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 811-04719
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The Westwood Funds
-------------------------------------------------------------
(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: September 30
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Date of reporting period: March 31, 2007
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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 WESTWOOD FUNDS
================================================================================
(UNAUDITED)
CLASS AAA SHARES
--------------------------------------------------------------
Average Annual Returns -- March 31, 2007 (a)(e)
Current
Expense
Ratio after
Gross Adviser Maximum
Since Expense Reimburse- Sales
1 Year 5 Year 10 Year Inception Ratio ments Charge
----------------------------------------------------------------
Mighty Mites(SM) . 18.56% 14.13% N/A 14.75% 1.61% 1.61% None
Equity ........... 13.65 8.69 9.88% 12.14 1.54 1.54 None
Balanced ......... 9.96 7.42 8.51 10.51 1.32 1.32 None
Intermediate Bond 5.00 4.18 5.33 5.70 1.53 1.00 None
SmallCap Equity .. 12.96 7.42 N/A 8.79 2.02 1.50 None
Income ........... 11.79 15.30 N/A 10.91 2.02 1.50 None
CLASS B SHARES
--------------------------------------------------------------
Average Annual Returns -- March 31, 2007 (a)(c)(e)
Current
Expense
Ratio after
Gross Adviser Maximum
Since Expense Reimburse- Sales
1 Year 5 Year 10 Year Inception Ratio ments Charge
----------------------------------------------------------------
Mighty Mites(SM) . 12.65% 13.03% N/A 14.19% 2.36% 2.36% 5.00%
Equity ........... 7.72 7.59 9.31% 11.79 2.29 2.29 5.00
Balanced ......... 4.10 6.31 7.95 10.02 2.07 2.07 5.00
Intermediate Bond (0.69) 3.06 4.84 5.38 2.28 1.75 5.00
SmallCap Equity .. 7.16 6.34 N/A 8.32 2.77 2.25 5.00
Income ........... 5.98 14.31 N/A 10.53 2.77 2.25 5.00
CLASS A SHARES
--------------------------------------------------------------
Average Annual Returns -- March 31, 2007 (a)(b)(e)
Current
Expense
Ratio after
Gross Adviser Maximum
Since Expense Reimburse- Sales
1 Year 5 Year 10 Year Inception Ratio ments Charge
---------------------------------------------------------------
Mighty Mites(SM) 13.63% 12.88% N/A 14.06% 1.86% 1.86% 4.00%
Equity .......... 8.80 7.51 9.13% 11.70 1.79 1.79 4.00
Balanced ........ 5.27 6.29 7.79 9.92 1.57 1.57 4.00
Intermediate Bond 0.75 3.25 4.84 5.39 1.63 1.10 4.00
SmallCap Equity . 8.30 6.38 N/A 8.28 2.27 1.75 4.00
Income .......... 7.00 14.07 N/A 10.26 2.27 1.75 4.00
CLASS C SHARES
--------------------------------------------------------------
Average Annual Returns -- March 31, 2007 (a)(d)(e)
Current
Expense
Ratio after
Gross Adviser Maximum
Since Expense Reimburse- Sales
1 Year 5 Year 10 Year Inception Ratio ments Charge
---------------------------------------------------------------
Mighty Mites(SM) 16.67% 13.26% N/A 14.20% 2.36% 2.36% 1.00%
Equity ..........11.82 7.86 9.30% 11.79 2.29 2.29 1.00
Balanced ........ 8.14 6.61 8.00 10.06 2.07 2.07 1.00
Intermediate Bond 1.93 3.12 4.73 5.32 2.28 1.75 1.00
SmallCap Equity .11.18 6.46 N/A 8.27 2.77 2.25 1.00
Income .......... 9.86 14.63 N/A 10.58 2.77 2.25 1.00
(a) RETURNS REPRESENT PAST PERFORMANCE AND DO NOT GUARANTEE FUTURE RESULTS.
TOTAL RETURNS AND AVERAGE ANNUAL RETURNS REFLECT CHANGES IN SHARE PRICE AND
REINVESTMENT OF DISTRIBUTIONS 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. FOR THE
INTERMEDIATE BOND, SMALLCAP EQUITY, AND INCOME FUNDS, THE ADVISER
REIMBURSED EXPENSES TO LIMIT THE EXPENSE RATIO. HAD SUCH LIMITATIONS NOT
BEEN IN PLACE, RETURNS WOULD HAVE BEEN LOWER. THE CONTRACTUAL EXPENSE
LIMITATIONS ARE IN EFFECT THROUGH SEPTEMBER 30, 2007 AND ARE RENEWABLE
ANNUALLY BY THE ADVISER. 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 CAREFULLY
CONSIDER THE INVESTMENT OBJECTIVES, RISKS, CHARGES, AND EXPENSES OF THE
FUND BEFORE INVESTING. THE PROSPECTUS CONTAINS MORE INFORMATION ABOUT THIS
AND OTHER MATTERS AND SHOULD BE READ CAREFULLY BEFORE INVESTING.
(b) INCLUDES THE EFFECT OF THE MAXIMUM 4.0% SALES CHARGE AT THE BEGINNING OF
THE PERIOD.
(c) PERFORMANCE RESULTS INCLUDE THE DEFERRED SALES CHARGES FOR THE CLASS B
SHARES UPON REDEMPTION AT THE END OF THE ONE YEAR, FIVE YEAR, TEN YEAR, AND
SINCE INCEPTION PERIODS OF 5%, 2%, 0%, AND 0%, RESPECTIVELY, OF THE FUND'S
NAV AT THE TIME OF PURCHASE OR SALE, WHICHEVER IS LOWER.
(d) PERFORMANCE RESULTS INCLUDE THE DEFERRED SALES CHARGE FOR THE CLASS C
SHARES UPON REDEMPTION AT THE END OF THE ONE YEAR PERIOD OF 1% OF THE
FUND'S NAV AT THE TIME OF PURCHASE OR SALE, WHICHEVER IS LOWER.
(e) THE PERFORMANCE OF THE CLASS AAA SHARES IS USED TO CALCULATE PERFORMANCE
FOR THE PERIODS PRIOR TO THE ISSUANCE OF CLASS A SHARES, CLASS B SHARES,
AND CLASS C SHARES. THE 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 INCEPTION DATES FOR THE CLASS AAA SHARES AND
THE INITIAL ISSUANCE DATES FOR THE CLASS A SHARES, CLASS B SHARES, AND
CLASS C SHARES AFTER WHICH SHARES REMAINED CONTINUOUSLY OUTSTANDING ARE
LISTED BELOW.
Class AAA Shares Class A Shares Class B Shares Class C Shares
---------------- -------------- -------------- --------------
Mighty Mites(SM) ............... 05/11/98 11/26/01 06/06/01 08/03/01
Equity ......................... 01/02/87 01/28/94 03/27/01 02/13/01
Balanced ....................... 10/01/91 04/06/93 03/27/01 09/25/01
Intermediate Bond .............. 10/01/91 07/26/01 03/27/01 10/22/01
SmallCap Equity ................ 04/15/97 11/26/01 03/27/01 11/26/01
Income ......................... 09/30/97 05/09/01 11/26/01 11/26/01
THE WESTWOOD FUNDS
DISCLOSURE OF FUND EXPENSES (UNAUDITED)
For the Six Month Period from October 1, 2006 through March 31, 2007
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.
Beginning Ending Annualized Expenses
Account Value Account Value Expense Paid During
10/01/06 03/31/07 Ratio Period*
- --------------------------------------------------------------------------------
WESTWOOD MIGHTY MITES(SM) FUND
- --------------------------------------------------------------------------------
Actual Fund Return
Class AAA $1,000.00 $1,180.00 1.68% $ 9.18
Class A $1,000.00 $1,179.00 1.93% $10.54
Class B $1,000.00 $1,176.00 2.43% $13.26
Class C $1,000.00 $1,176.00 2.43% $13.26
Hypothetical 5% Return
Class AAA $1,000.00 $1,016.65 1.68% $ 8.49
Class A $1,000.00 $1,015.39 1.93% $ 9.75
Class B $1,000.00 $1,012.89 2.43% $12.26
Class C $1,000.00 $1,012.89 2.43% $12.26
2
THE WESTWOOD FUNDS
DISCLOSURE OF FUND EXPENSES (CONTINUED) (UNAUDITED)
For the Six Month Period from October 1, 2006 through March 31, 2007
EXPENSE TABLE
================================================================================
Beginning Ending Annualized Expenses
Account Value Account Value Expense Paid During
10/01/06 03/31/07 Ratio Period*
- --------------------------------------------------------------------------------
WESTWOOD EQUITY FUND
- --------------------------------------------------------------------------------
Actual Fund Return
Class AAA $1,000.00 $1,083.00 1.48% $ 7.73
Class A $1,000.00 $1,082.00 1.73% $ 9.03
Class B $1,000.00 $1,079.00 2.23% $11.62
Class C $1,000.00 $1,079.00 2.23% $11.62
Hypothetical 5% Return
Class AAA $1,000.00 $1,017.65 1.48% $ 7.49
Class A $1,000.00 $1,016.39 1.73% $ 8.74
Class B $1,000.00 $1,013.89 2.23% $11.26
Class C $1,000.00 $1,013.89 2.23% $11.26
- --------------------------------------------------------------------------------
WESTWOOD BALANCED FUND
- --------------------------------------------------------------------------------
Actual Fund Return
Class AAA $1,000.00 $1,057.00 1.23% $ 6.34
Class A $1,000.00 $1,054.00 1.48% $ 7.62
Class B $1,000.00 $1,052.00 1.98% $10.19
Class C $1,000.00 $1,052.00 1.98% $10.19
Hypothetical 5% Return
Class AAA $1,000.00 $1,018.90 1.23% $ 6.23
Class A $1,000.00 $1,017.65 1.48% $ 7.49
Class B $1,000.00 $1,015.14 1.98% $10.00
Class C $1,000.00 $1,015.14 1.98% $10.00
- --------------------------------------------------------------------------------
WESTWOOD INTERMEDIATE BOND FUND
- --------------------------------------------------------------------------------
Actual Fund Return
Class AAA $1,000.00 $1,019.00 1.00% $ 5.06
Class A $1,000.00 $1,019.00 1.10% $ 5.57
Class B $1,000.00 $1,016.00 1.75% $ 8.84
Class C $1,000.00 $1,018.00 1.75% $ 8.85
Hypothetical 5% Return
Class AAA $1,000.00 $1,020.05 1.00% $ 5.06
Class A $1,000.00 $1,019.55 1.10% $ 5.57
Class B $1,000.00 $1,016.29 1.75% $ 8.85
Class C $1,000.00 $1,016.29 1.75% $ 8.85
Beginning Ending Annualized Expenses
Account Value Account Value Expense Paid During
10/01/06 03/31/07 Ratio Period*
- --------------------------------------------------------------------------------
WESTWOOD SMALLCAP EQUITY FUND
- --------------------------------------------------------------------------------
Actual Fund Return
Class AAA $1,000.00 $1,177.00 1.50% $ 8.19
Class A $1,000.00 $1,175.00 1.75% $ 9.54
Class B $1,000.00 $1,172.00 2.25% $12.25
Class C $1,000.00 $1,172.00 2.25% $12.25
Hypothetical 5% Return
Class AAA $1,000.00 $1,017.55 1.50% $ 7.59
Class A $1,000.00 $1,016.29 1.75% $ 8.85
Class B $1,000.00 $1,013.79 2.25% $11.36
Class C $1,000.00 $1,013.79 2.25% $11.36
- --------------------------------------------------------------------------------
WESTWOOD INCOME FUND
- --------------------------------------------------------------------------------
Actual Fund Return
Class AAA $1,000.00 $1,090.00 1.50% $ 7.86
Class A $1,000.00 $1,088.00 1.75% $ 9.16
Class B $1,000.00 $1,085.00 2.25% $11.76
Class C $1,000.00 $1,084.00 2.25% $11.75
Hypothetical 5% Return
Class AAA $1,000.00 $1,017.55 1.50% $ 7.59
Class A $1,000.00 $1,016.29 1.75% $ 8.85
Class B $1,000.00 $1,013.79 2.25% $11.36
Class C $1,000.00 $1,013.79 2.25% $11.36
* 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.
- --------------------------------------------------------------------------------
We have separated the portfolio managers' 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 managers' commentary is unrestricted. The
financial statements and investment portfolio are mailed separately from the
commentary. Both the commentary and the financial statements, including the
portfolio of investments, will be available on our website at
www.gabelli.com/funds.
- --------------------------------------------------------------------------------
3
SUMMARY OF PORTFOLIO HOLDINGS (UNAUDITED)
The following tables present portfolio holdings as a percent of total net assets
as of March 31, 2007:
- --------------------------------------------------------------------------------
WESTWOOD MIGHTY MITES(SM) FUND
- --------------------------------------------------------------------------------
Financial Services ............................ 18.5%
Health Care ................................... 11.6%
Equipment and Supplies ........................ 6.9%
Broadcasting .................................. 4.5%
Diversified Industrial ........................ 4.5%
Automotive: Parts and Accessories ............. 4.4%
Real Estate ................................... 4.2%
Business Services ............................. 3.9%
Consumer Products ............................. 3.8%
Computer Software and Services ................ 3.8%
Telecommunications ............................ 3.5%
Manufactured Housing and Recreational Vehicles 3.3%
Energy and Utilities: Services ................ 3.0%
Electronics ................................... 2.8%
Entertainment ................................. 2.5%
Food and Beverage ............................. 2.4%
Energy and Utilities: Integrated .............. 2.3%
Energy and Utilities: Natural Gas ............. 2.3%
Specialty Chemicals ........................... 1.9%
Energy and Utilities: Water ................... 1.9%
Aviation: Parts and Services .................. 1.4%
U.S. Government Obligations ................... 1.0%
Mutual Funds .................................. 1.0%
Retail ........................................ 0.8%
Restaurants ................................... 0.6%
Publishing .................................... 0.6%
Building and Construction ..................... 0.6%
Energy and Utilities: Electric ................ 0.5%
Agriculture ................................... 0.4%
Communications Equipment ...................... 0.3%
Wireless Communications ....................... 0.3%
Hotels and Gaming ............................. 0.2%
Paper and Forest Products ..................... 0.1%
Transportation ................................ 0.1%
Metals and Mining ............................. 0.1%
Cable ......................................... 0.1%
Environmental Control ......................... 0.1%
Consumer Services ............................. 0.0%
Educational Services .......................... 0.0%
Other Assets and Liabilities (Net) ............ (0.2)%
------
100.0%
======
- --------------------------------------------------------------------------------
WESTWOOD EQUITY FUND
- --------------------------------------------------------------------------------
Financial Services ............................ 11.0%
Energy: Oil ................................... 8.8%
Banking ....................................... 8.7%
Business Services ............................. 7.4%
Telecommunications ............................ 6.3%
Computer Software and Services ................ 6.1%
Retail ........................................ 6.1%
Utilities ..................................... 5.1%
Energy and Utilities: Integrated .............. 5.0%
Diversified Industrial ........................ 4.9%
Consumer Products ............................. 3.7%
Brokerage ..................................... 3.6%
Metals and Mining ............................. 2.8%
Energy: Natural Gas ........................... 2.6%
Transportation ................................ 2.5%
Aviation: Parts and Services .................. 2.5%
Health Care ................................... 2.4%
Communications Equipment ...................... 2.1%
Computer Hardware ............................. 1.3%
Entertainment ................................. 1.3%
Food and Beverage ............................. 1.2%
Hotels and Gaming ............................. 1.2%
Aerospace ..................................... 1.2%
Other Assets and Liabilities (Net) ............ 2.2%
------
100.0%
======
- --------------------------------------------------------------------------------
WESTWOOD BALANCED FUND
- --------------------------------------------------------------------------------
U.S. Government Agency Obligations ............ 16.9%
U.S. Government Obligations ................... 12.5%
Energy: Oil ................................... 7.8%
Banking ....................................... 6.9%
Financial Services ............................ 6.6%
Telecommunications ............................ 4.8%
Business Services ............................. 4.5%
Retail ........................................ 4.5%
Diversified Industrial ........................ 3.8%
Computer Software and Services ................ 3.7%
Brokerage ..................................... 3.3%
Energy and Utilities: Integrated .............. 3.1%
Utilities ..................................... 3.1%
Consumer Products ............................. 2.2%
Metals and Mining ............................. 1.6%
Energy: Natural Gas ........................... 1.6%
Transportation ................................ 1.5%
Aviation: Parts and Services .................. 1.5%
Health Care ................................... 1.4%
Food and Beverage ............................. 1.4%
Computer Hardware ............................. 1.3%
Communications Equipment ...................... 1.2%
Real Estate ................................... 1.1%
Aerospace ..................................... 0.8%
Entertainment ................................. 0.8%
Hotels and Gaming ............................. 0.7%
Asset Backed Securities ....................... 0.0%
Other Assets and Liabilities (Net) ............ 1.4%
------
100.0%
======
4
SUMMARY OF PORTFOLIO HOLDINGS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
WESTWOOD INTERMEDIATE BOND FUND
- --------------------------------------------------------------------------------
Corporate Bonds ............................... 43.5%
U.S. Government Agency Obligations ............ 30.5%
U.S. Government Obligations ................... 21.9%
Asset Backed Securities ....................... 0.2%
Other Assets and Liabilities (Net) ............ 3.9%
------
100.0%
======
- --------------------------------------------------------------------------------
WESTWOOD SMALLCAP EQUITY FUND
- --------------------------------------------------------------------------------
Real Estate ................................... 10.1%
Financial Services ............................ 9.9%
Retail ........................................ 8.0%
Energy and Utilities .......................... 7.9%
Building and Construction ..................... 7.0%
Metals and Mining ............................. 6.9%
Computer Software and Services ................ 6.0%
Transportation ................................ 6.0%
Business Services ............................. 4.1%
Telecommunications ............................ 4.0%
Hotels and Gaming ............................. 4.0%
Aerospace ..................................... 4.0%
Consumer Products ............................. 3.0%
Equipment and Supplies ........................ 3.0%
Food and Beverage ............................. 2.1%
Electronics ................................... 2.0%
Health Care ................................... 2.0%
Diversified Industrial ........................ 2.0%
Specialty Chemicals ........................... 1.0%
Other Assets and Liabilities (Net) ............ 7.0%
------
100.0%
======
- --------------------------------------------------------------------------------
WESTWOOD INCOME FUND
- --------------------------------------------------------------------------------
Financial Services ............................ 18.6%
U.S. Government Obligations ................... 16.8%
U.S. Government Agency Obligations ............ 13.5%
Transportation ................................ 9.0%
Real Estate Investment Trusts ................. 7.0%
Brokerage ..................................... 4.4%
Metals and Mining ............................. 4.3%
Banking ....................................... 3.5%
Energy and Utilities: Natural Gas ............. 3.0%
Health Care ................................... 2.5%
Broadcasting .................................. 2.5%
Energy and Utilities .......................... 2.5%
Energy and Utilities: Integrated .............. 2.4%
Business Services ............................. 2.2%
Energy and Utilities: Oil ..................... 1.7%
Food and Beverage ............................. 1.3%
Other Assets and Liabilities (Net) ............ 4.8%
------
100.0%
======
THE FUNDS FILE A COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS WITH THE SECURITIES AND
EXCHANGE COMMISSION (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 DECEMBER 31,
2006. SHAREHOLDERS MAY OBTAIN THIS INFORMATION AT WWW.GABELLI.COM OR BY CALLING
THE FUND AT 800-GABELLI (800-422-3554). THE FUNDS' FORM N-Q IS AVAILABLE ON THE
SEC'S WEBSITE AT WWW.SEC.GOV AND MAY ALSO BE REVIEWED AND COPIED AT THE SEC'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
Each 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 Funds' proxy voting policies, procedures, and how the Funds voted proxies
relating to portfolio securities are available without charge, upon request by,
(i) calling 800-GABELLI (800-422-3554); (ii) writing to The Gabelli Funds at One
Corporate Center, Rye, NY 10580-1422; or (iii) visiting the Securities and
Exchange Commission's website at www.sec.gov.
5
WESTWOOD MIGHTY MITES(SM) FUND
SCHEDULE OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- ------
COMMON STOCKS -- 97.4%
AGRICULTURE -- 0.4%
200 J.G. Boswell Co. .................$ 124,000 $ 141,000
5 Limoneira Co. .................... 910 1,275
------------ ------------
124,910 142,275
------------ ------------
AUTOMOTIVE: PARTS AND ACCESSORIES -- 2.9%
200 Amerityre Corp.+ ................. 1,108 890
50,000 Earl Scheib Inc.+ ................ 243,865 187,500
18,000 Midas Inc.+ ...................... 242,100 388,260
27,000 Proliance International Inc.+ .... 126,684 102,060
1,000 Puradyn Filter Technologies Inc.+ 1,645 580
27,000 Standard Motor Products Inc. ..... 304,529 460,890
------------ ------------
919,931 1,140,180
------------ ------------
AVIATION: PARTS AND SERVICES -- 1.4%
8,000 CPI Aerostructures Inc.+ ......... 86,268 54,880
800 Curtiss-Wright Corp. ............. 8,610 30,832
6,200 Kaman Corp. ...................... 92,246 144,522
159,300 The Fairchild Corp., Cl. A+ ...... 756,192 321,786
------------ ------------
943,316 552,020
------------ ------------
BROADCASTING -- 4.5%
52,000 Acme Communications Inc. ......... 315,186 296,400
25,000 Beasley Broadcast Group Inc.,
Cl. A ........................... 240,605 211,750
50,000 Crown Media Holdings Inc.,
Cl. A+ .......................... 382,410 266,500
10,000 Fisher Communications Inc.+ ...... 413,617 486,000
5,000 Granite Broadcasting Corp.+ ...... 2,000 350
23,000 Gray Television Inc. ............. 212,749 239,660
10,000 ION Media Networks Inc.+ ......... 21,361 13,300
9,000 Salem Communications Corp.,
Cl. A ........................... 154,890 112,500
40,000 Young Broadcasting Inc., Cl. A+ .. 282,307 161,600
------------ ------------
2,025,125 1,788,060
------------ ------------
BUILDING AND CONSTRUCTION -- 0.6%
4,000 Huttig Building Products Inc.+ ... 13,358 24,200
6,200 The Monarch Cement Co. ........... 146,839 194,060
------------ ------------
160,197 218,260
------------ ------------
BUSINESS SERVICES -- 3.9%
150,000 AMICAS Inc.+ ..................... 709,160 426,000
28,000 ANC Rental Corp.+ ................ 840 3
74,000 Edgewater Technology Inc.+ ....... 293,188 624,560
41,000 Nashua Corp.+ .................... 267,736 364,900
804 National Stock Yards Co. ......... 80,700 136,680
10,000 PubliCARD Inc.+ .................. 14,436 150
500 StarTek Inc. ..................... 8,375 4,895
------------ ------------
1,374,435 1,557,188
------------ ------------
CABLE -- 0.1%
90,000 Adelphia Communications Corp.,
Cl. A+ .......................... 15,750 1,800
2,500 Outdoor Channel Holdings Inc.+ ... 24,825 25,550
------------ ------------
40,575 27,350
------------ ------------
MARKET
SHARES COST VALUE
------ ---- ------
COMMUNICATIONS EQUIPMENT -- 0.3%
1,000 Andrew Corp.+ ....................$ 3,413 $ 10,590
10,000 Communications Systems Inc. ...... 84,990 103,800
40,000 ViewCast.com Inc.+ ............... 18,600 17,200
------------ ------------
107,003 131,590
------------ ------------
COMPUTER SOFTWARE AND SERVICES -- 3.8%
1,910 Gemalto NV+ ...................... 10,945 44,075
24,000 Mobius Management
Systems Inc.+ ................... 180,423 176,880
435,000 Net Perceptions Inc.+ ............ 178,368 1,087,500
834 Prosoft Learning Corp.+ .......... 11,216 5
850,000 StorageNetworks Inc. Escrow+ (a) . 0 25,500
4,000 Tyler Technologies Inc.+ ......... 16,100 50,800
20,000 Xanser Corp.+ .................... 83,498 110,000
------------ ------------
480,550 1,494,760
------------ ------------
CONSUMER PRODUCTS -- 3.8%
68,000 Adams Golf Inc.+ ................. 115,878 128,520
6,000 American Locker Group Inc.+ ...... 74,117 25,200
1,000 Ducati Motor Holding SpA, ADR .... 15,665 16,310
5,000 Levcor International Inc.+ ....... 15,701 2,000
4,500 Marine Products Corp. ............ 4,609 43,065
1,000 Marzotto SpA ..................... 787 4,682
300 National Presto Industries Inc. .. 8,618 18,492
175,000 Schiff Nutrition
International Inc.+ ............. 319,238 1,202,250
41,530 Syratech Corp.+ .................. 10,383 3,530
1,500 Valentino Fashion Group SpA ...... 8,653 60,634
------------ ------------
573,649 1,504,683
------------ ------------
CONSUMER SERVICES -- 0.0%
1,000 Collectors Universe Inc. ......... 3,530 14,010
------------ ------------
DIVERSIFIED INDUSTRIAL -- 4.5%
7,000 Ampco-Pittsburgh Corp. ........... 140,000 202,230
25,500 Haulotte Group ................... 136,743 817,196
62,000 Katy Industries Inc.+ ............ 296,348 136,400
2,000 Lindsay Corp. .................... 39,765 63,580
15,000 Magnetek Inc.+ ................... 81,766 75,600
11,750 RWC Inc.+ ........................ 281,315 26,438
35,000 Tech/Ops Sevcon Inc. ............. 205,347 239,750
500 The Lamson & Sessions Co.+ ....... 2,475 13,895
24,000 WHX Corp.+ ....................... 309,477 204,000
------------ ------------
1,493,236 1,779,089
------------ ------------
EDUCATIONAL SERVICES -- 0.0%
500 Universal Technical
Institute Inc.+ ................. 10,158 11,540
------------ ------------
ELECTRONICS -- 2.8%
5,000 Alliance Semiconductor Corp.+ .... 20,763 22,550
6,000 California Micro Devices Corp.+ .. 32,865 28,080
16,000 CTS Corp. ........................ 140,236 221,120
11,300 George Risk Industries Inc. ...... 52,272 81,925
105,000 IntriCon Corp.+ .................. 332,496 619,500
5,000 Methode Electronics Inc. ......... 46,440 73,850
20,000 SIRIT Inc.+ ...................... 11,714 4,071
See accompanying notes to financial statements.
6
WESTWOOD MIGHTY MITES(SM) FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- MARCH 31, 2007 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- ------
COMMON STOCKS (CONTINUED)
ELECTRONICS (CONTINUED)
178 Trimble Navigation Ltd.+ .........$ 4,954 $ 4,788
4,000 Zoran Corp.+ ..................... 25,729 68,080
------------ ------------
667,469 1,123,964
------------ ------------
ENERGY AND UTILITIES: ELECTRIC -- 0.5%
500 Green Mountain Power Corp. ....... 10,785 17,435
7,000 Unitil Corp. ..................... 172,599 190,190
------------ ------------
183,384 207,625
------------ ------------
ENERGY AND UTILITIES: INTEGRATED -- 2.3%
25,000 Aquila Inc.+ ..................... 71,600 104,500
34,950 Florida Public Utilities Co. ..... 318,064 433,380
6,000 MGE Energy Inc. .................. 189,291 212,760
800 Pardee Resources Co. Inc. ........ 72,100 140,800
95,200 Progress Energy Inc., CVO+ ....... 10,472 30,464
------------ ------------
661,527 921,904
------------ ------------
ENERGY AND UTILITIES: NATURAL GAS -- 2.3%
500 Cascade Natural Gas Corp. ........ 10,612 13,175
4,000 Chesapeake Utilities Corp. ....... 100,296 123,760
15,000 Corning Natural Gas Corp.+ ....... 226,160 228,750
2,000 EnergySouth Inc. ................. 79,670 83,860
1,000 Evergreen Energy Inc.+ ........... 7,920 6,570
31,200 PetroCorp Escrow Shares+ (a) ..... 0 1,872
15,500 RGC Resources Inc. ............... 332,976 439,425
2,100 U.S. Energy Corp.+ ............... 14,476 11,172
------------ ------------
772,110 908,584
------------ ------------
ENERGY AND UTILITIES: SERVICES -- 3.0%
13,000 Acergy SA, ADR+ .................. 42,284 276,770
950 Covanta Holding Corp.+ ........... 3,996 21,071
52,000 RPC Inc. ......................... 213,373 866,320
------------ ------------
259,653 1,164,161
------------ ------------
ENERGY AND UTILITIES: WATER -- 1.9%
4,500 Artesian Resources Corp.,
Cl. A ........................... 48,062 92,700
1,500 BIW Ltd. ......................... 27,266 26,475
2,500 California Water Service Group ... 55,553 95,800
4,000 Consolidated Water Co. Ltd. ...... 55,124 94,840
5,700 Middlesex Water Co. .............. 96,987 104,823
8,500 SJW Corp. ........................ 103,376 344,080
------------ ------------
386,368 758,718
------------ ------------
ENTERTAINMENT -- 2.5%
12,500 Canterbury Park Holding Corp. .... 129,392 176,875
1,802 Chestnut Hill Ventures+ (a) ...... 67,956 51,220
34,000 Dover Motorsports Inc. ........... 170,332 178,500
21,000 Jetix Europe NV+ ................. 122,472 527,391
800 LodgeNet Entertainment Corp.+ .... 8,800 24,576
2,000 Triple Crown Media Inc.+ ......... 12,000 16,780
------------ ------------
510,952 975,342
------------ ------------
MARKET
SHARES COST VALUE
------ ---- ------
ENVIRONMENTAL CONTROL -- 0.1%
10,000 BioteQ Environmental
Technologies Inc.+ ..............$ 16,559 $ 20,355
------------ ------------
EQUIPMENT AND SUPPLIES -- 6.9%
134,000 Baldwin Technology Co. Inc.,
Cl. A+ .......................... 301,856 670,000
15,000 Capstone Turbine Corp.+ .......... 27,450 15,900
21,500 Cherokee International Corp.+ .... 100,897 121,260
12,000 Core Molding Technologies Inc.+ .. 35,748 93,600
20,000 Fedders Corp.+ ................... 95,200 18,000
1,000 Genoil Inc.+ ..................... 225 641
3,500 Gerber Scientific Inc.+ .......... 12,173 37,135
9,000 Gildemeister AG .................. 66,269 155,813
4,000 GrafTech International Ltd.+ ..... 24,000 36,320
10,000 Industrial Distribution
Group Inc.+ ..................... 124,990 124,900
19,000 L.S. Starrett Co., Cl. A ......... 308,211 342,000
20,000 Maezawa Kyuso
Industries Co. Ltd. ............. 108,117 330,787
7,500 Mine Safety Appliances Co. ....... 227,906 315,450
13,600 SL Industries Inc.+ .............. 84,464 204,680
1,000 SRS Labs Inc.+ ................... 5,500 13,930
5,700 The Eastern Co. .................. 58,424 154,926
2,000 TransAct Technologies Inc.+ ...... 18,560 13,920
3,800 Vicor Corp. ...................... 38,232 38,076
500 Watts Water Technologies Inc.,
Cl. A ........................... 7,648 19,015
------------ ------------
1,645,870 2,706,353
------------ ------------
FINANCIAL SERVICES -- 18.5%
1,000 Bank of Florida Corp.+ ........... 14,313 18,900
14,000 Berkshire Bancorp Inc. ........... 184,901 220,500
20,000 Coconut Palm Acquisition Corp.+ .. 104,860 101,800
11,000 Crazy Woman Creek Bancorp Inc. ... 143,391 216,480
227,900 Epoch Holding Corp.+ ............. 536,030 3,012,838
6,000 Fidelity Southern Corp. .......... 53,378 114,240
30,000 Flushing Financial Corp. ......... 449,987 486,900
27,000 Fulton Financial Corp. ........... 170,703 392,310
10 Guaranty Corp., Cl. A+ ........... 137,500 160,000
70,000 Ladenburg Thalmann
Financial Services Inc.+ ........ 50,558 186,900
500 Magyar Bancorp Inc.+ ............. 5,275 7,125
3,150 Northrim BanCorp Inc. ............ 60,970 93,083
6,400 Parish National Corp. ............ 238,648 603,200
9,167 Patriot National Bancorp Inc. .... 141,747 204,699
2,500 PennFed Financial Services Inc. .. 42,628 54,175
5,000 Provident New York Bancorp ....... 74,850 70,750
11,500 Seacoast Banking Corp.
of Florida ...................... 222,420 260,705
116 Sunwest Bank+ .................... 322,722 414,700
18,000 SWS Group Inc. ................... 221,139 446,580
13,000 Synergy Financial Group Inc. ..... 132,062 203,450
1,000 TIB Financial Corp. .............. 7,780 15,000
------------ ------------
3,315,862 7,284,335
------------ ------------
See accompanying notes to financial statements.
7
WESTWOOD MIGHTY MITES(SM) FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- MARCH 31, 2007 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- ------
COMMON STOCKS (CONTINUED)
FOOD AND BEVERAGE -- 2.2%
4,000 Boston Beer Co. Inc., Cl. A+ .....$ 76,589 $ 133,400
4,000 Genesee Corp., Cl. A+ ............ 13,980 8,900
30,100 Genesee Corp., Cl. B+ ............ 55,564 73,143
2,000 J & J Snack Foods Corp. .......... 28,830 78,980
28,000 Lifeway Foods Inc.+ .............. 129,705 252,280
14,000 MGP Ingredients Inc. ............. 67,550 285,180
400 Scheid Vineyards Inc., Cl. A+ .... 11,311 13,350
1,000 The Inventure Group Inc.+ ........ 2,660 2,850
100 Willamette Valley
Vineyards Inc.+ ................. 400 697
------------ ------------
386,589 848,780
------------ ------------
HEALTH CARE -- 11.5%
25,000 AFP Imaging Corp.+ ............... 54,566 41,750
2,000 Alpharma Inc., Cl. A ............. 44,140 48,160
6,500 Animal Health
International Inc.+ ............. 71,976 78,585
13,000 Arkopharma ....................... 187,359 235,830
48,000 BioLase Technology Inc.+ ......... 568,166 467,040
2,200 Biosite Inc.+ .................... 65,538 184,734
10,000 Boiron SA ........................ 166,957 276,253
1,000 Bruker BioSciences Corp.+ ........ 5,980 10,520
16,500 Cholestech Corp.+ ................ 132,129 284,460
96,000 Del Global Technologies Corp.+ ... 146,022 196,800
3,000 DexCom Inc.+ ..................... 48,615 23,580
15,279 Exactech Inc.+ ................... 235,527 242,783
8,600 I-Flow Corp.+ .................... 115,063 126,764
1,000 ICU Medical Inc.+ ................ 30,050 39,200
2,000 IntraLase Corp.+ ................. 43,603 49,960
20,000 Lifecore Biomedical Inc.+ ........ 152,960 375,400
2,500 Matrixx Initiatives Inc.+ ........ 44,375 40,625
14,000 Neogen Corp.+ .................... 160,903 330,120
2,500 NMT Medical Inc.+ ................ 7,858 34,000
1,000 Orthofix International NV+ ....... 27,010 51,050
5,000 Pain Therapeutics Inc.+ .......... 36,979 39,200
20,000 Quidel Corp.+ .................... 88,363 240,000
36,000 Regeneration Technologies Inc.+ .. 320,656 261,000
400 Sirona Dental Systems Inc. ....... 7,800 13,784
75,000 Sonic Innovations Inc.+ .......... 376,873 633,750
2,000 Tutogen Medical Inc.+ ............ 10,180 16,800
11,500 United-Guardian Inc. ............. 107,716 107,180
3,000 Young Innovations Inc. ........... 81,168 81,660
------------ ------------
3,338,532 4,530,988
------------ ------------
HOTELS AND GAMING -- 0.2%
1,000 Cloverleaf Kennel Club, Cl. A+ ... 3,250 2,525
4,000 Dover Downs Gaming &
Entertainment Inc. .............. 24,903 51,520
2,000 Florida Gaming Corp.+ ............ 6,950 39,000
------------ ------------
35,103 93,045
------------ ------------
MANUFACTURED HOUSING AND RECREATIONAL VEHICLES -- 3.3%
75,000 Cavalier Homes Inc.+ ............. 415,069 364,500
9,000 Cavco Industries Inc.+ ........... 167,143 314,550
MARKET
SHARES COST VALUE
------ ---- ------
9,000 Nobility Homes Inc. ..............$ 141,603 $ 214,650
15,000 Palm Harbor Homes Inc.+ .......... 302,479 215,100
6,000 Skyline Corp. .................... 203,272 202,440
------------ ------------
1,229,566 1,311,240
------------ ------------
METALS AND MINING -- 0.1%
615,000 Royal Oak Mines Inc.+ ............ 2,314 0
4,000 Uranium Resources Inc.+ .......... 22,056 32,600
------------ ------------
24,370 32,600
------------ ------------
MUTUAL FUNDS -- 1.0%
24,000 MVC Capital Inc. ................. 217,842 375,600
------------ ------------
PAPER AND FOREST PRODUCTS -- 0.1%
300 Keweenaw Land Association Ltd. ... 46,200 53,250
------------ ------------
PUBLISHING -- 0.6%
90,000 PRIMEDIA Inc.+ ................... 146,833 239,400
------------ ------------
REAL ESTATE -- 4.2%
5,000 Capital Properties Inc., Cl. A ... 73,300 109,850
350 Case Pomeroy & Co. Inc.,
Cl. A (a) ....................... 570,325 649,250
50 Case Pomeroy & Co. Inc.,
Cl. B (a) ....................... 58,825 92,750
2,500 CKX Lands Inc. ................... 19,766 32,338
15,500 Griffin Land & Nurseries Inc.+ ... 311,580 550,250
3,000 Gyrodyne Co. of America Inc. ..... 53,308 177,000
400 Holobeam Inc.+ ................... 15,500 20,810
2,508 Royalty LLC (a) .................. 0 19,925
------------ ------------
1,102,604 1,652,173
------------ ------------
RESTAURANTS -- 0.6%
17,000 Nathan's Famous Inc.+ ............ 119,527 255,000
------------ ------------
RETAIL -- 0.8%
2,200 Bowlin Travel Centers Inc.+ ...... 3,750 3,905
24,000 CoolBrands International Inc.+ ... 56,139 23,907
1,000 Cost-U-Less Inc.+ ................ 7,022 8,990
10,000 Movado Group Inc. ................ 145,136 294,500
------------ ------------
212,047 331,302
------------ ------------
SPECIALTY CHEMICALS -- 1.9%
267,226 General Chemical Group Inc.+ ..... 59,859 6,681
30,000 Hawkins Inc. ..................... 380,688 444,000
1,000 KMG Chemicals Inc. ............... 3,270 11,500
55,000 Omnova Solutions Inc.+ ........... 302,076 300,300
------------ ------------
745,893 762,481
------------ ------------
TELECOMMUNICATIONS -- 3.5%
1,000 Ambient Corp.+ ................... 280 63
1,000 Applied Signal Technology Inc. ... 16,330 17,930
24,000 D&E Communications Inc. .......... 265,251 319,680
13,000 HickoryTech Corp. ................ 154,118 90,090
80 Horizon Telecom Inc., Cl. A+ ..... 9,250 9,160
339 Horizon Telecom Inc., Cl. B ...... 39,073 30,849
1,200 Lexcom Inc., Cl. B+ .............. 68,955 48,900
See accompanying notes to financial statements.
8
WESTWOOD MIGHTY MITES(SM) FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- MARCH 31, 2007 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- ------
COMMON STOCKS (CONTINUED)
TELECOMMUNICATIONS (CONTINUED)
20,000 New Ulm Telecom Inc. .............$ 198,219 $ 239,000
10,000 PNV Inc.+ ........................ 3 15
300 Preformed Line Products Co. ...... 13,941 11,097
6,000 Shenandoah
Telecommunications Co. .......... 94,686 282,540
20,000 Stratos International Inc.+ ...... 81,837 148,400
33,000 Sycamore Networks Inc.+ .......... 107,085 123,420
2,305 Virgin Media Inc. ................ 31,540 58,201
------------ ------------
1,080,568 1,379,345
------------ ------------
TRANSPORTATION -- 0.1%
2,500 Providence and Worcester
Railroad Co. .................... 36,934 44,250
------------ ------------
WIRELESS COMMUNICATIONS -- 0.3%
9,000 Rural Cellular Corp., Cl. A+ ..... 7,830 107,640
------------ ------------
TOTAL COMMON STOCKS .............. 25,406,807 38,449,440
------------ ------------
PREFERRED STOCKS -- 1.5%
AUTOMOTIVE: PARTS AND ACCESSORIES -- 1.5%
16,000 Jungheinrich AG Pfd. ............. 129,990 581,360
------------ ------------
CONVERTIBLE PREFERRED STOCKS -- 0.2%
BUSINESS SERVICES -- 0.0%
150 Interep National Radio Sales Inc.,
4.000% Cv. Pfd.,
Ser. A+ (a)(b)(c) ............... 13,849 5,243
------------ ------------
FOOD AND BEVERAGE -- 0.2%
3,000 Seneca Foods Corp.,
Cv. Pfd., Ser. 2003+ ............ 45,750 80,145
------------ ------------
TOTAL CONVERTIBLE
PREFERRED STOCKS ................ 59,599 85,388
------------ ------------
RIGHTS -- 0.1%
HEALTH CARE -- 0.1%
96,000 Del Global Technologies Corp.,+ .. 59,643 19,200
------------ ------------
WARRANTS -- 0.0%
BUSINESS SERVICES -- 0.0%
1,666 Avalon Digital Marketing Systems Inc.,
expire 11/11/11+ (a)(c) ......... 0 0
37,500 Interep National Radio Sales Inc.,
expire 05/06/07+ (a)(b)(c) ...... 0 0
------------ ------------
0 0
------------ ------------
DIVERSIFIED INDUSTRIAL -- 0.0%
3,780 WHX Corp., expire 02/28/08+ ...... 11,721 1,417
------------ ------------
MARKET
SHARES COST VALUE
------ ---- ------
ENERGY AND UTILITIES: ELECTRIC -- 0.0%
1,680 British Energy Group plc,
expire 01/17/10+ ................$ 5,488 $ 12,315
------------ ------------
TOTAL WARRANTS ................... 17,209 13,732
------------ ------------
PRINCIPAL
AMOUNT
--------
U.S. GOVERNMENT OBLIGATIONS -- 1.0%
$415,000 U.S. Treasury Bills,
4.979% to 5.181%++,
04/12/07 to 06/21/07 ............ 412,869 412,880
------------ ------------
TOTAL
INVESTMENTS -- 100.2% ..........$ 26,086,117 39,562,000
============
OTHER ASSETS AND LIABILITIES (NET) -- (0.2)% .... (92,545)
------------
NET ASSETS -- 100.0% ............................$ 39,469,455
============
--------------
(a) Security fair valued under procedures established by the Board of
Trustees. The procedures may include reviewing available financial
information about the company and reviewing valuation of comparable
securities and other factors on a regular basis. At March 31, 2007, the
market value of fair valued securities amounted to $845,760 or 2.14% of
total net assets.
(b) Security exempt from registration under Rule 144A of the Securities Act of
1933, as amended. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At March
31, 2007, the market value of Rule 144A securities amounted to $5,243 or
0.01% of total net assets.
(c) At March 31, 2007, the Fund held investments in restricted and illiquid
securities amounting to $5,243 or 0.01% of total net assets, that were
valued under methods approved by the Board, as follows:
03/31/07
CARRYING
ACQUISITION ACQUISITION ACQUISITION VALUE
SHARES ISSUER DATE COST PER UNIT
------- ------ ------ ------ --------
1,666 Avalon Digital Marketing
Systems Inc.
Warrants expire 11/11/11 ....... 04/03/00 -- --
37,500 Interep National Radio
Sales Inc.
Warrants expire 05/06/07 ....... 05/03/02 -- --
150 Interep National Radio
Sales Inc.,
4.000% Cv. Pfd., Ser. A ........ 05/03/02 $13,849 $34.9533
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
ADR American Depository Receipt
CVO Contingent Value Obligation
See accompanying notes to financial statements.
9
WESTWOOD EQUITY FUND
SCHEDULE OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- ------
COMMON STOCKS -- 97.8%
AEROSPACE -- 1.2%
23,700 Lockheed Martin Corp. ............$ 1,250,602 $ 2,299,374
------------ ------------
AVIATION: PARTS AND SERVICES -- 2.5%
70,300 United Technologies Corp. ........ 3,902,393 4,569,500
------------ ------------
BANKING -- 8.7%
90,000 Bank of America Corp. ............ 2,996,140 4,591,800
92,233 Citigroup Inc. ................... 3,832,292 4,735,242
93,984 JPMorgan Chase & Co. ............. 3,340,447 4,546,946
55,000 Mellon Financial Corp. ........... 2,330,094 2,372,700
------------ ------------
12,498,973 16,246,688
------------ ------------
BROKERAGE -- 3.6%
31,300 Lehman Brothers Holdings Inc. .... 2,044,337 2,193,191
28,500 Morgan Stanley ................... 1,789,890 2,244,660
15,500 The Bear Stearns Companies Inc. .. 1,391,471 2,330,425
------------ ------------
5,225,698 6,768,276
------------ ------------
BUSINESS SERVICES -- 7.4%
63,000 Accenture Ltd., Cl. A ............ 2,330,038 2,428,020
92,600 Automatic Data
Processing Inc. ................. 4,320,948 4,481,840
20,400 FedEx Corp. ...................... 2,132,224 2,191,572
87,500 First Data Corp. ................. 2,164,256 2,353,750
22,500 MasterCard Inc., Cl. A ........... 2,092,343 2,390,400
------------ ------------
13,039,809 13,845,582
------------ ------------
COMMUNICATIONS EQUIPMENT -- 2.1%
90,700 Cisco Systems Inc.+ .............. 2,345,003 2,315,571
86,900 Motorola Inc. .................... 1,811,636 1,535,523
------------ ------------
4,156,639 3,851,094
------------ ------------
COMPUTER HARDWARE -- 1.3%
24,800 International Business
Machines Corp. .................. 2,356,058 2,337,648
------------ ------------
COMPUTER SOFTWARE AND SERVICES -- 6.1%
82,500 Electronic Data Systems Corp. .... 2,295,245 2,283,600
161,000 Microsoft Corp. .................. 4,595,667 4,487,070
252,300 Oracle Corp.+ .................... 3,932,418 4,574,199
------------ ------------
10,823,330 11,344,869
------------ ------------
CONSUMER PRODUCTS -- 3.7%
27,900 Altria Group Inc. ................ 2,047,859 2,449,899
67,100 Colgate-Palmolive Co. ............ 3,491,681 4,481,609
------------ ------------
5,539,540 6,931,508
------------ ------------
DIVERSIFIED INDUSTRIAL -- 4.9%
131,100 General Electric Co. ............. 3,837,931 4,635,696
38,900 ITT Corp. ........................ 1,723,128 2,346,448
24,400 Textron Inc. ..................... 1,897,812 2,191,120
------------ ------------
7,458,871 9,173,264
------------ ------------
ENERGY AND UTILITIES: INTEGRATED -- 5.0%
67,100 ConocoPhillips ................... 3,282,068 4,586,285
28,000 Dominion Resources Inc. .......... 2,343,140 2,485,560
46,800 McDermott International Inc.+ .... 2,309,521 2,292,264
------------ ------------
7,934,729 9,364,109
------------ ------------
ENERGY: NATURAL GAS -- 2.6%
67,306 Apache Corp. ..................... 4,105,249 4,758,534
------------ ------------
ENERGY: OIL -- 8.8%
65,500 Exxon Mobil Corp. ................ 2,740,507 4,941,975
MARKET
SHARES COST VALUE
------ ---- ------
45,600 Marathon Oil Corp. ...............$ 3,790,045 $ 4,506,648
85,935 Murphy Oil Corp. ................. 4,369,242 4,588,929
47,610 Occidental Petroleum Corp. ....... 1,933,557 2,347,649
------------ ------------
12,833,351 16,385,201
------------ ------------
ENTERTAINMENT -- 1.3%
67,700 The Walt Disney Co. .............. 2,390,636 2,330,911
------------ ------------
FINANCIAL SERVICES -- 11.0%
77,900 American Express Co. ............. 2,680,491 4,393,560
14,600 BlackRock Inc. ................... 2,056,452 2,282,126
19,200 Franklin Resources Inc. .......... 1,864,398 2,319,936
48,600 Hartford Financial Services
Group Inc. ...................... 4,262,320 4,645,188
45,200 Lazard Ltd., Cl. A ............... 2,204,705 2,268,136
75,600 The Allstate Corp. ............... 4,339,191 4,540,536
------------ ------------
17,407,557 20,449,482
------------ ------------
FOOD AND BEVERAGE -- 1.2%
40,000 General Mills Inc. ............... 2,002,629 2,328,800
------------ ------------
HEALTH CARE -- 2.4%
179,600 Pfizer Inc. ...................... 4,499,911 4,536,696
------------ ------------
HOTELS AND GAMING -- 1.2%
35,500 Starwood Hotels & Resorts
Worldwide Inc. .................. 1,884,408 2,302,175
------------ ------------
METALS AND MINING -- 2.8%
24,300 Allegheny Technologies Inc. ...... 2,504,960 2,592,567
38,300 Freeport-McMoRan Copper &
Gold Inc. ....................... 2,418,656 2,535,077
------------ ------------
4,923,616 5,127,644
------------ ------------
RETAIL -- 6.1%
135,700 CVS/Caremark Corp. ............... 4,205,464 4,632,798
50,700 Federated Department
Stores Inc. ..................... 1,810,312 2,284,035
12,575 Sears Holdings Corp.+ ............ 1,883,514 2,265,512
57,700 The Home Depot Inc. .............. 2,278,236 2,119,898
------------ ------------
10,177,526 11,302,243
------------ ------------
TELECOMMUNICATIONS -- 6.3%
37,670 Alltel Corp. ..................... 2,056,634 2,335,540
118,300 AT&T Inc. ........................ 4,310,556 4,664,569
123,604 Verizon Communications Inc. ...... 4,436,110 4,687,064
------------ ------------
10,803,300 11,687,173
------------ ------------
TRANSPORTATION -- 2.5%
29,000 Burlington Northern Santa
Fe Corp. ........................ 1,602,068 2,332,470
119,200 Eagle Bulk Shipping Inc. ......... 2,269,074 2,311,288
------------ ------------
3,871,142 4,643,758
------------ ------------
UTILITIES -- 5.1%
70,400 Exelon Corp. ..................... 3,890,375 4,837,184
95,400 PG&E Corp. ....................... 3,806,176 4,604,958
------------ ------------
7,696,551 9,442,142
------------ ------------
TOTAL COMMON STOCKS .............. 156,782,518 182,026,671
------------ ------------
TOTAL INVESTMENTS -- 97.8% .......$156,782,518 182,026,671
============
OTHER ASSETS AND LIABILITIES
(NET) -- 2.2% .................................. 4,061,388
------------
NET ASSETS -- 100.0% ............................$186,088,059
============
--------------
+ Non-income producing security.
See accompanying notes to financial statements.
10
WESTWOOD BALANCED FUND
SCHEDULE OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- ------
COMMON STOCKS -- 59.9%
AEROSPACE -- 0.8%
12,995 Lockheed Martin Corp. ............$ 757,621 $ 1,260,775
------------ ------------
AVIATION: PARTS AND SERVICES -- 1.5%
35,000 United Technologies Corp. ........ 1,934,317 2,275,000
------------ ------------
BANKING -- 5.3%
46,100 Bank of America Corp. ............ 1,669,020 2,352,022
42,833 Citigroup Inc. ................... 1,664,150 2,199,046
48,496 JPMorgan Chase & Co. ............. 1,914,237 2,346,237
27,800 Mellon Financial Corp. ........... 1,177,790 1,199,292
------------ ------------
6,425,197 8,096,597
------------ ------------
BROKERAGE -- 2.3%
15,800 Lehman Brothers Holdings Inc. .... 1,020,626 1,107,106
15,000 Morgan Stanley ................... 936,262 1,181,400
7,900 The Bear Stearns Companies Inc. .. 749,263 1,187,765
------------ ------------
2,706,151 3,476,271
------------ ------------
BUSINESS SERVICES -- 4.5%
31,000 Accenture Ltd., Cl. A ............ 1,146,433 1,194,740
46,200 Automatic Data Processing Inc. ... 2,159,470 2,236,080
10,300 FedEx Corp. ...................... 1,075,702 1,106,529
46,400 First Data Corp. ................. 1,147,017 1,248,160
11,300 MasterCard Inc., Cl. A ........... 1,044,686 1,200,512
------------ ------------
6,573,308 6,986,021
------------ ------------
COMMUNICATIONS EQUIPMENT -- 1.2%
45,000 Cisco Systems Inc.+ .............. 1,163,452 1,148,850
42,800 Motorola Inc. .................... 876,389 756,276
------------ ------------
2,039,841 1,905,126
------------ ------------
COMPUTER HARDWARE -- 0.8%
12,300 International Business
Machines Corp. .................. 1,163,541 1,159,398
------------ ------------
COMPUTER SOFTWARE AND SERVICES -- 3.7%
40,800 Electronic Data Systems Corp. .... 1,135,113 1,129,344
78,900 Microsoft Corp. .................. 2,199,755 2,198,943
129,680 Oracle Corp.+ .................... 2,059,158 2,351,098
------------ ------------
5,394,026 5,679,385
------------ ------------
CONSUMER PRODUCTS -- 2.2%
13,400 Altria Group Inc. ................ 972,779 1,176,654
34,000 Colgate-Palmolive Co. ............ 1,788,288 2,270,860
------------ ------------
2,761,067 3,447,514
------------ ------------
DIVERSIFIED INDUSTRIAL -- 3.0%
66,000 General Electric Co. ............. 1,944,668 2,333,760
20,190 ITT Corp. ........................ 968,429 1,217,861
11,200 Textron Inc. ..................... 871,993 1,005,760
------------ ------------
3,785,090 4,557,381
------------ ------------
ENERGY AND UTILITIES: INTEGRATED -- 3.1%
34,700 ConocoPhillips ................... 1,978,340 2,371,745
14,000 Dominion Resources Inc. .......... 1,171,546 1,242,780
24,700 McDermott International Inc.+ .... 1,220,192 1,209,806
------------ ------------
4,370,078 4,824,331
------------ ------------
MARKET
SHARES COST VALUE
------ ---- ------
ENERGY: NATURAL GAS -- 1.6%
33,655 Apache Corp. .....................$ 2,174,176 $ 2,379,408
------------ ------------
ENERGY: OIL -- 5.9%
36,500 Exxon Mobil Corp. ................ 1,528,026 2,753,925
26,615 Marathon Oil Corp. ............... 2,179,456 2,630,361
45,386 Murphy Oil Corp. ................. 2,260,695 2,423,612
24,400 Occidental Petroleum Corp. ....... 981,285 1,203,164
------------ ------------
6,949,462 9,011,062
------------ ------------
ENTERTAINMENT -- 0.8%
33,400 The Walt Disney Co. .............. 1,179,428 1,149,962
------------ ------------
FINANCIAL SERVICES -- 6.6%
38,200 American Express Co. ............. 1,434,602 2,154,480
7,300 BlackRock Inc. ................... 1,034,597 1,141,063
9,400 Franklin Resources Inc. .......... 890,268 1,135,802
23,800 Hartford Financial Services
Group Inc. ...................... 2,080,493 2,274,804
22,300 Lazard Ltd., Cl. A ............... 1,085,286 1,119,014
39,000 The Allstate Corp. ............... 2,221,561 2,342,340
------------ ------------
8,746,807 10,167,503
------------ ------------
FOOD AND BEVERAGE -- 0.8%
20,300 General Mills Inc. ............... 1,014,076 1,181,866
------------ ------------
HEALTH CARE -- 1.4%
87,000 Pfizer Inc. ...................... 2,180,366 2,197,620
------------ ------------
HOTELS AND GAMING -- 0.7%
17,620 Starwood Hotels & Resorts
Worldwide Inc. .................. 975,290 1,142,657
------------ ------------
METALS AND MINING -- 1.6%
12,000 Allegheny Technologies Inc. ...... 1,278,604 1,280,280
18,900 Freeport-McMoRan
Copper & Gold Inc. .............. 1,193,540 1,250,991
------------ ------------
2,472,144 2,531,271
------------ ------------
RETAIL -- 3.7%
67,500 CVS/Caremark Corp. ............... 2,098,104 2,304,450
25,370 Federated Department Stores Inc. . 919,250 1,142,918
6,341 Sears Holdings Corp.+ ............ 933,817 1,142,395
29,200 The Home Depot Inc. .............. 1,152,939 1,072,808
------------ ------------
5,104,110 5,662,571
------------ ------------
TELECOMMUNICATIONS -- 3.8%
19,000 Alltel Corp. ..................... 1,039,124 1,178,000
61,100 AT&T Inc. ........................ 2,220,824 2,409,173
60,518 Verizon Communications Inc. ...... 2,100,214 2,294,843
------------ ------------
5,360,162 5,882,016
------------ ------------
TRANSPORTATION -- 1.5%
14,700 Burlington Northern
Santa Fe Corp. .................. 909,419 1,182,321
59,200 Eagle Bulk Shipping Inc. ......... 1,126,733 1,147,888
------------ ------------
2,036,152 2,330,209
------------ ------------
UTILITIES -- 3.1%
34,400 Exelon Corp. ..................... 1,911,436 2,363,624
49,700 PG&E Corp. ....................... 1,979,277 2,399,019
------------ ------------
3,890,713 4,762,643
------------ ------------
TOTAL COMMON STOCKS .............. 79,993,123 92,066,587
------------ ------------
See accompanying notes to financial statements.
11
WESTWOOD BALANCED FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- MARCH 31, 2007 (UNAUDITED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT COST VALUE
-------- ---- -------
ASSET BACKED SECURITIES -- 0.0%
$ 76,997 GS Mortgage Securities Corp. II,
97-GL Cl. A2D,
6.940%, 07/13/30 ................$ 77,573 $ 76,853
------------ ------------
CORPORATE BONDS -- 9.3%
BANKING -- 1.6%
1,250,000 Bank of America Corp.,
5.375%, 06/15/14 ................ 1,296,180 1,252,039
1,125,000 Citigroup Inc.,
6.500%, 01/18/11 ................ 1,208,479 1,177,942
------------ ------------
2,504,659 2,429,981
------------ ------------
BROKERAGE -- 1.0%
1,450,000 Goldman Sachs Group Inc.,
6.650%, 05/15/09 ................ 1,455,498 1,495,726
------------ ------------
COMPUTER HARDWARE -- 0.5%
750,000 Hewlett-Packard Co.,
3.625%, 03/15/08 ................ 749,528 738,563
------------ ------------
DIVERSIFIED INDUSTRIAL -- 0.8%
1,200,000 General Electric Co.,
5.000%, 02/01/13 ................ 1,211,232 1,192,399
------------ ------------
ENERGY: OIL -- 1.9%
1,000,000 Anadarko Petroleum Corp.,
5.755%, 09/15/09 (a) ............ 1,001,597 1,002,809
1,000,000 ChevronTexaco Capital Co.,
3.375%, 02/15/08 ................ 984,211 985,069
1,005,000 Occidental Petroleum Corp., MTN,
4.250%, 03/15/10 ................ 1,006,692 985,011
------------ ------------
2,992,500 2,972,889
------------ ------------
FOOD AND BEVERAGE -- 0.6%
950,000 Anheuser-Busch Cos. Inc.,
4.375%, 01/15/13 ................ 938,113 911,463
------------ ------------
REAL ESTATE -- 1.1%
1,600,000 Archstone-Smith Trust,
7.200%, 03/01/13 ................ 1,563,172 1,707,552
------------ ------------
RETAIL -- 0.8%
1,250,000 Wal-Mart Stores Inc.,
6.875%, 08/10/09 ................ 1,285,302 1,301,804
------------ ------------
TELECOMMUNICATIONS -- 1.0%
1,460,000 Verizon Communications Inc.,
Insured by MBIA Inc., Deb.,
6.460%, 04/15/08 ................ 1,462,518 1,482,148
------------ ------------
TOTAL CORPORATE BONDS ............ 14,162,522 14,232,525
------------ ------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 16.9%
FEDERAL HOME LOAN BANK -- 3.6%
1,500,000 5.220%++, 06/12/07 .............. 1,485,001 1,484,957
1,500,000 5.125%, 06/18/08 ................ 1,501,487 1,502,608
1,000,000 4.625%, 11/21/08 ................ 993,044 996,041
1,500,000 5.375%, 05/18/16 ................ 1,509,254 1,544,002
------------ ------------
5,488,786 5,527,608
------------ ------------
PRINCIPAL MARKET
AMOUNT COST VALUE
-------- ---- -------
FEDERAL HOME LOAN MORTGAGE CORP. -- 5.8%
$1,800,000 5.200%++, 04/20/07 ..............$ 1,795,500 $ 1,795,500
2,000,000 3.500%, 09/15/07 ................ 2,003,115 1,985,182
1,500,000 4.750%, 12/08/10 ................ 1,488,825 1,496,066
2,000,000 5.000%, 07/15/14 ................ 2,046,877 2,015,176
1,500,000 5.250%, 04/18/16 ................ 1,477,754 1,530,571
------------ ------------
8,812,071 8,822,495
------------ ------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 7.5%
1,500,000 5.250%++, 05/11/07 .............. 1,491,713 1,491,713
2,000,000 4.250%, 07/15/07 ................ 1,997,726 1,994,292
2,000,000 3.250%, 11/15/07 ................ 1,972,439 1,976,536
1,500,000 4.625%, 01/15/08 ................ 1,497,261 1,494,262
1,600,000 4.250%, 05/15/09 ................ 1,574,830 1,581,290
1,500,000 5.375%, 11/15/11 ................ 1,509,993 1,534,797
1,500,000 5.000%, 04/15/15 ................ 1,566,652 1,508,220
------------ ------------
11,610,614 11,581,110
------------ ------------
TOTAL U.S. GOVERNMENT
AGENCY OBLIGATIONS .............. 25,911,471 25,931,213
------------ ------------
U.S. GOVERNMENT OBLIGATIONS -- 12.5%
U.S. TREASURY BILLS -- 1.0%
1,500,000 U.S. Treasury Bills,
5.110%++, 09/06/07 .............. 1,467,881 1,468,141
------------ ------------
U.S. TREASURY INFLATION INDEXED NOTES -- 1.0%
1,500,000 0.875%, 04/15/10 ................ 1,604,750 1,550,180
------------ ------------
U.S. TREASURY NOTES -- 10.5%
1,800,000 3.625%, 04/30/07 ................ 1,798,934 1,798,934
1,500,000 3.125%, 05/15/07 ................ 1,496,533 1,496,533
2,000,000 3.375%, 02/15/08 ................ 1,983,046 1,973,986
1,200,000 4.875%, 04/30/08 ................ 1,198,746 1,200,235
1,250,000 3.375%, 12/15/08 ................ 1,242,300 1,224,121
1,250,000 4.875%, 02/15/12 ................ 1,247,758 1,269,874
2,250,000 4.750%, 05/15/14 ................ 2,247,435 2,271,006
1,500,000 4.000%, 02/15/15 ................ 1,468,655 1,438,477
2,000,000 4.250%, 08/15/15 ................ 1,994,887 1,947,110
1,500,000 5.125%, 05/15/16 ................ 1,510,066 1,551,387
------------ ------------
16,188,360 16,171,663
------------ ------------
TOTAL U.S.
GOVERNMENT OBLIGATIONS .......... 19,260,991 19,189,984
------------ ------------
TOTAL INVESTMENTS -- 98.6% .......$139,405,680 151,497,162
============
OTHER ASSETS AND LIABILITIES
(NET) -- 1.4% .................................. 2,145,304
------------
NET ASSETS -- 100.0% ............................$153,642,466
============
--------------
(a) Floating rate security. The rate disclosed is that in effect at March 31,
2007.
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
MTN Medium Term Note
See accompanying notes to financial statements.
12
WESTWOOD INTERMEDIATE BOND FUND
SCHEDULE OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT COST VALUE
-------- ---- -------
ASSET BACKED SECURITIES -- 0.2%
$ 20,999 GS Mortgage Securities Corp. II,
97-GL Cl. A2D,
6.940%, 07/13/30 ................$ 21,579 $ 20,960
------------ ------------
CORPORATE BONDS -- 43.5%
BANKING -- 5.8%
300,000 Bank of America Corp.,
5.375%, 06/15/14 ................ 311,083 300,489
225,000 Citigroup Inc.,
6.500%, 01/18/11 ................ 241,436 235,589
------------ ------------
552,519 536,078
------------ ------------
COMPUTER HARDWARE -- 3.5%
325,000 Hewlett-Packard Co.,
3.625%, 03/15/08 ................ 325,275 320,044
------------ ------------
DIVERSIFIED INDUSTRIAL -- 2.7%
250,000 General Electric Co.,
5.000%, 02/01/13 ................ 252,340 248,416
------------ ------------
ENERGY AND UTILITIES: OIL -- 7.0%
200,000 Anadarko Petroleum Corp.,
5.755%, 09/15/09 (a) ............ 200,319 200,562
225,000 ChevronTexaco Capital Co.,
3.375%, 02/15/08 ................ 225,323 221,640
225,000 Occidental Petroleum Corp., MTN,
4.250%, 03/15/10 ................ 225,000 220,525
------------ ------------
650,642 642,727
------------ ------------
FINANCIAL SERVICES -- 16.6%
200,000 American Express Credit Corp., MTN,
5.480%, 06/16/11 (a) ............ 200,000 200,476
300,000 Goldman Sachs Group Inc.,
6.650%, 05/15/09 ................ 305,319 309,461
260,000 International Bank for
Reconstruction
& Development,
8.625%, 10/15/16 ................ 315,436 330,759
275,000 Merrill Lynch & Co. Inc.,
MTN Series C,
5.000%, 01/15/15 ................ 275,228 266,965
200,000 SLM Corp.,
5.450%, 04/25/11 ................ 199,892 202,598
225,000 The Bear Stearns Co. Inc.,
2.875%, 07/02/08 ................ 221,384 218,799
------------ ------------
1,517,259 1,529,058
------------ ------------
FOOD AND BEVERAGE -- 2.6%
250,000 Anheuser-Busch Cos. Inc.,
4.375%, 01/15/13 ................ 246,879 239,859
------------ ------------
REAL ESTATE -- 1.7%
150,000 Archstone-Smith Trust,
7.200%, 03/01/13 ................ 146,827 160,083
------------ ------------
PRINCIPAL MARKET
AMOUNT COST VALUE
-------- ---- -------
RETAIL -- 2.2%
$200,000 Wal-Mart Stores Inc.,
6.875%, 08/10/09 ................$ 205,648 $ 208,289
------------ ------------
TELECOMMUNICATIONS -- 1.4%
125,000 Verizon Communications Inc.,
Insured by MBIA Inc., Deb.,
6.460%, 04/15/08 ................ 125,459 126,896
------------ ------------
TOTAL CORPORATE BONDS ............ 4,022,848 4,011,450
------------ ------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 30.5%
FEDERAL HOME LOAN BANK -- 4.6%
175,000 3.875%, 01/15/10 ................ 169,851 170,855
250,000 5.375%, 05/18/16 ................ 251,542 257,333
------------ ------------
421,393 428,188
------------ ------------
FEDERAL HOME LOAN MORTGAGE CORP. -- 10.3%
250,000 3.750%, 04/15/07 ................ 249,978 249,978
200,000 3.500%, 09/15/07 ................ 199,548 198,518
250,000 3.625%, 09/15/08 ................ 246,335 245,630
250,000 5.250%, 04/18/16 ................ 246,292 255,095
------------ ------------
942,153 949,221
------------ ------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 6.9%
175,000 5.250%++, 05/11/07 .............. 174,033 174,033
175,000 5.375%, 11/15/11 ................ 175,661 179,060
147,090 Pool #255554,
5.500%, 09/01/20 ................ 146,896 147,694
138,582 Pool #745122,
5.500%, 01/01/35 ................ 140,862 137,409
------------ ------------
637,452 638,196
------------ ------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 8.7%
9,554 Pool #580871,
6.500%, 12/15/31 ................ 9,576 9,832
89,118 Pool #562288,
6.000%, 12/15/33 ................ 90,910 90,501
154,004 Pool #604946,
5.500%, 01/15/34 ................ 156,323 153,367
130,640 Pool #604970,
5.500%, 01/15/34 ................ 132,220 130,099
176,949 Pool #003747,
5.000%, 08/20/35 ................ 175,337 171,665
243,777 Pool #550728,
5.500%, 11/15/35 ................ 244,366 242,662
------------ ------------
808,732 798,126
------------ ------------
TOTAL U.S. GOVERNMENT
AGENCY OBLIGATIONS .............. 2,809,730 2,813,731
------------ ------------
See accompanying notes to financial statements.
13
WESTWOOD INTERMEDIATE BOND FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- MARCH 31, 2007 (UNAUDITED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT COST VALUE
-------- ---- -------
U.S. GOVERNMENT OBLIGATIONS -- 21.9%
U.S. TREASURY BONDS -- 10.4%
$250,000 7.125%, 02/15/23 ................$ 307,157 $ 310,449
300,000 6.125%, 11/15/27 ................ 308,643 346,453
275,000 5.500%, 08/15/28 ................ 300,785 295,862
------------ ------------
916,585 952,764
------------ ------------
U.S. TREASURY INFLATION INDEXED NOTES -- 3.1%
275,000 0.875%, 04/15/10 ................ 294,295 284,200
------------ ------------
U.S. TREASURY NOTES -- 8.4%
275,000 4.750%, 05/15/14 ................ 281,247 277,567
300,000 4.250%, 08/15/15 ................ 298,559 292,066
200,000 5.125%, 05/15/16 ................ 201,342 206,852
------------ ------------
781,148 776,485
------------ ------------
TOTAL U.S.
GOVERNMENT OBLIGATIONS .......... 1,992,028 2,013,449
------------ ------------
TOTAL INVESTMENTS -- 96.1% .......$ 8,846,185 8,859,590
============
OTHER ASSETS AND LIABILITIES
(NET) -- 3.9% .................................. 357,289
------------
NET ASSETS -- 100.0% ............................$ 9,216,879
============
--------------
(a) Floating rate security. The rate disclosed is that in effect at March 31,
2007.
++ Represents annualized yield at date of purchase.
MTN Medium Term Note
See accompanying notes to financial statements.
14
WESTWOOD SMALLCAP EQUITY FUND
SCHEDULE OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- ------
COMMON STOCKS -- 93.0%
AEROSPACE -- 4.0%
4,500 Moog Inc., Cl. A+ ................$ 123,455 $ 187,425
4,900 Teledyne Technologies Inc.+ ...... 170,159 183,456
------------ ------------
293,614 370,881
------------ ------------
BUILDING AND CONSTRUCTION -- 7.0%
5,200 Layne Christensen Co.+ ........... 135,575 189,384
1,800 NCI Building Systems Inc.+ ....... 97,414 85,932
2,600 The Genlyte Group Inc.+ .......... 184,731 183,430
2,800 Washington Group
International Inc.+ ............. 147,643 185,976
------------ ------------
565,363 644,722
------------ ------------
BUSINESS SERVICES -- 4.1%
4,800 Macquarie Infrastructure Co.
Trust ........................... 135,750 188,640
4,400 URS Corp.+ ....................... 154,718 187,396
------------ ------------
290,468 376,036
------------ ------------
COMPUTER SOFTWARE AND SERVICES -- 6.0%
2,300 Hurco Cos. Inc.+ ................. 70,669 98,555
1,800 Hyperion Solutions Corp.+ ........ 59,400 93,294
5,500 ManTech International Corp.,
Cl. A+ .......................... 160,025 183,755
6,400 SI International Inc.+ ........... 180,649 183,744
------------ ------------
470,743 559,348
------------ ------------
CONSUMER PRODUCTS -- 3.0%
4,100 Alberto-Culver Co. ............... 87,285 93,808
7,900 Knoll Inc. ....................... 143,555 188,257
------------ ------------
230,840 282,065
------------ ------------
DIVERSIFIED INDUSTRIAL -- 2.0%
2,700 Kennametal Inc. .................. 119,709 182,547
------------ ------------
ELECTRONICS -- 2.0%
9,050 Benchmark Electronics Inc.+ ...... 198,382 186,973
------------ ------------
ENERGY AND UTILITIES -- 7.9%
7,100 Cleco Corp. ...................... 160,896 183,393
5,400 Foundation Coal Holdings Inc. .... 167,193 185,436
5,700 Oil States International Inc.+ ... 180,618 182,913
1,800 Unit Corp.+ ...................... 83,533 91,062
2,300 Whiting Petroleum Corp.+ ......... 99,026 90,643
------------ ------------
691,266 733,447
------------ ------------
EQUIPMENT AND SUPPLIES -- 3.0%
1,000 Hydril Co.+ ...................... 57,851 96,240
1,400 Middleby Corp.+ .................. 146,607 184,576
------------ ------------
204,458 280,816
------------ ------------
FINANCIAL SERVICES -- 9.9%
6,500 Boston Private Financial
Holdings Inc. ................... 168,185 181,480
5,400 Cathay General Bancorp ........... 185,432 183,492
10,200 SeaBright Insurance
Holdings Inc.+ .................. 184,846 187,680
5,900 Sterling Financial Corp. ......... 194,476 184,021
4,100 Stifel Financial Corp.+ .......... 162,532 181,630
------------ ------------
895,471 918,303
------------ ------------
MARKET
SHARES COST VALUE
------ ---- ------
FOOD AND BEVERAGE -- 2.1%
4,800 J & J Snack Foods Corp. ..........$ 107,220 $ 189,552
------------ ------------
HEALTH CARE -- 2.0%
18,100 Five Star Quality Care Inc.+ ..... 187,885 186,068
------------ ------------
HOTELS AND GAMING -- 4.0%
8,000 Marcus Corp. ..................... 162,057 186,080
3,100 Orient-Express Hotels Ltd.,
Cl. A ........................... 83,091 185,442
------------ ------------
245,148 371,522
------------ ------------
METALS AND MINING -- 6.9%
9,100 Claymont Steel Holdings Inc.+ .... 175,276 181,363
1,400 Cleveland-Cliffs Inc. ............ 67,750 89,614
4,700 Northwest Pipe Co.+ .............. 147,073 187,201
2,000 RTI International Metals Inc.+ ... 139,768 182,020
------------ ------------
529,867 640,198
------------ ------------
REAL ESTATE -- 10.1%
6,400 Getty Realty Corp. ............... 177,809 183,936
4,100 LaSalle Hotel Properties ......... 131,259 190,076
4,400 Lexington Realty Trust ........... 96,592 92,972
3,777 Longview Fibre Co. ............... 83,815 93,028
2,600 Maguire Properties Inc. .......... 96,526 92,456
4,100 Post Properties Inc. ............. 165,325 187,493
3,400 Sunstone Hotel Investors Inc. .... 87,824 92,684
------------ ------------
839,150 932,645
------------ ------------
RETAIL -- 8.0%
9,700 CKE Restaurants Inc. ............. 161,572 182,942
3,300 The Children's Place Retail
Stores Inc.+ .................... 192,604 184,008
3,900 The Men's Wearhouse Inc. ......... 143,730 183,495
6,600 The Warnaco Group Inc.+ .......... 143,052 187,440
------------ ------------
640,958 737,885
------------ ------------
SPECIALTY CHEMICALS -- 1.0%
6,300 Tronox Inc., Cl. A ............... 96,215 90,720
------------ ------------
TELECOMMUNICATIONS -- 4.0%
13,376 General Communication Inc.,
Cl. A+ .......................... 146,472 187,264
9,300 Iowa Telecommunications
Services Inc. ................... 180,982 186,000
------------ ------------
327,454 373,264
------------ ------------
TRANSPORTATION -- 6.0%
7,700 Arlington Tankers Ltd. ........... 174,505 183,722
5,800 Genco Shipping & Trading Ltd. .... 144,836 184,324
5,700 Horizon Lines Inc., Cl. A ........ 64,454 187,074
------------ ------------
383,795 555,120
------------ ------------
TOTAL COMMON STOCKS .............. 7,318,006 8,612,112
------------ ------------
TOTAL INVESTMENTS -- 93.0% .......$ 7,318,006 8,612,112
============
OTHER ASSETS AND LIABILITIES
(NET) -- 7.0% .................................. 652,943
------------
NET ASSETS -- 100.0% ............................$ 9,265,055
============
--------------
+ Non-income producing security.
See accompanying notes to financial statements.
15
WESTWOOD INCOME FUND
SCHEDULE OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- ------
COMMON STOCKS -- 31.0%
BANKING -- 3.5%
5,900 Bank of America Corp. ............$ 285,804 $ 301,018
2,400 Citigroup Inc. ................... 128,773 123,216
------------ ------------
414,577 424,234
------------ ------------
BUSINESS SERVICES -- 2.2%
6,900 Macquarie Infrastructure Co.
Trust ........................... 209,555 271,170
------------ ------------
ENERGY AND UTILITIES: NATURAL GAS -- 3.0%
7,100 Enterprise Products Partners LP .. 184,011 225,780
4,463 Universal Compression
Partners LP ..................... 103,056 137,907
------------ ------------
287,067 363,687
------------ ------------
ENERGY AND UTILITIES: OIL -- 1.7%
4,500 BreitBurn Energy Partners LP ..... 85,068 145,665
2,100 Teekay Offshore Partners LP ...... 48,800 60,900
------------ ------------
133,868 206,565
------------ ------------
FINANCIAL SERVICES -- 1.1%
1,500 AllianceBernstein Holding LP ..... 81,824 132,750
------------ ------------
FOOD AND BEVERAGE -- 1.3%
5,095 Reddy Ice Holdings Inc. .......... 106,931 153,767
------------ ------------
HEALTH CARE -- 2.5%
12,100 Pfizer Inc. ...................... 302,940 305,646
------------ ------------
METALS AND MINING -- 1.9%
8,200 Penn Virginia Resource
Partners LP ..................... 217,482 228,780
------------ ------------
REAL ESTATE INVESTMENT TRUSTS -- 4.8%
4,300 Getty Realty Corp. ............... 118,011 123,582
8,300 Healthcare Realty Trust Inc. ..... 299,342 309,590
3,582 Rayonier Inc. .................... 139,843 154,026
------------ ------------
557,196 587,198
------------ ------------
TRANSPORTATION -- 9.0%
11,500 Arlington Tankers Ltd. ........... 251,733 274,390
20,300 Double Hull Tankers Inc. ......... 271,696 300,034
8,600 General Maritime Corp. ........... 340,909 248,368
7,300 Teekay LNG Partners LP ........... 216,369 272,363
------------ ------------
1,080,707 1,095,155
------------ ------------
TOTAL COMMON STOCKS .............. 3,392,147 3,768,952
------------ ------------
PREFERRED STOCKS -- 21.1%
BROADCASTING -- 2.5%
12,000 CBS Corp., 7.250% Pfd. ........... 304,396 302,040
------------ ------------
BROKERAGE -- 2.2%
10,300 Lehman Brothers Holdings Inc.,
6.070% Pfd., Ser. G (a) ......... 259,797 263,062
------------ ------------
MARKET
SHARES COST VALUE
------ ---- ------
FINANCIAL SERVICES -- 14.2%
12,000 Bank One Capital Trust VI,
7.200% Pfd. .....................$ 305,738 $ 305,280
10,100 Barclays Bank plc, 6.625% Pfd.,
Ser. 2 .......................... 252,500 268,155
6,000 Fannie Mae, 7.015% Pfd.,
Ser. O (a) ...................... 332,225 316,500
10,900 General Electric Capital Corp.,
5.875% Pfd. ..................... 268,650 272,173
10,100 Metlife Inc., 6.355% Pfd.,
Ser. A (a) ...................... 260,398 267,751
11,900 Wells Fargo Capital Trust IV,
7.000% Pfd. ..................... 306,100 301,189
------------ ------------
1,725,611 1,731,048
------------ ------------
REAL ESTATE INVESTMENT TRUSTS -- 2.2%
10,900 Public Storage Inc., 6.625% Pfd.,
Ser. M .......................... 272,500 269,775
------------ ------------
TOTAL PREFERRED STOCKS ........... 2,562,304 2,565,925
------------ ------------
CONVERTIBLE PREFERRED STOCKS -- 7.0%
BROKERAGE -- 2.2%
9,800 Lehman Brothers Holdings Inc.,
6.250% Cv. Pfd., Ser. GIS ....... 255,960 268,716
------------ ------------
ENERGY AND UTILITIES: INTEGRATED -- 2.4%
4,400 Entergy Corp., 7.625% Cv. Pfd. ... 221,265 285,956
------------ ------------
FINANCIAL SERVICES -- 1.2%
400 Alleghany Corp., 5.750% Cv. Pfd. . 105,840 140,150
------------ ------------
METALS AND MINING -- 1.2%
1,400 Freeport-McMoRan
Copper & Gold Inc.,
6.750% Cv. Pfd. ................. 140,612 149,674
------------ ------------
TOTAL CONVERTIBLE
PREFERRED STOCKS ................ 723,677 844,496
------------ ------------
PRINCIPAL
AMOUNT
------
CORPORATE BONDS -- 5.8%
ENERGY AND UTILITIES: OIL -- 2.5%
$300,000 Anadarko Petroleum Corp.,
5.755%, 09/15/09 (a) ............ 300,479 300,843
------------ ------------
FINANCIAL SERVICES -- 2.1%
250,000 American Express
Credit Corp., MTN,
5.480%, 06/16/11 (a) ........... 250,000 250,595
------------ ------------
METALS AND MINING -- 1.2%
140,000 Freeport-McMoRan Copper
& Gold Inc.,
8.564%, 04/01/15 (a) ........... 142,972 147,525
------------ ------------
TOTAL CORPORATE BONDS ............ 693,451 698,963
------------ ------------
See accompanying notes to financial statements.
16
WESTWOOD INCOME FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- MARCH 31, 2007 (UNAUDITED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT COST VALUE
-------- ---- -------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 13.5%
FEDERAL HOME LOAN BANK -- 5.7%
$375,000 4.625%, 01/18/08 ................$ 373,493 $ 373,550
325,000 5.125%, 06/18/08 ................ 325,322 325,565
------------ ------------
698,815 699,115
------------ ------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 7.8%
250,000 5.250%++, 05/11/07 .............. 248,619 248,619
350,000 4.250%, 07/15/07 ................ 349,080 349,001
350,000 3.250%, 11/15/07 ................ 345,754 345,894
------------ ------------
943,453 943,514
------------ ------------
TOTAL U.S. GOVERNMENT
AGENCY OBLIGATIONS .............. 1,642,268 1,642,629
------------ ------------
U.S. GOVERNMENT OBLIGATIONS -- 16.8%
U.S. TREASURY NOTES -- 16.8%
275,000 3.750%, 03/31/07 ................ 275,000 275,000
300,000 3.125%, 05/15/07 ................ 299,545 299,545
275,000 3.625%, 06/30/07 ................ 274,055 274,108
350,000 4.250%, 10/31/07 ................ 348,482 348,578
200,000 3.375%, 02/15/08 ................ 197,073 197,399
325,000 4.875%, 04/30/08 ................ 324,660 325,064
325,000 4.875%, 05/31/08 ................ 325,178 325,254
------------ ------------
2,043,993 2,044,948
------------ ------------
TOTAL U.S.
GOVERNMENT OBLIGATIONS .......... 2,043,993 2,044,948
------------ ------------
TOTAL INVESTMENTS -- 95.2% .......$ 11,057,840 11,565,913
============
OTHER ASSETS AND LIABILITIES
(NET) -- 4.8% .................................. 586,014
------------
NET ASSETS -- 100.0% ............................$ 12,151,927
============
- --------------
(a) Floating rate security. The rate disclosed is that in effect at March 31,
2007.
++ Represents annualized yield at date of purchase.
MTN Medium Term Note
See accompanying notes to financial statements.
17
THE WESTWOOD FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 2007 (UNAUDITED)
- --------------------------------------------------------------------------------
MIGHTY EQUITY BALANCED INTERMEDIATE SMALLCAP INCOME
MITES(SM) FUND FUND FUND BOND FUND EQUITY FUND FUND
-------------- ----------- ------------ ------------ ------------ ------------
ASSETS:
Investments, at value (cost $26,086,117,
$156,782,518, $139,405,680, $8,846,185,
$7,318,006, and $11,057,840,
respectively) ............................ $39,562,000 $182,026,671 $151,497,162 $8,859,590 $ 8,612,112 $11,565,913
Cash ........................................ 949 1,159,991 1,404,493 279,577 -- 1,436,576
Receivable for investments sold ............. 43,258 7,451,191 2,492,010 -- 2,311,762 --
Receivable for Fund shares sold ............. 250 279,074 108,397 6,020 6,718 739
Dividends and interest receivable ........... 46,022 231,409 778,142 98,569 17,455 62,710
Receivable from Adviser ..................... -- -- -- 2,591 -- --
Prepaid expense ............................. 2,088 5,873 5,094 1,341 4,609 1,391
----------- ------------ ------------ ---------- ----------- -----------
TOTAL ASSETS ................................ 39,654,567 191,154,209 156,285,298 9,247,688 10,952,656 13,067,329
----------- ------------ ------------ ---------- ----------- -----------
LIABILITIES:
Payable for investments purchased ........... 104,039 4,640,249 2,298,565 -- 114,483 886,249
Payable for Fund shares redeemed ............ 1,900 81,986 80,441 3,242 17,685 6,079
Distributions payable ....................... -- 156 -- 6,788 -- --
Payable for investment advisory fees ........ 33,918 161,523 100,718 -- 4,846 4,140
Payable for distribution fees ............... 9,020 41,310 35,516 2,136 2,732 2,494
Payable for legal and audit fees ............ 3,954 62,948 52,592 6,219 5,941 351
Payable for shareholder
communications expenses .................. 12,772 33,455 25,450 2,348 3,029 4,788
Payable for shareholder services fees ....... 15,080 36,934 36,121 5,592 3,868 5,523
Payable to custodian ........................ -- -- -- -- 1,534,813 --
Other accrued expenses ...................... 4,429 7,589 13,429 4,484 204 5,778
----------- ------------ ------------ ---------- ----------- -----------
TOTAL LIABILITIES ........................... 185,112 5,066,150 2,642,832 30,809 1,687,601 915,402
----------- ------------ ------------ ---------- ----------- -----------
NET ASSETS .................................. $39,469,455 $186,088,059 $153,642,466 $9,216,879 $ 9,265,055 $12,151,927
=========== ============ ============ ========== =========== ===========
NET ASSETS CONSIST OF:
Paid-in capital, at
$0.001 par value .......................... $23,244,824 $148,631,959 $136,045,175 $9,249,045 $15,013,559 $11,287,977
Accumulated net investment income (loss) .... 48,339 132,051 4,475 (6,735) (3,258) 58,163
Accumulated net realized gain
(loss) on investments
and foreign currency transactions ........ 2,700,037 12,079,896 5,501,334 (38,836) (7,039,352) 297,714
Net unrealized appreciation/
(depreciation) on investments ............ 13,475,883 25,244,153 12,091,482 13,405 1,294,106 508,073
Net unrealized appreciation on foreign
currency translations .................... 372 -- -- -- -- --
----------- ------------ ------------ ---------- ----------- -----------
NET ASSETS .................................. $39,469,455 $186,088,059 $153,642,466 $9,216,879 $ 9,265,055 $12,151,927
=========== ============ ============ ========== =========== ===========
SHARES OF BENEFICIAL INTEREST:
CLASS AAA:
Net assets .................................. $38,626,989 $182,551,288 $146,983,122 $8,999,751 $ 8,428,054 $12,063,463
=========== ============ ============ ========== =========== ===========
Shares of beneficial
interest outstanding;
unlimited number of
shares authorized ........................ 2,379,240 15,972,799 12,461,147 831,662 579,171 1,169,222
========= ========== ========== ======= ======= =========
NET ASSET VALUE, offering
and redemption
price per share .......................... $16.24 $11.43 $11.80 $10.82 $14.55 $10.32
====== ====== ====== ====== ====== ======
CLASS A:
Net assets .................................. $4,382 $3,157,031 $5,535,095 $58,815 $536,737 $68,617
====== ========== ========== ======= ======== =======
Shares of beneficial
interest outstanding;
unlimited number of
shares authorized ........................ 271.5 277,317 467,378 5,435 37,079 6,447
===== ======= ======= ===== ====== =====
NET ASSET VALUE and
redemption price
per share ................................ $16.14 $11.38 $11.84 $10.82 $14.48 $10.64
====== ====== ====== ====== ====== ======
Maximum offering price per
share (NAV / .96,
based on maximum sales
charge of 4.00%
of the offering price) ................... $16.81 $11.85 $12.33 $11.27 $15.08 $11.08
====== ====== ====== ====== ====== ======
CLASS B:
Net assets .................................. $502,805 $29,979 $184,105 $158,215 $7,097 $2,277
======== ======= ======== ======== ====== ======
Shares of beneficial
interest outstanding;
unlimited number of
shares authorized ........................ 32,457 2,671 15,435 14,626 504.6 209.33
====== ===== ====== ====== ===== ======
NET ASSET VALUE and offering
price per share (a) ...................... $15.49 $11.22 $11.93 $10.82 $14.06 $10.88
====== ====== ====== ====== ====== ======
CLASS C:
Net assets .................................. $335,279 $349,761 $940,144 $98.4 $293,167 $17,570
======== ======== ======== ===== ======== =======
Shares of beneficial
interest outstanding;
unlimited number of
shares authorized ........................ 21,765 31,173 78,686 9.63 21,030 1,550.20
====== ====== ====== ==== ====== ========
NET ASSET VALUE and offering
price per share (a) ...................... $15.40 $11.22 $11.95 $10.22 $13.94 $11.33
====== ====== ====== ====== ====== ======
- --------------------
(a) Redemption price varies based on the length of time held.
See accompanying notes to financial statements.
18
THE WESTWOOD FUNDS
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED MARCH 31, 2007 (UNAUDITED)
- --------------------------------------------------------------------------------
MIGHTY EQUITY BALANCED INTERMEDIATE SMALLCAP INCOME
MITES(SM) FUND FUND FUND BOND FUND EQUITY FUND FUND
-------------- ----------- ------------ ------------ ------------ ------------
INVESTMENT INCOME:
Dividends (net of foreign
taxes of $237, $528,
$585, $0, $0, and $0,
respectively) .......................... $ 266,393 $ 1,618,671 $ 812,877 -- $ 75,131 $ 297,813
Interest .................................. 6,552 38,612 1,456,851 $ 219,288 -- 106,835
------------ ------------ ------------ ------------ ------------ ------------
TOTAL INVESTMENT INCOME ................... 272,945 1,657,283 2,269,728 219,288 75,131 404,648
------------ ------------ ------------ ------------ ------------ ------------
EXPENSES:
Investment advisory fees .................. 191,024 924,395 583,353 28,726 51,072 57,748
Distribution fees - Class AAA ............. 46,744 226,882 185,844 11,638 11,815 14,305
Distribution fees - Class A ............... 10 7,506 14,225 132 1,197 216
Distribution fees - Class B ............... 2,422 159 886 947 34 11
Distribution fees - Class C ............... 1,606 1,696 5,093 1 1,384 85
Accounting fees ........................... -- 22,625 22,625 -- -- --
Custodian fees ............................ 16,719 49,456 48,298 4,692 12,972 11,523
Interest expense .......................... 1,436 -- -- -- -- --
Legal and audit fees ...................... 17,855 51,824 45,211 10,444 10,364 11,100
Registration expenses ..................... 11,754 20,057 18,969 15,464 14,541 18,181
Shareholder communications expenses ....... 8,950 20,870 16,814 1,258 1,830 2,623
Shareholder services fees ................. 18,963 85,773 59,832 6,501 7,036 7,516
Trustees' fees ............................ 1,117 5,435 4,543 297 282 358
Miscellaneous expenses .................... 4,454 10,113 9,058 3,891 2,451 2,481
------------ ------------ ------------ ------------ ------------ ------------
TOTAL EXPENSES ............................ 323,054 1,426,791 1,014,751 83,991 114,978 126,147
------------ ------------ ------------ ------------ ------------ ------------
LESS:
Expense reimbursements (see Note 3) .... -- -- -- (31,702) (23,980) (28,068)
Custodian fee credits .................. (38) (49,219) (47,931) (3,664) (12,728) (11,277)
------------ ------------ ------------ ------------ ------------ ------------
TOTAL REIMBURSEMENTS AND CREDITS .......... (38) (49,219) (47,931) (35,366) (36,708) (39,345)
------------ ------------ ------------ ------------ ------------ ------------
NET EXPENSES .............................. 323,016 1,377,572 966,820 48,625 78,270 86,802
------------ ------------ ------------ ------------ ------------ ------------
NET INVESTMENT INCOME (LOSS) .............. (50,071) 279,711 1,302,908 170,663 (3,139) 317,846
------------ ------------ ------------ ------------ ------------ ------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY:
Net realized gain (loss) on investments ... 3,395,771 14,040,307 5,737,379 (9,343) 1,236,407 401,540
Net realized gain (loss) on foreign
currency transactions .................. 12 (41) -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Net realized gain (loss) on investments and
foreign currency transactions .......... 3,395,783 14,040,266 5,737,379 (9,343) 1,236,407 401,540
------------ ------------ ------------ ------------ ------------ ------------
Net change in unrealized appreciation/
depreciation on investments ............ 2,992,525 27,517 1,315,391 21,300 360,963 262,934
Net change in unrealized appreciation/
depreciation on foreign currency
translations ........................... 191 -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Net change in unrealized appreciation/
depreciation on investments and
foreign currency translations .......... 2,992,716 27,517 1,315,391 21,300 360,963 262,934
------------ ------------ ------------ ------------ ------------ ------------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS AND FOREIGN CURRENCY .... 6,388,499 14,067,783 7,052,770 11,957 1,597,370 664,474
------------ ------------ ------------ ------------ ------------ ------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ........................ $ 6,338,428 $ 14,347,494 $ 8,355,678 $ 182,620 $ 1,594,231 $ 982,320
============ ============ ============ ============ ============ ============
See accompanying notes to financial statements.
19
THE WESTWOOD FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
MITES(SM) FUND EQUITY FUND
--------------------------------- ---------------------------------
FOR THE SIX FOR THE FOR THE SIX FOR THE
MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED
MARCH 31, 2007 SEPTEMBER 30, MARCH 31, 2007 SEPTEMBER 30,
(UNAUDITED) 2006 (UNAUDITED) 2006
------------- ------------- ------------- -------------
OPERATIONS:
Net investment income (loss) ........................ $ (50,071) $ (125,865) $ 279,711 $ 1,000,235
Net realized gain on investments and foreign
currency transactions ............................ 3,395,783 5,570,818 14,040,266 31,162,114
Net change in unrealized appreciation/depreciation on
investments and foreign currency translations .... 2,992,716 (1,883,665) 27,517
(8,918,553)
------------- ------------- ------------- -------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 6,338,428 3,561,288 14,347,494 23,243,796
------------- ------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income
Class AAA ........................................ -- -- (737,096) (782,257)
Class A .......................................... -- -- (4,914) (14,014)
Class B .......................................... -- -- -- (77)
Class C .......................................... -- -- -- (619)
------------- ------------- ------------- -------------
-- -- (742,010) (796,967)
------------- ------------- ------------- -------------
Net realized gain on investments
Class AAA ........................................ (5,192,410) (5,443,979) (28,093,088) --
Class A .......................................... (567) (5,023) (451,192) --
Class B .......................................... (72,032) (53,095) (5,227) --
Class C .......................................... (45,682) (35,532) (52,506) --
------------- ------------- ------------- -------------
(5,310,691) (5,537,629) (28,602,013) --
------------- ------------- ------------- -------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS ................. (5,310,691) (5,537,629) (29,344,023) (796,967)
------------- ------------- ------------- -------------
SHARES OF BENEFICIAL INTEREST TRANSACTIONS:
Proceeds from shares issued
Class AAA ........................................ 1,015,507 2,461,715 25,012,428 33,121,467
Class A .......................................... 144 1,008 259,201 1,707,348
Class B .......................................... -- -- -- --
Class C .......................................... -- 2,900 14,073 268,288
------------- ------------- ------------- -------------
1,015,651 2,465,623 25,285,702 35,097,103
------------- ------------- ------------- -------------
Proceeds from reinvestment of distributions
Class AAA ........................................ 4,658,234 5,123,877 27,658,190 726,922
Class A .......................................... 546 5,005 451,853 9,432
Class B .......................................... 71,845 52,941 3,906 41
Class C .......................................... 45,659 35,514 51,834 619
------------- ------------- ------------- -------------
4,776,284 5,217,337 28,165,783 737,014
------------- ------------- ------------- -------------
Cost of shares redeemed
Class AAA ........................................ (4,905,179) (15,297,041) (24,783,241) (64,882,159)
Class A .......................................... -- (39,730) (107,352) (1,573,899)
Class B .......................................... (26,688) (15,709) (3,000) (1,442)
Class C .......................................... (27,748) (43,008) (5,319) (131,911)
------------- ------------- ------------- -------------
(4,959,615) (15,395,488) (24,898,912) (66,589,411)
------------- ------------- ------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS FROM
SHARES OF BENEFICIAL INTEREST TRANSACTIONS ....... 832,320 (7,712,528) 28,552,573 (30,755,294)
------------- ------------- ------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS ............... 1,860,057 (9,688,869) 13,556,044 (8,308,465)
NET ASSETS:
Beginning of period ................................. 37,609,398 47,298,267 172,532,015 180,840,480
------------- ------------- ------------- -------------
End of period ....................................... $ 39,469,455 $ 37,609,398 $ 186,088,059 $ 172,532,015
============= ============= ============= =============
Undistributed net investment income ................. $ 48,339 $ 98,410 $ 132,051 $ 594,350
============= ============= ============= =============
See accompanying notes to financial statements.
20
THE WESTWOOD FUNDS
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
BALANCED FUND INTERMEDIATE BOND FUND
--------------------------------- ---------------------------------
FOR THE SIX FOR THE FOR THE SIX FOR THE
MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED
MARCH 31, 2007 SEPTEMBER 30, MARCH 31, 2007 SEPTEMBER 30,
(UNAUDITED) 2006 (UNAUDITED) 2006
------------- ------------- ------------- -------------
OPERATIONS:
Net investment income (loss) ....................... $ 1,302,908 $ 2,651,377 $ 170,663 $ 389,137
Net realized gain (loss) on investments ............ 5,737,379 19,456,154 (9,343) (12,289)
Net change in unrealized appreciation/depreciation
on investments .................................. 1,315,391 (7,798,557) 21,300 (90,810)
------------- ------------- ------------- -------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 8,355,678 14,308,974 182,620 286,038
------------- ------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income
Class AAA ....................................... (1,254,121) (2,709,658) (172,762) (373,401)
Class A ......................................... (40,835) (67,539) (1,366) (5,320)
Class B ......................................... (911) (454) (2,802) (10,351)
Class C ......................................... (4,566) (2,979) (3) (65)
------------- ------------- ------------- -------------
(1,300,433) (2,780,630) (176,933) (389,137)
------------- ------------- ------------- -------------
Net realized gain on investments
Class AAA ....................................... (18,214,060) (9,760,439) -- (14,113)
Class A ......................................... (697,805) (364,172) -- (241)
Class B ......................................... (22,753) (9,202) -- (665)
Class C ......................................... (127,276) (61,573) -- --*
------------- ------------- ------------- -------------
(19,061,894) (10,195,386) -- (15,019)
------------- ------------- ------------- -------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS ................ (20,362,327) (12,976,016) (176,933) (404,156)
------------- ------------- ------------- -------------
SHARES OF BENEFICIAL INTEREST TRANSACTIONS:
Proceeds from shares issued
Class AAA ....................................... 14,951,121 27,845,576 315,177 2,310,376
Class A ......................................... 207,365 795,329 -- 168,497
Class B ......................................... 43,323 3,171 -- 137,989
Class C ......................................... 98,840 103,367 -- 53,292
------------- ------------- ------------- -------------
15,300,649 28,747,443 315,177 2,670,154
------------- ------------- ------------- -------------
Proceeds from reinvestment of distributions
Class AAA ....................................... 18,733,748 11,833,526 135,272 329,870
Class A ......................................... 647,159 388,820 1,333 5,414
Class B ......................................... 15,346 8,142 606 5,372
Class C ......................................... 104,955 52,080 -- --
------------- ------------- ------------- -------------
19,501,208 12,282,568 137,211 340,656
------------- ------------- ------------- -------------
Cost of shares redeemed
Class AAA ....................................... (20,256,002) (40,477,393) (1,373,256) (2,883,978)
Class A ......................................... (477,743) (1,305,055) (34,365) (138,752)
Class B ......................................... -- (11,401) (124,890) (235,964)
Class C ......................................... (129,507) (208,504) -- (53,344)
------------- ------------- ------------- -------------
(20,863,252) (42,002,353) (1,532,511) (3,312,038)
------------- ------------- ------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS FROM
SHARES OF BENEFICIAL INTEREST TRANSACTIONS ...... 13,938,605 (972,342) (1,080,123) (301,228)
------------- ------------- ------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS .............. 1,931,956 360,616 (1,074,436) (419,346)
NET ASSETS:
Beginning of period ................................ 151,710,510 151,349,894 10,291,315 10,710,661
------------- ------------- ------------- -------------
End of period ...................................... $ 153,642,466 $ 151,710,510 $ 9,216,879 $ 10,291,315
============= ============= ============= =============
Undistributed net investment income ................ $ 4,475 $ 2,000 $ -- $ --
============= ============= ============= =============
- ------------------
* Amount represents less than $1.00.
See accompanying notes to financial statements.
21
THE WESTWOOD FUNDS
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
SMALLCAP EQUITY FUND INCOME FUND
--------------------------------- ---------------------------------
FOR THE SIX FOR THE FOR THE SIX FOR THE
MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED
MARCH 31, 2007 SEPTEMBER 30, MARCH 31, 2007 SEPTEMBER 30,
(UNAUDITED) 2006 (UNAUDITED) 2006
------------- ------------- ------------- -------------
OPERATIONS:
Net investment income (loss) ....................... $ (3,139) $ 112,195 $ 317,846 $ 600,887
Net realized gain on investments ................... 1,236,407 1,048,122 401,540 2,485,605
Net change in unrealized appreciation/depreciation
on investments .................................. 360,963 (156,440) 262,934 (2,698,672)
------------ ------------ ------------ ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 1,594,231 1,003,877 982,320 387,820
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income
Class AAA ....................................... (105,452) -- (269,447) (415,259)
Class A ......................................... (4,971) -- (1,614) (2,324)
Class B ......................................... (19) -- (44) (23)
Class C ......................................... (1,872) -- (323) (162)
------------ ------------ ------------ ------------
(112,314) -- (271,428) (417,768)
------------ ------------ ------------ ------------
Net realized gains on investments
Class AAA ....................................... -- -- (2,261,447) (4,124,003)
Class A ......................................... -- -- (20,488) (24,170)
Class B ......................................... -- -- (415) (544)
Class C ......................................... -- -- (3,062) (3,976)
------------ ------------ ------------ ------------
-- -- (2,285,412) (4,152,693)
------------ ------------ ------------ ------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS ................ (112,314) -- (2,556,840) (4,570,461)
------------ ------------ ------------ ------------
SHARES OF BENEFICIAL INTEREST TRANSACTIONS:
Proceeds from shares issued
Class AAA ....................................... 2,014,271 2,726,239 2,018,813 4,386,990
Class A ......................................... 132,635 278,007 6,865 288
Class B ......................................... -- -- -- --
Class C ......................................... 25,511 225,481 -- --
------------ ------------ ------------ ------------
2,172,417 3,229,727 2,025,678 4,387,278
------------ ------------ ------------ ------------
Proceeds from reinvestment of distributions
Class AAA ....................................... 77,961 -- 2,406,727 4,301,518
Class A ......................................... 4,969 -- 20,659 26,449
Class B ......................................... 18 -- 431 520
Class C ......................................... 1,871 -- 3,357 4,093
------------ ------------ ------------ ------------
84,819 -- 2,431,174 4,332,580
------------ ------------ ------------ ------------
Cost of shares redeemed
Class AAA ....................................... (3,753,958) (3,680,038) (2,858,591) (8,661,378)
Class A ......................................... (71,524) (26,885) (40,751) --
Class B ......................................... -- (5,461) -- --
Class C ......................................... (12,900) -- -- --
------------ ------------ ------------ ------------
(3,838,382) (3,712,384) (2,899,342) (8,661,378)
------------ ------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS FROM
SHARES OF BENEFICIAL INTEREST TRANSACTIONS ...... (1,581,146) (482,657) 1,557,510 58,480
------------ ------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS .............. (99,229) 521,220 (17,010) (4,124,161)
NET ASSETS:
Beginning of period ................................ 9,364,284 8,843,064 12,168,937 16,293,098
------------ ------------ ------------ ------------
End of period ...................................... $ 9,265,055 $ 9,364,284 $ 12,151,927 $ 12,168,937
============ ============ ============ ============
Undistributed net investment income ................ $ -- $ 112,195 $ 58,163 $ 11,745
============ ============ ============ ============
See accompanying notes to financial statements.
22
THE WESTWOOD FUNDS
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
1. ORGANIZATION. The Westwood Funds, formerly the Gabelli Westwood Funds, (the
"Trust") was organized as a Massachusetts business trust on June 12, 1986. The
Trust is registered under the Investment Company Act of 1940, as amended (the
"1940 Act"), as a diversified open-end management investment company and
currently consists of six active separate investment portfolios: Mighty
Mites(SM) Fund, Equity Fund, Balanced Fund, Intermediate Bond Fund, SmallCap
Equity Fund, and Income Fund (individually, a "Fund" and collectively, the
"Funds"), each with four classes of shares outstanding. Each class of shares
outstanding bears the same voting, dividend, liquidation, and other rights and
conditions, except that the expenses incurred in the distribution and marketing
of such shares are different for each class. Prior to July 18, 2005, the
Westwood Income Fund's name was Westwood Realty Fund.
Effective July 1, 2007, the name of the Trust will change to the GAMCO
Westwood Funds and the name of each of the individual funds will become: GAMCO
Westwood Mighty Mites(SM) Fund, GAMCO Westwood Equity Fund, GAMCO Westwood
Balanced Fund, GAMCO Westwood Intermediate Bond Fund, GAMCO Westwood SmallCap
Equity Fund, and GAMCO Westwood Income Fund.
The investment objectives of each Fund are as follows:
o Mighty Mites(SM) Fund seeks to provide long-term capital appreciation by
investing primarily in micro-capitalization equity securities.
o Equity Fund seeks to provide capital appreciation. The Fund's secondary goal
is to produce current income.
o Balanced Fund seeks to provide capital appreciation and current income
resulting in a high total investment return consistent with prudent investment
risk and a balanced investment approach.
o Intermediate Bond Fund seeks to maximize total return, while maintaining a
level of current income consistent with the maintenance of principal and
liquidity.
o SmallCap Equity Fund seeks to provide long-term capital appreciation by
investing primarily in smaller capitalization equity securities.
o Income Fund seeks to provide a high level of current income as well as
long-term capital appreciation by investing primarily in income producing
equity and fixed income securities.
2. SIGNIFICANT ACCOUNTING POLICIES. The preparation of financial statements in
accordance with United States ("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 Funds in the preparation of their 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 Advisers, Inc. (the "Adviser").
23
THE WESTWOOD FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
Portfolio securities primarily traded on a foreign market are generally valued
at the preceding closing values of such securities on the relevant market, but
may be fair valued pursuant to procedures established by the Board if market
conditions change significantly after the close of the foreign market but prior
to the close of business on the day the securities are being valued. 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 fair valued 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
fair valued as determined by 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.
In September 2006, the Financial Accounting Standards Board (the "FASB") issued
Statement of Financial Accounting Standards ("SFAS") 157, Fair Value
Measurements, which clarifies the definition of fair value and requires
companies to expand their disclosure about the use of fair value to measure
assets and liabilities in interim and annual periods subsequent to initial
recognition. Adoption of SFAS 157 requires the use of the price that would be
received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. SFAS 157 is
effective for financial statements issued for fiscal years beginning after
November 15, 2007, and interim periods within those fiscal years. At this time,
management is in the process of reviewing the requirements of SFAS 157 against
its current valuation policies to determine future applicability.
ACCOUNTING FOR REAL ESTATE INVESTMENT TRUSTS. The Mighty Mites(SM), Balanced,
SmallCap Equity, and Income Funds own shares of Real Estate Investment Trusts
("REITS") which report information on the source of their distributions
annually. Distributions received from REITS during the year which represent a
return of capital are recorded as a reduction to the cost of the individual REIT
and distributions which represent a capital gain dividend are recorded as a
realized long-term capital gain on investments.
SECURITIES SOLD SHORT. The Mighty Mites(SM) Fund may enter into short sale
transactions. Short selling involves selling securities that may or may not be
owned and, at times, borrowing the same securities for delivery to the
purchaser, with an obligation to replace such borrowed securities at a later
date. The proceeds received from short sales are recorded as liabilities and the
Mighty Mites(SM) Fund records an unrealized gain or loss to the extent of the
difference between the proceeds received and the value of an open short position
on the day of determination. The Mighty Mites(SM) Fund records a realized gain
or loss when the short position is closed out. By entering into a short sale,
the Mighty Mites(SM) Fund bears the market risk of an unfavorable change in the
price of the security sold short. Dividends on short sales are recorded as an
expense by the Mighty Mites(SM) Fund on the ex-dividend date and interest
expense is recorded on the accrual basis. The Mighty Mites(SM) Fund did not hold
any short positions as of March 31, 2007.
FOREIGN CURRENCY TRANSLATIONS. The books and records of the Funds are maintained
in U.S. dollars. Foreign currencies, investments, and other assets and
liabilities are translated into U.S. dollars at the current exchange rates.
Purchases and sales of investment securities, income, and expenses are
translated at the exchange rate prevailing on the respective dates
24
THE WESTWOOD FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
of such transactions. Unrealized gains and losses that result from changes in
foreign exchange rates and/or changes in market prices of securities have been
included in unrealized appreciation/depreciation on investments and foreign
currency translations. Net realized foreign currency gains and losses resulting
from changes in exchange rates include foreign currency gains and losses between
trade date and settlement date on investment securities transactions, foreign
currency transactions, and the difference between the amounts of interest and
dividends recorded on the books of the Funds and the amounts actually received.
The portion of foreign currency gains and losses related to fluctuation in
exchange rates between the initial trade date and subsequent sale trade date is
included in realized gain/(loss) on investments.
FOREIGN SECURITIES. The Funds 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 Funds may be subject to foreign taxes on income, gains on
investments, or currency repatriation, a portion of which may be recoverable.
The Funds will accrue such taxes and recoveries as applicable, based upon their
current interpretation of tax rules and regulations that exist in the markets in
which they invest.
RESTRICTED AND ILLIQUID SECURITIES. Each Fund may invest up to 10% (except for
the Mighty Mites(SM) Fund, SmallCap Equity Fund, and Income Fund which may
invest up to 15%) of its net assets in restricted securities issued under
Section 4(2) of the Securities Act of 1933, as amended. Illiquid securities
include securities the disposition of which is subject to substantial legal or
contractual restrictions. The sale of illiquid securities often requires more
time and results in higher brokerage charges or dealer discounts and other
selling expenses than does the sale of securities eligible for trading on
national securities exchanges or in the over-the-counter markets. Restricted
securities may sell at a price lower than similar securities that are not
subject to restrictions on resale. Rule 144A securities freely saleable among
qualified institutional investors under special rules adopted by the SEC may be
treated as liquid if they satisfy liquidity standards established by the Board.
The continued liquidity of such securities is not as well assured as that of
publicly traded securities, and accordingly the Board will monitor their
liquidity.
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
effective yield to maturity method. Dividend income is recorded on the
ex-dividend date except for certain dividends which are recorded as soon as the
Funds are 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 the 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.
25
THE WESTWOOD FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
CUSTODIAN FEE CREDITS AND INTEREST EXPENSE. When cash balances are maintained in
a Fund's custody account, the Fund receives credits which are used to offset
custodian fees. The gross expenses paid under each custody arrangement are
included in custodian fees in the Statement of Operations with the corresponding
expense offset, if any, shown as "custodian fee credits". When cash balances are
overdrawn, the Fund is charged an overdraft fee equal to 90% of the current
Treasury Bill rate. This amount, if any, is shown as "interest expense" in the
Statement of Operations.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions from net investment income are
declared and paid annually for the Mighty Mites(SM), Equity, and SmallCap Equity
Funds, and quarterly for the Balanced and Income Funds. The Intermediate Bond
Fund declares dividends daily and pays those dividends monthly. Distributions of
net realized gain on investments are normally declared and paid at least
annually by each Fund. Distributions to shareholders are recorded on the
ex-dividend date. Distributions to shareholders are based on income and 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 and foreign
currency transactions held by the Funds, timing differences, and differing
characterizations of distributions made by the Funds. Distributions from net
investment income include net realized gains on foreign currency transactions.
These book/tax differences are either temporary or permanent in nature. To the
extent these differences are permanent, adjustments are made to the appropriate
capital accounts in the period when the differences arise. These
reclassifications have no impact on the NAV of the Funds.
The tax character of distributions paid during the fiscal year ended September
30, 2006 was as follows:
MIGHTY INTERMEDIATE SMALLCAP
MITES(SM) EQUITY BALANCED BOND EQUITY INCOME
FUND FUND FUND FUND FUND FUND
---------- -------- ----------- -------- -------- ----------
Ordinary income
(inclusive of
short-term capital gains) ....... -- $796,967 $ 3,260,752 $397,787 -- $ 522,331
Net long-term capital gains ....... $5,537,629 -- 9,715,264 6,369 -- 4,048,130
---------- -------- ----------- -------- -------- ----------
Total distributions paid .......... $5,537,629 $796,967 $12,976,016 $404,156 -- $4,570,461
========== ======== =========== ======== ======== ==========
PROVISION FOR INCOME TAXES. The Funds intend to continue to qualify as regulated
investment companies under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"). It is the policy of the Funds to comply with the
requirements of the Code applicable to regulated investment companies and to
distribute substantially all of the Funds' net investment company taxable income
and net capital gains. Therefore, no provision for Federal income taxes is
required.
The following summarizes capital loss carryforwards and expiration dates for
each Fund at September 30, 2006:
MIGHTY INTERMEDIATE SMALLCAP
MITES(SM) EQUITY BALANCED BOND EQUITY INCOME
EXPIRING IN FISCAL YEAR FUND FUND FUND FUND FUND FUND
- ----------------------- ---------- -------- ----------- -------- -------- ----------
2010 ..................... -- -- -- -- $3,418,946 --
2011 ..................... -- -- -- -- 4,845,486 --
2012 ..................... -- -- -- -- -- --
2013 ..................... -- -- -- -- -- --
2014 ..................... -- -- -- $3,903 -- --
26
THE WESTWOOD FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
These capital loss carryforwards are available to reduce future required
distributions of net capital gains to shareholders.
Under the current tax law, capital losses related to securities realized after
October 31 and prior to the Funds' fiscal year end may be treated as occurring
on the first day of the following year. For the fiscal year ended September 30,
2006, the Mighty Mites(SM) Fund and Intermediate Bond Fund deferred capital
losses of $3,281 and $8,386, respectively.
The following summarizes the tax cost of investments and the related unrealized
appreciation/(depreciation) at March 31, 2007:
MIGHTY INTERMEDIATE SMALLCAP
MITES(SM) EQUITY BALANCED BOND EQUITY INCOME
FUND FUND FUND FUND FUND FUND
---------- -------- ----------- -------- -------- ----------
Aggregate cost of investments $26,151,271 $156,935,407 $139,451,807 $8,846,185 $7,342,168 $11,059,287
=========== ============ ============ ========== ========== ===========
Gross unrealized appreciation $16,015,501 $ 25,923,671 $ 12,796,378 $ 109,021 $1,362,675 $ 632,425
Gross unrealized depreciation (2,604,772) (832,407) (751,023) (95,616) (92,731) (125,799)
----------- ------------ ------------ ---------- ---------- -----------
Net unrealized appreciation $13,410,729 $ 25,091,264 $ 12,045,355 $ 13,405 $1,269,944 $ 506,626
=========== ============ ============ ========== ========== ===========
In July 2006, the FASB issued Interpretation No. 48, "Accounting for Uncertainty
in Income Taxes, an Interpretation of FASB Statement No. 109" ("the
Interpretation"). The Interpretation establishes for all entities, including
pass-through entities such as the Funds, a minimum threshold for financial
statement recognition of the benefit of positions taken in filing tax returns
(including whether an entity is taxable in a particular jurisdiction), and
requires certain expanded tax disclosures. The Interpretation is required to be
implemented for the Funds no later than its March 31, 2008 NAV, and is to be
applied to all open tax years as of the date of effectiveness. Management is
evaluating the application of the Interpretation to the Funds, and is not in a
position at this time to estimate the significance of its impact, if any, on the
Funds' financial statements.
3. INVESTMENT ADVISORY AGREEMENTS AND OTHER TRANSACTIONS. The Funds have entered
into an investment advisory agreement (the "Advisory Agreement") with the
Adviser which provides that the Funds will pay the Adviser a fee, computed daily
and paid monthly, at the annual rate of 1.00% for the Mighty Mites(SM), Equity,
SmallCap Equity, and Income Funds, 0.75% for the Balanced Fund, and 0.60% for
the Intermediate Bond Fund, of the value of the Fund's average daily net assets.
In accordance with the Advisory Agreement, the Adviser provides a continuous
investment program for the Funds' portfolios, oversees the administration of all
aspects of the Funds' business and affairs, and pays the compensation of all
Officers and Trustees of the Funds who are affiliated persons of the Adviser.
The Adviser has contractually agreed to waive investment advisory fees and/or to
reimburse expenses to the Intermediate Bond, SmallCap Equity, and Income Funds
in the event annual expenses of such Funds exceed certain prescribed limits.
Such fee waiver/reimbursement arrangement will continue until at least September
30, 2007. The reimbursement agreement ended on September 30, 2005 for the Mighty
Mites(SM) Fund. For the six months ended March 31, 2007, the Adviser waived fees
or reimbursed expenses in the amounts of $31,702, $23,980, and $28,068 for the
Intermediate Bond, SmallCap Equity, and Income Funds, respectively.
27
THE WESTWOOD FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
The Intermediate Bond, SmallCap Equity, and Income Funds are obliged to repay
the Adviser for a period of two fiscal years following the fiscal year in which
the Adviser reimbursed the Funds only to the extent that the operating expenses
of the Funds fall below the applicable expense limitation for Class AAA of
1.00%, 1.50%, and 1.50%, respectively, and for Class A of 1.10%, 1.75%, and
1.75%, respectively, and for Class B and Class C of 1.75%, 2.25%, and 2.25%,
respectively of average daily net assets, the annual limitation under the
Advisory Agreement. If the Mighty Mites(SM) Fund's expense ratio for the fiscal
year ending September 30, 2007, is less than its prior expense cap of 1.50%,
1.75%, 2.25% and 2.25% for Class AAA, Class A, Class B, and Class C Shares,
respectively, the Fund will repay the Adviser for any amounts which are under
the limits for the respective Class(es) up to the amount the Adviser reimbursed
the Fund in the fiscal year ended September 30, 2005. As of March 31, 2007, the
cumulative unreimbursed amounts which may be recovered by the Adviser within the
next two fiscal years are $118,942, $160,589, $135,754, and $215,623 for the
Mighty Mites(SM), Intermediate Bond, SmallCap Equity, and Income Funds,
respectively.
The Adviser has entered into a Sub-Advisory Agreement with Westwood Management
Corp. (the "Sub-Adviser") for all Funds except the Mighty Mites(SM) Fund, for
which there is not a Sub-Advisory agreement. The Adviser pays the Sub-Adviser
out of its advisory fees with respect to the Funds (except the Mighty Mites(SM)
Fund) a fee computed daily and payable monthly, in an amount equal on an
annualized basis to the greater of (i) $150,000 per year on an aggregate basis
for all applicable Funds or (ii) 35% of the net revenues to the Adviser from the
applicable Funds. For the six months ended March 31, 2007, the Adviser informed
the Funds that it paid collectively to the Sub-Adviser fees of $414,205 for the
Equity, Balanced, Intermediate Bond, SmallCap Equity, and Income Funds.
On May 1, 2007, the Trust informed the Sub-Adviser that the Trust had elected to
terminate the Sub-Advisory Agreement with respect to the Westwood SmallCap
Equity Fund and the Westwood Income Fund effective July 1, 2007. Beginning July
1, 2007, the Adviser will assume all of the duties and responsibilities with
respect to these Funds that had been delegated to the Sub-Adviser. The
Sub-Adviser will continue to serve as such to the Westwood Equity Fund, the
Westwood Balanced Fund, and the Westwood Intermediate Bond Fund. Gabelli
Advisers,Inc. will remain as the investment adviser to the Westwood Mighty
Mites(SM) Fund, Westwood SmallCap Equity Fund, and the Westwood Income Fund.
The Trust pays each Trustee that is not considered to be an affiliated person an
annual retainer of $3,000 plus $500 for each Board meeting attended and they are
reimbursed for any out of pocket expenses incurred in attending meetings. All
Board committee members receive $500 per meeting attended. Trustees who are
directors or employees of the Adviser or an affiliated company receive no
compensation or expense reimbursement from the Funds.
4. DISTRIBUTION PLAN. The Trust'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 Funds. 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%, 0.50% (for the Intermediate Bond Fund's Class A Shares at an
annual rate of 0.35%), 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.
28
THE WESTWOOD FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
5. PORTFOLIO SECURITIES. Purchases and proceeds from the sales of securities for
the six months ended March 31, 2007, other than short-term securities, are as
follows:
PURCHASES SALES PURCHASES SALES
(EXCLUDING U.S. (EXCLUDING U.S. OF U.S. OF U.S.
GOVERNMENT GOVERNMENT GOVERNMENT GOVERNMENT
SECURITIES) SECURITIES) SECURITIES SECURITIES
------------- ------------ ---------- ----------
Mighty Mites(SM) Fund .......... $ 1,073,446 $ 4,183,638 -- --
Equity Fund .................... 60,580,426 63,266,114 -- --
Balanced Fund .................. 29,948,263 29,861,348 $7,526,858 $13,546,934
Intermediate Bond Fund ......... -- 250,000 423,275 1,082,082
SmallCap Equity Fund ........... 3,419,467 5,959,916 -- --
Income Fund .................... 2,950,837 2,804,774 1,494,364 1,639,419
6. TRANSACTIONS WITH AFFILIATES. During the six months ended March 31, 2007, the
Mighty Mites(SM) Fund paid brokerage commissions of $3,254 to Gabelli & Company.
Additionally, Gabelli & Company informed the Trust that it received $27,889 from
investors representing commissions (sales charges and underwriting fees) on
sales and redemptions of Fund shares.
The cost of calculating each Fund's NAV per share is a Fund expense pursuant to
the Advisory Agreement between each Fund and the Adviser. During the six months
ended March 31, 2007, the Equity and Balanced Funds each paid or accrued $22,625
to the Adviser in connection with the cost of computing these Fund's NAVs. A
reimbursement was not sought during the six months ended March 31, 2007 for the
Mighty Mites(SM), Intermediate Bond, SmallCap Equity, and Income Funds.
7. SHARES OF BENEFICIAL INTEREST. The Funds currently offer 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, or the transfer agent
without a sales charge. Class A Shares are subject to a maximum front-end sales
charge of 4.00%. 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 1.00% 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.
Only the Mighty Mites(SM) Fund imposes 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. The
redemption fee is deducted from the proceeds otherwise payable to the redeeming
shareholders and is retained by the Mighty Mites(SM) Fund. The Mighty Mites(SM)
Fund did not retain any redemption fees during the six months ended March 31,
2007.
The redemption fee will not apply to redemptions of shares where (i) the shares
were purchased through automatic reinvestment of dividends or other
distributions, (ii) the redemption is initiated by the Mighty Mites(SM) Fund,
(iii) the shares were purchased through programs that collect the redemption
fees at the program level and remit them to the Mighty Mites(SM) Fund, or
(iv) the shares were purchased through programs that the Adviser determines to
have appropriate anti-short-term trading policies in place or as to which the
Adviser has received assurances that look-through redemption fee procedures or
effective anti-short-term trading policies and procedures are in place.
29
THE WESTWOOD FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
Transactions in shares of beneficial interest were as follows:
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
MARCH 31, 2007 SEPTEMBER 30, MARCH 31, 2007 SEPTEMBER 30, MARCH 31, 2007 SEPTEMBER 30,
(UNAUDITED) 2006 (UNAUDITED) 2006 (UNAUDITED) 2006
---------------- ------------ ---------------- ------------- --------------- -------------
MIGHTY MITES(SM) FUND EQUITY FUND BALANCED FUND
----------------------------- ------------------------------- ------------------------------
CLASS AAA
Shares sold ....................... 65,579 161,543 2,054,191 2,831,089 1,217,219 2,232,486
Shares issued upon
reinvestment of distributions ... 309,929 350,949 2,471,688 64,387 1,607,789 977,328
Shares redeemed ...................(297,902) (990,386) (2,094,530) (5,457,286) (1,672,605) (3,247,049)
-------- -------- ---------- ---------- ---------- ----------
Net increase (decrease) in
Class AAA shares .............. 77,606 (477,894) 2,431,349 (2,561,810) 1,152,403 (37,235)
======== ======== ========== ========== ========== ==========
CLASS A
Shares sold ....................... 9 64 22,867 153,176 17,378 63,619
Shares issued upon
reinvestment of distributions ... 37 344 40,525 838 55,304 32,181
Shares redeemed ................... -- (2,646) (9,285) (135,896) (40,154) (105,132)
-------- -------- ---------- ---------- ---------- ----------
Net increase (decrease) in
Class A shares ................ 46 (2,238) 54,107 18,118 32,528 (9,332)
======== ======== ========== ========== ========== ==========
CLASS B
Shares sold ....................... -- -- -- -- 3,276 258
Shares issued upon
reinvestment of distributions ... 4,999 3,739 354 4 1,303 675
Shares redeemed ................... (1,828) (1,025) (271) (123) -- (911)
-------- -------- ---------- ---------- ---------- ----------
Net increase (decrease) in
Class B shares ................ 3,171 2,714 83 (119) 4,579 22
======== ======== ========== ========== ========== ==========
CLASS C
Shares sold ....................... -- 193 1,177 23,107 7,539 8,421
Shares issued upon
reinvestment of distributions ... 3,195 2,521 4,708 55 8,894 4,312
Shares redeemed ................... (1,680) (2,620) (419) (11,083) (10,687) (16,669)
-------- -------- ---------- ---------- ---------- ----------
Net increase (decrease) in
Class C shares ................ 1,515 94 5,466 12,079 5,746 (3,936)
======== ======== ========== ========== ========== ==========
INTERMEDIATE BOND FUND SMALLCAP EQUITY FUND INCOME FUND
----------------------------- ------------------------------- ------------------------------
CLASS AAA
Shares sold ....................... 29,118 215,535 144,382 231,280 191,044 331,345
Shares issued upon
reinvestment of distributions ... 12,487 30,698 5,666 -- 236,290 371,438
Shares redeemed ...................(126,987) (268,616) (267,461) (305,471) (258,891) (681,221)
-------- -------- ---------- ---------- ---------- ----------
Net increase (decrease) in
Class AAA shares .............. (85,382) (22,383) (117,413) (74,191) 168,443 21,562
======== ======== ========== ========== ========== ==========
CLASS A
Shares sold ....................... -- 15,561 9,502 22,889 537 22
Shares issued upon
reinvestment of distributions ... 123 505 363 -- 1,966 2,237
Shares redeemed ................... (3,161) (12,868) (5,163) (2,150) (3,888) --
-------- -------- ---------- ---------- ---------- ----------
Net increase (decrease) in
Class A shares ................ (3,038) 3,198 4,702 20,739 (1,385) 2,259
======== ======== ========== ========== ========== ==========
CLASS B
Shares sold ....................... -- 12,727 -- -- -- --
Shares issued upon
reinvestment of distributions ... 56 500 1 -- 40 43
Shares redeemed ................... (11,571) (21,971) -- (414) -- --
-------- -------- ---------- ---------- ---------- ----------
Net increase (decrease) in
Class B shares ................ (11,515) (8,744) 1 (414) 40 43
======== ======== ========== ========== ========== ==========
CLASS C
Shares sold ....................... -- 5,174 1,901 19,909 -- --
Shares issued upon
reinvestment of distributions ... -- -- 141 -- 300 333
Shares redeemed ................... -- (5,174) (931) -- -- --
-------- -------- ---------- ---------- ---------- ----------
Net increase (decrease) in
Class C shares ................ -- -- 1,111 19,909 300 333
======== ======== ========== ========== ========== ==========
30
THE WESTWOOD FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
8. INDEMNIFICATIONS. The Funds enter into contracts that contain a variety of
indemnifications. The Funds' maximum exposure under these arrangements is
unknown. However, the Funds have not had prior claims or losses pursuant to
these contracts and expect the risk of loss to be remote.
9. OTHER MATTERS. Affiliates of the Adviser, including Gabelli Funds LLC,
received subpoenas from the Attorney General of the State of New York and the
SEC requesting information on mutual fund share trading practices involving
certain funds managed by Gabelli Funds, LLC. GAMCO Investors, Inc. ("GAMCO"),
the Adviser's parent company, responded to these requests for documents and
testimony. In June 2006, GAMCO began discussions with the SEC regarding a
possible resolution of their inquiry. In February 2007, the Adviser made an
offer of settlement to the staff of the SEC for communication to the Commission
for its consideration to resolve this matter. This offer of settlement is
subject to agreement regarding the specific language of the SEC's administrative
order and other settlement documents. On a separate matter, in September 2005,
Gabelli Funds, LLC 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 Gabelli Funds, LLC in connection with the actions of two of seven
closed-end funds managed by Gabelli Funds, LLC 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.
31
THE WESTWOOD FUNDS
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period:
OPERATING PERFORMANCE DISTRIBUTIONS TO SHAREHOLDERS
--------------------------------- -------------------------------------
NET
REALIZED AND
NET ASSET NET UNREALIZED TOTAL NET
VALUE, INVESTMENT GAIN FROM NET REALIZED
PERIOD ENDED BEGINNING INCOME ON INVESTMENT INVESTMENT GAIN ON TOTAL REDEMPTION
SEPTEMBER 30 OF PERIOD (LOSS)(A) INVESTMENTS OPERATIONS INCOME INVESTMENTS DISTRIBUTIONS FEES(A)
- ------------ --------- --------- ----------- ---------- ---------- ----------- ------------- ----------
MIGHTY MITES(SM) FUND
CLASS AAA
2007(c) $16.01 $(0.02) $2.71 $2.69 -- $(2.46) $(2.46) --
2006 16.73 (0.04) 1.34 1.30 -- (2.02) (2.02) --
2005 15.07 (0.02) 2.97 2.95 -- (1.29) (1.29) $0.00(g)
2004 13.42 (0.03) 1.84 1.81 -- (0.16) (0.16) 0.00(g)
2003 11.29 (0.03) 2.25 2.22 $(0.04) (0.05) (0.09) --
2002 10.99 0.03 0.37 0.40 (0.10) -- (0.10) --
CLASS A
2007(c) $15.94 $(0.04) $2.70 $2.66 -- $(2.46) $(2.46) --
2006 16.70 (0.10) 1.36 1.26 -- (2.02) (2.02) --
2005 15.08 (0.06) 2.97 2.91 -- (1.29) (1.29) $0.00(g)
2004 13.46 (0.06) 1.84 1.78 -- (0.16) (0.16) 0.00(g)
2003 11.36 (0.05) 2.26 2.21 $(0.06) (0.05) (0.11) --
2002(h) 10.97 (0.01) 0.40 0.39 -- -- -- --
CLASS B
2007(c) $15.43 $(0.08) $2.60 $2.52 -- $(2.46) $(2.46) --
2006 16.31 (0.15) 1.29 1.14 -- (2.02) (2.02) --
2005 14.82 (0.14) 2.92 2.78 -- (1.29) (1.29) $0.00(g)
2004 13.30 (0.14) 1.82 1.68 -- (0.16) (0.16) 0.00(g)
2003 11.24 (0.11) 2.22 2.11 -- (0.05) (0.05) --
2002 10.96 (0.02) 0.34 0.32 $(0.04) -- (0.04) --
CLASS C
2007(c) $15.35 $(0.08) $2.59 $2.51 -- $(2.46) $(2.46) --
2006 16.24 (0.15) 1.28 1.13 -- (2.02) (2.02) --
2005 14.77 (0.14) 2.90 2.76 -- (1.29) (1.29) $0.00(g)
2004 13.25 0.02 1.66 1.68 -- (0.16) (0.16) 0.00(g)
2003 11.19 (0.12) 2.23 2.11 -- (0.05) (0.05) --
2002 10.98 (0.06) 0.37 0.31 $(0.10) -- (0.10) --
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
---------------------------------------------------------------------
OPERATING
EXPENSES
OPERATING NET OF OPERATING
NET NET EXPENSES WAIVERS/ EXPENSES
ASSET ASSETS, NET NET OF REIMBURSE- BEFORE
VALUE, END OF INVESTMENT WAIVERS/ MENTS/ WAIVERS/ PORTFOLIO
PERIOD ENDED END OF TOTAL PERIOD INCOME REIMBURSE- CUSTODIAN REIMBURSE- TURNOVER
SEPTEMBER 30 PERIOD RETURN+ (IN 000'S) (LOSS) MENTS FEE CREDITS MENTS(B) RATE
- ------------ ------ ------- -------- -------- --------- ----------- ---------- ---------
MIGHTY MITES(SM) FUND
CLASS AAA
2007(c) $16.24 18.0% $38,627 (0.25)%(d) 1.68%(d) 1.68%(d) 1.68%(d)(e) 3%
2006 16.01 9.0 36,843 (0.28) 1.61 1.61 1.61(f) 4
2005 16.73 20.4 46,497 (0.13) 1.50 1.50 1.74 9
2004 15.07 13.6 50,805 (0.20) 1.50 1.50 1.66 36
2003 13.42 19.8 51,138 (0.21) 1.50 1.50 1.66 14
2002 11.29 3.6 31,103 0.27 1.50 1.50 1.78 18
CLASS A
2007(c) $16.14 17.9% $ 4 (0.50)%(d) 1.93%(d) 1.93%(d) 1.93%(d)(e) 3%
2006 15.94 8.7 3 (0.63) 1.86 1.86 1.86(f) 4
2005 16.70 20.1 41 (0.41) 1.75 1.75 2.00 9
2004 15.08 13.3 39 (0.42) 1.75 1.75 1.91 36
2003 13.46 19.7 33 (0.46) 1.75 1.75 1.91 14
2002(h) 11.36 3.6 1 0.02 1.75(d) 1.75(d) 2.03(d) 18
CLASS B
2007(c) $15.49 17.6% $ 503 (1.00)%(d) 2.43%(d) 2.43%(d) 2.43%(d)(e) 3%
2006 15.43 8.1 452 (1.00) 2.36 2.36 2.36(f) 4
2005 16.31 19.6 433 (0.89) 2.25 2.25 2.49 9
2004 14.82 12.7 400 (0.95) 2.25 2.25 2.41 36
2003 13.30 18.9 517 (0.96) 2.25 2.25 2.41 14
2002 11.24 2.9 4 (0.48) 2.25 2.25 2.53 18
CLASS C
2007(c) $15.40 17.6% $ 335 (1.00)%(d) 2.43%(d) 2.43%(d) 2.43%(d)(e) 3%
2006 15.35 8.1 311 (1.01) 2.36 2.36 2.36(f) 4
2005 16.24 19.5 327 (0.91) 2.25 2.25 2.49 9
2004 14.77 12.7 308 (0.89) 2.25 2.25 2.41 36
2003 13.25 19.0 99 (0.96) 2.25 2.25 2.41 14
2002 11.19 2.8 59 (0.48) 2.25 2.25 2.53 18
- ---------------
+ 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 distributions and does not reflect applicable
sales charges. Total return for a period of less than one year is not
annualized.
(a) Per share data is calculated using the average shares outstanding method.
(b) Prior to the period beginning October 1, 2005, certain fees were voluntarily
reduced and/or reimbursed. If such fee reductions and/or reimbursements had
not occurred, the ratio would have been as shown.
(c) For the six months ended March 31, 2007, unaudited.
(d) Annualized.
(e) The fund incurred interest expense during the six months ended March 31,
2007. If interest expense had not been incurred, the ratios of operating
expenses to average net assets would have been 1.67% (Class AAA), 1.92%
(Class A), and 2.42% (Class B and Class C).
(f) The fund incurred interest expense during the fiscal year ended September
30, 2006. If interest expense had not been incurred, the ratios of operating
expenses to average net assets would have been 1.57% (Class AAA), 1.82%
(Class A), and 2.32% (Class B and Class C).
(g) Amount represents less than $0.005 per share.
(h) From November 26, 2001 through September 30, 2002, the period through which
Class A Shares were continuously outstanding.
See accompanying notes to financial statements.
32
THE WESTWOOD FUNDS
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period:
OPERATING PERFORMANCE DISTRIBUTIONS TO SHAREHOLDERS
--------------------------------- -------------------------------------
NET
REALIZED AND
NET ASSET NET UNREALIZED TOTAL NET
VALUE, INVESTMENT GAIN FROM NET REALIZED
PERIOD ENDED BEGINNING INCOME (LOSS) ON INVESTMENT INVESTMENT GAIN ON TOTAL REDEMPTION
SEPTEMBER 30 OF PERIOD (LOSS)(A) INVESTMENTS OPERATIONS INCOME INVESTMENTS DISTRIBUTIONS FEES(A)
- ------------ --------- --------- ----------- ---------- ---------- ----------- ------------- ----------
EQUITY FUND
CLASS AAA
2007(b) $12.51 $ 0.02 $ 0.97 $ 0.99 $(0.05) $(2.02) $(2.07) $ 0.00(c)
2006 11.08 0.06 1.42 1.48 (0.05) -- (0.05) --
2005 9.32 0.07 1.79 1.86 (0.10) -- (0.10) (0.00)(c)
2004 7.99 0.08 1.36 1.44 (0.11) -- (0.11) 0.00(c)
2003 7.02 0.09 0.96 1.05 (0.08) -- (0.08) --
2002 8.32 0.07 (1.32) (1.25) (0.05) -- (0.05) --
CLASS A
2007(b) $12.45 $ 0.00(c) $ 0.97 $ 0.97 $(0.02) $(2.02) $(2.04) $ 0.00(c)
2006 11.05 0.03 1.41 1.44 (0.04) -- (0.04) --
2005 9.28 0.06 1.75 1.81 (0.04) -- (0.04) (0.00)(c)
2004 7.97 0.05 1.35 1.40 (0.09) -- (0.09) 0.00(c)
2003 6.99 0.07 0.97 1.04 (0.06) -- (0.06) --
2002 8.29 0.05 (1.32) (1.27) (0.03) -- (0.03) --
CLASS B
2007(b) $12.31 $(0.03) $ 0.96 $ 0.93 -- $(2.02) $(2.02) $ 0.00(c)
2006 10.96 (0.02) 1.40 1.38 $(0.03) -- (0.03) --
2005 9.21 (0.00)(c) 1.75 1.75 -- -- -- (0.00)(c)
2004 7.92 0.02 1.34 1.36 (0.07) -- (0.07) 0.00(c)
2003 6.97 0.04 0.95 0.99 (0.04) -- (0.04) --
2002 8.29 0.02 (1.32) (1.30) (0.02) -- (0.02) --
CLASS C
2007(b) $12.31 $(0.03) $ 0.96 $ 0.93 -- $(2.02) $(2.02) $ 0.00(c)
2006 10.97 (0.03) 1.40 1.37 $(0.03) -- (0.03) --
2005 9.24 (0.01) 1.77 1.76 (0.03) -- (0.03) (0.00)(c)
2004 7.89 0.01 1.34 1.35 -- -- -- 0.00(c)
2003 6.98 0.04 0.96 1.00 (0.09) -- (0.09) --
2002 8.28 0.01 (1.31) (1.30) -- -- -- --
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
-----------------------------------------------------------
NET NET OPERATING
ASSET ASSETS, NET EXPENSES
VALUE, END OF INVESTMENT NET OF PORTFOLIO
PERIOD ENDED END OF TOTAL PERIOD INCOME OPERATING CUSTODIAN TURNOVER
SEPTEMBER 30 PERIOD RETURN+ (IN 000'S) (LOSS) EXPENSES FEE CREDITS RATE
- ------------ ------ ------- -------- -------- --------- ----------- ---------
EQUITY FUND
CLASS AAA
2007(b) $11.43 8.3% $182,551 0.31%(d) 1.53%(d) 1.48%(d) 34%
2006 12.51 13.4 169,404 0.55 1.54 1.50 73
2005 11.08 20.0 178,394 0.69 1.51 1.49 59
2004 9.32 18.1 179,407 0.90 1.50 1.49 44
2003 7.99 15.1 221,635 1.19 1.48 1.47 50
2002 7.02 (15.1) 231,197 0.84 1.46 1.43 84
CLASS A
2007(b) $11.38 8.2% $ 3,157 0.06%(d) 1.78%(d) 1.73%(d) 34%
2006 12.45 13.1 2,780 0.27 1.79 1.75 73
2005 11.05 19.6 2,267 0.59 1.76 1.74 59
2004 9.28 17.7 3,328 0.61 1.75 1.74 44
2003 7.97 15.0 2,923 0.94 1.73 1.72 50
2002 6.99 (15.4) 1,808 0.59 1.71 1.68 84
CLASS B
2007(b) $11.22 7.9% $ 30 (0.44)%(d) 2.28%(d) 2.23%(d) 34%
2006 12.31 12.6 32 (0.20) 2.29 2.25 73
2005 10.96 19.0 30 (0.01) 2.26 2.24 59
2004 9.21 17.2 38 0.21 2.25 2.24 44
2003 7.92 14.3 74 0.44 2.23 2.22 50
2002 6.97 (15.7) 53 0.09 2.21 2.18 84
CLASS C
2007(b) $11.22 7.9% $ 350 (0.44)%(d) 2.28%(d) 2.23%(d) 34%
2006 12.31 12.6 316 (0.28) 2.29 2.25 73
2005 10.97 19.1 149 (0.06) 2.26 2.24 59
2004 9.24 17.1 152 0.11 2.25 2.24 44
2003 7.89 14.4 129 0.44 2.23 2.22 50
2002 6.98 (15.7) 33 0.09 2.21 2.18 84
- ------------------------
+ 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 distributions and does not reflect applicable
sales charges. Total return for a period of less than one year is not
annualized.
(a) Per share data is calculated using the average shares outstanding method.
(b) For the six months ended March 31, 2007, unaudited.
(c) Amount represents less than $0.005 per share.
(d) Annualized.
See accompanying notes to financial statements.
33
THE WESTWOOD FUNDS
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period:
OPERATING PERFORMANCE DISTRIBUTIONS TO SHAREHOLDERS
------------------------------- ---------------------------------------
NET
REALIZED AND
NET ASSET UNREALIZED TOTAL NET
VALUE, NET GAIN FROM NET REALIZED
PERIOD ENDED BEGINNING INVESTMENT ON INVESTMENT INVESTMENT GAIN ON TOTAL REDEMPTION
SEPTEMBER 30 OF PERIOD INCOME(A) INVESTMENTS OPERATIONS INCOME INVESTMENTS DISTRIBUTIONS FEES(A)
- ------------ --------- --------- ----------- ---------- ---------- ----------- ------------- ----------
BALANCED FUND
CLASS AAA
2007(b) $12.82 $0.10 $ 0.60 $ 0.70 $(0.11) $(1.61) $(1.72) $0.00(c)
2006 12.74 0.22 0.95 1.17 (0.24) (0.85) (1.09) --
2005 11.47 0.20 1.26 1.46 (0.19) -- (0.19) 0.00(c)
2004 10.51 0.21 0.97 1.18 (0.22) -- (0.22) 0.00(c)
2003 9.65 0.21 0.87 1.08 (0.22) -- (0.22) --
2002 10.40 0.24 (0.75) (0.51) (0.24) (0.00)(c) (0.24) --
CLASS A
2007(b) $12.87 $0.09 $ 0.58 $ 0.67 $(0.09) $(1.61) $(1.70) $0.00(c)
2006 12.74 0.19 0.95 1.14 (0.16) (0.85) (1.01) --
2005 11.44 0.17 1.26 1.43 (0.13) -- (0.13) 0.00(c)
2004 10.48 0.18 0.97 1.15 (0.19) -- (0.19) 0.00(c)
2003 9.62 0.19 0.86 1.05 (0.19) -- (0.19) --
2002 10.37 0.21 (0.75) (0.54) (0.21) (0.00)(c) (0.21) --
CLASS B
2007(b) $12.95 $0.06 $ 0.59 $ 0.65 $(0.06) $(1.61) $(1.67) $0.00(c)
2006 12.76 0.13 0.95 1.08 (0.04) (0.85) (0.89) --
2005 11.43 0.11 1.26 1.37 (0.04) -- (0.04) 0.00(c)
2004 10.48 0.13 0.96 1.09 (0.14) -- (0.14) 0.00(c)
2003 9.63 0.14 0.86 1.00 (0.15) -- (0.15) --
2002 10.40 0.17 (0.77) (0.60) (0.17) (0.00)(c) (0.17) --
CLASS C
2007(b) $12.97 $0.06 $ 0.59 $ 0.65 $(0.06) $(1.61) $(1.67) $0.00(c)
2006 12.78 0.13 0.95 1.08 (0.04) (0.85) (0.89) --
2005 11.45 0.11 1.26 1.37 (0.04) -- (0.04) 0.00(c)
2004 10.49 0.13 0.97 1.10 (0.14) -- (0.14) 0.00(c)
2003 9.62 0.14 0.87 1.01 (0.14) -- (0.14) --
2002 10.40 0.19 (0.79) (0.60) (0.18) (0.00)(c) (0.18) --
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
-------------------------------------------------------
NET NET OPERATING
ASSET ASSETS, NET EXPENSES
VALUE, END OF INVESTMENT NET OF PORTFOLIO
PERIOD ENDED END OF TOTAL PERIOD INCOME OPERATING CUSTODIAN TURNOVER
SEPTEMBER 30 PERIOD RETURN+ (IN 000'S) (LOSS) EXPENSES FEE CREDITS RATE
- ------------ ------ ------- -------- -------- --------- ----------- ---------
BALANCED FUND
CLASS AAA
2007(b) $11.80 5.7% $146,983 1.69%(d) 1.29%(d) 1.23%(d) 28%
2006 12.82 9.8 145,028 1.78 1.32 1.27 68
2005 12.74 12.8 144,572 1.67 1.25 1.22 56
2004 11.47 11.3 136,400 1.92 1.23 1.22 41
2003 10.51 11.2 152,409 2.10 1.23 1.20 56
2002 9.65 (5.1) 150,915 2.25 1.22 1.17 78
CLASS A
2007(b) $11.84 5.4% $ 5,535 1.44%(d) 1.54%(d) 1.48%(d) 28%
2006 12.87 9.5 5,596 1.53 1.57 1.52 68
2005 12.74 12.6 5,658 1.42 1.50 1.47 56
2004 11.44 11.0 5,298 1.66 1.48 1.47 41
2003 10.48 11.0 5,070 1.85 1.48 1.45 56
2002 9.62 (5.4) 5,761 2.00 1.47 1.42 78
CLASS B
2007(b) $11.93 5.2% $ 184 0.95%(d) 2.04%(d) 1.98%(d) 28%
2006 12.95 9.0 141 1.02 2.07 2.02 68
2005 12.76 12.0 138 0.93 2.00 1.97 56
2004 11.43 10.4 163 1.18 1.98 1.97 41
2003 10.48 10.4 184 1.35 1.98 1.95 56
2002 9.63 (5.9) 113 1.50 1.97 1.92 78
CLASS C
2007(b) $11.95 5.2% $ 940 0.94%(d) 2.04%(d) 1.98%(d) 28%
2006 12.97 9.0 946 1.02 2.07 2.02 68
2005 12.78 12.0 982 0.92 2.00 1.97 56
2004 11.45 10.5 846 1.19 1.98 1.97 41
2003 10.49 10.5 456 1.35 1.98 1.95 56
2002 9.62 (5.9) 284 1.50 1.97 1.92 78
- ------------------
+ 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 distributions and does not reflect applicable
sales charges. Total return for a period of less than one year is not
annualized.
(a) Per share data is calculated using the average shares outstanding method.
(b) For the six months ended March 31, 2007, unaudited.
(c) Amount represents less than $0.005 per share.
(d) Annualized.
See accompanying notes to financial statements.
34
THE WESTWOOD FUNDS
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period:
OPERATING PERFORMANCE DISTRIBUTIONS TO SHAREHOLDERS
------------------------------- ---------------------------------------
NET
REALIZED AND
NET ASSET UNREALIZED TOTAL NET
VALUE, NET GAIN FROM NET REALIZED
PERIOD ENDED BEGINNING INVESTMENT (LOSS) ON INVESTMENT INVESTMENT GAIN ON TOTAL REDEMPTION
SEPTEMBER 30 OF PERIOD INCOME(A) INVESTMENTS OPERATIONS INCOME INVESTMENTS DISTRIBUTIONS FEES(A)
- ------------ --------- --------- ----------- ---------- ---------- ----------- ------------- ----------
INTERMEDIATE BOND FUND
CLASS AAA
2007(c) $10.81 $0.19 $ 0.02 $ 0.21 $(0.20) -- $(0.20) --
2006 10.93 0.39 (0.11) 0.28 (0.39) $(0.01) (0.40) --
2005 11.18 0.34 (0.16) 0.18 (0.34) (0.09) (0.43) $(0.00)(e)
2004 11.31 0.33 (0.12) 0.21 (0.33) (0.01) (0.34) 0.00(e)
2003 11.30 0.31 -- 0.31 (0.30) -- (0.30) --
2002 10.82 0.45 0.48 0.93 (0.45) -- (0.45) --
CLASS A
2007(c) $10.81 $0.19 $ 0.02 $ 0.21 $(0.20) -- $(0.20) --
2006 10.93 0.39 (0.12) 0.27 (0.38) $(0.01) (0.39) --
2005 11.18 0.33 (0.16) 0.17 (0.33) (0.09) (0.42) $(0.00)(e)
2004 11.31 0.32 (0.12) 0.20 (0.32) (0.01) (0.33) 0.00(e)
2003 11.30 0.30 0.01 0.31 (0.30) -- (0.30) --
2002 10.82 0.44 0.48 0.92 (0.44) -- (0.44) --
CLASS B
2007(c) $10.81 $0.15 $ 0.02 $ 0.17 $(0.16) -- $(0.16) --
2006 10.93 0.31 (0.11) 0.20 (0.31) $(0.01) (0.32) --
2005 11.18 0.26 (0.16) 0.10 (0.26) (0.09) (0.35) $(0.00)(e)
2004 11.30 0.25 (0.11) 0.14 (0.25) (0.01) (0.26) 0.00(e)
2003 11.29 0.23 -- 0.23 (0.22) -- (0.22) --
2002 10.82 0.37 0.47 0.84 (0.37) -- (0.37) --
CLASS C
2007(c) $10.31 $0.18 -- $ 0.18 $(0.27) -- $(0.27) --
2006 10.82 0.32 $(0.36) (0.04) (0.46) $(0.01) (0.47) --
2005 11.17 0.27 (0.12) 0.15 (0.41) (0.09) (0.50) $(0.00)(e)
2004 11.30 0.25 (0.09) 0.16 (0.28) (0.01) (0.29) 0.00(e)
2003 11.29 0.22 0.01 0.23 (0.22) -- (0.22) --
2002(f) 10.84 0.35 0.45 0.80 (0.35) -- (0.35) --
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
---------------------------------------------------------------------
OPERATING
EXPENSES
OPERATING NET OF OPERATING
NET NET EXPENSES WAIVERS/ EXPENSES
ASSET ASSETS, NET OF REIMBURSE- BEFORE
VALUE, END OF NET WAIVERS/ MENTS/ WAIVERS/ PORTFOLIO
PERIOD ENDED END OF TOTAL PERIOD INVESTMENT REIMBURSE- CUSTODIAN REIMBURSE- TURNOVER
SEPTEMBER 30 PERIOD RETURN+ (IN 000'S) INCOME MENTS FEE CREDITS MENTS(B) RATE
- ------------ ------ ------- -------- -------- --------- ----------- ---------- ---------
INTERMEDIATE BOND FUND
CLASS AAA
2007(c) $10.82 1.9% $ 9,000 3.58%(d) 1.08%(d) 1.00%(d) 1.15%(d) 5%
2006 10.81 2.7 9,917 3.65 1.06 1.00 1.53 35
2005 10.93 1.7 10,272 3.10 1.04 1.00 1.79 33
2004 11.18 2.0 9,553 2.97 1.02 1.00 1.76 32
2003 11.31 2.8 12,174 2.70 1.06 1.00 1.57 73
2002 11.30 8.9 15,157 4.06 1.05 1.00 1.69 46
CLASS A
2007(c) $10.82 1.9% $ 59 3.52%(d) 1.18%(d) 1.10%(d) 1.25%(d) 5%
2006 10.81 2.6 92 3.59 1.16 1.10 1.63 35
2005 10.93 1.6 58 3.00 1.14 1.10 1.88 33
2004 11.18 1.8 75 2.88 1.12 1.10 1.86 32
2003 11.31 2.8 138 2.60 1.16 1.10 1.67 73
2002 11.30 8.8 56 3.96 1.15 1.10 1.79 46
CLASS B
2007(c) $10.82 1.6% $ 158 2.84%(d) 1.83%(d) 1.75%(d) 1.90%(d) 5%
2006 10.81 2.0 282 2.87 1.81 1.75 2.28 35
2005 10.93 0.9 381 2.34 1.79 1.75 2.53 33
2004 11.18 1.3 456 2.23 1.77 1.75 2.51 32
2003 11.30 2.1 502 1.95 1.81 1.75 2.32 73
2002 11.29 8.0 229 3.31 1.80 1.75 2.44 46
CLASS C
2007(c) $10.22 1.8% $ 0.1 3.43%(d) 1.83%(d) 1.75%(d) 1.90%(d) 5%
2006 10.31 (0.3) 0.1 3.08 1.81 1.75 2.28 35
2005 10.82 1.4 0.1 2.50 1.79 1.75 2.90 33
2004 11.17 1.5 0 2.21 1.77 1.75 2.51 32
2003 11.30 2.1 46 1.95 1.81 1.75 2.32 73
2002(f) 11.29 7.6 50 3.31(d) 1.80(d) 1.75(d) 2.44(d) 46
- -----------------
+ 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 distributions and does not reflect applicable
sales charges. Total return for a period of less than one year is not
annualized.
(a) Per share data is calculated using the average shares outstanding method.
(b) During the period, certain fees were voluntarily reduced and/or reimbursed.
If such fee reductions and/or reimbursements had not occurred, the ratio
would have been as shown.
(c) For the six months ended March 31, 2007, unaudited.
(d) Annualized.
(e) Amount represents less than $0.005 per share.
(f) From October 22, 2001 through September 30, 2002, the period through which
Class C Shares were continuously outstanding.
See accompanying notes to financial statements.
35
THE WESTWOOD FUNDS
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period:
OPERATING PERFORMANCE DISTRIBUTIONS TO SHAREHOLDERS
--------------------------------- -------------------------------------
NET
REALIZED AND
NET ASSET NET UNREALIZED TOTAL
VALUE, INVESTMENT GAIN FROM NET
PERIOD ENDED BEGINNING INCOME ON INVESTMENT INVESTMENT TOTAL REDEMPTION
SEPTEMBER 30 OF PERIOD (LOSS)(A) INVESTMENTS OPERATIONS INCOME DISTRIBUTIONS FEES(A)
- ------------ --------- --------- ----------- ---------- ---------- ------------- ----------
SMALLCAP EQUITY FUND
CLASS AAA
2007(c) $12.51 $(0.00)(d) $ 2.20 $ 2.20 $(0.16) $(0.16) --
2006 11.29 0.14 1.08 1.22 -- -- --
2005 9.08 (0.01) 2.22 2.21 -- -- $(0.00)(d)
2004 8.18 (0.10) 1.00 0.90 -- -- 0.00(d)
2003 7.49 (0.08) 0.77 0.69 -- -- --
2002 8.86 (0.09) (1.28) (1.37) -- -- --
CLASS A
2007(c) $12.45 $(0.02) $ 2.19 $ 2.17 $(0.14) $(0.14) --
2006 11.25 0.13 1.07 1.20 -- -- --
2005 9.07 (0.04) 2.22 2.18 -- -- $(0.00)(d)
2004 8.18 (0.12) 1.01 0.89 -- -- 0.00(d)
2003 7.51 (0.10) 0.77 0.67 -- -- --
2002(g) 9.91 (0.09) (2.31) (2.40) -- -- --
CLASS B
2007(c) $12.03 $(0.05) $ 2.12 $ 2.07 $(0.04) $(0.04) --
2006 10.93 0.05 1.05 1.10 -- -- --
2005 8.86 (0.08) 2.15 2.07 -- -- $(0.00)(d)
2004 8.03 (0.17) 1.00 0.83 -- -- 0.00(d)
2003 7.41 (0.13) 0.75 0.62 -- -- --
2002 8.83 (0.16) (1.26) (1.42) -- -- --
CLASS C
2007(c) $11.97 $(0.05) $ 2.11 $ 2.06 $(0.09) $(0.09) --
2006 10.87 0.09 1.01 1.10 -- -- --
2005 8.99 (0.13) 2.01 1.88 -- -- $(0.00)(d)
2004 8.15 (0.17) 1.01 0.84 -- -- 0.00(d)
2003 7.47 (0.10) 0.78 0.68 -- -- --
2002(g) 9.91 (0.11) (2.33) (2.44) -- -- --
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
-------------------------------------------------------------------
OPERATING
EXPENSES
OPERATING NET OF OPERATING
NET NET EXPENSES WAIVERS/ EXPENSES
ASSET ASSETS, NET NET OF REIMBURSE- BEFORE
VALUE, END OF INVESTMENT WAIVERS/ MENTS/ WAIVERS/ PORTFOLIO
PERIOD ENDED END OF TOTAL PERIOD INCOME REIMBURSE- CUSTODIAN REIMBURSE- TURNOVER
SEPTEMBER 30 PERIOD RETURN+ (IN 000'S) (LOSS) MENTS FEE CREDITS MENTS(B) RATE
- ------------ ------ ------- -------- -------- --------- ----------- ---------- ---------
SMALLCAP EQUITY FUND
CLASS AAA
2007(c) $14.55 17.7% $ 8,428 (0.03)%(e) 1.75%(e) 1.50%(e) 2.22%(e) 37%
2006 12.51 10.8 8,717 1.16 1.71 1.50 2.02 81
2005 11.29 24.3 8,702 (0.10) 1.56 1.50 2.37 108
2004 9.08 11.0(f) 12,106 (1.11) 1.51 1.50 2.12 260
2003 8.18 9.2 15,721 (1.03) 1.53 1.50 1.99 329
2002 7.49 (15.5) 16,212 (0.98) 1.56 1.50 1.76 202
CLASS A
2007(c) $14.48 17.5% $ 537 (0.26)%(e) 2.00%(e) 1.75%(e) 2.47%(e) 37%
2006 12.45 10.7 403 1.04 1.96 1.75 2.27 81
2005 11.25 24.0 131 (0.35) 1.81 1.75 2.69 108
2004 9.07 10.9(f) 140 (1.31) 1.76 1.75 2.37 260
2003 8.18 8.9 112 (1.28) 1.78 1.75 2.24 329
2002(g) 7.51 (24.2) 71 (1.23)(e) 1.80(e) 1.75(e) 2.01(e) 202
CLASS B
2007(c) $14.06 17.2% $ 7 (0.78)%(e) 2.50%(e) 2.25%(e) 2.97%(e) 37%
2006 12.03 10.1 6 0.44 2.46 2.25 2.77 81
2005 10.93 23.4 10 (0.81) 2.31 2.25 3.17 108
2004 8.86 10.3(f) 20 (1.93) 2.26 2.25 2.87 260
2003 8.03 8.4 65 (1.78) 2.28 2.25 2.74 329
2002 7.41 (16.1) 31 (1.73) 2.30 2.25 2.51 202
CLASS C
2007(c) $13.94 17.2% $ 293 (0.78)%(e) 2.50%(e) 2.25%(e) 2.97%(e) 37%
2006 11.97 10.1 238 0.74 2.46 2.25 2.77 81
2005 10.87 20.9 0.1 (1.40) 2.31 2.25 2.73 108
2004 8.99 10.3(f) 10 (1.98) 2.26 2.25 2.87 260
2003 8.15 9.1 111 (1.78) 2.28 2.25 2.74 329
2002(g) 7.47 (24.6) 0.1 (1.73)(e) 2.30(e) 2.25(e) 2.51(e) 202
- -------------------
+ 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 distributions and does not reflect applicable
sales charges. Total return for a period of less than one year is not
annualized.
(a) Per share data is calculated using the average shares outstanding method.
(b) During the period, certain fees were voluntarily reduced and/or reimbursed.
If such fee reductions and/or reimbursements had not occurred, the ratio
would have been as shown.
(c) For the six months ended March 31, 2007, unaudited.
(d) Amount represents less than $0.005 per share.
(e) Annualized.
(f) Total return excluding the effect of the reimbursement from the Fund's
Adviser of $51,180 for the year ended September 30, 2004 was 10.6%, 10.5%,
10.0%, and 9.9% for Class AAA, Class A, Class B, and Class C, respectively.
The Adviser fully reimbursed the Fund for a loss on a transaction exceeding
the Fund's investment restrictions, which otherwise would have reduced total
return by 0.4%, 0.4%, 0.3%, and 0.4% for Class AAA, Class A, Class B, and
Class C, respectively.
(g) From November 26, 2001 through September 30, 2002, the period through which
Class A Shares and Class C Shares were continuously outstanding.
See accompanying notes to financial statements.
36
THE WESTWOOD FUNDS
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period:
OPERATING PERFORMANCE DISTRIBUTIONS TO SHAREHOLDERS
--------------------------------- -------------------------------------
NET
REALIZED AND
NET ASSET UNREALIZED TOTAL NET
VALUE, NET GAIN FROM NET REALIZED
PERIOD ENDED BEGINNING INVESTMENT ON INVESTMENT INVESTMENT GAIN ON TOTAL REDEMPTION
SEPTEMBER 30 OF PERIOD INCOME(A) INVESTMENTS OPERATIONS INCOME INVESTMENTS DISTRIBUTIONS FEES(A)
- ------------ --------- --------- ----------- ---------- ---------- ----------- ------------- ----------
INCOME FUND
CLASS AAA
2007(c) $12.04 $0.31 $ 0.68 $0.99 $(0.26) $(2.45) $(2.71) $(0.00)(d)
2006 16.53 0.55 (0.31) 0.24 (0.40) (4.33) (4.73) --
2005 14.12 0.28 3.12 3.40 (0.27) (0.73) (1.00) 0.01
2004 11.87 0.33 2.30 2.63 (0.33) (0.05) (0.38) 0.00(d)
2003 10.03 0.38 1.85 2.23 (0.39) -- (0.39) --
2002 9.76 0.43 0.31 0.74 (0.47) -- (0.47) --
CLASS A
2007(c) $12.34 $0.28 $ 0.72 $1.00 $(0.25) $(2.45) $(2.70) $(0.00)(d)
2006 16.76 0.54 (0.32) 0.22 (0.31) (4.33) (4.64) --
2005 14.33 0.29 3.13 3.42 (0.26) (0.73) (0.99) 0.00(d)
2004 12.00 0.51 2.12 2.63 (0.26) (0.04) (0.30) 0.00(d)
2003 10.04 0.38 1.85 2.23 (0.27) -- (0.27) --
2002 9.76 0.41 0.30 0.71 (0.43) -- (0.43) --
CLASS B
2007(c) $12.56 $0.28 $ 0.71 $0.99 $(0.22) $(2.45) $(2.67) $(0.00)(d)
2006 16.86 0.48 (0.31) 0.17 (0.14) (4.33) (4.47) --
2005 14.33 0.18 3.16 3.34 (0.08) (0.73) (0.81) 0.00(d)
2004 12.04 0.25 2.35 2.60 (0.27) (0.04) (0.31) 0.00(d)
2003 10.07 0.27 1.91 2.18 (0.21) -- (0.21) --
2002(f) 9.90 0.36 0.22 0.58 (0.41) -- (0.41) --
CLASS C
2007(c) $12.98 $0.30 $ 0.71 $1.01 $(0.21) $(2.45) $(2.66) $(0.00)(d)
2006 17.26 0.50 (0.32) 0.18 (0.13) (4.33) (4.46) --
2005 14.66 0.25 3.17 3.42 (0.09) (0.73) (0.82) 0.00(d)
2004 12.32 0.24 2.41 2.65 (0.27) (0.04) (0.31) 0.00(d)
2003 10.26 0.32 1.99 2.31 (0.25) -- (0.25) --
2002(f) 9.90 0.09 0.49 0.58 (0.22) -- (0.22) --
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
-------------------------------------------------------------------
OPERATING
EXPENSES
OPERATING NET OF OPERATING
NET NET EXPENSES WAIVERS/ EXPENSES
ASSET ASSETS, NET OF REIMBURSE- BEFORE
VALUE, END OF NET WAIVERS/ MENTS/ WAIVERS/ PORTFOLIO
PERIOD ENDED END OF TOTAL PERIOD INVESTMENT REIMBURSE- CUSTODIAN REIMBURSE- TURNOVER
SEPTEMBER 30 PERIOD RETURN+ (IN 000'S) INCOME MENTS FEE CREDITS MENTS(B) RATE
- ------------ ------ ------- -------- -------- --------- ----------- ---------- ---------
INCOME FUND
CLASS AAA
2007(c) $10.32 9.0% $12,063 5.51%(e) 1.69%(e) 1.50%(e) 1.89%(e) 41%
2006 12.04 3.4 12,054 4.36 1.65 1.50 2.02 141
2005 16.53 24.9 16,182 1.83 1.62 1.50 2.40 58
2004 14.12 22.5 16,472 2.51 1.54 1.50 1.85 28
2003 11.87 22.8 13,923 3.70 1.56 1.50 2.05 33
2002 10.03 7.5 9,122 4.42 1.59 1.50 2.61 47
CLASS A
2007(c) $10.64 8.8% $ 69 4.89%(e) 1.94%(e) 1.75%(e) 2.14%(e) 41%
2006 12.34 3.2 97 4.21 1.90 1.75 2.27 141
2005 16.76 24.6 93 1.87 1.87 1.75 3.03 58
2004 14.33 22.2 5 3.96 1.79 1.75 2.10 28
2003 12.00 22.6 10 3.45 1.81 1.75 2.30 33
2002 10.04 7.2 3 4.17 1.84 1.75 2.86 47
CLASS B
2007(c) $10.88 8.5% $ 2 4.88%(e) 2.44%(e) 2.25%(e) 2.64%(e) 41%
2006 12.56 2.7 2 3.72 2.40 2.25 2.77 141
2005 16.86 23.9 2 1.14 2.37 2.25 3.18 58
2004 14.33 21.8 2 1.86 2.29 2.25 2.60 28
2003 12.04 22.0 2 2.95 2.31 2.25 2.80 33
2002(f) 10.07 5.8 10 3.67(e) 2.34(e) 2.25(e) 3.36(e) 47
CLASS C
2007(c) $11.33 8.4% $ 18 4.90%(e) 2.44%(e) 2.25%(e) 2.64%(e) 41%
2006 12.98 2.8 16 3.71 2.40 2.25 2.77 141
2005 17.26 23.9 16 1.56 2.37 2.25 3.41 58
2004 14.66 21.7 5 1.79 2.29 2.25 2.60 28
2003 12.32 22.8 4 2.95 2.31 2.25 2.80 33
2002(f) 10.26 5.8 0.1 3.67(e) 2.34(e) 2.25(e) 3.36(e) 47
- ------------------------
+ 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 distributions and does not reflect applicable
sales charges. Total return for a period of less than one year is not
annualized.
(a) Per share data is calculated using the average shares outstanding method.
(b) During the period, certain fees were voluntarily reduced and/or reimbursed.
If such fee reductions and/or reimbursements had not occurred, the ratio
would have been as shown.
(c) For the six months ended March 31, 2007, unaudited.
(d) Amount represents less than $0.005 per share.
(e) Annualized.
(f) From November 26, 2001 through September 30, 2002, the period through which
Class B and C Shares were continuously outstanding.
See accompanying notes to financial statements.
37
- --------------------------------------------------------------------------------
WESTWOOD FUNDS AND YOUR PERSONAL PRIVACY
================================================================================
WHO ARE WE?
The Gabelli/GAMCO and Westwood 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
SHAREHOLDER?
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. 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 at the time of investment of $2 billion or less) 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 generally less than $3.0 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 average market 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) TEAM MANAGED
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
GABELLI SRI FUND
Seeks to invest in common and preferred stocks of companies that meet the Fund's
guidelines for social responsibility at the time of investment, looking to avoid
companies in tobacco, alcohol, and gaming, defense/weapons contractors, and
manufacturers of abortifacients. The Fund's primary objective is capital
appreciation. (MULTICLASS) PORTFOLIO MANAGER: CHRISTOPHER C. DESMARAIS
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 worldwide 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. (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 debt instruments. (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 FUNDS MAY 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 CAREFULLY
CONSIDER THE INVESTMENT OBJECTIVES, RISKS, CHARGES, AND EXPENSES OF THE FUND
BEFORE INVESTING. THE PROSPECTUS CONTAINS MORE INFORMATION
ABOUT THIS AND OTHER MATTERS AND SHOULD BE READ CAREFULLY BEFORE INVESTING.
THE WESTWOOD FUNDS
================================================================================
One Corporate Center
Rye, New York 10580-1422
GENERAL AND ACCOUNT INFORMATION:
800-GABELLI [800-422-3554]
fax: 914-921-5118
website: www.gabelli.com
e-mail: info@gabelli.com
BOARD OF TRUSTEES
ANTHONY J. COLAVITA WERNER J. ROEDER, MD
ATTORNEY-AT-LAW MEDICAL DIRECTOR
ANTHONY J. COLAVITA, P.C. LAWRENCE HOSPITAL
JAMES P. CONN SALVATORE J. ZIZZA
FORMER CHIEF INVESTMENT OFFICER CHAIRMAN
FINANCIAL SECURITY ASSURANCE ZIZZA & CO., LTD.
HOLDINGS LTD.
OFFICERS
BRUCE N. ALPERT JAMES E. McKEE
PRESIDENT SECRETARY
PETER D. GOLDSTEIN AGNES MULLADY
CHIEF COMPLIANCE OFFICER TREASURER
INVESTMENT ADVISER
Gabelli Advisers, Inc.
INVESTMENT SUB-ADVISER
Westwood Management Corp.
DISTRIBUTOR
Gabelli & Company, Inc.
CUSTODIAN
The Bank of New York
LEGAL COUNSEL
Paul, Hastings, Janofsky & Walker LLP
- --------------------------------------------------------------------------------
This report is submitted for the information of the shareholders of
The Westwood Funds. It is not authorized for distribution to prospective
investors unless preceded or accompanied by an effective prospectus.
- --------------------------------------------------------------------------------
GABWWQ107SR
THE
WESTWOOD
FUNDS
MIGHTY MITES(SM) FUND
EQUITY FUND
BALANCED FUND
INTERMEDIATE BOND FUND
SMALLCAP EQUITY FUND
INCOME FUND
SEMI-ANNUAL REPORT
MARCH 31, 2007
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 407(c)(2)(iv) of Regulation S-K (17 CFR
229.407) (as required by Item 22(b)(15) 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 Westwood Funds
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By (Signature and Title)* /s/ Bruce N. Alpert
-------------------------------------------------------
Bruce N. Alpert, Principal Executive Officer
Date 5/29/07
----------------------------------------------------------------------------
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
Date 5/29/07
----------------------------------------------------------------------------
By (Signature and Title)* /s/ Agnes Mullady
-------------------------------------------------------
Agnes Mullady,
Principal Financial Officer and Treasurer
Date 5/29/07
----------------------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.