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 GAMCO Growth 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: December 31, 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, 100 F Street, NE,
Washington, DC 20549. 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 GAMCO GROWTH FUND
ANNUAL REPORT
DECEMBER 31, 2005
TO OUR SHAREHOLDERS,
The Sarbanes-Oxley Act requires a Fund's principal executive and financial
officers to certify the entire contents of the semi-annual and annual
shareholder reports in a filing with the Securities and Exchange Commission on
Form N-CSR. This certification would cover the portfolio manager's commentary
and subjective opinions if they are attached to or a part of the financial
statements. Many of these comments and opinions would be difficult or impossible
to certify.
Because we do not want our portfolio managers to eliminate their opinions
and/or restrict their commentary to historical facts, we have separated their
commentary from the financial statements and investment portfolio and have sent
it to you separately. Both the commentary and the financial statements,
including the portfolio of investments, will be available on our website at
www.gabelli.com/funds.
Enclosed are the audited financial statements and the investment portfolio
as of December 31, 2005 with a description of factors that affected the
performance during the past year.
PERFORMANCE DISCUSSION
The year was similar to 2004. Strong earnings overcame Fed interest rate
increases, natural disasters and soaring energy prices to lift stocks higher.
Returns were strong in energy and materials related issues and varied widely
across and within other sectors. For the year, large-cap growth stocks staged a
comeback of sorts, and we fully participated in the market's advance. We were
fortunate to have a number of holdings perform well, especially in the energy,
healthcare, information technology and materials areas. For the 12 months ended
December 31, 2005, the Fund returned 10.30% compared to 4.91% for the S&P 500
and 5.26% for the Russell 1000 Growth Index.
For the year, energy was far and away the top performing sector, according
to Standard & Poor's, with the sector returning 29.1%. The next best sector was
Utilities, with a gain of 12.8%, a group we did not participate in. Our
relatively good results were driven by strong energy and materials holdings,
along with exceptional returns from certain healthcare and information
technology stocks. Our top-performing holding was healthcare services company
Express Scripts Inc. (+119%), followed by Burlington Resources Inc. (+98%),
Suncor Energy Inc. (+78%), Google Inc. (+71% from purchase price during year)
and Genentech Inc. (+70%). Other winners were Allegheny Technologies Inc.
(+67%), Transocean Inc. (+64%), Whole Foods Market Inc. (+62%), Alcon Inc.
(+61%) and Devon Energy Corp. (+61%). These companies all had robust earnings
gains in 2005, which propelled their shares higher.
Our weakest holdings for the year were Dell Inc. (-29%), Sysco Corp.
(-19%), Zimmer Holdings Inc. (-16%), Biomet Inc. (-16%), Harley-Davidson Inc.
(-15%), Electronic Arts Inc. (-15%), News Corp. (-14%), UPS Inc. (-12%),
Wal-Mart Stores Inc. (-11%) and Cisco Systems Inc. (-11%). There is no real
theme here as these companies were for the most part grappling with different
issues. The weakest S&P industry sector was telecommunication services, which
fell 9.0%. Our performance was helped by the absence of investments in this
sector.
Sincerely yours,
/s/ Bruce N. Alpert
Bruce N. Alpert
President
February 13, 2006
[GRAPHIC OMITTED]
PLOT POINTS FOLLOW:
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN
THE GAMCO GROWTH FUND AND THE S&P 500 INDEX
GAMCO Growth Fund
Class AAA S&P 500 Index
4/10/87 $10,000 $10,000
12/31/87 9,510 8,447
12/31/88 13,234 9,846
12/31/89 18,542 12,961
12/31/90 18,173 12,558
12/31/91 24,410 16,375
12/31/92 25,506 17,621
12/31/93 28,378 19,394
12/31/94 27,414 19,648
12/31/95 36,383 27,022
12/31/96 43,449 33,224
12/31/97 61,971 44,304
12/31/98 80,426 56,975
12/31/99 117,623 68,956
12/31/00 105,191 62,681
12/31/01 79,840 55,235
12/31/02 52,862 43,033
12/31/03 69,450 55,371
12/31/04 72,707 61,390
12/31/05 80,196 64,404
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. The performance tables and
graph do not reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares.
COMPARATIVE RESULTS
- --------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS THROUGH DECEMBER 31, 2005 (A)
----------------------------------------------------
Since
Inception
Quarter Year 3 Year 5 Year 10 Year 15 Year (4/10/87)
- --------------------------------------------------------------------------------------------------------------
GAMCO GROWTH FUND CLASS AAA .... 3.60% 10.30% 14.91% (5.28)% 8.23% 10.40% 11.75%
S&P 500 Index .................. 2.08 4.91 14.38 0.54 9.07 11.51 10.51
Russell 1000 Growth Index ...... 2.98 5.26 13.23 (3.58) 6.73 N/A* N/A*
Class A ........................ 3.59 10.29 14.92 (5.27) 8.21 10.39 11.74
(2.37)(b) 3.97(b) 12.67(b) (6.39)(b) 7.57(b) 9.96(b) 11.39(b)
Class B ........................ 3.39 9.45 14.33 (5.56) 8.06 10.29 11.66
(1.61)(c) 4.45(c) 13.56(c) (5.94)(c) 8.06(c) 10.29(c) 11.66(c)
Class C ........................ 3.39 9.45 14.33 (5.56) 8.06 10.29 11.66
2.39(c) 8.45(c) 14.33(c) (5.56)(c) 8.06(c) 10.29(c) 11.66(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, CHARGES, AND EXPENSES OF THE FUND CAREFULLY BEFORE INVESTING. THE
PROSPECTUS CONTAINS MORE 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.
- --------------------------------------------------------------------------------
2
SUMMARY OF PORTFOLIO HOLDINGS (UNAUDITED)
The following table presents portfolio holdings as a percent of total net assets
as of December 31, 2005:
THE GAMCO GROWTH FUND
Industrial .................................... 14.9%
Financial ..................................... 12.5%
Software & Services ........................... 12.1%
Consumer Staples .............................. 10.7%
Health Care Equipment & Services .............. 10.0%
Energy ........................................ 9.6%
Retail ........................................ 8.2%
Materials ..................................... 5.0%
Pharmaceuticals & Biotechnology ............... 4.6%
Semiconductors ................................ 4.4%
Media ......................................... 3.5%
Communications Equipment ...................... 2.1%
Computers & Peripheral ........................ 1.3%
U.S. Government Obligations ................... 1.0%
Auto & Components ............................. 0.4%
Other Assets and Liabilities - (Net) .......... (0.3)%
--------
100.0%
========
THE FUND FILES A COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS WITH THE SEC FOR THE
FIRST AND THIRD QUARTERS OF EACH FISCAL YEAR ON FORM N-Q, THE LAST OF WHICH WAS
FILED FOR THE QUARTER ENDED SEPTEMBER 30, 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, procedures, and how the Fund voted proxies
relating to portfolio securities 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 GAMCO GROWTH FUND
DISCLOSURE OF FUND EXPENSES (UNAUDITED)
For the Six Month Period from July 1, 2005 through December 31, 2005
EXPENSE TABLE
================================================================================
We believe it is important for you to understand the impact of fees and expenses
regarding your investment. All mutual funds have operating expenses. As a
shareholder of a fund, you incur ongoing costs, which include costs for
portfolio management, administrative services, and shareholder reports (like
this one), among others. Operating expenses, which are deducted from a fund's
gross income, directly reduce the investment return of a fund. When a fund's
expenses are expressed as a percentage of its average net assets, this figure is
known as the expense ratio. The following examples are intended to help you
understand the ongoing costs (in dollars) of investing in your Fund and to
compare these costs with those of other mutual funds. The examples are based on
an investment of $1,000 made at the beginning of the period shown and held for
the entire period.
The Expense Table below illustrates your Fund's costs in two ways:
ACTUAL FUND RETURN: This section provides information about actual account
values and actual expenses. You may use this section to help you to estimate the
actual expenses that you paid over the period after any fee waivers and expense
reimbursements. The "Ending Account Value" shown is derived from the Fund's
ACTUAL return during the past six months, and the "Expenses Paid During Period"
shows the dollar amount that would have been paid by an investor who started
with $1,000 in the Fund. You may use this information, together with the amount
you invested, to estimate the expenses that you paid over the period.
To do so, simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
given for your Fund under the heading "Expenses Paid During Period" to estimate
the expenses you paid during this period.
HYPOTHETICAL 5% RETURN: This section provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio. It assumes a hypothetical annualized return of 5% before expenses during
the period shown. In this case - because the hypothetical return used is NOT the
Fund's actual return - the results do not apply to your investment and you
cannot use the hypothetical account value and expense to estimate the actual
ending account balance or expenses you paid for the period. This example is
useful in making comparisons of the ongoing costs of investing in the Fund and
other funds. To do so, compare this 5% hypothetical example with the 5%
hypothetical examples that appear in shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs such as sales
charges (loads), redemption fees, or exchange fees, if any, which are described
in the Prospectus. If these costs were applied to your account, your costs would
be higher. Therefore, the 5% hypothetical return is useful in comparing ongoing
costs only, and will not help you determine the relative total costs of owning
different funds. The "Annualized Expense Ratio" represents the actual expenses
for the last six months and may be different from the expense ratio in the
Financial Highlights which is for the year ended December 31, 2005.
Beginning Ending Annualized Expenses
Account Value Account Value Expense Paid During
07/01/05 12/31/05 Ratio Period*
- --------------------------------------------------------------------------------
GAMCO GROWTH FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Class AAA $1,000.00 $1,105.50 1.46% $ 7.75
Class A $1,000.00 $1,105.50 1.43% $ 7.59
Class B $1,000.00 $1,101.30 2.20% $11.65
Class C $1,000.00 $1,101.30 2.20% $11.65
HYPOTHETICAL 5% RETURN
Class AAA $1,000.00 $1,017.85 1.46% $ 7.43
Class A $1,000.00 $1,018.00 1.43% $ 7.27
Class B $1,000.00 $1,014.12 2.20% $11.17
Class C $1,000.00 $1,014.12 2.20% $11.17
* Expenses are equal to the Fund's annualized expense ratio for the last six
months multiplied by the average account value over the period, multiplied by
the number of days in the most recent fiscal half-year, then divided by 365.
4
THE GAMCO GROWTH FUND
SCHEDULE OF INVESTMENTS -- DECEMBER 31, 2005
================================================================================
MARKET
SHARES COST VALUE
------ ---- ------
COMMON STOCKS -- 99.3%
CONSUMER DISCRETIONARY -- 12.1%
AUTO & COMPONENTS -- 0.4%
75,000 Harley-Davidson Inc. ....$ 3,549,974 $ 3,861,750
------------ --------------
MEDIA -- 3.5%
50,000 Boyd Gaming Corp. ....... 2,325,282 2,383,000
20,000 Las Vegas Sands Corp.+ .. 812,940 789,400
230,000 McGraw-Hill Companies
Inc. .................. 5,605,642 11,874,900
170,000 News Corp., Cl. B ....... 3,234,043 2,823,700
1,270,000 Time Warner Inc. ........ 21,432,121 22,148,800
------------ --------------
33,410,028 40,019,800
------------ --------------
RETAIL -- 8.2%
175,000 Bed Bath & Beyond Inc.+ 6,690,348 6,326,250
85,000 Best Buy Co. Inc. ....... 3,207,702 3,695,800
215,000 Cheesecake Factory Inc.+ 5,475,834 8,038,850
125,000 Chico's FAS Inc.+ ....... 5,037,537 5,491,250
195,000 Coach Inc.+ ............. 4,589,057 6,501,300
135,000 Costco Wholesale Corp. .. 5,890,582 6,678,450
380,000 eBay Inc.+ .............. 14,981,487 16,435,000
260,000 Starbucks Corp.+ ........ 4,019,454 7,802,600
125,000 Target Corp. ............ 5,165,862 6,871,250
286,577 The Home Depot Inc. ..... 7,903,571 11,600,637
283,400 Tiffany & Co. ........... 7,327,872 10,851,386
140,000 Urban Outfitters Inc.+ .. 4,291,641 3,543,400
------------ --------------
74,580,947 93,836,173
------------ --------------
TOTAL CONSUMER
DISCRETIONARY ......... 111,540,949 137,717,723
------------ --------------
CONSUMER STAPLES -- 10.7%
90,000 Hershey Co. ............. 5,141,713 4,972,500
60,000 Nestle SA, ADR .......... 4,446,450 4,472,856
500,000 PepsiCo Inc. ............ 24,635,063 29,540,000
575,000 Procter & Gamble Co. .... 31,167,837 33,281,000
105,000 Sysco Corp. ............. 3,078,747 3,260,250
250,000 Wal-Mart Stores Inc. .... 13,368,139 11,700,000
585,000 Walgreen Co. ............ 18,201,005 25,892,100
30,000 Whole Foods Market Inc. 1,219,585 2,321,700
105,000 Wrigley (Wm.) Jr. Co. ... 7,498,088 6,981,450
------------ --------------
TOTAL
CONSUMER STAPLES ...... 108,756,627 122,421,856
------------ --------------
ENERGY -- 9.6%
40,000 Amerada Hess Corp. ...... 5,356,694 5,072,800
55,000 Anadarko Petroleum Corp. 4,231,594 5,211,250
76,000 Apache Corp. ............ 2,443,523 5,207,520
90,000 Baker Hughes Inc. ....... 4,626,387 5,470,200
50,000 Burlington Resources Inc. 1,627,055 4,310,000
MARKET
SHARES COST VALUE
------ ---- ------
110,000 Canadian Natural
Resources Ltd. ........$ 4,876,764 $ 5,458,200
200,000 Chesapeake Energy Corp. 6,236,896 6,346,000
80,000 Devon Energy Corp. ...... 3,392,381 5,003,200
110,000 EnCana Corp. ............ 5,315,304 4,967,600
40,000 EOG Resources Inc. ...... 3,203,641 2,934,800
100,000 Murphy Oil Corp. ........ 2,552,873 5,399,000
90,000 National-Oilwell
Varco Inc.+ ........... 5,254,602 5,643,000
65,000 Occidental
Petroleum Corp. ....... 2,448,219 5,192,200
115,000 Peabody Energy Corp. .... 8,232,779 9,478,300
108,000 Pioneer Natural
Resources Co. ......... 5,344,040 5,537,160
59,000 Schlumberger Ltd. ....... 2,738,816 5,731,850
94,000 Suncor Energy Inc. ...... 3,235,187 5,934,220
90,000 Transocean Inc.+ ........ 3,570,430 6,272,100
100,000 Valero Energy Corp. ..... 4,899,768 5,160,000
110,000 XTO Energy Inc. ......... 4,650,725 4,833,400
------------ --------------
TOTAL ENERGY ............ 84,237,678 109,162,800
------------ --------------
FINANCIAL -- 12.5%
215,000 American Express Co. .... 8,144,325 11,063,900
700,000 Citigroup Inc. .......... 31,984,293 33,971,000
85,000 Commerce Bancorp Inc. ... 2,935,764 2,924,850
150,000 Credit Suisse Group, ADR 7,490,705 7,642,500
120,000 Goldman Sachs Group Inc. 13,041,122 15,325,200
70,000 Legg Mason Inc. ......... 7,932,579 8,378,300
330,000 Merrill Lynch & Co. Inc. 13,554,792 22,350,900
205,900 Northern Trust Corp. .... 11,865,045 10,669,738
208,800 State Street Corp. ...... 10,080,364 11,575,872
190,000 UBS AG .................. 16,193,212 18,078,500
------------ --------------
TOTAL FINANCIAL ......... 123,222,201 141,980,760
------------ --------------
HEALTH CARE -- 14.6%
HEALTH CARE EQUIPMENT & SERVICES -- 10.0%
55,000 Alcon Inc. .............. 4,356,959 7,128,000
150,000 Biomet Inc. ............. 6,401,935 5,485,500
115,000 Caremark Rx Inc.+ ....... 4,581,258 5,955,850
120,000 Edwards Lifesciences Corp.+ 4,934,302 4,993,200
70,000 Express Scripts Inc.+ ... 2,742,683 5,866,000
85,000 IDEXX Laboratories Inc.+ 5,482,892 6,118,300
70,000 Lincare Holdings Inc.+ .. 3,008,947 2,933,700
265,000 Medtronic Inc. .......... 12,644,170 15,256,050
220,000 St. Jude Medical Inc.+ .. 7,246,759 11,044,000
210,000 Stryker Corp. ........... 10,492,131 9,330,300
310,000 UnitedHealth Group Inc. 8,035,193 19,263,400
210,000 Varian Medical Systems
Inc.+ ................. 8,298,039 10,571,400
145,000 Zimmer Holdings Inc.+ ... 11,300,086 9,778,800
------------ --------------
89,525,354 113,724,500
------------ --------------
See accompanying notes to financial statements.
5
THE GAMCO GROWTH FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- DECEMBER 31, 2005
================================================================================
MARKET
SHARES COST VALUE
------ ---- ------
COMMON STOCKS (CONTINUED)
HEALTH CARE (CONTINUED)
PHARMACEUTICALS & BIOTECHNOLOGY -- 4.6%
208,000 Amgen Inc.+ .............$ 13,795,826 $ 16,402,880
165,000 Eli Lilly & Co. ......... 9,778,609 9,337,350
90,000 Genentech Inc.+ ......... 4,727,103 8,325,000
120,000 Genzyme Corp.+ .......... 6,819,345 8,493,600
174,000 Johnson & Johnson ....... 9,244,669 10,457,400
------------ --------------
44,365,552 53,016,230
------------ --------------
TOTAL HEALTH CARE ....... 133,890,906 166,740,730
------------ --------------
INDUSTRIAL -- 14.9%
130,000 3M Co. .................. 10,594,090 10,075,000
175,000 C.H. Robinson
Worldwide Inc. ........ 3,847,243 6,480,250
110,000 Caterpillar Inc. ........ 4,813,524 6,354,700
50,000 Deere & Co. ............. 3,522,269 3,405,500
100,000 Expeditors International
of Washington Inc. .... 4,752,081 6,751,000
130,000 Fluor Corp. ............. 5,770,718 10,043,800
93,500 General Dynamics Corp. .. 6,533,711 10,663,675
1,305,000 General Electric Co. .... 45,589,717 45,740,250
230,000 Ingersoll-Rand Co.
Ltd., Cl. A ........... 9,321,185 9,285,100
200,000 ITT Industries Inc. ..... 18,125,746 20,564,000
150,000 L-3 Communications
Holdings Inc. ......... 6,838,824 11,152,500
160,000 Rockwell Automation Inc. 9,845,044 9,465,600
60,000 United Parcel Service
Inc., Cl. B ........... 4,378,496 4,509,000
280,000 United Technologies
Corp. ................. 13,040,830 15,654,800
------------ --------------
TOTAL INDUSTRIAL ........ 146,973,478 170,145,175
------------ --------------
INFORMATION TECHNOLOGY -- 19.9%
COMMUNICATIONS EQUIPMENT -- 2.1%
626,000 Cisco Systems Inc.+ ..... 9,015,862 10,717,120
40,000 Harman International
Industries Inc. ....... 3,337,982 3,914,000
216,000 QUALCOMM Inc. ........... 4,458,929 9,305,280
------------ --------------
16,812,773 23,936,400
------------ --------------
COMPUTERS & PERIPHERAL -- 1.3%
500,000 Dell Inc.+ .............. 12,250,702 14,995,000
------------ --------------
SEMICONDUCTORS -- 4.4%
170,000 Broadcom Corp., Cl. A+ .. 6,006,791 8,015,500
660,000 Intel Corp. ............. 31,894,795 16,473,600
360,000 Linear Technology Corp. 12,671,048 12,985,200
220,000 Microchip Technology Inc. 5,516,796 7,073,000
181,000 Texas Instruments Inc. .. 4,474,111 5,804,670
------------ --------------
60,563,541 50,351,970
------------ --------------
MARKET
SHARES COST VALUE
------ ---- ------
SOFTWARE & SERVICES -- 12.1%
375,000 Adobe Systems Inc. ......$ 10,481,398 $ 13,860,000
150,000 CheckFree Corp.+ ........ 5,011,139 6,885,000
110,000 Citrix Systems Inc.+ .... 2,746,262 3,165,800
90,000 Electronic Arts Inc.+ ... 4,566,604 4,707,900
510,100 EMC Corp.+ .............. 6,745,890 6,947,562
20,000 FactSet Research Systems
Inc. .................. 839,511 823,200
95,000 Getty Images Inc.+ ...... 7,161,839 8,480,650
50,900 Google Inc., Cl. A+ ..... 12,337,542 21,116,374
130,000 International Game
Technology ............ 3,808,307 4,001,400
1,650,000 Microsoft Corp. ......... 42,986,229 43,147,500
185,000 NAVTEQ Corp.+ ........... 7,610,444 8,115,950
430,000 Yahoo! Inc.+ ............ 15,411,573 16,847,400
------------ --------------
119,706,738 138,098,736
------------ --------------
TOTAL INFORMATION
TECHNOLOGY ............ 209,333,754 227,382,106
------------ --------------
MATERIALS -- 5.0%
170,000 Allegheny Technologies
Inc. .................. 4,283,865 6,133,600
240,000 Commercial Metals Co. ... 7,778,340 9,009,600
245,000 Freeport-McMoRan Copper
& Gold Inc., Cl. B .... 9,742,764 13,181,000
310,000 Newmont Mining Corp. .... 14,377,079 16,554,000
65,000 Rio Tinto plc, ADR ...... 10,579,622 11,881,350
------------ --------------
TOTAL MATERIALS ......... 46,761,670 56,759,550
------------ --------------
TOTAL COMMON STOCKS ..... 964,717,263 1,132,310,700
------------ --------------
PRINCIPAL
AMOUNT
------
U.S. GOVERNMENT OBLIGATIONS -- 1.0%
$11,979,000 U.S. Treasury Bills,
3.506% to 4.004%++,
01/12/06 to 03/30/06 .. 11,900,453 11,901,661
------------ --------------
TOTAL
INVESTMENTS -- 100.3% $976,617,716 1,144,212,361
============
OTHER ASSETS AND
LIABILITIES (NET) -- (0.3)% ....... (3,471,155)
--------------
NET ASSETS -- 100.0% ................ $1,140,741,206
==============
- ----------------
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
ADR American Depository Receipt.
See accompanying notes to financial statements.
6
THE GAMCO GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2005
================================================================================
ASSETS:
Investments, at value (cost $976,617,716) ............$ 1,144,212,361
Cash ................................................. 4,894
Receivable for Fund shares sold ...................... 1,457,298
Dividends receivable ................................. 887,473
Other assets ......................................... 38,928
---------------
TOTAL ASSETS ......................................... 1,146,600,954
---------------
LIABILITIES:
Payable for Fund shares redeemed ..................... 3,411,485
Payable for investment advisory fees ................. 995,739
Payable for shareholder services fees ................ 774,705
Payable for shareholder ............................
communications expenses ............................. 329,582
Payable for distribution fees ........................ 249,481
Other accrued expenses ............................... 98,756
---------------
TOTAL LIABILITIES .................................... 5,859,748
---------------
NET ASSETS applicable to 39,601,917
shares outstanding ..................................$ 1,140,741,206
===============
NET ASSETS CONSIST OF:
Shares of beneficial interest, each class
at $0.01 par value ..................................$ 396,019
Additional paid-in capital ........................... 2,034,173,788
Accumulated net realized loss on investments ......... (1,061,423,246)
Net unrealized appreciation on investments ........... 167,594,645
---------------
NET ASSETS ...........................................$ 1,140,741,206
===============
SHARES OF BENEFICIAL INTEREST:
CLASS AAA:
Net Asset Value, offering and redemption price per share
($1,139,640,553 / 39,563,277 shares outstanding;
unlimited number of shares authorized) .............. $28.81
======
CLASS A:
Net Asset Value and redemption price per share
($273,840 / 9,503 shares outstanding;
unlimited number of shares authorized) .............. $28.82
======
Maximum offering price per share (NAV / 0.9425,
based on maximum sales charge of 5.75%
of the offering price) .............................. $30.58
======
CLASS B:
Net Asset Value and offering price per share
($274,057 / 9,658 shares outstanding;
unlimited number of shares authorized) .............. $28.38(a)
======
CLASS C:
Net Asset Value and offering price per share
($552,756 / 19,479 shares outstanding;
unlimited number of shares authorized) .............. $28.38(a)
======
- -------------------
(a) Redemption price varies based on length of time held.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2005
================================================================================
INVESTMENT INCOME:
Dividends (net of foreign taxes of $28,307) .......... $ 12,389,463
Interest ............................................. 574,410
------------
TOTAL INVESTMENT INCOME .............................. 12,963,873
------------
EXPENSES:
Investment advisory fees ............................. 12,753,618
Distribution fees - Class AAA ........................ 3,186,483
Distribution fees - Class A .......................... 251
Distribution fees - Class B .......................... 2,556
Distribution fees - Class C .......................... 4,124
Shareholder services fees ............................ 2,021,375
Shareholder communications expenses .................. 568,909
Custodian fees ....................................... 162,746
Legal and audit fees ................................. 88,262
Trustees' fees ....................................... 69,461
Registration fees .................................... 44,436
Miscellaneous expenses ............................... 159,043
------------
TOTAL EXPENSES ....................................... 19,061,264
Less: Custodian fee credits .......................... (593)
------------
NET EXPENSES ......................................... 19,060,671
------------
NET INVESTMENT LOSS .................................. (6,096,798)
------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain on investments ..................... 117,060,872
Net change in unrealized appreciation/
depreciation on investments ......................... 5,770,520
------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS ...................................... 122,831,392
------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS .................................... $116,734,594
============
See accompanying notes to financial statements.
7
THE GAMCO GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
================================================================================
YEAR ENDED YEAR ENDED
DECEMBER 31, 2005 DECEMBER 31, 2004
----------------- -----------------
OPERATIONS:
Net investment loss ...................................................... $ (6,096,798) $ (7,501,356)
Net realized gain on investments ........................................ 117,060,872 6,104,056
Net change in unrealized appreciation/depreciation on investments ........ 5,770,520 62,086,843
-------------- --------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ..................... 116,734,594 60,689,543
-------------- --------------
SHARES OF BENEFICIAL INTEREST TRANSACTIONS:
Class AAA ............................................................. (424,688,588) (494,470,178)
Class A ............................................................... 192,347 66,824
Class B ............................................................... -- 242,719
Class C ............................................................... 272,594 211,422
-------------- --------------
NET DECREASE IN NET ASSETS FROM SHARES OF BENEFICIAL INTEREST TRANSACTIONS (424,223,647) (493,949,213)
-------------- --------------
REDEMPTION FEES .......................................................... 25,950 6,601
-------------- --------------
NET DECREASE IN NET ASSETS ............................................... (307,463,103) (433,253,069)
NET ASSETS:
Beginning of period ...................................................... 1,448,204,309 1,881,457,378
-------------- --------------
End of period (including undistributed net investment income
of $0 and $0, respectively) ........................................... $1,140,741,206 $1,448,204,309
============== ==============
THE GAMCO GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
================================================================================
1. ORGANIZATION. The GAMCO Growth Fund (the "Fund"), formerly The Gabelli Growth
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
8
THE GAMCO GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
securities may be fair valued pursuant to procedures established by the Board.
Debt instruments with remaining maturities of 60 days or less that are not
credit impaired 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 average of the latest 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.
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.
FOREIGN TAXES. The Fund may be subject to foreign taxes on income, gains on
investments or currency repatriation, a portion of which may be recoverable. The
Fund will accrue such taxes and recoveries as applicable, based upon its current
interpretation of tax rules and regulations that exist in the markets in which
it invests.
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 on the accrual
basis. Premiums and discounts on debt securities are amortized using the yield
to maturity method. Dividend income is recorded on the ex-dividend date except
for certain dividends which are recorded as soon as the Fund is informed of the
dividend.
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 ("NAV") 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 borne solely by the class incurring the expense.
CUSTODIAN FEE CREDITS. When cash balances are maintained in the custody account,
the Fund receives credits which are used to offset custodian fees. The gross
expenses paid under the custody arrangement are included in custodian fees in
the Statement of Operations with the corresponding expense offset shown as
"custodian fee credits".
9
THE GAMCO GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders are recorded on the ex-dividend date. Distributions to shareholders
are based on ordinary income and long-term capital gains as determined in
accordance with Federal income tax regulations, which may differ from income and
capital gains as determined under U.S. generally accepted accounting principles.
These differences are primarily due to differing treatments of income and gains
on various investment securities held by the Fund, timing differences, and
differing characterizations of distributions made by the Fund. These book/tax
differences are either temporary or permanent in nature. To the extent these
differences are permanent, adjustments are made to the appropriate equity
accounts in the period when the differences arise. These reclassifications have
no impact on the NAV of the Fund and the calculation of net investment income
per share in the Financial Highlights excludes these adjustments. For the year
ended December 31, 2005, reclassifications were made to decrease accumulated net
investment loss by $6,096,798, with an offsetting adjustment to additional
paid-in capital.
No distributions were made in the fiscal years ended December 31, 2005 and 2004.
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, 2005, the difference between book basis and tax basis unrealized
appreciation was primarily attributable to the tax deferral of losses on wash
sales.
As of December 31, 2005, the components of accumulated earnings/(losses) on a
tax basis were as follows:
Accumulated capital loss carryforward ................. $(1,052,343,474)
Net unrealized appreciation ........................... 158,514,873
---------------
Total accumulated loss ................................ $ (893,828,601)
===============
At December 31, 2005, the Fund has net capital loss carryforwards for Federal
income tax purposes of $1,052,343,474, which are available to reduce future
required distributions of net capital gains to shareholders. $701,151,305 of the
loss carryforward is available through 2010; $350,050,494 is available through
2011; and $1,141,675 is available through 2012. For the year ended December 31,
2005 the Fund utilized capital loss carryforwards of $110,960,677.
The following summarizes the tax cost of investments and related unrealized
appreciation/depreciation at December 31, 2005:
GROSS GROSS NET UNREALIZED
UNREALIZED UNREALIZED APPRECIATION/
COST APPRECIATION DEPRECIATION (DEPRECIATION)
---- ------------ ------------ --------------
Investments ............... $985,697,488 $194,206,472 $(35,691,599) $158,514,873
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 affiliated persons of the Adviser.
10
THE GAMCO GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
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 year ended December 31, 2005, other than short-term securities, aggregated
$493,884,741 and $925,954,385, respectively.
6. TRANSACTIONS WITH AFFILIATES. During the year ended December 31, 2005, the
Fund paid brokerage commissions of $17,000 to Gabelli & Company. During the year
ended December 31, 2005, Gabelli & Company informed the Fund that it received
$1,575 from investors representing commissions (sales charges and underwriting
fees) on sales and redemptions of Fund shares.
The cost of calculating the Fund's NAV per share is a Fund expense pursuant to
the Advisory Agreement between the Fund and the Adviser. During the year ended
December 31, 2005, the Fund reimbursed the Adviser $45,000 in connection with
the cost of computing the Fund's NAV, 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 year ended December 31, 2005 there were no
borrowings from the line of credit.
8. SHARES OF BENEFICIAL INTEREST. The Fund currently 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 approximately eight years after the original purchase. The applicable
CDSC is equal to a declining percentage of the lesser of the NAV 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. 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. (From
November 1, 2004 through June 14, 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 years ended December 31, 2005 and December 31,
2004 amounted to $25,950 and $6,601, respectively.
11
THE GAMCO GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
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:
YEAR ENDED YEAR ENDED
DECEMBER 31, 2005 DECEMBER 31, 2004
---------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- -------------
CLASS AAA CLASS AAA
---------------------------- ----------------------------
Shares sold ....................................... 4,243,927 $ 113,064,508 7,724,349 $ 191,537,714
Shares redeemed ................................... (20,096,781) (537,753,096) (27,719,706) (686,007,892)
----------- ------------- ----------- -------------
Net decrease .................................... (15,852,854) $(424,688,588) (19,995,357) $(494,470,178)
=========== ============= =========== =============
CLASS A CLASS A
---------------------------- ----------------------------
Shares sold ....................................... 7,311 $ 208,331 2,747 $ 66,849
Shares redeemed ................................... (594) (15,984) (1) (25)
----------- ------------- ----------- -------------
Net increase .................................... 6,717 $ 192,347 2,746 $ 66,824
=========== ============= =========== =============
CLASS B CLASS B
---------------------------- ----------------------------
Shares sold ....................................... -- -- 9,618 $ 242,719
----------- ------------- ----------- -------------
Net increase .................................... -- -- 9,618 $ 242,719
=========== ============= =========== =============
CLASS C CLASS C
---------------------------- ----------------------------
Shares sold ....................................... 14,494 $ 373,629 8,810 $ 214,167
Shares redeemed ................................... (3,750) (101,035) (115) (2,745)
----------- ------------- ----------- -------------
Net increase .................................... 10,744 $ 272,594 8,695 $ 211,422
=========== ============= =========== =============
9. INDEMNIFICATIONS. The Fund enters into contracts that contain a variety of
indemnifications. The Fund's maximum exposure under these arrangements is
unknown. However, the Fund has not had prior claims or losses pursuant to these
contracts and expects the risk of loss to be remote.
10. OTHER MATTERS. The Adviser and/or affiliates have received subpoenas from
the Attorney General of the State of New York and the Securities and Exchange
Commission (the "SEC") requesting information on mutual fund trading practices
involving certain funds managed by the Adviser. GAMCO Investors, Inc., the
Adviser's parent company, is responding to these requests for documents and
testimony. On a separate matter, in September 2005, the Adviser was informed by
the staff of the SEC that the staff may recommend to the Commission that an
administrative remedy and a monetary penalty be sought from the Adviser in
connection with the actions of two of seven closed-end funds managed by the
Adviser relating to Section 19(a) and Rule 19a-1 of the 1940 Act. These
provisions require registered investment companies to provide written statements
to shareholders when a dividend is made from a source other than net investment
income. While the two closed-end funds sent annual statements and provided other
materials containing this information, the funds did not send written statements
to shareholders with each distribution in 2002 and 2003. The Adviser believes
that all of the funds are now in compliance. The Adviser believes that these
matters would have no effect on the Fund or any material adverse effect on the
Adviser or its ability to manage the Fund.
12
THE GAMCO 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(c) Investments Operations Investments Distributions
- ----------- --------- ---------- -------------- ---------- ----------- -------------
CLASS AAA
2005 $26.12 $(0.13) $2.82 $2.69 -- --
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)
CLASS A
2005 $26.13 $(0.12) $2.81 $2.69 -- --
2004(b) 24.95 (0.02) 1.20 1.18 -- --
CLASS B
2005 $25.93 $(0.32) $2.77 $2.45 -- --
2004(b) 24.95 (0.28) 1.26 0.98 -- --
CLASS C
2005 $25.93 $(0.32) $2.77 $2.45 -- --
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(c) Period Return+ (in 000's) Loss Expenses Rate
- ----------- ---------- --------- ------- ---------- ---------- --------- ---------
CLASS AAA
2005 $0.00(a) $28.81 10.3% $1,139,640 (0.48)% 1.49% 39%
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
CLASS A
2005 $0.00(a) $28.82 10.3% $ 274 (0.43)% 1.47% 39%
2004(b) 0.00(a) 26.13 4.7 73 (0.09) 1.60 31
CLASS B
2005 $0.00(a) $28.38 9.5% $ 274 (1.22)% 2.24% 39%
2004(b) 0.00(a) 25.93 3.9 250 (1.12) 2.30 31
CLASS C
2005 $0.00(a) $28.38 9.5% $ 553 (1.21)% 2.23% 39%
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.
(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.
See accompanying notes to financial statements.
13
THE GAMCO GROWTH FUND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
================================================================================
To the Board of Trustees and Shareholders of
The GAMCO Growth Fund:
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of The GAMCO Growth Fund (hereafter
referred to as the "Fund") at December 31, 2005, the results of its operations
for the year then ended, the changes in its net assets for each of the two years
in the period then ended and the financial highlights for each of the periods
presented, in conformity with accounting principles generally accepted in the
United States of America. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at
December 31, 2005 by correspondence with the custodian, provide a reasonable
basis for our opinion.
PricewaterhouseCoopers LLP
New York, New York
February 24, 2006
14
THE GAMCO GROWTH FUND
ADDITIONAL FUND INFORMATION (UNAUDITED)
===============================================================================
The business and affairs of the Fund are managed under the direction of the
Fund's Board of Trustees. Information pertaining to the Trustees and officers of
the Fund is set forth below. The Fund's Statement of Additional Information
includes additional information about The GAMCO Growth Fund Trustees and is
available, without charge, upon request, by calling 800-GABELLI (800-422-3554)
or by writing to The GAMCO Growth Fund at One Corporate Center, Rye, NY
10580-1422.
TERM OF NUMBER OF
OFFICE AND FUNDS IN FUND
NAME, POSITION(S) LENGTH OF COMPLEX
ADDRESS 1 TIME OVERSEEN BY PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIPS
AND AGE SERVED 2 TRUSTEE DURING PAST FIVE YEARS HELD BY TRUSTEE 4
- ---------------- -------- ----------- ---------------------- --------------------
INTERESTED TRUSTEES 3:
- ---------------------
MARIO J. GABELLI Since 1992 24 Chairman of the Board and Chief Executive Director of Morgan Group
Trustee Officer of GAMCO Investors, Inc. and Holdings, Inc.
Age: 63 Chief Investment Officer - Value (holding company)
Portfolios of Gabelli Funds, LLC and GAMCO
Asset Management Inc.; Chairman and Chief
Executive Officer of Lynch Interactive
Corporation (multimedia and services)
JOHN D. GABELLI Since 1995 10 Senior Vice President of Gabelli & Director of GAMCO
Trustee Company, Inc. Investors, Inc.
Age: 61
ANTHONY TORNA, SR. Since 1987 1 Registered Representative, Maxim Group LLC --
Age: 79 from 2002; Investec Ernst & Company,
2001-2002; Herzog, Heine & Geduld, Inc.
through 2000
NON-INTERESTED TRUSTEES:
- -----------------------
ANTHONY J. COLAVITA Since 1989 34 Partner in the law firm of --
Trustee Anthony J. Colavita, P.C.
Age: 70
JAMES P. CONN Since 1992 14 Former Managing Director and Chief Director of LaQuinta Corp.
Trustee Investment Officer of Financial Security (hotels) and First Republic
Age: 67 Assurance Holdings Ltd. (insurance Bank (banking)
holding company) (1992-1998)
DUGALD A. FLETCHER 1989-1996 2 President, Fletcher & Company, Inc. Director of Harris and
Trustee 2000-present Harris Group, Inc.
Age: 76 (venture capital)
ROBERT J. MORRISSEY Since 2001 7 Partner in the law firm of Morrissey, --
Trustee Hawkins & Lynch
Age: 66
ANTHONY R. PUSTORINO Since 1987 14 Certified Public Accountant; Professor Director of Lynch Corporation
Trustee Emeritus, Pace University (diversified manufacturing)
Age: 80
15
THE GAMCO GROWTH FUND
ADDITIONAL FUND INFORMATION (UNAUDITED) (CONTINUED)
================================================================================
TERM OF NUMBER OF
OFFICE AND FUNDS IN FUND
NAME, POSITION(S) LENGTH OF COMPLEX
ADDRESS 1 TIME OVERSEEN BY PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIPS
AND AGE SERVED 2 TRUSTEE DURING PAST FIVE YEARS HELD BY TRUSTEE 4
- ---------------- -------- ----------- ---------------------- --------------------
NON-INTERESTED TRUSTEES (CONTINUED):
- -----------------------------------
ANTHONIE C. VAN EKRIS 1987-1989 18 Chairman of BALMAC International, Inc. --
Trustee 1992-present commodities and futures trading)
Age: 71
SALVATORE J. ZIZZA 1987-1996 25 Chairman of Hallmark Electrical Director of Hollis-Eden
Trustee 2000-present Supplies Corp. Pharmaceuticals
Age: 60 (biotechnology); Director
of Earl Scheib, Inc.
(automotive services)
OFFICERS:
- --------
BRUCE N. ALPERT Since 1994 -- Executive Vice President and Chief Operating --
President and Treasurer Officer of Gabelli Funds, LLC since 1988 and
Age: 54 an officer of all of the registered investment
companies in the Gabelli Funds complex.
Director and President of Gabelli Advisers, Inc.
since 1998.
JAMES E. MCKEE Since 1995 -- Vice President, General Counsel and Secretary --
Secretary of GAMCO Investors, Inc. since 1999 and
Age: 42 GAMCO Asset Management Inc. since 1993;
Secretary of all of the registered investment
companies in the Gabelli Funds complex.
PETER D. GOLDSTEIN Since 2004 -- Director of Regulatory Affairs for GAMCO Investors, Inc. --
Chief Compliance Officer since 2004; Chief Compliance Officer of all of the
Age: 52 registered investment companies in the Gabelli Funds
complex; Vice President of Goldman Sachs Asset Management
from 2000 through 2004.
- ------------------
1 Address: One Corporate Center, Rye, NY 10580-1422, unless otherwise noted.
2 Each Trustee will hold office for an indefinite term until the earliest of
(i) the next meeting of shareholders, if any, called for the purpose of
considering the election or re-election of such Trustee and until the
election and qualification of his or her successor, if any, elected at such
meeting, or (ii) the date a Trustee resigns or retires, or a Trustee is
removed by the Board of Trustees or shareholders, in accordance with the
Fund's By-Laws and Declaration of Trust. Each officer will hold office for
an indefinite term until the date he or she resigns or retires or until his
or her successor is elected and qualified. Effective November 16, 2005, Mr.
Karl Otto Pohl resigned from the Board of Directors and now serves as
Director Emeritus.
3 "Interested person" of the Fund as defined in the Investment Company Act of
1940. Messrs. M. Gabelli and J. Gabelli are each considered an "interested
person" because of their affiliation with Gabelli Funds, LLC which acts as
the Fund's investment adviser. Mr. Torna is considered an interested person
because he is a registered broker with a firm to which the Fund Complex (but
not the Fund) pays brokerage commissions. Mario J. Gabelli and John D.
Gabelli are brothers.
4 This column includes only directorships of companies required to report to
the SEC under the Securities Exchange Act of 1934 (i.e. public companies) or
other investment companies registered under the 1940 Act.
16
- --------------------------------------------------------------------------------
GABELLI FUNDS AND YOUR PERSONAL PRIVACY
================================================================================
WHO ARE WE?
The Gabelli/GAMCO 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 and Gabelli Advisers, Inc., which are affiliated with
GAMCO Investors, Inc. GAMCO Investors, Inc. 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 ______________________________________
GAMCO 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
GAMCO 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 _________________________
GAMCO 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 ____________________________
GAMCO 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
GAMCO 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 ______________________________________
GAMCO 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
GAMCO 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_________________________________
GAMCO 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
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
AN INVESTMENT IN THE ABOVE MONEY MARKET FUND IS NEITHER INSURED NOR GUARANTEED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY GOVERNMENT AGENCY. ALTHOUGH
THE FUND SEEKS TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00 PER SHARE, IT
IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUND.
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.
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 GAMCO 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 Robert J. Morrissey
CHAIRMAN AND CHIEF ATTORNEY-AT-LAW
EXECUTIVE OFFICER MORRISSEY, HAWKINS & LYNCH
GAMCO INVESTORS, 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.
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
- --------------------------------------------------------------------------------
This report is submitted for the general information of the shareholders of The
GAMCO Growth Fund. It is not authorized for distribution to prospective
investors unless preceded or accompanied by an effective prospectus.
- --------------------------------------------------------------------------------
GAB406Q405SR
GAMCO
THE
GAMCO
GROWTH
FUND
ANNUAL REPORT
DECEMBER 31, 2005
ITEM 2. CODE OF ETHICS.
(a) The registrant, as of the end of the period covered by this report, has
adopted a code of ethics that applies to the registrant's principal
executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions,
regardless of whether these individuals are employed by the registrant
or a third party.
(c) There have been no amendments, during the period covered by this
report, to a provision of the code of ethics that applies to the
registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing
similar functions, regardless of whether these individuals are employed
by the registrant or a third party, and that relates to any element of
the code of ethics description.
(d) The registrant has not granted any waivers, including an implicit
waiver, from a provision of the code of ethics that applies to the
registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing
similar functions, regardless of whether these individuals are employed
by the registrant or a third party, that relates to one or more of the
items set forth in paragraph (b) of this item's instructions.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
As of the end of the period covered by the report, the registrant's Board of
Trustees has determined that Anthony R. Pustorino is qualified to serve as an
audit committee financial expert serving on its audit committee and that he is
"independent," as defined by Item 3 of Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
AUDIT FEES
(a) The aggregate fees billed for each of the last two fiscal years for
professional services rendered by the principal accountant for the
audit of the registrant's annual financial statements or services that
are normally provided by the accountant in connection with statutory
and regulatory filings or engagements for those fiscal years are
$42,829 in 2005 and $44,420 in 2004.
AUDIT-RELATED FEES
(b) The aggregate fees billed in each of the last two fiscal years for
assurance and related services by the principal accountant that are
reasonably related to the performance of the audit of the registrant's
financial statements and are not reported under paragraph (a) of this
Item are $0 in 2005 and $0 in 2004.
TAX FEES
(c) The aggregate fees billed in each of the last two fiscal years for
professional services rendered by the principal accountant for tax
compliance, tax advice, and tax planning are $2,880 in 2005 and $2,550
in 2004.
Tax fees represent tax compliance services provided in connection with
the review of the Registrant's tax returns.
ALL OTHER FEES
(d) The aggregate fees billed in each of the last two fiscal years for
products and services provided by the principal accountant, other than
the services reported in paragraphs (a) through (c) of this Item are $0
in 2005 and $0 in 2004.
(e)(1) Disclose the audit committee's pre-approval policies and procedures
described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
Pre-Approval Policies and Procedures. The Audit Committee ("Committee")
of the registrant is responsible for pre-approving (i) all audit and
permissible non-audit services to be provided by the independent
auditors to the registrant and (ii) all permissible non-audit services
to be provided by the independent auditors to the Adviser, Gabelli
Funds, LLC, and any affiliate of Gabelli Funds, LLC ("Gabelli") that
provides services to the registrant (a "Covered Services Provider") if
the independent auditors' engagement related directly to the operations
and financial reporting of the registrant. The Committee may delegate
its responsibility to pre-approve any such audit and permissible
non-audit services to the Chairperson of the Committee, and the
Chairperson must report to the Committee, at its next regularly
scheduled meeting after the Chairperson's pre-approval of such
services, his or her decision(s). The Committee may also establish
detailed pre-approval policies and procedures for pre-approval of such
services in accordance with applicable laws, including the delegation
of some or all of the Committee's pre-approval responsibilities to the
other persons (other than Gabelli or the registrant's officers).
Pre-approval by the Committee of any permissible non-audit services is
not required so long as: (i) the aggregate amount of all such
permissible non-audit services provided to the registrant, Gabelli and
any Covered Services Provider constitutes not more than 5% of the total
amount of revenues paid by the registrant to its independent auditors
during the fiscal year in which the permissible non-audit services are
provided; (ii) the permissible non-audit services were not recognized
by the registrant at the time of the engagement to be non-audit
services; and (iii) such services are promptly brought to the attention
of the Committee and approved by the Committee or Chairperson prior to
the completion of the audit.
(e)(2) The percentage of services described in each of paragraphs (b)
through (d) of this Item that were approved by the audit committee
pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X are
as follows:
(b) N/A
(c) 100%
(d) N/A
(f) The percentage of hours expended on the principal accountant's
engagement to audit the registrant's financial statements for the most
recent fiscal year that were attributed to work performed by persons
other than the principal accountant's full-time, permanent employees
was zero percent (0%).
(g) The aggregate non-audit fees billed by the registrant's accountant for
services rendered to the registrant, and rendered to the registrant's
investment adviser (not including any sub-adviser whose role is
primarily portfolio management and is subcontracted with or overseen by
another investment adviser), and any entity controlling, controlled by,
or under common control with the adviser that provides ongoing services
to the registrant for each of the last two fiscal years of the
registrant was $0 in 2005 and $0 in 2004.
(h) The registrant's audit committee of the board of directors has
considered whether the provision of non-audit services that were
rendered to the registrant's investment adviser (not including any
sub-adviser whose role is primarily portfolio management and is
subcontracted with or overseen by another investment adviser), and any
entity controlling, controlled by, or under common control with the
investment adviser that provides ongoing services to the registrant
that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule
2-01 of Regulation S-X is compatible with maintaining the principal
accountant's independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
Schedule of Investments in securities of unaffiliated issuers as of the close of
the reporting period is included as part of the report to shareholders filed
under Item 1 of this form.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which the shareholders
may recommend nominees to the registrant's Board of 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) Code of ethics, or any amendment thereto, that is the subject of
disclosure required by Item 2 is attached hereto.
(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 GAMCO Growth Fund
-------------------------------------------------------------------
By (Signature and Title)* /s/ Bruce N. Alpert
-------------------------------------------------------
Bruce N. Alpert, Principal Executive Officer
Date March 10, 2006
----------------------------------------------------------------------------
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 March 10, 2006
----------------------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.