UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-04494
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The Gabelli Asset Fund
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(Exact name of registrant as specified in charter)
One Corporate Center
Rye, New York 10580-1422
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(Address of principal executive offices) (Zip code)
Bruce N. Alpert
Gabelli Funds, LLC
One Corporate Center
Rye, New York 10580-1422
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(Name and address of agent for service)
registrant's telephone number, including area code: 1-800-422-3554
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Date of fiscal year end: December 31
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Date of reporting period: June 30, 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 GABELLI ASSET FUND
SEMI-ANNUAL REPORT
JUNE 30, 2007
TO OUR SHAREHOLDERS,
During the second quarter of 2007, The Gabelli Asset Fund (the "Fund")
rose 7.2%, while the Standard & Poor's ("S&P") 500 Index gained 6.3% and the Dow
Jones Industrial Average rose 9.1%. For the six month period ended June 30,
2007, the Fund was up 11.6% versus gains of 7.0% and 8.8% for the S&P 500 Index
and the Dow Jones Industrial Average, respectively.
Enclosed are the financial statements and the investment portfolio as of
June 30, 2007.
COMPARATIVE RESULTS
- --------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS THROUGH JUNE 30, 2007 (A)
------------------------------------------------
Since
Year to Inception
Quarter Date 1 Year 3 Year 5 Year 10 Year 15 Year 20 Year (3/3/86)
- --------------------------------------------------------------------------------------------------------------------
GABELLI ASSET FUND CLASS AAA ..... 7.24% 11.57% 25.52% 16.36% 14.68% 12.08% 13.85% 13.41% 14.50%
S&P 500 Index .................... 6.27 6.96 20.57 11.67 10.70 7.13 11.18 10.81 11.85
Dow Jones Industrial Average ..... 9.10 8.79 22.98 11.26 10.21 7.88 12.20 11.76 13.05
Nasdaq Composite Index ........... 7.50 7.78 19.85 8.33 12.21 6.08 10.74 9.46 9.72
Class A .......................... 7.23 11.54 25.52 16.36 14.67 12.08 13.85 13.41 14.50
1.06(b) 5.13(b) 18.30(b) 14.09(b) 13.32(b)11.41(b) 13.40(b) 13.07(b) 14.17(b)
Class B .......................... 7.03 11.13 24.50 15.53 14.08 11.79 13.65 13.26 14.36
2.03(c) 6.13(c) 19.50(c) 14.77(c) 13.85(c)11.79 13.65 13.26 14.36
Class C .......................... 7.03 11.14 24.58 15.49 14.08 11.78 13.65 13.26 14.36
6.03(d) 10.14(d) 23.58(d) 15.49 14.08 11.78 13.65 13.26 14.36
THE CURRENT EXPENSE RATIO FOR CLASS AAA, A, B, AND C SHARES IS 1.36%, 1.35%,
2.11%, AND 2.11%, RESPECTIVELY. CLASS AAA SHARES DO NOT HAVE A SALES CHARGE. THE
MAXIMUM SALES CHARGE FOR CLASS A, B, AND C SHARES IS 5.75%, 5.00%, AND 1.00%,
RESPECTIVELY.
(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.
PERFORMANCE RETURNS FOR PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED.
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA
PRESENTED. VISIT WWW.GABELLI.COM FOR PERFORMANCE INFORMATION AS OF THE MOST
RECENT MONTH END. INVESTORS SHOULD 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 DOW JONES INDUSTRIAL AVERAGE
IS AN UNMANAGED INDEX OF 30 LARGE CAPITALIZATION STOCKS. THE S&P 500 INDEX
AND THE NASDAQ COMPOSITE INDEX ARE UNMANAGED INDICATORS OF STOCK MARKET
PERFORMANCE. DIVIDENDS ARE CONSIDERED REINVESTED EXCEPT FOR THE NASDAQ
COMPOSITE INDEX. YOU CANNOT INVEST DIRECTLY IN AN INDEX.
THE CLASS AAA SHARES' NET ASSET VALUES ("NAV'S") PER SHARE ARE USED TO
CALCULATE PERFORMANCE FOR THE PERIODS PRIOR TO THE ISSUANCE OF CLASS A
SHARES, CLASS B SHARES, AND CLASS C SHARES ON DECEMBER 31, 2003. THE ACTUAL
PERFORMANCE FOR THE CLASS B SHARES AND CLASS C SHARES WOULD HAVE BEEN LOWER
DUE TO THE ADDITIONAL EXPENSES ASSOCIATED WITH THESE CLASSES OF SHARES.
(b) INCLUDES THE EFFECT OF THE MAXIMUM 5.75% SALES CHARGE AT THE BEGINNING OF
THE PERIOD.
(c) PERFORMANCE RESULTS INCLUDE THE DEFERRED SALES CHARGES FOR THE CLASS
B SHARES UPON REDEMPTION AT THE END OF THE QUARTER, YEAR TO DATE, ONE YEAR,
THREE YEAR, AND FIVE YEAR PERIODS OF 5%, 5%, 5%, 3%, AND 2%, RESPECTIVELY,
OF THE FUND'S NAV AT THE TIME OF PURCHASE OR SALE, WHICHEVER IS LOWER.
CLASS BSHARES ARE NOT AVAILABLE FOR NEW PURCHASES.
(d) PERFORMANCE RESULTS INCLUDE THE DEFERRED SALES CHARGES FOR THE CLASS C
SHARES UPON REDEMPTION AT THE END OF THE QUARTER, YEAR TO DATE, AND ONE
YEAR PERIODS OF 1% OF THE FUND'S NAV AT THE TIME OF PURCHASE OR SALE,
WHICHEVER IS LOWER.
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We have separated the portfolio manager's commentary from the financial
statements and investment portfolio due to corporate governance regulations
stipulated by the Sarbanes-Oxley Act of 2002. We have done this to ensure that
the content of the portfolio manager's commentary is unrestricted. The financial
statements and investment portfolio are mailed separately from the commentary.
Both the commentary and the financial statements, including the portfolio of
investments, will be available on our website at www.gabelli.com/funds.
- --------------------------------------------------------------------------------
THE GABELLI ASSET FUND
DISCLOSURE OF FUND EXPENSES (UNAUDITED)
For the Six Month Period from January 1, 2007 through June 30, 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
01/01/07 06/30/07 Ratio Period*
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THE GABELLI ASSET FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Class AAA $1,000.00 $1,115.70 1.35% $ 7.04
Class A $1,000.00 $1,115.40 1.35% $ 7.04
Class B $1,000.00 $1,111.30 2.09% $10.88
Class C $1,000.00 $1,111.40 2.10% $10.93
HYPOTHETICAL 5% RETURN
Class AAA $1,000.00 $1,018.00 1.35% $ 6.72
Class A $1,000.00 $1,018.00 1.35% $ 6.72
Class B $1,000.00 $1,014.35 2.09% $10.38
Class C $1,000.00 $1,014.30 2.10% $10.43
* Expenses are equal to the Fund's annualized expense ratio for the last six
months multiplied by the average account value over the period, multiplied by
the number of days in the most recent fiscal half-year, then divided by 365.
2
SUMMARY OF PORTFOLIO HOLDINGS (UNAUDITED)
The following table presents portfolio holdings as a percent of total net assets
as of June 30, 2007:
THE GABELLI ASSET FUND
Food and Beverage ................................. 11.3%
Energy and Utilities .............................. 7.5%
Diversified Industrial ............................ 6.5%
Financial Services ................................ 6.5%
Telecommunications ................................ 6.0%
Cable and Satellite ............................... 5.9%
Equipment and Supplies ............................ 5.6%
Publishing ........................................ 5.3%
Consumer Products ................................. 4.6%
Entertainment ..................................... 4.6%
Aviation: Parts and Services ...................... 3.3%
Health Care ....................................... 3.2%
Hotels and Gaming ................................. 3.0%
Broadcasting ...................................... 2.8%
Automotive: Parts and Accessories ................. 2.6%
Machinery ......................................... 2.4%
U.S. Government Obligations ....................... 2.0%
Communications Equipment .......................... 1.7%
Specialty Chemicals ............................... 1.6%
Metals and Mining ................................. 1.4%
Automotive ........................................ 1.4%
Consumer Services ................................. 1.3%
Environmental Services ............................ 1.3%
Aerospace ......................................... 1.3%
Electronics ....................................... 1.1%
Agriculture ....................................... 1.1%
Retail ............................................ 0.9%
Transportation .................................... 0.9%
Wireless Communications ........................... 0.9%
Business Services ................................. 0.8%
Real Estate ....................................... 0.6%
Computer Software and Services .................... 0.3%
Manufactured Housing and
Recreational Vehicles .......................... 0.3%
Closed-End Funds .................................. 0.1%
Other Assets and Liabilities (Net) ................ (0.1)%
------
100.0%
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THE FUND FILES 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 MARCH 31,
2007. SHAREHOLDERS MAY OBTAIN THIS INFORMATION AT WWW.GABELLI.COM OR BY CALLING
THE FUND AT 800-GABELLI (800-422-3554). THE FUND'S FORM N-Q IS AVAILABLE ON THE
SEC'S WEBSITE AT WWW.SEC.GOV AND MAY ALSO BE REVIEWED AND COPIED AT THE 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
The Fund files Form N-PX with its complete proxy voting record for the 12 months
ended June 30th, no later than August 31st of each year. A description of the
Fund's proxy voting policies, procedures, and how the Fund voted proxies
relating to portfolio securities is 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 SEC's website at
www.sec.gov.
3
THE GABELLI ASSET FUND
SCHEDULE OF INVESTMENTS -- JUNE 30, 2007 (UNAUDITED)
================================================================================
MARKET
SHARES COST VALUE
------ ------- --------
COMMON STOCKS -- 97.8%
AEROSPACE -- 1.1%
70,000 Boeing Co. .............. $ 2,424,385 $ 6,731,200
100,000 Herley Industries Inc.+ . 1,509,337 1,637,000
12,000 Lockheed Martin Corp. ... 354,600 1,129,560
15,000 Northrop Grumman Corp. .. 734,191 1,168,050
2,030,000 Rolls-Royce Group plc+ .. 15,039,463 21,951,787
118,400,000 Rolls-Royce Group plc,
Cl. B ................. 231,986 242,516
-------------- --------------
20,293,962 32,860,113
-------------- --------------
AGRICULTURE -- 1.1%
635,000 Archer-Daniels-Midland Co. 8,714,776 21,012,150
85,058 Monsanto Co. ............ 818,413 5,744,817
3,000 Potash Corp. of
Saskatchewan Inc. ..... 41,184 233,910
100,000 The Mosaic Co.+ ......... 1,586,792 3,902,000
-------------- --------------
11,161,165 30,892,877
-------------- --------------
AUTOMOTIVE -- 1.4%
120,000 General Motors Corp. .... 3,714,069 4,536,000
400,000 Navistar International
Corp.+ ................ 7,339,853 26,400,000
67,500 PACCAR Inc. ............. 522,021 5,875,200
25,000 Volkswagen AG ........... 1,044,095 3,996,075
-------------- --------------
12,620,038 40,807,275
-------------- --------------
AUTOMOTIVE: PARTS AND ACCESSORIES -- 2.6%
96,000 BorgWarner Inc. ......... 1,888,822 8,259,840
240,000 CLARCOR Inc. ............ 1,718,044 8,983,200
300,000 Dana Corp.+ ............. 1,996,093 606,000
260,000 Earl Scheib Inc.+ ....... 1,603,290 962,000
195,000 Federal-Mogul Corp.+ .... 411,720 212,550
500,000 Genuine Parts Co. ....... 12,128,320 24,800,000
140,000 Johnson Controls Inc. ... 3,793,042 16,207,800
175,000 Midas Inc.+ ............. 2,332,651 3,967,250
285,000 Modine Manufacturing Co. 6,650,816 6,441,000
145,000 Proliance International Inc.+ 898,178 449,500
180,000 Standard Motor Products
Inc. .................. 2,488,936 2,705,400
75,000 Superior Industries
International Inc. .... 1,853,169 1,632,000
50,000 Tenneco Inc.+ ........... 190,244 1,752,000
200,000 TI Automotive Ltd.,
Cl. A+ (a) ............ 0 0
-------------- --------------
37,953,325 76,978,540
-------------- --------------
AVIATION: PARTS AND SERVICES -- 3.3%
510,000 Curtiss-Wright Corp. .... 3,360,602 23,771,100
15,000 EDO Corp. ............... 431,784 493,050
570,000 GenCorp Inc.+ ........... 2,079,772 7,449,900
MARKET
SHARES COST VALUE
------ ------- --------
110,000 Kaman Corp. ............. $ 1,534,270 $ 3,430,900
310,000 Precision Castparts Corp. 3,780,441 37,621,600
102,000 Sequa Corp., Cl. A+ ..... 4,294,565 11,424,000
105,000 Sequa Corp., Cl. B+ ..... 5,381,630 11,884,425
260,000 The Fairchild Corp., Cl. A+ 1,358,151 577,200
-------------- --------------
22,221,215 96,652,175
-------------- --------------
BROADCASTING -- 2.8%
400,000 CBS Corp., Cl. A ........ 7,019,670 13,332,000
50,000 CBS Corp., Cl. B ........ 1,257,800 1,666,000
30,717 Citadel Broadcasting Corp. 81,666 198,122
400,000 Clear Channel
Communications Inc. ... 15,147,647 15,128,000
10,000 Cogeco Inc. ............. 194,764 373,715
13,333 Corus Entertainment Inc.,
Cl. B, New York ....... 43,320 624,384
6,667 Corus Entertainment Inc.,
Cl. B, Toronto ........ 21,662 311,680
90,000 Fisher Communications
Inc.+ ................. 4,712,056 4,571,100
844 Granite Broadcasting
Corp.+ ................ 69,153 27,417
340,000 Gray Television Inc. .... 3,676,794 3,151,800
8,000 Gray Television Inc., Cl. A 76,930 74,800
230,000 Liberty Media Corp. -
Capital, Cl. A+ ....... 4,578,481 27,066,400
300,000 Lin TV Corp., Cl. A+ .... 5,652,204 5,643,000
40,000 Sinclair Broadcast Group
Inc., Cl. A ........... 358,285 568,800
400,000 Television Broadcasts Ltd. 1,815,551 2,813,587
140,000 Tokyo Broadcasting
System Inc. ........... 4,663,263 4,286,700
230,000 Young Broadcasting Inc.,
Cl. A+ ................ 2,442,732 848,700
-------------- --------------
51,811,978 80,686,205
-------------- --------------
BUSINESS SERVICES -- 0.8%
25,851 ACCO Brands Corp.+ ...... 152,168 595,866
50,000 aQuantive Inc.+ ......... 3,186,485 3,190,000
10,000 Avis Budget Group Inc.+ . 189,500 284,300
45,000 ChoicePoint Inc.+ ....... 1,609,312 1,910,250
12,500 Clear Channel Outdoor
Holdings Inc., Cl. A+ . 259,405 354,250
195,000 Ecolab Inc. ............. 1,837,428 8,326,500
10,000 Imation Corp. ........... 203,344 368,600
65,000 Landauer Inc. ........... 402,818 3,201,250
23,500 MasterCard Inc., Cl. A .. 916,500 3,897,945
115,000 Nashua Corp.+ ........... 1,679,783 1,240,850
-------------- --------------
10,436,743 23,369,811
-------------- --------------
See accompanying notes to financial statements.
4
THE GABELLI ASSET FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- JUNE 30, 2007 (UNAUDITED)
================================================================================
MARKET
SHARES COST VALUE
------ ------- --------
COMMON STOCKS (CONTINUED)
CABLE AND SATELLITE -- 5.9%
2,000,000 Cablevision Systems
Corp., Cl. A+ ......... $ 5,712,538 $ 72,380,000
245,000 Comcast Corp., Cl. A+ ... 4,091,857 6,889,400
60,000 Comcast Corp.,
Cl. A, Special+ ....... 306,462 1,677,600
100,000 EchoStar Communications
Corp., Cl. A+ ......... 2,982,011 4,337,000
320,096 Liberty Global Inc., Cl. A+ 3,187,437 13,136,740
260,000 Liberty Global Inc., Cl. C+ 2,801,037 10,218,000
1,240,000 Rogers Communications
Inc., Cl. B, New York 6,438,452 52,687,600
50,000 Rogers Communications
Inc., Cl. B, Toronto .. 229,821 2,131,894
60,000 Shaw Communications
Inc., Cl. B ........... 164,952 2,535,743
80,000 Shaw Communications
Inc., Cl. B, Non-Voting 312,647 3,363,200
150,000 The DIRECTV Group Inc.+ 2,281,295 3,466,500
20,000 Time Warner Cable Inc.,
Cl. A+ ................ 761,800 783,400
-------------- --------------
29,270,309 173,607,077
-------------- --------------
CLOSED-END FUNDS -- 0.1%
78,001 Royce Value Trust Inc. .. 938,786 1,670,782
-------------- --------------
COMMUNICATIONS EQUIPMENT -- 1.6%
50,000 Alcatel-Lucent, ADR ..... 1,140,036 700,000
565,000 Corning Inc.+ ........... 4,174,676 14,435,750
240,000 Motorola Inc. ........... 2,546,729 4,248,000
110,000 Nortel Networks Corp.,
New York+ ............. 2,932,023 2,645,500
90,000 Nortel Networks Corp.,
Toronto+ .............. 2,888,687 2,169,632
390,000 Thomas & Betts Corp.+ ... 7,650,700 22,620,000
-------------- --------------
21,332,851 46,818,882
-------------- --------------
COMPUTER SOFTWARE AND SERVICES -- 0.3%
10,000 CA Inc. ................. 145,700 258,300
1,600 eBay Inc.+ .............. 24,652 51,488
50,000 Jupitermedia Corp.+ ..... 287,066 364,000
26,026 Telecom Italia Media SpA+ 26,184 9,564
265,000 Yahoo! Inc.+ ............ 8,644,606 7,189,450
-------------- --------------
9,128,208 7,872,802
-------------- --------------
CONSUMER PRODUCTS -- 4.6%
50,000 Alberto-Culver Co. ...... 1,116,801 1,186,000
100,000 Altadis SA .............. 6,742,411 6,658,997
12,000 Altria Group Inc. ....... 274,083 841,680
10,000 Avon Products Inc. ...... 275,840 367,500
11,000 Christian Dior SA ....... 307,335 1,432,523
MARKET
SHARES COST VALUE
------ ------- --------
280,000 Church & Dwight Co. Inc. $ 1,838,465 $ 13,568,800
38,000 Clorox Co. .............. 2,111,402 2,359,800
36,000 Colgate-Palmolive Co. ... 1,894,813 2,334,600
40,000 Eastman Kodak Co. ....... 950,513 1,113,200
275,000 Energizer Holdings Inc.+ 4,987,400 27,390,000
110,000 Fortune Brands Inc. ..... 2,384,058 9,060,700
3,000 Givaudan SA ............. 1,028,013 2,971,756
37,000 Harley-Davidson Inc. .... 93,194 2,205,570
90,000 Lenox Group Inc.+ ....... 949,612 632,700
80,000 Mattel Inc. ............. 1,444,000 2,023,200
38,000 National Presto
Industries Inc. ....... 1,219,218 2,368,920
4,000 Nintendo Co. Ltd. ....... 1,244,028 1,465,178
520,000 Procter & Gamble Co. .... 17,588,062 31,818,800
50,000 Reckitt Benckiser plc ... 1,570,345 2,746,095
120,000 Sally Beauty Holdings Inc.+ 980,508 1,080,000
60,000 Spectrum Brands Inc.+ ... 583,519 406,200
60,000 Svenska Cellulosa
Aktiebolaget, Cl. B ... 864,557 1,008,890
1,000,000 Swedish Match AB ........ 10,327,823 19,373,611
10,000 Syratech Corp.+ ......... 2,000 500
45,000 Wolverine World Wide Inc. 418,548 1,246,950
-------------- --------------
61,196,548 135,662,170
-------------- --------------
CONSUMER SERVICES -- 1.3%
360,000 IAC/InterActiveCorp+ .... 4,107,743 12,459,600
730,000 Liberty Media Corp. -
Interactive, Cl. A+ ... 4,012,490 16,300,900
435,000 Rollins Inc. ............ 3,384,294 9,904,950
-------------- --------------
11,504,527 38,665,450
-------------- --------------
DIVERSIFIED INDUSTRIAL -- 6.5%
45,000 Acuity Brands Inc. ...... 632,250 2,712,600
5,000 Anixter International Inc.+ 45,044 376,050
75,403 Contax Participacoes
SA, ADR ............... 30,974 92,783
490,000 Cooper Industries
Ltd., Cl. A ........... 12,041,804 27,974,100
450,000 Crane Co. ............... 7,844,551 20,452,500
110,000 Gardner Denver Inc.+ .... 901,088 4,680,500
446,000 Greif Inc., Cl. A ....... 5,167,942 26,586,060
420,000 Honeywell International Inc. 13,542,006 23,637,600
590,000 ITT Corp. ............... 9,292,829 40,285,200
150,000 Katy Industries Inc.+ ... 1,284,355 195,000
80,000 Magnetek Inc.+ .......... 414,007 412,000
240,000 Myers Industries Inc. ... 1,460,520 5,306,400
52,000 Pentair Inc. ............ 762,065 2,005,640
170,000 Rinker Group Ltd., ADR .. 13,340,305 13,532,000
53,333 Smiths Group plc ........ 880,176 1,269,128
80,000 Smiths Group plc, Cl. B+ 578,435 554,239
185,000 The Lamson &
Sessions Co.+ ......... 1,134,427 4,915,450
See accompanying notes to financial statements.
5
THE GABELLI ASSET FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- JUNE 30, 2007 (UNAUDITED)
================================================================================
MARKET
SHARES COST VALUE
------ ------- --------
COMMON STOCKS (CONTINUED)
DIVERSIFIED INDUSTRIAL (CONTINUED)
112,500 Trinity Industries Inc. $ 931,715 $ 4,898,250
300,000 Tyco International Ltd. 8,569,207 10,137,000
-------------- --------------
78,853,700 190,022,500
-------------- --------------
ELECTRONICS -- 1.1%
9,600 Chemring Group plc ...... 125,113 379,003
3,000 Hitachi Ltd., ADR ....... 172,200 212,250
120,000 Intel Corp. ............. 2,567,140 2,851,200
13,000 Kyocera Corp., ADR ...... 448,063 1,370,330
250,000 LSI Corp.+ .............. 1,628,435 1,877,500
22,000 Molex Inc., Cl. A ....... 609,932 584,100
46,000 Samsung Electronics Co.
Ltd., GDR (b) ......... 8,616,601 14,090,269
50,000 Sony Corp., ADR ......... 1,556,873 2,568,500
205,000 Texas Instruments Inc. .. 5,187,155 7,714,150
-------------- --------------
20,911,512 31,647,302
-------------- --------------
ENERGY AND UTILITIES -- 7.5%
35,000 AGL Resources Inc. ...... 585,625 1,416,800
150,000 Allegheny Energy Inc.+ .. 1,510,943 7,761,000
1,000,000 Aquila Inc.+ ............ 4,221,323 4,090,000
250,000 BP plc, ADR ............. 7,151,966 18,035,000
2,000 Cameron International
Corp.+ ................ 69,450 142,940
25,000 CH Energy Group Inc. .... 1,040,745 1,124,250
354,000 Chevron Corp. ........... 13,555,634 29,820,960
360,000 ConocoPhillips .......... 10,273,006 28,260,000
20,000 Constellation Energy
Group Inc. ............ 484,262 1,743,400
124,000 Devon Energy Corp. ...... 1,695,494 9,707,960
120,000 DPL Inc. ................ 2,716,196 3,400,800
20,000 DTE Energy Co. .......... 832,127 964,400
170,000 Duke Energy Corp. ....... 1,922,357 3,111,000
25,000 Edison International .... 425,000 1,403,000
330,000 El Paso Corp. ........... 2,738,857 5,685,900
235,000 El Paso Electric Co.+ ... 2,798,469 5,771,600
150,000 Energy East Corp. ....... 3,072,446 3,913,500
110,000 EOG Resources Inc. ...... 503,773 8,036,600
340,000 Exxon Mobil Corp. ....... 8,166,149 28,519,200
9,000 FPL Group Inc. .......... 266,625 510,660
38,000 GlobalSantaFe Corp. ..... 991,439 2,745,500
120,000 Halliburton Co. ......... 3,330,213 4,140,000
130,000 Mirant Corp. Escrow+ (a) 0 0
1,000 Niko Resources Ltd. ..... 57,456 91,058
22,086 NiSource Inc. ........... 475,953 457,401
180,000 Northeast Utilities ..... 3,429,763 5,104,800
10,000 NSTAR ................... 284,757 324,500
24,000 Oceaneering International
Inc.+ ................. 650,712 1,263,360
1,000 PetroChina Co. Ltd., ADR 61,027 148,680
MARKET
SHARES COST VALUE
------ ------- --------
100,000 Progress Energy Inc.,
CVO+ .................. $ 52,000 $ 36,000
50,000 Royal Dutch Shell plc,
Cl. A, ADR ............ 2,980,580 4,060,000
118,000 SJW Corp. ............... 1,872,429 3,929,400
260,000 Southwest Gas Corp. ..... 4,582,147 8,790,600
118,000 Spectra Energy Corp. .... 1,900,714 3,063,280
110,000 The AES Corp.+ .......... 434,151 2,406,800
65,000 Transocean Inc.+ ........ 3,979,635 6,888,700
100,000 TXU Corp. ............... 3,261,960 6,730,000
16,666 UIL Holdings Corp. ...... 426,371 551,645
80,000 Weatherford International
Ltd.+ ................. 3,574,054 4,419,200
-------------- --------------
96,375,808 218,569,894
-------------- --------------
ENTERTAINMENT -- 4.6%
110,000 Aruze Corp. ............. 3,527,660 3,421,726
8,010 Chestnut Hill Ventures+ (a) 218,000 364,551
700,000 Discovery Holding Co.,
Cl. A+ ............... 5,315,943 16,093,000
45,000 DreamWorks Animation
SKG Inc., Cl. A+ ...... 1,084,168 1,297,800
19,406 EMI Group plc ........... 75,408 104,438
185,000 EMI Group plc, ADR ...... 1,538,472 1,989,490
600,000 Gemstar-TV Guide
International Inc.+ ... 2,634,672 2,952,000
600,000 Grupo Televisa SA, ADR 4,129,388 16,566,000
1,440,000 Rank Group plc .......... 9,837,464 5,385,759
20,000 Regal Entertainment
Group, Cl. A .......... 290,903 438,600
100,000 Six Flags Inc.+ ......... 450,414 609,000
400,000 The Walt Disney Co. ..... 8,084,963 13,656,000
1,500,000 Time Warner Inc. ........ 19,847,989 31,560,000
50,000 Triple Crown Media Inc.+ 549,453 466,000
400,000 Viacom Inc., Cl. A+ ..... 10,979,484 16,640,000
530,000 Vivendi ................. 10,600,520 22,890,032
55,000 World Wrestling
Entertainment Inc., Cl. A 549,085 879,450
-------------- --------------
79,713,986 135,313,846
-------------- --------------
ENVIRONMENTAL SERVICES -- 1.3%
350,000 Allied Waste Industries Inc.+ 3,229,628 4,711,000
450,000 Republic Services Inc. .. 3,560,581 13,788,000
500,000 Waste Management Inc. ... 10,415,537 19,525,000
-------------- --------------
17,205,746 38,024,000
-------------- --------------
EQUIPMENT AND SUPPLIES -- 5.6%
709,000 AMETEK Inc. ............. 2,751,141 28,133,120
6,000 Amphenol Corp., Cl. A ... 23,163 213,900
106,000 CIRCOR International Inc. 932,373 4,285,580
155,000 Crown Holdings Inc.+ .... 698,786 3,870,350
155,000 CTS Corp. ............... 815,744 1,962,300
See accompanying notes to financial statements.
6
THE GABELLI ASSET FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- JUNE 30, 2007 (UNAUDITED)
================================================================================
MARKET
SHARES COST VALUE
------ ------- --------
COMMON STOCKS (CONTINUED)
EQUIPMENT AND SUPPLIES (CONTINUED)
4,000 Danaher Corp. ........... $ 70,641 $ 302,000
380,000 Donaldson Co. Inc. ...... 1,470,210 13,509,000
290,000 Fedders Corp.+ .......... 1,130,994 66,700
417,000 Flowserve Corp. ......... 6,599,240 29,857,200
150,000 Gerber Scientific Inc.+ . 1,412,103 1,743,000
210,000 GrafTech International Ltd.+ 2,229,118 3,536,400
780,000 IDEX Corp. .............. 2,958,676 30,061,200
24,000 Ingersoll-Rand Co.
Ltd., Cl. A ........... 501,720 1,315,680
210,000 Interpump Group SpA ..... 825,318 2,269,540
200,000 Lufkin Industries Inc. .. 1,810,811 12,910,000
47,866 Met-Pro Corp. ........... 321,979 751,975
16,524 Mueller Water Products
Inc., Cl. B ........... 227,158 247,860
20,000 Sealed Air Corp. ........ 168,679 620,400
110,000 Tenaris SA, ADR ......... 5,219,832 5,385,600
35,000 The Manitowoc Co. Inc. .. 127,596 2,813,300
120,000 The Weir Group plc ...... 504,947 1,759,107
30,000 Valmont Industries Inc. . 242,908 2,182,800
400,000 Watts Water Technologies
Inc., Cl. A ........... 4,652,635 14,988,000
-------------- --------------
35,695,772 162,785,012
-------------- --------------
FINANCIAL SERVICES -- 6.5%
20,000 A.G. Edwards Inc. ....... 1,747,323 1,691,000
15,500 Alleghany Corp.+ ........ 2,688,224 6,300,750
420,000 American Express Co. .... 9,628,368 25,695,600
60,000 American International
Group Inc. ............ 4,122,601 4,201,800
85,000 Ameriprise Financial Inc. 1,628,209 5,403,450
50,000 Argonaut Group Inc. ..... 1,184,298 1,560,500
10,000 Bank of America Corp. ... 188,637 488,900
220 Berkshire Hathaway Inc.,
Cl. A+ ................ 874,549 24,084,500
55,000 BKF Capital Group Inc.+ 614,666 127,050
7,500 Calamos Asset
Management Inc., Cl. A 135,000 191,625
450,000 Citigroup Inc. .......... 23,067,078 23,080,500
35,000 Commerzbank AG .......... 624,519 1,681,194
110,000 Commerzbank AG, ADR ..... 2,308,920 5,236,748
154,000 Deutsche Bank AG ........ 6,960,775 22,289,960
55,000 H&R Block Inc. .......... 694,635 1,285,350
31,000 Interactive Brokers Group
Inc., Cl. A+ .......... 904,342 841,030
120,000 Janus Capital Group Inc. 2,225,261 3,340,800
25,000 JPMorgan Chase & Co. .... 508,088 1,211,250
6,000 Legg Mason Inc. ......... 527,420 590,280
12,000 Lehman Brothers
Holdings Inc. ......... 54,150 894,240
75,000 Leucadia National Corp. 655,691 2,643,750
MARKET
SHARES COST VALUE
------ ------- --------
100,000 Marsh & McLennan
Companies Inc. ........ $ 3,171,189 $ 3,088,000
120,000 Mellon Financial Corp. .. 4,103,608 5,280,000
22,000 Merrill Lynch & Co. Inc. 909,870 1,838,760
45,100 NewAlliance Bancshares
Inc. .................. 731,342 663,872
30,000 Nuveen Investments Inc.,
Cl. A ................. 1,895,276 1,864,500
30,000 PNC Financial Services
Group Inc. ............ 1,456,850 2,147,400
2,500 Prudential Financial Inc. 68,750 243,075
85,000 State Street Corp. ...... 661,975 5,814,000
20,000 SunTrust Banks Inc. ..... 424,879 1,714,800
60,000 T. Rowe Price Group Inc. 1,012,984 3,113,400
1,000 The Allstate Corp. ...... 23,675 61,510
55,000 The Bank of New York
Co. Inc. .............. 1,858,706 2,279,200
100 The Blackstone Group LP+ 3,004 2,927
378,000 The Midland Co. ......... 1,942,907 17,743,320
150,000 The Phoenix
Companies Inc. ........ 2,222,423 2,251,500
40,000 The Travelers
Companies Inc. ........ 1,575,006 2,140,000
19,000 Unitrin Inc. ............ 498,464 934,420
8,500 Value Line Inc. ......... 136,515 373,150
180,000 Waddell & Reed Financial
Inc., Cl. A ........... 3,692,409 4,681,800
-------------- --------------
87,732,586 189,075,911
-------------- --------------
FOOD AND BEVERAGE -- 11.3%
345,000 Brown-Forman Corp., Cl. A 8,021,206 26,175,150
120,000 Cadbury Schweppes
plc, ADR .............. 4,284,867 6,516,000
135,000 Campbell Soup Co. ....... 3,720,358 5,239,350
150,000 China Mengniu Dairy
Co. Ltd. .............. 474,582 516,997
60,000 Coca-Cola Enterprises Inc. 1,176,706 1,440,000
11,000 Coca-Cola Hellenic
Bottling Co. SA ....... 268,442 505,780
60,000 Constellation Brands Inc.,
Cl. A+ ................ 1,281,157 1,456,800
340,000 Corn Products
International Inc. .... 4,148,001 15,453,000
220,000 Davide Campari-Milano
SpA ................... 2,223,586 2,309,129
215,000 Del Monte Foods Co. ..... 2,130,243 2,614,400
318,000 Diageo plc, ADR ......... 11,903,832 26,492,580
70,000 Farmer Brothers Co. ..... 943,094 1,584,100
300,000 Flowers Foods Inc. ...... 1,927,372 10,008,000
42,000 Fomento Economico
Mexicano SAB de CV, ADR 1,291,042 1,651,440
360,000 General Mills Inc. ...... 12,545,904 21,031,200
See accompanying notes to financial statements.
7
THE GABELLI ASSET FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- JUNE 30, 2007 (UNAUDITED)
================================================================================
MARKET
SHARES COST VALUE
------ ------- --------
COMMON STOCKS (CONTINUED)
FOOD AND BEVERAGE (CONTINUED)
408,000 Groupe Danone ........... $ 20,352,486 $ 33,143,615
180,000 Groupe Danone, ADR ...... 1,851,062 2,926,800
1,589,300 Grupo Bimbo SA de CV,
Cl. A ................. 3,285,390 10,003,462
180,000 H.J. Heinz Co. .......... 6,572,778 8,544,600
10,000 Hain Celestial Group Inc.+ 141,134 271,400
10,000 Heineken NV ............. 473,801 588,617
220,000 ITO EN Ltd. ............. 6,883,372 7,236,548
125,000 Kellogg Co. ............. 3,311,846 6,473,750
95,000 Kerry Group plc, Cl. A .. 1,122,284 2,664,628
170,000 Kikkoman Corp. .......... 2,055,582 2,529,462
140,000 Kraft Foods Inc., Cl. A 4,211,871 4,935,000
33,000 LVMH Moet Hennessy
Louis Vuitton SA ...... 1,150,670 3,820,559
75,000 Morinaga Milk Industry
Co. Ltd. .............. 327,266 302,132
9,000 Nestle SA ............... 1,868,526 3,433,483
280,000 Nissin Food Products
Co. Ltd. .............. 10,238,467 9,392,081
850,000 PepsiAmericas Inc. ...... 13,139,557 20,876,000
355,000 PepsiCo Inc. ............ 9,198,266 23,021,750
12,424 Pernod-Ricard SA ........ 2,007,105 2,756,872
155,000 Ralcorp Holdings Inc.+ .. 2,450,803 8,284,750
45,000 Remy Cointreau SA ....... 2,908,550 3,377,208
300,000 The Coca-Cola Co. ....... 12,025,431 15,693,000
65,000 The Hershey Co. ......... 1,230,126 3,290,300
20,000 The J.M. Smucker Co. .... 547,733 1,273,200
162,860 Tootsie Roll Industries Inc. 2,005,302 4,512,851
255,000 Wm. Wrigley Jr. Co. ..... 6,240,995 14,104,050
63,750 Wm. Wrigley Jr. Co., Cl. B 1,658,999 3,506,250
340,000 YAKULT HONSHA Co. Ltd. .. 9,465,225 8,615,635
-------------- --------------
183,065,019 328,571,929
-------------- --------------
HEALTH CARE -- 3.2%
20,000 Advanced Medical
Optics Inc.+ .......... 741,493 697,600
52,444 Allergan Inc. ........... 2,458,117 3,022,872
53,000 Alpharma Inc., Cl. A .... 1,316,748 1,378,530
44,000 Amgen Inc.+ ............. 203,194 2,432,760
70,000 AngioDynamics Inc.+ ..... 1,331,466 1,260,700
6,000 ArthroCare Corp.+ ....... 154,880 263,460
44,000 Biogen Idec Inc.+ ....... 409,921 2,354,000
20,000 Biomet Inc. ............. 803,385 914,400
150,000 Bristol-Myers Squibb Co. 4,060,053 4,734,000
82,000 Chemed Corp. ............ 1,285,790 5,435,780
58,000 CONMED Corp.+ ........... 1,270,859 1,698,240
5,000 Dade Behring Holdings Inc. 229,894 265,600
10,000 DENTSPLY International Inc. 190,509 382,600
MARKET
SHARES COST VALUE
------ ------- --------
90,000 Eli Lilly & Co. ......... $ 5,251,364 $ 5,029,200
40,000 Exactech Inc.+ .......... 612,866 643,200
40,000 Henry Schein Inc.+ ...... 1,091,829 2,137,200
27,000 Hospira Inc.+ ........... 983,460 1,054,080
25,000 IMS Health Inc. ......... 663,577 803,250
15,000 Inverness Medical
Innovations Inc.+ ..... 255,011 765,300
45,000 Invitrogen Corp.+ ....... 2,307,565 3,318,750
100,000 Johnson & Johnson ....... 3,213,956 6,162,000
2,000 Laboratory Corp. of
America Holdings+ ..... 157,830 156,520
118,000 Medco Health
Solutions Inc.+ ....... 3,767,554 9,202,820
150,000 Merck & Co. Inc. ........ 4,480,183 7,470,000
2,000 Nobel Biocare Holding AG 285,863 655,751
12,000 Orthofix International NV+ 416,910 539,640
4,000 OrthoLogic Corp.+ ....... 13,880 5,680
20,000 Pain Therapeutics Inc.+ . 165,381 174,200
32,000 Patterson Companies Inc.+ 702,130 1,192,640
600,000 Pfizer Inc. ............. 11,577,326 15,342,000
130,000 Schering-Plough Corp. ... 2,409,430 3,957,200
2,000 Stryker Corp. ........... 65,440 126,180
40,000 Thoratec Corp.+ ......... 514,145 735,600
60,000 UnitedHealth Group Inc. 3,035,521 3,068,400
35,000 William Demant
Holding A/S+ .......... 1,644,239 3,481,922
5,000 Wright Medical Group Inc.+ 92,660 120,600
55,000 Wyeth ................... 2,169,854 3,153,700
3,000 Young Innovations Inc. .. 87,647 87,540
3,500 Zimmer Holdings Inc.+ ... 217,154 297,115
-------------- --------------
60,639,084 94,521,030
-------------- --------------
HOTELS AND GAMING -- 3.0%
1,200 Accor SA ................ 103,072 106,739
16,000 Churchill Downs Inc. .... 629,526 838,080
340,000 Gaylord Entertainment Co.+ 9,356,448 18,237,600
45,000 Harrah's Entertainment Inc. 1,614,531 3,836,700
650,000 Hilton Hotels Corp. ..... 8,942,483 21,755,500
11,000 Home Inns & Hotels
Management Inc., ADR+ . 358,483 354,310
35,000 Host Hotels & Resorts Inc. 715,575 809,200
39,600 International Game
Technology ............ 1,114,521 1,572,120
1,582,576 Ladbrokes plc ........... 15,136,688 13,760,703
22,000 Las Vegas Sands Corp.+ .. 809,047 1,680,580
3,615,000 Mandarin Oriental
International Ltd. .... 7,250,864 8,061,450
100,000 MGM Mirage+ ............. 3,767,167 8,248,000
8,000 Orient-Express Hotels
Ltd., Cl. A ........... 386,142 427,200
See accompanying notes to financial statements.
8
THE GABELLI ASSET FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- JUNE 30, 2007 (UNAUDITED)
================================================================================
MARKET
SHARES COST VALUE
------ ------- --------
COMMON STOCKS (CONTINUED)
HOTELS AND GAMING (CONTINUED)
60,000 Pinnacle Entertainment
Inc.+ ................. $ 1,776,000 $ 1,689,000
90,000 Starwood Hotels &
Resorts Worldwide Inc. 1,823,635 6,036,300
30,000 Wyndham Worldwide Corp.+ 714,450 1,087,800
-------------- --------------
54,498,632 88,501,282
-------------- --------------
MACHINERY -- 2.4%
155,000 Baldor Electric Co. ..... 5,270,000 7,638,400
140,000 Caterpillar Inc. ........ 927,858 10,962,000
50,000 CNH Global NV ........... 1,156,505 2,554,500
395,000 Deere & Co. ............. 6,618,190 47,692,300
-------------- --------------
13,972,553 68,847,200
-------------- --------------
MANUFACTURED HOUSING AND RECREATIONAL VEHICLES -- 0.3%
150,000 Cavalier Homes Inc.+ .... 741,010 733,500
32,200 Cavco Industries Inc.+ .. 609,204 1,208,144
110,000 Champion Enterprises Inc.+ 1,051,665 1,081,300
35,000 Coachmen Industries Inc. 487,069 338,100
115,000 Fleetwood Enterprises Inc.+ 1,319,659 1,040,750
76,000 Huttig Building
Products Inc.+ ........ 232,463 575,320
20,000 Nobility Homes Inc. ..... 437,266 420,600
20,000 Palm Harbor Homes Inc.+ . 346,431 283,000
71,500 Skyline Corp. ........... 2,837,933 2,145,715
-------------- --------------
8,062,700 7,826,429
-------------- --------------
METALS AND MINING -- 1.4%
60,000 Alcoa Inc. .............. 1,800,870 2,431,800
73,000 Arizona Star Resource
Corp.+ ................ 304,897 797,329
403,580 Barrick Gold Corp. ...... 7,594,595 11,732,071
12,525 Freeport-McMoRan Copper
& Gold Inc. ........... 272,500 1,037,321
100,000 Ivanhoe Mines Ltd.+ ..... 775,930 1,424,000
20,000 James River Coal Co.+ ... 192,187 259,200
50,000 Kinross Gold Corp.+ ..... 359,224 584,000
52,000 New Hope Corp. Ltd. ..... 70,252 97,429
560,000 Newmont Mining Corp. .... 11,743,667 21,873,600
30,000 Peabody Energy Corp. .... 1,314,868 1,451,400
-------------- --------------
24,428,990 41,688,150
-------------- --------------
PUBLISHING -- 5.3%
230,000 Belo Corp., Cl. A ....... 4,146,932 4,735,700
110,000 Dow Jones & Co. Inc. .... 4,196,705 6,319,500
25,000 Emap plc ................ 362,733 413,169
9,000 Idearc Inc. ............. 234,217 317,970
220,000 Independent News &
Media plc ............. 674,635 1,116,600
40,000 Lee Enterprises Inc. .... 935,673 834,400
MARKET
SHARES COST VALUE
------ ------- --------
70,035 McClatchy Co., Cl. A .... $ 1,713,010 $ 1,772,586
364,000 Media General Inc., Cl. A 10,175,790 12,110,280
80,000 Meredith Corp. .......... 1,650,283 4,928,000
4,000,000 News Corp., Cl. A ....... 29,452,066 84,840,000
24,000 News Corp., Cl. B ....... 227,345 550,560
640,000 PRIMEDIA Inc.+ .......... 2,319,603 1,824,000
20,300 Seat Pagine Gialle SpA .. 11,997 12,213
245,000 The E.W. Scripps Co., Cl. A 7,786,098 11,194,050
276,000 The McGraw-Hill
Companies Inc. ........ 2,547,393 18,790,080
132,000 The New York Times
Co., Cl. A ............ 1,094,267 3,352,800
25,373 Tribune Co. ............. 777,240 745,966
-------------- --------------
68,305,987 153,857,874
-------------- --------------
REAL ESTATE -- 0.6%
103,000 Griffin Land &
Nurseries Inc.+ ....... 1,479,146 3,718,300
58,000 ProLogis ................ 1,579,353 3,300,200
257,000 The St. Joe Co. ......... 1,964,571 11,909,380
-------------- --------------
5,023,070 18,927,880
-------------- --------------
RETAIL -- 0.9%
15,000 Aaron Rents Inc. ........ 46,693 438,000
60,750 Aaron Rents Inc., Cl. A 287,231 1,585,575
220,000 AutoNation Inc.+ ........ 1,864,663 4,936,800
20,000 AutoZone Inc.+ .......... 1,681,602 2,732,400
18,000 Coldwater Creek Inc.+ ... 30,574 418,140
100,000 Costco Wholesale Corp. .. 5,087,455 5,852,000
70,000 CSK Auto Corp.+ ......... 1,178,899 1,288,000
100,000 CVS Caremark Corp. ...... 3,797,278 3,645,000
10,000 Safeway Inc. ............ 224,866 340,300
10,000 SUPERVALU Inc. .......... 297,500 463,200
40,000 The Home Depot Inc. ..... 1,465,730 1,574,000
118,000 The Kroger Co. .......... 693,975 3,319,340
-------------- --------------
16,656,466 26,592,755
-------------- --------------
SPECIALTY CHEMICALS -- 1.6%
350,000 Chemtura Corp. .......... 3,496,553 3,888,500
480,000 Ferro Corp. ............. 7,925,912 11,966,400
1,000 FMC Corp. ............... 64,790 89,390
130,000 General Chemical
Group Inc.+ ........... 502,184 3,250
135,000 H.B. Fuller Co. ......... 1,040,815 4,035,150
230,000 Hercules Inc.+ .......... 3,423,219 4,519,500
180,000 International Flavors
& Fragrances Inc. ..... 7,255,378 9,385,200
100,000 Material Sciences Corp.+ 934,840 1,179,000
648,000 Omnova Solutions Inc.+ 2,046,412 3,920,400
350,000 Sensient Technologies Corp. 6,822,605 8,886,500
13,380 Tronox Inc., Cl. B ...... 152,038 187,989
-------------- --------------
33,664,746 48,061,279
-------------- --------------
See accompanying notes to financial statements.
9
THE GABELLI ASSET FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- JUNE 30, 2007 (UNAUDITED)
================================================================================
MARKET
SHARES COST VALUE
------ ------- --------
COMMON STOCKS (CONTINUED)
TELECOMMUNICATIONS -- 6.0%
80,000 Alltel Corp. ............ $ 3,974,820 $ 5,404,000
150,000 AT&T Inc. ............... 3,658,467 6,225,000
14,000 Brasil Telecom
Participacoes SA, ADR 810,959 846,440
200,000 BT Group plc ............ 753,355 1,335,395
18,000 BT Group plc, ADR ....... 593,084 1,198,440
64,000 CenturyTel Inc. ......... 918,720 3,139,200
600,000 Cincinnati Bell Inc.+ ... 3,483,667 3,468,000
210,000 Citizens Communications Co. 3,082,800 3,206,700
12,000 Clearwire Corp., Cl. A+ 245,533 293,160
100,000 Deutsche Telekom AG, ADR 1,589,599 1,841,000
40,000 Embarq Corp. ............ 1,044,655 2,534,800
35,000 France Telecom SA, ADR .. 683,990 961,800
1,950,000 Qwest Communications
International Inc.+ ... 5,457,824 18,915,000
1,100,000 Sprint Nextel Corp. ..... 16,019,959 22,781,000
75,403 Tele Norte Leste
Participacoes SA, ADR . 1,001,480 1,430,395
4,300,935 Telecom Italia SpA ...... 2,446,277 11,816,875
280,000 Telecom Italia SpA, ADR 1,913,792 7,688,800
94,000 Telefonica SA, ADR ...... 3,341,710 6,275,440
10,400 Telefonica SA, BDR ...... 119,280 229,134
40,000 Telefonos de Mexico SAB
de CV, Cl. L, ADR ..... 171,746 1,515,600
585,000 Telephone & Data
Systems Inc. .......... 12,048,593 36,603,450
495,000 Telephone & Data
Systems Inc., Special . 9,961,936 28,487,250
180,000 Verizon Communications Inc. 5,621,212 7,410,600
35,000 Windstream Corp. ........ 249,129 516,600
-------------- --------------
79,192,587 174,124,079
-------------- --------------
TRANSPORTATION -- 0.9%
85,000 AMR Corp.+ .............. 1,245,603 2,239,750
120,082 Florida East Coast
Industries Inc. ....... 1,856,261 9,964,404
280,000 GATX Corp. .............. 6,764,603 13,790,000
63,000 Grupo TMM SA,
Cl. A, ADR+ ........... 411,039 213,570
4,000 Kansas City Southern+ 7,317 150,160
10,000 Providence and Worcester
Railroad Co. .......... 144,797 193,400
-------------- --------------
10,429,620 26,551,284
-------------- --------------
MARKET
SHARES COST VALUE
------ ------- --------
WIRELESS COMMUNICATIONS -- 0.9%
110,000 America Movil SAB de CV,
Cl. L, ADR ............ $ 692,685 $ 6,812,300
72,000 Price Communications Corp. 1,120,226 1,600,560
1,350 Tele Norte Celular
Participacoes SA, ADR+ 20,857 14,769
3,375 Telemig Celular
Participacoes SA, ADR 97,540 169,898
13,001 Tim Participacoes SA, ADR 157,722 448,144
175,000 United States Cellular Corp.+ 8,331,364 15,855,000
192 Vivo Participacoes SA+ .. 670 1,531
67,505 Vivo Participacoes SA, ADR 648,113 338,200
4,174 Vivo Participacoes SA,
Preference ............ 66,002 20,751
4,375 Vodafone Group plc,
ADR ................... 43,962 147,131
-------------- --------------
11,179,141 25,408,284
-------------- --------------
TOTAL COMMON STOCKS 1,285,477,360 2,855,462,079
-------------- --------------
PREFERRED STOCKS -- 0.2%
AEROSPACE -- 0.2%
29,000 Northrop Grumman Corp.,
7.000% Cv. Pfd., Ser. B 3,379,080 4,187,600
-------------- --------------
PRINCIPAL
AMOUNT
------
CONVERTIBLE CORPORATE BONDS -- 0.1%
AUTOMOTIVE: PARTS AND ACCESSORIES -- 0.0%
$ 1,000,000 Standard Motor
Products Inc.,
Sub. Deb. Cv.,
6.750%, 07/15/09 ...... 958,158 957,500
-------------- --------------
COMMUNICATIONS EQUIPMENT -- 0.1%
2,000,000 Agere Systems Inc.,
Sub. Deb. Cv.,
6.500%, 12/15/09 ...... 1,941,490 2,042,500
1,100,000 Nortel Networks Corp., Cv.,
4.250%, 09/01/08 ...... 1,085,748 1,090,375
-------------- --------------
3,027,238 3,132,875
-------------- --------------
TOTAL CONVERTIBLE
CORPORATE BONDS ....... 3,985,396 4,090,375
-------------- --------------
See accompanying notes to financial statements.
10
THE GABELLI ASSET FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- JUNE 30, 2007 (UNAUDITED)
================================================================================
MARKET
SHARES COST VALUE
------ ------- --------
WARRANTS -- 0.0%
BROADCASTING -- 0.0%
2,109 Granite Broadcasting
Corp., Ser. A,
expire 06/04/12+ ...... $ 0 $ 10,547
2,109 Granite Broadcasting
Corp., Ser. B,
expire 06/04/12+ ...... 0 7,383
-------------- --------------
0 17,930
-------------- --------------
COMMUNICATIONS EQUIPMENT -- 0.0%
1,097 Alcatel-Lucent,
expire 12/10/07+ ...... 1,821 187
-------------- --------------
ENERGY AND UTILITIES -- 0.0%
11,313 Mirant Corp., Ser. A,
expire 01/03/11+ ...... 149,058 260,425
-------------- --------------
TOTAL WARRANTS .......... 150,879 278,542
-------------- --------------
PRINCIPAL
AMOUNT
------
U.S. GOVERNMENT OBLIGATIONS -- 2.0%
U.S. TREASURY BILLS -- 1.5%
$42,941,000 U.S. Treasury Bills,
4.351% to 5.126%++,
07/05/07 to 09/27/07 .. 42,551,083 42,550,465
-------------- --------------
U.S. TREASURY NOTES -- 0.5%
15,000,000 U.S. Treasury Note,
3.375%, 02/15/08 ...... 14,845,011 14,853,525
-------------- --------------
TOTAL U.S. GOVERNMENT
OBLIGATIONS ........... 57,396,094 57,403,990
-------------- --------------
TOTAL
INVESTMENTS -- 100.1% . $1,350,388,809 2,921,422,586
==============
OTHER ASSETS AND LIABILITIES (NET) -- (0.1)% (2,418,169)
-------------
NET ASSETS -- 100.0% .................... $2,919,004,417
==============
- ----------------
(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 June 30, 2007, the market value of the fair
valued securities amounted to $364,551 or 0.01% of total investments.
(b) Security exempt from registration under Rule 144A of the Securities Act
of 1933, as amended. This security may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At June 30,
2007, the Rule 144A security is considered liquid and the market value
amounted to $14,090,269 or 0.48% of total investments.
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
ADR American Depository Receipt
BDR Brazilian Depository Receipt
CVO Contingent Value Obligation
GDR Global Depository Receipt
See accompanying notes to financial statements.
11
THE GABELLI ASSET FUND
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2007 (UNAUDITED)
================================================================================
ASSETS:
Investments, at value (cost $1,350,388,809) ............. $2,921,422,586
Foreign currency, at value (cost $24,014) ............... 23,000
Cash .................................................... 953
Receivable for Fund shares sold ......................... 1,703,704
Dividends and interest receivable ....................... 3,125,209
Prepaid expense ......................................... 37,103
--------------
TOTAL ASSETS ............................................ 2,926,312,555
--------------
LIABILITIES:
Payable for investments purchased ....................... 2,139,627
Payable for Fund shares redeemed ........................ 1,871,691
Payable for investment advisory fees .................... 2,324,845
Payable for distribution fees ........................... 584,313
Payable for accounting fees ............................. 3,501
Payable for Trustees' fees .............................. 1,921
Other accrued expenses .................................. 382,240
--------------
TOTAL LIABILITIES ....................................... 7,308,138
--------------
NET ASSETS applicable to 55,228,076
shares outstanding .................................... $2,919,004,417
==============
NET ASSETS CONSIST OF:
Paid-in capital ......................................... $1,275,682,003
Accumulated net investment income ....................... 6,697,052
Accumulated net realized gain on investments
and foreign currency transactions ..................... 65,597,233
Net unrealized appreciation on investments .............. 1,571,033,777
Net unrealized depreciation on foreign
currency translations ................................. (5,648)
--------------
NET ASSETS .............................................. $2,919,004,417
==============
SHARES OF BENEFICIAL INTEREST:
CLASS AAA:
Net Asset Value, offering and redemption price per
share ($2,904,155,137 / 54,944,347 shares
outstanding; unlimited number of
shares authorized) .................................... $52.86
======
CLASS A:
Net Asset Value and redemption price per share
($9,464,485 /179,718 shares outstanding;
unlimited number of shares authorized) ................ $52.66
======
Maximum offering price per share (NAV / .9425,
based on maximum sales charge of 5.75%
of the offering price) ................................ $55.87
======
CLASS B:
Net Asset Value and offering price per share
($1,611/31.03 shares outstanding; unlimited
number of shares authorized) .......................... $51.92(a)
======
CLASS C:
Net Asset Value and offering price per share
($5,383,184/103,980 shares outstanding;
unlimited number of shares authorized) ................ $51.77(a)
======
- --------------------
(a) Redemption price varies based on the length of time held.
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED)
===============================================================================
INVESTMENT INCOME:
Dividends (net of foreign taxes of $803,552) ............ $ 23,783,941
Interest ................................................ 1,134,581
------------
TOTAL INVESTMENT INCOME ................................. 24,918,522
------------
EXPENSES:
Investment advisory fees ................................ 13,520,711
Distribution fees - Class AAA ........................... 3,366,015
Distribution fees - Class A ............................. 8,872
Distribution fees - Class B ............................. 8
Distribution fees - Class C ............................. 21,159
Shareholder services fees ............................... 751,394
Shareholder communications expenses ..................... 203,867
Custodian fees .......................................... 195,640
Legal and audit fees .................................... 40,367
Registration expenses ................................... 30,115
Trustees' fees .......................................... 26,921
Accounting fees ......................................... 22,375
Interest expense ........................................ 13,306
Miscellaneous expenses .................................. 94,257
------------
TOTAL EXPENSES .......................................... 18,295,007
Less: Custodian fee credits ............................. (30,809)
------------
NET EXPENSES ............................................ 18,264,198
------------
NET INVESTMENT INCOME ................................... 6,654,324
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY:
Net realized gain on investments ........................ 72,573,404
Capital gain distributions from an
investment company .................................... 70,981
Net realized gain on foreign currency
transactions .......................................... 12,548
------------
Net realized gain on investments and
foreign currency transactions ......................... 72,656,933
------------
Net change in unrealized appreciation/
depreciation on investments ........................... 219,905,585
Net change in unrealized appreciation/
depreciation on foreign currency translations ......... (6,955)
------------
Net change in unrealized appreciation/
depreciation on investments and foreign
currency translations ................................. 219,898,630
------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN CURRENCY ................... 292,555,563
------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ....................................... $299,209,887
============
See accompanying notes to financial statements.
12
THE GABELLI ASSET FUND
STATEMENT OF CHANGES IN NET ASSETS
================================================================================
SIX MONTHS ENDED
JUNE 30, 2007 YEAR ENDED
(UNAUDITED) DECEMBER 31, 2006
---------------- -----------------
OPERATIONS:
Net investment income .................................................... $ 6,654,324 $ 15,609,218
Net realized gain on investments and foreign currency transactions ....... 72,656,933 123,052,407
Net change in unrealized appreciation/depreciation on investments
and foreign currency translations ...................................... 219,898,630 324,727,122
-------------- --------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ..................... 299,209,887 463,388,747
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income
Class AAA .............................................................. -- (15,507,490)
Class A ................................................................ -- (32,680)
Class C ................................................................ -- (1,640)
-------------- --------------
-- (15,541,810)
-------------- --------------
Net realized gain on investments and foreign currency transactions
Class AAA .............................................................. -- (123,401,185)
Class A ................................................................ -- (235,506)
Class B ................................................................ -- (72)
Class C ................................................................ -- (166,895)
-------------- --------------
-- (123,803,658)
-------------- --------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS ...................................... -- (139,345,468)
-------------- --------------
CAPITAL SHARE TRANSACTIONS:
Class AAA .............................................................. 90,077,418 (53,691,894)
Class A ................................................................ 3,872,891 2,459,100
Class B ................................................................ -- (105)
Class C ................................................................ 1,596,592 734,082
-------------- --------------
Net increase (decrease) in net assets from shares of
beneficial interest transactions ....................................... 95,546,901 (50,498,817)
-------------- --------------
REDEMPTION FEES .......................................................... 5,102 6,381
-------------- --------------
NET INCREASE IN NET ASSETS ............................................... 394,761,890 273,550,843
NET ASSETS:
Beginning of period ...................................................... 2,524,242,527 2,250,691,684
-------------- --------------
End of period (including undistributed net investment income of $6,697,052
and $42,728 respectively) .............................................. $2,919,004,417 $2,524,242,527
============== ==============
See accompanying notes to financial statements.
13
THE GABELLI ASSET FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
================================================================================
1. ORGANIZATION. The Gabelli Asset Fund (the "Fund") was organized on November
25, 1985 as a Massachusetts business trust. The Fund is a diversified open-end
management investment company registered under the Investment Company Act of
1940, as amended (the "1940 Act"). The Fund's primary objective is growth of
capital. The Fund commenced investment operations on March 3, 1986.
2. SIGNIFICANT ACCOUNTING POLICIES. The preparation of financial statements in
accordance with 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 Fund in the preparation of its financial statements.
SECURITY VALUATION. Portfolio securities listed or traded on a nationally
recognized securities exchange or traded in the U.S. over-the-counter market for
which market quotations are readily available are valued at the last quoted sale
price or a market's official closing price as of the close of business on the
day the securities are being valued. If there were no sales that day, the
security is valued at the average of the closing bid and asked prices or, if
there were no asked prices quoted on that day, then the security is valued at
the closing bid price on that day. If no bid or asked prices are quoted on such
day, the security is valued at the most recently available price or, if the
Board of Trustees (the "Board") so determines, by such other method as the Board
shall determine in good faith to reflect its fair market value. Portfolio
securities traded on more than one national securities exchange or market are
valued according to the broadest and most representative market, as determined
by Gabelli Funds, LLC (the "Adviser").
Portfolio securities primarily traded on 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
14
THE GABELLI ASSET FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
================================================================================
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.
FORWARD FOREIGN EXCHANGE CONTRACTS. The Fund may engage in forward foreign
exchange contracts for hedging a specific transaction with respect to either the
currency in which the transaction is denominated or another currency as deemed
appropriate by the Adviser. Forward foreign exchange contracts are valued at the
forward rate and are marked-to-market daily. The change in market value is
included in unrealized appreciation/depreciation on investments and foreign
currency translations. When the contract is closed, the Fund records a realized
gain or loss equal to the difference between the value of the contract at the
time it was opened and the value at the time it was closed.
The use of forward foreign exchange contracts does not eliminate fluctuations in
the underlying prices of the Fund's portfolio securities, but it does establish
a rate of exchange that can be achieved in the future. Although forward foreign
exchange contracts limit the risk of loss due to a decline in the value of the
hedged currency, they also limit any potential gain that might result should the
value of the currency increase. In addition, the Fund could be exposed to risks
if the counterparties to the contracts are unable to meet the terms of their
contracts. At June 30, 2007, there were no open forward foreign exchange
contracts.
FOREIGN CURRENCY TRANSLATIONS. The books and records of the Fund 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 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 Fund and the amounts actually received.
The portion of foreign currency gains and losses related to fluctuation in
exchange rates between the initial trade date and subsequent sale trade date is
included in realized gain/(loss) on investments.
FOREIGN SECURITIES. The Fund may directly purchase securities of foreign
issuers. Investing in securities of foreign issuers involves special risks not
typically associated with investing in securities of U.S. issuers. The risks
include possible revaluation of currencies, the ability to repatriate funds,
less complete financial information about companies, and possible future adverse
political and economic developments. Moreover, securities of many foreign
issuers and their markets may be less liquid and their prices more volatile than
those of securities of comparable U.S. issuers.
FOREIGN TAXES. The Fund may be subject to foreign taxes on income, gains on
investments, or currency repatriation, a portion of which may be recoverable.
The Fund will accrue such taxes and recoveries as applicable, based upon its
current interpretation of tax rules and regulations that exist in the markets in
which it invests.
RESTRICTED AND ILLIQUID SECURITIES. The Fund may invest up to 10% of its net
assets in securities for which the markets are illiquid. Illiquid securities
include securities the disposition of which is subject to substantial legal
15
THE GABELLI ASSET FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
================================================================================
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. 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
Fund is informed of the dividend.
DETERMINATION OF NET ASSET VALUE AND CALCULATION OF EXPENSES. Certain
administrative expenses are common to, and allocated among, various affiliated
funds. Such allocations are made on the basis of each Fund's average net assets
or other criteria directly affecting the expenses as determined by the Adviser
pursuant to procedures established by the Board.
In calculating the NAV per share of each class, investment income, realized and
unrealized gains and losses, redemption fees, and expenses other than class
specific expenses are allocated daily to each class of shares based upon the
proportion of net assets of each class at the beginning of each day.
Distribution expenses are borne solely by the class incurring the expense.
CUSTODIAN FEE CREDITS AND INTEREST EXPENSE. When cash balances are maintained in
the custody account, the Fund receives credits which are used to offset
custodian fees. The gross expenses paid under the custody arrangement are
included in custodian fees in the Statement of Operations with the corresponding
expense offset, if any, shown as "custodian fee credits". When cash balances are
overdrawn, the Fund is charged an overdraft fee equal to 2.00% above the Federal
Funds rate on outstanding balances. This amount, if any, would be shown as
"interest expense" in the Statement of Operations.
DISTRIBUTIONS TO SHAREHOLDERS. 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 Fund, timing differences, and differing
characterizations of distributions made by the Fund. 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 Fund.
16
THE GABELLI ASSET FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
================================================================================
The tax character of distributions paid during the fiscal year ended December
31, 2006 was as follows:
DISTRIBUTIONS PAID FROM:
Ordinary income
(inclusive of short-term capital gains) .......... $ 18,460,454
Net long-term capital gains ........................ 120,885,014
------------
Total distributions paid ........................... $139,345,468
============
PROVISION FOR INCOME TAXES. The Fund intends to continue to qualify as a
regulated investment company under Subchapter M of the Internal Revenue Code of
1986, as amended (the "Code"). It is the policy of the Fund to comply with the
requirements of the Code applicable to regulated investment companies and to
distribute substantially all of its net investment company taxable income and
net capital gains. Therefore, no provision for federal income taxes is required.
The following summarizes the tax cost of investments and the related unrealized
appreciation/(depreciation) at June 30, 2007:
GROSS GROSS
UNREALIZED UNREALIZED NET UNREALIZED
COST APPRECIATION DEPRECIATION APPRECIATION
---- ------------ ------------ --------------
Investments ............ $1,356,789,097 $1,595,973,202 $(31,339,713) $1,564,633,489
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 established for all entities, including
pass-through entities such as the Fund, 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
required certain expanded tax disclosures. The Interpretation was implemented by
the Fund on June 29, 2007 and applied to all open tax years as of the effective
date. Management has evaluated the application of the Interpretation to the
Fund, and the adoption of the Interpretation had no impact on the amounts
reported in the financial statements.
3. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS. The Fund has entered
into an investment advisory agreement (the "Advisory Agreement") with the
Adviser which provides that the Fund will pay the Adviser a fee, computed daily
and paid monthly, at the annual rate of 1.00% of the value of its average daily
net assets. In accordance with the Advisory Agreement, the Adviser provides a
continuous investment program for the Fund's portfolio, oversees the
administration of all aspects of the Fund's business and affairs, and pays the
compensation of all Officers and Trustees of the Fund who are affiliated persons
of the Adviser.
The Fund pays each Trustee that is not considered to be an affiliated person an
annual retainer of $6,000 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 and the chairman of
each committee also receives $1,000 per year. Trustees who are directors or
employees of the Adviser or an affiliated company receive no compensation or
expense reimbursement from the Fund.
4. DISTRIBUTION PLAN. The Fund's Board has adopted a distribution plan (the
"Plan") for each class of shares pursuant to Rule 12b-1 under the 1940 Act.
Gabelli & Company, Inc. ("Gabelli & Company"), an affiliate of the Adviser,
serves as distributor of the Fund. Under the Class AAA, Class A, Class B, and
Class C Share Plans, payments are authorized to Gabelli & Company at annual
rates of 0.25%, 0.25%, 1.00%, and 1.00%, respectively, of the average daily net
assets of those classes, the annual limitations under each Plan. Such payments
are accrued daily and paid monthly.
17
THE GABELLI ASSET FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
================================================================================
5. PORTFOLIO SECURITIES. Purchases and proceeds from the sales of securities for
the six months ended June 30, 2007, other than short-term securities, aggregated
$281,005,238 and $102,369,888, respectively.
6. TRANSACTIONS WITH AFFILIATES. During the six months ended June 30, 2007, the
Fund paid brokerage commissions of $261,619 to Gabelli & Company. Additionally,
Gabelli & Company informed the Fund that it received $15,913 from investors
representing commissions (sales charges and underwriting fees) on sales and
redemptions of Fund shares.
The cost of calculating the Fund's NAV per share is a Fund expense pursuant to
the Advisory Agreement between the Fund and the Adviser. During the six months
ended June 30, 2007, the Fund paid or accrued $22,375 to the Adviser in
connection with the cost of computing the Fund's NAV.
7. LINE OF CREDIT. Effective June 20, 2007, the Fund participates in an
unsecured line of credit of up to $75,000,000, and may borrow up to 10% of its
net assets from the custodian for temporary borrowing purposes. Prior to June
20, 2007, the line of credit was $25,000,000. Borrowings under this arrangement
bear interest at 0.75% above the Federal Funds rate on outstanding balances.
This amount, if any, would be shown as "interest expense" in the Statement of
Operations. At June 30, 2007, there were no borrowings outstanding under the
line of credit.
The average daily amount of borrowings outstanding from the line of credit
within the six months ended June 30, 2007 was $279,873 with a weighted average
interest rate of 6.02%. The maximum amount borrowed at any time during this
period was $12,329,000.
8. SHARES OF BENEFICIAL INTEREST. The Fund currently offers four classes of
shares - Class AAA Shares, Class A Shares, Class B Shares, and Class C Shares.
Class AAA Shares are offered only to investors who acquire them directly from
Gabelli & Company, or through selected broker/dealers, or the transfer agent
without a sales charge. Class A Shares are subject to a maximum front-end sales
charge of 5.75%. Class B Shares are subject to a contingent deferred sales
charge ("CDSC") upon redemption within six years of purchase and automatically
convert to Class A Shares approximately eight years after the original purchase.
The applicable CDSC is equal to a declining percentage of the lesser of the NAV
per share at the date of the original purchase or at the date of redemption,
based on the length of time held. Class C Shares are subject to a 1.00% 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.
The 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 Fund. The redemption fees retained by the Fund during the six
months ended June 30, 2007 and the fiscal year ended December 31, 2006 amounted
to $5,102 and $6,381, respectively.
The redemption fee does not apply to redemptions of shares where (i) the shares
were purchased through automatic reinvestment of dividends or other
distributions, (ii) the redemption was initiated by the Fund, (iii) the shares
were purchased through programs that collect the redemption fee at the program
level and remit them to the 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.
18
THE GABELLI ASSET FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
================================================================================
Transactions in shares of beneficial interest were as follows:
SIX MONTHS ENDED
JUNE 30, 2007 YEAR ENDED
(UNAUDITED) DECEMBER 31, 2006
---------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------- ---------- -------------
CLASS AAA CLASS AAA
---------------------------- ---------------------------
Shares sold ....................................... 4,897,420 $ 243,695,548 4,386,829 $ 200,022,345
Shares issued upon reinvestment of distributions .. -- -- 2,754,940 131,438,858
Shares redeemed ................................... (3,059,002) (153,618,130) (8,657,022) (385,153,097)
---------- ------------- ---------- -------------
Net increase (decrease) ........................ 1,838,418 $ 90,077,418 (1,515,253) $ (53,691,894)
========== ============= ========== =============
CLASS A CLASS A
---------------------------- ---------------------------
Shares sold ....................................... 89,408 $ 4,457,385 68,271 $ 3,117,967
Shares issued upon reinvestment of distributions .. -- -- 5,392 256,308
Shares redeemed ................................... (11,494) (584,494) (20,401) (915,175)
---------- ------------- ---------- -------------
Net increase ................................... 77,914 $ 3,872,891 53,262 $ 2,459,100
========== ============= ========== =============
CLASS B CLASS B
---------------------------- ---------------------------
Shares sold ....................................... -- -- 133 $ 5,658
Shares issued upon reinvestment of distributions .. -- -- 2 72
Shares redeemed ................................... -- -- (133) (5,835)
---------- ------------- ---------- -------------
Net increase (decrease) ........................ -- -- 2 $ (105)
========== ============= ========== =============
CLASS C CLASS C
---------------------------- ---------------------------
Shares sold ....................................... 37,562 $ 1,861,403 17,459 $ 784,241
Shares issued upon reinvestment of distributions .. -- -- 3,534 165,790
Shares redeemed ................................... (5,453) (264,811) (4,903) (215,949)
---------- ------------- ---------- -------------
Net increase ................................... 32,109 $ 1,596,592 16,090 $ 734,082
========== ============= ========== =============
9. INDEMNIFICATIONS. The Fund enters into contracts that contain a variety of
indemnifications. The Fund's maximum exposure under these arrangements is
unknown. However, the Fund has not had prior claims or losses pursuant to these
contracts and expects the risk of loss to be remote.
10. OTHER MATTERS. The Adviser and/or affiliates 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 the
Adviser. 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, the Adviser was informed by the staff of the
SEC that the staff may recommend to the Commission that an administrative remedy
and a monetary penalty be sought from the Adviser in connection with the actions
of two of seven closed-end funds managed by the Adviser relating to Section
19(a) and Rule 19a-1 of the 1940 Act. These provisions require registered
investment companies to provide written statements to shareholders when a
dividend is made from a source other than net investment income. While the two
closed-end funds sent annual statements and provided other materials containing
this information, the funds did not send written statements to shareholders with
each distribution in 2002 and 2003. The Adviser believes that all of the funds
are now in compliance. The Adviser believes that these matters would have no
effect on the Fund or any material adverse effect on the Adviser or its ability
to manage the Fund.
19
THE GABELLI ASSET FUND
FINANCIAL HIGHLIGHTS
================================================================================
Selected data for a share of beneficial interest outstanding throughout each
period:
INCOME FROM INVESTMENT OPERATIONS DISTRIBUTIONS
---------------------------------------- ---------------------------------------
Net
Net Asset Net Realized and Total Net
Period Value, Investment Unrealized from Net Realized
Ended Beginning Income Gain (Loss) on Investment Investment Gain on Total
December 31 of Period (Loss)(a) Investments Operations Income Investments Distributions
- ----------- --------- --------- -------------- ---------- ---------- ----------- -------------
CLASS AAA
2007(b) $47.38 $0.12 $5.36 $5.48 -- -- --
2006 41.13 0.30 8.70 9.00 $(0.31) $(2.44) $(2.75)
2005 41.45 0.12 1.73 1.85 (0.12) (2.05) (2.17)
2004 36.26 0.02 5.96 5.98 (0.03) (0.76) (0.79)
2003 28.25 0.04 8.60 8.64 (0.03) (0.60) (0.63)
2002 32.97 0.02 (4.72) (4.70) (0.02) (0.00)(c) (0.02)
CLASS A
2007(b) $47.21 $0.14 $5.31 $5.45 -- -- --
2006 41.01 0.32 8.66 8.98 $(0.34) $(2.44) $(2.78)
2005 41.39 0.10 1.74 1.84 (0.17) (2.05) (2.22)
2004(e) 36.26 0.03 5.94 5.97 (0.08) (0.76) (0.84)
CLASS B
2007(b) $46.72 $(0.07) $5.27 $5.20 -- -- --
2006 40.64 0.18 8.34 8.52 -- $(2.44) $(2.44)
2005 41.16 (0.17) 1.70 1.53 -- (2.05) (2.05)
2004(e) 36.26 (0.25) 5.91 5.66 -- (0.76) (0.76)
CLASS C
2007(b) $46.58 $(0.05) $5.24 $5.19 -- -- --
2006 40.54 (0.03) 8.54 8.51 $(0.03) $(2.44) $(2.47)
2005 41.14 (0.20) 1.71 1.51 (0.06) (2.05) (2.11)
2004(e) 36.26 (0.26) 5.92 5.66 (0.02) (0.76) (0.78)
--------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
----------------------------------------------
Net Asset Net Assets Net
Period Value, End of Investment Portfolio
Ended Redemption End of Total Period Income Operating Turnover
December 31 Fees(a) Period Return+ (in 000's) (Loss) Expenses Rate
- ----------- ---------- ------ ------- ---------- ---- ---------- --------
CLASS AAA
2007(b) $0.00(c) $52.86 11.6% $2,904,155 0.49%(d) 1.35%(d) 4%
2006 0.00(c) 47.38 21.8 2,516,088 0.67 1.36 7
2005 0.00(c) 41.13 4.4 2,246,439 0.29 1.37 6
2004 0.00(c) 41.45 16.5 2,216,050 0.06 1.38 7
2003 -- 36.26 30.6 1,958,431 0.11 1.38 7
2002 -- 28.25 (14.3) 1,501,420 0.04 1.38 8
CLASS A
2007(b) $0.00(c) $52.66 11.5% $ 9,464 0.57%(d) 1.35%(d) 4%
2006 0.00(c) 47.21 21.9 4,806 0.71 1.35 7
2005 0.00(c) 41.01 4.4 1,991 0.23 1.38 6
2004(e) 0.00(c) 41.39 16.5 351 0.07 1.40 7
CLASS B
2007(b) $0.00(c) $51.92 11.1% $ 2 (0.28)%(d) 2.09%(d) 4%
2006 0.00(c) 46.72 20.9 1 0.41 2.11 7
2005 0.00(c) 40.64 3.7 1 (0.41) 2.02 6
2004(e) 0.00(c) 41.16 15.6 1 (0.67) 2.07 7
CLASS C
2007(b) $0.00(c) $51.77 11.1% $ 5,383 (0.22)%(d) 2.10%(d) 4%
2006 0.00(c) 46.58 20.9 3,348 (0.07) 2.11 7
2005 0.00(c) 40.54 3.6 2,261 (0.49) 2.13 6
2004(e) 0.00(c) 41.14 15.6 349 (0.68) 2.15 7
------------
+ Total return represents aggregate total return of a hypothetical $1,000
investment at the beginning of the period and sold at the end of the period
including reinvestment of distributions and does not reflect applicable
sales charges. Total return for a period of less than one year is not
annualized.
(a) Per share amounts have been calculated using the average shares outstanding
method.
(b) For the period ended June 30, 2007, unaudited.
(c) Amount represents less than $0.005 per share.
(d) Annualized
(e) Class A, Class B, and Class C Shares were initially offered on December 31,
2003.
See accompanying notes to financial statements.
20
THE GABELLI ASSET FUND
BOARD CONSIDERATION AND RE-APPROVAL OF INVESTMENT ADVISORY AGREEMENT (UNAUDITED)
At its meeting on February 22, 2007, the Board of Trustees ("Board") of the Fund
approved the continuation of the investment advisory agreement with the Adviser
for the Fund on the basis of the recommendation by the trustees who are not
"interested persons" of the Fund (the "independent board members"). The
following paragraphs summarize the material information and factors considered
by the independent board members as well as their conclusions relative to such
factors.
NATURE, EXTENT AND QUALITY OF SERVICES. The independent board members considered
information regarding the portfolio manager, the depth of the analyst pool
available to the Adviser and the portfolio manager, the scope of administrative,
shareholder, and other services supervised or provided by the Adviser, and the
absence of significant service problems reported to the Board. The independent
board members noted the experience, length of service, and reputation of the
portfolio manager.
INVESTMENT PERFORMANCE. The independent board members reviewed the short,
medium, and long-term performance of the Fund against a peer group of multi-cap
core and multi-cap value value funds chosen by Lipper as being comparable. The
independent board members noted that the Fund's performance was in or near the
top one-third of the funds in its category for the relevant periods.
PROFITABILITY. The independent board members reviewed summary data regarding the
profitability of the Fund to the Adviser both with an administrative overhead
charge and without such a charge. The independent board members also noted that
a substantial portion of the Fund's portfolio transactions were executed by an
affiliated broker, that the affiliated broker received distribution fees and
minor amounts of sales commissions and that the Adviser received a moderate
amount of soft dollar research benefits through the Fund's portfolio brokerage.
ECONOMIES OF SCALE. The independent board members discussed the major elements
of the Adviser's cost structure and the relationship of those elements to
potential economies of scale.
SHARING OF ECONOMIES OF SCALE. The independent board members noted that the
investment advisory fee schedule for the Fund does not take into account any
potential economies of scale that may develop or any losses or diminished
profitability to the Adviser in prior years.
SERVICE AND COST COMPARISONS. The independent board members compared the expense
ratios of the investment advisory fee, other expenses, and total expenses of the
Fund to similar expense ratios of the peer group of multi-cap core and multi-cap
value funds and noted that the advisory fee includes substantially all
administrative services of the Fund as well as investment advisory services of
the Adviser. The independent board members noted that the Fund's expense ratios
and the Fund's size were above average within this group. The independent board
members also noted that the advisory fee structure was the same as that in
effect for most of the Gabelli funds. The independent board members were
presented with, but did not consider to be material to their decision, various
information comparing the advisory fee to the fee for other types of accounts
managed by affiliates of the Adviser.
CONCLUSIONS. The independent board members concluded that the Fund enjoyed
highly experienced portfolio management services, good ancillary services, and a
good performance record. The independent board members also concluded that the
Fund's expense ratios and the profitability to the Adviser of managing the Fund
were reasonable in light of the Fund's performance and that economies of scale
were not a significant factor in their thinking at this time. The independent
board members did not view the potential profitability of ancillary services as
material to their decision. On the basis of the foregoing and without assigning
particular weight to any single conclusion, the independent board members
determined to recommend continuation of the investment advisory agreement to the
full Board.
21
- --------------------------------------------------------------------------------
GABELLI/GAMCO FUNDS AND YOUR PERSONAL PRIVACY
================================================================================
WHO ARE WE?
The Gabelli/GAMCO Funds are investment companies registered with the
Securities and Exchange Commission under the Investment Company Act of
1940. We are managed by Gabelli Funds, LLC and Gabelli Advisers, Inc.,
which are affiliated with GAMCO Investors, Inc. GAMCO Investors, Inc. is a
publicly held company that has subsidiaries that provide investment
advisory or brokerage services for a variety of clients.
WHAT KIND OF NON-PUBLIC INFORMATION DO WE COLLECT ABOUT YOU IF YOU BECOME A
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
GAMCO 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
GAMCO 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) PORTFOLIO MANAGER: ELIZABETH M. LILLY, CFA
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 ___________________________________
GAMCO 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
GAMCO 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
GAMCO WESTWOOD INCOME FUND
Seeks to provide a high level of current income as well as long-term capital
appreciation by investing in income producing equity and fixed income
securities. (MULTICLASS) PORTFOLIO MANAGER: BARBARA MARCIN, CFA
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 ________________________________
GAMCO 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 GABELLI ASSET FUND
One Corporate Center
Rye, New York 10580-1422
800-GABELLI
800-422-3554
FAX: 914-921-5118
WEBSITE: WWW.GABELLI.COM
E-MAIL: INFO@GABELLI.COM
Net Asset Value per share available daily by calling
800-GABELLI after 6:00 P.M.
BOARD OF TRUSTEES
Mario J. Gabelli, CFA Anthony R. Pustorino
CHAIRMAN AND CHIEF CERTIFIED PUBLIC ACCOUNTANT,
EXECUTIVE OFFICER PROFESSOR EMERITUS
GAMCO INVESTORS, INC. PACE UNIVERSITY
Anthony J. Colavita Werner J. Roeder, MD
ATTORNEY-AT-LAW MEDICAL DIRECTOR
ANTHONY J. COLAVITA, P.C. LAWRENCE HOSPITAL
James P. Conn Anthonie C. van Ekris
FORMER CHIEF INVESTMENT OFFICER CHAIRMAN
FINANCIAL SECURITY ASSURANCE BALMAC INTERNATIONAL, INC.
HOLDINGS LTD.
Salvatore J. Zizza
John D. Gabelli CHAIRMAN
SENIOR VICE PRESIDENT ZIZZA & CO., LTD.
GABELLI & COMPANY, INC.
OFFICERS
Bruce N. Alpert James E. McKee
PRESIDENT SECRETARY
Agnes Mullady Peter D. Goldstein
TREASURER CHIEF COMPLIANCE OFFICER
DISTRIBUTOR
Gabelli & Company, Inc.
CUSTODIAN, TRANSFER AGENT, AND DIVIDEND AGENT
State Street Bank and Trust Company
LEGAL COUNSEL
Skadden, Arps, Slate, Meagher & Flom LLP
- --------------------------------------------------------------------------------
This report is submitted for the general information of the shareholders of The
Gabelli Asset Fund. It is not authorized for distribution to prospective
investors unless preceded or accompanied by an effective prospectus.
- --------------------------------------------------------------------------------
GAB405Q207SR
THE
GABELLI
ASSET
FUND
[GRAPHIC OMITTED] E P
Gabelli Triangle P M
MANAGEMENT S V
CASH FLOW
RESEARCH
SEMI-ANNUAL REPORT
JUNE 30, 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 Gabelli Asset Fund
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By (Signature and Title)* /s/ Bruce N. Alpert
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Bruce N. Alpert, Principal Executive Officer
Date August 31, 2007
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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
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Bruce N. Alpert, Principal Executive Officer
Date August 31, 2007
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By (Signature and Title)* /s/ Agnes Mullady
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Agnes Mullady, Principal Financial Officer &
Treasurer
Date August 31, 2007
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* Print the name and title of each signing officer under his or her signature.