UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF
REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-04719
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The GAMCO Westwood Funds
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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: September 30
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Date of reporting period: September 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.
GAMCO WESTWOOD FUNDS
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MIGHTY MITES(SM) FUND
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EQUITY FUND
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BALANCED FUND
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INTERMEDIATE BOND FUND
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SMALLCAP EQUITY FUND
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INCOME FUND
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ANNUAL REPORT
SEPTEMBER 30, 2007
GAMCO WESTWOOD FUNDS
(UNAUDITED)
CLASS AAA SHARES
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Average Annual Returns -- September 30, 2007 (a)
Current
Expense
Ratio after
Gross Adviser Maximum
Since Expense Reimburse- Sales
1 Year 5 Year 10 Year Inception Ratio ments Charge
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Mighty Mites(SM) ........................... 23.93% 17.20% N/A 14.50% 1.61% 1.61% None
Equity ..................................... 19.66 17.22 8.45% 12.37 1.54 1.54 None
Balanced ................................... 13.62 11.73 7.41 10.67 1.32 1.32 None
Intermediate Bond .......................... 3.67 2.59 4.78 5.64 1.53 1.00 None
SmallCap Equity ............................ 21.22 15.15 5.11 8.66 2.02 1.50 None
Income ..................................... 9.97 16.40 10.43 10.43 2.02 1.50 None
CLASS A SHARES
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Average Annual Returns -- September 30, 2007 (a)(b)(e)
Current
Expense
Ratio after
Gross Adviser Maximum
Since Expense Reimburse- Sales
1 Year 5 Year 10 Year Inception Ratio ments Charge
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Mighty Mites(SM) ........................... 18.81% 16.03% N/A 13.84% 1.86% 1.86% 4.00%
Equity ..................................... 14.68 15.98 7.73% 11.94 1.79 1.79 4.00
Balanced ................................... 8.72 10.57 6.70 10.12 1.57 1.57 4.00
Intermediate Bond .......................... (0.48) 1.67 4.29 5.33 1.63 1.10 4.00
SmallCap Equity ............................ 16.02 13.98 4.61 8.16 2.27 1.75 4.00
Income ..................................... 5.37 15.18 9.81 9.82 2.27 1.75 4.00
CLASS B SHARES
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Average Annual Returns -- September 30, 2007 (a)(c)(e)
Current
Expense
Ratio after
Gross Adviser Maximum
Since Expense Reimburse- Sales
1 Year 5 Year 10 Year Inception Ratio ments Charge
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Mighty Mites(SM) ........................... 18.04% 16.11% N/A 13.94% 2.36% 2.36% 5.00%
Equity ..................................... 13.83 16.13 7.87% 12.01 2.29 2.29 5.00
Balanced ................................... 7.74 10.64 6.84 10.20 2.07 2.07 5.00
Intermediate Bond .......................... (2.00) 1.47 4.25 5.30 2.28 1.75 5.00
SmallCap Equity ............................ 15.37 14.10 4.63 8.18 2.77 2.25 5.00
Income ..................................... 4.04 15.35 10.02 10.02 2.77 2.25 5.00
CLASS C SHARES
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Average Annual Returns -- September 30, 2007 (a)(d)(e)
Current
Expense
Ratio after
Gross Adviser Maximum
Since Expense Reimburse- Sales
1 Year 5 Year 10 Year Inception Ratio ments Charge
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Mighty Mites(SM) ........................... 22.17% 16.36% N/A 13.96% 2.36% 2.36% 1.00%
Equity ..................................... 17.83 16.37 7.87% 12.01 2.29 2.29 1.00
Balanced ................................... 11.68 10.92 6.88 10.23 2.07 2.07 1.00
Intermediate Bond .......................... 3.84 1.87 4.31 5.34 2.28 1.75 1.00
SmallCap Equity ............................ 19.35 14.04 4.58 8.13 2.77 2.25 1.00
Income ..................................... 8.13 15.74 10.10 10.10 2.77 2.25 1.00
(a) RETURNS REPRESENT PAST PERFORMANCE AND DO NOT GUARANTEE FUTURE RESULTS.
TOTAL RETURNS AND AVERAGE ANNUAL RETURNS REFLECT CHANGES IN SHARE PRICE
AND REINVESTMENT OF DISTRIBUTIONS AND ARE NET OF EXPENSES. INVESTMENT
RETURNS AND THE PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE. WHEN
SHARES ARE REDEEMED, THEY MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST. FOR THE INTERMEDIATE BOND, SMALLCAP EQUITY, AND INCOME FUNDS, THE
ADVISER REIMBURSED EXPENSES TO LIMIT THE EXPENSE RATIO. HAD SUCH
LIMITATIONS NOT BEEN IN PLACE, RETURNS WOULD HAVE BEEN LOWER. THE
CONTRACTUAL EXPENSE LIMITATIONS ARE IN EFFECT THROUGH SEPTEMBER 30, 2008
AND ARE RENEWABLE ANNUALLY BY THE ADVISER. CURRENT PERFORMANCE MAY BE
LOWER OR HIGHER THAN THE PERFORMANCE DATA PRESENTED. VISIT WWW.GABELLI.COM
FOR PERFORMANCE INFORMATION AS OF THE MOST RECENT MONTH END. INVESTORS
SHOULD CAREFULLY CONSIDER THE INVESTMENT OBJECTIVES, RISKS, CHARGES, AND
EXPENSES OF THE FUND BEFORE INVESTING. THE PROSPECTUS CONTAINS MORE
INFORMATION ABOUT THIS AND OTHER MATTERS AND SHOULD BE READ CAREFULLY
BEFORE INVESTING.
(b) INCLUDES THE EFFECT OF THE MAXIMUM 4.0% SALES CHARGE AT THE BEGINNING OF
THE PERIOD.
(c) PERFORMANCE RESULTS INCLUDE THE DEFERRED SALES CHARGES FOR THE CLASS B
SHARES UPON REDEMPTION AT THE END OF THE ONE YEAR AND FIVE YEAR PERIODS OF
5% AND 2%, RESPECTIVELY, OF THE FUND'S NET ASSET VALUES ("NAV") PER SHARE
AT THE TIME OF PURCHASE OR SALE, WHICHEVER IS LOWER.
(d) PERFORMANCE RESULTS INCLUDE THE DEFERRED SALES CHARGE FOR THE CLASS C
SHARES UPON REDEMPTION AT THE END OF THE ONE YEAR PERIOD OF 1% OF THE
FUND'S NAV PER SHARE AT THE TIME OF PURCHASE OR SALE, WHICHEVER IS LOWER.
(e) THE PERFORMANCE OF THE CLASS AAA SHARES IS USED TO CALCULATE PERFORMANCE
FOR THE PERIODS PRIOR TO THE ISSUANCE OF CLASS A SHARES, CLASS B SHARES,
AND CLASS C SHARES. THE PERFORMANCE FOR THE CLASS B SHARES AND CLASS C
SHARES WOULD HAVE BEEN LOWER DUE TO THE ADDITIONAL EXPENSES ASSOCIATED
WITH THESE CLASSES OF SHARES. THE INCEPTION DATES FOR THE CLASS AAA SHARES
AND THE INITIAL ISSUANCE DATES FOR THE CLASS A SHARES, CLASS B SHARES, AND
CLASS C SHARES AFTER WHICH SHARES REMAINED CONTINUOUSLY OUTSTANDING ARE
LISTED BELOW.
Class AAA Shares Class A Shares Class B Shares Class C Shares
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Mighty Mites(SM) ............ 05/11/98 11/26/01 06/06/01 08/03/01
Equity ...................... 01/02/87 01/28/94 03/27/01 02/13/01
Balanced .................... 10/01/91 04/06/93 03/27/01 09/25/01
Intermediate Bond ........... 10/01/91 07/26/01 03/27/01 10/22/01
SmallCap Equity ............. 04/15/97 11/26/01 03/27/01 11/26/01
Income ...................... 09/30/97 05/09/01 11/26/01 11/26/01
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We have separated the portfolio managers' commentary from the financial
statements and investment portfolio due to corporate governance regulations
stipulated by the Sarbanes-Oxley Act of 2002. We have done this to ensure that
the content of the portfolio managers' commentary is unrestricted. The financial
statements and investment portfolio are mailed separately from the commentary.
Both the commentary and the financial statements, including the portfolio of
investments, will be available on our website at www.gabelli.com/funds.
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2
PERFORMANCE DISCUSSION
MIGHTY MITES(SM) FUND
The GAMCO Westwood Mighty Mites(SM) Fund's Class AAA Shares' total return
for the twelve months ended September 30, 2007 was 23.93% versus the Russell
2000 Index, the Russell Microcap(TM) Index, and the Lipper Small Cap Value Fund
Average returns of 12.34%, 9.68%, and 9.77%, respectively.
For the fiscal year ended September 30, 2007 the top contributors were:
o Epoch Holding Corporation (4.8% of net assets at September 30, 2007)
is a financial services company that continued its rapid growth of
assets under management, up 84% to $6 billion.
o IntriCon Corporation (1.6%) makes micro-miniature components for
hearing aids, such as volume controls and microphones. Sales grew
26% in the first half of 2007. IntriCon is part of our "aging of the
population" theme.
o Sonic Innovations Inc. (1.1%) manufactures digital hearing aids and
is another "aging of the population" stock.
o Haulotte Group (1.8%) manufactures aerial work platforms, telescopic
handlers, cranes and loaders, and is benefiting from a worldwide
infrastructure boom.
o Jungheinrich (1.4%) makes material handling equipment for the
warehousing and material flow engineering sectors. The company is
posting strong growth in orders and sales.
The biggest detractors were:
o MGP Ingredients Inc. (0.3%) produces ingredients such as specialty
wheat starches and proteins for food products, food grade alcohol,
and ethanol. The stock had been riding high as a play on ethanol. It
took a hit during the year as ethanol prices declined due to
oversupply just as corn prices rose significantly.
o Seacoast Banking Corp. of Florida saw its stock price decline amid
the continued softening of the residential real estate market in
Southern Florida.
o Baldwin Technology Co. Inc. (1.2%) makes process automation
equipment for the printing and publishing industry. Business is
strong, and the company should benefit from continued global growth
in this industry, particularly overseas.
o Sonesta International Hotels Corporation (1.7%) operates 21 hotels
in Boston, Miami, New Orleans, Egypt, Brazil, Peru, and St. Maarten
as well as five Nile cruises. Sonesta's existing hotel pipeline
includes properties in Orlando, Qatar, and Mexico. On June 4, 2007,
Sonesta retained an investment bank to assist in enhancing
shareholder value. The timing was unfortunate, as credit market
turmoil this summer made LBO firms seem less likely acquirers of
Sonesta.
Overall, micro cap stocks outperformed the general stock market in the
first half of the past twelve months and were at par with large cap stocks in
the quarter ended June 30. In the final quarter of the fiscal year, the broader
market staged a stronger comeback than did micro cap stocks. We believe this is
due to investors seeking a perceived safe haven in what many believe may have
been the eye of the credit storm.
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AVERAGE ANNUAL RETURNS THROUGH SEPTEMBER 30, 2007 (a)
SINCE
YEAR TO INCEPTION
QUARTER DATE 1 YEAR 3 YEAR 5 YEAR (5/11/98)
------- ------- ------- ------ ------ ---------
MIGHTY MITES(SM) FUND CLASS AAA ............ (1.56)% 12.32% 23.93% 17.59% 17.20% 14.50%
Russell Microcap (TM) Index ................ (4.61) (0.53) 9.68 11.15 19.46 N/A(b)
Russell 2000 Index ......................... (3.09) 3.16 12.34 13.36 18.75 7.01
Lipper Small Cap Value Fund Average ........ (6.18) 1.05 9.77 12.14 17.81 8.72
THE FUND'S EXPENSE RATIO IS 1.61% IN THE CURRENT PROSPECTUS. THE FUND'S CLASS
AAA SHARES DO NOT HAVE A SALES CHARGE.
(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. THE ADVISER REIMBURSED EXPENSES IN PRIOR YEARS TO LIMIT THE EXPENSE
RATIO. HAD SUCH LIMITATION NOT BEEN IN PLACE, RETURNS WOULD HAVE BEEN
LOWER. CURRENT PERFORMANCE MAY BE HIGHER OR LOWER THAN THE PERFORMANCE
DATA PRESENTED. VISIT WWW.GABELLI.COM FOR PERFORMANCE INFORMATION AS OF
THE MOST RECENT MONTH END. PERFORMANCE RETURNS FOR PERIODS LESS THAN ONE
YEAR ARE NOT ANNUALIZED. 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. SEE PAGE 2 FOR
FURTHER DETAILS ABOUT ADDITIONAL CLASSES OF SHARES.
THE RUSSELL MICROCAP(TM) INDEX AND THE RUSSELL 2000 INDEX ARE UNMANAGED
INDICATORS OF STOCK MARKET PERFORMANCE, WHILE THE LIPPER SMALL CAP VALUE
FUND AVERAGE REFLECTS THE AVERAGE PERFORMANCE OF MUTUAL FUNDS CLASSIFIED
IN THIS PARTICULAR CATEGORY. INVESTING IN SMALL CAPITALIZATION SECURITIES
INVOLVES SPECIAL CHALLENGES BECAUSE THESE SECURITIES MAY TRADE LESS
FREQUENTLY AND EXPERIENCE MORE ABRUPT PRICE MOVEMENTS THAN LARGE
CAPITALIZATION SECURITIES. DIVIDENDS ARE CONSIDERED REINVESTED. YOU CANNOT
INVEST DIRECTLY IN AN INDEX.
(b) INCEPTION DATE FOR THE RUSSELL MICROCAP(TM) INDEX IS JULY 1, 2000.
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3
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN
THE MIGHTY MITES(SM) FUND CLASS AAA, THE RUSSELL 2000 INDEX,
AND THE RUSSELL MICROCAP(TM) INDEX (Unaudited)
- ---------------------------------------------------
Average Annual Total Return*
- ---------------------------------------------------
1 Year 3 Year 5 Year Life of Fund
------ ------ ------ ------------
Class AAA 23.93% 17.59% 17.20% 14.50%
- ---------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Mighty Mites(SM) Russell 2000 Russell Microcap(TM)
Date Fund (Class AAA) Index Index**
5/11/1998 $ 10,000 $ 10,000 $ 10,000
9/30/1998 $ 9,700 $ 7,660
9/30/1999 $ 13,018 $ 9,121
9/30/2000 $ 16,010 $ 11,254 $ 15,750
9/30/2001 $ 15,567 $ 8,867 $ 13,359
9/30/2002 $ 16,128 $ 8,042 $ 12,594
9/30/2003 $ 19,314 $ 10,978 $ 19,443
9/30/2004 $ 21,915 $ 13,039 $ 22,185
9/30/2005 $ 26,391 $ 15,395 $ 26,067
9/30/2006 $ 28,755 $ 16,922 $ 28,035
9/30/2007 $ 35,636 $ 19,010 $ 30,749
* PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. The performance
tables and graph do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares.
** The Russell Microcap(TM) Index inception date is July 1, 2000 and the
value of the Index prior to July 1, 2000 is that of the Mighty Mites(SM)
Fund (Class AAA).
4
EQUITY FUND
For the twelve months ended September 30, 2007, the GAMCO Westwood Equity
Fund's Class AAA Shares posted a return of 19.66% and the Standard & Poor's
("S&P") 500 Index and the Lipper Large Cap Value Fund Average had returns of
16.78% and 14.63%, respectively.
During the fiscal year, both stock selection and overweight positions in
the highest performing S&P 500 sectors contributed to strong outperformance by
the Fund. Contributing the most were the Energy and Materials & Processing
sectors of the Fund, which were the two top performing sectors in the S&P 500.
The Fund benefited from being overweight in Energy and from receiving strong
performance out of Marathon Oil Corp. (2.4% of net assets as of September 30,
2007), McDermott International Inc. (1.3%), ConocoPhillips (2.5%), and Murphy
Oil Corp. (2.6%).
The other two top contributing stocks were from Materials and Processing:
Freeport-McMoRan Copper & Gold Inc. (2.4%) and Phelps Dodge Corp. Phelps Dodge,
which had led performance in 2006, was targeted for acquisition by
Freeport-McMoRan, and sold out of the Fund on the subsequent run up in price. In
analyzing Freeport-McMoRan post-acquisition, we perceived a strongly managed and
well diversified metals company with significant free cash flow generation and
the capability to pay off deal related debt sooner than was expected by the
market. After purchase for the Fund, it has led performance in 2007.
Contributing the least to Fund performance was the Technology sector, led by
Motorola, which was sold after reporting disappointing earnings and margin
trends.
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AVERAGE ANNUAL RETURNS THROUGH SEPTEMBER 30, 2007*
SINCE
YEAR TO INCEPTION
QUARTER DATE 1 YEAR 3 YEAR 5 YEAR 10 YEAR 15 YEAR 20 YEAR (1/2/87)
------- ------- ------ ------ ------ ------- ------- ------- ---------
EQUITY FUND CLASS AAA................. 2.68% 12.77% 19.66% 17.66% 17.22% 8.45% 13.39% 11.32% 12.37%
S&P 500 Index ........................ 2.33 9.45 16.78 13.24 15.51 6.60 11.12 10.59 11.83
Lipper Large Cap Value Fund Average .. (0.02) 7.17 14.63 13.47 15.95 6.77 11.26 10.61 11.36
THE FUND'S EXPENSE RATIO IS 1.54% IN THE CURRENT PROSPECTUS. THE FUND'S CLASS
AAA SHARES DO NOT HAVE A SALES CHARGE.
* RETURNS REPRESENT PAST PERFORMANCE AND DO NOT GUARANTEE FUTURE RESULTS.
TOTAL RETURNS AND AVERAGE ANNUAL RETURNS REFLECT CHANGES IN SHARE PRICE
AND REINVESTMENT OF DIVIDENDS AND ARE NET OF EXPENSES. INVESTMENT RETURNS
AND THE PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE. WHEN SHARES ARE
REDEEMED, THEY MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. 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. PERFORMANCE RETURNS FOR PERIODS LESS THAN ONE YEAR ARE NOT
ANNUALIZED. 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. SEE PAGE 2 FOR FURTHER DETAILS ABOUT
ADDITIONAL CLASSES OF SHARES. THE S&P 500 INDEX IS AN UNMANAGED INDICATOR
OF STOCK MARKET PERFORMANCE. THE LIPPER LARGE CAP VALUE FUND AVERAGE
REFLECTS THE AVERAGE PERFORMANCE OF MUTUAL FUNDS CLASSIFIED IN THIS
PARTICULAR CATEGORY. DIVIDENDS ARE CONSIDERED REINVESTED. YOU CANNOT
INVEST DIRECTLY IN AN INDEX.
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COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN
THE EQUITY FUND CLASS AAA AND THE S&P 500 INDEX (Unaudited)
- ----------------------------------------------------
Average Annual Total Return*
- ----------------------------------------------------
1 Year 5 Year 10 Year Life of Fund
------ ------ ------- ------------
Class AAA 19.66% 17.22% 8.45% 12.37%
- ----------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Date Equity Fund (Class AAA) S&P 500 Index
1/2/87 $ 10,000 $ 10,000
9/30/87 $ 13,148 $ 13,585
9/30/88 $ 11,779 $ 11,902
9/30/89 $ 15,323 $ 15,823
9/30/90 $ 13,700 $ 14,361
9/30/91 $ 16,386 $ 18,826
9/30/92 $ 17,068 $ 20,905
9/30/93 $ 20,509 $ 23,616
9/30/94 $ 22,384 $ 24,485
9/30/95 $ 28,170 $ 31,760
9/30/96 $ 35,742 $ 38,213
9/30/97 $ 49,899 $ 53,663
9/30/98 $ 49,185 $ 58,536
9/30/99 $ 58,909 $ 74,803
9/30/00 $ 70,273 $ 84,729
9/30/01 $ 59,809 $ 62,183
9/30/02 $ 50,754 $ 49,454
9/30/03 $ 58,413 $ 61,506
9/30/04 $ 68,974 $ 70,030
9/30/05 $ 82,796 $ 78,609
9/30/06 $ 93,883 $ 87,083
9/30/07 $ 112,340 $ 101,696
* PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. The performance
tables and graph do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares.
5
BALANCED FUND
For the twelve months ended September 30, 2007, the GAMCO Westwood
Balanced Fund's Class AAA Shares posted a return of 13.62% while the balanced
benchmark which is comprised of 60% of the S&P 500 Stock Index and 40% of the
Lehman Brothers Government/Corporate Bond Index (the "Lehman Index") returned
12.10%, the Lehman Index returned 5.08%, and the Lipper Mixed-Asset Target
Allocation Moderate Fund returned 11.68%.
During the fiscal year, both stock selection and overweight positions in
the highest performing S&P 500 sectors contributed to strong outperformance by
the Fund. Contributing the most were the Energy and Materials & Processing
sectors of the Fund, which were the two top performing sectors in the S&P 500.
The Fund benefited from being overweight in Energy and from receiving strong
performance out of Marathon Oil Corp. (1.4% of net assets as of September 30,
2007), McDermott International Inc. (0.8%), ConocoPhillips (1.5%), and Murphy
Oil Corp. (1.6%).
The other two top contributing stocks were from Materials and Processing:
Freeport-McMoRan Copper & Gold Inc. (1.5%) and Phelps Dodge Corp. Phelps Dodge,
which had led performance in 2006, was targeted for acquisition by
Freeport-McMoRan, and sold out of the Fund on the subsequent run up in price. In
analyzing Freeport-McMoRan post-acquisition, we perceived a strongly managed and
well diversified metals company with significant free cash flow generation and
the capability to pay off deal related debt sooner than was expected by the
market. After purchase for the Fund, it has led performance in 2007.
Contributing the least to Fund performance was the Technology sector, led by
Motorola, which was sold after reporting disappointing earnings and margin
trends.
The Fund is designed to provide exposure to equities with reduced overall
risk through investment in short-to-intermediate fixed income securities. The
bond portion typically invests in high quality notes with lower interest rate
sensitivity than the typical bond index, with the objective of dampening the
volatility of equity holdings. Top contributing fixed income holdings included
Treasury notes maturing in 2008 (5.3% of net assets as of September 30, 2007),
2014 (1.4%), and 2015 (2.2%), as well as a Freddie Mac 7 year note (1.3%) and a
floating rate note issued by independent exploration and production company
Anadarko (0.6%).
As many shareholders know, Westwood's analysis of the capital markets
(cash, bonds, and stocks) provides a risk-reward framework that is the
foundation of asset allocation decisions within the Balanced Fund. During the
fiscal year the significant market move prior to the easing of fed funds
provided an opportunity to adjust allocations among stocks, bonds, and cash
toward a neutral position. Treasury bonds had previously rallied from the flight
to quality while stocks had faded during the credit crunch.
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AVERAGE ANNUAL RETURNS THROUGH SEPTEMBER 30, 2007*
SINCE
YEAR TO INCEPTION
QUARTER DATE 1 YEAR 3 YEAR 5 YEAR 10 YEAR 15 YEAR (10/1/91)
------- ------- ------ ------ ------ ------- ------- ---------
BALANCED FUND CLASS AAA ................... 2.80% 9.38% 13.62% 12.07% 11.73% 7.41% 10.85% 10.67%
S&P 500 Index ............................. 2.33 9.45 16.78 13.24 15.51 6.60 11.12 11.12
60% S&P 500 and 40% Lehman Indices ........ 2.60 7.27 12.10 9.41 10.97 6.37 9.20 9.37
Lehman Bros. Gov't./Corporate Bond Index .. 3.01 4.00 5.08 3.66 4.16 6.03 6.33 6.75
Lipper Mixed-Asset Target Allocation
Moderate Fund .......................... 1.72 6.62 11.68 9.46 10.96 5.55 8.38 8.54
THE FUND'S EXPENSE RATIO IS 1.32% IN THE CURRENT PROSPECTUS. THE FUND'S CLASS
AAA SHARES DO NOT HAVE A SALES CHARGE.
* RETURNS REPRESENT PAST PERFORMANCE AND DO NOT GUARANTEE FUTURE RESULTS.
TOTAL RETURNS AND AVERAGE ANNUAL RETURNS REFLECT CHANGES IN SHARE PRICE
AND REINVESTMENT OF DIVIDENDS AND ARE NET OF EXPENSES. INVESTMENT RETURNS
AND THE PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE. WHEN SHARES ARE
REDEEMED, THEY MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. THE
ADVISER REIMBURSED EXPENSES IN YEARS PRIOR TO 1998 TO LIMIT THE EXPENSE
RATIO. HAD SUCH LIMITATION NOT BEEN IN PLACE, RETURNS WOULD HAVE BEEN
LOWER. 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. PERFORMANCE RETURNS FOR PERIODS LESS THAN ONE
YEAR ARE NOT ANNUALIZED. 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. SEE PAGE 2 FOR
FURTHER DETAILS ABOUT ADDITIONAL CLASSES OF SHARES. THE S&P 500 INDEX IS
AN UNMANAGED INDICATOR OF STOCK MARKET PERFORMANCE AND THE LEHMAN BROTHERS
GOVERNMENT/CORPORATE BOND INDEX IS A MARKET VALUE WEIGHTED INDEX THAT
TRACKS THE TOTAL RETURN PERFORMANCE OF FIXED RATE, PUBLICLY PLACED, DOLLAR
DENOMINATED OBLIGATIONS. THE LIPPER MIXED-ASSET TARGET ALLOCATION MODERATE
FUND AVERAGE REFLECTS THE AVERAGE PERFORMANCE OF MUTUAL FUNDS CLASSIFIED
IN THIS PARTICULAR CATEGORY. DIVIDENDS ARE CONSIDERED REINVESTED. YOU
CANNOT INVEST DIRECTLY IN AN INDEX.
- --------------------------------------------------------------------------------
6
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE BALANCED FUND CLASS
AAA, THE S&P 500 INDEX, THE LEHMAN BROTHERS GOVERNMENT/CORPORATE BOND INDEX,
AND A COMPOSITE OF 60% OF THE S&P 500 INDEX AND 40% OF
THE LEHMAN BROTHERS GOVERNMENT/CORPORATE BOND INDEX (Unaudited)
- ----------------------------------------------------
Average Annual Total Return*
- ----------------------------------------------------
1 Year 5 Year 10 Year Life of Fund
------ ------ ------- ------------
Class AAA 13.62% 11.73% 7.41% 10.67%
- ----------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
60% S&P 500 and 40%
Lehman Brothers Lehman Brothers
Balanced Fund Government/Corporate Government/
Date (Class AAA) Bond Indices S&P 500 Index Corporate Bond Index
10/1/1991 $ 10,000 $ 10,000 $ 10,000 $ 10,000
9/30/92 $ 10,797 $ 11,192 $ 11,104 $ 11,323
9/30/93 $ 12,622 $ 12,575 $ 12,544 $ 12,618
9/30/94 $ 13,291 $ 12,644 $ 13,006 $ 12,096
9/30/95 $ 16,212 $ 15,624 $ 16,870 $ 13,832
9/30/96 $ 19,297 $ 17,810 $ 20,298 $ 14,454
9/30/97 $ 24,762 $ 22,814 $ 28,504 $ 15,842
9/30/98 $ 25,460 $ 25,229 $ 31,092 $ 17,876
9/30/99 $ 28,658 $ 29,272 $ 39,733 $ 17,586
9/30/00 $ 32,495 $ 32,392 $ 45,006 $ 18,772
9/30/01 $ 30,620 $ 28,926 $ 33,030 $ 21,244
9/30/02 $ 29,062 $ 26,439 $ 26,268 $ 23,200
9/30/03 $ 32,325 $ 30,994 $ 32,670 $ 24,711
9/30/04 $ 35,956 $ 33,984 $ 37,198 $ 25,534
9/30/05 $ 40,591 $ 36,833 $ 41,755 $ 26,192
9/30/06 $ 44,556 $ 39,705 $ 46,256 $ 27,064
9/30/07 $ 50,625 $ 44,510 $ 54,018 $ 28,439
* PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. The performance
tables and graph do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares.
7
INTERMEDIATE BOND FUND
For the twelve months ended September 30, 2007, the GAMCO Westwood
Intermediate Bond Fund's Class AAA Shares posted, net of all fees and expenses,
a return of 3.67%, the Lehman Brothers Government/Corporate Bond Index returned
5.08%, and the Lipper Intermediate Investment Grade Debt Fund Average returned
4.14% for the same period.
Across the maturity spectrum, Treasury yields ended the fiscal year below
5%. However, unlike the start of the fiscal year, the yield curve was steeper
and generally lower, reflecting the summer flight to quality in shorter maturity
Treasuries. Short-maturity yields were at or below 4.00%; the five year note
ended at 4.22%, down from 4.58% one year earlier. Yields for maturities 10 years
and longer ended near their starting points, with the 30 year Treasury yield
0.07% higher at 4.83%.
While investors piled into Treasuries during the third quarter of 2007,
other debt experienced spread widening as risk was repriced in all markets.
Government holdings in the Lehman Brothers Government/Corporate Bond Index
returned 5.63%, led by 3-7 year maturities; U.S. credit holdings returned only
4.28% for the fiscal year, led by 1-3 year maturities. The Fund was
underweighted in Treasury debt and earned a lower return. Mortgage-backed
securities other than Ginnie Maes underperformed the index. However, the Fund's
overweight credit segment earned a return 0.50% above that of the index,
reflecting our preference for debt of high quality companies. Security selection
in the government agency sector also contributed positively.
Top contributing securities included a financial note (Goldman Sachs Group
6.65% due 05-15-09) (3.2% of net assets as of September 30, 2007), an industrial
note (Hewlett-Packard Co. 3.625% due 03-15-08) (3.4%), Treasuries maturing in
2014 (2.9%) and 2015 (3.1%), and top performing floating rate note (Anadarko
Petroleum Corp. 6.094% due 09-15-09) (2.1%). Detracting from performance was SLM
Corp. 5.45% due 04-25-11 (2.0%); the prospects of being taken private remained
in the news.
- --------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS THROUGH SEPTEMBER 30, 2007*
SINCE
YEAR TO INCEPTION
QUARTER DATE 1 YEAR 3 YEAR 5 YEAR 10 YEAR 15 YEAR (10/1/91)
------- ------- ------ ------ ------ ------- ------- ---------
INTERMEDIATE BOND FUND CLASS AAA .......... 2.47% 2.92% 3.67% 2.73% 2.59% 4.78% 5.23% 5.64%
Lehman Bros. Gov't./Corporate Bond Index .. 3.01 4.00 5.08 3.66 4.16 6.03 6.33 6.75
Lipper Intermediate Investment Grade
Debt Fund Average ...................... 2.18 2.81 4.14 3.27 3.87 5.20 5.82 6.36
THE FUND'S GROSS EXPENSE RATIO IS 1.53% IN THE CURRENT PROSPECTUS. THE NET
EXPENSE RATIO IS 1.00%, AFTER CONTRACTUAL REIMBURSEMENTS BY THE ADVISER IN PLACE
THROUGH SEPTEMBER 30, 2008. THE FUND'S CLASS AAA SHARES DO NOT HAVE A SALES
CHARGE.
* 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. THE ADVISER REIMBURSED EXPENSES TO LIMIT THE EXPENSE RATIO. HAD SUCH
LIMITATION NOT BEEN IN PLACE, RETURNS WOULD HAVE BEEN LOWER. 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. PERFORMANCE RETURNS FOR PERIODS LESS THAN ONE YEAR ARE NOT
ANNUALIZED. 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. SEE PAGE 2 FOR FURTHER DETAILS ABOUT
ADDITIONAL CLASSES OF SHARES. THE LEHMAN BROTHERS GOVERNMENT/CORPORATE
BOND INDEX IS A MARKET VALUE WEIGHTED INDEX THAT TRACKS THE PERFORMANCE OF
FIXED RATE, PUBLICLY PLACED, DOLLAR DENOMINATED OBLIGATIONS, WHILE THE
LIPPER INTERMEDIATE INVESTMENT GRADE DEBT FUND AVERAGE REFLECTS THE
AVERAGE PERFORMANCE OF MUTUAL FUNDS CLASSIFIED IN THIS PARTICULAR
CATEGORY. DIVIDENDS ARE CONSIDERED REINVESTED. YOU CANNOT INVEST DIRECTLY
IN AN INDEX.
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
INTERMEDIATE BOND FUND CLASS AAA AND
THE LEHMAN BROTHERS GOVERNMENT/CORPORATE BOND INDEX (Unaudited)
- ----------------------------------------------------
Average Annual Total Return*
- ----------------------------------------------------
1 Year 5 Year 10 Year Life of Fund
------ ------ ------- ------------
Class AAA 3.67% 2.59% 4.78% 5.64%
- ----------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Lehman Brothers
Intermediate Bond Fund Government/Corporate
Date (Class AAA) Bond Index
10/1/1991 $ 10,000 $ 10,000
9/30/92 $ 11,186 $ 11,323
9/30/93 $ 12,331 $ 12,618
9/30/94 $ 11,658 $ 12,096
9/30/95 $ 12,956 $ 13,832
9/30/96 $ 13,539 $ 14,454
9/30/97 $ 15,077 $ 15,842
9/30/98 $ 16,612 $ 17,876
9/30/99 $ 16,218 $ 17,586
9/30/00 $ 17,256 $ 18,772
9/30/01 $ 19,442 $ 21,244
9/30/02 $ 21,172 $ 23,200
9/30/03 $ 21,772 $ 24,711
9/30/04 $ 22,194 $ 25,534
9/30/05 $ 22,571 $ 26,192
9/30/06 $ 23,203 $ 27,064
9/30/07 $ 24,055 $ 28,439
* PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. The performance
tables and graph do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares.
8
SMALLCAP EQUITY FUND*
For the twelve months ended September 30, 2007, the GAMCO Westwood
SmallCap Equity Fund's Class AAA Shares produced a return of 21.22% versus the
12.34% return of the Russell 2000 Index, 18.94% for the Russell 2000 Growth
Index, and 21.55% for the Lipper Small Cap Growth Fund Average.
During the past year the Fund had several investments that added to the
overall performance. Genco Shipping and Trading Ltd. (2.9% of net assets as of
September 30, 2007), Oil States International Inc. (2.8%), and Layne
Christianson were the top performing stocks in the portfolio. Genco Shipping is
benefiting from a favorable supply/demand balance and improved pricing in the
dry bulk industry. Oil States and Layne Christianson both serve the oil and gas
market, which has recently experienced high prices, surging demand, and strong
utilization trends. In addition, Layne has participated in the long-term growth
of the water infrastructure industry because of its water well drilling
operation and infrastructure contractor division.
The portfolio had its share of disappointments during the year, the
biggest being Children's Place. Children's Place is a specialty retailer of
apparel and accessories for children aged 0 to 12 years old. Over the past
several quarters, Children's Place has been plagued with poor fashion execution,
high inventory leads, and productivity challenges at the recently acquired
Disney Store chain. Although significant upscale potential exists with their
operating margins, high management turnover and a large capital expenditure
program were of great concern to us so we sold our investment.
- --------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS THROUGH SEPTEMBER 30, 2007**
SINCE
YEAR TO INCEPTION
QUARTER DATE 1 YEAR 3 YEAR 5 YEAR 10 YEAR (4/15/97)
------- ------- ------ ------ ------ ------- ---------
SMALLCAP EQUITY FUND CLASS AAA ............ (2.35)% 8.54% 21.22% 18.64% 15.15% 5.11% 8.66%
Russell 2000 Index ........................ (3.09) 3.16 12.34 13.36 18.75 7.22 6.95
Russell 2000 Growth Index ................. 0.02 9.35 18.94 14.10 18.70 3.65 6.83
Lipper Small Cap Growth Fund Average ...... 1.22 12.34 21.55 14.46 17.34 7.04 10.56
THE FUND'S GROSS EXPENSE RATIO IS 2.02% IN THE CURRENT PROSPECTUS. THE NET
EXPENSE RATIO IS 1.50%, AFTER CONTRACTUAL REIMBURSEMENTS BY THE ADVISER IN PLACE
THROUGH SEPTEMBER 30, 2008. THE FUND'S CLASS AAA SHARES DO NOT HAVE A SALES
CHARGE.
* GABELLI ADVISERS, INC. ASSUMED PORTFOLIO MANAGEMENT RESPONSIBILITIES ON
JULY 1, 2007 FROM WESTWOOD MANAGEMENT CORPORATION, THE SUB-ADVISER.
** RETURNS REPRESENT PAST PERFORMANCE AND DO NOT GUARANTEE FUTURE RESULTS.
TOTAL RETURNS AND AVERAGE ANNUAL RETURNS REFLECT CHANGES IN SHARE PRICE
AND REINVESTMENT OF DIVIDENDS AND ARE NET OF EXPENSES. INVESTMENT RETURNS
AND THE PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE. WHEN SHARES ARE
REDEEMED, THEY MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. THE
ADVISER REIMBURSED EXPENSES TO LIMIT THE EXPENSE RATIO. HAD SUCH
LIMITATION NOT BEEN IN PLACE, RETURNS WOULD HAVE BEEN LOWER. 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. PERFORMANCE RETURNS FOR PERIODS LESS THAN ONE YEAR ARE NOT
ANNUALIZED. 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. SEE PAGE 2 FOR FURTHER DETAILS ABOUT
ADDITIONAL CLASSES OF SHARES. THE RUSSELL 2000 INDEX IS AN UNMANAGED INDEX
OF THE 2,000 SMALLEST COMMON STOCKS IN THE RUSSELL 3000 INDEX, WHICH
CONTAINS THE 3,000 LARGEST STOCKS IN THE U.S. BASED ON TOTAL MARKET
CAPITALIZATION WHILE THE LIPPER SMALL CAP GROWTH FUND AVERAGE REFLECTS THE
AVERAGE PERFORMANCE OF MUTUAL FUNDS CLASSIFIED IN THIS PARTICULAR
CATEGORY. INVESTING IN SMALL CAPITALIZATION SECURITIES INVOLVES SPECIAL
CHALLENGES BECAUSE THESE SECURITIES MAY TRADE LESS FREQUENTLY AND
EXPERIENCE MORE ABRUPT PRICE MOVEMENTS THAN LARGE CAPITALIZATION
SECURITIES. DIVIDENDS ARE CONSIDERED REINVESTED. YOU CANNOT INVEST
DIRECTLY IN AN INDEX.
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN
THE SMALLCAP EQUITY FUND CLASS AAA AND THE RUSSELL 2000 INDEX (Unaudited)
- -------------------------------------------------------------
Average Annual Total Return*
- -------------------------------------------------------------
1 Year 3 Year 5 Year 10 Year Life of Fund
------ ------ ------ ------- ------------
Class AAA 21.22% 18.64% 15.15% 5.11% 8.66%
- -------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
SmallCap Equity Fund Russell 2000
Date (Class AAA) Index
4/15/1997 $ 10,000 $ 10,000
9/30/1997 $ 14,480 $ 13,410
9/30/1998 $ 11,923 $ 10,859
9/30/1999 $ 18,950 $ 12,930
9/30/2000 $ 24,512 $ 15,955
9/30/2001 $ 13,930 $ 12,571
9/30/2002 $ 11,777 $ 11,402
9/30/2003 $ 12,861 $ 15,563
9/30/2004 $ 14,276 $ 18,484
9/30/2005 $ 17,751 $ 21,825
9/30/2006 $ 19,670 $ 23,990
9/30/2007 $ 23,843 $ 26,950
* PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. The performance
tables and graph do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares.
9
INCOME FUND*
For the twelve months ended September 30, 2007, the GAMCO Westwood Income
Fund's Class AAA Shares produced a return of 9.97%, net of all fees and
expenses, versus the 8.10% return of a stock/bond blend comprised of a 25% blend
of each of the 10 Year Treasury Note Index, the 3 Month Treasury Bill Index, the
S&P 500 Index, the NAREIT Composite REIT Index, and the 15.59% return for the
Lipper Equity Income Fund Average. The Westwood Income Fund (formerly Realty
Fund) was transitioned from a realty focus to a broader income focus. We had
been continuing to rebalance the Fund, which held assets as of June 30th when we
took over management, in cash, stocks, and real estate investment trusts, bonds,
and preferred stocks.
The transition of the Fund is now complete, and going forward the Fund
will be managed with the objective of providing current income as well as
capital appreciation. As of September 30th the Fund had 52% invested in common
stocks, 15% in bonds, 22% in preferred stocks, and 11% in cash and cash
equivalents. Going forward, the Fund will generally hold between 50% and 70% in
stocks, with the balance in bonds and preferred stocks. The common stock portion
of the Fund will generally be invested in higher yielding stocks, but the
individual stocks will be purchased with a total return objective, which will
consist of capital appreciation potential, a high dividend yield, or a
combination of the two. Going forward, the Fund will use a simple benchmark
index of 50% common stocks as represented by the S&P 500 and 50% 10 Year
Treasury Note Index. As part of our total return focus, in the last quarter we
purchased positions in the common stocks of Chevron Corp., ConocoPhillips,
Microsoft Corp., Halliburton Co., Pfizer Inc., and Intel Corp., among others,
which we believe have good total return opportunity through their dividends and
potential price appreciation.
- --------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS THROUGH SEPTEMBER 30, 2007**
SINCE
YEAR TO INCEPTION
QUARTER DATE 1 YEAR 3 YEAR 5 YEAR 10 YEAR (9/30/97)
------- ------- ------ ------ ------ ------- ---------
INCOME FUND CLASS AAA ...................... (0.79)% 4.24% 9.97% 12.41% 16.40% 10.43% 10.43%
Blended Index*** ........................... 2.74 3.54 8.10 9.74 10.64 7.00 7.00
10 Year Treasury Note Index ................ 4.72 4.27 4.71 2.61 2.61 5.41 5.41
3 Month Treasury Bill Index ................ 1.34 3.91 5.22 4.11 2.94 3.79 3.79
S&P 500 Index .............................. 2.33 9.45 16.78 13.24 15.51 6.60 6.60
NAREIT Composite REIT Index ................ 2.59 (3.46) 5.68 19.00 21.52 12.19 12.19
Lipper Equity Income Fund Average .......... 0.71 8.12 15.59 13.92 15.79 7.50 7.50
THE FUND'S GROSS EXPENSE RATIO IS 2.02% IN THE CURRENT PROSPECTUS. THE NET
EXPENSE RATIO IS 1.50%, AFTER CONTRACTUAL REIMBURSEMENTS BY THE ADVISER IN PLACE
THROUGH SEPTEMBER 30, 2008. THE FUND'S CLASS AAA SHARES DO NOT HAVE A SALES
CHARGE.
* GABELLI ADVISERS, INC. ASSUMED PORTFOLIO MANAGEMENT RESPONSIBILITIES ON
JULY 1, 2007 FROM WESTWOOD MANAGEMENT CORPORATION, THE SUB-ADVISER.
** 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. THE ADVISER REIMBURSED EXPENSES TO LIMIT THE EXPENSE RATIO. HAD SUCH
LIMITATION NOT BEEN IN PLACE, RETURNS WOULD HAVE BEEN LOWER. 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. PERFORMANCE RETURNS FOR PERIODS LESS THAN ONE YEAR ARE NOT
ANNUALIZED. 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. SEE PAGE 2 FOR FURTHER DETAILS ABOUT
ADDITIONAL CLASSES OF SHARES. THE STANDARD & POOR'S ("S&P") 500 INDEX IS
AN UNMANAGED INDICATOR OF STOCK MARKET PERFORMANCE. THE 3 MONTH TREASURY
BILL INDEX AND THE 10 YEAR TREASURY NOTE INDEX ARE BOTH UNMANAGED INDICES
TRACKING SHORT-TERM U.S. TREASURY SECURITIES WITH A THREE MONTH MATURITY
AND U.S. TREASURY NOTES WITH A 10 YEAR MATURITY, RESPECTIVELY. THE NAREIT
COMPOSITE REIT INDEX IS A MARKET CAPITALIZATION WEIGHTED UNMANAGED INDEX
OF CERTAIN EXCHANGE LISTED TAX-QUALIFIED REITS. INVESTING IN REAL ESTATE
RELATED SECURITIES INVOLVES SPECIAL RISKS ASSOCIATED WITH GENERAL OR LOCAL
ECONOMIC CONDITIONS, OVERBUILDING AND CHANGES IN ZONING, OR THAT THE REAL
ESTATE MARKET WILL UNDERPERFORM THE STOCK MARKET GENERALLY. DIVIDENDS ARE
CONSIDERED REINVESTED. YOU CANNOT INVEST DIRECTLY IN AN INDEX.
*** THE BLENDED INDEX CONSISTS OF A 25% BLEND OF EACH OF THE 10 YEAR TREASURY
NOTE INDEX, THE 3 MONTH TREASURY BILL INDEX, THE S&P 500 INDEX, AND THE
NAREIT COMPOSITE REIT INDEX.
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN
THE INCOME FUND CLASS AAA, THE S&P 500 INDEX, AND
THE NATIONAL ASSOCIATION OF REITS COMPOSITE REIT INDEX (Unaudited)
- -----------------------------------------------
Average Annual Total Return*
- -----------------------------------------------
1 Year 3 Year 5 Year 10 Year
------ ------ ------ -------
Class AAA 9.97% 12.41% 16.40% 10.43%
- -----------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Lipper Equity
Income Fund 10 Year Treasury 3 Month Treasury NAREIT Composite Income
Date (Class AAA) Blended Index Note Index Bill Index S&P 500 Index REIT Index Fund Average
9/30/1997 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000
9/30/1998 $ 8,950 $ 10,486 $ 11,860 $ 10,536 $ 10,908 $ 8,646 $ 10,332
9/30/1999 $ 8,442 $ 10,935 $ 11,046 $ 11,034 $ 13,939 $ 8,088 $ 11,654
9/30/2000 $ 10,541 $ 12,127 $ 11,616 $ 11,672 $ 15,789 $ 9,754 $ 12,779
9/30/2001 $ 11,741 $ 12,317 $ 13,213 $ 12,308 $ 11,588 $ 10,980 $ 12,030
9/30/2002 $ 12,622 $ 12,440 $ 14,896 $ 12,553 $ 9,216 $ 11,918 $ 10,044
9/30/2003 $ 15,503 $ 14,128 $ 15,205 $ 12,719 $ 11,461 $ 14,924 $ 12,068
9/30/2004 $ 18,986 $ 15,671 $ 15,682 $ 12,859 $ 13,050 $ 18,739 $ 14,142
9/30/2005 $ 23,718 $ 17,400 $ 15,992 $ 13,196 $ 14,649 $ 23,851 $ 16,114
9/30/2006 $ 24,524 $ 19,215 $ 16,180 $ 13,790 $ 16,228 $ 29,882 $ 18,015
9/30/2007 $ 26,969 $ 20,771 $ 16,942 $ 14,509 $ 18,951 $ 31,516 $ 20,824
* PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. The performance
tables and graph do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares.
10
GAMCO WESTWOOD FUNDS
DISCLOSURE OF FUND EXPENSES (UNAUDITED)
For the Six Month Period from April 1, 2007 through September 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. The "Annualized Expense Ratio" represents the actual expenses
for the last six months and may be different from the expense ratio in the
Financial Highlights which is for the year ended September 30, 2007.
Beginning Ending Annualized Expenses
Account Value Account Value Expense Paid During
04/01/07 09/30/07 Ratio Period*
- -------------------------------------------------------------------------------------------------
GAMCO WESTWOOD MIGHTY MITES (SM) FUND
- -------------------------------------------------------------------------------------------------
ACTUAL FUND RETURN
Class AAA $1,000.00 $1,049.90 1.62% $ 8.28
Class A $1,000.00 $1,049.60 1.89% $ 9.66
Class B $1,000.00 $1,046.50 2.36% $12.04
Class C $1,000.00 $1,047.40 2.38% $12.15
HYPOTHETICAL 5% RETURN
Class AAA $1,000.00 $1,016.85 1.62% $ 8.15
Class A $1,000.00 $1,015.51 1.89% $ 9.50
Class B $1,000.00 $1,013.16 2.36% $11.85
Class C $1,000.00 $1,013.06 2.38% $11.94
- -------------------------------------------------------------------------------------------------
GAMCO WESTWOOD EQUITY FUND
- -------------------------------------------------------------------------------------------------
ACTUAL FUND RETURN
Class AAA $1,000.00 $1,105.00 1.46% $ 7.66
Class A $1,000.00 $1,104.60 1.71% $ 8.97
Class B $1,000.00 $1,101.60 2.21% $11.58
Class C $1,000.00 $1,101.60 2.21% $11.58
HYPOTHETICAL 5% RETURN
Class AAA $1,000.00 $1,017.65 1.46% $ 7.34
Class A $1,000.00 $1,016.40 1.71% $ 8.60
Class B $1,000.00 $1,013.91 2.21% $11.10
Class C $1,000.00 $1,013.91 2.21% $11.10
- -------------------------------------------------------------------------------------------------
GAMCO WESTWOOD BALANCED FUND
- -------------------------------------------------------------------------------------------------
ACTUAL FUND RETURN
Class AAA $1,000.00 $1,075.40 1.15% $ 5.95
Class A $1,000.00 $1,074.60 1.40% $ 7.24
Class B $1,000.00 $1,071.40 1.90% $ 9.81
Class C $1,000.00 $1,071.30 1.90% $ 9.81
HYPOTHETICAL 5% RETURN
Class AAA $1,000.00 $1,019.20 1.15% $ 5.79
Class A $1,000.00 $1,017.95 1.40% $ 7.04
Class B $1,000.00 $1,015.46 1.90% $ 9.55
Class C $1,000.00 $1,015.46 1.90% $ 9.55
- -------------------------------------------------------------------------------------------------
GAMCO WESTWOOD INTERMEDIATE BOND FUND
- -------------------------------------------------------------------------------------------------
ACTUAL FUND RETURN
Class AAA $1,000.00 $1,017.90 1.00% $ 5.03
Class A $1,000.00 $1,017.40 1.10% $ 5.53
Class B $1,000.00 $1,014.10 1.75% $ 8.79
Class C $1,000.00 $1,030.30 1.75% $ 8.86
HYPOTHETICAL 5% RETURN
Class AAA $1,000.00 $1,019.95 1.00% $ 5.04
Class A $1,000.00 $1,019.45 1.10% $ 5.54
Class B $1,000.00 $1,016.21 1.75% $ 8.80
Class C $1,000.00 $1,016.21 1.75% $ 8.80
- -------------------------------------------------------------------------------------------------
GAMCO WESTWOOD SMALLCAP EQUITY FUND
- -------------------------------------------------------------------------------------------------
ACTUAL FUND RETURN
Class AAA $1,000.00 $1,030.20 1.50% $ 7.59
Class A $1,000.00 $1,028.30 1.75% $ 8.85
Class B $1,000.00 $1,027.00 2.25% $11.37
Class C $1,000.00 $1,026.50 2.25% $11.37
HYPOTHETICAL 5% RETURN
Class AAA $1,000.00 $1,017.45 1.50% $ 7.54
Class A $1,000.00 $1,016.21 1.75% $ 8.80
Class B $1,000.00 $1,013.71 2.25% $11.30
Class C $1,000.00 $1,013.71 2.25% $11.30
- -------------------------------------------------------------------------------------------------
GAMCO WESTWOOD INCOME FUND
- -------------------------------------------------------------------------------------------------
ACTUAL FUND RETURN
Class AAA $1,000.00 $1,009.10 1.50% $ 7.51
Class A $1,000.00 $1,008.80 1.75% $ 8.76
Class B $1,000.00 $1,004.70 2.25% $11.25
Class C $1,000.00 $1,006.30 2.25% $11.25
HYPOTHETICAL 5% RETURN
Class AAA $1,000.00 $1,017.45 1.50% $ 7.54
Class A $1,000.00 $1,016.21 1.75% $ 8.80
Class B $1,000.00 $1,013.71 2.25% $11.30
Class C $1,000.00 $1,013.71 2.25% $11.30
* 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.
11
SUMMARY OF PORTFOLIO HOLDINGS (UNAUDITED)
The following tables present portfolio holdings as a percent of total net assets
as of September 30, 2007:
- --------------------------------------------------------------------------------
GAMCO WESTWOOD MIGHTY MITES SM FUND
- --------------------------------------------------------------------------------
U.S. Government Obligations .......................................... 16.9%
Financial Services ................................................... 11.9%
Health Care .......................................................... 8.9%
Equipment and Supplies ............................................... 6.9%
Automotive: Parts and Accessories .................................... 6.2%
Diversified Industrial ............................................... 5.5%
Business Services .................................................... 3.9%
Telecommunications ................................................... 3.3%
Real Estate .......................................................... 3.3%
Broadcasting ......................................................... 3.1%
Electronics .......................................................... 3.0%
Energy and Utilities: Natural Gas .................................... 2.2%
Food and Beverage .................................................... 2.1%
Energy and Utilities: Integrated ..................................... 2.0%
Energy and Utilities: Services ....................................... 2.0%
Manufactured Housing and Recreational Vehicles ....................... 2.0%
Consumer Products .................................................... 1.9%
Entertainment ........................................................ 1.9%
Hotels and Gaming .................................................... 1.8%
Specialty Chemicals .................................................. 1.5%
Aviation: Parts and Services ......................................... 1.5%
Energy and Utilities: Water .......................................... 1.4%
Mutual Funds ......................................................... 0.9%
Retail ............................................................... 0.8%
Wireless Communications .............................................. 0.7%
Energy and Utilities: Electric ....................................... 0.7%
Computer Software and Services ....................................... 0.6%
Building and Construction ............................................ 0.6%
Restaurants .......................................................... 0.5%
Agriculture .......................................................... 0.5%
Publishing ........................................................... 0.4%
Paper and Forest Products ............................................ 0.3%
Communications Equipment ............................................. 0.3%
Transportation ....................................................... 0.3%
Aerospace ............................................................ 0.1%
Environmental Control ................................................ 0.1%
Metals and Mining .................................................... 0.1%
Cable ................................................................ 0.0%
Consumer Services .................................................... 0.0%
Educational Services ................................................. 0.0%
Other Assets and Liabilities (Net) ................................... (0.1)%
-------
100.0%
=======
- --------------------------------------------------------------------------------
GAMCO WESTWOOD EQUITY FUND
- --------------------------------------------------------------------------------
Financial Services ................................................... 15.1%
Energy: Oil .......................................................... 8.7%
Banking .............................................................. 8.4%
Consumer Products .................................................... 7.6%
Business Services .................................................... 7.3%
Diversified Industrial ............................................... 5.2%
Computer Software and Services ....................................... 5.2%
Telecommunications ................................................... 5.0%
Energy and Utilities: Integrated ..................................... 5.0%
Utilities ............................................................ 4.9%
Metals and Mining .................................................... 4.0%
Retail ............................................................... 3.8%
Aviation: Parts and Services ......................................... 2.6%
Computer Hardware .................................................... 2.5%
Health Care .......................................................... 2.4%
Entertainment ........................................................ 2.4%
Communications Equipment ............................................. 1.4%
Electronics .......................................................... 1.3%
Energy: Natural Gas .................................................. 1.3%
Transportation ....................................................... 1.2%
Food and Beverage .................................................... 1.2%
Other Assets and Liabilities (Net) ................................... 3.5%
-------
100.0%
=======
- --------------------------------------------------------------------------------
GAMCO WESTWOOD BALANCED FUND
- --------------------------------------------------------------------------------
U.S. Government Agency Obligations ................................... 14.6%
U.S. Government Obligations .......................................... 12.7%
Financial Services ................................................... 9.1%
Energy: Oil .......................................................... 7.1%
Banking .............................................................. 6.6%
Consumer Products .................................................... 4.7%
Business Services .................................................... 4.6%
Telecommunications ................................................... 4.2%
Diversified Industrial ............................................... 4.2%
Retail ............................................................... 3.2%
Computer Software and Services ....................................... 3.1%
Utilities ............................................................ 3.0%
Energy: Integrated ................................................... 3.0%
Metals and Mining .................................................... 2.4%
Computer Hardware .................................................... 2.0%
Aviation: Parts and Services ......................................... 1.8%
Entertainment ........................................................ 1.5%
Health Care .......................................................... 1.5%
Transportation ....................................................... 1.4%
Energy: Natural Gas .................................................. 1.4%
Food and Beverage .................................................... 1.3%
Real Estate Investment Trusts ........................................ 1.1%
Communications Equipment ............................................. 0.9%
Brokerage ............................................................ 0.9%
Electronics .......................................................... 0.8%
Other Assets and Liabilities (Net) ................................... 2.9%
-------
100.0%
=======
12
SUMMARY OF PORTFOLIO HOLDINGS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
GAMCO WESTWOOD INTERMEDIATE BOND FUND
- --------------------------------------------------------------------------------
Corporate Bonds ...................................................... 45.7%
U.S. Government Obligations .......................................... 26.1%
U.S. Government Agency Obligations ................................... 24.6%
Other Assets and Liabilities (Net) ................................... 3.6%
-------
100.0%
=======
- --------------------------------------------------------------------------------
GAMCO WESTWOOD SMALLCAP EQUITY FUND
- --------------------------------------------------------------------------------
U.S. Government Obligations .......................................... 11.6%
Computer Software and Services ....................................... 10.2%
Financial Services ................................................... 9.3%
Business Services .................................................... 8.0%
Diversified Industrial ............................................... 8.0%
Health Care .......................................................... 7.4%
Consumer Products .................................................... 5.5%
Food and Beverage .................................................... 5.4%
Metals and Mining .................................................... 4.9%
Energy and Utilities ................................................. 4.9%
Aerospace ............................................................ 4.8%
Transportation ....................................................... 4.7%
Hotels and Gaming .................................................... 3.8%
Specialty Chemicals .................................................. 3.4%
Telecommunications ................................................... 2.7%
Real Estate Investment Trusts ........................................ 2.7%
Building and Construction ............................................ 2.5%
Automotive: Parts and Accessories .................................... 2.1%
Equipment and Supplies ............................................... 1.6%
Retail ............................................................... 1.6%
Other Assets and Liabilities (Net) ................................... (5.1)%
-------
100.0%
=======
- --------------------------------------------------------------------------------
GAMCO WESTWOOD INCOME FUND
- --------------------------------------------------------------------------------
Financial Services ................................................... 26.7%
U.S. Government Agency Obligations ................................... 11.4%
U.S. Government Obligations .......................................... 10.4%
Banking .............................................................. 6.9%
Energy and Utilities: Oil ............................................ 6.2%
Real Estate Investment Trusts ........................................ 4.8%
Business Services .................................................... 4.4%
Metals and Mining .................................................... 3.8%
Health Care .......................................................... 3.4%
Energy and Utilities: Integrated ..................................... 3.0%
Energy and Utilities: Natural Gas .................................... 2.5%
Telecommunications ................................................... 2.4%
Electronics .......................................................... 2.3%
Energy and Utilities: Services ....................................... 1.9%
Diversified Industrial ............................................... 1.8%
Transportation ....................................................... 1.7%
Broadcasting ......................................................... 1.6%
Computer Software and Services ....................................... 1.1%
Specialty Chemicals .................................................. 1.1%
Retail ............................................................... 0.9%
Food and Beverage .................................................... 0.9%
Real Estate .......................................................... 0.6%
Other Assets and Liabilities (Net) ................................... 0.2%
-------
100.0%
=======
THE FUNDS FILE A COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS WITH THE SECURITIES AND
EXCHANGE COMMISSION (THE "SEC") FOR THE FIRST AND THIRD QUARTERS OF EACH FISCAL
YEAR ON FORM N-Q, THE LAST OF WHICH WAS FILED FOR THE QUARTER ENDED JUNE 30,
2007. SHAREHOLDERS MAY OBTAIN THIS INFORMATION AT WWW.GABELLI.COM OR BY CALLING
THE FUND AT 800-GABELLI (800-422-3554). THE FUNDS' FORM N-Q IS AVAILABLE ON THE
SEC'S WEBSITE AT WWW.SEC.GOV AND MAY ALSO BE REVIEWED AND COPIED AT THE SEC'S
PUBLIC REFERENCE ROOM IN WASHINGTON, DC. INFORMATION ON THE OPERATION OF THE
PUBLIC REFERENCE ROOM MAY BE OBTAINED BY CALLING 1-800-SEC-0330.
PROXY VOTING
Each Fund files Form N-PX with its complete proxy voting record for the 12
months ended June 30th, no later than August 31st of each year. A description of
the Funds' proxy voting policies, procedures, and how the Funds voted proxies
relating to portfolio securities are available without charge, upon request, by
(i) calling 800-GABELLI (800-422-3554); (ii) writing to The Gabelli Funds at One
Corporate Center, Rye, NY 10580-1422; or (iii) visiting the SEC's website at
www.sec.gov.
13
GAMCO WESTWOOD MIGHTY MITES(SM) FUND
SCHEDULE OF INVESTMENTS -- SEPTEMBER 30, 2007
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ----------- -----------
COMMON STOCKS -- 81.7%
AEROSPACE -- 0.1%
3,000 Herley Industries Inc.+ .............. $ 45,491 $ 44,880
500 Innovative Solutions &
Support Inc.+ ...................... 8,973 9,485
----------- -----------
54,464 54,365
----------- -----------
AGRICULTURE -- 0.5%
225 J.G. Boswell Co. ..................... 144,676 188,100
170 Limoneira Co. ........................ 50,215 51,000
----------- -----------
194,891 239,100
----------- -----------
AUTOMOTIVE: PARTS AND ACCESSORIES -- 4.8%
200 Amerityre Corp.+ ..................... 1,108 694
50,000 Earl Scheib Inc.+ .................... 243,865 187,500
24,000 Midas Inc.+ .......................... 357,950 452,880
21,000 Proliance International Inc.+ ........ 98,964 44,310
1,000 Puradyn Filter
Technologies Inc.+ ................. 1,645 400
196,700 Standard Motor Products Inc. ......... 1,611,544 1,848,980
----------- -----------
2,315,076 2,534,764
----------- -----------
AVIATION: PARTS AND SERVICES -- 1.5%
8,000 CPI Aerostructures Inc.+ ............. 86,268 61,760
800 Curtiss-Wright Corp. ................. 8,610 38,000
6,200 Kaman Corp. .......................... 92,246 214,272
227,800 The Fairchild Corp., Cl. A+ .......... 827,828 455,600
----------- -----------
1,014,952 769,632
----------- -----------
BROADCASTING -- 3.1%
50,000 Acme Communications Inc. ............. 299,086 193,500
25,000 Beasley Broadcast Group Inc.,
Cl. A .............................. 240,605 187,750
44,000 Crown Media Holdings Inc.,
Cl. A+ ............................. 348,173 316,360
25,000 Equity Media
Holdings Corp.+ .................... 126,560 75,000
10,000 Fisher Communications Inc.+ .......... 413,617 498,700
25 Granite Broadcasting Corp.+ .......... 2,000 813
23,000 Gray Television Inc. ................. 212,749 195,270
8,000 Salem Communications Corp.,
Cl. A .............................. 112,030 64,000
40,000 Young Broadcasting Inc.,
Cl. A+ ............................. 282,307 88,000
----------- -----------
2,037,127 1,619,393
----------- -----------
BUILDING AND CONSTRUCTION -- 0.6%
4,000 Huttig Building Products Inc.+ ....... 13,358 21,520
10,000 Material Sciences Corp.+ ............. 121,893 106,200
6,200 The Monarch Cement Co. ............... 146,839 186,310
----------- -----------
282,090 314,030
----------- -----------
BUSINESS SERVICES -- 3.9%
150,000 AMICAS Inc.+ ......................... 709,160 441,000
28,000 ANC Rental Corp.+ .................... 840 45
98,000 Edgewater Technology Inc.+ ........... 465,900 853,580
56,800 Nashua Corp.+ ........................ 431,402 630,480
804 National Stock Yards Co. ............. 80,700 145,524
10,000 PubliCARD Inc.+ ...................... 14,435 150
500 StarTek Inc. ......................... 8,375 5,065
----------- -----------
1,710,812 2,075,844
----------- -----------
CABLE -- 0.0%
90,000 Adelphia Communications
Corp., Cl. A+ ...................... 15,750 1,800
90,000 Adelphia Communications
Corp., Cl. A, Escrow+ (a) .......... 0 0
2,500 Outdoor Channel
Holdings Inc.+ ..................... 24,825 22,575
----------- -----------
40,575 24,375
----------- -----------
MARKET
SHARES COST VALUE
------ ----------- -----------
COMMUNICATIONS EQUIPMENT -- 0.3%
1,000 Andrew Corp.+ ........................ $ 3,413 $ 13,850
10,000 Communications Systems Inc. .......... 84,990 105,000
40,000 ViewCast.com Inc.+ ................... 18,600 19,600
----------- -----------
107,003 138,450
----------- -----------
COMPUTER SOFTWARE AND SERVICES -- 0.6%
20,000 Furmanite Corp.+ ..................... 83,498 182,000
1,910 Gemalto NV+ .......................... 10,945 55,356
834 Prosoft Learning Corp.+ .............. 11,216 7
850,000 StorageNetworks Inc.,
Escrow+ (a) ........................ 0 25,500
4,000 Tyler Technologies Inc.+ ............. 16,100 53,400
----------- -----------
121,759 316,263
----------- -----------
CONSUMER PRODUCTS -- 1.9%
68,000 Adams Golf Inc.+ ..................... 115,878 139,400
1,000 Ducati Motor Holding SpA,
ADR+ ............................... 15,665 24,475
5,000 Levcor International Inc.+ ........... 15,701 1,425
4,500 Marine Products Corp. ................ 4,609 38,160
300 National Presto Industries Inc. ...... 8,618 15,900
132,400 Schiff Nutrition
International Inc. ................. 254,040 793,076
41,530 Syratech Corp.+ ...................... 10,383 831
----------- -----------
424,894 1,013,267
----------- -----------
CONSUMER SERVICES -- 0.0%
1,000 Collectors Universe Inc. ............. 3,530 14,080
----------- -----------
DIVERSIFIED INDUSTRIAL -- 5.5%
6,500 Ampco-Pittsburgh Corp. ............... 130,000 255,970
200 Burnham Holdings Inc., Cl. A ......... 3,294 2,980
25,000 Haulotte Group ....................... 134,090 942,905
65,000 Katy Industries Inc.+ ................ 300,428 104,000
2,000 Lindsay Corp. ........................ 39,765 87,560
32,800 Magnetek Inc.+ ....................... 166,496 157,440
10,000 RWC Inc.+ ............................ 217,877 17,500
430,000 Stamford Industrial
Group Inc.+ ........................ 176,319 851,400
36,800 Tech/Ops Sevcon Inc. ................. 220,725 320,160
500 The Lamson & Sessions Co.+ ........... 2,475 13,480
24,000 WHX Corp.+ ........................... 309,477 180,000
----------- -----------
1,700,946 2,933,395
----------- -----------
EDUCATIONAL SERVICES -- 0.0%
500 Universal Technical
Institute Inc.+ .................... 10,158 9,000
----------- -----------
ELECTRONICS -- 3.0%
50,000 Alliance Semiconductor Corp. ......... 159,909 115,000
1,200 Bel Fuse Inc., Cl. A ................. 39,566 45,816
50,000 California Micro Devices Corp.+ ...... 213,178 219,500
16,000 CTS Corp. ............................ 140,236 206,400
90,300 IntriCon Corp.+ ...................... 286,158 839,790
5,000 Methode Electronics Inc. ............. 46,441 75,250
20,000 SIRIT Inc.+ .......................... 11,714 6,636
178 Trimble Navigation Ltd.+ ............. 4,954 6,995
3,500 Zoran Corp.+ ......................... 22,500 70,700
----------- -----------
924,656 1,586,087
----------- -----------
ENERGY AND UTILITIES: ELECTRIC -- 0.7%
3,000 Maine & Maritimes Corp.+ ............. 87,418 84,960
9,200 Unitil Corp. ......................... 236,985 271,400
----------- -----------
324,403 356,360
----------- -----------
ENERGY AND UTILITIES: INTEGRATED -- 2.0%
25,000 Aquila Inc.+ ......................... 71,600 100,250
48,950 Florida Public Utilities Co. ......... 485,364 577,610
6,000 MGE Energy Inc. ...................... 189,291 200,640
800 Pardee Resources Co. Inc. ............ 72,100 174,800
95,200 Progress Energy Inc., CVO+ (a) ....... 10,472 31,416
----------- -----------
828,827 1,084,716
----------- -----------
See accompanying notes to financial statements.
14
GAMCO WESTWOOD MIGHTY MITES(SM) FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- SEPTEMBER 30, 2007
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ----------- -----------
COMMON STOCKS (CONTINUED)
ENERGY AND UTILITIES: NATURAL GAS -- 2.2%
4,500 Chesapeake Utilities Corp. ........... $ 115,696 $ 152,955
30,000 Corning Natural Gas Corp.+ ........... 466,159 490,500
2,000 EnergySouth Inc. ..................... 79,670 100,840
1,000 Evergreen Energy Inc.+ ............... 7,920 5,100
31,200 PetroCorp Escrow Shares+ (a) ......... 0 1,872
16,000 RGC Resources Inc. ................... 348,522 427,040
2,600 U.S. Energy Corp. .................... 16,694 11,466
----------- -----------
1,034,661 1,189,773
----------- -----------
ENERGY AND UTILITIES: SERVICES -- 2.0%
10,000 Acergy SA, ADR ....................... 33,524 297,000
950 Covanta Holding Corp.+ ............... 3,996 23,284
52,000 RPC Inc. ............................. 213,373 738,920
----------- -----------
250,893 1,059,204
----------- -----------
ENERGY AND UTILITIES: WATER -- 1.4%
4,500 Artesian Resources Corp.,
Cl. A .............................. 48,062 85,500
1,500 BIW Ltd. ............................. 27,266 34,875
2,500 California Water
Service Group ...................... 55,553 96,225
4,000 Consolidated Water Co. Ltd. .......... 55,124 120,080
5,700 Middlesex Water Co. .................. 96,987 107,730
8,000 SJW Corp. ............................ 98,372 273,120
----------- -----------
381,364 717,530
----------- -----------
ENTERTAINMENT -- 1.9%
12,500 Canterbury Park
Holding Corp. ...................... 129,392 152,500
1,802 Chestnut Hill Ventures+ (a) .......... 67,956 82,024
34,000 Dover Motorsports Inc. ............... 170,332 219,980
21,000 Jetix Europe NV ...................... 122,472 509,062
800 LodgeNet
Entertainment Corp.+ ............... 8,800 20,288
2,000 Triple Crown Media Inc.+ ............. 12,000 12,340
----------- -----------
510,952 996,194
----------- -----------
ENVIRONMENTAL CONTROL -- 0.1%
10,000 BioteQ Environmental
Technologies Inc.+ ................. 16,559 38,707
----------- -----------
EQUIPMENT AND SUPPLIES -- 6.9%
130,800 Baldwin Technology Co. Inc.,
Cl. A+ ............................. 308,707 655,308
15,000 Capstone Turbine Corp.+ .............. 27,450 18,000
21,500 Cherokee International Corp.+ ........ 100,897 72,885
14,000 Core Molding
Technologies Inc.+ .................. 51,468 107,240
6,100 Fedders Corp.+ ....................... 1,645 280
1,000 Genoil Inc.+ ......................... 225 603
10,000 Gerber Scientific Inc.+ .............. 82,578 108,500
8,500 Gildemeister AG ...................... 61,536 236,108
4,000 GrafTech International Ltd.+ ......... 24,000 71,360
40,000 Industrial Distribution
Group Inc.+ ........................ 426,349 377,600
20,000 L.S. Starrett Co., Cl. A ............. 326,600 387,000
20,000 Maezawa Kyuso
Industries Co. Ltd. ................ 108,117 365,647
9,000 Mine Safety Appliances Co. ........... 294,989 423,990
13,600 SL Industries Inc.+ .................. 84,464 309,944
1,000 SRS Labs Inc.+ ....................... 5,500 7,330
5,000 The Eastern Co. ...................... 50,980 112,250
45,000 TransAct Technologies Inc.+ .......... 298,359 274,950
9,000 Vicor Corp. .......................... 99,181 109,080
500 Watts Water Technologies Inc.,
Cl. A .............................. 7,648 15,350
----------- -----------
2,360,693 3,653,425
----------- -----------
MARKET
SHARES COST VALUE
------ ----------- -----------
FINANCIAL SERVICES -- 11.9%
1,000 Bank of Florida Corp.+ ............... $ 14,313 $ 16,280
15,100 Berkshire Bancorp Inc. ............... 203,044 247,187
26,000 Crazy Woman Creek
Bancorp Inc. ....................... 444,343 546,000
181,500 Epoch Holding Corp.+ ................. 459,195 2,555,520
20 Farmers & Merchants
Bank of Long Beach ................. 131,500 126,500
6,000 Fidelity Southern Corp. .............. 53,378 89,580
30,300 Flushing Financial Corp. ............. 454,751 509,040
1,500 Gateway Financial
Holdings Inc. ...................... 23,220 23,610
10 Guaranty Corp., Cl. A+ ............... 137,500 160,250
40,000 Integrity Mutual Funds Inc.+ ......... 35,200 24,800
70,000 Ladenburg Thalmann
Financial Services Inc.+ ........... 50,558 137,200
3,055 New York Community
Bancorp Inc. ....................... 42,628 58,198
5,198 Northrim BanCorp Inc. ................ 110,154 129,417
2,600 Oritani Financial Corp.+ ............. 39,802 41,184
6,400 Parish National Corp. ................ 238,648 555,200
9,167 Patriot National Bancorp Inc. ........ 141,747 183,340
5,000 Provident New York Bancorp ........... 74,850 65,550
1,000 Seacoast Banking
Corp. of Florida ................... 20,160 18,700
116 Sunwest Bank+ ........................ 322,721 308,850
19,000 SWS Group Inc. ....................... 238,753 336,110
10,000 Synergy Financial Group Inc. ......... 101,183 151,600
1,000 TIB Financial Corp. .................. 7,780 11,050
2,700 Wilshire Bancorp Inc. ................ 30,290 29,619
----------- -----------
3,375,718 6,324,785
----------- -----------
FOOD AND BEVERAGE -- 2.0%
3,300 Boston Beer Co. Inc., Cl. A+ ......... 67,533 160,578
4,000 Genesee Corp., Cl. A+ ................ 4,060 0
30,100 Genesee Corp., Cl. B+ ................ 13,986 0
200 Hanover Foods Corp., Cl. A+ .......... 21,954 22,025
2,000 J & J Snack Foods Corp. .............. 28,830 69,640
28,000 Lifeway Foods Inc.+ .................. 129,705 471,240
14,000 MGP Ingredients Inc. ................. 67,550 143,780
6,000 Rock Field Co. Ltd. .................. 99,390 87,285
600 Scheid Vineyards Inc., Cl. A+ ........ 18,937 22,215
1,000 The Inventure Group Inc.+ ............ 2,660 2,190
5,000 The Steak n Shake Co.+ ............... 76,337 75,050
1,400 Willamette Valley
Vineyards Inc.+ .................... 8,810 9,478
----------- -----------
539,752 1,063,481
----------- -----------
HEALTH CARE -- 8.9%
21,000 AFP Imaging Corp.+ ................... 45,653 26,460
2,000 Alpharma Inc., Cl. A ................. 44,140 42,720
13,000 Animal Health
International Inc.+ ................ 132,852 144,690
45,000 BioLase Technology Inc.+ ............. 532,656 307,800
10,000 Boiron SA ............................ 166,957 246,688
1,000 Bruker BioSciences Corp.+ ............ 5,980 8,800
10,000 Continucare Corp.+ ................... 26,191 28,500
96,000 Del Global
Technologies Corp.+ ................ 205,665 283,200
4,000 DexCom Inc.+ ......................... 58,335 39,960
1,000 Elite Pharmaceuticals Inc.,
Cl. A+ ............................. 2,690 2,300
15,279 Exactech Inc.+ ....................... 235,526 245,228
18,500 Heska Corp.+ ......................... 41,340 39,960
8,000 I-Flow Corp.+ ........................ 106,998 148,720
1,000 ICU Medical Inc.+ .................... 30,050 38,750
5,673 Inverness Medical
Innovations Inc.+ .................. 106,035 313,831
10,000 Langer Inc.+ ......................... 49,577 50,000
See accompanying notes to financial statements.
15
GAMCO WESTWOOD MIGHTY MITES(SM) FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- SEPTEMBER 30, 2007
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ----------- -----------
COMMON STOCKS (CONTINUED)
HEALTH CARE (CONTINUED)
30,000 Lifecore Biomedical Inc.+ ............ $ 280,477 $ 387,000
2,500 Matrixx Initiatives Inc.+ ............ 44,375 49,400
21,000 Neogen Corp.+ ........................ 160,903 498,120
2,500 NMT Medical Inc.+ .................... 7,858 19,925
5,000 Opko Health Inc.+ .................... 20,353 20,000
1,000 Orthofix International NV+ ........... 27,010 48,970
6,000 Pain Therapeutics Inc.+ .............. 46,488 56,100
20,000 Quidel Corp.+ ........................ 88,363 391,200
34,975 Regeneration
Technologies Inc.+ ................. 311,637 374,932
400 Sirona Dental Systems Inc.+ .......... 7,800 14,268
66,000 Sonic Innovations Inc.+ .............. 331,740 605,220
1,000 ThermoGenesis Corp.+ ................. 2,520 2,230
2,000 Tutogen Medical Inc.+ ................ 10,180 23,000
15,200 United-Guardian Inc. ................. 145,895 155,040
3,000 Young Innovations Inc. ............... 81,168 85,830
----------- -----------
3,357,412 4,698,842
----------- -----------
HOTELS AND GAMING -- 1.8%
1,200 Cloverleaf Kennel Club, Cl. A+ ....... 3,704 2,928
4,000 Dover Downs Gaming &
Entertainment Inc. ................. 24,903 41,560
2,000 Florida Gaming Corp.+ ................ 6,950 44,500
20,900 Sonesta International
Hotels Corp., Cl. A ................ 979,035 891,594
----------- -----------
1,014,592 980,582
----------- -----------
MANUFACTURED HOUSING AND RECREATIONAL VEHICLES -- 2.0%
82,000 Cavalier Homes Inc.+ ................. 437,972 262,400
9,000 Cavco Industries Inc.+ ............... 167,143 301,500
9,000 Nobility Homes Inc. .................. 141,603 171,000
12,000 Palm Harbor Homes Inc.+ .............. 236,250 149,760
5,000 Skyline Corp. ........................ 169,393 150,400
----------- -----------
1,152,361 1,035,060
----------- -----------
METALS AND MINING -- 0.1%
615,000 Royal Oak Mines Inc.+ ................ 2,314 0
4,000 Uranium Resources Inc.+ .............. 22,056 37,560
----------- -----------
24,370 37,560
----------- -----------
MUTUAL FUNDS -- 0.9%
27,000 MVC Capital Inc. ..................... 270,762 500,310
----------- -----------
PAPER AND FOREST PRODUCTS -- 0.3%
700 Keweenaw Land
Association Ltd. ................... 130,662 143,500
----------- -----------
PUBLISHING -- 0.4%
14,001 PRIMEDIA Inc. ........................ 139,299 196,574
----------- -----------
REAL ESTATE -- 3.3%
1,700 Bresler & Reiner Inc. ................ 68,094 65,067
6,000 Capital Properties Inc., Cl. A ....... 97,890 141,750
350 Case Pomeroy & Co. Inc.,
Cl. A+ (a) ......................... 570,325 714,875
50 Case Pomeroy & Co. Inc.,
Cl. B+ (a) ......................... 58,825 102,125
15,500 Griffin Land & Nurseries Inc.+ ....... 311,580 566,060
3,000 Gyrodyne Co. of America Inc. ......... 53,308 148,470
400 Holobeam Inc.+ ....................... 15,500 14,800
2,508 Royalty LLC+ (a) ..................... 0 4,685
----------- -----------
1,175,522 1,757,832
----------- -----------
RESTAURANTS -- 0.5%
17,000 Nathan's Famous Inc.+ ................ 119,527 280,500
----------- -----------
MARKET
SHARES COST VALUE
------ ----------- -----------
RETAIL -- 0.8%
3,200 Bowlin Travel Centers Inc.+ .......... $ 5,720 $ 7,968
16,000 CoolBrands International Inc.+ ....... 37,057 15,443
1,200 Cost-U-Less Inc.+ .................... 8,874 13,872
10,000 Movado Group Inc. .................... 145,136 319,200
1,400 Village Super Market Inc.,
Cl. A .............................. 64,779 72,800
----------- -----------
261,566 429,283
----------- -----------
SPECIALTY CHEMICALS -- 1.5%
267,226 General Chemical Group Inc.+ ......... 59,859 6,013
30,000 Hawkins Inc. ......................... 380,688 432,000
1,000 KMG Chemicals Inc. ................... 3,270 26,180
55,000 Omnova Solutions Inc.+ ............... 302,076 317,900
----------- -----------
745,893 782,093
----------- -----------
TELECOMMUNICATIONS -- 3.3%
1,000 Ambient Corp.+ ....................... 280 54
1,000 Applied Signal
Technology Inc. .................... 16,330 13,520
24,000 D&E Communications Inc. .............. 265,251 341,280
2,000 Electronic Systems
Technology Inc. .................... 1,410 1,920
15,000 HickoryTech Corp. .................... 172,168 145,350
80 Horizon Telecom Inc., Cl. A+ ......... 9,250 9,200
350 Horizon Telecom Inc., Cl. B .......... 39,964 33,075
1,200 Lexcom Inc., Cl. B+ .................. 68,955 56,250
31,000 New Ulm Telecom Inc. ................. 340,771 387,500
5,000 North Pittsburgh Systems Inc. ........ 108,089 118,800
10,000 PNV Inc.+ ............................ 3 33
1,600 Preformed Line Products Co. .......... 71,693 83,232
18,000 Shenandoah
Telecommunications Co. ............. 94,686 391,680
33,000 Sycamore Networks Inc.+ .............. 107,085 134,310
152 Telecorp Escrow Shares ............... 0 0
2,305 Virgin Media Inc. .................... 31,540 55,942
----------- -----------
1,327,475 1,772,146
----------- -----------
TRANSPORTATION -- 0.3%
7,500 Providence and Worcester
Railroad Co. ....................... 132,354 135,750
----------- -----------
WIRELESS COMMUNICATIONS -- 0.7%
9,000 Rural Cellular Corp., Cl. A+ ......... 7,830 391,500
----------- -----------
TOTAL COMMON STOCKS .................. 30,426,380 43,267,752
----------- -----------
PREFERRED STOCKS -- 1.4%
AUTOMOTIVE: PARTS AND ACCESSORIES -- 1.4%
16,000 Jungheinrich AG Pfd. ................. 129,990 724,379
----------- -----------
CONVERTIBLE PREFERRED STOCKS -- 0.1%
BUSINESS SERVICES -- 0.0%
150 Interep National Radio Sales Inc.,
4.000% Cv. Pfd.,
Ser. A+ (a)(b)(c) .................. 13,849 2,621
----------- -----------
FOOD AND BEVERAGE -- 0.1%
2,400 Seneca Foods Corp.,
Cv. Pfd., Ser. 2003+ ............... 36,600 64,368
----------- -----------
TOTAL CONVERTIBLE
PREFERRED STOCKS ................... 50,449 66,989
----------- -----------
See accompanying notes to financial statements.
16
GAMCO WESTWOOD MIGHTY MITES(SM) FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- SEPTEMBER 30, 2007
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ----------- -----------
WARRANTS -- 0.0%
BROADCASTING -- 0.0%
64 Granite Broadcasting Corp.,
Ser. A, expire 06/04/12+ ........... $ 0 $ 191
64 Granite Broadcasting Corp.,
Ser. B, expire 06/04/12+ ........... 0 127
----------- -----------
0 318
----------- -----------
BUSINESS SERVICES -- 0.0%
1,666 Avalon Digital Marketing
Systems Inc.,
expire 11/11/11+ (a)(b)(c) ......... 0 0
----------- -----------
DIVERSIFIED INDUSTRIAL -- 0.0%
3,780 WHX Corp., expire 02/28/08+ .......... 11,721 775
----------- -----------
ENERGY AND UTILITIES: ELECTRIC -- 0.0%
1,680 British Energy Group plc,
expire 01/17/10+ ................... 5,488 14,316
15,000 Corning Natural Gas Corp.,
expire 08/17/11+ ................... 0 0
----------- -----------
5,488 14,316
----------- -----------
TOTAL WARRANTS ....................... 17,209 15,409
----------- -----------
PRINCIPAL MARKET
AMOUNT COST VALUE
--------- ----------- -----------
U.S. GOVERNMENT OBLIGATIONS -- 16.9%
$9,010,000 U.S. Treasury Bills,
3.632% to 5.062%++,
10/04/07 to 03/20/08 ............... $ 8,933,894 $ 8,938,465
----------- -----------
TOTAL
INVESTMENTS -- 100.1% .............. $39,557,922 53,012,994
===========
OTHER ASSETS AND LIABILITIES (NET) -- (0.1)% ....... (52,109)
-----------
NET ASSETS -- 100.0% ............................... $52,960,885
===========
- ----------
(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 the valuation of comparable
securities and other factors on a regular basis. At September 30, 2007,
the market value of fair valued securities amounted to $965,118 or 1.82%
of total net assets.
(b) At September 30, 2007, the Fund held investments in restricted and
illiquid securities amounting to $2,621 or 0.00% of total net assets,
which were valued under methods approved by the Board, as follows:
09/30/07
CARRYING
ACQUISITION ACQUISITION ACQUISITION VALUE
SHARES ISSUER DATE COST PER UNIT
- ----------- ------ ----------- ----------- -----------
1,666 Avalon Digital Marketing
Systems Inc., Warrants
expire 11/11/11 ....... 04/03/00 -- $ 0.0000
150 Interep National Radio
Sales Inc., 4.000% Cv.
Pfd., Ser. A .......... 05/03/02 $ 13,849 17.4733
(c) Security exempt from registration under Rule 144A of the Securities Act of
1933, as amended. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At
September 30, 2007, the market value of Rule 144A securities amounted to
$2,621 or 0.00% of total net assets.
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
ADR American Depository Receipt
CVO Contingent Value Obligation
See accompanying notes to financial statements.
17
GAMCO WESTWOOD EQUITY FUND
SCHEDULE OF INVESTMENTS -- SEPTEMBER 30, 2007
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ------------ ------------
COMMON STOCKS -- 96.5%
AVIATION: PARTS AND SERVICES -- 2.6%
61,900 United Technologies Corp. ............ $ 3,598,396 $ 4,981,712
------------ ------------
BANKING -- 8.4%
95,100 Bank of America Corp. ................ 3,398,025 4,780,677
100,133 Citigroup Inc. ....................... 4,224,785 4,673,207
39,900 Comerica Inc. ........................ 2,328,592 2,046,072
105,584 JPMorgan Chase & Co. ................. 3,892,432 4,837,859
------------ ------------
13,843,834 16,337,815
------------ ------------
BUSINESS SERVICES -- 7.3%
121,300 Accenture Ltd., Cl. A ................ 4,765,694 4,882,325
97,400 Automatic Data
Processing Inc. ................... 4,133,588 4,473,582
20,400 FedEx Corp. .......................... 2,132,224 2,136,900
17,800 MasterCard Inc., Cl. A ............... 1,873,188 2,633,866
------------ ------------
12,904,694 14,126,673
------------ ------------
COMMUNICATIONS EQUIPMENT -- 1.4%
79,000 Cisco Systems Inc.+ .................. 2,043,605 2,615,690
------------ ------------
COMPUTER HARDWARE -- 2.5%
41,200 International Business
Machines Corp. .................... 4,223,602 4,853,360
------------ ------------
COMPUTER SOFTWARE AND SERVICES -- 5.2%
167,600 Microsoft Corp. ...................... 4,779,550 4,937,496
233,200 Oracle Corp.+ ........................ 3,675,126 5,048,780
------------ ------------
8,454,676 9,986,276
------------ ------------
CONSUMER PRODUCTS -- 7.6%
69,580 Altria Group Inc. .................... 4,443,758 4,837,898
69,900 Colgate-Palmolive Co. ................ 3,732,122 4,985,268
84,700 NIKE Inc., Cl. B ..................... 4,855,733 4,968,502
------------ ------------
13,031,613 14,791,668
------------ ------------
DIVERSIFIED INDUSTRIAL -- 5.2%
123,100 General Electric Co. ................. 3,581,781 5,096,340
35,700 ITT Corp. ............................ 1,587,823 2,425,101
41,000 Textron Inc. ......................... 1,595,845 2,550,610
------------ ------------
6,765,449 10,072,051
------------ ------------
ELECTRONICS -- 1.3%
44,100 MEMC Electronic
Materials Inc.+ ................... 2,502,115 2,595,726
------------ ------------
ENERGY AND UTILITIES:
INTEGRATED -- 5.0%
54,300 ConocoPhillips ....................... 2,894,918 4,765,911
28,000 Dominion Resources Inc. .............. 2,355,373 2,360,400
47,500 McDermott
International Inc.+ ............... 1,222,776 2,568,800
------------ ------------
6,473,067 9,695,111
------------ ------------
ENERGY: NATURAL GAS -- 1.3%
27,306 Apache Corp. ......................... 1,763,929 2,459,178
------------ ------------
ENERGY: OIL -- 8.7%
52,000 Exxon Mobil Corp. .................... 2,168,886 4,813,120
81,400 Marathon Oil Corp. ................... 3,520,106 4,641,428
71,335 Murphy Oil Corp. ..................... 3,752,562 4,985,603
37,010 Occidental Petroleum Corp. ........... 1,521,739 2,371,601
------------ ------------
10,963,293 16,811,752
------------ ------------
MARKET
SHARES COST VALUE
------ ------------ ------------
ENTERTAINMENT -- 2.4%
135,100 The Walt Disney Co. .................. $ 4,785,114 $ 4,646,089
------------ ------------
FINANCIAL SERVICES -- 15.1%
78,600 American Express Co. ................. 2,723,472 4,666,482
74,500 American International Group Inc. .... 5,255,687 5,039,925
33,600 Arch Capital Group Ltd.+ ............. 2,427,172 2,500,176
19,200 Franklin Resources Inc. .............. 1,864,398 2,448,000
51,600 Hartford Financial
Services Group Inc. ............... 4,567,589 4,775,580
56,900 Lazard Ltd., Cl. A ................... 2,680,988 2,412,560
43,700 The Allstate Corp. ................... 2,525,094 2,499,203
110,800 The Bank of New York
Mellon Corp. ...................... 4,756,350 4,890,712
------------ ------------
26,800,750 29,232,638
------------ ------------
FOOD AND BEVERAGE -- 1.2%
40,000 General Mills Inc. ................... 2,002,629 2,320,400
------------ ------------
HEALTH CARE -- 2.4%
191,200 Pfizer Inc. .......................... 4,794,329 4,671,016
------------ ------------
METALS AND MINING -- 4.0%
27,200 Allegheny Technologies Inc. .......... 2,680,878 2,990,640
45,200 Freeport-McMoRan
Copper & Gold Inc. ................ 3,106,628 4,741,028
------------ ------------
5,787,506 7,731,668
------------ ------------
RETAIL -- 3.8%
125,700 CVS Caremark Corp. ................... 3,889,645 4,981,491
74,000 Macy's Inc. .......................... 2,619,243 2,391,680
------------ ------------
6,508,888 7,373,171
------------ ------------
TELECOMMUNICATIONS -- 5.0%
118,300 AT&T Inc. ............................ 4,310,557 5,005,273
107,104 Verizon Communications Inc. .......... 3,793,539 4,742,565
------------ ------------
8,104,096 9,747,838
------------ ------------
TRANSPORTATION -- 1.2%
90,900 Eagle Bulk Shipping Inc. ............. 1,732,789 2,339,766
------------ ------------
UTILITIES -- 4.9%
62,500 Exelon Corp. ......................... 3,459,444 4,710,000
101,500 PG&E Corp. ........................... 4,111,015 4,851,700
------------ ------------
7,570,459 9,561,700
------------ ------------
TOTAL
COMMON STOCKS ..................... 154,654,833 186,951,298
------------ ------------
TOTAL
INVESTMENTS -- 96.5% .............. $154,654,833 186,951,298
============
OTHER ASSETS AND LIABILITIES
(NET) -- 3.5% ..................... 6,831,518
------------
NET ASSETS -- 100.0% ................. $193,782,816
============
- ----------
+ Non-income producing security.
See accompanying notes to financial statements.
18
GAMCO WESTWOOD BALANCED FUND
SCHEDULE OF INVESTMENTS -- SEPTEMBER 30, 2007
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ------------ ------------
COMMON STOCKS -- 59.6%
AVIATION: PARTS AND SERVICES -- 1.8%
35,000 United Technologies Corp. ............ $ 1,934,317 $ 2,816,800
------------ ------------
BANKING -- 5.1%
47,800 Bank of America Corp. ................ 1,752,662 2,402,906
49,533 Citigroup Inc. ....................... 1,995,833 2,311,705
19,800 Comerica Inc. ........................ 1,155,612 1,015,344
52,296 JPMorgan Chase & Co. ................. 2,115,545 2,396,203
------------ ------------
7,019,652 8,126,158
------------ ------------
BUSINESS SERVICES -- 4.6%
60,500 Accenture Ltd., Cl. A ................ 2,370,752 2,435,125
52,900 Automatic Data Processing Inc. ....... 2,248,908 2,429,697
10,300 FedEx Corp. .......................... 1,075,703 1,078,925
8,800 MasterCard Inc., Cl. A ............... 927,975 1,302,136
------------ ------------
6,623,338 7,245,883
------------ ------------
COMMUNICATIONS EQUIPMENT -- 0.9%
45,000 Cisco Systems Inc.+ .................. 1,163,452 1,489,950
------------ ------------
COMPUTER HARDWARE -- 1.5%
20,400 International Business
Machines Corp. .................... 2,122,278 2,403,120
------------ ------------
COMPUTER SOFTWARE AND SERVICES -- 3.1%
82,600 Microsoft Corp. ...................... 2,305,920 2,433,396
114,480 Oracle Corp.+ ........................ 1,851,644 2,478,492
------------ ------------
4,157,564 4,911,888
------------ ------------
CONSUMER PRODUCTS -- 4.7%
34,020 Altria Group Inc. .................... 2,167,145 2,365,411
35,900 Colgate-Palmolive Co. ................ 1,912,610 2,560,388
42,100 NIKE Inc., Cl. B ..................... 2,412,617 2,469,586
------------ ------------
6,492,372 7,395,385
------------ ------------
DIVERSIFIED INDUSTRIAL -- 3.4%
66,000 General Electric Co. ................. 1,944,668 2,732,400
18,590 ITT Corp. ............................ 900,875 1,262,819
22,400 Textron Inc. ......................... 871,993 1,393,504
------------ ------------
3,717,536 5,388,723
------------ ------------
ELECTRONICS -- 0.8%
22,600 MEMC Electronic
Materials Inc.+ ................... 1,277,405 1,330,236
------------ ------------
ENERGY: INTEGRATED -- 3.0%
26,700 ConocoPhillips ....................... 1,610,088 2,343,459
13,600 Dominion Resources Inc. .............. 1,143,193 1,146,480
23,400 McDermott International Inc.+ ........ 569,440 1,265,472
------------ ------------
3,322,721 4,755,411
------------ ------------
ENERGY: NATURAL GAS -- 0.8%
13,455 Apache Corp. ......................... 879,932 1,211,757
------------ ------------
ENERGY: OIL -- 5.2%
25,600 Exxon Mobil Corp. .................... 1,113,983 2,369,536
40,130 Marathon Oil Corp. ................... 1,762,451 2,288,213
35,186 Murphy Oil Corp. ..................... 1,827,906 2,459,149
18,200 Occidental Petroleum Corp. ........... 740,410 1,166,256
------------ ------------
5,444,750 8,283,154
------------ ------------
ENTERTAINMENT -- 1.5%
69,800 The Walt Disney Co. .................. 2,470,452 2,400,422
------------ ------------
FINANCIAL SERVICES -- 9.1%
38,300 American Express Co. ................. 1,440,742 2,273,871
36,600 American International
Group Inc. ........................ 2,575,035 2,475,990
16,000 Arch Capital Group Ltd.+ ............. 1,155,834 1,190,560
9,400 Franklin Resources Inc. .............. 890,268 1,198,500
24,700 Hartford Financial Services
Group Inc. ........................ 2,167,331 2,285,985
29,400 Lazard Ltd., Cl. A ................... 1,372,824 1,246,560
MARKET
SHARES COST VALUE
------ ------------ ------------
21,500 The Allstate Corp. ................... $ 1,227,037 $ 1,229,585
57,800 The Bank of New York
Mellon Corp. ...................... 2,481,008 2,551,292
------------ ------------
13,310,079 14,452,343
------------ ------------
FOOD AND BEVERAGE -- 0.7%
20,300 General Mills Inc. ................... 1,014,076 1,177,603
------------ ------------
HEALTH CARE -- 1.5%
95,100 Pfizer Inc. .......................... 2,386,040 2,323,293
------------ ------------
METALS AND MINING -- 2.4%
13,800 Allegheny Technologies Inc. .......... 1,405,390 1,517,310
22,200 Freeport-McMoRan Copper
& Gold Inc. ....................... 1,538,276 2,328,558
------------ ------------
2,943,666 3,845,868
------------ ------------
RETAIL -- 2.4%
66,900 CVS Caremark Corp. ................... 2,080,097 2,651,247
36,970 Macy's Inc. .......................... 1,317,895 1,194,870
------------ ------------
3,397,992 3,846,117
------------ ------------
TELECOMMUNICATIONS -- 3.3%
61,100 AT&T Inc. ............................ 2,220,824 2,585,141
60,518 Verizon Communications Inc. .......... 2,100,214 2,679,737
------------ ------------
4,321,038 5,264,878
------------ ------------
TRANSPORTATION --0.8%
47,800 Eagle Bulk Shipping Inc. ............. 910,703 1,230,372
------------ ------------
UTILITIES -- 3.0%
30,600 Exelon Corp. ......................... 1,702,533 2,306,016
51,900 PG&E Corp. ........................... 2,079,426 2,480,820
------------ ------------
3,781,959 4,786,836
------------ ------------
TOTAL
COMMON STOCKS ..................... 78,691,322 94,686,197
------------ ------------
PRINCIPAL
AMOUNT
- ----------
CORPORATE BONDS -- 10.2%
BANKING -- 1.5%
$1,250,000 Bank of America Corp.,
5.375%, 06/15/14 .................. 1,293,464 1,237,844
1,125,000 Citigroup Inc.,
6.500%, 01/18/11 .................. 1,198,255 1,170,617
------------ ------------
2,491,719 2,408,461
------------ ------------
BROKERAGE -- 0.9%
1,450,000 The Goldman Sachs Group Inc.,
6.650%, 05/15/09 .................. 1,454,239 1,487,514
------------ ------------
COMPUTER HARDWARE -- 0.5%
750,000 Hewlett-Packard Co.,
3.625%, 03/15/08 .................. 749,772 744,762
------------ ------------
DIVERSIFIED INDUSTRIAL -- 0.8%
1,200,000 General Electric Co.,
5.000%, 02/01/13 .................. 1,210,387 1,190,894
------------ ------------
ENERGY: NATURAL GAS -- 0.6%
1,000,000 Apache Corp.,
5.250%, 04/15/13 .................. 999,880 995,605
------------ ------------
ENERGY: OIL --1.9%
1,000,000 Anadarko Petroleum Corp.,
6.094%, 09/15/09 (a) .............. 1,001,273 994,679
1,000,000 ChevronTexaco Capital Co.,
3.375%, 02/15/08 .................. 993,192 993,683
1,005,000 Occidental Petroleum
Corp., MTN,
4.250%, 03/15/10 .................. 1,006,419 998,973
------------ ------------
3,000,884 2,987,335
------------ ------------
See accompanying notes to financial statements.
19
GAMCO WESTWOOD BALANCED FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- SEPTEMBER 30, 2007
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT COST VALUE
- ---------- ------------ ------------
CORPORATE BONDS (CONTINUED)
FOOD AND BEVERAGE -- 0.6%
$ 950,000 Anheuser-Busch Cos. Inc.,
4.375%, 01/15/13 .................. $ 939,019 $ 904,848
------------ ------------
REAL ESTATE INVESTMENT TRUSTS -- 1.1%
1,600,000 Archstone-Smith Trust,
7.200%, 03/01/13 .................. 1,565,663 1,698,400
------------ ------------
RETAIL -- 0.8%
1,250,000 Wal-Mart Stores Inc.,
6.875%, 08/10/09 .................. 1,278,187 1,292,673
------------ ------------
TELECOMMUNICATIONS -- 0.9%
1,460,000 Verizon Communications Inc.,
Deb., Insured by MBIA Inc.,
6.460%, 04/15/08 .................. 1,461,327 1,476,425
------------ ------------
TRANSPORTATION -- 0.6%
1,000,000 Burlington Northern
Santa Fe Corp.,
5.650%, 05/01/17 .................. 982,120 981,481
------------ ------------
TOTAL
CORPORATE BONDS ................... 16,133,197 16,168,398
------------ ------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 14.6%
FEDERAL HOME LOAN BANK -- 2.9%
1,500,000 5.125%, 06/18/08 .................. 1,500,885 1,503,987
1,500,000 4.625%, 11/21/08 .................. 1,492,418 1,501,718
1,500,000 5.375%, 05/18/16 .................. 1,508,856 1,546,405
------------ ------------
4,502,159 4,552,110
------------ ------------
FEDERAL HOME LOAN MORTGAGE CORP -- 4.9%
1,500,000 4.250%, 07/15/09 .................. 1,482,663 1,496,354
1,500,000 4.750%, 12/08/10 .................. 1,490,221 1,513,285
1,250,000 5.125%, 07/15/12 .................. 1,238,780 1,278,979
2,000,000 5.000%, 07/15/14 .................. 2,044,722 2,029,666
1,500,000 5.250%, 04/18/16 .................. 1,478,727 1,533,750
------------ ------------
7,735,113 7,852,034
------------ ------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 6.8%
2,000,000 3.250%, 11/15/07 .................. 1,994,525 1,994,525
1,500,000 4.625%, 01/15/08 .................. 1,498,989 1,498,643
1,250,000 3.250%, 02/15/09 .................. 1,231,890 1,230,124
1,600,000 4.250%, 05/15/09 .................. 1,580,520 1,596,474
1,500,000 4.250%, 08/15/10 .................. 1,459,230 1,493,421
1,500,000 5.375%, 11/15/11 .................. 1,509,029 1,547,497
1,500,000 5.000%, 04/15/15 .................. 1,563,159 1,516,479
------------ ------------
10,837,342 10,877,163
------------ ------------
TOTAL U.S. GOVERNMENT
AGENCY OBLIGATIONS ................ 23,074,614 23,281,307
------------ ------------
PRINCIPAL MARKET
AMOUNT COST VALUE
- ---------- ------------ ------------
U.S. GOVERNMENT OBLIGATIONS -- 12.7%
U.S. TREASURY BILLS -- 0.9%
$1,500,000 U.S. Treasury Bill,
4.011%++, 03/20/08 ................ $ 1,472,341 $ 1,472,142
------------ ------------
U.S. TREASURY INFLATION INDEXED NOTES -- 1.0%
1,500,000 0.875%, 04/15/10 .................. 1,652,988 1,595,050
------------ ------------
U.S. TREASURY NOTES -- 10.8%
1,500,000 4.375%, 01/31/08 .................. 1,502,105 1,502,111
2,000,000 3.375%, 02/15/08 .................. 1,992,703 1,995,002
1,500,000 4.875%, 04/30/08 .................. 1,499,176 1,506,564
1,500,000 4.875%, 08/31/08 .................. 1,499,450 1,510,195
2,000,000 3.375%, 12/15/08 .................. 1,980,604 1,986,094
1,250,000 4.875%, 02/15/12 .................. 1,247,965 1,287,696
2,250,000 4.750%, 05/15/14 .................. 2,246,936 2,301,329
1,500,000 4.000%, 02/15/15 .................. 1,470,480 1,459,806
2,000,000 4.250%, 08/15/15 .................. 1,995,145 1,971,564
1,500,000 5.125%, 05/15/16 .................. 1,509,627 1,563,399
------------ ------------
16,944,191 17,083,760
------------ ------------
TOTAL U.S. GOVERNMENT
OBLIGATIONS ....................... 20,069,520 20,150,952
------------ ------------
TOTAL INVESTMENTS -- 97.1% ........... $137,968,653 154,286,854
============
OTHER ASSETS AND LIABILITIES
(NET) -- 2.9% ........................ 4,613,661
------------
NET ASSETS -- 100.0% ................. $158,900,515
============
- ----------
(a) Floating rate security. The rate disclosed is that in effect at September
30, 2007.
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
MTN Medium Term Note
See accompanying notes to financial statements.
20
GAMCO WESTWOOD INTERMEDIATE BOND FUND
SCHEDULE OF INVESTMENTS -- SEPTEMBER 30, 2007
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT COST VALUE
- ---------- ----------- -----------
CORPORATE BONDS -- 45.7%
BANKING -- 5.5%
$ 300,000 Bank of America Corp.,
5.375%, 06/15/14 .................. $ 310,431 $ 297,082
225,000 Citigroup Inc.,
6.500%, 01/18/11 .................. 239,424 234,124
----------- -----------
549,855 531,206
----------- -----------
COMPUTER HARDWARE -- 3.4%
325,000 Hewlett-Packard Co.,
3.625%, 03/15/08 .................. 325,133 322,730
----------- -----------
DIVERSIFIED INDUSTRIAL -- 2.6%
250,000 General Electric Co.,
5.000%, 02/01/13 .................. 252,164 248,103
----------- -----------
ENERGY AND UTILITIES: NATURAL GAS -- 2.1%
200,000 Apache Corp.,
5.250%, 04/15/13 .................. 199,535 199,121
----------- -----------
ENERGY AND UTILITIES: OIL -- 6.7%
200,000 Anadarko Petroleum Corp.,
6.094%, 09/15/09 (a) .............. 200,255 198,936
225,000 ChevronTexaco Capital Co.,
3.375%, 02/15/08 .................. 225,138 223,579
225,000 Occidental Petroleum
Corp., MTN,
4.250%, 03/15/10 .................. 225,000 223,650
----------- -----------
650,393 646,165
----------- -----------
FINANCIAL SERVICES -- 15.7%
200,000 American Express
Credit Corp., MTN,
5.913%, 06/16/11 (a) .............. 200,000 198,340
260,000 International Bank for
Reconstruction &
Development,
8.625%, 10/15/16 .................. 313,012 329,350
275,000 Merrill Lynch & Co. Inc.,
MTN, Series C,
5.000%, 01/15/15 .................. 275,215 260,917
200,000 SLM Corp.,
5.450%, 04/25/11 .................. 199,987 188,616
225,000 The Bear Stearns Co. Inc.,
2.875%, 07/02/08 .................. 222,804 220,465
300,000 The Goldman Sachs
Group Inc.,
6.650%, 05/15/09 .................. 304,093 307,761
----------- -----------
1,515,111 1,505,449
----------- -----------
FOOD AND BEVERAGE -- 2.5%
250,000 Anheuser-Busch Cos. Inc.,
4.375%, 01/15/13 .................. 247,117 238,118
----------- -----------
REAL ESTATE INVESTMENT TRUSTS -- 1.7%
150,000 Archstone-Smith Trust,
7.200%, 03/01/13 .................. 147,042 159,225
----------- -----------
RETAIL -- 2.2%
200,000 Wal-Mart Stores Inc.,
6.875%, 08/10/09 .................. 204,510 206,828
----------- -----------
TELECOMMUNICATIONS -- 1.3%
125,000 Verizon Communications Inc.,
Deb., Insured by MBIA Inc.,
6.460%, 04/15/08 .................. 125,242 126,406
----------- -----------
TRANSPORTATION -- 2.0%
200,000 Burlington Northern
Santa Fe Corp.,
5.650%, 05/01/17 .................. 199,084 196,296
----------- -----------
TOTAL
CORPORATE BONDS ................... 4,415,186 4,379,647
----------- -----------
PRINCIPAL MARKET
AMOUNT COST VALUE
- ---------- ----------- -----------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 24.6%
FEDERAL HOME LOAN BANK -- 4.5%
$ 175,000 3.875%, 01/15/10 .................. $ 170,722 $ 173,053
250,000 5.375%, 05/18/16 .................. 251,476 257,734
----------- -----------
422,198 430,787
----------- -----------
FEDERAL HOME LOAN MORTGAGE CORP. -- 2.6%
250,000 3.625%, 09/15/08 .................. 247,558 247,790
----------- -----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 9.8%
250,000 4.250%, 05/15/09 .................. 248,572 249,449
250,000 4.250%, 08/15/10 .................. 247,603 248,904
175,000 5.375%, 11/15/11 .................. 175,597 180,541
134,327 Pool #745122,
5.500%, 09/01/20 ............... 134,114 134,195
128,864 Pool #255554,
5.500%, 01/01/35 ............... 130,915 126,499
----------- -----------
936,801 939,588
----------- -----------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 7.7%
8,547 Pool #580871,
6.500%, 12/15/31 .................. 8,565 8,762
84,948 Pool #562288,
6.000%, 12/15/33 .................. 86,605 85,662
140,640 Pool #604946,
5.500%, 01/15/34 .................. 142,692 138,850
122,164 Pool #604970,
5.500%, 01/15/34 .................. 123,590 120,608
166,042 Pool #003747,
5.000%, 08/20/35 .................. 164,544 159,457
229,954 Pool #550728,
5.500%, 11/15/35 .................. 230,476 226,932
----------- -----------
756,472 740,271
----------- -----------
TOTAL U.S. GOVERNMENT
AGENCY OBLIGATIONS ................ 2,363,029 2,358,436
----------- -----------
U.S. GOVERNMENT OBLIGATIONS -- 26.1%
U.S. TREASURY BONDS -- 9.9%
250,000 7.125%, 02/15/23 .................. 305,956 310,352
300,000 6.125%, 11/15/27 .................. 308,530 347,226
275,000 5.500%, 08/15/28 .................. 300,432 296,914
----------- -----------
914,918 954,492
----------- -----------
U.S. TREASURY INFLATION INDEXED NOTES -- 3.0%
275,000 0.875%, 04/15/10 .................. 303,136 292,426
----------- -----------
U.S. TREASURY NOTES -- 13.2%
275,000 4.375%, 01/31/08 .................. 275,386 275,387
200,000 4.875%, 08/31/08 .................. 199,927 201,359
275,000 4.750%, 05/15/14 .................. 280,870 281,274
300,000 4.250%, 08/15/15 .................. 298,631 295,735
200,000 5.125%, 05/15/16 .................. 201,284 208,453
----------- -----------
1,256,098 1,262,208
----------- -----------
TOTAL U.S. GOVERNMENT
OBLIGATIONS ....................... 2,474,152 2,509,126
----------- -----------
TOTAL
INVESTMENTS -- 96.4% .............. $ 9,252,367 9,247,209
===========
OTHER ASSETS AND LIABILITIES (NET) -- 3.6% ......... 342,666
-----------
NET ASSETS -- 100.0% ............................... $ 9,589,875
===========
- ----------
(a) Floating rate security. The rate disclosed is that in effect at September
30, 2007.
MTN Medium Term Note
See accompanying notes to financial statements.
21
GAMCO WESTWOOD SMALLCAP EQUITY FUND
SCHEDULE OF INVESTMENTS -- SEPTEMBER 30, 2007
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
- ---------- ----------- -----------
COMMON STOCKS -- 93.5%
AEROSPACE -- 4.8%
4,500 Moog Inc., Cl. A+ .................... $ 123,455 $ 197,730
5,100 Teledyne Technologies Inc.+ .......... 177,793 272,289
----------- -----------
301,248 470,019
----------- -----------
AUTOMOTIVE: PARTS AND ACCESSORIES -- 2.1%
9,494 Noble International Ltd. ............. 186,143 202,127
----------- -----------
BUILDING AND CONSTRUCTION -- 2.5%
2,800 Washington Group
International Inc.+ ............... 147,642 245,868
----------- -----------
BUSINESS SERVICES -- 8.0%
5,866 Intermec Inc.+ ....................... 143,577 153,220
4,800 Macquarie Infrastucture
Co. LLC ........................... 135,750 185,232
3,500 The Brink's Co. ...................... 192,858 195,580
4,400 URS Corp.+ ........................... 154,718 248,380
----------- -----------
626,903 782,412
----------- -----------
COMPUTER SOFTWARE AND SERVICES -- 10.2%
2,300 Hurco Cos. Inc.+ ..................... 70,669 124,338
19,700 Lawson Software Inc.+ ................ 194,567 197,197
6,500 ManTech International
Corp., Cl. A+ ..................... 192,179 233,870
7,400 SI International Inc.+ ............... 208,126 211,418
22,318 Tier Technologies Inc., Cl. B+ ....... 217,962 227,644
----------- -----------
883,503 994,467
----------- -----------
CONSUMER PRODUCTS -- 5.5%
6,600 Alberto-Culver Co. ................... 145,388 163,614
9,271 Kimball International Inc.,
Cl. B ............................. 121,772 105,504
6,900 The Warnaco Group Inc.+ .............. 151,317 269,583
----------- -----------
418,477 538,701
----------- -----------
DIVERSIFIED INDUSTRIAL -- 8.0%
14,000 Hawk Corp., Cl. A+ ................... 193,200 194,180
2,700 Kennametal Inc. ...................... 119,709 226,746
33,723 Magnetek Inc.+ ....................... 150,617 161,870
2,443 Texas Industries Inc. ................ 186,585 191,776
----------- -----------
650,111 774,572
----------- -----------
ENERGY AND UTILITIES -- 4.9%
4,500 ALLETE Inc. .......................... 193,559 201,420
5,700 Oil States International Inc.+ ....... 180,618 275,310
----------- -----------
374,177 476,730
----------- -----------
EQUIPMENT AND SUPPLIES -- 1.6%
3,250 Tennant Co. .......................... 139,912 158,275
----------- -----------
FINANCIAL SERVICES -- 9.3%
7,200 Boston Private Financial
Holdings Inc. ..................... 187,392 200,448
4,400 Hilb Rogal & Hobbs Co. ............... 194,703 190,652
4,950 KBW Inc.+ ............................ 158,910 142,461
6,700 Sterling Financial Corp. ............. 218,487 180,297
3,400 Stifel Financial Corp.+ .............. 133,516 196,656
----------- -----------
893,008 910,514
----------- -----------
FOOD AND BEVERAGE -- 5.4%
19,000 Del Monte Foods Co. .................. 199,893 199,500
5,100 J & J Snack Foods Corp. .............. 118,995 177,582
12,438 Triarc Cos. Inc., Cl. A .............. 188,411 152,863
----------- -----------
507,299 529,945
----------- -----------
MARKET
SHARES COST VALUE
- ---------- ----------- -----------
HEALTH CARE -- 7.4%
18,900 Five Star Quality Care Inc.+ ......... $ 196,299 $ 155,358
6,850 K-V Pharmaceutical Co.,
Cl. A+ ............................ 192,197 195,910
16,882 Lifecore Biomedical Inc.+ ............ 191,486 217,778
3,600 West Pharmaceutical
Services Inc. ..................... 148,028 149,976
----------- -----------
728,010 719,022
----------- -----------
HOTELS AND GAMING -- 3.8%
9,200 Marcus Corp. ......................... 188,682 176,640
3,700 Orient-Express Hotels Ltd.,
Cl. A ............................. 116,137 189,699
----------- -----------
304,819 366,339
----------- -----------
METALS AND MINING -- 4.9%
9,100 Claymont Steel Holdings
Inc.+ ............................. 175,276 184,275
5,500 Northwest Pipe Co.+ .................. 176,350 208,010
1,100 RTI International Metals
Inc.+ ............................. 100,629 87,186
----------- -----------
452,255 479,471
----------- -----------
REAL ESTATE INVESTMENT TRUSTS -- 2.7%
4,100 LaSalle Hotel Properties ............. 131,259 172,528
4,700 Lexington Realty Trust ............... 101,694 94,047
----------- -----------
232,953 266,575
----------- -----------
RETAIL -- 1.6%
9,700 CKE Restaurants Inc. ................. 161,572 157,237
----------- -----------
SPECIALTY CHEMICALS -- 3.4%
4,270 FMC Corp. ............................ 188,879 222,125
3,500 H.B. Fuller Co. ...................... 95,236 103,880
----------- -----------
284,115 326,005
----------- -----------
TELECOMMUNICATIONS -- 2.7%
14,076 General Communication
Inc., Cl. A+ ...................... 156,343 170,883
9,900 HickoryTech Corp. .................... 97,372 95,931
----------- -----------
253,715 266,814
----------- -----------
TRANSPORTATION -- 4.7%
4,300 Genco Shipping &
Trading Ltd. ...................... 113,712 281,779
5,700 Horizon Lines Inc., Cl. A ............ 64,454 174,021
----------- -----------
178,166 455,800
----------- -----------
TOTAL
COMMON STOCKS ..................... 7,724,028 9,120,893
----------- -----------
PRINCIPAL
AMOUNT
- ----------
U.S. GOVERNMENT OBLIGATIONS -- 11.6%
$1,134,000 U.S. Treasury Bills,
3.684% to 4.446%++,
10/04/07 to 12/27/07 .............. 1,128,062 1,127,944
----------- -----------
TOTAL
INVESTMENTS -- 105.1% ............. $ 8,852,090 10,248,837
===========
OTHER ASSETS AND LIABILITIES (NET) -- (5.1)% ....... (493,546)
-----------
NET ASSETS -- 100.0% ............................... $ 9,755,291
===========
- ----------
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
See accompanying notes to financial statements.
22
GAMCO WESTWOOD INCOME FUND
SCHEDULE OF INVESTMENTS -- SEPTEMBER 30, 2007
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
- ---------- ----------- -----------
COMMON STOCKS -- 52.1%
BANKING -- 6.9%
15,000 Bank of America Corp. ................ $ 735,180 $ 754,050
11,000 Citigroup Inc. ....................... 568,745 513,370
----------- -----------
1,303,925 1,267,420
----------- -----------
BUSINESS SERVICES -- 4.4%
12,200 Macquarie Infrastucture Co.
LLC ............................... 424,197 470,798
8,000 Paychex Inc. ......................... 351,129 328,000
----------- -----------
775,326 798,798
----------- -----------
COMPUTER SOFTWARE AND SERVICES -- 1.1%
7,000 Microsoft Corp. ...................... 208,870 206,220
----------- -----------
DIVERSIFIED INDUSTRIAL -- 1.8%
8,000 General Electric Co. ................. 309,575 331,200
----------- -----------
ELECTRONICS -- 2.3%
8,000 Intel Corp. .......................... 196,321 206,880
6,000 Microchip Technology Inc. ............ 227,140 217,920
----------- -----------
423,461 424,800
----------- -----------
ENERGY AND UTILITIES: INTEGRATED -- 1.1%
4,000 Integrys Energy Group Inc. ........... 203,851 204,920
----------- -----------
ENERGY AND UTILITIES: NATURAL GAS -- 2.5%
8,800 Enterprise Products
Partners LP ....................... 238,981 266,200
8,000 Spectra Energy Corp. ................. 208,775 195,840
----------- -----------
447,756 462,040
----------- -----------
ENERGY AND UTILITIES: OIL -- 4.6%
4,900 BreitBurn Energy
Partners LP ....................... 99,298 159,005
2,000 Chevron Corp. ........................ 169,778 187,160
3,000 ConocoPhillips ....................... 240,082 263,310
5,363 Exterran Partners LP ................. 133,476 171,616
2,100 Teekay Offshore Partners LP .......... 48,800 59,745
----------- -----------
691,434 840,836
----------- -----------
ENERGY AND UTILITIES: SERVICES -- 1.9%
9,000 Halliburton Co. ...................... 318,703 345,600
----------- -----------
FINANCIAL SERVICES -- 9.8%
5,000 AllianceBernstein Holding LP ......... 388,423 440,350
5,000 Federal National
Mortgage Association .............. 324,095 304,050
7,000 H&R Block Inc. ....................... 157,780 148,260
3,000 HSBC Holdings plc, ADR ............... 274,455 277,800
5,000 Susquehanna Bancshares Inc. .......... 113,735 100,500
11,000 U.S. Bancorp ......................... 363,413 357,830
3,000 Valley National Bancorp .............. 67,760 66,540
3,000 Wells Fargo & Co. .................... 105,650 106,860
----------- -----------
1,795,311 1,802,190
----------- -----------
FOOD AND BEVERAGE -- 0.9%
6,095 Reddy Ice Holdings Inc. .............. 135,941 160,725
----------- -----------
HEALTH CARE -- 3.4%
20,000 Pfizer Inc. .......................... 508,178 488,600
3,000 Wyeth ................................ 161,958 133,650
----------- -----------
670,136 622,250
----------- -----------
METALS AND MINING -- 1.6%
11,000 Penn Virginia Resource
Partners LP ....................... 301,645 301,400
----------- -----------
REAL ESTATE -- 0.6%
3,000 Brookfield Asset
Management Inc., Cl. A ............ 98,362 115,500
----------- -----------
MARKET
SHARES COST VALUE
- ---------- ----------- -----------
REAL ESTATE INVESTMENT TRUSTS -- 3.1%
6,100 Getty Realty Corp. ................... $ 170,406 $ 165,920
7,500 Healthcare Realty Trust Inc. ......... 267,606 199,950
4,082 Rayonier Inc. ........................ 162,565 196,099
----------- -----------
600,577 561,969
----------- -----------
RETAIL -- 0.9%
5,000 The Home Depot Inc. .................. 198,531 162,200
----------- -----------
SPECIALTY CHEMICALS -- 1.1%
4,000 E.I. du Pont de Nemours
& Co. ............................. 208,360 198,240
----------- -----------
TELECOMMUNICATIONS -- 2.4%
10,000 Verizon Communications Inc. .......... 417,736 442,800
----------- -----------
TRANSPORTATION -- 1.7%
9,200 Teekay LNG Partners LP ............... 288,982 310,408
----------- -----------
TOTAL
COMMON STOCKS ..................... 9,398,482 9,559,516
----------- -----------
PREFERRED STOCKS -- 16.1%
BROADCASTING -- 1.6%
12,000 CBS Corp., 7.250% Pfd. ............... 304,396 299,640
----------- -----------
FINANCIAL SERVICES -- 12.8%
12,000 Bank One Capital Trust VI,
7.200% Pfd. ....................... 305,738 300,960
13,500 Barclays Bank plc,
6.625% Pfd., Ser. 2 ............... 342,380 326,565
6,000 Federal National
Mortgage Association,
7.000% Pfd., Ser. O (a) ........... 332,225 314,250
14,300 General Electric
Capital Corp., 5.875% Pfd. ........ 352,755 343,057
13,700 Lehman Brothers
Holdings Inc.,
6.503% Pfd., Ser. G (a) ........... 347,510 329,348
13,400 MetLife Inc.,
6.694% Pfd., Ser. A (a) ........... 348,190 338,350
3,000 Morgan Stanley
Capital Trust VIII,
6.450% Pfd. ....................... 69,903 67,020
12,900 Wells Fargo Capital Trust IV,
7.000% Pfd. ....................... 331,400 321,339
----------- -----------
2,430,101 2,340,889
----------- -----------
REAL ESTATE INVESTMENT TRUSTS -- 1.7%
14,300 Public Storage Inc.,
6.625% Pfd., Ser. M ............... 356,856 316,745
----------- -----------
TOTAL
PREFERRED STOCKS .................. 3,091,353 2,957,274
----------- -----------
CONVERTIBLE PREFERRED STOCKS -- 6.0%
ENERGY AND UTILITIES: INTEGRATED -- 1.9%
5,100 Entergy Corp.,
7.625% Cv. Pfd. ................... 270,415 340,935
----------- -----------
FINANCIAL SERVICES -- 2.8%
500 Alleghany Corp.,
5.750% Cv. Pfd. ................... 139,920 185,625
12,500 Lehman Brothers
Holdings Inc.,
6.250% Cv. Pfd., Ser. GIS ......... 332,511 331,875
----------- -----------
472,431 517,500
----------- -----------
METALS AND MINING -- 1.4%
1,600 Freeport-McMoRan
Copper & Gold Inc.,
6.750% Cv. Pfd. ................... 162,622 248,160
----------- -----------
TOTAL CONVERTIBLE
PREFERRED STOCKS .................. 905,468 1,106,595
----------- -----------
See accompanying notes to financial statements.
23
GAMCO WESTWOOD INCOME FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- SEPTEMBER 30, 2007
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT COST VALUE
- ---------- ----------- -----------
CORPORATE BONDS -- 3.8%
ENERGY AND UTILITIES: OIL -- 1.6%
$ 300,000 Anadarko Petroleum Corp.,
6.094%, 09/15/09 (a) .............. $ 300,179 $ 298,404
----------- -----------
FINANCIAL SERVICES -- 1.3%
250,000 American Express
Credit Corp., MTN,
5.913%, 06/16/11 (a) .............. 250,000 247,925
----------- -----------
METALS AND MINING -- 0.8%
140,000 Freeport-McMoRan
Copper & Gold Inc.,
8.564%, 04/01/15 (a) .............. 142,929 145,775
----------- -----------
TOTAL
CORPORATE BONDS ................... 693,108 692,104
----------- -----------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 11.4%
FEDERAL HOME LOAN BANK -- 6.8%
375,000 4.625%, 01/18/08 .................. 374,433 374,653
325,000 5.125%, 06/18/08 .................. 325,192 325,864
550,000 4.625%, 11/21/08 .................. 547,068 550,630
----------- -----------
1,246,693 1,251,147
----------- -----------
FEDERAL HOME LOAN MORTGAGE CORP. -- 2.7%
500,000 3.625%, 09/15/08 .................. 492,449 495,580
----------- -----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 1.9%
350,000 3.250%, 11/15/07 .................. 349,157 349,157
----------- -----------
TOTAL U.S. GOVERNMENT
AGENCY OBLIGATIONS ................ 2,088,299 2,095,884
----------- -----------
PRINCIPAL MARKET
AMOUNT COST VALUE
- ---------- ----------- -----------
U.S. GOVERNMENT OBLIGATIONS -- 10.4%
U.S. TREASURY BILLS -- 2.3%
$ 424,000 U.S. Treasury Bills,
3.864% to 4.065%++,
10/11/07 to 03/20/08 .............. $ 421,333 $ 421,345
----------- -----------
U.S. TREASURY NOTES -- 8.1%
325,000 4.875%, 05/31/08 .................. 325,115 326,574
550,000 4.875%, 08/31/08 .................. 549,772 553,739
600,000 3.375%, 12/15/08 .................. 588,856 595,828
----------- -----------
1,463,743 1,476,141
----------- -----------
TOTAL U.S. GOVERNMENT
OBLIGATIONS ....................... 1,885,076 1,897,486
----------- -----------
TOTAL
INVESTMENTS -- 99.8% .............. $18,061,786 18,308,859
===========
OTHER ASSETS AND LIABILITIES (NET) -- 0.2% ......... 41,604
-----------
NET ASSETS -- 100.0% ............................... $18,350,463
===========
- ----------
(a) Floating rate security. The rate disclosed is that in effect at September
30, 2007.
++ Represents annualized yield at date of purchase.
ADR American Depository Receipt
MTN Medium Term Note
See accompanying notes to financial statements.
24
GAMCO WESTWOOD FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2007
- --------------------------------------------------------------------------------
MIGHTY EQUITY BALANCED INTERMEDIATE SMALLCAP INCOME
MITES(SM) FUND FUND FUND BOND FUND EQUITY FUND FUND
-------------- ------------ ------------ ------------ ----------- -----------
ASSETS:
Investments, at value (cost $39,557,922,
$154,654,833, $137,968,653, $9,252,367,
$8,852,090, and $18,061,786,
respectively) .............................. $ 53,012,994 $186,951,298 $154,286,854 $ 9,247,209 $10,248,837 $18,308,859
Cash ......................................... 1,276 6,642,739 7,347,659 314,083 391 --
Receivable for investments sold .............. 82,650 -- -- -- -- --
Receivable for Fund shares sold .............. 925,690 368,740 163,190 80 15,231 52,254
Dividends and interest receivable ............ 33,106 267,197 856,656 105,433 6,213 79,206
Prepaid expenses ............................. 26,358 28,075 27,282 20,368 18,547 27,730
-------------- ------------ ------------ ------------ ----------- -----------
TOTAL ASSETS ................................. 54,082,074 194,258,049 162,681,641 9,687,173 10,289,219 18,468,049
-------------- ------------ ------------ ------------ ----------- -----------
LIABILITIES:
Payable to custodian ......................... -- -- -- -- -- 70,689
Payable for investments purchased ............ 975,439 -- 3,269,667 50,432 491,969 --
Payable for Fund shares redeemed ............. 40,024 138,021 283,445 54 6,936 991
Distributions payable ........................ -- 156 -- 5,952 -- --
Payable for investment advisory fees ......... 40,520 155,258 96,334 12,984 7,944 14,493
Payable for distribution fees ................ 11,849 39,691 33,951 2,060 2,291 4,007
Payable for accounting fees .................. -- 3,753 3,753 -- -- --
Payable for legal and audit fees ............. 26,984 70,621 61,080 17,891 18,183 19,875
Payable for shareholder communications
expenses ................................... 13,188 20,288 14,038 3,579 1,765 2,129
Payable for shareholder services fees ........ 5,980 43,140 14,914 1,985 2,468 2,643
Other accrued expenses ....................... 7,205 4,305 3,944 2,361 2,372 2,759
-------------- ------------ ------------ ------------ ----------- -----------
TOTAL LIABILITIES ............................ 1,121,189 475,233 3,781,126 97,298 533,928 117,586
-------------- ------------ ------------ ------------ ----------- -----------
NET ASSETS ................................... $ 52,960,885 $193,782,816 $158,900,515 $ 9,589,875 $ 9,755,291 $18,350,463
============== ============ ============ ============ =========== ===========
NET ASSETS CONSIST OF:
Paid-in capital, at $0.001 par value ......... $ 34,673,296 $137,325,737 $131,272,963 $ 9,634,728 $15,208,041 $17,726,485
Accumulated net investment income (loss) ..... 195,407 531,934 73,636 (465) (1,369) 154,764
Accumulated net realized gain (loss) on
investments and foreign currency
transactions ............................... 4,636,386 23,628,680 11,235,715 (39,241) (6,848,128) 222,141
Net unrealized appreciation/(depreciation)
on investments ............................. 13,455,072 32,296,465 16,318,201 (5,158) 1,396,747 247,073
Net unrealized appreciation on foreign
currency translations ...................... 724 -- -- 11 -- --
-------------- ------------ ------------ ----------- ----------- -----------
NET ASSETS .................................... $ 52,960,885 $193,782,816 $158,900,515 $ 9,589,875 $ 9,755,291 $18,350,463
============== ============ ============ ============ =========== ===========
SHARES OF BENEFICIAL INTEREST:
CLASS AAA:
Net assets ................................... $ 48,251,973 $189,912,471 $152,185,452 $ 9,413,020 $ 8,672,307 $17,871,237
============== ============ ============ ============ =========== ===========
Shares of beneficial interest outstanding;
unlimited number of shares authorized ...... 2,829,234 15,030,856 12,100,309 871,300 578,526 1,750,609
============== ============ ============ ============ =========== ===========
NET ASSET VALUE, offering and redemption
price per share ............................ $ 17.05 $ 12.63 $ 12.58 $ 10.80 $ 14.99 $ 10.21
============== ============ ============ ============ =========== ===========
CLASS A:
Net assets ................................... $ 2,246,495 $ 3,527,426 $ 5,518,545 $ 68,903 $ 778,064 $ 79,446
============== ============ ============ ============ =========== ===========
Shares of beneficial interest outstanding;
unlimited number of shares authorized ...... 132,606 280,628 436,954 6,378 52,239 7,540
============== ============ ============ ============ =========== ===========
NET ASSET VALUE and redemption price per
share $ 16.94 $ 12.57 $ 12.63 $ 10.80 $ 14.89 $ 10.54
============== ============ ============ ============ =========== ===========
Maximum offering price per share (NAV/.96,
based on maximum sales charge of 4.00% of
the offering price) ........................ $ 17.65 $ 13.09 $ 13.16 $ 11.25 $ 15.51 $ 10.98
============== ============ ============ ============ =========== ===========
CLASS B:
Net assets ................................... $ 421,777 $ 23,151 $ 193,835 $ 92,897 $ 7,215 $ 2,287
============== ============ ============ ============ =========== ===========
Shares of beneficial interest outstanding;
unlimited number of shares authorized ...... 26,018 1,873 15,238 8,603 499.8 212.3
============== ============ ============ ============ =========== ===========
NET ASSET VALUE and offering price per
share (a) .................................. $ 16.21 $ 12.36 $ 12.72 $ 10.80 $ 14.44 $ 10.77
============== ============ ============ ============ =========== ===========
CLASS C:
Net assets ................................... $ 2,040,640 $ 319,768 $ 1,002,683 $ 15,055 $ 297,705 $ 397,493
============== ============ ============ ============ =========== ===========
Shares of beneficial interest outstanding;
unlimited number of shares authorized ...... 126,530 25,880 78,690 1,464 20,806 35,442
============== ============ ============ ============ =========== ===========
NET ASSET VALUE and offering price per
share (a) ................................ $ 16.13 $ 12.36 $ 12.74 $ 10.28 $ 14.31 $ 11.22
============== ============ ============ ============ =========== ===========
- ----------
(a) Redemption price varies based on the length of time held.
See accompanying notes to financial statements.
25
GAMCO WESTWOOD FUNDS
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 2007
- --------------------------------------------------------------------------------
MIGHTY EQUITY BALANCED INTERMEDIATE SMALLCAP INCOME
MITES(SM) FUND FUND FUND BOND FUND EQUITY FUND FUND
-------------- ------------ ------------ ------------ ------------ ----------
INVESTMENT INCOME:
Dividends (net of foreign taxes of $5,756,
$528, $585,$0, $0, and $0, respectively) .. $ 811,292 $ 3,411,792 $ 1,707,617 -- $ 116,065 $ 641,522
Interest .................................... 76,217 38,612 2,891,159 $ 446,477 5,648 249,812
-------------- ------------ ------------ ------------ ------------ ----------
TOTAL INVESTMENT INCOME ..................... 887,509 3,450,404 4,598,776 446,477 121,713 891,334
-------------- ------------ ------------ ------------ ------------ ----------
EXPENSES:
Investment advisory fees .................... 412,566 1,876,762 1,167,818 56,592 100,094 144,938
Distribution fees - Class AAA ............... 99,418 460,415 372,230 23,016 22,859 35,781
Distribution fees - Class A ................. 1,469 15,766 28,184 237 2,837 387
Distribution fees - Class B ................. 4,895 285 1,833 1,558 70 22
Distribution fees - Class C ................. 7,060 3,284 9,969 19 2,912 1,017
Accounting fees ............................. -- 45,000 45,000 -- -- --
Custodian fees .............................. 28,526 103,548 128,112 11,208 21,697 38,699
Interest expense ............................ 1,477 -- -- -- 100 367
Legal and audit fees ........................ 48,063 70,587 63,358 26,253 33,871 52,806
Registration expenses ....................... 9,344 20,685 15,376 13,050 14,037 13,853
Shareholder communications expenses ......... 27,842 53,169 40,757 8,552 6,400 8,722
Shareholder services fees ................... 27,418 189,750 100,693 8,799 13,396 13,141
Trustees' fees .............................. 2,277 10,883 8,926 559 585 801
Miscellaneous expenses ...................... 17,938 23,743 21,226 6,263 9,136 8,624
-------------- ------------ ------------ ------------ ------------ ----------
TOTAL EXPENSES .............................. 688,293 2,873,877 2,003,482 156,106 227,994 319,158
-------------- ------------ ------------ ------------ ------------ ----------
LESS:
Expense reimbursements (see Note 3) ....... -- -- -- (50,811) (52,880) (62,857)
Custodian fee credits ..................... (619) (103,069) (127,394) (9,725) (21,318) (37,576)
-------------- ------------ ------------ ------------ ------------ ----------
TOTAL REIMBURSEMENTS AND CREDITS ............ (619) (103,069) (127,394) (60,536) (74,198) (100,433)
-------------- ------------ ------------ ------------ ------------ ----------
NET EXPENSES ................................ 687,674 2,770,808 1,876,088 95,570 153,796 218,725
-------------- ------------ ------------ ------------ ------------ ----------
NET INVESTMENT INCOME (LOSS) ................ 199,835 679,596 2,722,688 350,907 (32,083) 672,609
-------------- ------------ ------------ ------------ ------------ ----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY:
Net realized gain (loss) on investments ..... 5,199,138 25,589,050 11,476,050 (2,613) 1,433,147 304,989
Net realized loss on foreign currency
transactions .............................. (1,118) (2) -- -- -- --
-------------- ------------ ------------ ------------ ------------ ----------
Net realized gain (loss) on investments and
foreign currency transactions ............. 5,198,020 25,589,048 11,476,050 (2,613) 1,433,147 304,989
-------------- ------------ ------------ ------------ ------------ ----------
Net change in unrealized appreciation/
depreciation on investments ............... 2,971,714 7,079,829 5,542,110 2,737 463,604 1,934
Net change in unrealized appreciation/
depreciation on foreign currency
translations .............................. 543 -- -- 11 -- --
-------------- ------------ ------------ ------------ ------------ ----------
Net change in unrealized appreciation/
depreciation on investments and foreign
currency translations ..................... 2,972,257 7,079,829 5,542,110 2,748 463,604 1,934
-------------- ------------ ------------ ------------ ------------ ----------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN CURRENCY ....... 8,170,277 32,668,877 17,018,160 135 1,896,751 306,923
-------------- ------------ ------------ ------------ ------------ ----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ........................... $ 8,370,112 $ 33,348,473 $ 19,740,848 $ 351,042 $ 1,864,668 $ 979,532
============== ============ ============ ============ ============ ==========
See accompanying notes to financial statements.
26
GAMCO WESTWOOD FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
MIGHTY MITES(SM) FUND EQUITY FUND
-------------------------------- --------------------------------
FOR THE YEAR ENDED SEPTEMBER 30, FOR THE YEAR ENDED SEPTEMBER 30,
-------------------------------- --------------------------------
2007 2006 2007 2006
--------------- -------------- -------------- ---------------
OPERATIONS:
Net investment income (loss) ............................. $ 199,835 $ (125,865) $ 679,596 $ 1,000,235
Net realized gain on investments and foreign currency
transactions ........................................... 5,198,020 5,570,818 25,589,048 31,162,114
Net change in unrealized appreciation/depreciation on
investments and foreign currency translations .......... 2,972,257 (1,883,665) 7,079,829 (8,918,553)
--------------- -------------- -------------- ---------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ..... 8,370,112 3,561,288 33,348,473 23,243,796
--------------- -------------- -------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income
Class AAA ............................................ -- -- (737,096) (782,257)
Class A .............................................. -- -- (4,914) (14,014)
Class B .............................................. -- -- -- (77)
Class C .............................................. -- -- -- (619)
--------------- -------------- -------------- ---------------
-- -- (742,010) (796,967)
--------------- -------------- -------------- ---------------
Net realized gain on investments
Class AAA ............................................ (5,192,410) (5,443,979) (28,093,088) --
Class A .............................................. (567) (5,023) (451,192) --
Class B .............................................. (72,032) (53,095) (5,227) --
Class C .............................................. (45,681) (35,532) (52,506) --
--------------- -------------- -------------- ---------------
(5,310,690) (5,537,629) (28,602,013) --
--------------- -------------- -------------- ---------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS ...................... (5,310,690) (5,537,629) (29,344,023) (796,967)
--------------- -------------- -------------- ---------------
SHARES OF BENEFICIAL INTEREST TRANSACTIONS:
Proceeds from shares issued
Class AAA ............................................ 13,160,409 2,461,715 38,533,796 33,121,467
Class A .............................................. 2,241,765 1,008 564,785 1,707,348
Class B .............................................. -- -- -- --
Class C .............................................. 1,845,146 2,900 18,205 268,288
--------------- -------------- -------------- ---------------
17,247,320 2,465,623 39,116,786 35,097,103
--------------- -------------- -------------- ---------------
Proceeds from reinvestment of distributions
Class AAA ............................................ 4,658,234 5,123,877 27,658,190 726,922
Class A .............................................. 545 5,005 451,854 9,432
Class B .............................................. 71,845 52,941 3,906 41
Class C .............................................. 45,659 35,514 51,834 619
--------------- -------------- -------------- ---------------
4,776,283 5,217,337 28,165,784 737,014
--------------- -------------- -------------- ---------------
Cost of shares redeemed
Class AAA ............................................ (9,412,055) (15,297,041) (49,588,854) (64,882,159)
Class A .............................................. (11,391) (39,730) (363,055) (1,573,899)
Class B .............................................. (131,824) (15,709) (12,586) (1,442)
Class C .............................................. (176,399) (43,008) (71,724) (131,911)
--------------- -------------- -------------- ---------------
(9,731,669) (15,395,488) (50,036,219) (66,589,411)
--------------- -------------- -------------- ---------------
NET INCREASE (DECREASE) IN NET ASSETS FROM
SHARES OF BENEFICIAL INTEREST TRANSACTIONS ........... 12,291,934 (7,712,528) 17,246,351 (30,755,294)
--------------- -------------- -------------- ---------------
REDEMPTION FEES .......................................... 131 -- -- --
--------------- -------------- -------------- ---------------
NET INCREASE (DECREASE) IN NET ASSETS .................... 15,351,487 (9,688,869) 21,250,801 (8,308,465)
NET ASSETS:
Beginning of period ...................................... 37,609,398 47,298,267 172,532,015 180,840,480
--------------- -------------- -------------- ---------------
End of period ............................................ $ 52,960,885 $ 37,609,398 $ 193,782,816 $ 172,532,015
=============== ============== ============== ===============
Undistributed net investment income ...................... $ 195,407 $ 98,410 $ 531,934 $ 594,350
=============== ============== ============== ===============
See accompanying notes to financial statements.
27
GAMCO WESTWOOD FUNDS
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
BALANCED FUND INTERMEDIATE BOND FUND
-------------------------------- --------------------------------
FOR THE YEAR ENDED SEPTEMBER 30, FOR THE YEAR ENDED SEPTEMBER 30,
-------------------------------- --------------------------------
2007 2006 2007 2006
--------------- -------------- -------------- ---------------
OPERATIONS:
Net investment income .................................... $ 2,722,688 $ 2,651,377 $ 350,907 $ 389,137
Net realized gain (loss) on investments .................. 11,476,050 19,456,154 (2,613) (12,289)
Net change in unrealized appreciation/depreciation on
investments ............................................ 5,542,110 (7,798,557) 2,748 (90,810)
--------------- -------------- -------------- ---------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ..... 19,740,848 14,308,974 351,042 286,038
--------------- -------------- -------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income
Class AAA ............................................ (2,562,323) (2,709,658) (350,708) (373,401)
Class A .............................................. (81,823) (67,539) (2,513) (5,320)
Class B .............................................. (1,846) (454) (4,748) (10,351)
Class C .............................................. (9,350) (2,979) (73) (65)
--------------- -------------- -------------- ---------------
(2,655,342) (2,780,630) (358,042) (389,137)
--------------- -------------- -------------- ---------------
Net realized gain on investments
Class AAA ............................................ (18,214,060) (9,760,439) -- (14,113)
Class A .............................................. (697,805) (364,172) -- (241)
Class B .............................................. (22,753) (9,202) -- (665)
Class C .............................................. (127,276) (61,573) -- --*
--------------- -------------- -------------- ---------------
(19,061,894) (10,195,386) -- (15,019)
--------------- -------------- -------------- ---------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS ...................... (21,717,236) (12,976,016) (358,042) (404,156)
--------------- -------------- -------------- ---------------
SHARES OF BENEFICIAL INTEREST TRANSACTIONS:
Proceeds from shares issued
Class AAA ............................................ 27,827,449 27,845,576 1,292,471 2,310,376
Class A .............................................. 376,204 795,329 9,000 168,497
Class B .............................................. 43,323 3,171 -- 137,989
Class C .............................................. 174,540 103,367 89,952 53,292
--------------- -------------- -------------- ---------------
28,421,516 28,747,443 1,391,423 2,670,154
--------------- -------------- -------------- ---------------
Proceeds from reinvestment of distributions
Class AAA ............................................ 19,991,375 11,833,526 272,125 329,870
Class A .............................................. 685,203 388,820 2,478 5,414
Class B .............................................. 15,985 8,142 880 5,372
Class C .............................................. 108,766 52,080 17 --
--------------- -------------- -------------- ---------------
20,801,329 12,282,568 275,500 340,656
--------------- -------------- -------------- ---------------
Cost of shares redeemed
Class AAA ............................................ (38,789,648) (40,477,393) (2,061,718) (2,883,978)
Class A .............................................. (1,054,294) (1,305,055) (34,365) (138,752)
Class B .............................................. (3,077) (11,401) (190,022) (235,964)
Class C .............................................. (209,433) (208,504) (75,258) (53,344)
--------------- -------------- -------------- ---------------
(40,056,452) (42,002,353) (2,361,363) (3,312,038)
--------------- -------------- -------------- ---------------
NET INCREASE (DECREASE) IN NET ASSETS FROM
SHARES OF BENEFICIAL INTEREST TRANSACTIONS ............. 9,166,393 (972,342) (694,440) (301,228)
--------------- -------------- -------------- ---------------
NET INCREASE (DECREASE) IN NET ASSETS .................... 7,190,005 360,616 (701,440) (419,346)
NET ASSETS:
Beginning of period ...................................... 151,710,510 151,349,894 10,291,315 10,710,661
--------------- -------------- -------------- ---------------
End of period ............................................ $ 158,900,515 $ 151,710,510 $ 9,589,875 $ 10,291,315
=============== ============== ============== ===============
Undistributed net investment income ...................... $ 73,636 $ 2,000 -- --
=============== ============== ============== ===============
- ----------
* Amount represents less than $1.00.
See accompanying notes to financial statements.
28
GAMCO WESTWOOD FUNDS
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
SMALLCAP EQUITY FUND INCOME FUND
-------------------------------- --------------------------------
FOR THE YEAR ENDED SEPTEMBER 30, FOR THE YEAR ENDED SEPTEMBER 30,
-------------------------------- --------------------------------
2007 2006 2007 2006
--------------- -------------- -------------- ---------------
OPERATIONS:
Net investment income (loss) ............................. $ (32,083) $ 112,195 $ 672,609 $ 600,887
Net realized gain on investments ......................... 1,433,147 1,048,122 304,989 2,485,605
Net change in unrealized appreciation/depreciation on
investments ............................................ 463,604 (156,440) 1,934 (2,698,672)
--------------- -------------- -------------- ---------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ..... 1,864,668 1,003,877 979,532 387,820
--------------- -------------- -------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income
Class AAA ............................................ (105,452) -- (635,769) (415,259)
Class A .............................................. (4,971) -- (3,135) (2,324)
Class B .............................................. (18) -- (78) (23)
Class C .............................................. (1,872) -- (4,873) (162)
--------------- -------------- -------------- ---------------
(112,313) -- (643,855) (417,768)
--------------- -------------- -------------- ---------------
Net realized gain on investments
Class AAA ............................................ -- -- (2,261,447) (4,124,003)
Class A .............................................. -- -- (20,488) (24,170)
Class B .............................................. -- -- (414) (544)
Class C .............................................. -- -- (3,062) (3,976)
--------------- -------------- -------------- ---------------
-- -- (2,285,411) (4,152,693)
--------------- -------------- -------------- ---------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS ...................... (112,313) -- (2,929,266) (4,570,461)
--------------- -------------- -------------- ---------------
SHARES OF BENEFICIAL INTEREST TRANSACTIONS:
Proceeds from shares issued
Class AAA ............................................ 3,612,664 2,726,239 13,573,132 4,386,990
Class A .............................................. 382,618 278,007 81,406 288
Class B .............................................. -- -- -- --
Class C .............................................. 37,487 225,481 386,845 --
--------------- -------------- -------------- ---------------
4,032,769 3,229,727 14,041,383 4,387,278
--------------- -------------- -------------- ---------------
Proceeds from reinvestment of distributions
Class AAA ............................................ 77,961 -- 2,752,191 4,301,518
Class A .............................................. 4,969 -- 22,075 26,449
Class B .............................................. 18 -- 463 520
Class C .............................................. 1,871 -- 7,879 4,093
--------------- -------------- -------------- ---------------
84,819 -- 2,782,608 4,332,580
--------------- -------------- -------------- ---------------
Cost of shares redeemed
Class AAA ............................................ (5,355,936) (3,680,038) (8,584,925) (8,661,378)
Class A .............................................. (95,381) (26,885) (104,769) --
Class B .............................................. (70) (5,461) -- --
Class C .............................................. (27,549) -- (3,037) --
--------------- -------------- -------------- ---------------
(5,478,936) (3,712,384) (8,692,731) (8,661,378)
--------------- -------------- -------------- ---------------
NET INCREASE (DECREASE) IN NET ASSETS FROM
SHARES OF BENEFICIAL INTEREST TRANSACTIONS ........... (1,361,348) (482,657) 8,131,260 58,480
--------------- -------------- -------------- ---------------
NET INCREASE (DECREASE) IN NET ASSETS .................... 391,007 521,220 6,181,526 (4,124,161)
NET ASSETS:
Beginning of period ...................................... 9,364,284 8,843,064 12,168,937 16,293,098
--------------- -------------- -------------- ---------------
End of period ............................................ $ 9,755,291 $ 9,364,284 $ 18,350,463 $ 12,168,937
=============== ============== ============== ===============
Undistributed net investment income ...................... -- $ 112,195 $ 154,764 $ 11,745
=============== ============== ============== ===============
See accompanying notes to financial statements.
29
GAMCO WESTWOOD FUNDS
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. ORGANIZATION. The GAMCO Westwood Funds (the "Trust"), formerly The Westwood
Funds, was organized as a Massachusetts business trust on June 12, 1986. The
Trust is registered under the Investment Company Act of 1940, as amended (the
"1940 Act"), as a diversified open-end management investment company and
currently consists of six active separate investment portfolios: GAMCO Westwood
Mighty Mites(SM) Fund ("Mighty Mites(SM) Fund"), GAMCO Westwood Equity Fund
("Equity Fund"), GAMCO Westwood Balanced Fund ("Balanced Fund"), GAMCO Westwood
Intermediate Bond Fund ("Intermediate Bond Fund"), GAMCO Westwood SmallCap
Equity Fund ("SmallCap Equity Fund"), and GAMCO Westwood Income Fund ("Income
Fund") (individually, a "Fund" and collectively, the "Funds"), each with four
classes of shares outstanding. Each class of shares outstanding bears the same
voting, dividend, liquidation, and other rights and conditions, except that the
expenses incurred in the distribution and marketing of such shares are different
for each class.
The investment objectives of each Fund are as follows:
o Mighty Mites(SM) Fund seeks to provide long-term capital appreciation by
investing primarily in micro-capitalization equity securities.
o Equity Fund seeks to provide capital appreciation. The Fund's secondary
goal is to produce current income.
o Balanced Fund seeks to provide capital appreciation and current income
resulting in a high total investment return consistent with prudent
investment risk and a balanced investment approach.
o Intermediate Bond Fund seeks to maximize total return, while maintaining a
level of current income consistent with the maintenance of principal and
liquidity.
o SmallCap Equity Fund seeks to provide long-term capital appreciation by
investing primarily in smaller capitalization equity securities.
o Income Fund seeks to provide a high level of current income as well as
long-term capital appreciation by investing primarily in income producing
equity and fixed income securities.
2. SIGNIFICANT ACCOUNTING POLICIES. The preparation of financial statements in
accordance with United States ("U.S.") generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amounts and disclosures in the financial statements. Actual results could differ
from those estimates. The following is a summary of significant accounting
policies followed by the Funds in the preparation of their financial statements.
SECURITY VALUATION. Portfolio securities listed or traded on a nationally
recognized securities exchange or traded in the U.S. over-the-counter market for
which market quotations are readily available are valued at the last quoted sale
price or a market's official closing price as of the close of business on the
day the securities are being valued. If there were no sales that day, the
security is valued at the average of the closing bid and asked prices or, if
there were no asked prices quoted on that day, then the security is valued at
the closing bid price on that day. If no bid or asked prices are quoted on such
day, the security is valued at the most recently available price or, if the
Board of Trustees (the "Board") so determines, by such other method as the Board
shall determine in good faith to reflect its fair market value. Portfolio
securities traded on more than one national securities exchange or market are
valued according to the broadest and most representative market, as determined
by Gabelli Advisers, Inc. (the "Adviser").
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.
30
GAMCO WESTWOOD FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
In September 2006, the Financial Accounting Standards Board (the "FASB") issued
Statement of Financial Accounting Standards ("SFAS") 157, Fair Value
Measurements, which clarifies the definition of fair value and requires
companies to expand their disclosure about the use of fair value to measure
assets and liabilities in interim and annual periods subsequent to initial
recognition. Adoption of SFAS 157 requires the use of the price that would be
received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. SFAS 157 is
effective for financial statements issued for fiscal years beginning after
November 15, 2007, and interim periods within those fiscal years. At this time,
management is in the process of reviewing the requirements of SFAS 157 against
its current valuation policies to determine future applicability.
ACCOUNTING FOR REAL ESTATE INVESTMENT TRUSTS. The Balanced, Intermediate Bond,
SmallCap Equity, and Income Funds own shares of Real Estate Investment Trusts
("REITs") which report information on the source of their distributions
annually. Distributions received from REITs during the year which represent a
return of capital are recorded as a reduction to the cost of the individual REIT
and distributions which represent a capital gain dividend are recorded as a
realized long-term capital gain on investments.
SECURITIES SOLD SHORT. The Mighty Mites(SM) Fund may enter into short sale
transactions. Short selling involves selling securities that may or may not be
owned and, at times, borrowing the same securities for delivery to the
purchaser, with an obligation to replace such borrowed securities at a later
date. The proceeds received from short sales are recorded as liabilities and the
Mighty Mites(SM) Fund records an unrealized gain or loss to the extent of the
difference between the proceeds received and the value of an open short position
on the day of determination. The Mighty Mites(SM) Fund records a realized gain
or loss when the short position is closed out. By entering into a short sale,
the Mighty Mites(SM) Fund bears the market risk of an unfavorable change in the
price of the security sold short. Dividends on short sales are recorded as an
expense by the Mighty Mites(SM) Fund on the ex-dividend date and interest
expense is recorded on the accrual basis. The Mighty Mites(SM) Fund did not hold
any short positions as of September 30, 2007.
FOREIGN CURRENCY TRANSLATIONS. The books and records of the Funds are maintained
in U.S. dollars. Foreign currencies, investments, and other assets and
liabilities are translated into U.S. dollars at the current exchange rates.
Purchases and sales of investment securities, income, and expenses are
translated at the exchange rate prevailing on the respective dates of such
transactions. Unrealized gains and losses that result from changes in foreign
exchange rates and/or changes in market prices of securities have been included
in unrealized appreciation/depreciation on investments and foreign currency
translations. Net realized foreign currency gains and losses resulting from
changes in exchange rates include foreign currency gains and losses between
trade date and settlement date on investment securities transactions, foreign
currency transactions, and the difference between the amounts of interest and
dividends recorded on the books of the Funds and the amounts actually received.
The portion of foreign currency gains and losses related to fluctuation in
exchange rates between the initial trade date and subsequent sale trade date is
included in realized gain/(loss) on investments.
FOREIGN SECURITIES. The Funds may directly purchase securities of foreign
issuers. Investing in securities of foreign issuers involves special risks not
typically associated with investing in securities of U.S. issuers. The risks
include possible revaluation of currencies, the ability to repatriate funds,
less complete financial information about companies, and possible future adverse
political and economic developments. Moreover, securities of many foreign
issuers and their markets may be less liquid and their prices more volatile than
those of securities of comparable U.S. issuers.
FOREIGN TAXES. The Funds may be subject to foreign taxes on income, gains on
investments, or currency repatriation, a portion of which may be recoverable.
The Funds will accrue such taxes and recoveries as applicable, based upon their
current interpretation of tax rules and regulations that exist in the markets in
which they invest.
RESTRICTED AND ILLIQUID SECURITIES. Each Fund may invest up to 10% (except for
the Mighty Mites(SM) Fund, SmallCap Equity Fund, and Income Fund which may
invest up to 15%) of its net assets in restricted securities issued under
Section 4(2) of the Securities Act of 1933, as amended. Illiquid securities
include securities the disposition of which is subject to substantial legal or
contractual restrictions. The sale of illiquid securities often requires more
time and results in higher brokerage charges or dealer discounts and other
selling expenses than does the sale of securities eligible for trading on
national securities exchanges or in the over-the-counter markets. Restricted
securities may sell at a price lower than similar securities that are not
subject to restrictions on resale. Rule 144A securities freely saleable among
qualified institutional investors under special rules adopted by the SEC may be
treated as liquid if they satisfy liquidity standards established by the Board.
The continued liquidity of such securities is not as well assured as that of
publicly traded securities, and accordingly the Board will monitor their
liquidity.
31
GAMCO WESTWOOD FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
SECURITIES TRANSACTIONS AND INVESTMENT INCOME. Securities transactions are
accounted for on the trade date with realized gain or loss on investments
determined by using the identified cost method. Interest income (including
amortization of premium and accretion of discount) is recorded on the accrual
basis. Premiums and discounts on debt securities are amortized using the
effective yield to maturity method. Dividend income is recorded on the
ex-dividend date except for certain dividends which are recorded as soon as the
Funds are informed of the dividend.
DETERMINATION OF NET ASSET VALUE AND CALCULATION OF EXPENSES. Certain
administrative expenses are common to, and allocated among, various affiliated
funds. Such allocations are made on the basis of each Fund's average net assets
or other criteria directly affecting the expenses as determined by the Adviser
pursuant to procedures established by the Board.
In calculating the 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
a Fund's custody account, the Fund receives credits which are used to offset
custodian fees. The gross expenses paid under each custody arrangement are
included in custodian fees in the Statements of Operations with the
corresponding expense offset, if any, shown as "custodian fee credits." When
cash balances are overdrawn, the Fund is charged an overdraft fee equal to 90%
of the current Treasury Bill rate. This amount, if any, is shown as "interest
expense" in the Statements of Operations.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions from net investment income are
declared and paid annually for the Mighty Mites(SM), Equity, and SmallCap Equity
Funds, and quarterly for the Balanced and Income Funds. The Intermediate Bond
Fund declares dividends daily and pays those dividends monthly. Distributions of
net realized gain on investments are normally declared and paid at least
annually by each Fund. Distributions to shareholders are recorded on the
ex-dividend date. Distributions to shareholders are based on income and capital
gains as determined in accordance with federal income tax regulations, which may
differ from income and capital gains as determined under U.S. generally accepted
accounting principles. These differences are primarily due to differing
treatments of income and gains on various investment securities and foreign
currency transactions held by the Funds, timing differences, and differing
characterizations of distributions made by the Funds. Distributions from net
investment income include net realized gains on foreign currency transactions.
These book/tax differences are either temporary or permanent in nature. To the
extent these differences are permanent, adjustments are made to the appropriate
capital accounts in the period when the differences arise. These
reclassifications have no impact on the NAV of the Funds. For the fiscal year
ended September 30, 2007, the following reclassifications were made to increase
(decrease) such amounts with offsetting adjustments to paid-in capital. These
reclassifications were primarily the recharacterization of shareholder
distributions, distributions from paydowns, partnership interests, and net
operating losses.
ACCUMULATED UNDISTRIBUTED ACCUMULATED NET REALIZED
NET INVESTMENT INCOME (LOSS) GAIN (LOSS) ON INVESTMENTS PAID-IN CAPITAL
---------------------------- -------------------------- ---------------
Mighty Mites(SM) Fund ...... $ (102,838) $ 134,111 $ (31,273)
Equity Fund ................ (2) 2 --
Balanced Fund .............. 4,290 (4,290) --
Intermediate Bond Fund ..... 7,135 (7,135) --
SmallCap Equity Fund ....... 30,832 (5,516) (25,316)
Income Fund ................ 114,265 20,977 (135,242)
The tax character of distributions paid during the fiscal years ended September
30, 2007 and September 30, 2006 was as follows:
MIGHTY MITES(SM) FUND EQUITY FUND BALANCED FUND
------------------------ ------------------------ --------------------------
YEAR ENDED SEPTEMBER 30, YEAR ENDED SEPTEMBER 30, YEAR ENDED SEPTEMBER 30,
------------------------ ------------------------ --------------------------
2007 2006 2007 2006 2007 2006
----------- ----------- ------------ ---------- ------------ ------------
Ordinary Income
(inclusive of short-term capital gains) ....... -- -- $ 2,016,357 $ 796,967 $ 6,207,247 $ 3,260,752
Net long-term capital gains ...................... $ 5,310,690 $ 5,537,629 27,327,666 -- 15,509,989 9,715,264
----------- ----------- ------------ ---------- ------------ ------------
Total distributions paid ......................... $ 5,310,690 $ 5,537,629 $ 29,344,023 $ 796,967 $ 21,717,236 $ 12,976,016
=========== =========== ============ ========== ============ ============
INTERMEDIATE BOND FUND SMALLCAP EQUITY FUND INCOME FUND
------------------------ ------------------------ --------------------------
YEAR ENDED SEPTEMBER 30, YEAR ENDED SEPTEMBER 30, YEAR ENDED SEPTEMBER 30,
------------------------ ------------------------ --------------------------
2007 2006 2007 2006 2007 2006
----------- ----------- ------------ ---------- ------------ ------------
Ordinary Income
(inclusive of short-term capital gains) ....... $ 358,042 $ 397,787 $ 112,313 -- $ 612,849 $ 522,331
Net long-term capital gains. ..................... -- 6,369 -- -- 2,316,417 4,048,130
Return of capital ................................ -- -- -- -- -- --
----------- ----------- ------------ ---------- ------------ ------------
Total distributions paid ......................... $ 358,042 $ 404,156 $ 112,313 -- $ 2,929,266 $ 4,570,461
=========== =========== ============ ========== ============ ============
32
GAMCO WESTWOOD FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
PROVISION FOR INCOME TAXES. The Funds intend to continue to qualify as regulated
investment companies under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"). It is the policy of the Funds to comply with the
requirements of the Code applicable to regulated investment companies and to
distribute substantially all of the Funds' net investment company taxable income
and net capital gains. Therefore, no provision for federal income taxes is
required.
At September 30, 2007, the components of accumulated earnings/(losses) on a tax
basis were as follows:
MIGHTY EQUITY BALANCED INTERMEDIATE SMALLCAP INCOME
MITES(SM) FUND FUND FUND BOND FUND EQUITY FUND FUND
-------------- ------------- ------------- ------------ ----------- ------------
Undistributed ordinary income/(loss) ....... $ 224,614 $ 6,721,667 $ 3,153,770 $ 5,487 -- $ 32,209
Undistributed long-term capital gain ....... 4,674,421 17,468,025 8,189,304 -- -- 247,542
Accumulated capital loss carryforward ...... -- -- -- (16,921) $(6,843,479) --
Unrealized appreciation/(depreciation) ..... 13,389,672 32,267,546 16,284,478 (7,919) 1,393,510 395,837
Post-October losses ........................ (1,118) (2) -- (19,548) -- (34)
Distribution payable ....................... -- (157) -- (5,952) --
Other temporary differences ................ -- -- -- -- (2,781) (51,576)
------------ ------------- ------------- --------- ----------- ------------
Total accumulated income/loss .............. $ 18,287,589 $ 56,457,079 $ 27,627,552 $ (44,853) $(5,452,750) $ 623,978
============ ============= ============= ========= =========== ============
At September 30, 2007, the difference between book and tax basis unrealized
appreciation/(depreciation) is primarily attributable to the tax basis deferral
of losses on wash sales. Additionally, the Income, Equity, and Balanced Funds
have basis adjustments due to investments in publicly traded partnerships, and
the Income Fund has basis adjustments due to income accruals on hybrid
securities.
The following summarizes capital loss carryforwards and expiration dates for
each Fund at September 30, 2007:
MIGHTY EQUITY BALANCED INTERMEDIATE SMALLCAP INCOME
EXPIRING IN FISCAL YEAR MITES(SM) FUND FUND FUND BOND FUND EQUITY FUND FUND
- ----------------------- -------------- ------------- ------------- ------------ ----------- ------------
2010 ....................................... -- -- -- -- $ 1,997,993 --
2011 ....................................... -- -- -- -- 4,845,486 --
2012 ....................................... -- -- -- -- -- --
2013 ....................................... -- -- -- -- -- --
2014 ....................................... -- -- -- $ 3,903 -- --
2015 ....................................... -- -- -- 13,018 -- --
These capital loss carryforwards are available to reduce future required
distributions of net capital gains to shareholders.
During the fiscal year ended September 30, 2007, the SmallCap Equity Fund
utilized capital loss carryforwards of $1,397,683.
Under the current tax law, capital losses related to securities realized after
October 31 and prior to the Funds' fiscal year end may be treated as occurring
on the first day of the following year. For the fiscal year ended September 30,
2007, the Intermediate Bond Fund deferred capital losses of $19,548, and the
Mighty Mites(SM), Equity, and Income Funds deferred currency losses of $1,118,
$2, and $34, respectively.
The following summarizes the tax cost of investments and the related unrealized
appreciation/(depreciation) at September 30, 2007:
MIGHTY EQUITY BALANCED INTERMEDIATE SMALLCAP INCOME
MITES(SM) FUND FUND FUND BOND FUND EQUITY FUND FUND
-------------- ------------- ------------- ------------ ----------- ------------
Aggregate cost of investments .............. $ 39,624,046 $ 154,683,752 $ 138,002,376 $ 9,255,139 $ 8,855,327 $ 17,913,022
============ ============= ============= =========== =========== ============
Gross unrealized appreciation .............. $ 16,391,863 $ 33,590,820 $ 17,262,572 $ 103,992 $ 1,587,613 $ 859,918
Gross unrealized depreciation .............. (3,002,915) (1,323,274) (978,094) (111,922) (194,103) (464,081)
------------ ------------- ------------- ----------- ----------- ------------
Net unrealized appreciation/
(depreciation) .......................... $ 13,388,948 $ 32,267,546 $ 16,284,478 $ (7,930) $ 1,393,510 $ 395,837
============ ============= ============= =========== =========== ============
FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes, an
Interpretation of FASB Statement No. 109" (the "Interpretation") established a
minimum threshold for financial statement recognition of the benefit of
positions taken in filing tax returns (including whether a Fund is taxable in a
particular jurisdiction) and required certain expanded tax disclosures.
Management is still assessing the impact of the Interpretation on these
financial statements.
33
GAMCO WESTWOOD FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
3. INVESTMENT ADVISORY AGREEMENTS AND OTHER TRANSACTIONS. The Funds have entered
into an investment advisory agreement (the "Advisory Agreement") with the
Adviser which provides that the Funds will pay the Adviser a fee, computed daily
and paid monthly, at the annual rate of 1.00% for the Mighty Mites(SM), Equity,
SmallCap Equity, and Income Funds, 0.75% for the Balanced Fund, and 0.60% for
the Intermediate Bond Fund, of the value of the Fund's average daily net assets.
In accordance with the Advisory Agreement, the Adviser provides a continuous
investment program for the Funds' portfolios, oversees the administration of all
aspects of the Funds' business and affairs, and pays the compensation of all
Officers and Trustees of the Funds who are affiliated persons of the Adviser.
The Adviser has contractually agreed to waive investment advisory fees and/or to
reimburse expenses to the Intermediate Bond, SmallCap Equity, and Income Funds
in the event annual expenses of such Funds exceed certain prescribed limits.
Such fee waiver/reimbursement arrangement will continue until at least September
30, 2008. The reimbursement agreement ended on September 30, 2005 for the Mighty
Mites(SM) Fund. For the fiscal year ended September 30, 2007, the Adviser waived
fees or reimbursed expenses in the amounts of $50,811, $52,880, and $62,857 for
the Intermediate Bond, SmallCap Equity, and Income Funds, respectively.
The Intermediate Bond, SmallCap Equity, and Income Funds are obliged to repay
the Adviser for a period of two fiscal years following the fiscal year in which
the Adviser reimbursed the Funds only to the extent that the operating expenses
of the Funds fall below the applicable expense limitation for Class AAA of
1.00%, 1.50%, and 1.50%, respectively, and for Class A of 1.10%, 1.75%, and
1.75%, respectively, and for Class B and Class C of 1.75%, 2.25%, and 2.25%,
respectively of average daily net assets, the annual limitation under the
Advisory Agreement. The Mighty Mites(SM) Fund's expense ratio for the fiscal
year ending September 30, 2007 was not less than its prior expense cap of 1.50%,
1.75%, 2.25% and 2.25% for Class AAA, Class A, Class B, and Class C Shares,
respectively. The Fund did not repay the Adviser for any amounts which were
under the limits for the respective Class(es) up to the amount the Adviser
reimbursed the Fund in the fiscal year ended September 30, 2005. As of September
30, 2007, the cumulative unreimbursed amounts which may be recovered by the
Adviser within the next two fiscal years are $100,599, $83,358, and $113,286 for
the Intermediate Bond, SmallCap Equity, and Income Funds, respectively.
Prior to July 1, 2007, the Adviser had a Sub-Advisory Agreement with Westwood
Management Corp. (the "Sub-Adviser") for all Funds except the Mighty Mites(SM)
Fund, for which there is not a Sub-Advisory agreement. The Adviser pays the
Sub-Adviser out of its advisory fees with respect to the Funds (except the
Mighty Mites(SM) Fund) a fee computed daily and payable monthly, in an amount
equal on an annualized basis to the greater of (i) $150,000 per year on an
aggregate basis for all applicable Funds or (ii) 35% of the net revenues to the
Adviser from the applicable Funds. For the fiscal year ended September 30, 2007,
the Adviser informed the Funds that it paid collectively to the Sub-Adviser fees
of $838,389 for the Equity, Balanced, Intermediate Bond, SmallCap Equity, and
Income Funds.
Effective July 1, 2007, the Adviser assumed all of the duties and
responsibilities with respect to the SmallCap Equity Fund and the Income Fund
that had been delegated to the Sub-Adviser. The Sub-Adviser continues to serve
as such to the Equity Fund, the Balanced Fund, and the Intermediate Bond Fund.
Gabelli Advisers, Inc. remains as the investment adviser to the Mighty Mites(SM)
Fund, SmallCap Equity Fund, and the Income Fund.
The Trust pays each Trustee that is not considered to be an affiliated person an
annual retainer of $3,000 plus $500 for each Board meeting attended and they are
reimbursed for any out of pocket expenses incurred in attending meetings. All
Board committee members receive $500 per meeting attended. Trustees who are
directors or employees of the Adviser or an affiliated company receive no
compensation or expense reimbursement from the Funds.
4. DISTRIBUTION PLAN. The Trust's Board has adopted a distribution plan (the
"Plan") for each class of shares pursuant to Rule 12b-1 under the 1940 Act.
Gabelli & Company, Inc. ("Gabelli & Company"), an affiliate of the Adviser,
serves as distributor of the Funds. Under the Class AAA, Class A, Class B, and
Class C Share Plans, payments are authorized to Gabelli & Company at annual
rates of 0.25%, 0.50% (for the Intermediate Bond Fund's Class A Shares at an
annual rate of 0.35%), 1.00%, and 1.00%, respectively, of the average daily net
assets of those classes, the annual limitations under each Plan. Such payments
are accrued daily and paid monthly.
34
GAMCO WESTWOOD FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
5. PORTFOLIO SECURITIES. Purchases and proceeds from the sales of securities for
the fiscal year ended September 30, 2007, other than short-term securities, are
as follows:
PURCHASES SALES PURCHASES SALES
(EXCLUDING U.S. (EXCLUDING U.S. OF U.S. OF U.S.
GOVERNMENT GOVERNMENT GOVERNMENT GOVERNMENT
SECURITIES) SECURITIES) SECURITIES SECURITIES
--------------- --------------- ------------ -----------
Mighty Mites(SM) Fund .................. $ 9,240,605 $ 8,313,483 -- --
Equity Fund ............................ 105,723,639 121,786,256 -- --
Balanced Fund .......................... 53,626,110 57,226,775 $ 14,509,778 $ 5,096,934
Intermediate Bond Fund ................. 398,533 -- 1,394,730 1,335,289
SmallCap Equity Fund ................... 8,320,594 10,134,695 -- --
Income Fund ............................ 10,997,983 4,018,545 4,065,043 2,504,751
6. TRANSACTIONS WITH AFFILIATES. During the fiscal year ended September 30,
2007, the Mighty Mites(SM) Fund and the Income Fund paid brokerage commissions
on security trades of $22,417 and $6,916 respectively to Gabelli & Company.
Additionally, Gabelli & Company informed the Trust that it received $17,300 from
investors representing commissions (sales charges and underwriting fees) on
sales and redemptions of Fund shares.
The cost of calculating each Fund's NAV per share is a Fund expense pursuant to
the Advisory Agreement between each Fund and the Adviser. During the fiscal year
ended September 30, 2007, the Equity and Balanced Funds each paid or accrued
$45,000 to the Adviser in connection with the cost of computing these Funds'
NAVs. A reimbursement was not sought during the fiscal year ended September 30,
2007 for the Mighty Mites(SM), Intermediate Bond, SmallCap Equity, and Income
Funds.
7. SHARES OF BENEFICIAL INTEREST. The Funds currently offer four classes of
shares - Class AAA Shares, Class A Shares, Class B Shares, and Class C Shares.
Class AAA Shares are offered only to investors who acquire them directly from
Gabelli & Company, or through selected broker/dealers, or the transfer agent
without a sales charge. Class A Shares are subject to a maximum front-end sales
charge of 4.00%. Class B Shares are subject to a contingent deferred sales
charge ("CDSC") upon redemption within six years of purchase and automatically
convert to Class A Shares approximately eight years after the original purchase.
The applicable CDSC is equal to a declining percentage of the lesser of the NAV
per share at the date of the original purchase or at the date of redemption,
based on the length of time held. Class C Shares are subject to a 1.00% CDSC for
one year after purchase. Class B Shares are available only through exchange of
Class B Shares of other funds distributed by Gabelli & Company. The Board has
approved Class I Shares which have not been offered publicly.
Only the Mighty Mites(SM) Fund imposes a redemption fee of 2.00% on Class AAA
Shares, Class A Shares, Class B Shares, and Class C Shares that are redeemed or
exchanged on or before the seventh day after the date of a purchase. The
redemption fee is deducted from the proceeds otherwise payable to the redeeming
shareholders and is retained by the Mighty Mites(SM) Fund. The redemption fees
retained by the Mighty Mites SM Fund during the fiscal year ended September 30,
2007 amounted to $131.
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 Mighty Mites(SM) Fund,
(iii) the shares were purchased through programs that collect the redemption fee
at the program level and remit them to the Mighty Mites(SM) Fund, or (iv) the
shares were purchased through programs that the Adviser determines to have
appropriate anti-short-term trading policies in place or as to which the Adviser
has received assurances that look-through redemption fee procedures or effective
anti-short-term trading policies and procedures are in place.
35
GAMCO WESTWOOD FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
Transactions in shares of beneficial interest were as follows:
------------------------ ------------------------ -------------------------
YEAR ENDED SEPTEMBER 30, YEAR ENDED SEPTEMBER 30, YEAR ENDED SEPTEMBER 30,
------------------------ ------------------------ -------------------------
2007 2006 2007 2006 2007 2006
--------- ------------ ----------- ----------- ----------- ------------
MIGHTY MITES (SM) FUND EQUITY FUND BALANCED FUND
------------------------ ------------------------ -------------------------
CLASS AAA
Shares sold ........................................ 783,276 161,543 3,159,294 2,831,089 2,267,326 2,232,486
Shares issued upon reinvestment of distributions ... 309,929 350,949 2,471,688 64,387 1,709,223 977,328
Shares redeemed .................................... (565,605) (990,386) (4,141,576) (5,457,286) (3,184,984) (3,247,049)
--------- ------------ ----------- ----------- ----------- -----------
Net increase (decrease) in Class AAA shares ..... 527,600 (477,894) 1,489,406 (2,561,810) 791,565 (37,235)
========= ============ =========== =========== =========== ===========
CLASS A
Shares sold ........................................ 133,030 64 47,697 153,176 31,137 63,619
Shares issued upon reinvestment of distributions ... 37 344 40,525 838 58,360 32,181
Shares redeemed .................................... (687) (2,646) (30,804) (135,896) (87,393) (105,132)
--------- ------------ ----------- ----------- ----------- -----------
Net increase (decrease) in Class A shares ....... 132,380 (2,238) 57,418 18,118 2,104 (9,332)
========= ============ =========== =========== =========== ===========
CLASS B
Shares sold -- -- -- -- 3,276 258
Shares issued upon reinvestment of distributions ... 4,999 3,739 355 4 1,354 675
Shares redeemed .................................... (8,267) (1,025) (1,070) (123) (248) (911)
--------- ------------ ----------- ----------- ----------- -----------
Net increase (decrease) in Class B shares ....... (3,268) 2,714 (715) (119) 4,382 22
========= ============ =========== =========== =========== ===========
CLASS C
Shares sold ........................................ 114,117 193 1,532 23,107 13,769 8,421
Shares issued upon reinvestment of distributions ... 3,195 2,521 4,708 55 9,197 4,312
Shares redeemed .................................... (11,032) (2,620) (6,067) (11,083) (17,216) (16,669)
--------- ------------ ----------- ----------- ----------- -----------
Net increase (decrease) in Class C shares ....... 106,280 94 173 12,079 5,750 (3,936)
========= ============ =========== =========== =========== ===========
INTERMEDIATE BOND FUND SMALLCAP EQUITY FUND INCOME FUND
------------------------ ------------------------ -------------------------
CLASS AAA
Shares sold ........................................ 120,020 215,535 251,401 231,280 1,290,924 331,345
Shares issued upon reinvestment of distributions ... 25,233 30,698 5,666 -- 269,742 371,438
Shares redeemed .................................... (190,997) (268,616) (375,125) (305,471) (810,836) (681,221)
--------- ------------ ----------- ----------- ----------- -----------
Net increase (decrease) in Class AAA shares ..... (45,744) (22,383) (118,058) (74,191) 749,830 21,562
========= ============ =========== =========== =========== ===========
CLASS A
Shares sold ........................................ 836 15,561 26,209 22,889 7,402 22
Shares issued upon reinvestment of distributions ... 230 505 363 -- 2,100 2,237
Shares redeemed .................................... (3,161) (12,868) (6,710) (2,150) (9,794) --
--------- ------------ ----------- ----------- ----------- -----------
Net increase (decrease) in Class A shares ....... (2,095) 3,198 19,862 20,739 (292) 2,259
========= ============ =========== =========== =========== ===========
CLASS B
Shares sold ........................................ -- 12,727 -- -- -- --
Shares issued upon reinvestment of distributions ... 81 500 2 -- 43 43
Shares redeemed .................................... (17,619) (21,971) (5) (414) -- --
--------- ------------ ----------- ----------- ----------- -----------
Net increase (decrease) in Class B shares ....... (17,538) (8,744) (3) (414) 43 43
========= ============ =========== =========== =========== ===========
CLASS C
Shares sold ........................................ 8,938 5,174 2,746 19,909 33,760 --
Shares issued upon reinvestment of distributions ... 1 -- 142 -- 700 333
Shares redeemed .................................... (7,485) (5,174) (2,001) -- (268) --
--------- ------------ ----------- ----------- ----------- -----------
Net increase in Class C shares .................. 1,454 -- 887 19,909 34,192 333
========= ============ =========== =========== =========== ===========
36
GAMCO WESTWOOD FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
8. INDEMNIFICATIONS. The Funds enter into contracts that contain a variety of
indemnifications. The Funds' maximum exposure under these arrangements is
unknown. However, the Funds have not had prior claims or losses pursuant to
these contracts and expect the risk of loss to be remote.
9. OTHER MATTERS. Affiliates of the Adviser, including Gabelli Funds LLC,
received subpoenas from the Attorney General of the State of New York and the
SEC requesting information on mutual fund share trading practices involving
certain funds managed by Gabelli Funds, LLC. GAMCO Investors, Inc. ("GAMCO"),
the Adviser's parent company, responded to these requests for documents and
testimony. In June 2006, GAMCO began discussions with the SEC regarding a
possible resolution of their inquiry. In February 2007, the Adviser made an
offer of settlement to the staff of the SEC for communication to the Commission
for its consideration to resolve this matter. This offer of settlement is
subject to agreement regarding the specific language of the SEC's administrative
order and other settlement documents. On a separate matter, in September 2005,
Gabelli Funds, LLC was informed by the staff of the SEC that the staff may
recommend to the Commission that an administrative remedy and a monetary penalty
be sought from Gabelli Funds, LLC in connection with the actions of two of nine
closed-end funds managed by Gabelli Funds, LLC relating to Section 19(a) and
Rule 19a-1 of the 1940 Act. These provisions require registered investment
companies to provide written statements to shareholders when a dividend is made
from a source other than net investment income. While the two closed-end funds
sent annual statements and provided other materials containing this information,
the funds did not send written statements to shareholders with each distribution
in 2002 and 2003. The Adviser believes that all of the funds are now in
compliance. The Adviser believes that these matters would have no effect on the
Fund or any material adverse effect on the Adviser or its ability to manage the
Fund.
37
GAMCO WESTWOOD FUNDS
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period:
OPERATING PERFORMANCE DISTRIBUTIONS TO SHAREHOLDERS
---------------------------------------- ----------------------------------------
NET
NET ASSET NET REALIZED AND TOTAL NET
VALUE, INVESTMENT UNREALIZED FROM NET REALIZED
PERIOD ENDED BEGINNING INCOME GAIN ON INVESTMENT INVESTMENT GAIN ON TOTAL
SEPTEMBER 30 OF PERIOD (LOSS)(a)(e) INVESTMENTS OPERATIONS INCOME INVESTMENTS DISTRIBUTIONS
- ------------ --------- ------------ ------------ ---------- ---------- ----------- -------------
MIGHTY MITES(SM) FUND
CLASS AAA
2007 $ 16.01 $ 0.08 $ 3.42 $ 3.50 -- $ (2.46) $ (2.46)
2006 16.73 (0.04) 1.34 1.30 -- (2.02) (2.02)
2005 15.07 (0.02) 2.97 2.95 -- (1.29) (1.29)
2004 13.42 (0.03) 1.84 1.81 -- (0.16) (0.16)
2003 11.29 (0.03) 2.25 2.22 $(0.04) (0.05) (0.09)
CLASS A
2007 $ 15.94 $ 0.36 $ 3.10 $ 3.46 -- $ (2.46) $ (2.46)
2006 16.70 (0.10) 1.36 1.26 -- (2.02) (2.02)
2005 15.08 (0.06) 2.97 2.91 -- (1.29) (1.29)
2004 13.46 (0.06) 1.84 1.78 -- (0.16) (0.16)
2003 11.36 (0.05) 2.26 2.21 $(0.06) (0.05) (0.11)
CLASS B
2007 $ 15.43 $ (0.06) $ 3.30 $ 3.24 -- $ (2.46) $ (2.46)
2006 16.31 (0.15) 1.29 1.14 -- (2.02) (2.02)
2005 14.82 (0.14) 2.92 2.78 -- (1.29) (1.29)
2004 13.30 (0.14) 1.82 1.68 -- (0.16) (0.16)
2003 11.24 (0.11) 2.22 2.11 -- (0.05) (0.05)
CLASS C
2007 $ 15.35 $ 0.10 $ 3.14 $ 3.24 -- $ (2.46) $ (2.46)
2006 16.24 (0.15) 1.28 1.13 -- (2.02) (2.02)
2005 14.77 (0.14) 2.90 2.76 -- (1.29) (1.29)
2004 13.25 0.02 1.66 1.68 -- (0.16) (0.16)
2003 11.19 (0.12) 2.23 2.11 -- (0.05) (0.05)
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
----------------------------------------------------------------------------
OPERATING
EXPENSES
OPERATING NET OF OPERATING
NET NET EXPENSES WAIVERS/ EXPENSES
ASSET ASSETS, NET NET OF REIMBURSE- BEFORE
VALUE, END OF INVESTMENT WAIVERS/ MENTS/ WAIVERS/ PORTFOLIO
PERIOD ENDED REDEMPTION END OF TOTAL PERIOD INCOME REIMBURSE- CUSTODIAN REIMBURSE- TURNOVER
SEPTEMBER 30 FEES(a) PERIOD RETURN+ (IN 000'S) (LOSS)(e) MENTS FEE CREDITS MENTS(b) RATE
- ------------ ---------- -------- ------- ---------- ---------- ---------- ----------- ---------- ---------
MIGHTY MITES(SM) FUND
CLASS AAA
2007 $ 0.00(c) $ 17.05 23.9% $ 48,252 0.48% 1.64% 1.64% 1.64% 21%
2006 -- 16.01 9.0 36,843 (0.28) 1.61 1.61 1.61(d) 4
2005 0.00(c) 16.73 20.4 46,497 (0.13) 1.50 1.50 1.74 9
2004 0.00(c) 15.07 13.6 50,805 (0.20) 1.50 1.50 1.66 36
2003 -- 13.42 19.8 51,138 (0.21) 1.50 1.50 1.66 14
CLASS A
2007 $ 0.00(c) $ 16.94 23.8% $ 2,246 2.13% 1.89% 1.89% 1.89% 21%
2006 -- 15.94 8.7 3 (0.63) 1.86 1.86 1.86(d) 4
2005 0.00(c) 16.70 20.1 41 (0.41) 1.75 1.75 2.00 9
2004 0.00(c) 15.08 13.3 39 (0.42) 1.75 1.75 1.91 36
2003 -- 13.46 19.7 33 (0.46) 1.75 1.75 1.91 14
CLASS B
2007 $ 0.00(c) $ 16.21 23.0% $ 422 (0.40)% 2.39% 2.39% 2.39% 21%
2006 -- 15.43 8.1 452 (1.00) 2.36 2.36 2.36(d) 4
2005 0.00(c) 16.31 19.6 433 (0.89) 2.25 2.25 2.49 9
2004 0.00(c) 14.82 12.7 400 (0.95) 2.25 2.25 2.41 36
2003 -- 13.30 18.9 517 (0.96) 2.25 2.25 2.41 14
CLASS C
2007 $ 0.00(c) $ 16.13 23.2% $ 2,041 0.65% 2.39% 2.39% 2.39% 21%
2006 -- 15.35 8.1 311 (1.01) 2.36 2.36 2.36(d) 4
2005 0.00(c) 16.24 19.5 327 (0.91) 2.25 2.25 2.49 9
2004 0.00(c) 14.77 12.7 308 (0.89) 2.25 2.25 2.41 36
2003 -- 13.25 19.0 99 (0.96) 2.25 2.25 2.41 14
- ----------
+ 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.
(a) Per share data is calculated using the average shares outstanding method.
(b) Prior to the period beginning October 1, 2005, certain fees were
voluntarily reduced and/or reimbursed. If such fee reductions and/or
reimbursements had not occurred, the ratio would have been as shown.
(c) Amount represents less than $0.005 per share.
(d) The fund incurred interest expense during the fiscal year ended September
30, 2006. If interest expense had not been incurred, the ratios of
operating expenses to average net assets would have been 1.57% (Class
AAA), 1.82% (Class A), and 2.32% (Class B and Class C). For the fiscal
year ended September 30, 2007, interest expense was minimal.
(e) Due to capital share activity throughout the fiscal year, net investment
income per share and the ratio to average net assets are not necessarily
correlated among the different classes of shares.
See accompanying notes to financial statements.
38
GAMCO WESTWOOD FUNDS
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period:
OPERATING PERFORMANCE DISTRIBUTIONS TO SHAREHOLDERS
--------------------------------------- -----------------------------------------
NET
REALIZED
NET ASSET NET AND TOTAL
VALUE, INVESTMENT UNREALIZED FROM NET NET REALIZED
PERIOD ENDED BEGINNING INCOME GAIN ON INVESTMENT INVESTMENT GAIN ON TOTAL
SEPTEMBER 30 OF PERIOD (LOSS)(a) INVESTMENTS OPERATIONS INCOME INVESTMENTS DISTRIBUTIONS
- ------------ --------- ---------- -------------- ---------- ---------- ------------ -------------
EQUITY FUND
CLASS AAA
2007 $ 12.51 $ 0.04 $ 2.15 $ 2.19 $ (0.05) $ (2.02) $ (2.07)
2006 11.08 0.06 1.42 1.48 (0.05) -- (0.05)
2005 9.32 0.07 1.79 1.86 (0.10) -- (0.10)
2004 7.99 0.08 1.36 1.44 (0.11) -- (0.11)
2003 7.02 0.09 0.96 1.05 (0.08) -- (0.08)
CLASS A
2007 $ 12.45 $ 0.01 $ 2.15 $ 2.16 $ (0.02) $ (2.02) $ (2.04)
2006 11.05 0.03 1.41 1.44 (0.04) -- (0.04)
2005 9.28 0.06 1.75 1.81 (0.04) -- (0.04)
2004 7.97 0.05 1.35 1.40 (0.09) -- (0.09)
2003 6.99 0.07 0.97 1.04 (0.06) -- (0.06)
CLASS B
2007 $ 12.31 $ (0.05) $ 2.12 $ 2.07 -- $ (2.02) $ (2.02)
2006 10.96 (0.02) 1.40 1.38 $ (0.03) -- (0.03)
2005 9.21 (0.00)(b) 1.75 1.75 -- -- --
2004 7.92 0.02 1.34 1.36 (0.07) -- (0.07)
2003 6.97 0.04 0.95 0.99 (0.04) -- (0.04)
CLASS C
2007 $ 12.31 $ (0.05) $ 2.12 $ 2.07 -- $ (2.02) $ (2.02)
2006 10.97 (0.03) 1.40 1.37 $ (0.03) -- (0.03)
2005 9.24 (0.01) 1.77 1.76 (0.03) -- (0.03)
2004 7.89 0.01 1.34 1.35 -- -- --
2003 6.98 0.04 0.96 1.00 (0.09) -- (0.09)
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
------------------------------------------------------------------
OPERATING
NET NET ASSETS, EXPENSES
ASSET VALUE, END OF NET NET OF PORTFOLIO
PERIOD ENDED REDEMPTION END OF TOTAL PERIOD INVESTMENT OPERATING CUSTODIAN TURNOVER
SEPTEMBER 30 FEES(a) PERIOD RETURN+ (IN 000'S) INCOME (LOSS) EXPENSES FEE CREDITS RATE
- ------------ ---------- ------------- -------- ----------- ------------- --------- ----------- ---------
EQUITY FUND
CLASS AAA
2007 -- $ 12.63 19.7% $ 189,913 0.37% 1.52% 1.47% 58%
2006 -- 12.51 13.4 169,404 0.55 1.54 1.50 73
2005 $ (0.00)(b) 11.08 20.0 178,394 0.69 1.51 1.49 59
2004 0.00(b) 9.32 18.1 179,407 0.90 1.50 1.49 44
2003 -- 7.99 15.1 221,635 1.19 1.48 1.47 50
CLASS A
2007 -- $ 12.57 19.5% $ 3,527 0.12% 1.77% 1.72% 58%
2006 -- 12.45 13.1 2,780 0.27 1.79 1.75 73
2005 (0.00)(b) 11.05 19.6 2,267 0.59 1.76 1.74 59
2004 0.00(b) 9.28 17.7 3,328 0.61 1.75 1.74 44
2003 -- 7.97 15.0 2,923 0.94 1.73 1.72 50
CLASS B
2007 -- $ 12.36 18.8% $ 23 (0.39)% 2.27% 2.22% 58%
2006 -- 12.31 12.6 32 (0.20) 2.29 2.25 73
2005 $ (0.00)(b) 10.96 19.0 30 (0.01) 2.26 2.24 59
2004 0.00(b) 9.21 17.2 38 0.21 2.25 2.24 44
2003 -- 7.92 14.3 74 0.44 2.23 2.22 50
CLASS C
2007 -- $ 12.36 18.8% $ 320 (0.39)% 2.27% 2.22% 58%
2006 -- 12.31 12.6 316 (0.28) 2.29 2.25 73
2005 $ (0.00)(b) 10.97 19.1 149 (0.06) 2.26 2.24 59
2004 0.00(b) 9.24 17.1 152 0.11 2.25 2.24 44
2003 -- 7.89 14.4 129 0.44 2.23 2.22 50
- ----------
+ 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.
(a) Per share data is calculated using the average shares outstanding method.
(b) Amount represents less than $0.005 per share.
See accompanying notes to financial statements.
39
GAMCO WESTWOOD FUNDS
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period:
OPERATING PERFORMANCE DISTRIBUTIONS TO SHAREHOLDERS
------------------------------------- ----------------------------------------
NET
REALIZED
NET ASSET AND TOTAL NET
VALUE, NET UNREALIZED FROM NET REALIZED
PERIOD ENDED BEGINNING INVESTMENT GAIN ON INVESTMENT INVESTMENT GAIN ON TOTAL
SEPTEMBER 30 OF PERIOD INCOME(a) INVESTMENTS OPERATIONS INCOME INVESTMENTS DISTRIBUTIONS
- ------------ --------- ---------- ------------ ---------- ---------- ----------- -------------
BALANCED FUND
CLASS AAA
2007 $ 12.82 $ 0.22 $ 1.36 $ 1.58 $ (0.21) $ (1.61) $ (1.82)
2006 12.74 0.22 0.95 1.17 (0.24) (0.85) (1.09)
2005 11.47 0.20 1.26 1.46 (0.19) -- (0.19)
2004 10.51 0.21 0.97 1.18 (0.22) -- (0.22)
2003 9.65 0.21 0.87 1.08 (0.22) -- (0.22)
CLASS A
2007 $ 12.87 $ 0.19 $ 1.36 $ 1.55 $ (0.18) $ (1.61) $ (1.79)
2006 12.74 0.19 0.95 1.14 (0.16) (0.85) (1.01)
2005 11.44 0.17 1.26 1.43 (0.13) -- (0.13)
2004 10.48 0.18 0.97 1.15 (0.19) -- (0.19)
2003 9.62 0.19 0.86 1.05 (0.19) -- (0.19)
CLASS B
2007 $ 12.95 $ 0.13 $ 1.37 $ 1.50 $ (0.12) $ (1.61) $ (1.73)
2006 12.76 0.13 0.95 1.08 (0.04) (0.85) (0.89)
2005 11.43 0.11 1.26 1.37 (0.04) -- (0.04)
2004 10.48 0.13 0.96 1.09 (0.14) -- (0.14)
2003 9.63 0.14 0.86 1.00 (0.15) -- (0.15)
CLASS C
2007 $ 12.97 $ 0.13 $ 1.37 $ 1.50 $ (0.12) $ (1.61) $ (1.73)
2006 12.78 0.13 0.95 1.08 (0.04) (0.85) (0.89)
2005 11.45 0.11 1.26 1.37 (0.04) -- (0.04)
2004 10.49 0.13 0.97 1.10 (0.14) -- (0.14)
2003 9.62 0.14 0.87 1.01 (0.14) -- (0.14)
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
--------------------------------------------------------------
OPERATING
NET NET ASSETS, EXPENSES
ASSET VALUE, END OF NET NET OF PORTFOLIO
PERIOD ENDED REDEMPTION END OF TOTAL PERIOD INVESTMENT OPERATING CUSTODIAN TURNOVER
SEPTEMBER 30 FEES(a) PERIOD RETURN+ (IN 000'S) INCOME EXPENSES FEE CREDITS RATE
- ------------ ---------- ------------ ------- ----------- ---------- --------- ----------- ---------
BALANCED FUND
CLASS AAA
2007 -- $ 12.58 13.6% $ 152,185 1.76% 1.27% 1.19% 46%
2006 -- 12.82 9.8 145,028 1.78 1.32 1.27 68
2005 $ 0.00(b) 12.74 12.8 144,572 1.67 1.25 1.22 56
2004 0.00(b) 11.47 11.3 136,400 1.92 1.23 1.22 41
2003 -- 10.51 11.2 152,409 2.10 1.23 1.20 56
CLASS A
2007 -- $ 12.63 13.3% $ 5,519 1.51% 1.52% 1.44% 46%
2006 -- 12.87 9.5 5,596 1.53 1.57 1.52 68
2005 $ 0.00(b) 12.74 12.6 5,658 1.42 1.50 1.47 56
2004 0.00(b) 11.44 11.0 5,298 1.66 1.48 1.47 41
2003 -- 10.48 11.0 5,070 1.85 1.48 1.45 56
CLASS B
2007 -- $ 12.72 12.7% $ 194 1.02% 2.02% 1.94% 46%
2006 -- 12.95 9.0 141 1.02 2.07 2.02 68
2005 $ 0.00(b) 12.76 12.0 138 0.93 2.00 1.97 56
2004 0.00(b) 11.43 10.4 163 1.18 1.98 1.97 41
2003 -- 10.48 10.4 184 1.35 1.98 1.95 56
CLASS C
2007 -- $ 12.74 12.7% $ 1,003 1.01% 2.02% 1.94% 46%
2006 -- 12.97 9.0 946 1.02 2.07 2.02 68
2005 $ 0.00(b) 12.78 12.0 982 0.92 2.00 1.97 56
2004 0.00(b) 11.45 10.5 846 1.19 1.98 1.97 41
2003 -- 10.49 10.5 456 1.35 1.98 1.95 56
- ----------
+ 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.
(a) Per share data is calculated using the average shares outstanding method.
(b) Amount represents less than $0.005 per share.
See accompanying notes to financial statements.
40
GAMCO WESTWOOD FUNDS
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period:
OPERATING PERFORMANCE DISTRIBUTIONS TO SHAREHOLDERS
------------------------------------------ ----------------------------------------
NET
REALIZED
NET ASSET AND TOTAL NET
VALUE, NET UNREALIZED GAIN FROM NET REALIZED
PERIOD ENDED BEGINNING INVESTMENT (LOSS) ON INVESTMENT INVESTMENT GAIN ON TOTAL
SEPTEMBER 30 OF PERIOD INCOME(a) INVESTMENTS OPERATIONS INCOME INVESTMENTS DISTRIBUTIONS
- ------------ --------- ---------- --------------- ---------- ---------- ----------- -------------
INTERMEDIATE BOND FUND
CLASS AAA
2007 $ 10.81 $ 0.40 $ 0.00(c) $ 0.40 $ (0.41) -- $ (0.41)
2006 10.93 0.39 (0.11) 0.28 (0.39) $ (0.01) (0.40)
2005 11.18 0.34 (0.16) 0.18 (0.34) (0.09) (0.43)
2004 11.31 0.33 (0.12) 0.21 (0.33) (0.01) (0.34)
2003 11.30 0.31 -- 0.31 (0.30) -- (0.30)
CLASS A
2007 $ 10.81 $ 0.39 $ 0.00(c) $ 0.39 $ (0.40) -- $ (0.40)
2006 10.93 0.39 (0.12) 0.27 (0.38) $ (0.01) (0.39)
2005 11.18 0.33 (0.16) 0.17 (0.33) (0.09) (0.42)
2004 11.31 0.32 (0.12) 0.20 (0.32) (0.01) (0.33)
2003 11.30 0.30 0.01 0.31 (0.30) -- (0.30)
CLASS B
2007 $ 10.81 $ 0.32 $ 0.00(c) $ 0.32 $ (0.33) -- $ (0.33)
2006 10.93 0.31 (0.11) 0.20 (0.31) $ (0.01) (0.32)
2005 11.18 0.26 (0.16) 0.10 (0.26) (0.09) (0.35)
2004 11.30 0.25 (0.11) 0.14 (0.25) (0.01) (0.26)
2003 11.29 0.23 -- 0.23 (0.22) -- (0.22)
CLASS C
2007 $ 10.31 $ 0.40 $ 0.09 $ 0.49 $ (0.52) -- $ (0.52)
2006 10.82 0.32 (0.36) (0.04) (0.46) $ (0.01) (0.47)
2005 11.17 0.27 (0.12) 0.15 (0.41) (0.09) (0.50)
2004 11.30 0.25 (0.09) 0.16 (0.28) (0.01) (0.29)
2003 11.29 0.22 0.01 0.23 (0.22) -- (0.22)
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
---------------------------------------------------------------------------
OPERATING
EXPENSES
OPERATING NET OF OPERATING
NET NET EXPENSES WAIVERS/ EXPENSES
ASSET ASSETS, NET OF REIMBURSE- BEFORE
VALUE, END OF NET WAIVERS/ MENTS/ WAIVERS/ PORTFOLIO
PERIOD ENDED REDEMPTION END OF TOTAL PERIOD INVESTMENT REIMBURSE- CUSTODIAN REIMBURSE- TURNOVER
SEPTEMBER 30 FEES(a) PERIOD RETURN+ (IN 000'S) INCOME MENTS FEE CREDITS MENTS(b) RATE
- ------------ ---------- ------- ------- ---------- ----------- ---------- ----------- ---------- ---------
INTERMEDIATE BOND FUND
CLASS AAA
2007 -- $ 10.80 3.7% $ 9,413 3.73% 1.10% 1.00% 1.64% 20%
2006 -- 10.81 2.7 9,917 3.65 1.06 1.00 1.53 35
2005 $ (0.00)(c) 10.93 1.7 10,272 3.10 1.04 1.00 1.79 33
2004 0.00(c) 11.18 2.0 9,553 2.97 1.02 1.00 1.76 32
2003 -- 11.31 2.8 12,174 2.70 1.06 1.00 1.57 73
CLASS A
2007 -- $ 10.80 3.7% $ 69 3.64% 1.20% 1.10% 1.74% 20%
2006 -- 10.81 2.6 92 3.59 1.16 1.10 1.63 35
2005 $ (0.00)(c) 10.93 1.6 58 3.00 1.14 1.10 1.88 33
2004 0.00(c) 11.18 1.8 75 2.88 1.12 1.10 1.86 32
2003 -- 11.31 2.8 138 2.60 1.16 1.10 1.67 73
CLASS B
2007 -- $ 10.80 3.0% $ 93 2.97% 1.85% 1.75% 2.39% 20%
2006 -- 10.81 2.0 282 2.87 1.81 1.75 2.28 35
2005 $ (0.00)(c) 10.93 0.9 381 2.34 1.79 1.75 2.53 33
2004 0.00(c) 11.18 1.3 456 2.23 1.77 1.75 2.51 32
2003 -- 11.30 2.1 502 1.95 1.81 1.75 2.32 73
CLASS C
2007 -- $ 10.28 4.8% $ 15 3.96% 1.85% 1.75% 2.39% 20%
2006 -- 10.31 (0.3) 0.1 3.08 1.81 1.75 2.28 35
2005 $ (0.00)(c) 10.82 1.4 0.1 2.50 1.79 1.75 2.90 33
2004 0.00(c) 11.17 1.5 0 2.21 1.77 1.75 2.51 32
2003 -- 11.30 2.1 46 1.95 1.81 1.75 2.32 73
- ----------
+ 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.
(a) Per share data is calculated using the average shares outstanding method.
(b) During the period, certain fees were voluntarily reduced and/or
reimbursed. If such fee reductions and/or reimbursements had not occurred,
the ratio would have been as shown.
(c) Amount represents less than $0.005 per share.
See accompanying notes to financial statements.
41
GAMCO WESTWOOD FUNDS
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period:
OPERATING PERFORMANCE DISTRIBUTIONS TO SHAREHOLDERS
-------------------------------------- -----------------------------
NET
NET ASSET NET REALIZED AND TOTAL
VALUE, INVESTMENT UNREALIZED FROM NET
PERIOD ENDED BEGINNING INCOME GAIN ON INVESTMENT INVESTMENT TOTAL
SEPTEMBER 30 OF PERIOD (LOSS)(a) INVESTMENTS OPERATIONS INCOME DISTRIBUTIONS
- ------------ --------- ---------- ----------- ----------- ----------- -------------
SMALLCAP EQUITY FUND
CLASS AAA
2007 $ 12.51 $ (0.04) $ 2.68 $ 2.64 $ (0.16) $ (0.16)
2006 11.29 0.14 1.08 1.22 -- --
2005 9.08 (0.01) 2.22 2.21 -- --
2004 8.18 (0.10) 1.00 0.90 -- --
2003 7.49 (0.08) 0.77 0.69 -- --
CLASS A
2007 $ 12.45 $ (0.09) $ 2.67 $ 2.58 $ (0.14) $ (0.14)
2006 11.25 0.13 1.07 1.20 -- --
2005 9.07 (0.04) 2.22 2.18 -- --
2004 8.18 (0.12) 1.01 0.89 -- --
2003 7.51 (0.10) 0.77 0.67 -- --
CLASS B
2007 $ 12.03 $ (0.15) $ 2.60 $ 2.45 $ (0.04) $ (0.04)
2006 10.93 0.05 1.05 1.10 -- --
2005 8.86 (0.08) 2.15 2.07 -- --
2004 8.03 (0.17) 1.00 0.83 -- --
2003 7.41 (0.13) 0.75 0.62 -- --
CLASS C
2007 $ 11.97 $ (0.14) $ 2.57 $ 2.43 $ (0.09) $ (0.09)
2006 10.87 0.09 1.01 1.10 -- --
2005 8.99 (0.13) 2.01 1.88 -- --
2004 8.15 (0.17) 1.01 0.84 -- --
2003 7.47 (0.10) 0.78 0.68 -- --
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
---------------------------------------------------------------------------
OPERATING
EXPENSES
OPERATING NET OF OPERATING
NET NET EXPENSES WAIVERS/ EXPENSES
ASSET ASSETS, NET NET OF REIMBURSE- BEFORE
VALUE, END OF INVESTMENT WAIVERS/ MENTS/ WAIVERS/ PORTFOLIO
PERIOD ENDED REDEMPTION END OF TOTAL PERIOD INCOME REIMBURSE- CUSTODIAN REIMBURSE- TURNOVER
SEPTEMBER 30 FEES(a) PERIOD RETURN+ (IN 000'S) (LOSS) MENTS FEE CREDITS MENTS(b) RATE
- ------------ ---------- -------- ------- ----------- ---------- ---------- ----------- ---------- ---------
SMALLCAP EQUITY FUND
CLASS AAA
2007 -- $ 14.99 21.2% $ 8,672 (0.28)% 1.71% 1.50% 2.24% 90%
2006 -- 12.51 10.8 8,717 1.16 1.71 1.50 2.02 81
2005 $ (0.00)(c) 11.29 24.3 8,702 (0.10) 1.56 1.50 2.37 108
2004 0.00(c) 9.08 11.0(d) 12,106 (1.11) 1.51 1.50 2.12 260
2003 -- 8.18 9.2 15,721 (1.03) 1.53 1.50 1.99 329
CLASS A
2007 -- $ 14.89 20.9% $ 778 (0.62)% 1.96% 1.75% 2.49% 90%
2006 -- 12.45 10.7 403 1.04 1.96 1.75 2.27 81
2005 $ (0.00)(c) 11.25 24.0 131 (0.35) 1.81 1.75 2.69 108
2004 0.00(c) 9.07 10.9(d) 140 (1.31) 1.76 1.75 2.37 260
2003 -- 8.18 8.9 112 (1.28) 1.78 1.75 2.24 329
CLASS B
2007 -- $ 14.44 20.4% $ 7 (1.05)% 2.46% 2.25% 2.99% 90%
2006 -- 12.03 10.1 6 0.44 2.46 2.25 2.77 81
2005 $ (0.00)(c) 10.93 23.4 10 (0.81) 2.31 2.25 3.17 108
2004 0.00(c) 8.86 10.3(d) 20 (1.93) 2.26 2.25 2.87 260
2003 -- 8.03 8.4 65 (1.78) 2.28 2.25 2.74 329
CLASS C
2007 -- $ 14.31 20.4% $ 298 (1.04)% 2.46% 2.25% 2.99% 90%
2006 -- 11.97 10.1 238 0.74 2.46 2.25 2.77 81
2005 $ (0.00)(c) 10.87 20.9 0.1 (1.40) 2.31 2.25 2.73 108
2004 0.00(c) 8.99 10.3(d) 10 (1.98) 2.26 2.25 2.87 260
2003 -- 8.15 9.1 111 (1.78) 2.28 2.25 2.74 329
- ----------
+ 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.
(a) Per share data is calculated using the average shares outstanding method.
(b) During the period, certain fees were voluntarily reduced and/or
reimbursed. If such fee reductions and/or reimbursements had not occurred,
the ratio would have been as shown.
(c) Amount represents less than $0.005 per share.
(d) Total return excluding the effect of the reimbursement from the Fund's
Adviser of $51,180 for the year ended September 30, 2004 was 10.6%, 10.5%,
10.0%, and 9.9% for Class AAA, Class A, Class B, and Class C,
respectively. The Adviser fully reimbursed the Fund for a loss on a
transaction exceeding the Fund's investment restrictions, which otherwise
would have reduced total return by 0.4%, 0.4%, 0.3%, and 0.4% for Class
AAA, Class A, Class B, and Class C, respectively.
See accompanying notes to financial statements.
42
GAMCO WESTWOOD FUNDS
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period:
OPERATING PERFORMANCE DISTRIBUTIONS TO SHAREHOLDERS
----------------------------------------- ----------------------------------------
NET
REALIZED
NET ASSET AND TOTAL NET
VALUE, NET UNREALIZED GAIN FROM NET REALIZED
PERIOD ENDED BEGINNING INVESTMENT (LOSS) ON INVESTMENT INVESTMENT GAIN ON TOTAL
SEPTEMBER 30 OF PERIOD INCOME(a) INVESTMENTS OPERATIONS INCOME INVESTMENTS DISTRIBUTIONS
- ------------ --------- ---------- --------------- ---------- ---------- ----------- -------------
INCOME FUND
CLASS AAA
2007 $ 12.04 $ 0.50 $ 0.59 $ 1.09 $ (0.47) $ (2.45) $ (2.92)
2006 16.53 0.55 (0.31) 0.24 (0.40) (4.33) (4.73)
2005 14.12 0.28 3.12 3.40 (0.27) (0.73) (1.00)
2004 11.87 0.33 2.30 2.63 (0.33) (0.05) (0.38)
2003 10.03 0.38 1.85 2.23 (0.39) -- (0.39)
CLASS A
2007 $ 12.34 $ 0.50 $ 0.59 $ 1.09 $ (0.44) $ (2.45) $ (2.89)
2006 16.76 0.54 (0.32) 0.22 (0.31) (4.33) (4.64)
2005 14.33 0.29 3.13 3.42 (0.26) (0.73) (0.99)
2004 12.00 0.51 2.12 2.63 (0.26) (0.04) (0.30)
2003 10.04 0.38 1.85 2.23 (0.27) -- (0.27)
CLASS B
2007 $ 12.56 $ 0.47 $ 0.57 $ 1.04 $ (0.38) $ (2.45) $ (2.83)
2006 16.86 0.48 (0.31) 0.17 (0.14) (4.33) (4.47)
2005 14.33 0.18 3.16 3.34 (0.08) (0.73) (0.81)
2004 12.04 0.25 2.35 2.60 (0.27) (0.04) (0.31)
2003 10.07 0.27 1.91 2.18 (0.21) -- (0.21)
CLASS C
2007 $ 12.98 $ 0.38 $ 0.71 $ 1.09 $ (0.40) $ (2.45) $ (2.85)
2006 17.26 0.50 (0.32) 0.18 (0.13) (4.33) (4.46)
2005 14.66 0.25 3.17 3.42 (0.09) (0.73) (0.82)
2004 12.32 0.24 2.41 2.65 (0.27) (0.04) (0.31)
2003 10.26 0.32 1.99 2.31 (0.25) -- (0.25)
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
---------------------------------------------------------------------------
OPERATING
EXPENSES
OPERATING NET OF OPERATING
NET NET EXPENSES WAIVERS/ EXPENSES
ASSET ASSETS, NET OF REIMBURSE- BEFORE
VALUE, END OF NET WAIVERS/ MENTS/ WAIVERS/ PORTFOLIO
PERIOD ENDED REDEMPTION END OF TOTAL PERIOD INVESTMENT REIMBURSE- CUSTODIAN REIMBURSE- TURNOVER
SEPTEMBER 30 FEES(a) PERIOD RETURN+ (IN 000'S) INCOME MENTS FEE CREDITS MENTS(b) RATE
- ------------ ---------- ------- ------- ---------- ---------- ---------- ----------- ---------- ---------
INCOME FUND
CLASS AAA
2007 -- $ 10.21 10.0% $ 17,871 4.65% 1.76% 1.50% 2.20% 64%
2006 -- 12.04 3.4 12,054 4.36 1.65 1.50 2.02 141
2005 $ 0.01 16.53 24.9 16,182 1.83 1.62 1.50 2.40 58
2004 0.00(c) 14.12 22.5 16,472 2.51 1.54 1.50 1.85 28
2003 -- 11.87 22.8 13,923 3.70 1.56 1.50 2.05 33
CLASS A
2007 -- $ 10.54 9.7% $ 80 4.45% 2.01% 1.75% 2.45% 64%
2006 -- 12.34 3.2 97 4.21 1.90 1.75 2.27 141
2005 $ 0.00(c) 16.76 24.6 93 1.87 1.87 1.75 3.03 58
2004 0.00(c) 14.33 22.2 5 3.96 1.79 1.75 2.10 28
2003 -- 12.00 22.6 10 3.45 1.81 1.75 2.30 33
CLASS B
2007 -- $ 10.77 9.0% $ 2 4.16% 2.51% 2.25% 2.94% 64%
2006 -- 12.56 2.7 2 3.72 2.40 2.25 2.77 141
2005 $ 0.00(c) 16.86 23.9 2 1.14 2.37 2.25 3.18 58
2004 0.00(c) 14.33 21.8 2 1.86 2.29 2.25 2.60 28
2003 -- 12.04 22.0 2 2.95 2.31 2.25 2.80 33
CLASS C
2007 -- $ 11.22 9.1% $ 397 3.35% 2.51% 2.25% 2.94% 64%
2006 -- 12.98 2.8 16 3.71 2.40 2.25 2.77 141
2005 $ 0.00(c) 17.26 23.9 16 1.56 2.37 2.25 3.41 58
2004 0.00(c) 14.66 21.7 5 1.79 2.29 2.25 2.60 28
2003 -- 12.32 22.8 4 2.95 2.31 2.25 2.80 33
- ----------
+ 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.
(a) Per share data is calculated using the average shares outstanding method.
(b) During the period, certain fees were voluntarily reduced and/or
reimbursed. If such fee reductions and/or reimbursements had not occurred,
the ratio would have been as shown.
(c) Amount represents less than $0.005 per share.
See accompanying notes to financial statements.
43
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees and Shareholders of
The GAMCO Westwood Funds:
In our opinion, the accompanying statements of assets and liabilities, including
the schedules of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of GAMCO Westwood Mighty Mites(SM)
Fund, GAMCO Westwood Equity Fund, GAMCO Westwood Balanced Fund, GAMCO Westwood
Intermediate Bond Fund, GAMCO Westwood SmallCap Equity Fund and GAMCO Westwood
Income Fund (constituting The GAMCO Westwood Funds, hereafter referred to as the
"Funds") at September 30, 2007, the results of each of their operations for the
year then ended, the changes in each of their net assets for each of the two
years in the period then ended and the financial highlights for each of the
periods presented, in conformity with accounting principles generally accepted
in the United States of America. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Funds' management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at September 30, 2007 by correspondence with the
custodian and brokers, provide a reasonable basis for our opinion.
PRICEWATERHOUSECOOPERS LLP
NEW YORK, NY
NOVEMBER 27, 2007
44
- --------------------------------------------------------------------------------
2007 TAX NOTICE TO SHAREHOLDERS (UNAUDITED)
U.S. GOVERNMENT INCOME: - The percentage of the ordinary income dividend paid by
the Mighty Mites(SM) Fund, Equity Fund, Balanced Fund, Intermediate Bond Fund,
SmallCap Equity Fund, and Income Fund (collectively, the "Funds") during fiscal
year 2007 which was derived from U.S. Treasury securities was 0.00%, 0.40%,
13.18%, 20.68%, 0.00%, and 13.85%, respectively. Such income is exempt from
state and local tax in all states. However, many states, including New York and
California, allow a tax exemption for a portion of the income earned only if a
mutual fund has invested at least 50% of its assets at the end of each quarter
of the Fund's fiscal year in U.S. Government securities. The Funds did not meet
this strict requirement in 2007. Due to the diversity in state and local tax
law, it is recommended that you consult your personal tax adviser for the
applicability of the information provided as to your specific situation.
MIGHTY MITES(SM) FUND - For the fiscal year ended September 30, 2007, the Fund
paid to shareholders long-term capital gains totaling $5,310,690. The
distributions of long-term capital gains have been designated as Capital Gain
Dividends by the Funds' Board of Trustees.
EQUITY FUND- For the fiscal year ended September 30, 2007, the Fund paid to
shareholders ordinary income dividends (comprised of net investment income and
short-term capital gains) totaling $0.14, $0.11, $0.09, and $0.09 per share for
Class AAA, Class A, Class B, and Class C Shares, respectively, and long-term
capital gains totaling $27,327,666. The distributions of long-term capital gains
have been designated as Capital Gain Dividends by the Funds' Board of Trustees.
For the fiscal year ended September 30, 2007, 5.82% of the ordinary income
dividend qualifies for the dividends received deductions available to
corporations. The Fund designates 5.87% of the ordinary income distribution as
qualified dividend income, pursuant to the Jobs and Growth Tax Relief
Reconciliation Act of 2003. The Fund designates 18.73% of the ordinary income
distribution as qualified interest income, and 100% of the ordinary income
distribution as qualified short-term gain, pursuant to the American Jobs
Creation Act of 2004.
BALANCED FUND - For the fiscal year ended September 30, 2007, the Fund paid to
shareholders ordinary income dividends (comprised of net investment income and
short-term capital gains) totaling $0.51, $0.48, $0.42, and $0.42 per share for
Class AAA, Class A, Class B, and Class C Shares, respectively, and long-term
capital gains totaling $15,509,989. The distributions of long-term capital gains
have been designated as Capital Gain Dividends by the Funds' Board of Trustees.
For the fiscal year ended September 30, 2007, 28.74% of the ordinary income
dividend qualifies for the dividends received deductions available to
corporations. The Fund designates 28.24% of the ordinary income distribution as
qualified dividend income, pursuant to the Jobs and Growth Tax Relief
Reconciliation Act of 2003. The Fund designates 82.63% of the ordinary income
distribution as qualified interest income, and 100% of the ordinary income
distribution as qualified short-term gain, pursuant to the American Jobs
Creation Act of 2004.
INTERMEDIATE BOND FUND - For the fiscal year ended September 30, 2007, the Fund
paid to shareholders ordinary income dividends (comprised of net investment
income and short-term capital gains) totaling $0.41, $0.40, $0.33, and $0.52 per
share for Class AAA, Class A, Class B, and Class C Shares, respectively. For the
fiscal year ended September 30, 2007, the Fund designates 100% of the ordinary
income distribution as qualified interest income.
SMALLCAP EQUITY FUND - For the fiscal year ended September 30, 2007, the Fund
paid to shareholders ordinary income dividends (comprised of net investment
income and short-term capital gains) totaling $0.16, $0.14, $0.04, and $0.09 per
share for Class AAA, Class A, Class B, and Class C Shares, respectively.
INCOME FUND - For the fiscal year ended September 30, 2007, the Fund paid to
shareholders ordinary income dividends (comprised of net investment income and
short-term capital gains) totaling $0.44, $0.41, $0.35, and $0.37 per share for
Class AAA, Class A, Class B, and Class C Shares, respectively, and long-term
capital gains totaling $2,316,417. The distributions of long-term capital gains
have been designated as Capital Gain Dividends by the Funds' Board of Trustees.
For the fiscal year ended September 30, 2007, 69.88% of the ordinary income
dividend qualifies for the dividends received deductions available to
corporations. The Fund designates 55.21% of the ordinary income distribution as
qualified dividend income, pursuant to the Jobs and Growth Tax Relief
Reconciliation Act of 2003. The Fund designates 46.53% of the ordinary income
distribution as qualified interest income, and 100% of the ordinary income
distribution as qualified short-term gain, pursuant to the American Jobs
Creation Act of 2004.
- --------------------------------------------------------------------------------
45
GAMCO WESTWOOD FUNDS
BOARD CONSIDERATION AND RE-APPROVAL OF INVESTMENT ADVISORY AND
SUB-ADVISORY AGREEMENT (UNAUDITED)
In determining whether to approve the continuance of each of the Agreements, the
Board considered the following information at its August 2007 meeting:
1) THE NATURE, EXTENT AND QUALITY OF SERVICES PROVIDED BY THE ADVISER AND THE
SUB-ADVISER.
The Board reviewed in detail the nature and extent of the services provided by
the Adviser and the Sub-Adviser under the Agreements and the quality of those
services over the past year. The Board noted that these services included
managing the investment program of the Funds, including the purchase and sale of
portfolio securities, as well as the provision of general corporate services.
The Board considered that the Adviser also provided, at its expense, office
facilities for use by the Funds and supervisory personnel responsible for
supervising the performance of administrative, accounting, and related services
including, for each Fund, net asset value determinations, yield calculations,
and monitoring to assure compliance with stated investment policies and
restrictions under the 1940 Act and related securities regulations. The Board
noted that, in addition to managing the investment program for the Funds, the
Adviser provided certain non-advisory and compliance services, including
services under the Funds' Rule 38a-1 compliance program.
The Board also considered that the Adviser and Sub-Adviser paid for all
compensation of officers and Board Members of the Funds that were affiliated
with the Adviser or Sub-Adviser and that the Adviser further provided a
substantial level of services to shareholders of the Funds who had invested
through various programs offered by third party financial intermediaries
("Participating Organizations"). The Board evaluated these factors based on its
direct experience with the Adviser and Sub-Adviser and in consultation with Fund
Counsel. The Board noted that the Adviser had engaged, at its expense, PFPC Inc.
to assist it in performing certain of its administrative functions. The Board
concluded that the nature and extent of the services provided was reasonable and
appropriate in relation to the advisory fee, that the level of services provided
by the Adviser, either directly or through PFPC Inc., and by the Sub-Adviser,
had not diminished over the past year and that the quality of service continued
to be high.
The Board reviewed the personnel responsible for providing services to the Funds
and concluded, based on their experience and interaction with the Adviser and
Sub-Adviser, that (i) the Adviser and Sub-Adviser were able to retain quality
personnel, (ii) the Adviser, Sub-Adviser, and their agents exhibited a high
level of diligence and attention to detail in carrying out their advisory and
administrative responsibilities under the Agreements, (iii) the Adviser and
Sub-Adviser were responsive to requests of the Board, (iv) the scope and depth
of the Adviser's and Sub-Adviser's resources were adequate, and (v) the Adviser
and Sub-Adviser had kept the Board apprised of developments relating to each
Fund and the industry in general. The Board also focused on the Adviser's
reputation and long-standing relationship with the Funds. The Board also
believed that the Adviser had devoted substantial resources and made substantial
commitments to address new regulatory compliance requirements applicable to the
Funds.
2) THE PERFORMANCE OF THE FUNDS, THE ADVISER, AND THE SUB-ADVISER.
The Board reviewed the investment performance of each Fund, on an absolute
basis, as compared to its Lipper peer group, and against each Fund's broad based
securities market benchmarks as reflected in each Fund's prospectuses and annual
report. The Board also considered rankings and ratings of the Funds issued by
Lipper over the short, intermediate, and long term. The Board considered each
Fund's one, three, five, and, where available, ten year average annual total
return for the periods ended June 30, 2007, but placed greatest emphasis on a
Fund's longer term performance. The peer groups considered by the Board were
developed by Lipper and were comprised of funds of comparable size within the
same Lipper peer group category (the "Peer Group"), regardless of asset size or
primary channel of distribution. Each Fund's performance against the performance
Peer Group (the "Performance Peer Group") was considered by the Board as
providing an objective comparative benchmark against which each Fund's
performance could be assessed. In general, the Board considered these
comparisons helpful in their assessment as to whether the Adviser was obtaining
for the Funds' shareholders the total return performance that was available in
the marketplace, given each Fund's investment objectives, strategies,
limitations, and restrictions. In reviewing the Funds' performance, the Board
noted that each Fund's performance was generally acceptable, noting that on
occasion Funds have underperformed and on other occasions Funds have
outperformed certain of these Performance Peer Groups.
In connection with its assessment of the performance of the Adviser and the
Sub-Adviser, the Board considered the Adviser's and Sub-Adviser's financial
condition and whether they had the resources necessary to continue to carry out
their responsibilities under the Agreements. The Board concluded that the
Adviser and Sub-Adviser had the financial resources necessary to continue to
perform their obligations under the Agreements and to continue to provide the
high quality services that they have provided to the Funds to date.
46
3) THE COST OF THE ADVISORY SERVICES AND THE PROFITS TO THE ADVISER AND
SUB-ADVISER AND THEIR AFFILIATES FROM THE RELATIONSHIP WITH THE FUNDS.
In connection with the Board's consideration of the cost of the advisory and
sub-advisory services and the profits to the Adviser, Sub-Adviser, and their
affiliates from their relationships with the Fund, the Board considered a number
of factors. First, the Board compared the level of the advisory fee for each
Fund against comparative Lipper expense peer groups ("Expense Peer Group"). The
Board also considered comparative non-management fee expenses and comparative
total fund expenses of the Funds and each Expense Peer Group. The Board
considered this information as useful in assessing whether the Adviser and
Sub-Adviser were providing services at a cost that was competitive with other
similar funds. In assessing this information, the Board considered both the
comparative contract rates as well as the level of the advisory fees after
waivers and/or reimbursements. The Board noted that three of the Funds operated
pursuant to a Waiver and Expense Reimbursement Agreement with the Adviser
wherein the Adviser had agreed to waive a portion of its fee or reimburse a Fund
for a portion of its expenses necessary to limit the Fund's total operating
expenses to the level set forth in the respective Fund's prospectus. The Board
considered that despite the fact that the GAMCO Westwood Equity Fund, the GAMCO
Westwood Balanced Fund, and the GAMCO Westwood Mighty Mites(SM) Fund's advisory
fees and operating expenses were above the range of fees charged by their
respective Peer Group, the expenses were reasonable in light of the fact that
these Funds each outperformed most of the funds in their respective Peer Group
over various time periods. The Board also noted that while the GAMCO Westwood
Income Fund outperformed most of the funds in its Peer Group for the three and
five year periods, it underperformed most of the funds in its Peer Group for the
one year period. The Board considered the fact that the GAMCO Westwood Income
Fund's investment objective was changed recently, and as a result, performance
information with respect to the new investment objective was less meaningful
than performance information for a fund that had maintained the same investment
objective over a longer period of time. The Board concluded that it would
continue to monitor the situation.
The Board Members also reviewed the fees charged by the Adviser and Sub-Adviser
to provide similar advisory services to other registered investment companies
with similar investment objectives and to separate accounts, noting that in some
cases the fees charged by the Adviser or Sub-Adviser were higher and, in other
cases lower, than the fees charged to the Funds. In evaluating this information,
the Board considered the difference in services provided by the Adviser and
Sub-Adviser to these other accounts. In particular, the Board considered the
differences in risks involved in managing separate accounts and the Funds from a
compliance and regulatory perspective.
The Board also considered an analysis prepared by the Adviser of the estimated
profitability to the Adviser of its relationship with the Funds and reviewed
with the Adviser its cost allocation methodology in connection with its
profitability. In this regard, the Board reviewed Pro-forma Income Statements of
the Adviser for the year ended December 31, 2006. The Board considered one
analysis for the Adviser as a whole, and a second analysis for the Adviser with
respect to each of the Funds. With respect to the Fund analysis, the Board
received an analysis based on each Fund's average net assets during the period
as well as a pro-forma analysis of profitability at higher and lower asset
levels. The Board concluded that the profitability of the Funds to the Adviser
under either analysis was not excessive.
4) THE EXTENT TO WHICH ECONOMIES OF SCALE WILL BE REALIZED AS THE FUNDS GROW AND
WHETHER FEE LEVELS REFLECT THOSE ECONOMIES OF SCALE.
With respect to the Board's consideration of economies of scale, the Board
discussed whether economies of scale would be realized by the Funds at higher
asset levels. The Board also reviewed data from the Expense Peer Group to assess
whether the Expense Peer Group funds had advisory fee breakpoints and, if so, at
what asset levels. The Board also assessed whether certain of the Adviser's
costs would increase if asset levels rise. The Board concluded that under
foreseeable conditions, they were unable to assess at this time whether
economies of scale would be realized if the Funds were to experience significant
asset growth. In the event there was to be significant asset growth in the
Funds, the Board determined to reassess whether the advisory fee appropriately
took into account any economies of scale that had been realized as a result of
that growth.
5) OTHER FACTORS.
In addition to the above factors, the Board also discussed other benefits
received by the Adviser and Sub-Adviser from their management of the Funds. The
Board considered that the Adviser and Sub-Adviser did not use soft dollars in
connection with their management of the Funds.
Based on a consideration of all these factors in their totality, the Board
Members, including all of the Independent Board Members, determined that each
Fund's advisory fee and, with respect to the GAMCO Westwood Equity Fund, the
GAMCO Westwood Balanced Fund, and the GAMCO Westwood Intermediate Bond Fund, the
sub-advisory fee was fair and reasonable with respect to the quality of services
provided and in light of the other factors described above that the Board deemed
relevant. Accordingly, the Board Members determined to approve the continuation
of each Fund's advisory agreement and, with respect to the GAMCO Westwood Equity
Fund, the GAMCO Westwood Balanced Fund, and the GAMCO Westwood Intermediate Bond
Fund, the sub-advisory agreements. The Board based its decision on evaluations
of all these factors as a whole and did not consider any one factor as
all-important or controlling.
47
GAMCO WESTWOOD FUNDS
ADDITIONAL FUND INFORMATION (UNAUDITED)
- --------------------------------------------------------------------------------
The business and affairs of the Trust are managed under the direction of its
Board of Trustees. Information pertaining to the Trustees and officers of the
Trust is set forth below. The Trust's Statement of Additional Information
includes additional information about the GAMCO Westwood Funds' Trustees and is
available, without charge, upon request, by calling 800-GABELLI (800-422-3554)
or by writing to the GAMCO Westwood Funds at One Corporate Center, Rye, NY
10580-1422.
TERM OF NUMBER OF
NAME, POSITION(S), OFFICE AND FUNDS IN FUND
ADDRESS 1 LENGTH OF COMPLEX OVERSEEN PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIPS
AND AGE TIME SERVED 2 BY TRUSTEE DURING PAST FIVE YEARS HELD BY TRUSTEE 3
- ------------------------- ------------- ---------------- ---------------------------------------- -----------------------
INDEPENDENT TRUSTEES 4:
ANTHONY J. COLAVITA Since 1994 35 Partner in the law firm of Anthony J. --
Trustee Colavita, P.C.
Age: 71
JAMES P. CONN Since 1994 16 Former Managing Director and Chief Director of First
Trustee Investment Officer of Financial Republic Bank (banking)
Age: 69 Security Assurance Holdings Ltd.
(1992-1998)
WERNER J. ROEDER, M.D. Since 1994 23 Medical Director of Lawrence Hospital --
Trustee and practicing private physician
Age: 67
SALVATORE J. ZIZZA Since 2004 26 Chairman of Zizza & Company, Ltd. Director of Hollis-Eden
Trustee (consulting) Pharmaceuticals
Age: 61 (biotechnology);
Director of Earl
Scheib, Inc.
(automotive services)
OFFICERS:
BRUCE N. ALPERT Since 1994 -- Executive Vice President and Chief --
President Operating Officer of Gabelli Funds,
Age: 55 LLC since 1988 and an officer of all
of the registered investment companies
in the Gabelli/GAMCO Funds complex;
Director and President of Gabelli
Advisers, Inc. since 1998
AGNES MULLADY Since 2006 -- Vice President of Gabelli Funds LLC --
Treasurer since 2007; Officer of all of the
Age: 49 registered investment companies in the
Gabelli/GAMCO Funds complex; Senior
Vice President of U.S. Trust Company,
N.A. and Treasurer and Chief Financial
Officer of Excelsior Funds from 2004
through 2005; Chief Financial Officer
of AMIC Distribution Partners from
2002 through 2004; Controller of
Reserve Management Corporation and
Reserve Partners, Inc. and Treasurer
of Reserve Funds from 2000 through 2002
JAMES E. MCKEE Since 1995 -- Vice President, General Counsel, and --
Secretary Secretary of GAMCO Investors, Inc.
Age: 44 since 1999 and GAMCO Asset Management
Inc. since 1993; Secretary of all of
the registered investment companies in
the Gabelli/GAMCO Funds complex
PETER D. GOLDSTEIN Since 2004 -- Director of Regulatory Affairs at --
Chief Compliance Officer GAMCO Investors, Inc. since 2004;
Age: 54 Chief Compliance Officer of all of the
registered investment companies in the
Gabelli/GAMCO Funds complex; Vice
President of Goldman Sachs Asset
Management from 2000 through 2004
- ----------
1 Address: One Corporate Center, Rye, NY 10580-1422, unless otherwise noted.
2 Each Trustee will hold office for an indefinite term until the earliest of
(i) the next meeting of shareholders, if any, called for the purpose of
considering the election or re-election of such Trustee and until the
election and qualification of his or her successor, if any, elected at
such meeting, or (ii) the date a Trustee resigns or retires, or a Trustee
is removed by the Board of Trustees or shareholders, in accordance with
the Trust's Amended By-Laws and Amended and Restated Declaration of Trust.
Each officer will hold office for an indefinite term until the date he or
she resigns or retires or until his or her successor is elected and
qualified.
3 This column includes only directorships of companies required to report to
the SEC under the Securities Exchange Act of 1934 (i.e., public companies)
or other investment companies registered under the Investment Company Act
of 1940.
4 Trustees who are not interested persons are considered "Independent"
Trustees.
48
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GAMCO WESTWOOD 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 website, 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.
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GABELLI FAMILY OF FUNDS
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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.
GAMCO WESTWOOD FUNDS
GAMCO WESTWOOD MIGHTY MITES(SM) FUND
GAMCO WESTWOOD EQUITY FUND
GAMCO WESTWOOD BALANCED FUND
GAMCO WESTWOOD INTERMEDIATE BOND FUND
GAMCO WESTWOOD SMALLCAP EQUITY FUND
GAMCO WESTWOOD INCOME FUND
One Corporate Center
Rye, New York 10580-1422
GENERAL AND ACCOUNT INFORMATION:
800-GABELLI [800-422-3554]
fax: 914-921-5118
website: www.gabelli.com
e-mail: info@gabelli.com
Board of Trustees
ANTHONY J. COLAVITA WERNER J. ROEDER, MD
ATTORNEY-AT-LAW MEDICAL DIRECTOR
ANTHONY J. COLAVITA, P.C. LAWRENCE HOSPITAL
JAMES P. CONN SALVATORE J. ZIZZA
FORMER CHIEF INVESTMENT OFFICER CHAIRMAN
FINANCIAL SECURITY ASSURANCE ZIZZA & CO., LTD.
HOLDINGS LTD.
Officers
BRUCE N. ALPERT JAMES E. McKEE
PRESIDENT SECRETARY
PETER D. GOLDSTEIN AGNES MULLADY
CHIEF COMPLIANCE OFFICER TREASURER
INVESTMENT ADVISER
Gabelli Advisers, Inc.
DISTRIBUTOR
Gabelli & Company, Inc.
CUSTODIAN
Bank of New York Mellon Corporation
LEGAL COUNSEL
Paul, Hastings, Janofsky & Walker LLP
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We have separated the portfolio managers' commentary from the financial
statements and investment portfolio due to corporate governance regulations
stipulated by the Sarbanes-Oxley Act of 2002. We have done this to ensure that
the content of the portfolio managers' commentary is unrestricted. The financial
statements and investment portfolio are mailed separately from the commentary.
Both the commentary and the financial statements, including the portfolio of
investments, will be available on our website at www.gabelli.com/funds.
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This report is submitted for the information of the shareholders of the GAMCO
Westwood Funds. It is not authorized for distribution to prospective investors
unless preceded or accompanied by an effective prospectus.
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GABWWQ307AR
ITEM 2. CODE OF ETHICS.
(a) The registrant, as of the end of the period covered by this report, has
adopted a code of ethics that applies to the registrant's principal
executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions,
regardless of whether these individuals are employed by the registrant
or a third party.
(c) There have been no amendments, during the period covered by this
report, to a provision of the code of ethics that applies to the
registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing
similar functions, regardless of whether these individuals are employed
by the registrant or a third party, and that relates to any element of
the code of ethics description.
(d) The registrant has not granted any waivers, including an implicit
waiver, from a provision of the code of ethics that applies to the
registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing
similar functions, regardless of whether these individuals are employed
by the registrant or a third party, that relates to one or more of the
items set forth in paragraph (b) of this item's instructions.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
As of the end of the period covered by the report, the registrant's board of
directors has determined that James P. Conn is qualified to serve as an audit
committee financial expert serving on its audit committee and that he is
"independent."
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
AUDIT FEES
(a) The aggregate fees billed for each of the last two fiscal years for
professional services rendered by the principal accountant for the
audit of the registrant's annual financial statements or services that
are normally provided by the accountant in connection with statutory
and regulatory filings or engagements for those fiscal years are
$174,300 for 2007 and $141,150 for 2006.
AUDIT-RELATED FEES
(b) The aggregate fees billed in each of the last two fiscal years for
assurance and related services by the principal accountant that are
reasonably related to the performance of the audit of the registrant's
financial statements and are not reported under paragraph (a) of this
Item are $0 for 2007 and $0 for 2006.
TAX FEES
(c) The aggregate fees billed in each of the last two fiscal years for
professional services rendered by the principal accountant for tax
compliance, tax advice, and tax planning are $34,000 for 2007 and
$21,900 for 2006. Tax fees represent tax compliance services provided
in connection with the review of the Registrant's tax returns.
ALL OTHER FEES
(d) The aggregate fees billed in each of the last two fiscal years for
products and services provided by the principal accountant, other than
the services reported in paragraphs (a) through (c) of this Item are $0
for 2007 and $0 for 2006.
(e)(1) Disclose the audit committee's pre-approval policies and procedures
described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
Pre-Approval Policies and Procedures. The Audit Committee ("Committee")
of the registrant is responsible for pre-approving (i) all audit and
permissible non-audit services to be provided by the independent
registered public accounting firm to the registrant and (ii) all
permissible non-audit services to be provided by the independent
registered public accounting firm to the Adviser, Gabelli Advisers,
Inc., and any affiliate of Gabelli Funds, LLC ("Gabelli") that provides
services to the registrant (a "Covered Services Provider") if the
registered public accounting firm's engagement related directly to the
operations and financial reporting of the registrant. The Committee may
delegate its responsibility to pre-approve any such audit and
permissible non-audit services to the Chairperson of the Committee, and
the Chairperson must report to the Committee, at its next regularly
scheduled meeting after the Chairperson's pre-approval of such
services, his or her decision(s). The Committee may also establish
detailed pre-approval policies and procedures for pre-approval of such
services in accordance with applicable laws, including the delegation
of some or all of the Committee's pre-approval responsibilities to the
other persons (other than Gabelli or the registrant's officers).
Pre-approval by the Committee of any permissible non-audit services is
not required so long as: (i) the permissible non-audit services were
not recognized by the registrant at the time of the engagement to be
non-audit services; and (ii) such services are promptly brought to the
attention of the Committee and approved by the Committee or Chairperson
prior to the completion of the audit.
(e)(2) The percentage of services described in each of paragraphs (b) through
(d) of this Item that were approved by the audit committee pursuant to
paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X are as follows:
(b) Not applicable
(c) 100%
(d) Not applicable
(f) The percentage of hours expended on the principal accountant's
engagement to audit the registrant's financial statements for the most
recent fiscal year that were attributed to work performed by persons
other than the principal accountant's full-time, permanent employees
was zero percent (0%).
(g) The aggregate non-audit fees billed by the registrant's accountant for
services rendered to the registrant, and rendered to the registrant's
investment adviser (not including any sub-adviser whose role is
primarily portfolio management and is subcontracted with or overseen by
another investment adviser), and any entity controlling, controlled by,
or under common control with the adviser that provides ongoing services
to the registrant for each of the last two fiscal years of the
registrant was $0 for 2007 and $0 for 2006.
(h) The registrant's audit committee of the board of directors has
considered whether the provision of non-audit services that were
rendered to the registrant's investment adviser (not including any
sub-adviser whose role is primarily portfolio management and is
subcontracted with or overseen by another investment adviser), and any
entity controlling, controlled by, or under common control with the
investment adviser that provides ongoing services to the registrant
that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule
2-01 of Regulation S-X is compatible with maintaining the principal
accountant's independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
Schedule of Investments in securities of unaffiliated issuers as of the close of
the reporting period is included as part of the report to shareholders filed
under Item 1 of this form.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which the shareholders
may recommend nominees to the registrant's board of trustees, where those
changes were implemented after the registrant last provided disclosure in
response to the requirements of Item 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) Code of ethics, or any amendment thereto, that is the subject of
disclosure required by Item 2 is attached hereto.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and
Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.
(a)(3) Not applicable.
(b) Certifications pursuant to Rule 30a-2(b) under the 1940 Act and
Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(registrant) The GAMCO Westwood Funds
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By (Signature and Title)* /s/ Bruce N. Alpert
-------------------------------------------------------
Bruce N. Alpert, Principal Executive Officer
Date 12/3/07
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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
-------------------------------------------------------
Bruce N. Alpert, Principal Executive Officer
Date 12/3/07
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By (Signature and Title)* /s/ Agnes Mullady
-------------------------------------------------------
Agnes Mullady,
Principal Financial Officer and Treasurer
Date 12/3/07
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* Print the name and title of each signing officer under his or her signature.