UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-04873
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The GAMCO Growth Fund
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(Exact name of registrant as specified in charter)
One Corporate Center
Rye, New York 10580-1422
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(Address of principal executive offices) (Zip code)
Bruce N. Alpert
Gabelli Funds, LLC
One Corporate Center
Rye, New York 10580-1422
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(Name and address of agent for service)
registrant's telephone number, including area code: 1-800-422-3554
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Date of fiscal year end: December 31
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Date of reporting period: 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 GAMCO GROWTH FUND
SEMI-ANNUAL REPORT
JUNE 30, 2007
TO OUR SHAREHOLDERS,
During the second quarter of 2007, The GAMCO Growth Fund (the "Fund") rose
7.2%, while the Russell 1000 Growth Index and the Standard & Poor's ("S&P") 500
Index were up 6.9% and 6.3%, respectively. For the six month period ended June
30, 2007, the Fund gained 8.5% versus gains of 8.1% and 7.0% for the Russell
1000 Growth Index and the S&P 500 Index, respectively.
Enclosed are the financial statements and the investment portfolio as of
June 30, 2007.
COMPARATIVE RESULTS
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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 (4/10/87)
- ---------------------------------------------------------------------------------------------------------------------
GAMCO GROWTH FUND
CLASS AAA (B)................ 7.16% 8.46% 15.84% 10.06% 9.36% 5.79% 9.84% 11.31% 11.63%
S&P 500 Index.................. 6.27 6.96 20.57 11.67 10.70 7.13 11.18 10.81 10.77
Russell 1000 Growth Index...... 6.86 8.13 19.04 8.70 9.28 4.39 9.03 9.36 9.59
Class A........................ 7.16 8.46 15.83 10.07 9.37 5.80 9.84 11.31 11.63
1.00(c) 2.22(c) 9.17(c) 7.92(c) 8.08(c) 5.17(c) 9.41(c) 10.99(c) 11.30(c)
Class B........................ 6.98 8.05 14.96 9.23 8.79 5.52 9.65 11.17 11.48
1.98(d) 3.05(d) 9.96(d) 8.39(d) 8.50(d) 5.52 9.65 11.17 11.48
Class C........................ 6.98 8.05 14.96 9.25 8.79 5.52 9.65 11.17 11.48
5.98(e) 7.05(e) 13.96(e) 9.25 8.79 5.52 9.65 11.17 11.48
THE CURRENT EXPENSE RATIO FOR CLASS AAA, A, B, AND C SHARES IS 1.44%, 1.44%,
2.19%, AND 2.19%, 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 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. THE
S&P 500 INDEX AND THE RUSSELL 1000 GROWTH INDEX ARE UNMANAGED INDICATORS OF
STOCK MARKET PERFORMANCE. DIVIDENDS ARE REINVESTED. YOU CANNOT INVEST
DIRECTLY IN AN INDEX.
(b) EFFECTIVE FEBRUARY 15, 2007, CLASS AAA SHARES ARE OFFERED ONLY TO INVESTORS
WHO WERE SHAREHOLDERS IN ONE OR MORE OF THE REGISTERED FUNDS DISTRIBUTED BY
GABELLI & COMPANY, INC. PRIOR TO FEBRUARY 15, 2007.
(c) INCLUDES THE EFFECT OF THE MAXIMUM 5.75% SALES CHARGE AT THE BEGINNING OF
THE PERIOD.
(d) 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
B SHARES ARE NOT AVAILABLE FOR NEW PURCHASES.
(e) 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.
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THE GAMCO GROWTH FUND
DISCLOSURE OF FUND EXPENSES (UNAUDITED)
For the Six Month Period from January 1, 2007 through June 30, 2007
EXPENSE TABLE
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We believe it is important for you to understand the impact of fees and expenses
regarding your investment. All mutual funds have operating expenses. As a
shareholder of a fund, you incur ongoing costs, which include costs for
portfolio management, administrative services, and shareholder reports (like
this one), among others. Operating expenses, which are deducted from a fund's
gross income, directly reduce the investment return of a fund. When a fund's
expenses are expressed as a percentage of its average net assets, this figure is
known as the expense ratio. The following examples are intended to help you
understand the ongoing costs (in dollars) of investing in your Fund and to
compare these costs with those of other mutual funds. The examples are based on
an investment of $1,000 made at the beginning of the period shown and held for
the entire period.
The Expense Table below illustrates your Fund's costs in two ways:
ACTUAL FUND RETURN: This section provides information about actual account
values and actual expenses. You may use this section to help you to estimate the
actual expenses that you paid over the period after any fee waivers and expense
reimbursements. The "Ending Account Value" shown is derived from the Fund's
ACTUAL return during the past six months, and the "Expenses Paid During Period"
shows the dollar amount that would have been paid by an investor who started
with $1,000 in the Fund. You may use this information, together with the amount
you invested, to estimate the expenses that you paid over the period.
To do so, simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
given for your Fund under the heading "Expenses Paid During Period" to estimate
the expenses you paid during this period.
HYPOTHETICAL 5% RETURN: This section provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio. It assumes a hypothetical annualized return of 5% before expenses during
the period shown. In this case - because the hypothetical return used is NOT the
Fund's actual return - the results do not apply to your investment and you
cannot use the hypothetical account value and expense to estimate the actual
ending account balance or expenses you paid for the period. This example is
useful in making comparisons of the ongoing costs of investing in the Fund and
other funds. To do so, compare this 5% hypothetical example with the 5%
hypothetical examples that appear in shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs such as sales
charges (loads), redemption fees, or exchange fees, if any, which are described
in the Prospectus. If these costs were applied to your account, your costs would
be higher. Therefore, the 5% hypothetical return is useful in comparing ongoing
costs only, and will not help you determine the relative total costs of owning
different funds.
Beginning Ending Annualized Expenses
Account Value Account Value Expense Paid During
01/01/07 06/30/07 Ratio Period*
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THE GAMCO GROWTH FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Class AAA $1,000.00 $1,084.60 1.47% $ 7.56
Class A $1,000.00 $1,084.60 1.47% $ 7.56
Class B $1,000.00 $1,080.50 2.22% $11.39
Class C $1,000.00 $1,080.50 2.22% $11.39
HYPOTHETICAL 5% RETURN
Class AAA $1,000.00 $1,017.41 1.47% $ 7.31
Class A $1,000.00 $1,017.41 1.47% $ 7.31
Class B $1,000.00 $1,013.71 2.22% $11.02
Class C $1,000.00 $1,013.71 2.22% $11.02
* 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 GAMCO GROWTH FUND
Software & Services........................... 13.1%
Industrial.................................... 12.7%
Financial .................................... 11.3%
Energy........................................ 10.3%
Retail........................................ 7.2%
Semiconductors ............................... 6.7%
Consumer Staples ............................. 6.5%
Pharmaceuticals & Biotechnology .............. 5.8%
Health Care Equipment & Services ............. 4.9%
Communications Equipment...................... 4.8%
Media ........................................ 4.2%
Telecommunications............................ 4.2%
Computers & Peripherals ...................... 3.3%
Hotels and Gaming............................. 2.4%
Materials..................................... 2.1%
U.S. Treasury Bills........................... 1.8%
Other Assets and Liabilities (Net)............ (1.3)%
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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 GAMCO GROWTH FUND
SCHEDULE OF INVESTMENTS -- JUNE 30, 2007 (UNAUDITED)
================================================================================
MARKET
SHARES COST VALUE
------- ---- -------
COMMON STOCKS -- 99.5%
CONSUMER DISCRETIONARY -- 13.8%
HOTELS AND GAMING -- 2.4%
120,000 Boyd Gaming Corp................... $ 6,109,095 $ 5,902,800
117,000 Hilton Hotels Corp................. 3,677,164 3,915,990
60,000 Las Vegas Sands Corp.+............. 4,824,159 4,583,400
72,000 Marriott International Inc.,
Cl. A ........................... 2,816,184 3,113,280
58,000 Starwood Hotels & Resorts
Worldwide Inc.................... 3,688,012 3,890,060
------------ ------------
21,114,614 21,405,530
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MEDIA -- 4.2%
470,000 Comcast Corp., Cl. A+.............. 12,401,707 13,216,400
235,000 News Corp., Cl. B.................. 4,791,301 5,390,900
50,000 The McGraw-Hill Companies
Inc. ............................ 1,484,439 3,404,000
355,000 Time Warner Inc.................... 7,684,916 7,469,200
220,000 Viacom Inc., Cl. B+................ 8,524,840 9,158,600
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34,887,203 38,639,100
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RETAIL -- 7.2%
60,000 Abercrombie & Fitch Co.,
Cl. A .......................... 4,890,051 4,378,800
170,000 Coach Inc.+........................ 6,666,260 8,056,300
385,000 CVS Caremark Corp.................. 13,747,391 14,033,250
65,000 Kohl's Corp.+...................... 4,636,184 4,616,950
90,000 NIKE Inc., Cl. B................... 4,650,059 5,246,100
110,000 Nordstrom Inc...................... 5,880,678 5,623,200
50,000 Polo Ralph Lauren Corp............. 4,277,681 4,905,500
110,000 Starbucks Corp.+................... 3,163,365 2,886,400
75,000 Target Corp........................ 4,413,403 4,770,000
133,400 Tiffany & Co....................... 3,643,349 7,078,204
120,000 Whole Foods Market Inc............. 5,929,425 4,596,000
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61,897,846 66,190,704
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TOTAL CONSUMER
DISCRETIONARY ................... 117,899,663 126,235,334
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CONSUMER STAPLES -- 6.5%
400,000 PepsiCo Inc........................ 20,595,636 25,940,000
395,000 Procter & Gamble Co................ 22,250,279 24,170,050
220,000 Walgreen Co........................ 6,934,218 9,578,800
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TOTAL CONSUMER
STAPLES ......................... 49,780,133 59,688,850
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ENERGY -- 10.3%
92,000 Apache Corp........................ 6,554,062 7,506,280
140,000 Canadian Natural
Resources Ltd.................... 7,502,964 9,289,000
235,000 Chesapeake Energy Corp............. 8,332,270 8,131,000
38,000 EnCana Corp........................ 1,865,397 2,335,100
MARKET
SHARES COST VALUE
------- ---- -------
66,000 GlobalSantaFe Corp................. $ 3,929,239 $ 4,768,500
80,000 Hess Corp.......................... 3,768,013 4,716,800
110,000 Murphy Oil Corp.................... 6,369,483 6,538,400
60,000 National Oilwell Varco Inc.+....... 3,990,993 6,254,400
83,000 Noble Corp......................... 6,431,810 8,094,160
140,000 Occidental Petroleum Corp.......... 7,165,299 8,103,200
88,000 Schlumberger Ltd................... 4,346,073 7,474,720
100,000 Suncor Energy Inc.................. 7,502,350 8,992,000
78,000 Transocean Inc.+................... 6,143,160 8,266,440
72,000 XTO Energy Inc..................... 3,352,375 4,327,200
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TOTAL ENERGY....................... 77,253,488 94,797,200
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FINANCIAL -- 11.3%
68,000 Affiliated Managers
Group Inc.+ ................... 6,770,724 8,755,680
375,000 American Express Co................ 17,892,512 22,942,500
70,000 Merrill Lynch & Co. Inc............ 3,437,986 5,850,600
70,000 Moody's Corp....................... 4,657,198 4,354,000
100,000 Morgan Stanley..................... 8,459,109 8,388,000
165,900 Northern Trust Corp................ 9,532,388 10,657,416
148,800 State Street Corp.................. 7,048,651 10,177,920
128,000 T. Rowe Price Group Inc............ 5,445,643 6,641,920
80,000 The Goldman Sachs
Group Inc. ...................... 13,824,717 17,340,000
145,000 UBS AG............................. 7,056,748 8,701,450
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TOTAL FINANCIAL.................... 84,125,676 103,809,486
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HEALTH CARE -- 10.7%
HEALTH CARE EQUIPMENT & SERVICES -- 4.9%
86,000 Alcon Inc.......................... 9,865,989 11,602,260
130,000 St. Jude Medical Inc.+............. 5,141,691 5,393,700
190,000 Stryker Corp....................... 9,929,919 11,987,100
70,000 UnitedHealth Group Inc............. 3,872,633 3,579,800
145,000 Zimmer Holdings Inc.+.............. 10,397,832 12,309,050
------------ ------------
39,208,064 44,871,910
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PHARMACEUTICALS & BIOTECHNOLOGY -- 5.8%
210,000 Celgene Corp.+..................... 12,412,774 12,039,300
85,000 Genentech Inc.+.................... 7,228,806 6,431,100
140,000 Gilead Sciences Inc.+.............. 4,604,780 5,427,800
100,800 Novo Nordisk A/S, ADR.............. 8,022,451 10,952,928
615,000 Schering-Plough Corp............... 17,326,174 18,720,600
------------ ------------
49,594,985 53,571,728
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TOTAL HEALTH CARE.................. 88,803,049 98,443,638
------------ ------------
INDUSTRIAL -- 12.7%
70,000 C.H. Robinson
Worldwide Inc.................... 2,670,173 3,676,400
250,000 Emerson Electric Co................ 10,637,459 11,700,000
80,000 Expeditors International of
Washington Inc................... 3,515,454 3,304,000
See accompanying notes to financial statements.
4
THE GAMCO GROWTH FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- JUNE 30, 2007 (UNAUDITED)
================================================================================
MARKET
SHARES COST VALUE
------- ---- -------
COMMON STOCKS (CONTINUED)
INDUSTRIAL (CONTINUED)
35,000 First Solar Inc.+.................. $ 3,050,566 $ 3,125,150
70,000 General Dynamics Corp. 2,885,557 5,475,400
880,000 General Electric Co................ 30,473,822 33,686,400
240,000 ITT Corp........................... 11,117,197 16,387,200
130,000 L-3 Communications
Holdings Inc. ................... 9,832,493 12,660,700
140,000 Rockwell Collins Inc............... 8,344,809 9,889,600
25,000 SunPower Corp., Cl. A+............. 1,615,554 1,576,250
40,000 Suntech Power Holdings
Co. Ltd., ADR+................... 1,424,548 1,458,800
195,000 United Technologies Corp. ......... 9,590,780 13,831,350
------------ ------------
TOTAL INDUSTRIAL................... 95,158,412 116,771,250
------------ ------------
INFORMATION TECHNOLOGY -- 27.9%
COMMUNICATIONS EQUIPMENT -- 4.8%
941,000 Cisco Systems Inc.+................ 22,433,222 26,206,850
130,000 Harris Corp........................ 6,357,775 7,091,500
240,000 QUALCOMM Inc....................... 10,893,789 10,413,600
------------ ------------
39,684,786 43,711,950
------------ ------------
COMPUTERS & PERIPHERALS -- 3.3%
119,000 Apple Inc.+........................ 10,472,682 14,522,760
80,000 Research In Motion Ltd.+........... 11,757,815 15,999,200
------------ ------------
22,230,497 30,521,960
------------ ------------
SEMICONDUCTORS -- 6.7%
415,000 Intel Corp......................... 10,456,318 9,860,400
230,000 MEMC Electronic Materials
Inc.+ .......................... 13,843,665 14,057,600
100,000 Microchip Technology Inc........... 2,886,052 3,704,000
230,000 NVIDIA Corp.+...................... 7,898,295 9,501,300
635,000 Texas Instruments Inc.............. 19,669,264 23,895,050
------------ ------------
54,753,594 61,018,350
------------ ------------
SOFTWARE & SERVICES -- 13.1%
455,000 Adobe Systems Inc.+................ 16,459,252 18,268,250
180,000 Akamai Technologies Inc.+.......... 9,412,987 8,755,200
90,000 Autodesk Inc.+..................... 3,546,022 4,237,200
30,000 DST Systems Inc.+.................. 2,195,134 2,376,300
210,000 eBay Inc.+......................... 7,682,324 6,757,800
79,900 Google Inc., Cl. A+................ 23,393,530 41,818,062
25,000 MasterCard Inc., Cl. A............. 2,732,051 4,146,750
695,000 Microsoft Corp..................... 17,939,989 20,481,650
175,000 NAVTEQ Corp.+...................... 7,407,198 7,409,500
235,000 Yahoo! Inc.+....................... 7,721,481 6,375,550
------------ ------------
98,489,968 120,626,262
------------ ------------
TOTAL INFORMATION
TECHNOLOGY....................... 215,158,845 255,878,522
------------ ------------
MARKET
SHARES COST VALUE
------- ---- -------
MATERIALS -- 2.1%
87,000 Allegheny Technologies Inc......... $ 9,162,969 $ 9,124,560
110,000 Commercial Metals Co............... 1,968,277 3,714,700
130,000 E.I. du Pont de Nemours
& Co. ........................... 6,823,045 6,609,200
------------ ------------
TOTAL MATERIALS.................... 17,954,291 19,448,460
------------ ------------
WIRELESS COMMUNICATIONS -- 4.2%
TELECOMMUNICATIONS -- 4.2%
220,000 America Movil SAB de CV,
Cl. L, ADR ...................... 10,485,517 13,624,600
210,000 China Mobile Ltd., ADR............. 10,479,259 11,319,000
320,000 Rogers Communications
Inc., Cl. B ..................... 11,259,538 13,596,800
------------ ------------
32,224,314 38,540,400
------------ ------------
TOTAL WIRELESS
COMMUNICATIONS................... 32,224,314 38,540,400
------------ ------------
TOTAL COMMON STOCKS ............... 778,357,871 913,613,140
------------ ------------
PRINCIPAL
AMOUNT
---------
U.S. GOVERNMENT OBLIGATIONS -- 1.8%
$16,641,000 U.S. Treasury Bills,
4.760% to 4.991%++,
07/12/07 to 09/27/07............. 16,449,946 16,453,373
------------ ------------
TOTAL
INVESTMENTS -- 101.3% $794,807,817 930,066,513
============
OTHER ASSETS AND LIABILITIES (NET) -- (1.3)% (11,546,349)
------------
NET ASSETS -- 100.0%............................. $918,520,164
============
- ----------------
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
ADR American Depository Receipt
See accompanying notes to financial statements.
5
THE GAMCO GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2007 (UNAUDITED)
================================================================================
ASSETS:
Investments, at value (cost $794,807,817) $ 930,066,513
Receivable for Fund shares sold.................. 241,339
Dividends receivable............................. 667,520
Prepaid expense.................................. 15,629
--------------
TOTAL ASSETs..................................... 930,991,001
--------------
LIABILITIES:
Payable to custodian............................. 41,005
Payable for Fund shares redeemed................. 6,806,380
Payable for investments purchased................ 3,869,161
Payable for investment advisory fees............. 743,457
Payable for distribution fees.................... 186,360
Payable for accounting fees...................... 3,626
Other accrued expenses........................... 820,848
--------------
TOTAL LIABILITIES................................ 12,470,837
--------------
NET ASSETS applicable to 27,656,188
shares outstanding............................. $ 918,520,164
==============
NET ASSETS CONSIST OF:
Paid-in capital, each class at $0.01 par value $1,673,052,517
Accumulated net investment loss.................. (2,350,109)
Accumulated net realized loss on investments..... (887,440,940)
Net unrealized appreciation on investments 135,258,696
--------------
NET ASSETS....................................... $ 918,520,164
==============
SHARES OF BENEFICIAL INTEREST:
CLASS AAA:
Net Asset Value, offering and redemption price
per share ($917,451,411 / 27,623,347
shares outstanding; unlimited number
of shares authorized).......................... $33.21
======
CLASS A:
Net Asset Value and redemption price per share
($239,896 / 7,221 shares outstanding;
unlimited number of shares authorized)......... $33.22
======
Maximum offering price per share (NAV / .9425,
based on maximum sales charge of 5.75%
of the offering price)......................... $35.25
======
CLASS B:
Net Asset Value and offering price per share
($312,462 / 9,658 shares outstanding;
unlimited number of shares authorized)......... $32.35(a)
======
CLASS C:
Net Asset Value and offering price per share
($516,395 / 15,962 shares outstanding;
unlimited number of shares authorized)......... $32.35(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 $143,275)..... $ 4,213,887
Interest......................................... 222,755
-----------
TOTAL INVESTMENT INCOME.......................... 4,436,642
-----------
EXPENSES:
Investment advisory fees......................... 4,616,374
Distribution fees - Class AAA.................... 1,152,906
Distribution fees - Class A...................... 311
Distribution fees - Class B...................... 1,477
Distribution fees - Class C..................... 2,029
Shareholder services fees........................ 584,718
Shareholder communications expenses.............. 205,635
Custodian fees................................... 63,046
Legal and audit fees............................. 37,451
Trustees' fees................................... 34,656
Accounting fees.................................. 22,375
Registration expenses............................ 20,245
Interest expense................................. 3,035
Miscellaneous expenses........................... 44,764
-----------
TOTAL EXPENSES................................... 6,789,022
Less: Custodian fee credits...................... (2,271)
-----------
NET EXPENSES..................................... 6,786,751
-----------
NET INVESTMENT LOSS.............................. (2,350,109)
-----------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on investments................. 49,953,619
Net change in unrealized appreciation/
depreciation on investments.................... 28,384,131
-----------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS................................. 78,337,750
-----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS................................ $75,987,641
===========
See accompanying notes to financial statements.
6
THE GAMCO GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
================================================================================
SIX MONTHS ENDED
JUNE 30, 2007 YEAR ENDED
(UNAUDITED) DECEMBER 31, 2006
---------------- -----------------
OPERATIONS:
Net investment loss...................................................... $ (2,350,109) $ (1,935,652)
Net realized gain on investments......................................... 49,953,619 124,028,687
Net change in unrealized appreciation/depreciation on investments........ 28,384,131 (60,720,080)
------------- --------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS..................... 75,987,641 61,372,955
------------- --------------
SHARES OF BENEFICIAL INTEREST TRANSACTIONS:
Class AAA................................................................ (115,269,810) (244,152,530)
Class A.................................................................. (58,390) (14,124)
Class C.................................................................. 82,535 (176,602)
------------- --------------
NET DECREASE IN NET ASSETS FROM SHARES OF BENEFICIAL INTEREST TRANSACTIONS (115,245,665) (244,343,256)
------------- --------------
REDEMPTION FEES.......................................................... 692 6,591
------------- --------------
NET DECREASE IN NET ASSETS............................................... (39,257,332) (182,963,710)
NET ASSETS:
Beginning of period...................................................... 957,777,496 1,140,741,206
------------- --------------
End of period (including undistributed net investment income
of $0 and $0, respectively)............................................ $ 918,520,164 $ 957,777,496
============= ==============
THE GAMCO GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
================================================================================
1. ORGANIZATION. The GAMCO Growth Fund (the "Fund"), formerly The Gabelli Growth
Fund, was organized on October 24, 1986 as a Massachusetts business trust. The
Fund is a diversified open-end management investment company registered under
the Investment Company Act of 1940, as amended (the "1940 Act"). The Fund's
primary objective is capital appreciation. The Fund commenced investment
operations on April 10, 1987.
2. SIGNIFICANT ACCOUNTING POLICIES. The preparation of financial statements in
accordance with 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").
7
THE GAMCO GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)(UNAUDITED)
================================================================================
Portfolio securities primarily traded on a foreign market are generally valued
at the preceding closing values of such securities on the relevant market, but
may be fair valued pursuant to procedures established by the Board if market
conditions change significantly after the close of the foreign market but prior
to the close of business on the day the securities are being valued. Debt
instruments with remaining maturities of 60 days or less that are not credit
impaired are valued at amortized cost, unless the Board determines such amount
does not reflect the securities' fair value, in which case these securities will
be fair valued as determined by the Board. Debt instruments having a maturity
greater than 60 days for which market quotations are readily available are
valued at the average of the latest bid and asked prices. If there were no asked
prices quoted on such day, the security is valued using the closing bid price.
Futures contracts are valued at the closing settlement price of the exchange or
board of trade on which the applicable contract is traded.
Securities and assets for which market quotations are not readily available are
fair valued as determined by the Board. Fair valuation methodologies and
procedures may include, but are not limited to: analysis and review of available
financial and non-financial information about the company; comparisons to the
valuation and changes in valuation of similar securities, including a comparison
of foreign securities to the equivalent U.S. dollar value ADR securities at the
close of the U.S. exchange; and evaluation of any other information that could
be indicative of the value of the security.
In September 2006, the Financial Accounting Standards Board (the "FASB") issued
Statement of Financial Accounting Standards ("SFAS") 157, Fair Value
Measurements, which clarifies the definition of fair value and requires
companies to expand their disclosure about the use of fair value to measure
assets and liabilities in interim and annual periods subsequent to initial
recognition. Adoption of SFAS 157 requires the use of the price that would be
received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. SFAS 157 is
effective for financial statements issued for fiscal years beginning after
November 15, 2007, and interim periods within those fiscal years. At this time,
management is in the process of reviewing the requirements of SFAS 157 against
its current valuation policies to determine future applicability.
FOREIGN SECURITIES. The Fund may directly purchase securities of foreign
issuers. Investing in securities of foreign issuers involves special risks not
typically associated with investing in securities of U.S. issuers. The risks
include possible revaluation of currencies, the ability to repatriate funds,
less complete financial information about companies, and possible future adverse
political and economic developments. Moreover, securities of many foreign
issuers and their markets may be less liquid and their prices more volatile than
those of securities of comparable U.S. issuers.
FOREIGN TAXES. The Fund may be subject to foreign taxes on income, gains on
investments, or currency repatriation, a portion of which may be recoverable.
The Fund will accrue such taxes and recoveries as applicable, based upon its
current interpretation of tax rules and regulations that exist in the markets in
which it invests.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME. Securities transactions are
accounted for on the trade date with realized gain or loss on investments
determined by using the identified cost method. Interest income (including
amortization of premium and accretion of discount) is recorded on the accrual
basis. Premiums and discounts on debt securities are amortized using the
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.
8
THE GAMCO GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)(UNAUDITED)
================================================================================
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 held by the
Fund, timing differences, and differing characterizations of distributions made
by the Fund. These book/tax differences are either temporary or permanent in
nature. To the extent these differences are permanent, adjustments are made to
the appropriate capital accounts in the period when the differences arise. These
reclassifications have no impact on the NAV of the Fund.
No distributions were made during the fiscal year ended December 31, 2006.
PROVISION FOR INCOME TAXES. The Fund intends to continue to qualify as a
regulated investment company under Subchapter M of the Internal Revenue Code of
1986, as amended (the "Code"). It is the policy of the Fund to comply with the
requirements of the Code applicable to regulated investment companies and to
distribute substantially all of its net investment company taxable income and
net capital gains. Therefore, no provision for federal income taxes is required.
At December 31, 2006, the Fund had net capital loss carryforwards for federal
income tax purposes of $930,720,149, which are available to reduce future
required distributions of net capital gains to shareholders. $579,527,980 is
available through 2010; $350,050,494 is available through 2011; and $1,141,675
is available through 2012.
The following summarizes the tax cost of investments and the related unrealized
appreciation/(depreciation) at June 30, 2007:
GROSS GROSS
UNREALIZED UNREALIZED NET UNREALIZED
COST APPRECIATION DEPRECIATION APPRECIATION
---- ------------ ------------ ------------
Investments............. $798,330,192 $144,866,770 $(13,130,449) $131,736,321
9
THE GAMCO GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)(UNAUDITED)
================================================================================
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.
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
$456,272,436 and $556,556,148, respectively.
6. TRANSACTIONS WITH AFFILIATES. During the six months ended June 30, 2007, the
Fund paid brokerage commissions of $39,448 to Gabelli & Company. Additionally,
Gabelli & Company informed the Fund that it received $73 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.
10
THE GAMCO GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)(UNAUDITED)
================================================================================
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. During the six months ended June 30, 2007, there were no borrowings
under the line of credit.
8. SHARES OF BENEFICIAL INTEREST. The Fund currently offers four classes of
shares - Class AAA Shares, Class A Shares, Class B Shares, and Class C Shares.
Effective February 15, 2007, Class AAA Shares are offered only to investors who
were shareholders prior to that date in one or more of the registered funds
distributed by Gabelli & Company. Class AAA Shares are offered to these
investors only 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 $692 and $6,591, 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.
11
THE GAMCO GROWTH 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 ....................................... 685,153 $ 21,623,580 2,450,572 $ 71,744,626
Shares redeemed.................................... (4,312,892) (136,893,390) (10,762,763) (315,897,156)
---------- ------------- ----------- -------------
Net decrease..................................... (3,627,739) $(115,269,810) (8,312,191) $(244,152,530)
========== ============= =========== =============
CLASS A CLASS A
---------------------------- ----------------------------
Shares sold ....................................... 1,055 $ 31,907 1,400 $ 40,639
Shares redeemed.................................... (2,856) (90,297) (1,881) (54,763)
---------- ------------- ----------- -------------
Net decrease..................................... (1,801) $ (58,390) (481) $ (14,124)
========== ============= =========== =============
CLASS C CLASS C
---------------------------- ----------------------------
Shares sold ....................................... 7,906 $ 243,706 2,965 $ 85,939
Shares redeemed.................................... (5,348) (161,171) (9,040) (262,541)
---------- ------------- ----------- -------------
Net increase (decrease).......................... 2,558 $ 82,535 (6,075) $ (176,602)
========== ============= =========== =============
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.
12
THE GAMCO GROWTH FUND
FINANCIAL HIGHLIGHTS
================================================================================
Selected data for a share of beneficial interest outstanding throughout each
period:
INCOME FROM INVESTMENT OPERATIONS
--------------------------------------
Net
Net Asset Realized and Total
Period Value, Net Unrealized from
Ended Beginning Investment Gain/(Loss) on Investment
December 31 of Period Loss(a) Investments Operations
- ----------- --------- ---------- ------------- ----------
CLASS AAA
2007(b) $30.62 $(0.08) $ 2.67 $ 2.59
2006 28.81 (0.05) 1.86 1.81
2005 26.12 (0.13) 2.82 2.69
2004 24.95 (0.11) 1.28 1.17
2003 18.99 (0.14) 6.10 5.96
2002 28.68 (0.17) (9.52) (9.69)
CLASS A
2007(b) $30.63 $(0.08) $ 2.67 $ 2.59
2006 28.82 (0.06) 1.87 1.81
2005 26.13 (0.12) 2.81 2.69
2004(e) 24.95 (0.02) 1.20 1.18
CLASS B
2007(b) $29.93 $(0.19) $ 2.61 $ 2.42
2006 28.38 (0.27) 1.82 1.55
2005 25.93 (0.32) 2.77 2.45
2004(e) 24.95 (0.28) 1.26 0.98
CLASS C
2007(b) $29.93 $(0.19) $ 2.61 $ 2.42
2006 28.38 (0.27) 1.82 1.55
2005 25.93 (0.32) 2.77 2.45
2004(e) 24.95 (0.21) 1.19 0.98
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
--------------------------------------------------
Net Asset Net Assets
Period Value, End of Net Portfolio
Ended Redemption End of Total Period Investment Operating Turnover
December 31 Fees(a) Period Return+ (in 000's) Loss Expenses Rate
- ----------- --------- ------- ------- ---------- ---------- ----------- ----------
CLASS AAA
2007(b) $0.00(c) $33.21 8.5% $ 917,451 (0.51)%(d) 1.47%(d) 49%
2006 0.00(c) 30.62 6.3 956,811 (0.19) 1.44 57
2005 0.00(c) 28.81 10.3 1,139,640 (0.48) 1.49 39
2004 0.00(c) 26.12 4.7 1,447,655 (0.46) 1.53 31
2003 -- 24.95 31.4 1,881,457 (0.60) 1.47 42
2002 -- 18.99 (33.8) 1,675,816 (0.68) 1.43 30
CLASS A
2007(b) $0.00(c) $33.22 8.5% $ 240 (0.52)%(d) 1.47%(d) 49%
2006 0.00(c) 30.63 6.3 276 (0.19) 1.44 57
2005 0.00(c) 28.82 10.3 274 (0.43) 1.47 39
2004(e) 0.00(c) 26.13 4.7 73 (0.09) 1.60 31
CLASS B
2007(b) $0.00(c) $32.35 8.1% $ 313 (1.26)%(d) 2.22%(d) 49%
2006 0.00(c) 29.93 5.5 289 (0.94) 2.19 57
2005 0.00(c) 28.38 9.5 274 (1.22) 2.24 39
2004(e) 0.00(c) 25.93 3.9 250 (1.12) 2.30 31
CLASS C
2007(b) $0.00(c) $32.35 8.1% $ 516 (1.24)%(d) 2.22%(d) 49%
2006 0.00(c) 29.93 5.5 401 (0.95) 2.19 57
2005 0.00(c) 28.38 9.5 553 (1.21) 2.23 39
2004(e) 0.00(c) 25.93 3.9 226 (0.88) 2.37 31
+ Total return represents aggregate total return of a hypothetical $1,000
investment at the beginning of the period and sold at the end of the period
including reinvestment of 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 six months 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.
13
THE GAMCO GROWTH 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 large cap
growth 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 ten year period, was in the top one-half of the funds
for the three year period and was in the bottom 25% of the funds for the five
and one year period.
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 and that the affiliated broker received distribution fees and
minor amounts of sales commissions.
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 large-cap growth 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.
14
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 GAMCO GROWTH FUND
One Corporate Center
Rye, New York 10580-1422
800-GABELLI
800-422-3554
FAX: 914-921-5118
WEBSITE: WWW.GABELLI.COM
E-MAIL: INFO@GABELLI.COM
Net Asset Value per share available daily by calling
800-GABELLI after 6:00 P.M.
BOARD OF TRUSTEES
Mario J. Gabelli, CFA Robert J. Morrissey
CHAIRMAN AND CHIEF ATTORNEY-AT-LAW
EXECUTIVE OFFICER MORRISSEY, HAWKINS & LYNCH
GAMCO INVESTORS, INC.
Anthony J. Colavita Anthony R. Pustorino
ATTORNEY-AT-LAW CERTIFIED PUBLIC ACCOUNTANT,
ANTHONY J. COLAVITA, P.C. PROFESSOR EMERITUS
PACE UNIVERSITY
James P. Conn Anthony Torna
FORMER CHIEF INVESTMENT OFFICER MAXIM GROUP LLC
FINANCIAL SECURITY ASSURANCE
HOLDINGS LTD.
Dugald A. Fletcher Anthonie C. van Ekris
PRESIDENT CHAIRMAN
FLETCHER & COMPANY, INC. BALMAC INTERNATIONAL, INC.
John D. Gabelli Salvatore J. Zizza
SENIOR VICE PRESIDENT CHAIRMAN
GABELLI & COMPANY, INC. ZIZZA & CO., LTD.
OFFICERS AND PORTFOLIO MANAGER
Bruce N. Alpert Howard F. Ward, CFA
PRESIDENT PORTFOLIO MANAGER
James E. McKee Peter D. Goldstein
SECRETARY CHIEF COMPLIANCE OFFICER
Agnes Mullady
TREASURER
DISTRIBUTOR
Gabelli & Company, Inc.
CUSTODIAN, TRANSFER AGENT, AND DIVIDEND AGENT
State Street Bank and Trust Company
LEGAL COUNSEL
Skadden, Arps, Slate, Meagher & Flom LLP
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This report is submitted for the general information of the shareholders of The
GAMCO Growth Fund. It is not authorized for distribution to prospective
investors unless preceded or accompanied by an effective prospectus.
- --------------------------------------------------------------------------------
GAB406Q207SR
GAMCO
THE
GAMCO
GROWTH
FUND
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 GAMCO Growth Fund
--------------------------------------------------------------------
By (Signature and Title)* /s/ Bruce N. Alpert
-------------------------------------------------------
Bruce N. Alpert, Principal Executive Officer
Date August 31, 2007
----------------------------------------------------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Bruce N. Alpert
-------------------------------------------------------
Bruce N. Alpert, Principal Executive Officer
Date August 31, 2007
----------------------------------------------------------------------------
By (Signature and Title)* /s/ Agnes Mullady
-------------------------------------------------------
Agnes Mullady, Principal Financial Officer
& Treasurer
Date August 31, 2007
----------------------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.