UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-04873
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The GAMCO Growth Fund
-------------------------------------------------------
(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
-------------------------------------------------------
(Name and address of agent for service)
registrant's telephone number, including area code: 1-800-422-3554
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Date of fiscal year end: December 31
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Date of reporting period: December 31, 2007
------------------
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 100 F Street, NE,
Washington, DC 20549. The OMB has reviewed this collection of information under
the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
The Report to Shareholders is attached herewith.
THE GAMCO GROWTH FUND
ANNUAL REPORT
DECEMBER 31, 2007
TO OUR SHAREHOLDERS,
The Sarbanes-Oxley Act requires a fund's principal executive and financial
officers to certify the entire contents of the semi-annual and annual
shareholder reports in a filing with the Securities and Exchange Commission on
Form N-CSR. This certification would cover the portfolio manager's commentary
and subjective opinions if they are attached to or a part of the financial
statements. Many of these comments and opinions would be difficult or impossible
to certify.
Because we do not want our portfolio managers to eliminate their opinions
and/or restrict their commentary to historical facts, we have separated their
commentary from the financial statements and investment portfolio and have sent
it to you separately. Both the commentary and the financial statements,
including the portfolio of investments, will be available on our website at
www.gabelli.com/funds.
Enclosed are the audited financial statements and the investment portfolio
as of December 31, 2007 with a description of factors that affected the
performance during the past year.
PERFORMANCE DISCUSSION (UNAUDITED)
For the 12 months ended December 31, 2007, the Fund (Class AAA) returned
18.13% compared to 11.81% for the Russell 1000 Growth Index and 5.49% for the
Standard & Poor's 500 Stock Index. It was the first year since 1999 during which
Growth Funds outperformed Value Funds, according to Lipper. It was a year that
saw credit market problems drag down many financial service stocks.
Underweighting financial stocks early in the year helped the Fund's performance.
Oil prices rose to record levels and the Fund's overweighting in energy stocks
also helped performance. Related to this were strong upward price moves in
several solar energy issues held by the Fund. During the course of the year the
Fund profited from rising prices for various stocks in the materials sector, as
many commodity prices hit new highs. Most of these issues were sold before
year's end. While the Fund's technology stocks had a mixed year, several
individual holdings posted exceptionally good returns. Several consumer
discretionary, healthcare, media and consumer staples issues negatively impacted
the Fund's return. To a lesser extent, some technology and financial issues
weighed on results.
Measured by position size and return, the issues with the most positive
impact on performance last year were Google (5.0% of net assets as of December
31, 2007), Apple (2.2%), Research In Motion (1.6%), Suntech Power (1.4%),
National Oilwell Varco (0.5%), PepsiCo (3.8%), Procter & Gamble (3.7%), and Novo
Nordisk (1.3%). Holdings with the biggest negative impact on the Fund were
Genentech (0.9%), Starbucks (0.5%), Zimmer Holdings (0.8%), EMC (1.0%), and
American Express (1.0%).
Sincerely yours,
/s/ Bruce N. Alpert
Bruce N. Alpert
President
February 22, 2008
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE GAMCO GROWTH FUND
CLASS AAA SHARES AND THE S&P 500 INDEX
GAMCO GROWTH FUND S&P 500 INDEX
04/10/87 $ 10,000 $10,000
12/31/87 9,510 8,447
12/31/88 13,234 9,846
12/31/89 18,542 12,961
12/31/90 18,173 12,558
12/31/91 24,410 16,375
12/31/92 25,506 17,621
12/31/93 28,378 19,394
12/31/94 27,414 19,648
12/31/95 36,383 27,022
12/31/96 43,449 33,224
12/31/97 61,971 44,304
12/31/98 80,426 56,975
12/31/99 117,623 68,956
12/31/00 105,191 62,681
12/31/01 79,840 55,235
12/31/02 52,862 43,033
12/31/03 69,450 55,371
12/31/04 72,707 61,390
12/31/05 80,196 64,404
12/31/06 85,232 74,567
12/31/07 100,685 78,661
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. The performance tables and
graph do not reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares.
COMPARATIVE RESULTS
- --------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS THROUGH DECEMBER 31, 2007 (A)
----------------------------------------------------
Since
Inception
Quarter 1 Year 3 Year 5 Year 10 Year 15 Year 20 Year (4/10/87)
------- ------ ------ ------ ------- ------- ------- ---------
GAMCO GROWTH FUND CLASS AAA (B).......... 2.15% 18.13% 11.46% 13.75% 4.98% 9.59% 12.52% 11.79%
S&P 500 Index............................ (3.33) 5.49 8.61 12.82 5.91 10.49 11.80 10.46
Russell 1000 Growth Index................ (0.77) 11.81 8.68 12.11 3.83 8.47 10.66 9.53
Class A.................................. 2.15 18.12 11.46 13.76 4.98 9.59 12.52 11.79
(3.73)(c) 11.33(c) 9.28(c) 12.42(c) 4.36(c) 9.16(c) 12.19(c) 11.47(c)
Class B.................................. 1.95 17.23 10.62 13.07 4.66 9.37 12.35 11.63
(3.05)(d) 12.23(d) 9.80(d) 12.83(d) 4.66 9.37 12.35 11.63
Class C.................................. 1.95 17.23 10.62 13.07 4.66 9.37 12.35 11.63
0.95(e) 16.23(e) 10.62 13.07 4.66 9.37 12.35 11.63
IN THE CURRENT PROSPECTUS, THE EXPENSE RATIOS FOR CLASS AAA, A, B, AND C SHARES
ARE 1.44%, 1.44%, 2.19%, AND 2.19%, RESPECTIVELY. CLASS AAA SHARES DO NOT HAVE A
SALES CHARGE. THE MAXIMUM SALES CHARGE FOR CLASS A, B, AND C SHARES IS 5.75%,
5.00%, AND 1.00%, RESPECTIVELY.
(a) RETURNS REPRESENT PAST PERFORMANCE AND DO NOT GUARANTEE FUTURE RESULTS.
TOTAL RETURNS AND AVERAGE ANNUAL RETURNS REFLECT CHANGES IN SHARE PRICE AND
REINVESTMENT OF DISTRIBUTIONS AND ARE NET OF EXPENSES. INVESTMENT RETURNS
AND THE PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE. WHEN SHARES ARE
REDEEMED, THEY MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST.
PERFORMANCE RETURNS FOR PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED.
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA
PRESENTED. VISIT WWW.GABELLI.COM FOR PERFORMANCE INFORMATION AS OF THE MOST
RECENT MONTH END. INVESTORS SHOULD CAREFULLY CONSIDER THE INVESTMENT
OBJECTIVES, RISKS, CHARGES, AND EXPENSES OF THE FUND BEFORE INVESTING. THE
PROSPECTUS CONTAINS MORE INFORMATION ABOUT THIS AND OTHER MATTERS AND SHOULD
BE READ CAREFULLY BEFORE INVESTING.
THE CLASS AAA SHARES' NET ASSET VALUES ("NAV'S") PER SHARE ARE USED TO
CALCULATE PERFORMANCE FOR THE PERIODS PRIOR TO THE ISSUANCE OF CLASS A
SHARES, CLASS B SHARES, AND CLASS C SHARES ON DECEMBER 31, 2003. THE ACTUAL
PERFORMANCE FOR THE CLASS B SHARES AND CLASS C SHARES WOULD HAVE BEEN LOWER
DUE TO THE ADDITIONAL EXPENSES ASSOCIATED WITH THESE CLASSES OF SHARES. THE
S&P 500 INDEX AND THE RUSSELL 1000 GROWTH INDEX ARE UNMANAGED INDICATORS OF
STOCK MARKET PERFORMANCE. DIVIDENDS ARE CONSIDERED REINVESTED. YOU CANNOT
INVEST DIRECTLY IN AN INDEX.
(b) EFFECTIVE FEBRUARY 15, 2007, CLASS AAA SHARES ARE OFFERED ONLY TO INVESTORS
WHO WERE SHAREHOLDERS IN ONE OR MORE OF THE REGISTERED FUNDS DISTRIBUTED BY
GABELLI & COMPANY, INC. PRIOR TO FEBRUARY 15, 2007.
(c) INCLUDES THE EFFECT OF THE MAXIMUM 5.75% SALES CHARGE AT THE BEGINNING OF
THE PERIOD.
(d) PERFORMANCE RESULTS INCLUDE THE DEFERRED SALES CHARGES FOR THE CLASS B
SHARES UPON REDEMPTION AT THE END OF THE QUARTER, ONE YEAR, THREE YEAR, AND
FIVE YEAR PERIODS OF 5%, 5%, 3%, AND 2%, RESPECTIVELY, OF THE FUND'S NAV PER
SHARE AT THE TIME OF PURCHASE OR SALE, WHICHEVER IS LOWER. CLASS B SHARES
ARE NOT AVAILABLE FOR NEW PURCHASES.
(e) PERFORMANCE RESULTS INCLUDE THE DEFERRED SALES CHARGES FOR THE CLASS C
SHARES UPON REDEMPTION AT THE END OF THE QUARTER AND ONE YEAR PERIODS OF 1%
OF THE FUND'S NAV PER SHARE AT THE TIME OF PURCHASE OR SALE, WHICHEVER IS
LOWER.
- --------------------------------------------------------------------------------
2
THE GAMCO GROWTH FUND
DISCLOSURE OF FUND EXPENSES (UNAUDITED)
For the Six Month Period from July 1, 2007 through December 31, 2007
EXPENSE TABLE
================================================================================
We believe it is important for you to understand the impact of fees and expenses
regarding your investment. All mutual funds have operating expenses. As a
shareholder of a fund, you incur ongoing costs, which include costs for
portfolio management, administrative services, and shareholder reports (like
this one), among others. Operating expenses, which are deducted from a fund's
gross income, directly reduce the investment return of a fund. When a fund's
expenses are expressed as a percentage of its average net assets, this figure is
known as the expense ratio. The following examples are intended to help you
understand the ongoing costs (in dollars) of investing in your Fund and to
compare these costs with those of other mutual funds. The examples are based on
an investment of $1,000 made at the beginning of the period shown and held for
the entire period.
The Expense Table below illustrates your Fund's costs in two ways:
ACTUAL FUND RETURN: This section provides information about actual account
values and actual expenses. You may use this section to help you to estimate the
actual expenses that you paid over the period after any fee waivers and expense
reimbursements. The "Ending Account Value" shown is derived from the Fund's
ACTUAL return during the past six months, and the "Expenses Paid During Period"
shows the dollar amount that would have been paid by an investor who started
with $1,000 in the Fund. You may use this information, together with the amount
you invested, to estimate the expenses that you paid over the period.
To do so, simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
given for your Fund under the heading "Expenses Paid During Period" to estimate
the expenses you paid during this period.
HYPOTHETICAL 5% RETURN: This section provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio. It assumes a hypothetical annualized return of 5% before expenses during
the period shown. In this case - because the hypothetical return used is NOT the
Fund's actual return - the results do not apply to your investment and you
cannot use the hypothetical account value and expense to estimate the actual
ending account balance or expenses you paid for the period. This example is
useful in making comparisons of the ongoing costs of investing in the Fund and
other funds. To do so, compare this 5% hypothetical example with the 5%
hypothetical examples that appear in shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs such as sales
charges (loads), redemption fees, or exchange fees, if any, which are described
in the Prospectus. If these costs were applied to your account, your costs would
be higher. Therefore, the 5% hypothetical return is useful in comparing ongoing
costs only, and will not help you determine the relative total costs of owning
different funds. The "Annualized Expense Ratio" represents the actual expenses
for the last six months and may be different from the expense ratio in the
Financial Highlights which is for the year ended December 31, 2007.
Beginning Ending Annualized Expenses
Account Value Account Value Expense Paid During
07/01/07 12/31/07 Ratio Period*
- --------------------------------------------------------------------------------
THE GAMCO GROWTH FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Class AAA $1,000.00 $1,089.10 1.43% $ 7.57
Class A $1,000.00 $1,089.10 1.44% $ 7.62
Class B $1,000.00 $1,085.00 2.18% $11.52
Class C $1,000.00 $1,085.00 2.19% $11.57
HYPOTHETICAL 5% RETURN
Class AAA $1,000.00 $1,018.09 1.43% $ 7.31
Class A $1,000.00 $1,018.04 1.44% $ 7.36
Class B $1,000.00 $1,014.29 2.18% $11.13
Class C $1,000.00 $1,014.24 2.19% $11.18
* 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.
3
SUMMARY OF PORTFOLIO HOLDINGS (UNAUDITED)
The following table presents portfolio holdings as a percent of total net assets
as of December 31, 2007:
THE GAMCO GROWTH FUND
Industrial ................................... 16.6%
Software & Services .......................... 13.0%
Energy ....................................... 11.8%
Consumer Staples ............................. 9.5%
Semiconductors ............................... 7.5%
Retail ....................................... 6.7%
Financial Services ........................... 6.6%
Pharmaceuticals & Biotechnology .............. 5.1%
Communications Equipment ..................... 4.9%
Health Care Equipment & Services ............. 4.8%
Computers & Peripherals ...................... 4.6%
Telecommunications ........................... 3.3%
Media ........................................ 2.3%
U.S. Treasury Bills .......................... 2.3%
Materials .................................... 0.9%
U.S. Treasury Notes .......................... 0.4%
Hotels and Gaming ............................ 0.0%
Other Assets and Liabilities (Net) ........... (0.3)%
-----
100.0%
=====
THE FUND FILES A COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS WITH THE SECURITIES AND
EXCHANGE COMMISSION (THE "SEC") FOR THE FIRST AND THIRD QUARTERS OF EACH FISCAL
YEAR ON FORM N-Q, THE LAST OF WHICH WAS FILED FOR THE QUARTER ENDED SEPTEMBER
30, 2007. SHAREHOLDERS MAY OBTAIN THIS INFORMATION AT WWW.GABELLI.COM OR BY
CALLING THE FUND AT 800-GABELLI (800-422-3554). THE FUND'S FORM N-Q IS AVAILABLE
ON THE SEC'S WEBSITE AT WWW.SEC.GOV AND MAY ALSO BE REVIEWED AND COPIED AT THE
SEC'S PUBLIC REFERENCE ROOM IN WASHINGTON, DC. INFORMATION ON THE OPERATION OF
THE PUBLIC REFERENCE ROOM MAY BE OBTAINED BY CALLING 1-800-SEC-0330.
PROXY VOTING
The Fund files Form N-PX with its complete proxy voting record for the 12 months
ended June 30th, no later than August 31st of each year. A description of the
Fund's proxy voting policies, procedures, and how the Fund voted proxies
relating to portfolio securities is available without charge, upon request, by
(i) calling 800-GABELLI (800-422-3554); (ii) writing to The Gabelli Funds at One
Corporate Center, Rye, NY 10580-1422; or (iii) visiting the SEC's website at
www.sec.gov.
4
THE GAMCO GROWTH FUND
SCHEDULE OF INVESTMENTS -- DECEMBER 31, 2007
================================================================================
MARKET
SHARES COST VALUE
------ ---- -----
COMMON STOCKS -- 97.6%
CONSUMER DISCRETIONARY -- 9.0%
HOTELS AND GAMING -- 0.0%
20,000 InterContinental Hotels Group plc . $ 527,336 $ 348,000
------------ ------------
MEDIA -- 2.3%
335,000 News Corp., Cl. B ................. 7,179,851 7,118,750
330,000 Viacom Inc., Cl. B+. .............. 13,199,437 14,493,600
------------ ------------
20,379,288 21,612,350
------------ ------------
RETAIL -- 6.7%
40,000 Abercrombie & Fitch Co., Cl. A .... 3,302,822 3,198,800
210,000 Coach Inc.+ ....................... 8,403,832 6,421,800
335,000 CVS Caremark Corp. ................ 12,120,766 13,316,250
120,000 J. Crew Group Inc.+. .............. 4,879,535 5,785,200
75,000 NIKE Inc., Cl. B .................. 4,158,740 4,818,000
170,000 Nordstrom Inc. .................... 8,260,120 6,244,100
95,000 Polo Ralph Lauren Corp. ........... 7,555,124 5,870,050
230,000 Starbucks Corp.+ .................. 6,424,044 4,708,100
50,000 Target Corp. ...................... 3,044,894 2,500,000
88,400 Tiffany & Co. ..................... 2,513,492 4,069,052
160,000 Whole Foods Market Inc. ........... 7,744,435 6,528,000
------------ ------------
68,407,804 63,459,352
------------ ------------
TOTAL CONSUMER DISCRETIONARY ...... 89,314,428 85,419,702
------------ ------------
CONSUMER STAPLES -- 9.5%
80,000 Groupe Danone ..................... 6,169,679 7,181,602
14,000 Nestle SA ......................... 6,123,266 6,430,243
470,000 PepsiCo Inc. ...................... 25,545,814 35,673,000
475,000 Procter & Gamble Co. .............. 27,446,739 34,874,500
150,000 Walgreen Co. ...................... 4,878,449 5,712,000
------------ ------------
TOTAL CONSUMER STAPLES ............ 70,163,947 89,871,345
------------ ------------
ENERGY -- 11.8%
42,000 Apache Corp. ...................... 3,269,285 4,516,680
55,000 Canadian Natural Resources Ltd. ... 4,036,194 4,022,700
100,000 Chesapeake Energy Corp. ........... 3,591,928 3,920,000
33,000 Diamond Offshore Drilling Inc. .... 3,747,259 4,686,000
58,000 EnCana Corp. ...................... 3,842,718 3,941,680
55,000 Hess Corp. ........................ 2,619,511 5,547,300
50,000 Murphy Oil Corp. .................. 2,898,803 4,242,000
65,000 National Oilwell Varco Inc.+ ...... 2,960,394 4,774,900
72,000 Noble Corp. ....................... 3,731,682 4,068,720
58,000 Occidental Petroleum Corp. ........ 3,086,046 4,465,420
70,000 Oceaneering International Inc.+ ... 4,729,704 4,714,500
MARKET
SHARES COST VALUE
------ ---- -----
70,000 Petroleo Brasileiro SA, ADR ....... $ 7,449,163 $ 8,066,800
78,000 Schlumberger Ltd. ................. 4,113,503 7,672,860
140,000 Suncor Energy Inc. ................ 13,591,410 15,222,200
60,556 Transocean Inc. ................... 8,021,911 8,668,592
150,000 Veolia Environnement .............. 12,322,484 13,695,776
70,000 Weatherford International Ltd.+ ... 4,405,723 4,802,000
96,250 XTO Energy Inc. ................... 4,110,269 4,943,400
------------ ------------
TOTAL ENERGY....................... 92,527,987 111,971,528
------------ ------------
FINANCIAL SERVICES -- 6.6%
38,000 Affiliated Managers Group Inc.+ ... 4,213,081 4,463,480
180,000 American Express Co. .............. 10,250,565 9,363,600
135,900 Northern Trust Corp. .............. 7,890,481 10,407,222
128,800 State Street Corp. ................ 7,827,866 10,458,560
150,000 T. Rowe Price Group Inc. .......... 7,264,948 9,132,000
730,000 The Charles Schwab Corp. .......... 15,914,634 18,651,500
------------ ------------
TOTAL FINANCIAL SERVICES .......... 53,361,575 62,476,362
------------ ------------
HEALTH CARE -- 9.9%
HEALTH CARE EQUIPMENT & SERVICES -- 4.8%
101,000 Alcon Inc. ........................ 11,968,768 14,447,040
210,000 St. Jude Medical Inc.+ ............ 9,151,284 8,534,400
200,000 Stryker Corp. ..................... 11,082,822 14,944,000
115,000 Zimmer Holdings Inc.+ ............. 9,209,964 7,607,250
------------ ------------
41,412,838 45,532,690
------------ ------------
PHARMACEUTICALS & BIOTECHNOLOGY -- 5.1%
125,000 Genentech Inc.+ ................... 9,727,408 8,383,750
310,000 Gilead Sciences Inc.+ ............. 11,238,733 14,263,100
191,600 Novo Nordisk A/S, ADR ............. 7,946,444 12,427,176
480,000 Schering-Plough Corp. ............. 13,978,439 12,787,200
------------ ------------
42,891,024 47,861,226
------------ ------------
TOTAL HEALTH CARE.................. 84,303,862 93,393,916
------------ ------------
INDUSTRIAL -- 16.6%
1,692 Areva SA .......................... 1,914,487 1,941,927
70,000 C.H. Robinson Worldwide Inc. ...... 2,978,774 3,788,400
80,000 Deere & Co. ....................... 5,846,966 7,449,600
260,000 Emerson Electric Co. .............. 11,184,873 14,731,600
70,000 Expeditors International of
Washington Inc. ................. 3,180,961 3,127,600
70,000 General Dynamics Corp. ............ 2,885,557 6,229,300
780,000 General Electric Co. .............. 27,069,529 28,914,600
240,000 ITT Corp. ......................... 11,117,197 15,849,600
140,000 L-3 Communications Holdings Inc. .. 10,905,804 14,831,600
160,000 Rockwell Collins Inc. ............. 9,855,961 11,515,200
90,000 SunPower Corp., Cl. A+ ............ 7,869,279 11,735,100
See accompanying notes to financial statements.
5
THE GAMCO GROWTH FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- DECEMBER 31, 2007
================================================================================
MARKET
SHARES COST VALUE
------ ---- -----
COMMON STOCKS (CONTINUED)
INDUSTRIAL (CONTINUED)
165,000 Suntech Power Holdings Co. Ltd., ADR+ $ 6,863,471 $ 13,582,800
185,000 United Technologies Corp. ......... 9,498,178 14,159,900
85,000 Vestas Wind Systems A/S+ .......... 6,136,472 9,199,910
------------ ------------
TOTAL INDUSTRIAL................... 117,307,509 157,057,137
------------ ------------
INFORMATION TECHNOLOGY -- 31.0%
COMMUNICATIONS EQUIPMENT -- 4.9%
1,201,000 Cisco Systems Inc.+. .............. 30,391,728 32,511,070
225,000 Harris Corp. ...................... 12,308,377 14,103,000
------------ ------------
42,700,105 46,614,070
------------ ------------
COMPUTERS & PERIPHERALS -- 4.6%
105,000 Apple Inc.+ ....................... 12,358,384 20,798,400
12,000 Nintendo Co. Ltd. ................. 4,950,293 7,186,143
135,000 Research In Motion Ltd.+ .......... 12,775,312 15,309,000
------------ ------------
30,083,989 43,293,543
------------ ------------
SEMICONDUCTORS -- 7.5%
1,050,000 Intel Corp. ....................... 26,847,366 27,993,000
170,000 MEMC Electronic Materials Inc.+ ... 11,571,454 15,043,300
120,000 NVIDIA Corp.+ ..................... 2,926,426 4,082,400
530,000 Texas Instruments Inc. ............ 16,928,879 17,702,000
220,000 Trimble Navigation Ltd.+ .......... 8,238,570 6,652,800
------------ ------------
66,512,695 71,473,500
------------ ------------
SOFTWARE & SERVICES -- 13.0%
330,000 Adobe Systems Inc.+. .............. 12,751,565 14,100,900
200,000 eBay Inc.+ ........................ 7,086,767 6,638,000
510,000 EMC Corp.+ ........................ 11,805,196 9,450,300
67,900 Google Inc., Cl. A+. .............. 20,949,240 46,951,492
55,000 MasterCard Inc., Cl. A ............ 10,071,217 11,836,000
950,000 Microsoft Corp. ................... 26,108,730 33,820,000
------------ ------------
88,772,715 122,796,692
------------ ------------
TELECOMMUNICATIONS -- 1.0%
400,000 Corning Inc. ...................... 9,991,192 9,596,000
------------ ------------
TOTAL INFORMATION TECHNOLOGY ...... 238,060,696 293,773,805
------------ ------------
MARKET
SHARES COST VALUE
------ ---- -----
MATERIALS -- 0.9%
75,000 Monsanto Co. ...................... $ 6,389,656 $ 8,376,750
------------ ------------
WIRELESS COMMUNICATIONS -- 2.3%
TELECOMMUNICATIONS -- 2.3%
130,000 America Movil SAB de CV, Cl. L, ADR 6,913,777 7,980,700
310,000 Rogers Communications Inc., Cl. B . 11,360,417 14,027,500
------------ ------------
18,274,194 22,008,200
------------ ------------
TOTAL WIRELESS COMMUNICATIONS ..... 18,274,194 22,008,200
------------ ------------
TOTAL COMMON STOCKS ............... 769,703,854 924,348,745
------------ ------------
PRINCIPAL
AMOUNT
------
U.S. GOVERNMENT OBLIGATIONS -- 2.7%
U.S. TREASURY BILLS -- 2.3%
$22,092,000 U.S. Treasury Bills,
2.855% to 3.085%++,
01/03/08 to 03/27/08 ............. 21,984,346 21,981,746
------------ ------------
U.S. TREASURY NOTES -- 0.4%
3,339,000 U.S. Treasury Note,
3.000%, 02/15/08 ................. 3,334,598 3,334,598
------------ ------------
TOTAL U.S. GOVERNMENT OBLIGATIONS 25,318,944 25,316,344
------------ ------------
TOTAL
INVESTMENTS -- 100.3% ............ $795,022,798 949,665,089
============
OTHER ASSETS AND LIABILITIES (NET) -- (0.3)% (2,549,903)
------------
NET ASSETS -- 100.0%.............................. $947,115,186
============
- ----------------
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
ADR American Depository Receipt
See accompanying notes to financial statements.
6
THE GAMCO GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2007
================================================================================
ASSETS:
Investments, at value (cost $795,022,798)........... $ 949,665,089
Cash................................................ 1,663
Receivable for Fund shares sold..................... 797,758
Dividends receivable................................ 894,469
Prepaid expense..................................... 54,781
--------------
TOTAL ASSETS........................................ 951,413,760
--------------
LIABILITIES:
Payable for Fund shares redeemed.................... 2,407,543
Payable for investment advisory fees................ 808,242
Payable for distribution fees....................... 202,859
Payable for accounting fees......................... 11,251
Payable for shareholder services fees............... 577,998
Other accrued expenses.............................. 290,681
--------------
TOTAL LIABILITIES................................... 4,298,574
--------------
NET ASSETS applicable to 26,186,554
shares outstanding .............................. $ 947,115,186
==============
NET ASSETS CONSIST OF:
Paid-in capital, each class at $0.01 par value ..... $1,617,324,916
Accumulated net realized loss on investments
and foreign currency transactions ................ (824,852,021)
Net unrealized appreciation on investments ......... 154,642,291
--------------
NET ASSETS.......................................... $ 947,115,186
==============
SHARES OF BENEFICIAL INTEREST:
CLASS AAA:
Net Asset Value, offering and redemption price per
share ($945,067,704 / 26,128,819 shares outstanding;
unlimited number of shares authorized)............ $36.17
======
CLASS A:
Net Asset Value and redemption price per share
($706,881 / 19,539 shares outstanding;
unlimited number of shares authorized) ........... $36.18
======
Maximum offering price per share (NAV / .9425,
based on maximum sales charge of 5.75%
of the offering price) ........................... $38.39
======
CLASS B:
Net Asset Value and offering price per share
($338,979 / 9,658 shares outstanding;
unlimited number of shares authorized) ........... $35.10(a)
======
CLASS C:
Net Asset Value and offering price per share
($1,001,622 / 28,538 shares outstanding;
unlimited number of shares authorized) ........... $35.10(a)
======
(a) Redemption price varies based on the length of time held.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2007
================================================================================
INVESTMENT INCOME:
Dividends (net of foreign taxes of $119,508) $ 8,302,168
Interest............................................ 730,776
-------------
TOTAL INVESTMENT INCOME............................. 9,032,944
-------------
EXPENSES:
Investment advisory fees............................ 9,359,283
Distribution fees - Class AAA....................... 2,336,961
Distribution fees - Class A......................... 749
Distribution fees - Class B......................... 3,135
Distribution fees - Class C......................... 5,308
Shareholder services fees........................... 1,054,488
Shareholder communications expenses................. 416,084
Custodian fees...................................... 118,466
Legal and audit fees................................ 77,718
Trustees' fees...................................... 71,531
Accounting fees..................................... 45,000
Registration expenses............................... 16,565
Interest expense.................................... 3,500
Miscellaneous expenses.............................. 84,110
-------------
TOTAL EXPENSES...................................... 13,592,898
Less: Custodian fee credits......................... (4,444)
-------------
NET EXPENSES........................................ 13,588,454
-------------
NET INVESTMENT LOSS................................. (4,555,510)
-------------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS AND FOREIGN CURRENCY:
Net realized gain on investments.................... 112,541,893
Net realized gain on foreign currency transactions.. 2,282
-------------
Net realized gain on investments
and foreign currency transactions ................ 112,544,175
-------------
Net change in unrealized appreciation/
depreciation on investments ...................... 47,767,726
-------------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS AND FOREIGN CURRENCY .............. 160,311,901
-------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS .................................. $ 155,756,391
=============
See accompanying notes to financial statements.
7
THE GAMCO GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
================================================================================
YEAR ENDED YEAR ENDED
DECEMBER 31, 2007 DECEMBER 31, 2006
----------------- -----------------
OPERATIONS:
Net investment loss...................................................... $ (4,555,510) $ (1,935,652)
Net realized gain on investments and foreign currency transactions....... 112,544,175 124,028,687
Net change in unrealized appreciation/depreciation on investments........ 47,767,726 (60,720,080)
------------- --------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS..................... 155,756,391 61,372,955
------------- --------------
SHARES OF BENEFICIAL INTEREST TRANSACTIONS:
Class AAA................................................................ (167,322,376) (244,152,530)
Class A.................................................................. 383,595 (14,124)
Class C.................................................................. 517,747 (176,602)
------------- --------------
NET DECREASE IN NET ASSETS FROM SHARES OF BENEFICIAL INTEREST TRANSACTIONS (166,421,034) (244,343,256)
------------- --------------
REDEMPTION FEES.......................................................... 2,333 6,591
------------- --------------
NET DECREASE IN NET ASSETS............................................... (10,662,310) (182,963,710)
NET ASSETS:
Beginning of period...................................................... 957,777,496 1,140,741,206
------------ -------------
End of period (including undistributed net investment income
of $0 and $0, respectively) ........................................... $ 947,115,186 $ 957,777,496
============= ==============
THE GAMCO GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
================================================================================
1. ORGANIZATION. The GAMCO Growth Fund (the "Fund"), was organized on October
24, 1986 as a Massachusetts business trust. The Fund is a diversified open-end
management investment company registered under the Investment Company Act of
1940, as amended (the "1940 Act"). The Fund's primary objective is capital
appreciation. The Fund commenced investment operations on April 10, 1987.
2. SIGNIFICANT ACCOUNTING POLICIES. The preparation of financial statements in
accordance with United States ("U.S.") generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amounts and disclosures in the financial statements. Actual results could differ
from those estimates. The following is a summary of significant accounting
policies followed by the Fund in the preparation of its financial statements.
SECURITY VALUATION. Portfolio securities listed or traded on a nationally
recognized securities exchange or traded in the U.S. over-the-counter market for
which market quotations are readily available are valued at the last quoted sale
price or a market's official closing price as of the close of business on the
day the securities are being valued. If there were no sales that day, the
security is valued at the average of the closing bid and asked prices or, if
there were no asked prices quoted on that day, then the security is valued at
the closing bid price on that day. If no bid or asked prices are quoted on such
day, the security is valued at the most recently available price or, if the
Board of Trustees (the "Board") so determines, by such other method as the Board
shall determine in good faith to reflect its fair market value. Portfolio
securities traded on more than one national securities exchange or market are
valued according to the broadest and most representative market, as determined
by Gabelli Funds, LLC (the "Adviser").
8
THE GAMCO GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
Portfolio securities primarily traded on a foreign market are generally valued
at the preceding closing values of such securities on the relevant market, but
may be fair valued pursuant to procedures established by the Board if market
conditions change significantly after the close of the foreign market but prior
to the close of business on the day the securities are being valued. Debt
instruments with remaining maturities of 60 days or less that are not credit
impaired are valued at amortized cost, unless the Board determines such amount
does not reflect the securities' fair value, in which case these securities will
be fair valued as determined by the Board. Debt instruments having a maturity
greater than 60 days for which market quotations are readily available are
valued at the average of the latest bid and asked prices. If there were no asked
prices quoted on such day, the security is valued using the closing bid price.
Futures contracts are valued at the closing settlement price of the exchange or
board of trade on which the applicable contract is traded.
Securities and assets for which market quotations are not readily available are
fair valued as determined by the Board. Fair valuation methodologies and
procedures may include, but are not limited to: analysis and review of available
financial and non-financial information about the company; comparisons to the
valuation and changes in valuation of similar securities, including a comparison
of foreign securities to the equivalent U.S. dollar value ADR securities at the
close of the U.S. exchange; and evaluation of any other information that could
be indicative of the value of the security.
In September 2006, the Financial Accounting Standards Board (the "FASB") issued
Statement of Financial Accounting Standards ("SFAS") 157, Fair Value
Measurements, which clarifies the definition of fair value and requires
companies to expand their disclosure about the use of fair value to measure
assets and liabilities in interim and annual periods subsequent to initial
recognition. Adoption of SFAS 157 requires the use of the price that would be
received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. SFAS 157 is
effective for financial statements issued for fiscal years beginning after
November 15, 2007, and interim periods within those fiscal years. At this time,
management is in the process of reviewing the requirements of SFAS 157 against
its current valuation policies to determine future applicability.
FOREIGN SECURITIES. The Fund may directly purchase securities of foreign
issuers. Investing in securities of foreign issuers involves special risks not
typically associated with investing in securities of U.S. issuers. The risks
include possible revaluation of currencies, the ability to repatriate funds,
less complete financial information about companies, and possible future adverse
political and economic developments. Moreover, securities of many foreign
issuers and their markets may be less liquid and their prices more volatile than
those of securities of comparable U.S. issuers.
FOREIGN TAXES. The Fund may be subject to foreign taxes on income, gains on
investments, or currency repatriation, a portion of which may be recoverable.
The Fund will accrue such taxes and recoveries as applicable, based upon its
current interpretation of tax rules and regulations that exist in the markets in
which it invests.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME. Securities transactions are
accounted for on the trade date with realized gain or loss on investments
determined by using the identified cost method. Interest income (including
amortization of premium and accretion of discount) is recorded on the accrual
basis. Premiums and discounts on debt securities are amortized using the
effective yield to maturity method. Dividend income is recorded on the
ex-dividend date except for certain dividends which are recorded as soon as the
Fund is informed of the dividend.
9
THE GAMCO GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
DETERMINATION OF NET ASSET VALUE AND CALCULATION OF EXPENSES. Certain
administrative expenses are common to, and allocated among, various affiliated
funds. Such allocations are made on the basis of each Fund's average net assets
or other criteria directly affecting the expenses as determined by the Adviser
pursuant to procedures established by the Board.
In calculating the NAV per share of each class, investment income, realized and
unrealized gains and losses, redemption fees, and expenses other than class
specific expenses are allocated daily to each class of shares based upon the
proportion of net assets of each class at the beginning of each day.
Distribution expenses are borne solely by the class incurring the expense.
CUSTODIAN FEE CREDITS AND INTEREST EXPENSE. When cash balances are maintained in
the custody account, the Fund receives credits which are used to offset
custodian fees. The gross expenses paid under the custody arrangement are
included in custodian fees in the Statement of Operations with the corresponding
expense offset, if any, shown as "custodian fee credits." When cash balances are
overdrawn, the Fund is charged an overdraft fee equal to 2.00% above the federal
funds rate on outstanding balances. This amount, if any, would be shown as
"interest expense" in the Statement of Operations.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions to shareholders if any are recorded
on the ex-dividend date. Distributions to shareholders are based on income and
capital gains as determined in accordance with federal income tax regulations,
which may differ from income and capital gains as determined under U.S.
generally accepted accounting principles. These differences are primarily due to
differing treatments of income and gains on various investment securities held
by the Fund, timing differences, and differing characterizations of
distributions made by the Fund. These book/tax differences are either temporary
or permanent in nature. To the extent these differences are permanent,
adjustments are made to the appropriate capital accounts in the period when the
differences arise. These reclassifications have no impact on the net asset value
of the Fund. For the fiscal year ended December 31, 2007, reclassifications were
made to decrease accumulated net investment loss by $4,555,510, and to increase
accumulated net realized loss on investments and foreign currency transactions
by $1,637 with an offsetting adjustment to paid-in capital.
No distributions were made during the fiscal years ended December 31, 2007 and
December 31, 2006.
PROVISION FOR INCOME TAXES. The Fund intends to continue to qualify as a
regulated investment company under Subchapter M of the Internal Revenue Code of
1986, as amended (the "Code"). It is the policy of the Fund to comply with the
requirements of the Code applicable to regulated investment companies and to
distribute substantially all of its net investment company taxable income and
net capital gains. Therefore, no provision for federal income taxes is required.
At December 31, 2007, the difference between book basis and tax basis unrealized
appreciation was primarily due to deferral of losses from wash sales for tax
purposes.
At December 31, 2007, the components of accumulated earnings/(losses) on a tax
basis were as follows:
Accumulated capital loss carryforwards............... $(821,106,933)
Net unrealized appreciation.......................... 150,897,203
-------------
Total................................................ $(670,209,730)
=============
10
THE GAMCO GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
At December 31, 2007, the Fund had net capital loss carryforwards for federal
income tax purposes of $821,106,933, which are available to reduce future
required distributions of net capital gains to shareholders. $469,914,764 is
available through 2010; $350,050,494 is available through 2011; and $1,141,675
is available through 2012.
During the fiscal year ended December 31, 2007, The GAMCO Growth Fund utilized
capital loss carryforwards of $109,612,571.
The following summarizes the tax cost of investments and the related unrealized
appreciation/(depreciation) at December 31, 2007:
GROSS GROSS
UNREALIZED UNREALIZED NET UNREALIZED
COST APPRECIATION DEPRECIATION APPRECIATION
---- ------------ ------------ ------------
Investments............ $798,767,886 $174,658,435 $(23,761,232) $150,897,203
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 the Fund is taxable in
a particular jurisdiction) and required certain expanded tax disclosures. The
Fund has adopted the Interpretation for all open tax years and it had no impact
on the amounts reported in the financial statements.
3. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS. The Fund has entered
into an investment advisory agreement (the "Advisory Agreement") with the
Adviser which provides that the Fund will pay the Adviser a fee, computed daily
and paid monthly, at the annual rate of 1.00% of the value of its average daily
net assets. In accordance with the Advisory Agreement, the Adviser provides a
continuous investment program for the Fund's portfolio, oversees the
administration of all aspects of the Fund's business and affairs, and pays the
compensation of all Officers and Trustees of the Fund who are affiliated persons
of the Adviser.
The Fund pays each Trustee who is not considered to be an affiliated person an
annual retainer of $6,000 plus $500 for each Board meeting attended and they are
reimbursed for any out of pocket expenses incurred in attending meetings. All
Board committee members receive $500 per meeting attended and the chairman of
each committee also receives $1,000 per year. Trustees who are directors or
employees of the Adviser or an affiliated company receive no compensation or
expense reimbursement from the Fund.
4. DISTRIBUTION PLAN. The Fund's Board has adopted a distribution plan (the
"Plan") for each class of shares pursuant to Rule 12b-1 under the 1940 Act.
Gabelli & Company, Inc. ("Gabelli & Company"), an affiliate of the Adviser,
serves as distributor of the Fund. Under the Class AAA, Class A, Class B, and
Class C Share Plans, payments are authorized to Gabelli & Company at annual
rates of 0.25%, 0.25%, 1.00%, and 1.00%, respectively, of the average daily net
assets of those classes, the annual limitations under each Plan. Such payments
are accrued daily and paid monthly.
5. PORTFOLIO SECURITIES. Purchases and proceeds from the sales of securities for
the fiscal year ended December 31, 2007, other than short-term securities and
U.S. Government obligations, aggregated $833,650,701 and $992,179,121,
respectively.
11
THE GAMCO GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
6. TRANSACTIONS WITH AFFILIATES. During the fiscal year ended December 31, 2007,
the Fund paid brokerage commissions on security trades of $53,980 to Gabelli &
Company. Additionally, Gabelli & Company informed the Fund that it received
$1,336 from investors representing commissions (sales charges and underwriting
fees) on sales and redemptions of Fund shares.
The cost of calculating the Fund's NAV per share is a Fund expense pursuant to
the Advisory Agreement between the Fund and the Adviser. During the fiscal year
ended December 31, 2007, the Fund paid or accrued $45,000 to the Adviser in
connection with the cost of computing the Fund's NAV.
7. LINE OF CREDIT. Effective June 20, 2007, the Fund participates in an
unsecured line of credit of up to $75,000,000, and may borrow up to 10% of its
net assets from the custodian for temporary borrowing purposes. Prior to June
20, 2007, the line of credit was $25,000,000. Borrowings under this arrangement
bear interest at 0.75% above the federal funds rate on outstanding balances.
This amount, if any, would be shown as "interest expense" in the Statement of
Operations. During the fiscal year ended December 31, 2007, there were no
borrowings under the line of credit.
8. SHARES OF BENEFICIAL INTEREST. The Fund offers five classes of shares - Class
AAA Shares, Class A Shares, Class B Shares, Class C Shares, and Class I Shares.
Effective February 15, 2007, Class AAA Shares are offered only to investors who
were shareholders prior to that date in one or more of the registered funds
distributed by Gabelli & Company. Class AAA Shares are offered to these
investors only through selected broker/dealers or the transfer agent without a
sales charge. Class I Shares are offered to foundations, endowments,
institutions, and employee benefit plans. Class A Shares are subject to a
maximum front-end sales charge of 5.75%. Class B Shares are subject to a
contingent deferred sales charge ("CDSC") upon redemption within six years of
purchase and automatically convert to Class A Shares approximately eight years
after the original purchase. The applicable CDSC is equal to a declining
percentage of the lesser of the NAV per share at the date of the original
purchase or at the date of redemption, based on the length of time held. Class C
Shares are subject to a 1.00% CDSC for one year after purchase. Class B Shares
are available only through exchange of Class B Shares of other funds distributed
by Gabelli & Company. Class I Shares were first issued on January 11, 2008.
The Fund imposes a redemption fee of 2.00% on Class AAA Shares, Class A Shares,
Class B Shares, Class C Shares, and Class I Shares that are redeemed or
exchanged on or before the seventh day after the date of a purchase. The
redemption fee is deducted from the proceeds otherwise payable to the redeeming
shareholders and is retained by the Fund. The redemption fees retained by the
Fund during the fiscal years ended December 31, 2007 and December 31, 2006
amounted to $2,333 and $6,591, respectively.
The redemption fee does not apply to redemptions of shares where (i) the shares
were purchased through automatic reinvestment of dividends or other
distributions, (ii) the redemption was initiated by the Fund, (iii) the shares
were purchased through programs that collect the redemption fee at the program
level and remit them to the Fund, or (iv) the shares were purchased through
programs that the Adviser determines to have appropriate anti-short-term trading
policies in place or as to which the Adviser has received assurances that
look-through redemption fee procedures or effective anti-short-term trading
policies and procedures are in place.
12
THE GAMCO GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
Transactions in shares of beneficial interest were as follows:
YEAR ENDED YEAR ENDED
DECEMBER 31, 2007 DECEMBER 31, 2006
---------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------- ----------- -------------
CLASS AAA CLASS AAA
---------------------------- ----------------------------
Shares sold ....................................... 1,554,938 $ 52,014,192 2,450,572 $ 71,744,626
Shares redeemed.................................... (6,677,205) (219,336,568) (10,762,763) (315,897,156)
---------- ------------- ----------- -------------
Net decrease..................................... (5,122,267) $(167,322,376) (8,312,191) $(244,152,530)
========== ============= =========== =============
CLASS A CLASS A
---------------------------- ----------------------------
Shares sold ....................................... 13,455 $ 476,635 1,400 $ 40,639
Shares redeemed.................................... (2,938) (93,040) (1,881) (54,763)
---------- ------------- ----------- -------------
Net increase (decrease).......................... 10,517 $ 383,595 (481) $ (14,124)
========== ============= =========== =============
CLASS C CLASS C
---------------------------- ----------------------------
Shares sold ....................................... 21,140 $ 700,407 2,965 $ 85,939
Shares redeemed.................................... (6,006) (182,660) (9,040) (262,541)
---------- ------------- ----------- -------------
Net increase (decrease).......................... 15,134 $ 517,747 (6,075) $ (176,602)
========== ============= =========== =============
9. INDEMNIFICATIONS. The Fund enters into contracts that contain a variety of
indemnifications. The Fund's maximum exposure under these arrangements is
unknown. However, the Fund has not had prior claims or losses pursuant to these
contracts and expects the risk of loss to be remote.
10. OTHER MATTERS. The Adviser and/or affiliates received subpoenas from the
Attorney General of the State of New York and the SEC requesting information on
mutual fund share trading practices involving certain funds managed by the
Adviser. GAMCO Investors, Inc. ("GAMCO"), the Adviser's parent company,
responded to these requests for documents and testimony. In June 2006, GAMCO
began discussions with the SEC regarding a possible resolution of their inquiry.
In February 2007, the Adviser made an offer of settlement to the staff of the
SEC for communication to the Commission for its consideration to resolve this
matter. This offer of settlement is subject to agreement regarding the specific
language of the SEC's administrative order and other settlement documents. On a
separate matter, in September 2005, the Adviser was informed by the staff of the
SEC that the staff may recommend to the Commission that an administrative remedy
and a monetary penalty be sought from the Adviser in connection with the actions
of two of nine closed-end funds managed by the Adviser relating to Section 19(a)
and Rule 19a-1 of the 1940 Act. These provisions require registered investment
companies to provide written statements to shareholders when a dividend is made
from a source other than net investment income. While the two closed-end funds
sent annual statements and provided other materials containing this information,
the funds did not send written statements to shareholders with each distribution
in 2002 and 2003. The Adviser believes that all of the funds are now in
compliance. The Adviser believes that these matters would have no effect on the
Fund or any material adverse effect on the Adviser or its ability to manage the
Fund.
13
THE GAMCO GROWTH FUND
FINANCIAL HIGHLIGHTS
================================================================================
Selected data for a share of beneficial interest outstanding throughout each
period:
INCOME FROM INVESTMENT OPERATIONS
--------------------------------------
Net
Net Asset Realized and Total
Period Value, Net Unrealized from
Ended Beginning Investment Gain on Investment
December 31 of Period Loss(a) Investments Operations
- ----------- --------- ---------- ------------- ----------
CLASS AAA
2007 $30.62 $(0.16) $5.71 $5.55
2006 28.81 (0.05) 1.86 1.81
2005 26.12 (0.13) 2.82 2.69
2004 24.95 (0.11) 1.28 1.17
2003 18.99 (0.14) 6.10 5.96
CLASS A
2007 $30.63 $(0.08) $5.63 $5.55
2006 28.82 (0.06) 1.87 1.81
2005 26.13 (0.12) 2.81 2.69
2004(c) 24.95 (0.02) 1.20 1.18
CLASS B
2007 $29.93 $(0.40) $5.57 $5.17
2006 28.38 (0.27) 1.82 1.55
2005 25.93 (0.32) 2.77 2.45
2004(c) 24.95 (0.28) 1.26 0.98
CLASS C
2007 $29.93 $(0.40) $5.57 $5.17
2006 28.38 (0.27) 1.82 1.55
2005 25.93 (0.32) 2.77 2.45
2004(c) 24.95 (0.21) 1.19 0.98
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
--------------------------------------------------
Net Asset Net Assets
Period Value, End of Net Portfolio
Ended Redemption End of Total Period Investment Operating Turnover
December 31 Fees(a) Period Return+ (in 000's) Loss Expenses Rate
- ----------- --------- ------- ------- ---------- ---------- ----------- ----------
CLASS AAA
2007 $0.00(b) $36.17 18.1% $ 945,068 (0.49)% 1.45% 91%
2006 0.00(b) 30.62 6.3 956,811 (0.19) 1.44 57
2005 0.00(b) 28.81 10.3 1,139,640 (0.48) 1.49 39
2004 0.00(b) 26.12 4.7 1,447,655 (0.46) 1.53 31
2003 -- 24.95 31.4 1,881,457 (0.60) 1.47 42
CLASS A
2007 $0.00(b) $36.18 18.1% $ 707 (0.23)% 1.45% 91%
2006 0.00(b) 30.63 6.3 276 (0.19) 1.44 57
2005 0.00(b) 28.82 10.3 274 (0.43) 1.47 39
2004(c) 0.00(b) 26.13 4.7 73 (0.09) 1.60 31
CLASS B
2007 $0.00(b) $35.10 17.2% $ 339 (1.23)% 2.20% 91%
2006 0.00(b) 29.93 5.5 289 (0.94) 2.19 57
2005 0.00(b) 28.38 9.5 274 (1.22) 2.24 39
2004(c) 0.00(b) 25.93 3.9 250 (1.12) 2.30 31
CLASS C
2007 $0.00(b) $35.10 17.2% $ 1,001 (1.23)% 2.20% 91%
2006 0.00(b) 29.93 5.5 401 (0.95) 2.19 57
2005 0.00(b) 28.38 9.5 553 (1.21) 2.23 39
2004(c) 0.00(b) 25.93 3.9 226 (0.88) 2.37 31
+ Total return represents aggregate total return of a hypothetical $1,000
investment at the beginning of the period and sold at the end of the period
including reinvestment of distributions and does not reflect applicable
sales charges.
(a) Per share amounts have been calculated using the average shares outstanding
method.
(b) Amount represents less than $0.005 per share.
(c) Class A, Class B, and Class C Shares were initially offered on December 31,
2003.
See accompanying notes to financial statements.
14
THE GAMCO GROWTH FUND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
================================================================================
To the Board of Trustees and Shareholders of
The GAMCO Growth Fund:
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of The GAMCO Growth Fund (hereafter
referred to as the "Fund") at December 31, 2007, the results of its operations
for the year then ended, the changes in its net assets for each of the two years
in the period then ended and the financial highlights for each of the periods
presented, in conformity with accounting principles generally accepted in the
United States of America. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at
December 31, 2007 by correspondence with the custodian, provide a reasonable
basis for our opinion.
PricewaterhouseCoopers LLP
New York, New York
February 29, 2008
15
THE GAMCO GROWTH FUND
ADDITIONAL FUND INFORMATION (UNAUDITED)
================================================================================
The business and affairs of the Fund are managed under the direction of the
Fund's Board of Trustees. Information pertaining to the Trustees and officers of
the Fund is set forth below. The Fund's Statement of Additional Information
includes additional information about the Fund's Trustees and is available,
without charge, upon request, by calling 800-GABELLI (800-422-3554) or by
writing to The GAMCO Growth Fund at One Corporate Center, Rye, NY 10580-1422.
TERM OF NUMBER OF
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(4)
------- -------------- ---------- ---------------------- ------------------
INTERESTED TRUSTEES(3):
- -----------------------
MARIO J. GABELLI Since 1992 26 Chairman and Chief Executive Officer of Director of Morgan Group
Trustee GAMCO Investors, Inc. and Chief Investment Holdings, Inc. (holding company);
Age: 65 Officer - Value Portfolios of Gabelli Chairman of the Board of LICT
Funds, LLC and GAMCO Asset Management Inc.; Corp. (multimedia and
Director/Trustee or Chief Investment communication services
Officer of other registered investment company)
companies in the Gabelli/GAMCO Funds
complex; Chairman and Chief Executive
Officer of GGCP, Inc.
JOHN D. GABELLI Since 1995 10 Senior Vice President of Gabelli & Director of GAMCO
Trustee Company, Inc. Investors, Inc.
Age: 63
ANTHONY TORNA, SR. Since 1987 1 Registered Representative, Maxim Group LLC --
Trustee from 2002; Investec Ernst & Company,
Age: 81 2001-2002; Herzog, Heine & Geduld, Inc.
through 2000
INDEPENDENT TRUSTEES(5):
ANTHONY J. COLAVITA Since 1989 35 Partner in the law firm of --
Trustee Anthony J. Colavita, P.C.
Age: 72
JAMES P. CONN Since 1992 16 Former Managing Director and Chief --
Trustee Investment Officer of Financial Security
Age: 69 Assurance Holdings Ltd. (insurance
holding company) (1992-1998)
DUGALD A. FLETCHER 1989-1996 2 President, Fletcher & Company, Inc. Director of Harris and
Trustee 2000-present Harris Group, Inc.
Age: 78 (venture capital)
ROBERT J. MORRISSEY Since 2001 6 Partner in the law firm of Morrissey, --
Trustee Hawkins & Lynch
Age: 68
ANTHONY R. PUSTORINO Since 1987 14 Certified Public Accountant; Professor Director of The LGL Group, Inc.
Trustee Emeritus, Pace University (diversified manufacturing)
Age: 82
ANTHONIE C. VAN EKRIS 1987-1989 19 Chairman of BALMAC International, Inc. --
Trustee 1992-present (commodities and futures trading)
Age: 73
SALVATORE J. ZIZZA 1987-1996 26 Chairman of Zizza & Co., Ltd. Director of Hollis-Eden
Trustee 2000-present (consulting) Pharmaceuticals (biotechnology);
Age: 62 Director of Earl Scheib, Inc.
(automotive services)
16
THE GAMCO GROWTH FUND
ADDITIONAL FUND INFORMATION (CONTINUED) (UNAUDITED)
================================================================================
TERM OF
NAME, POSITION(S) OFFICE AND
ADDRESS(1) LENGTH OF PRINCIPAL OCCUPATION(S)
AND AGE TIME SERVED(2) DURING PAST FIVE YEARS
------- -------------- ----------------------
OFFICERS:
- ---------
BRUCE N. ALPERT Since 1994 Executive Vice President and Chief Operating Officer of Gabelli Funds, LLC
President since 1988 and an officer of most of the registered investment companies in
Age: 56 the Gabelli/GAMCO Funds complex. Director and President of Gabelli Advisers,
Inc. since 1998
JAMES E. MCKEE Since 1995 Vice President, General Counsel, and Secretary of GAMCO Investors, Inc.
Secretary since 1999 and GAMCO Asset Management Inc. since 1993; Secretary of all of
Age: 44 the registered investment companies in the Gabelli/GAMCO Funds complex
AGNES MULLADY Since 2006 Vice President of Gabelli Funds, LLC since 2007; Officer of all of the
Treasurer registered investment companies in the Gabelli/GAMCO Funds complex; Senior
Age: 49 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
PETER D. GOLDSTEIN Since 2004 Director of Regulatory Affairs at GAMCO Investors, Inc. since 2004;
Chief Compliance Officer Chief Compliance Officer of all of the registered investment companies in the
Age: 54 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
Fund's By-Laws and Declaration of Trust. Each officer will hold office for
an indefinite term until the date he or she resigns or retires or until his
or her successor is elected and qualified.
3 "Interested person" of the Fund as defined in the 1940 Act. Messrs. Gabelli
are each considered an "interested person" because of their affiliation
with Gabelli Funds, LLC which acts as the Fund's investment adviser. Mr.
Torna is considered an interested person because he is a registered broker
with a firm to which the Fund Complex (but not the Fund) pays brokerage
commissions. Mario J. Gabelli and John D. Gabelli are brothers.
4 This column includes only directorships of companies required to report to
the SEC under the Securities Exchange Act of 1934, as amended (i.e. public
companies) or other investment companies registered under the 1940 Act.
5 Trustees who are not interested persons are considered "Independent"
Trustees.
17
- --------------------------------------------------------------------------------
GABELLI/GAMCO FUNDS AND YOUR PERSONAL PRIVACY
================================================================================
WHO ARE WE?
The Gabelli/GAMCO Funds are investment companies registered with the
Securities and Exchange Commission under the Investment Company Act of
1940. We are managed by Gabelli Funds, LLC and Gabelli Advisers, Inc.,
which are affiliated with GAMCO Investors, Inc. GAMCO Investors, Inc. is a
publicly held company that has subsidiaries that provide investment
advisory or brokerage services for a variety of clients.
WHAT KIND OF NON-PUBLIC INFORMATION DO WE COLLECT ABOUT YOU IF YOU BECOME A
SHAREHOLDER?
If you apply to open an account directly with us, you will be giving us
some non-public information about yourself. The non-public information we
collect about you is:
o INFORMATION YOU GIVE US ON YOUR APPLICATION FORM. This could include
your name, address, telephone number, social security number, bank
account number, and other information.
o INFORMATION ABOUT YOUR TRANSACTIONS WITH US, ANY TRANSACTIONS WITH OUR
AFFILIATES, AND TRANSACTIONS WITH THE ENTITIES WE HIRE TO PROVIDE
SERVICES TO YOU. This would include information about the shares that
you buy or redeem. If we hire someone else to provide services--like a
transfer agent--we will also have information about the transactions
that you conduct through them.
WHAT INFORMATION DO WE DISCLOSE AND TO WHOM DO WE DISCLOSE IT?
We do not disclose any non-public personal information about our customers
or former customers to anyone other than our affiliates, our service
providers who need to know such information, and as otherwise permitted by
law. If you want to find out what the law permits, you can read the privacy
rules adopted by the Securities and Exchange Commission. They are in volume
17 of the Code of Federal Regulations, Part 248. The Commission often posts
information about its regulations on its web site, www.sec.gov.
WHAT DO WE DO TO PROTECT YOUR PERSONAL INFORMATION?
We restrict access to non-public personal information about you to the
people who need to know that information in order to provide services to
you or the Fund and to ensure that we are complying with the laws governing
the securities business. We maintain physical, electronic, and procedural
safeguards to keep your personal information confidential.
- --------------------------------------------------------------------------------
GABELLI FAMILY OF FUNDS
VALUE _______________________________________
GABELLI ASSET FUND
Seeks to invest primarily in a diversified portfolio of common stocks selling at
significant discounts to their private market value. The Fund's primary
objective is growth of capital. (MULTICLASS)
PORTFOLIO MANAGER: MARIO J. GABELLI, CFA
GABELLI BLUE CHIP VALUE FUND
Seeks long term growth of capital through investment primarily in the common
stocks of established companies which are temporarily out of favor. The fund's
objective is to identify a catalyst or sequence of events that will return the
company to a higher value.
(MULTICLASS) PORTFOLIO MANAGER: BARBARA MARCIN, CFA
GAMCO WESTWOOD EQUITY FUND
Seeks to invest primarily in the common stock of well seasoned companies that
have recently reported positive earnings surprises and are trading below
Westwood's proprietary growth rate estimates. The Fund's primary objective is
capital appreciation.
(MULTICLASS) PORTFOLIO MANAGER: SUSAN M. BYRNE
FOCUSED VALUE _______________________________
GABELLI VALUE FUND
Seeks to invest in securities of companies believed to be undervalued. The
Fund's primary objective is long-term capital appreciation. (MULTICLASS)
PORTFOLIO MANAGER: MARIO J. GABELLI, CFA
SMALL CAP VALUE _____________________________
GABELLI SMALL CAP FUND
Seeks to invest primarily in common stock of smaller companies (market
capitalizations at the time of investment of $2 billion or less) believed to
have rapid revenue and earnings growth potential. The Fund's primary objective
is capital appreciation.
(MULTICLASS) PORTFOLIO MANAGER: MARIO J. GABELLI, CFA
GAMCO WESTWOOD SMALLCAP EQUITY FUND
Seeks to invest primarily in smaller capitalization equity securities - market
caps of $2.5 billion or less. The Fund's primary objective is long-term capital
appreciation. (MULTICLASS) PORTFOLIO MANAGER: ELIZABETH M. LILLY, CFA
GABELLI WOODLAND SMALL CAP VALUE FUND
Seeks to invest primarily in the common stocks of smaller companies (market
capitalizations generally less than $3.0 billion) believed to be undervalued
with shareholder oriented management teams that are employing strategies to grow
the company's value. The Fund's primary objective is capital appreciation.
(MULTICLASS) PORTFOLIO MANAGER: ELIZABETH M. LILLY, CFA
GROWTH ______________________________________
GAMCO GROWTH FUND
Seeks to invest primarily in large cap stocks believed to have favorable, yet
undervalued, prospects for earnings growth. The Fund's primary objective is
capital appreciation. (MULTICLASS) PORTFOLIO MANAGER: HOWARD F. WARD, CFA
GAMCO INTERNATIONAL GROWTH FUND
Seeks to invest in the equity securities of foreign issuers with long-term
capital appreciation potential. The Fund offers investors global
diversification. (MULTICLASS) PORTFOLIO MANAGER: CAESAR BRYAN
AGGRESSIVE GROWTH ___________________________
GAMCO GLOBAL GROWTH FUND
Seeks capital appreciation through a disciplined investment program focusing on
the globalization and interactivity of the world's marketplace. The Fund invests
in companies at the forefront of accelerated growth. The Fund's primary
objective is capital appreciation. (MULTICLASS) TEAM MANAGED
MICRO-CAP ___________________________________
GAMCO WESTWOOD MIGHTY MITES(SM) FUND
Seeks to invest in micro-cap companies that have market capitalizations of $300
million or less. The Fund's primary objective is long-term capital appreciation.
(MULTICLASS) TEAM MANAGED
EQUITY INCOME _______________________________
GABELLI EQUITY INCOME FUND
Seeks to invest primarily in equity securities with above average market yields.
The Fund pays monthly dividends and seeks a high level of total return with an
emphasis on income. (MULTICLASS) PORTFOLIO MANAGER: MARIO J. GABELLI, CFA
GAMCO WESTWOOD BALANCED FUND
Seeks to invest in a balanced and diversified portfolio of stocks and bonds. The
Fund's primary objective is both capital appreciation and current income.
(MULTICLASS) CO-PORTFOLIO MANAGERS: SUSAN M. BYRNE
MARK FREEMAN, CFA
GAMCO WESTWOOD INCOME FUND
Seeks to provide a high level of current income as well as long-term capital
appreciation by investing in income producing equity and fixed income
securities. (MULTICLASS) PORTFOLIO MANAGER: BARBARA MARCIN, CFA
SPECIALTY EQUITY ____________________________
GAMCO GLOBAL CONVERTIBLE SECURITIES FUND
Seeks to invest principally in bonds and preferred stocks which are convertible
into common stock of foreign and domestic companies. The Fund's primary
objective is total return through a combination of current income and capital
appreciation. (MULTICLASS) TEAM MANAGED
GAMCO GLOBAL OPPORTUNITY FUND
Seeks to invest in common stock of companies which have rapid growth in revenues
and earnings and potential for above average capital appreciation or are
undervalued. The Fund's primary objective is capital appreciation.
(MULTICLASS) TEAM MANAGED
GABELLI SRI FUND
Seeks to invest in common and preferred stocks of companies that meet the Fund's
guidelines for social responsibility at the time of investment, looking to avoid
companies in tobacco, alcohol, and gaming, defense/weapons contractors, and
manufacturers of abortifacients. The Fund's primary objective is capital
appreciation. (MULTICLASS) PORTFOLIO MANAGER: CHRISTOPHER C. DESMARAIS
SECTOR ______________________________________
GAMCO GLOBAL TELECOMMUNICATIONS FUND
Seeks to invest in telecommunications companies throughout the world - targeting
undervalued companies with strong earnings and cash flow dynamics. The Fund's
primary objective is capital appreciation. (MULTICLASS) TEAM MANAGED
GAMCO GOLD FUND
Seeks to invest in a global portfolio of equity securities of gold mining and
related companies. The Fund's objective is long-term capital appreciation.
Investment in gold stocks is considered speculative and is affected by a variety
of worldwide economic, financial, and political factors. (MULTICLASS)
PORTFOLIO MANAGER: CAESAR BRYAN
GABELLI UTILITIES FUND
Seeks to provide a high level of total return through a combination of capital
appreciation and current income. (MULTICLASS) TEAM MANAGED
MERGER AND ARBITRAGE ________________________
GABELLI ABC FUND
Seeks to invest in securities with attractive opportunities for appreciation or
investment income. The Fund's primary objective is total return in various
market conditions without excessive risk of capital loss.
(NO-LOAD) PORTFOLIO MANAGER: MARIO J. GABELLI, CFA
CONTRARIAN __________________________________
GAMCO MATHERS FUND
Seeks long-term capital appreciation in various market conditions without
excessive risk of capital loss. (NO-LOAD)
PORTFOLIO MANAGER: HENRY VAN DER EB, CFA
COMSTOCK CAPITAL VALUE FUND
Seeks capital appreciation and current income. The Fund may use either long or
short positions to achieve its objective.
(MULTICLASS) PORTFOLIO MANAGER: MARTIN WEINER, CFA
COMSTOCK STRATEGY FUND
The Fund emphasizes investments in debt securities, which maximize total return
in light of credit risk, interest rate risk, and the risk associated with the
length of maturity of debt instruments. (MULTICLASS)
PORTFOLIO MANAGER: MARTIN WEINER, CFA
FIXED INCOME ________________________________
GAMCO WESTWOOD INTERMEDIATE BOND FUND
Seeks to invest in a diversified portfolio of bonds with various maturities. The
Fund's primary objective is total return.
(MULTICLASS) PORTFOLIO MANAGER: MARK FREEMAN, CFA
CASH MANAGEMENT-MONEY MARKET ________________
GABELLI U.S. TREASURY MONEY MARKET FUND
Seeks to invest exclusively in short-term U.S. Treasury securities. The Fund's
primary objective is to provide high current income consistent with the
preservation of principal and liquidity. (NO-LOAD)
PORTFOLIO MANAGER: JUDITH A. RANERI
AN INVESTMENT IN THE ABOVE MONEY MARKET FUND IS NEITHER INSURED NOR GUARANTEED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY GOVERNMENT AGENCY. ALTHOUGH
THE FUND SEEKS TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00 PER SHARE, IT
IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUND.
THE FUNDS MAY INVEST IN FOREIGN SECURITIES WHICH INVOLVE RISKS NOT ORDINARILY
ASSOCIATED WITH INVESTMENTS IN DOMESTIC ISSUES, INCLUDING CURRENCY FLUCTUATION,
ECONOMIC, AND POLITICAL RISKS.
TO RECEIVE A PROSPECTUS, CALL 800-GABELLI (422-3554). INVESTORS SHOULD CAREFULLY
CONSIDER THE INVESTMENT OBJECTIVES, RISKS, CHARGES, AND EXPENSES OF THE FUND
BEFORE INVESTING. THE PROSPECTUS CONTAINS MORE INFORMATION
ABOUT THIS AND OTHER MATTERS AND SHOULD BE READ CAREFULLY BEFORE INVESTING.
THE GAMCO GROWTH FUND
One Corporate Center
Rye, New York 10580-1422
800-GABELLI
800-422-3554
FAX: 914-921-5118
WEBSITE: WWW.GABELLI.COM
E-MAIL: INFO@GABELLI.COM
Net Asset Value per share available daily by calling
800-GABELLI after 6:00 P.M.
BOARD OF TRUSTEES
Mario J. Gabelli, CFA Robert J. Morrissey
CHAIRMAN AND CHIEF ATTORNEY-AT-LAW
EXECUTIVE OFFICER MORRISSEY, HAWKINS & LYNCH
GAMCO INVESTORS, INC.
Anthony J. Colavita Anthony R. Pustorino
ATTORNEY-AT-LAW CERTIFIED PUBLIC ACCOUNTANT,
ANTHONY J. COLAVITA, P.C. PROFESSOR EMERITUS
PACE UNIVERSITY
James P. Conn Anthony Torna
FORMER CHIEF INVESTMENT OFFICER MAXIM GROUP LLC
FINANCIAL SECURITY ASSURANCE
HOLDINGS LTD.
Dugald A. Fletcher Anthonie C. van Ekris
PRESIDENT CHAIRMAN
FLETCHER & COMPANY, INC. BALMAC INTERNATIONAL, INC.
John D. Gabelli Salvatore J. Zizza
SENIOR VICE PRESIDENT CHAIRMAN
GABELLI & COMPANY, INC. ZIZZA & CO., LTD.
OFFICERS AND PORTFOLIO MANAGER
Bruce N. Alpert Howard F. Ward, CFA
PRESIDENT PORTFOLIO MANAGER
James E. McKee Peter D. Goldstein
SECRETARY CHIEF COMPLIANCE OFFICER
Agnes Mullady
TREASURER
DISTRIBUTOR
Gabelli & Company, Inc.
CUSTODIAN, TRANSFER AGENT, AND DIVIDEND AGENT
State Street Bank and Trust Company
LEGAL COUNSEL
Skadden, Arps, Slate, Meagher & Flom LLP
- --------------------------------------------------------------------------------
This report is submitted for the general information of the shareholders of The
GAMCO Growth Fund. It is not authorized for distribution to prospective
investors unless preceded or accompanied by an effective prospectus.
- --------------------------------------------------------------------------------
GAB406Q407SR
GAMCO
THE
GAMCO
GROWTH
FUND
ANNUAL REPORT
DECEMBER 31, 2007
ITEM 2. CODE OF ETHICS.
(a) The registrant, as of the end of the period covered by this report,
has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the
registrant or a third party.
(c) There have been no amendments, during the period covered by this
report, to a provision of the code of ethics that applies to the
registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing
similar functions, regardless of whether these individuals are
employed by the registrant or a third party, and that relates to any
element of the code of ethics description.
(d) The registrant has not granted any waivers, including an implicit
waiver, from a provision of the code of ethics that applies to the
registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing
similar functions, regardless of whether these individuals are
employed by the registrant or a third party, that relates to one or
more of the items set forth in paragraph (b) of this item's
instructions.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
As of the end of the period covered by the report, the registrant's Board of
Trustees has determined that Anthony R. Pustorino is qualified to serve as an
audit committee financial expert serving on its audit committee and that he is
"independent," as defined by Item 3 of Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
AUDIT FEES
(a) The aggregate fees billed for each of the last two fiscal years for
professional services rendered by the principal accountant for the
audit of the registrant's annual financial statements or services that
are normally provided by the accountant in connection with statutory
and regulatory filings or engagements for those fiscal years are
$43,200 for 2006 and $45,000 for 2007.
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 2006 and $0 for 2007.
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 $3,100 for 2006 and
$4,350 for 2007. 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 2006 and $0 for 2007.
(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
Funds, LLC, and any affiliate of Gabelli Funds, LLC ("Gabelli") that
provides services to the registrant (a "Covered Services Provider") if
the independent 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 (0%) zero percent.
(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 2006 and $0 for 2007.
(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 Growth Fund
--------------------------------------------------------------------
By (Signature and Title)* /s/ Bruce N. Alpert
-------------------------------------------------------
Bruce N. Alpert, Principal Executive Officer
Date 03/05/08
----------------------------------------------------------------------------
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 03/05/08
----------------------------------------------------------------------------
By (Signature and Title)* /s/ Agnes Mullady
-------------------------------------------------------
Agnes Mullady, Principal Financial Officer and
Treasurer
Date 03/05/08
----------------------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.