
--------------- --------------
ENERGY -- 8.9%
145,000 Anadarko Petroleum Corp. .. 9,865,510 11,911,750
176,000 Apache Corp. .............. 5,524,718 11,369,600
220,000 Baker Hughes Inc. ......... 10,299,383 11,255,200
185,000 Burlington Resources Inc... 5,668,456 10,219,400
140,000 Devon Energy Corp. ........ 5,667,098 7,095,200
260,000 Murphy Oil Corp. .......... 5,930,352 13,579,800
190,000 Occidental Petroleum Corp. 6,380,705 14,616,700
190,000 Schlumberger Ltd. ......... 7,955,593 14,428,600
170,000 Suncor Energy Inc. ........ 5,425,055 8,044,400
190,000 Transocean Inc.+ .......... 7,244,034 10,254,300
--------------- --------------
TOTAL ENERGY .............. 69,960,904 112,774,950
--------------- --------------
MARKET
SHARES COST VALUE
------ ---- -----
FINANCIAL -- 8.0%
250,000 American Express Co. ...... $ 10,699,292 $ 13,307,500
665,000 Citigroup Inc. ............ 29,938,551 30,742,950
70,000 Goldman Sachs Group Inc. .. 7,056,718 7,141,400
360,000 Merrill Lynch & Co. Inc. .. 14,624,091 19,803,600
275,900 Northern Trust Corp. ...... 15,903,744 12,578,281
373,800 State Street Corp. ........ 18,417,575 18,035,850
--------------- --------------
TOTAL FINANCIAL ........... 96,639,971 101,609,581
--------------- --------------
HEALTH CARE -- 20.4%
HEALTH CARE EQUIPMENT & SERVICES -- 11.8%
120,000 Alcon Inc. ................ 9,536,498 13,122,000
170,000 Biomet Inc. ............... 7,217,796 5,888,800
305,000 Caremark Rx Inc.+ ......... 11,356,812 13,578,600
205,000 Edwards Lifesciences Corp.+ 8,098,853 8,819,100
140,000 Express Scripts Inc.+ ..... 5,459,075 6,997,200
100,000 Fisher Scientific
International Inc.+ 6,178,123 6,490,000
70,000 IDEXX Laboratories Inc.+ .. 4,523,156 4,363,100
100,000 Invitrogen Corp.+ ......... 7,429,011 8,329,000
425,000 Medtronic Inc. ............ 20,544,452 22,010,750
330,000 St. Jude Medical Inc.+ .... 10,749,340 14,391,300
225,000 Stryker Corp. ............. 11,067,366 10,701,000
340,000 UnitedHealth Group Inc. ... 8,811,088 17,727,600
235,000 Zimmer Holdings Inc.+ ..... 18,629,660 17,899,950
--------------- --------------
129,601,230 150,318,400
--------------- --------------
PHARMACEUTICALS & BIOTECHNOLOGY -- 8.6%
120,000 Affymetrix Inc.+ .......... 4,246,369 6,471,600
418,000 Amgen Inc.+ ............... 25,747,689 25,272,280
175,000 Eli Lilly & Co. ........... 10,362,687 9,749,250
225,000 Genentech Inc.+ ........... 11,637,359 18,063,000
155,000 Genzyme Corp.+ ............ 8,619,588 9,313,950
314,000 Johnson & Johnson ......... 16,834,447 20,410,000
707,500 Pfizer Inc. ............... 26,002,488 19,512,850
--------------- --------------
103,450,627 108,792,930
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TOTAL HEALTH CARE ......... 233,051,857 259,111,330
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See accompanying notes to financial statements.
4
THE GABELLI GROWTH FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- JUNE 30, 2005 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- -----
COMMON STOCKS (CONTINUED)
INDUSTRIAL -- 14.3%
270,000 3M Co. .................... $ 22,002,293 $ 19,521,000
155,000 C.H. Robinson
Worldwide Inc. .......... 6,631,131 9,021,000
145,000 Caterpillar Inc. .......... 12,114,449 13,819,950
140,000 Deere & Co. ............... 9,321,024 9,168,600
125,000 Expeditors International of
Washington Inc. ......... 5,856,676 6,226,250
215,000 Fluor Corp. ............... 9,150,403 12,381,850
118,500 General Dynamics Corp. .... 8,263,037 12,980,490
250,000 General Electric Co. ...... 9,108,748 8,662,500
195,000 Ingersoll-Rand Co. Ltd.,
Cl. A ................... 15,635,169 13,913,250
205,000 ITT Industries Inc. ....... 18,083,637 20,014,150
195,000 L-3 Communications
Holdings Inc. ........... 8,875,601 14,933,100
160,000 Rockwell Automation Inc. .. 9,845,044 7,793,600
120,000 United Parcel Service Inc.,
Cl. B ................... 8,540,295 8,299,200
480,000 United Technologies Corp... 21,811,886 24,648,000
--------------- --------------
TOTAL INDUSTRIAL .......... 165,239,393 181,382,940
--------------- --------------
INFORMATION TECHNOLOGY -- 18.4%
COMMUNICATIONS EQUIPMENT -- 2.1%
691,000 Cisco Systems Inc.+ ....... 8,827,045 13,205,010
85,000 Harman International
Industries Inc. ......... 7,485,865 6,915,600
206,000 QUALCOMM Inc. ............. 3,351,283 6,800,060
--------------- --------------
19,664,193 26,920,670
--------------- --------------
COMPUTERS & PERIPHERAL -- 1.7%
560,000 Dell Inc.+ ................ 13,731,850 22,125,600
--------------- --------------
SEMICONDUCTORS -- 7.3%
320,000 Altera Corp.+ ............. 7,060,735 6,342,400
140,000 Analog Devices Inc. ....... 7,409,489 5,223,400
410,000 Applied Materials Inc. .... 6,016,131 6,633,800
200,000 Broadcom Corp., Cl. A+ .... 6,448,965 7,102,000
840,000 Intel Corp. ............... 42,419,786 21,890,400
135,000 KLA-Tencor Corp. .......... 5,994,023 5,899,500
530,000 Linear Technology Corp. ... 16,838,784 19,445,700
275,000 Microchip Technology Inc... 6,497,793 8,145,500
201,000 Texas Instruments Inc. .... 5,573,547 5,642,070
240,000 Xilinx Inc. ............... 6,515,341 6,120,000
--------------- --------------
110,774,594 92,444,770
--------------- --------------
MARKET
SHARES COST VALUE
------ ---- -----
SOFTWARE & SERVICES -- 7.3%
320,000 Adobe Systems Inc. ........ $ 8,352,216 $ 9,158,400
255,000 CheckFree Corp.+ .......... 8,382,574 8,685,300
205,000 Citrix Systems Inc.+ ...... 4,825,412 4,440,300
170,000 Electronic Arts Inc.+ ..... 8,493,455 9,623,700
450,100 EMC Corp.+ ................ 5,899,732 6,170,871
35,000 Google Inc., Cl. A+ ....... 7,644,083 10,295,250
50,000 International Game
Technology ............. 1,426,864 1,407,500
1,360,000 Microsoft Corp. ........... 35,379,556 33,782,400
50,000 NAVTEQ Corp.+ ............. 1,905,333 1,859,000
225,000 Yahoo! Inc.+ .............. 7,642,044 7,796,250
--------------- --------------
89,951,269 93,218,971
--------------- --------------
TOTAL INFORMATION
TECHNOLOGY .............. 234,121,906 234,710,011
--------------- --------------
MATERIALS -- 3.0%
385,000 AK Steel Holding Corp.+ ... 6,518,656 2,467,850
120,000 Alcoa Inc. ................ 3,980,793 3,135,600
250,000 Allegheny Technologies Inc. 6,146,836 5,515,000
240,000 Commercial Metals Co. ..... 7,778,340 5,716,800
225,000 Freeport-McMoRan Copper
& Gold Inc., Cl. B ...... 8,621,600 8,424,000
340,000 Newmont Mining Corp. ...... 15,686,092 13,270,200
--------------- --------------
TOTAL MATERIALS ........... 48,732,317 38,529,450
--------------- --------------
TOTAL COMMON STOCKS ....... 1,099,199,595 1,233,225,992
--------------- --------------
PRINCIPAL
AMOUNT
-------
SHORT-TERM OBLIGATIONS -- 2.3%
U.S. GOVERNMENT OBLIGATIONS -- 2.3%
$28,787,000 U.S. Treasury Bills,
2.778% to 3.001%++,
07/07/05 to 09/08/05 .... 28,649,805 28,646,996
--------------- --------------
TOTAL SHORT-TERM
OBLIGATIONS ............. 28,649,805 28,646,996
--------------- --------------
TOTAL
INVESTMENTS -- 99.2% .... $ 1,127,849,400 1,261,872,988
==============
OTHER ASSETS AND LIABILITIES (NET) -- 0.8% 10,522,544
--------------
NET ASSETS -- 100.0% ....................... $1,272,395,532
==============
- ----------------
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
See accompanying notes to financial statements.
5
THE GABELLI GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2005 (UNAUDITED)
- --------------------------------------------------------------------------------
ASSETS:
Investments, at value (cost $1,127,849,400) ............... $ 1,261,872,988
Cash ...................................................... 29,450
Receivable for investments sold ........................... 12,309,357
Dividends receivable ...................................... 718,682
Receivable for Fund shares sold ........................... 388,454
Other assets .............................................. 23,516
---------------
TOTAL ASSETS .............................................. 1,275,342,447
---------------
LIABILITIES:
Payable for investment advisory fees ...................... 1,070,830
Payable for shareholder services fees ..................... 890,818
Payable for shareholder communication fees ................ 401,548
Payable for distribution fees ............................. 268,111
Payable for Fund shares redeemed .......................... 237,357
Other accrued expenses .................................... 78,251
---------------
TOTAL LIABILITIES ......................................... 2,946,915
---------------
NET ASSETS applicable to 48,819,115
shares outstanding ...................................... $ 1,272,395,532
===============
NET ASSETS CONSIST OF:
Shares of beneficial interest,
at $0.01 par value ...................................... $ 488,191
Additional paid-in capital ................................ 2,294,017,623
Accumulated net investment loss ........................... (3,250,432)
Accumulated net realized loss on investments .............. (1,152,883,438)
Net unrealized appreciation on investments ................ 134,023,588
---------------
NET ASSETS ................................................ $ 1,272,395,532
===============
SHARES OF BENEFICIAL INTEREST:
CLASS AAA:
Net Asset Value, offering and redemption price
per share ($1,271,644,081 / 48,789,995
shares outstanding; unlimited number of shares
authorized of $0.01 par value) .......................... $26.06
======
CLASS A:
Net Asset Value and redemption price per share
($83,018 / 3,185 shares outstanding;
unlimited number of shares authorized of
$0.01 par value) ........................................ $26.07
======
Maximum offering price per share (NAV / 0.9425,
based on maximum sales charge of
5.75% of the offering price) ............................ $27.66
======
CLASS B:
Net Asset Value and offering price per share
($248,917 / 9,658 shares outstanding;
unlimited number of shares authorized of
$0.01 par value) ........................................ $25.77(a)
======
CLASS C:
Net Asset Value and offering price per share
($419,516 / 16,277 shares outstanding;
unlimited number of shares authorized of
$0.01 par value) ........................................ $25.77(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 $24,867) ............... $ 6,683,281
Interest .................................................. 194,475
------------
TOTAL INVESTMENT INCOME ................................... 6,877,756
------------
EXPENSES:
Investment advisory fees .................................. 6,619,946
Distribution fees -- Class AAA ............................ 1,654,224
Distribution fees -- Class A .............................. 98
Distribution fees -- Class B .............................. 1,220
Distribution fees -- Class C .............................. 1,441
Shareholder services fees ................................. 1,216,036
Shareholder communications expenses ....................... 352,158
Custodian fees ............................................ 100,484
Legal and audit fees ...................................... 39,183
Trustees' fees ............................................ 35,223
Registration fees ......................................... 27,421
Miscellaneous expenses .................................... 80,844
------------
TOTAL EXPENSES ............................................ 10,128,278
Less: Custodian fee credits ............................... (90)
------------
NET EXPENSES .............................................. 10,128,188
------------
NET INVESTMENT LOSS ....................................... (3,250,432)
------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain on investments .......................... 25,600,680
Net change in unrealized appreciation/
depreciation on investments ............................. (27,800,537)
------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS .......................................... (2,199,857)
------------
NET DECREASE IN NET ASSETS RESULTING
FROM OPERATIONS ......................................... $ (5,450,289)
============
See accompanying notes to financial statements.
6
THE GABELLI GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS ENDED
JUNE 30, 2005 YEAR ENDED
(UNAUDITED) DECEMBER 31, 2004
---------------- -----------------
OPERATIONS:
Net investment loss ....................................................... $ (3,250,432) $ (7,501,356)
Net realized gain on investments .......................................... 25,600,680 6,104,056
Net change in unrealized appreciation/depreciation on investments ......... (27,800,537) 62,086,843
-------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ........... (5,450,289) 60,689,543
-------------- --------------
SHARES OF BENEFICIAL INTEREST TRANSACTIONS:
Class AAA ................................................................. (170,579,132) (494,470,178)
Class A ................................................................... 10,304 66,824
Class B ................................................................... -- 242,719
Class C ................................................................... 188,933 211,422
-------------- --------------
NET DECREASE IN NET ASSETS FROM SHARES OF BENEFICIAL INTEREST TRANSACTIONS (170,379,895) (493,949,213)
-------------- --------------
REDEMPTION FEES ........................................................... 21,407 6,601
-------------- --------------
NET DECREASE IN NET ASSETS ................................................ (175,808,777) (433,253,069)
NET ASSETS:
Beginning of period ....................................................... 1,448,204,309 1,881,457,378
-------------- --------------
End of period ............................................................. $1,272,395,532 $1,448,204,309
============== ==============
See accompanying notes to financial statements.
THE GABELLI GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
1. ORGANIZATION. The Gabelli Growth Fund (the "Fund") was organized on October
24, 1986 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 capital
appreciation. The Fund commenced investment operations on April 10, 1987.
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
7
THE GABELLI GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
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.
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.
For the year ended December 31, 2004, reclassifications were made to increase
accumulated net investment income by $7,501,356, with an offsetting adjustment
to additional paid-in capital.
No distributions were made during the year ended December 31, 2004.
8
THE GABELLI GROWTH 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.
At December 31, 2004, the difference between book basis and tax basis unrealized
appreciation was attributable primarily to the tax deferral of losses on wash
sales.
As of December 31, 2004, the components of accumulated earnings/(losses) on a
tax basis were as follows:
Accumulated capital loss carryforward ................ $(1,163,304,151)
Net unrealized appreciation .......................... 146,644,157
---------------
Total accumulated loss ............................... $(1,016,659,994)
===============
At December 31, 2004, the Fund has net capital loss carryforwards for Federal
income tax purposes of $1,163,304,151, which are available to reduce future
required distributions of net capital gains to shareholders. $68,961,980 of the
loss carryforward is available through 2009; $743,150,002 is available through
2010; $350,050,494 is available through 2011; and $1,141,675 is available
through 2012.
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 ............. $1,138,052,220 $196,644,288 $(72,823,520) $123,820,768
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
$202,007,548 and $408,139,083, respectively.
6. TRANSACTIONS WITH AFFILIATES. During the six months ended June 30, 2005, the
Fund paid brokerage commissions of $500 to Gabelli & Company. During the six
months ended June 30, 2005, Gabelli & Company informed the Fund that it received
$153 from investors representing commissions (sales charges and underwriting
fees) on sales and redemptions of Fund shares.
9
THE GABELLI GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
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 of 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 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 Board has approved
Class I Shares which have not been offered publicly.
Effective June 15, 2005, the Fund imposed a redemption fee of 2.00% on Class AAA
Shares, Class A Shares, Class B Shares 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 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 $21,407.
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.
10
THE GABELLI GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
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 ....................................... 2,320,688 $ 59,514,713 7,724,349 $ 191,537,714
Shares redeemed ................................... (8,946,824) (230,093,845) (27,719,706) (686,007,892)
---------- ------------- ----------- -------------
Net decrease .................................... (6,626,136) $(170,579,132) (19,995,357) $(494,470,178)
========== ============= =========== =============
CLASS A CLASS A
---------------------------- ----------------------------
Shares sold ....................................... 482 $ 12,454 2,747 $ 66,849
Shares redeemed ................................... (83) (2,150) (1) (25)
---------- ------------- ----------- -------------
Net increase .................................... 399 $ 10,304 2,746 $ 66,824
========== ============= =========== =============
CLASS B CLASS B
---------------------------- ----------------------------
Shares sold ....................................... -- -- 9,618 $ 242,719
Shares redeemed ................................... -- -- -- --
---------- ------------- ----------- -------------
Net increase .................................... -- -- 9,618 $ 242,719
========== ============= =========== =============
CLASS C CLASS C
---------------------------- ----------------------------
Shares sold ....................................... 8,587 $ 215,694 8,810 $ 214,167
Shares redeemed ................................... (1,045) (26,761) (115) (2,745)
---------- ------------- ----------- -------------
Net increase .................................... 7,542 $ 188,933 8,695 $ 211,422
========== ============= =========== =============
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.
11
THE GABELLI GROWTH 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 Realized
Ended Beginning Investment Gain/(Loss) on Investment Gain on Total
December 31 of Period Loss(d) Investments Operations Investments Distributions
- ----------- --------- ---------- -------------- ---------- ----------- -------------
CLASS AAA
2005(e) $26.12 $(0.06) -- $(0.06) -- --
2004 24.95 (0.11) $1.28 1.17 -- --
2003 18.99 (0.14) 6.10 5.96 -- --
2002 28.68 (0.17) (9.52) (9.69) -- --
2001 37.79 (0.23) (8.88) (9.11) $(0.00)(a) $(0.00)(a)
2000 46.51 (0.24) (4.64) (4.88) (3.84) (3.84)
CLASS A
2005(e) $26.13 $(0.06) -- $(0.06) -- --
2004(b) 24.95 (0.02) $1.20 1.18 -- --
CLASS B
2005(e) $25.93 $(0.16) -- $(0.16) -- --
2004(b) 24.95 (0.28) $1.26 0.98 -- --
CLASS C
2005(e) $25.93 $(0.15) $(0.01) $(0.16) -- --
2004(b) 24.95 (0.21) 1.19 0.98 -- --
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
December 31 Fees(d) Period Return+ (in 000's) Income/(Loss) Expenses(f) Rate
- ----------- ---------- ------ ------- ---------- ------------- ----------- ----------
CLASS AAA
2005(e) $0.00(a) $26.06 (0.2)% $1,271,644 (0.49)%(c) 1.53%(c) 15%
2004 0.00(a) 26.12 4.7 1,447,655 (0.46) 1.53 31
2003 -- 24.95 31.4 1,881,457 (0.60) 1.47 42
2002 -- 18.99 (33.8) 1,675,816 (0.68) 1.43 30
2001 -- 28.68 (24.1) 2,948,390 (0.71) 1.40 26
2000 -- 37.79 (10.6) 3,833,807 (0.63) 1.38 55
CLASS A
2005(e) $0.00(a) $26.07 (0.2)% $ 83 (0.49)%(c) 1.53%(c) 15%
2004(b) 0.00(a) 26.13 4.7 73 (0.09) 1.60 31
CLASS B
2005(e) $0.00(a) $25.77 (0.6)% $ 249 (1.24)%(c) 2.28%(c) 15%
2004(b) 0.00(a) 25.93 3.9 250 (1.12) 2.30 31
CLASS C
2005(e) $0.00(a) $25.77 (0.6)% $ 420 (1.22)%(c) 2.29%(c) 15%
2004(b) 0.00(a) 25.93 3.9 226 (0.88) 2.37 31
- ----------
+ 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) Annualized.
(d) Per share amounts have been calculated using the average shares outstanding
method.
(e) For the six months ended June 30, 2005, unaudited.
(f) 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.
See accompanying notes to financial statements.
12
THE GABELLI GROWTH FUND
BOARD CONSIDERATION AND RE-APPROVAL OF MANAGEMENT AGREEMENT (UNAUDITED)
At its meeting on February 16, 2005, the Board of Trustees ("Board") of the
Trust approved the continuation of the investment advisory agreement with the
Adviser for the Trust on the basis of the recommendation by the trustees (the
"independent trustees") who are not "interested persons" of the Trust. 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 Trust against a peer group of large-cap growth
funds. The trustees noted that the Trust's performance was near the top 25% of
the funds in its category for the prior ten years but was in or near the lowest
25% of the funds in its category for shorter one, three, and five year periods.
The trustees also noted that relative performance had shown substantial
improvement in recent months.
PROFITABILITY. The independent trustees reviewed summary data regarding the
profitability of the Trust to the Adviser both with an administrative overhead
charge and without such a charge. The trustees also noted that the Adviser's
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 Trust'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 Trust 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 Trust 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 Trust to similar expense ratios of the peer group of large-cap growth funds
and noted that the Adviser's management fee includes substantially all
administrative services of the Trust as well as investment advisory services.
The trustees noted that the Trust's expense ratios were above and the Trust'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 Trust enjoyed highly
experienced portfolio management services and good ancillary services but that
the intermediate performance record was poor and that the expense ratios were
significantly higher than those of the peer group. The trustees also noted that
the portfolio manager had previously achieved excellent performance and that
near-term relative performance was also improving although not yet as good as
the trustees would like to see. They concluded that the positive trend and
long-term record of the portfolio manager were sufficient in relation to the
performance factor to warrant renewal of the investment management agreement at
this time and that the fee structure of the Trust in relation to its peer group
should be revisited if both the long-term and short-term performance record were
not strong. The trustees concluded that the profitability to the Adviser of
managing the Trust was reasonable 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.
13
- --------------------------------------------------------------------------------
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 INCOME FUND
Seeks to provide a high level of current income as well as long-term capital
appreciation by investing in income producing equity and fixed income
securities. (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.
THE GABELLI 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 TRUSTEES
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
James P. Conn Anthony Torna
FORMER CHIEF INVESTMENT OFFICER MAXIM GROUP LLC
FINANCIAL SECURITY ASSURANCE
HOLDINGS LTD.
Dugald A. Fletcher Anthonie C. van Ekris
PRESIDENT MANAGING DIRECTOR
FLETCHER & COMPANY, INC. BALMAC INTERNATIONAL, INC.
John D. Gabelli Salvatore J. Zizza
SENIOR VICE PRESIDENT CHAIRMAN, HALLMARK ELECTRICAL
GABELLI & COMPANY, INC. SUPPLIES CORP.
Robert J. Morrissey
ATTORNEY-AT-LAW
MORRISSEY, HAWKINS & LYNCH
OFFICERS AND PORTFOLIO MANAGER
Bruce N. Alpert Howard F. Ward, CFA
PRESIDENT AND TREASURER PORTFOLIO MANAGER
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
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This report is submitted for the general information of the shareholders of The
Gabelli Growth Fund. It is not authorized for distribution to prospective
investors unless preceded or accompanied by an effective prospectus.
- --------------------------------------------------------------------------------
GAB406Q205SR
[GRAPHIC OMITTED]
Mario J. Gabelli
THE
GABELLI
GROWTH
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 Growth 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 Office &
Principal Financial Officer
Date September 7, 2005
----------------------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.