UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-04494
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The Gabelli Asset Fund
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(Exact name of registrant as specified in charter)
One Corporate Center
Rye, New York 10580-1422
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(Address of principal executive offices) (Zip code)
Bruce N. Alpert
Gabelli Funds, LLC
One Corporate Center
Rye, New York 10580-1422
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(Name and address of agent for service)
registrant's telephone number, including area code: 1-800-422-3554
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Date of fiscal year end: December 31
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Date of reporting period: December 31, 2007
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 100 F Street, NE,
Washington, DC 20549. The OMB has reviewed this collection of information under
the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
The Report to Shareholders is attached herewith.
THE GABELLI ASSET 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)
The Gabelli Asset Fund posted a total return of 11.84% in 2007 or more
than twice the 5.49% return of the Standard & Poor (S&P) 500 Index. For the
year, the best performing sectors were energy, utilities and materials, while
the worst performing groups were financials, consumer discretionary and health
care.
Investments that contributed significantly to returns over the past year
included Deere & Co. up 95.9% (2.4% of net assets as of December 31, 2007),
Flowserve up 90.6% (1.3%), Precision Castparts up 77.2% (1.4%), Energizer
Holdings up 57.9% (1.0%), and Rogers Communications up 51.85% (1.8%). Finally,
two long-time holdings of the Fund were the subjects of completed buyouts during
the year. Blackstone Group purchased Hilton Hotels for $47.50 per share while
the Carlyle Group purchased Sequa Corp. for $175 per share.
It was a difficult year for a few of the Fund's larger holdings including
Citigroup down 47.1% (0.5%), Media General down 42.8% (0.3%), McGraw-Hill down
35.6% (0.4%), and Sprint Nextel down 30.5% (0.5%).
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 GABELLI ASSET FUND
CLASS AAA SHARES, THE S&P 500 INDEX, AND THE CONSUMER PRICE INDEX +10%
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Gabelli Asset Fund Class AAA Shares S&P 500 Index Consumer Price Index + 10%
3/3/1986 $ 10,000 $ 10,000 $ 10,000
12/31/1986 $ 11,280 $ 10,980 $ 11,160
12/31/1987 $ 13,111 $ 11,556 $ 12,678
12/31/1988 $ 17,189 $ 13,470 $ 14,503
12/31/1989 $ 21,691 $ 17,731 $ 16,621
12/31/1990 $ 20,611 $ 17,179 $ 19,297
12/31/1991 $ 24,350 $ 22,402 $ 21,825
12/31/1992 $ 27,976 $ 24,107 $ 24,640
12/31/1993 $ 34,086 $ 26,532 $ 27,769
12/31/1994 $ 34,035 $ 26,879 $ 31,296
12/31/1995 $ 42,523 $ 36,967 $ 35,208
12/31/1996 $ 48,204 $ 45,451 $ 39,891
12/31/1997 $ 66,555 $ 60,609 $ 44,558
12/31/1998 $ 77,157 $ 77,943 $ 49,727
12/31/1999 $ 99,139 $ 94,335 $ 56,042
12/31/2000 $ 96,790 $ 85,751 $ 63,552
12/31/2001 $ 96,945 $ 75,563 $ 70,924
12/31/2002 $ 83,111 $ 58,871 $ 79,718
12/31/2003 $108,518 $ 75,750 $ 89,205
12/31/2004 $126,423 $ 83,984 $101,069
12/31/2005 $132,011 $ 88,107 $114,612
12/31/2006 $160,842 $102,011 $128,939
12/31/2007 $179,886 $107,611 $147,119
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
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AVERAGE ANNUAL RETURNS THROUGH DECEMBER 31, 2007 (a)
Since
Inception
Quarter 1 Year 3 Year 5 Year 10 Year 15 Year 20 Year (3/3/86)
------- ------ ------ ------ ------- ------- ------- ---------
GABELLI ASSET FUND CLASS AAA ...... (1.89)% 11.84% 12.48% 16.70% 10.45% 13.21% 13.99% 14.16%
S&P 500 Index ..................... (3.33) 5.49 8.61 12.82 5.91 10.49 11.80 11.50
Dow Jones Industrial Average ...... (3.99) 8.81 9.65 12.25 7.46 12.12 12.91 12.73
Nasdaq Composite Index. ........... (1.82) 9.81 6.83 14.71 5.38 9.53 10.97 9.58
Class A ........................... (1.88) 11.84 12.48 16.70 10.45 13.21 13.99 14.16
(7.52)(b) 5.41(b) 10.28(b) 15.32(b) 9.80(b) 12.76(b) 13.65(b) 13.83(b)
Class B ........................... (2.10) 10.93 11.63 16.00 10.12 12.98 13.82 14.00
(7.00)(c) 5.93(c) 10.82(c) 15.77(c) 10.12 12.98 13.82 14.00
Class C ........................... (2.07) 11.00 11.64 16.00 10.12 12.98 13.82 14.00
(3.05)(d) 10.00(d) 11.64 16.00 10.12 12.98 13.82 14.00
IN THE CURRENT PROSPECTUS, THE EXPENSE RATIOS FOR CLASS AAA, A, B, AND C SHARES
ARE 1.36%, 1.35%, 2.11%, AND 2.11%, RESPECTIVELY. CLASS AAA SHARES DO NOT HAVE A
SALES CHARGE. THE MAXIMUM SALES CHARGE FOR CLASS A, B, AND C SHARES IS 5.75%,
5.00%, AND 1.00%, RESPECTIVELY.
(a) RETURNS REPRESENT PAST PERFORMANCE AND DO NOT GUARANTEE FUTURE RESULTS.
TOTAL RETURNS AND AVERAGE ANNUAL RETURNS REFLECT CHANGES IN SHARE PRICE
AND REINVESTMENT OF DISTRIBUTIONS AND ARE NET OF EXPENSES. INVESTMENT
RETURNS AND THE PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE. WHEN
SHARES ARE REDEEMED, THEY MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST. PERFORMANCE RETURNS FOR PERIODS LESS THAN ONE YEAR ARE NOT
ANNUALIZED. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE
PERFORMANCE DATA PRESENTED. VISIT WWW.GABELLI.COM FOR PERFORMANCE
INFORMATION AS OF THE MOST RECENT MONTH END. INVESTORS SHOULD CAREFULLY
CONSIDER THE INVESTMENT OBJECTIVES, RISKS, CHARGES, AND EXPENSES OF THE
FUND BEFORE INVESTING. THE PROSPECTUS CONTAINS MORE INFORMATION ABOUT THIS
AND OTHER MATTERS AND SHOULD BE READ CAREFULLY BEFORE INVESTING. THE DOW
JONES INDUSTRIAL AVERAGE IS AN UNMANAGED INDEX OF 30 LARGE CAPITALIZATION
S&P 500 INDEX STOCKS. THE S&P 500 INDEX AND THE NASDAQ COMPOSITE INDEX ARE
UNMANAGED INDICATORS OF STOCK MARKET PERFORMANCE. DIVIDENDS ARE CONSIDERED
REINVESTED EXCEPT FOR THE NASDAQ COMPOSITE INDEX. YOU CANNOT INVEST
DIRECTLY IN AN INDEX.
THE CLASS AAA SHARES' NET ASSET VALUES ("NAV'S") PER SHARE ARE USED TO
CALCULATE PERFORMANCE FOR THE PERIODS PRIOR TO THE ISSUANCE OF CLASS A
SHARES, CLASS B SHARES, AND CLASS C SHARES ON DECEMBER 31, 2003. 10% THE
ACTUAL PERFORMANCE FOR THE CLASS B SHARES AND CLASS C SHARES WOULD HAVE
BEEN LOWER DUE TO THE ADDITIONAL EXPENSES ASSOCIATED WITH THESE CLASSES OF
SHARES.
(b) INCLUDES THE EFFECT OF THE MAXIMUM 5.75% SALES CHARGE AT THE BEGINNING OF
THE PERIOD.
(c) PERFORMANCE RESULTS INCLUDE THE DEFERRED SALES CHARGES FOR THE CLASS B
SHARES UPON REDEMPTION AT THE END OF THE QUARTER, 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.
(d) 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.
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2
THE GABELLI ASSET FUND
DISCLOSURE OF FUND EXPENSES (UNAUDITED)
For the Six Month Period from July 1, 2007 through December 31, 2007
EXPENSE TABLE
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We believe it is important for you to understand the impact of fees and expenses
regarding your investment. All mutual funds have operating expenses. As a
shareholder of a fund, you incur ongoing costs, which include costs for
portfolio management, administrative services, and shareholder reports (like
this one), among others. Operating expenses, which are deducted from a fund's
gross income, directly reduce the investment return of a fund. When a fund's
expenses are expressed as a percentage of its average net assets, this figure is
known as the expense ratio. The following examples are intended to help you
understand the ongoing costs (in dollars) of investing in your Fund and to
compare these costs with those of other mutual funds. The examples are based on
an investment of $1,000 made at the beginning of the period shown and held for
the entire period.
The Expense Table below illustrates your Fund's costs in two ways:
ACTUAL FUND RETURN: This section provides information about actual account
values and actual expenses. You may use this section to help you to estimate the
actual expenses that you paid over the period after any fee waivers and expense
reimbursements. The "Ending Account Value" shown is derived from the Fund's
ACTUAL return during the past six months, and the "Expenses Paid During Period"
shows the dollar amount that would have been paid by an investor who started
with $1,000 in the Fund. You may use this information, together with the amount
you invested, to estimate the expenses that you paid over the period.
To do so, simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
given for your Fund under the heading "Expenses Paid During Period" to estimate
the expenses you paid during this period.
HYPOTHETICAL 5% RETURN: This section provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio. It assumes a hypothetical annualized return of 5% before expenses during
the period shown. In this case - because the hypothetical return used is NOT the
Fund's actual return - the results do not apply to your investment and you
cannot use the hypothetical account value and expense to estimate the actual
ending account balance or expenses you paid for the period. This example is
useful in making comparisons of the ongoing costs of investing in the Fund and
other funds. To do so, compare this 5% hypothetical example with the 5%
hypothetical examples that appear in shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs such as sales
charges (loads), redemption fees, or exchange fees, if any, which are described
in the Prospectus. If these costs were applied to your account, your costs would
be higher. Therefore, the 5% hypothetical return is useful in comparing ongoing
costs only, and will not help you determine the relative total costs of owning
different funds. 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*
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THE GABELLI ASSET FUND
- ------------------------------------------------------------------------------------
ACTUAL FUND RETURN
Class AAA $ 1,000.00 $ 1,002.40 1.36% $ 6.90
Class A $ 1,000.00 $ 1,002.60 1.36% $ 6.90
Class B $ 1,000.00 $ 998.20 2.12% $ 10.74
Class C $ 1,000.00 $ 998.80 2.11% $ 10.69
HYPOTHETICAL 5% RETURN
Class AAA $ 1,000.00 $ 1,018.45 1.36% $ 6.96
Class A $ 1,000.00 $ 1,018.45 1.36% $ 6.96
Class B $ 1,000.00 $ 1,014.60 2.12% $ 10.82
Class C $ 1,000.00 $ 1,014.65 2.11% $ 10.77
* 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 GABELLI ASSET FUND
Food and Beverage ................................................... 12.0%
Energy and Utilities ................................................ 8.3%
Financial Services .................................................. 7.1%
Equipment and Supplies .............................................. 5.9%
Telecommunications .................................................. 5.5%
Diversified Industrial .............................................. 5.4%
Cable and Satellite ................................................. 5.3%
Consumer Products ................................................... 5.1%
Publishing .......................................................... 4.8%
Entertainment ....................................................... 4.4%
Health Care ......................................................... 3.7%
Machinery ........................................................... 3.0%
Aviation: Parts and Services ........................................ 2.6%
Automotive: Parts and Accessories ................................... 2.5%
Broadcasting ........................................................ 2.3%
Hotels and Gaming ................................................... 2.3%
U.S. Government Obligations ......................................... 2.3%
Metals and Mining ................................................... 1.8%
Agriculture ......................................................... 1.6%
Specialty Chemicals ................................................. 1.5%
Retail .............................................................. 1.5%
Communications Equipment ............................................ 1.4%
Aerospace ........................................................... 1.2%
Automotive .......................................................... 1.2%
Electronics ......................................................... 1.2%
Environmental Services .............................................. 1.1%
Consumer Services ................................................... 1.1%
Business Services ................................................... 0.9%
Wireless Communications ............................................. 0.9%
Computer Software and Services ...................................... 0.7%
Real Estate ......................................................... 0.5%
Transportation ...................................................... 0.4%
Manufactured Housing and Recreational Vehicles ...................... 0.2%
Building and Construction ........................................... 0.1%
Closed-End Funds .................................................... 0.0%
Other Assets and Liabilities (Net) .................................. 0.2%
-----
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 GABELLI ASSET FUND
SCHEDULE OF INVESTMENTS -- DECEMBER 31, 2007
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MARKET
SHARES COST VALUE
- ---------- ------------ ------------
COMMON STOCKS -- 97.2%
AEROSPACE -- 1.1%
73,000 Boeing Co. ......................... $ 2,697,854 $ 6,384,580
100,000 Herley Industries Inc.+ ............ 1,509,337 1,375,000
12,000 Lockheed Martin Corp. .............. 354,600 1,263,120
15,000 Northrop Grumman Corp. ............. 734,191 1,179,600
2,030,000 Rolls-Royce Group plc+ ............. 15,039,463 22,063,456
82,012,000 Rolls-Royce Group plc, Cl. B ....... 167,608 179,579
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20,503,053 32,445,335
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AGRICULTURE -- 1.6%
635,000 Archer-Daniels-Midland Co. ......... 8,714,776 29,483,050
85,058 Monsanto Co. ....................... 818,413 9,500,128
3,000 Potash Corp. of
Saskatchewan Inc. ............... 41,185 431,880
91,000 The Mosaic Co.+ .................... 1,461,007 8,584,940
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11,035,381 47,999,998
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AUTOMOTIVE -- 1.2%
150,000 General Motors Corp. ............... 4,920,725 3,733,500
400,000 Navistar International Corp.+ ...... 7,339,853 21,680,000
101,250 PACCAR Inc. ........................ 522,021 5,516,100
25,000 Volkswagen AG ...................... 1,044,095 5,705,660
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13,826,694 36,635,260
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AUTOMOTIVE: PARTS AND
ACCESSORIES -- 2.4%
192,000 BorgWarner Inc. .................... 1,888,822 9,294,720
240,000 CLARCOR Inc. ....................... 1,718,044 9,112,800
130,000 Dana Corp.+ ........................ 234,193 3,120
260,000 Earl Scheib Inc.+ .................. 1,603,290 910,000
195,000 Federal-Mogul Corp.+ ............... 411,720 87,750
500,000 Genuine Parts Co. .................. 12,128,320 23,150,000
416,000 Johnson Controls Inc. .............. 3,764,952 14,992,640
175,000 Midas Inc.+ ........................ 2,332,651 2,565,500
290,000 Modine Manufacturing Co. ........... 6,749,742 4,787,900
115,000 Proliance International Inc.+ ...... 756,089 207,000
270,000 Standard Motor
Products Inc. ................... 3,321,605 2,203,200
100,000 Superior Industries
International Inc. .............. 2,373,448 1,817,000
30,000 Tenneco Inc.+ ...................... 132,744 782,100
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37,415,620 69,913,730
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AVIATION: PARTS AND SERVICES -- 2.6%
484,000 Curtiss-Wright Corp. ............... 3,280,976 24,296,800
570,000 GenCorp Inc.+ ...................... 2,079,772 6,646,200
110,000 Kaman Corp. ........................ 1,534,270 4,049,100
301,000 Precision Castparts Corp. .......... 3,625,927 41,748,700
258,400 The Fairchild Corp., Cl. A+ ........ 1,163,527 671,840
------------ ------------
11,684,472 77,412,640
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BROADCASTING -- 2.3%
400,000 CBS Corp., Cl. A ................... 7,019,670 10,700,000
50,000 CBS Corp., Cl. B ................... 1,257,800 1,362,500
30,718 Citadel Broadcasting Corp. ......... 81,666 63,279
300,000 Clear Channel
Communications Inc. ............. 11,435,828 10,356,000
MARKET
SHARES COST VALUE
- ---------- ------------ ------------
10,000 Cogeco Inc. ........................ $ 194,764 $ 400,223
13,333 Corus Entertainment Inc.,
Cl. B, New York ................. 43,320 654,517
6,667 Corus Entertainment Inc.,
Cl. B, Toronto .................. 21,662 326,409
90,000 Fisher Communications Inc.+ ........ 4,712,056 3,416,400
843 Granite Broadcasting Corp.+ ........ 69,109 21,075
340,000 Gray Television Inc. ............... 3,676,794 2,726,800
8,000 Gray Television Inc., Cl. A ........ 76,930 68,000
230,000 Liberty Media Corp. -
Capital, Cl. A+ ................. 4,578,481 26,792,700
465,000 Lin TV Corp., Cl. A+ ............... 7,642,728 5,659,050
40,000 Sinclair Broadcast Group
Inc., Cl. A ..................... 358,285 328,400
400,000 Television Broadcasts Ltd. ......... 1,815,551 2,403,365
170,000 Tokyo Broadcasting
System Inc. ..................... 5,412,701 3,652,151
287,834 Young Broadcasting Inc.,
Cl. A+ .......................... 2,516,261 302,226
------------ ------------
50,913,606 69,233,095
------------ ------------
BUILDING AND CONSTRUCTION -- 0.1%
25,000 The Genlyte Group Inc.+ ............ 2,373,447 2,380,000
------------ ------------
BUSINESS SERVICES -- 0.9%
25,851 ACCO Brands Corp.+ ................. 152,168 414,650
160,000 ChoicePoint Inc.+ .................. 6,219,087 5,827,200
12,500 Clear Channel Outdoor
Holdings Inc., Cl. A+ ........... 259,405 345,750
195,000 Ecolab Inc. ........................ 1,837,428 9,985,950
10,000 Imation Corp. ...................... 203,344 210,000
65,000 Landauer Inc. ...................... 402,818 3,370,250
22,000 MasterCard Inc., Cl. A ............. 858,000 4,734,400
30,000 Nashua Corp.+ ...................... 297,230 348,600
5,000 The Brink's Co. .................... 298,344 298,700
280,000 The Interpublic Group of
Companies Inc.+ ................. 2,923,483 2,270,800
------------ ------------
13,451,307 27,806,300
------------ ------------
CABLE AND SATELLITE -- 5.3%
1,990,000 Cablevision Systems Corp.,
Cl. A+ .......................... 5,712,538 48,755,000
245,000 Comcast Corp., Cl. A+ .............. 4,091,857 4,473,700
60,000 Comcast Corp., Cl. A, Special+ ..... 306,462 1,087,200
187,700 EchoStar Communications
Corp., Cl. A+ ................... 6,234,322 7,080,044
320,096 Liberty Global Inc., Cl. A+ ........ 3,187,437 12,544,562
260,000 Liberty Global Inc., Cl. C+ ........ 2,801,037 9,513,400
1,150,000 Rogers Communications Inc.,
Cl. B, New York ................. 6,170,739 52,037,500
50,000 Rogers Communications Inc.,
Cl. B, Toronto .................. 229,820 2,279,244
120,000 Shaw Communications Inc.,
Cl. B ........................... 164,952 2,874,310
160,000 Shaw Communications Inc.,
Cl. B, Non-Voting ............... 312,647 3,788,800
See accompanying notes to financial statements.
5
THE GABELLI ASSET FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- DECEMBER 31, 2007
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
- ---------- ------------ ------------
COMMON STOCKS (CONTINUED)
CABLE AND SATELLITE (CONTINUED)
512,000 The DIRECTV Group Inc.+ ............ $ 11,248,004 $ 11,837,440
10,000 Time Warner Cable Inc.,
Cl. A+ .......................... 266,305 276,000
------------ ------------
40,726,120 156,547,200
------------ ------------
CLOSED-END FUNDS -- 0.0%
79,920 Royce Value Trust Inc. ............. 975,443 1,484,914
------------ ------------
COMMUNICATIONS EQUIPMENT -- 1.3%
70,000 Alcatel-Lucent, ADR ................ 948,782 512,400
565,000 Corning Inc. ....................... 4,174,676 13,554,350
240,000 Motorola Inc. ...................... 2,546,729 3,849,600
110,000 Nortel Networks Corp.,
New York+ ....................... 2,778,787 1,659,900
90,000 Nortel Networks Corp.,
Toronto+ ........................ 2,888,687 1,366,027
390,000 Thomas & Betts Corp.+ .............. 7,650,699 19,125,600
------------ ------------
20,988,360 40,067,877
------------ ------------
COMPUTER SOFTWARE AND SERVICES -- 0.7%
215,100 Cognos Inc.+ ....................... 12,365,961 12,383,307
1,600 eBay Inc.+ ......................... 24,652 53,104
50,000 Jupitermedia Corp.+ ................ 287,065 191,000
75,000 Metavante Technologies Inc.+ ....... 1,740,952 1,749,000
26,026 Telecom Italia Media SpA+ .......... 26,184 9,037
255,000 Yahoo! Inc.+ ....................... 8,301,980 5,931,300
------------ ------------
22,746,794 20,316,748
------------ ------------
CONSUMER PRODUCTS -- 5.1%
50,000 Alberto-Culver Co. ................. 1,116,801 1,227,000
150,000 Altadis SA ......................... 10,070,985 10,901,794
12,000 Altria Group Inc. .................. 274,083 906,960
10,000 Avon Products Inc. ................. 275,840 395,300
11,000 Christian Dior SA .................. 307,335 1,445,823
280,000 Church & Dwight Co. Inc. ........... 1,838,465 15,139,600
30,000 Clorox Co. ......................... 1,664,894 1,955,100
20,000 Colgate-Palmolive Co. .............. 1,060,210 1,559,200
40,000 Eastman Kodak Co. .................. 950,513 874,800
268,000 Energizer Holdings Inc.+ ........... 4,926,201 30,050,840
110,000 Fortune Brands Inc. ................ 2,384,058 7,959,600
3,000 Givaudan SA ........................ 1,028,013 2,890,960
35,000 Harley-Davidson Inc. ............... 88,156 1,634,850
70,000 Lenox Group Inc.+ .................. 684,406 184,800
80,000 Mattel Inc. ........................ 1,444,000 1,523,200
36,000 National Presto Industries Inc. .... 1,152,992 1,895,760
3,000 Nintendo Co. Ltd. .................. 931,854 1,796,536
520,000 Procter & Gamble Co. ............... 17,588,062 38,178,400
50,000 Reckitt Benckiser Group plc ........ 1,570,345 2,900,310
120,000 Sally Beauty Holdings Inc.+ ........ 980,508 1,086,000
60,000 Svenska Cellulosa
Aktiebolaget, Cl. B ............. 864,557 1,062,941
1,000,000 Swedish Match AB ................... 10,327,823 23,904,567
10,000 Syratech Corp.+ .................... 2,000 100
45,000 Wolverine World Wide Inc. .......... 418,548 1,103,400
------------ ------------
61,950,649 150,577,841
------------ ------------
MARKET
SHARES COST VALUE
- ---------- ------------ ------------
CONSUMER SERVICES -- 1.1%
350,000 IAC/InterActiveCorp+ ............... $ 4,046,555 $ 9,422,000
560,000 Liberty Media Corp. -
Interactive, Cl. A+ ............. 3,352,351 10,684,800
500 Priceline.com Inc.+ ................ 34,467 57,430
652,500 Rollins Inc. ....................... 3,384,294 12,528,000
------------ ------------
10,817,667 32,692,230
------------ ------------
DIVERSIFIED INDUSTRIAL -- 5.4%
35,000 Acuity Brands Inc. ................. 413,070 1,575,000
5,000 Anixter International Inc.+ ........ 45,044 311,350
75,403 Contax Participacoes SA, ADR ....... 30,974 98,024
490,000 Cooper Industries Ltd., Cl. A ...... 12,041,804 25,911,200
450,000 Crane Co. .......................... 7,844,551 19,305,000
110,000 Gardner Denver Inc.+ ............... 901,088 3,630,000
435,000 Greif Inc., Cl. A .................. 5,070,305 28,435,950
425,000 Honeywell International Inc. ....... 13,849,486 26,167,250
580,000 ITT Corp. .......................... 9,175,073 38,303,200
154,000 Katy Industries Inc.+ .............. 1,251,525 308,000
200,000 Magnetek Inc.+ ..................... 943,176 856,000
240,000 Myers Industries Inc. .............. 1,460,520 3,472,800
52,000 Pentair Inc. ....................... 762,065 1,810,120
53,333 Smiths Group plc ................... 880,170 1,075,450
112,500 Trinity Industries Inc. ............ 931,715 3,123,000
165,000 Tyco International Ltd. ............ 7,550,154 6,542,250
------------ ------------
63,150,720 160,924,594
------------ ------------
ELECTRONICS -- 1.2%
9,600 Chemring Group plc ................. 125,113 392,898
3,000 Hitachi Ltd., ADR .................. 172,200 219,420
120,000 Intel Corp. ........................ 2,567,140 3,199,200
13,000 Kyocera Corp., ADR ................. 448,063 1,133,860
400,000 LSI Corp.+ ......................... 2,712,845 2,124,000
22,000 Molex Inc., Cl. A .................. 609,932 577,940
46,000 Samsung Electronics Co.
Ltd., GDR (a) ................... 8,616,601 13,661,664
4,000 Samsung Electronics Co.
Ltd., OTC, GDR (a) .............. 1,439,399 1,171,000
50,000 Sony Corp., ADR .................... 1,556,873 2,715,000
205,000 Texas Instruments Inc. ............. 5,187,155 6,847,000
75,000 Tyco Electronics Ltd. .............. 2,485,070 2,784,750
------------ ------------
25,920,391 34,826,732
------------ ------------
ENERGY AND UTILITIES -- 8.2%
34,000 AGL Resources Inc. ................. 569,200 1,279,760
140,000 Allegheny Energy Inc. .............. 1,418,678 8,905,400
1,500,000 Aquila Inc.+ ....................... 6,163,573 5,595,000
250,000 BP plc, ADR ........................ 7,151,966 18,292,500
4,000 Cameron International Corp.+ ....... 69,450 192,520
25,000 CH Energy Group Inc. ............... 1,040,745 1,113,500
354,000 Chevron Corp. ...................... 13,555,634 33,038,820
355,000 ConocoPhillips ..................... 10,144,011 31,346,500
18,000 Constellation Energy
Group Inc. ...................... 436,827 1,845,540
124,000 Devon Energy Corp. ................. 1,695,494 11,024,840
120,000 DPL Inc. ........................... 2,716,196 3,558,000
20,000 DTE Energy Co. ..................... 832,127 879,200
See accompanying notes to financial statements.
6
THE GABELLI ASSET FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- DECEMBER 31, 2007
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
- ---------- ------------ ------------
COMMON STOCKS (CONTINUED)
ENERGY AND UTILITIES (CONTINUED)
170,000 Duke Energy Corp. .................. $ 1,922,357 $ 3,428,900
25,000 Edison International ............... 425,000 1,334,250
330,000 El Paso Corp. ...................... 2,738,856 5,689,200
235,000 El Paso Electric Co.+ .............. 2,798,469 6,008,950
150,000 Energy East Corp. .................. 3,072,446 4,081,500
110,000 EOG Resources Inc. ................. 503,773 9,817,500
330,000 Exxon Mobil Corp. .................. 8,011,545 30,917,700
14,600 FPL Group Inc. ..................... 664,423 989,588
20,000 Grant Prideco Inc.+ ................ 1,077,970 1,110,200
220,000 Halliburton Co. .................... 6,847,344 8,340,200
Mirant Corp.+ ...................... 0 0
130,000 Mirant Corp., Escrow+ (b) .......... 0 0
1,000 Niko Resources Ltd. ................ 57,456 90,430
22,086 NiSource Inc. ...................... 475,953 417,204
180,000 Northeast Utilities ................ 3,429,763 5,635,800
20,000 NSTAR .............................. 627,132 724,400
23,500 Oceaneering International Inc.+ .... 637,704 1,582,725
500 PetroChina Co. Ltd., ADR ........... 30,266 87,735
100,000 Progress Energy Inc., CVO+ (b) ..... 52,000 33,000
230,000 Rowan Companies Inc. ............... 8,715,947 9,075,800
50,000 Royal Dutch Shell plc,
Cl. A, ADR ...................... 2,980,580 4,210,000
118,000 SJW Corp. .......................... 1,872,429 4,091,060
260,000 Southwest Gas Corp. ................ 4,582,147 7,740,200
275,000 Spectra Energy Corp. ............... 5,975,046 7,100,500
110,000 The AES Corp.+ ..................... 434,151 2,352,900
54,000 Transocean Inc.+ ................... 4,227,405 7,730,100
16,666 UIL Holdings Corp. ................. 426,371 615,809
75,000 Weatherford International
Ltd.+ ........................... 3,346,917 5,145,000
------------ ------------
111,727,351 245,422,231
------------ ------------
ENTERTAINMENT -- 4.4%
115,000 Aruze Corp. ........................ 3,690,468 4,364,678
8,010 Chestnut Hill Ventures+ (b) ........ 218,000 225,482
749,000 Discovery Holding Co., Cl. A+ ...... 6,481,280 18,829,860
45,000 DreamWorks Animation
SKG Inc., Cl. A+ ................ 1,084,168 1,149,300
185,000 EMI Group plc, ADR ................. 1,538,472 1,868,500
600,000 Gemstar-TV Guide
International Inc.+ ................ 2,634,672 2,856,000
750,000 Grupo Televisa SA, ADR ............. 7,741,483 17,827,500
400,000 Rank Group plc ..................... 2,817,685 726,570
20,000 Regal Entertainment Group,
Cl. A ........................... 290,903 361,400
80,000 Six Flags Inc.+ .................... 345,979 162,400
280,000 The Walt Disney Co. ................ 5,299,257 9,038,400
1,500,000 Time Warner Inc. ................... 19,847,989 24,765,000
60,000 Triple Crown Media Inc.+ ........... 614,646 283,800
518,100 Viacom Inc., Cl. A+ ................ 16,109,582 22,786,038
550,000 Vivendi ............................ 11,538,712 25,233,563
50,000 World Wrestling
Entertainment Inc., Cl. A ....... 488,064 738,000
------------ ------------
80,741,360 131,216,491
------------ ------------
MARKET
SHARES COST VALUE
- ---------- ------------ ------------
ENVIRONMENTAL SERVICES -- 1.1%
315,000 Allied Waste Industries Inc.+ ...... $ 2,948,345 $ 3,471,300
450,000 Republic Services Inc. ............. 3,560,581 14,107,500
500,000 Waste Management Inc. .............. 10,415,537 16,335,000
------------ ------------
16,924,463 33,913,800
------------ ------------
EQUIPMENT AND SUPPLIES -- 6.0%
703,000 AMETEK Inc. ........................ 2,729,108 32,928,520
6,000 Amphenol Corp., Cl. A .............. 23,163 278,220
106,000 CIRCOR International Inc. .......... 932,373 4,914,160
150,000 Crown Holdings Inc.+ ............... 676,245 3,847,500
160,000 CTS Corp. .......................... 871,294 1,588,800
4,000 Danaher Corp. ...................... 70,641 350,960
380,000 Donaldson Co. Inc. ................. 1,470,210 17,624,400
20,000 Fedders Corp.+ ..................... 32,624 40
400,000 Flowserve Corp. .................... 6,320,445 38,480,000
200,000 Gerber Scientific Inc.+ ............ 1,964,548 2,160,000
210,000 GrafTech International Ltd.+ ....... 2,229,118 3,727,500
780,000 IDEX Corp. ......................... 2,958,676 28,181,400
24,000 Ingersoll-Rand Co. Ltd., Cl. A ..... 501,720 1,115,280
180,000 Interpump Group SpA ................ 707,416 1,854,028
200,000 Lufkin Industries Inc. ............. 1,810,811 11,458,000
63,821 Met-Pro Corp. ...................... 321,977 770,958
18,524 Mueller Water Products
Inc., Cl. B ..................... 246,018 184,684
20,000 Sealed Air Corp. ................... 168,679 462,800
150,000 Tenaris SA, ADR .................... 7,073,655 6,709,500
70,000 The Manitowoc Co. Inc. ............. 127,596 3,418,100
120,000 The Weir Group plc ................. 504,947 1,933,673
40,000 Trane Inc. ......................... 1,831,270 1,868,400
30,000 Valmont Industries Inc. ............ 242,908 2,673,600
380,000 Watts Water Technologies
Inc., Cl. A ..................... 4,456,404 11,324,000
------------ ------------
38,271,846 177,854,523
------------ ------------
FINANCIAL SERVICES -- 7.1%
15,500 Alleghany Corp.+ ................... 2,688,224 6,231,000
425,000 American Express Co. ............... 9,939,148 22,108,500
95,000 American International
Group Inc. ...................... 5,968,565 5,538,500
66,000 Ameriprise Financial Inc. .......... 1,537,366 3,637,260
32,000 Argo Group International
Holdings Ltd.+ .................. 1,167,431 1,348,160
30,000 Bank of America Corp. .............. 1,073,107 1,237,800
218 Berkshire Hathaway Inc., Cl. A+ .... 849,349 30,868,800
70,000 BKF Capital Group Inc.+ ............ 569,766 155,400
7,500 Calamos Asset Management
Inc., Cl. A ..................... 135,000 223,350
460,000 Citigroup Inc. ..................... 23,249,289 13,542,400
35,000 Commerzbank AG ..................... 624,519 1,343,772
110,000 Commerzbank AG, ADR ................ 2,308,920 4,235,000
154,000 Deutsche Bank AG ................... 6,960,775 19,929,140
100,000 Federal National
Mortgage Association ............ 3,508,492 3,998,000
20,000 Fortress Investment Group
LLC, Cl. A ...................... 361,914 311,600
60,000 Freddie Mac ........................ 2,102,290 2,044,200
See accompanying notes to financial statements.
7
THE GABELLI ASSET FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- DECEMBER 31, 2007
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
- ---------- ------------ ------------
COMMON STOCKS (CONTINUED)
FINANCIAL SERVICES (CONTINUED)
110,000 H&R Block Inc. ..................... $ 1,807,491 $ 2,042,700
24,000 Interactive Brokers Group
Inc., Cl. A+ .................... 690,148 775,680
200,000 Janus Capital Group Inc. ........... 4,953,709 6,570,000
25,000 JPMorgan Chase & Co. ............... 508,088 1,091,250
70,000 Legg Mason Inc. .................... 5,805,549 5,120,500
14,000 Lehman Brothers Holdings Inc. ...... 164,850 916,160
75,000 Leucadia National Corp. ............ 655,691 3,532,500
40,000 Loews Corp. ........................ 1,927,312 2,013,600
180,000 Marsh & McLennan
Companies Inc. .................. 5,377,792 4,764,600
23,000 Merrill Lynch & Co. Inc. ........... 964,120 1,234,640
170,000 NewAlliance Bancshares Inc. ........ 2,487,566 1,958,400
30,000 PNC Financial Services
Group Inc. ...................... 1,456,850 1,969,500
2,500 Prudential Financial Inc. .......... 68,750 232,600
85,000 State Street Corp. ................. 661,975 6,902,000
20,000 SunTrust Banks Inc. ................ 424,879 1,249,800
60,000 T. Rowe Price Group Inc. ........... 1,012,984 3,652,800
2,000 The Allstate Corp. ................. 73,509 104,460
170,000 The Bank of New York
Mellon Corp. .................... 5,902,236 8,289,200
23,000 The Bear Stearns
Companies Inc. .................. 2,202,969 2,029,750
28,000 The Blackstone Group LP ............ 655,307 619,640
3,000 The Goldman Sachs
Group Inc. ...................... 610,879 645,150
378,000 The Midland Co. .................... 1,942,907 24,452,820
150,000 The Phoenix Companies Inc. ......... 2,222,423 1,780,500
40,000 The Travelers Companies Inc. ....... 1,575,006 2,152,000
19,000 Unitrin Inc. ....................... 498,464 911,810
8,500 Value Line Inc. .................... 136,515 342,210
70,656 Wachovia Corp. ..................... 3,286,418 2,687,048
180,000 Waddell & Reed
Financial Inc., Cl. A ........... 3,692,409 6,496,200
22,000 Wells Fargo & Co. .................. 671,230 664,180
------------ ------------
115,482,181 211,954,580
------------ ------------
FOOD AND BEVERAGE -- 12.0%
345,000 Brown-Forman Corp., Cl. A .......... 8,021,206 25,819,800
120,000 Cadbury Schweppes
plc, ADR ........................ 4,284,867 5,924,400
135,000 Campbell Soup Co. .................. 3,720,358 4,823,550
210,000 China Mengniu Dairy Co. Ltd. ....... 688,713 770,257
60,000 Coca-Cola Enterprises Inc. ......... 1,176,706 1,561,800
16,500 Coca-Cola Hellenic
Bottling Co. SA ................. 268,442 705,210
180,000 Constellation Brands
Inc., Cl. A+ .................... 4,248,540 4,255,200
330,000 Corn Products
International Inc. ................. 4,032,439 12,127,500
330,000 Davide Campari-Milano SpA .......... 3,297,097 3,160,226
215,000 Del Monte Foods Co. ................ 2,130,243 2,033,900
318,000 Diageo plc, ADR .................... 11,903,832 27,293,940
MARKET
SHARES COST VALUE
- ---------- ------------ ------------
70,000 Farmer Brothers Co. ................ $ 943,094 $ 1,609,300
375,000 Flowers Foods Inc. ................. 1,631,075 8,778,750
75,000 Fomento Economico
Mexicano SAB de CV, ADR ......... 2,425,593 2,862,750
365,000 General Mills Inc. ................. 12,840,535 20,805,000
395,000 Groupe Danone ...................... 19,781,529 35,459,158
145,000 Groupe Danone, ADR ................. 1,504,329 2,617,250
1,570,000 Grupo Bimbo SAB de CV,
Cl. A ........................... 3,245,685 9,358,750
180,000 H.J. Heinz Co. ..................... 6,572,778 8,402,400
10,000 Hain Celestial Group Inc.+ ......... 141,134 320,000
22,000 Heineken NV ........................ 1,213,884 1,422,343
240,000 ITO EN Ltd. ........................ 5,823,746 4,565,188
66,000 ITO EN Ltd., Preference ............ 1,514,342 943,490
110,000 Kellogg Co. ........................ 2,931,250 5,767,300
95,000 Kerry Group plc, Cl. A ............. 1,122,284 3,047,352
170,000 Kikkoman Corp. ..................... 2,055,582 2,338,898
140,000 Kraft Foods Inc., Cl. A ............ 4,211,871 4,568,200
33,000 LVMH Moet Hennessy
Louis Vuitton SA ................ 1,150,670 3,989,122
100,000 Meiji Seika Kaisha Ltd. ............ 505,816 425,189
210,000 Morinaga Milk Industry
Co. Ltd. ........................ 769,502 614,689
9,000 Nestle SA .......................... 1,868,526 4,133,728
350,000 Nissin Food Products Co. Ltd. ...... 12,559,164 11,310,030
820,000 PepsiAmericas Inc. ................. 12,731,151 27,322,400
344,000 PepsiCo Inc. ....................... 9,031,234 26,109,600
42,000 Pernod-Ricard SA ................... 8,589,698 9,708,321
155,000 Ralcorp Holdings Inc.+ ............. 2,450,803 9,422,450
65,000 Remy Cointreau SA .................. 4,352,546 4,634,779
320,000 The Coca-Cola Co. .................. 13,144,705 19,638,400
100,000 The Hershey Co. .................... 2,682,099 3,940,000
20,000 The J.M. Smucker Co. ............... 547,733 1,028,800
162,860 Tootsie Roll Industries Inc. ....... 2,005,302 4,465,621
250,000 Wm. Wrigley Jr. Co. ................ 6,160,774 14,637,500
63,750 Wm. Wrigley Jr. Co., Cl. B ......... 1,658,999 3,761,250
420,000 YAKULT HONSHA Co. Ltd. ............. 11,260,923 9,718,480
------------ ------------
203,200,799 356,202,271
------------ ------------
HEALTH CARE -- 3.7%
30,000 Adams Respiratory
Therapeutics Inc.+ .............. 1,785,842 1,792,200
130,000 Advanced Medical
Optics Inc.+ ....................... 3,892,229 3,188,900
52,444 Allergan Inc. ...................... 2,458,117 3,369,002
53,000 Alpharma Inc., Cl. A+ .............. 1,316,748 1,067,950
44,000 Amgen Inc.+ ........................ 203,194 2,043,360
65,000 AngioDynamics Inc.+ ................ 1,198,908 1,237,600
4,000 ArthroCare Corp.+ .................. 133,290 192,200
50,000 Biogen Idec Inc.+ .................. 762,809 2,846,000
135,000 Boston Scientific Corp.+ ........... 1,800,236 1,570,050
150,000 Bristol-Myers Squibb Co. ........... 4,060,053 3,978,000
70,000 Chemed Corp. ....................... 1,121,991 3,911,600
56,000 CONMED Corp.+ ...................... 1,210,759 1,294,160
10,000 DENTSPLY International Inc. ........ 190,509 450,200
90,000 Eli Lilly & Co. .................... 5,251,364 4,805,100
40,000 Exactech Inc.+ ..................... 612,866 830,000
See accompanying notes to financial statements.
8
THE GABELLI ASSET FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- DECEMBER 31, 2007
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
- ---------- ------------ ------------
COMMON STOCKS (CONTINUED)
HEALTH CARE (CONTINUED)
145,000 Greatbatch Inc.+ ................... $ 3,443,022 $ 2,898,550
40,000 Henry Schein Inc.+ ................. 1,091,829 2,456,000
20,000 Hospira Inc.+ ...................... 754,476 852,800
20,000 IMS Health Inc. .................... 526,733 460,800
15,000 Inverness Medical
Innovations Inc.+ ............... 255,011 842,700
45,000 Invitrogen Corp.+ .................. 2,307,565 4,203,450
125,000 Johnson & Johnson .................. 4,867,043 8,337,500
10,000 Laboratory Corp. of
America Holdings+ ............... 746,669 755,300
92,000 Medco Health Solutions Inc.+ ....... 3,073,554 9,328,800
140,000 Merck & Co. Inc. ................... 4,318,176 8,135,400
10,000 MGI Pharma Inc.+ ................... 402,632 405,300
2,000 Nobel Biocare Holding AG ........... 285,863 535,265
11,000 Orthofix International NV+ ......... 388,910 637,670
4,000 OrthoLogic Corp.+ .................. 13,880 5,400
25,000 Pain Therapeutics Inc.+ ............ 215,981 265,000
50,000 Patterson Companies Inc.+ .......... 1,242,490 1,697,500
670,000 Pfizer Inc. ........................ 13,266,826 15,229,100
130,000 Schering-Plough Corp. .............. 2,409,430 3,463,200
2,000 Stryker Corp. ...................... 65,440 149,440
100,000 Tenet Healthcare Corp.+ ............ 558,830 508,000
46,000 Thoratec Corp.+ .................... 663,548 836,740
135,000 UnitedHealth Group Inc. ............ 7,210,331 7,857,000
35,000 William Demant Holding A/S+ ........ 1,644,239 3,246,047
5,000 Wright Medical Group Inc.+ ......... 92,660 145,850
55,000 Wyeth .............................. 2,169,854 2,430,450
3,000 Young Innovations Inc. ............. 87,647 71,730
5,000 Zimmer Holdings Inc.+ .............. 314,314 330,750
------------ ------------
78,415,868 108,662,064
------------ ------------
HOTELS AND GAMING -- 2.3%
1,200 Accor SA ........................... 103,072 95,969
16,000 Churchill Downs Inc. ............... 629,526 863,520
340,000 Gaylord Entertainment Co.+ ......... 9,356,448 13,759,800
45,000 Harrah's Entertainment Inc. ........ 1,614,531 3,993,750
22,000 Home Inns & Hotels
Management Inc., ADR+ ........... 665,336 784,080
22,000 Host Hotels & Resorts Inc. ......... 449,790 374,880
180,000 International Game
Technology ...................... 6,786,249 7,907,400
1,582,576 Ladbrokes plc ...................... 15,136,688 10,183,287
37,000 Las Vegas Sands Corp.+ ............. 2,188,954 3,812,850
4,050,000 Mandarin Oriental
International Ltd. .............. 8,176,342 9,558,000
120,100 MGM Mirage+ ........................ 5,449,119 10,090,802
13,000 Orient-Express Hotels Ltd.,
Cl. A ........................... 647,464 747,760
92,200 Pinnacle Entertainment Inc.+ ....... 2,598,414 2,172,232
90,000 Starwood Hotels & Resorts
Worldwide Inc. .................. 1,823,635 3,962,700
20,000 Wyndham Worldwide Corp. ............ 518,059 471,200
------------ ------------
56,143,627 68,778,230
------------ ------------
MARKET
SHARES COST VALUE
- ---------- ------------ ------------
MACHINERY -- 3.0%
160,000 Baldor Electric Co. ................ $ 5,432,100 $ 5,385,600
140,000 Caterpillar Inc. ................... 927,858 10,158,400
50,000 CNH Global NV ...................... 1,156,505 3,291,000
756,000 Deere & Co. ........................ 6,205,078 70,398,720
------------ ------------
13,721,541 89,233,720
------------ ------------
MANUFACTURED HOUSING AND
RECREATIONAL VEHICLES -- 0.2%
200,000 Cavalier Homes Inc.+ ............... 842,870 390,000
32,000 Cavco Industries Inc.+ ............. 605,460 1,082,880
100,000 Champion Enterprises Inc.+ ......... 958,740 942,000
40,000 Coachmen Industries Inc. ........... 499,536 238,000
110,000 Fleetwood Enterprises Inc.+ ........ 1,252,012 657,800
73,000 Huttig Building
Products Inc.+ .................. 225,166 254,770
22,000 Nobility Homes Inc. ................ 475,436 401,500
25,000 Palm Harbor Homes Inc.+ ............ 401,517 263,750
73,000 Skyline Corp. ...................... 2,863,929 2,142,550
------------ ------------
8,124,666 6,373,250
------------ ------------
METALS AND MINING -- 1.8%
60,000 Alcoa Inc. ......................... 1,857,948 2,193,000
403,580 Barrick Gold Corp. ................. 7,594,595 16,970,539
12,525 Freeport-McMoRan Copper
& Gold Inc. ..................... 272,500 1,283,061
100,000 Ivanhoe Mines Ltd.+ ................ 775,930 1,073,000
40,000 James River Coal Co.+ .............. 335,219 447,200
50,000 Kinross Gold Corp.+ ................ 359,224 920,000
52,000 New Hope Corp. Ltd. ................ 70,252 105,015
560,000 Newmont Mining Corp. ............... 11,743,667 27,344,800
3,000 Patriot Coal Corp.+ ................ 78,892 125,220
30,000 Peabody Energy Corp. ............... 1,235,976 1,849,200
------------ ------------
24,324,203 52,311,035
------------ ------------
PUBLISHING -- 4.8%
230,000 Belo Corp., Cl. A .................. 4,146,932 4,011,200
25,000 Emap plc ........................... 362,733 457,839
1,966,000 Il Sole 24 Ore+ .................... 16,574,660 16,369,680
220,000 Independent News &
Media plc ....................... 674,635 761,993
50,000 Lee Enterprises Inc. ............... 1,086,573 732,500
70,035 McClatchy Co., Cl. A ............... 1,713,010 876,838
364,000 Media General Inc., Cl. A .......... 10,175,790 7,735,000
80,000 Meredith Corp. ..................... 1,650,283 4,398,400
3,895,000 News Corp., Cl. A .................. 29,151,525 79,808,550
24,000 News Corp., Cl. B .................. 227,345 510,000
100,000 PRIMEDIA Inc. ...................... 1,759,981 850,000
20,300 Seat Pagine Gialle SpA ............. 11,997 8,028
250,000 The E.W. Scripps Co.,Cl. A ......... 7,999,768 11,252,500
265,000 The McGraw-Hill
Companies Inc. .................. 2,463,949 11,609,650
132,000 The New York Times Co.,
Cl. A ........................... 1,094,267 2,313,960
------------ ------------
79,093,448 141,696,138
------------ ------------
See accompanying notes to financial statements.
9
THE GABELLI ASSET FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- DECEMBER 31, 2007
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
- ---------- -------------- --------------
COMMON STOCKS (CONTINUED)
REAL ESTATE -- 0.5%
103,000 Griffin Land & Nurseries Inc. .... $ 1,479,146 $ 3,759,500
40,000 ProLogis ......................... 1,099,392 2,535,200
257,000 The St. Joe Co.................... 1,964,571 9,126,070
-------------- --------------
4,543,109 15,420,770
-------------- --------------
RETAIL -- 1.5%
14,000 Aaron Rents Inc. ................. 45,200 269,360
60,750 Aaron Rents Inc., Cl. A .......... 287,231 1,048,545
258,000 AutoNation Inc.+ ................. 2,471,084 4,040,280
20,000 AutoZone Inc.+ ................... 1,681,602 2,398,200
150,000 Coldwater Creek Inc.+ ............ 1,099,306 1,003,500
110,000 Costco Wholesale Corp............. 5,673,495 7,673,600
190,000 CSK Auto Corp.+ .................. 2,245,817 951,900
165,000 CVS Caremark Corp................. 6,246,734 6,558,750
30,000 Macy's Inc. ...................... 890,282 776,100
40,000 Safeway Inc. ..................... 1,263,568 1,368,400
10,000 SUPERVALU Inc. ................... 297,500 375,200
150,000 The Great Atlantic & Pacific
Tea Co. Inc.+ ................. 4,781,125 4,699,500
118,000 The Kroger Co..................... 693,975 3,151,780
30,000 Wal-Mart Stores Inc............... 1,340,831 1,425,900
100,000 Walgreen Co. ..................... 3,880,956 3,808,000
30,000 Whole Foods Market Inc............ 1,337,335 1,224,000
160,000 Winn-Dixie Stores Inc.+ .......... 2,674,541 2,699,200
-------------- --------------
36,910,582 43,472,215
-------------- --------------
SPECIALTY CHEMICALS -- 1.5%
400,000 Chemtura Corp. ................... 3,859,492 3,120,000
480,000 Ferro Corp. ...................... 7,925,912 9,950,400
2,000 FMC Corp. ........................ 64,790 109,100
130,000 General Chemical
Group Inc.+ ................... 502,184 1,170
135,000 H.B. Fuller Co. .................. 1,040,815 3,030,750
220,000 Hercules Inc. .................... 3,241,328 4,257,000
180,000 International Flavors &
Fragrances Inc. ............... 7,255,378 8,663,400
100,000 Material Sciences Corp.+ ......... 934,841 743,000
648,000 Omnova Solutions Inc.+ ........... 2,046,412 2,857,680
345,000 Sensient Technologies Corp. ...... 6,722,455 9,756,600
13,380 Tronox Inc., Cl. B ............... 152,038 115,737
70,000 Zep Inc.+ ........................ 732,324 970,900
-------------- --------------
34,477,969 43,575,737
-------------- --------------
TELECOMMUNICATIONS -- 5.5%
150,000 AT&T Inc. ........................ 3,658,468 6,234,000
14,000 Brasil Telecom Participacoes
SA, ADR ....................... 810,959 1,044,120
200,000 BT Group plc...................... 753,355 1,085,874
18,000 BT Group plc, ADR ................ 593,084 970,560
64,000 CenturyTel Inc. .................. 918,720 2,653,440
700,000 Cincinnati Bell Inc.+ ............ 3,931,162 3,325,000
190,000 Citizens Communications Co. ...... 2,789,200 2,418,700
22,000 Clearwire Corp., Cl. A+ .......... 381,650 301,620
MARKET
SHARES COST VALUE
- ---------- -------------- --------------
350,000 Deutsche Telekom AG, ADR ......... $ 6,327,169 $ 7,584,500
40,000 Embarq Corp. ..................... 1,044,656 1,981,200
35,000 France Telecom SA, ADR ........... 683,990 1,247,050
1,625,000 Qwest Communications
International Inc.+ ........... 4,860,819 11,391,250
1,100,000 Sprint Nextel Corp. .............. 16,019,959 14,443,000
75,403 Tele Norte Leste
Participacoes SA, ADR ......... 1,001,480 1,453,770
4,200,935 Telecom Italia SpA ............... 2,397,072 13,051,723
275,000 Telecom Italia SpA, ADR .......... 1,882,012 8,481,000
94,000 Telefonica SA, ADR ............... 3,341,710 9,173,460
10,400 Telefonica SA, BDR ............... 119,280 333,034
40,000 Telefonos de Mexico SAB
de CV, Cl. L, ADR ............. 171,746 1,473,600
585,000 Telephone & Data
Systems Inc. .................. 12,048,593 36,621,000
495,000 Telephone & Data Systems
Inc., Special ................. 9,961,936 28,512,000
10,000 Time Warner Telecom Inc.,
Cl. A+ ........................ 209,039 202,900
237,584 Verizon Communications Inc. ...... 7,597,250 10,380,045
35,000 Windstream Corp. ................. 249,129 455,700
-------------- --------------
81,752,438 164,818,546
-------------- --------------
TRANSPORTATION -- 0.4%
85,000 AMR Corp.+ ....................... 1,245,603 1,192,550
280,000 GATX Corp. ....................... 6,764,603 10,270,400
63,000 Grupo TMM SA, Cl. A, ADR+ ........ 411,039 141,750
4,000 Kansas City Southern+ ............ 7,317 137,320
20,000 Providence and Worcester
Railroad Co. .................. 332,439 334,400
-------------- --------------
8,761,001 12,076,420
-------------- --------------
WIRELESS COMMUNICATIONS -- 0.9%
100,000 America Movil SAB de CV,
Cl. L, ADR .................... 626,224 6,139,000
3,200 NTT DoCoMo Inc. .................. 4,601,636 5,327,843
72,000 Price Communications
Corp., Escrow+ ................ 0 0
1,350 Tele Norte Celular
Participacoes SA, ADR+ ........ 20,857 19,575
3,375 Telemig Celular
Participacoes SA, ADR ......... 97,539 189,506
13,001 Tim Participacoes SA, ADR ........ 157,722 454,385
175,000 United States Cellular Corp.+ .... 8,331,364 14,717,500
192 Vivo Participacoes SA+ ........... 670 1,462
67,505 Vivo Participacoes SA, ADR ....... 648,113 369,252
4,174 Vivo Participacoes SA,
Preference .................... 66,002 22,066
4,375 Vodafone Group plc, ADR .......... 43,962 163,275
-------------- --------------
14,594,089 27,403,864
-------------- --------------
TOTAL COMMON STOCKS .............. 1,415,690,265 2,891,650,379
-------------- --------------
See accompanying notes to financial statements.
10
THE GABELLI ASSET FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- DECEMBER 31, 2007
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
- ----------- -------------- --------------
PREFERRED STOCKS -- 0.1%
AEROSPACE -- 0.1%
29,000 Northrop Grumman Corp.,
7.000% Cv. Pfd., Ser. B ....... $ 3,379,080 $ 4,223,850
-------------- --------------
PRINCIPAL
AMOUNT
- -----------
CONVERTIBLE CORPORATE BONDS -- 0.2%
AUTOMOTIVE: PARTS AND ACCESSORIES -- 0.1%
$ 1,000,000 Standard Motor Products Inc.,
Sub. Deb. Cv.,
6.750%, 07/15/09 .............. 967,343 957,500
-------------- --------------
COMMUNICATIONS EQUIPMENT -- 0.1%
2,000,000 Agere Systems Inc.,
Sub. Deb. Cv.,
6.500%, 12/15/09 .............. 1,944,978 2,027,500
1,413,000 Nortel Networks Corp., Cv.,
4.250%, 09/01/08 .............. 1,397,480 1,393,571
-------------- --------------
3,342,458 3,421,071
-------------- --------------
TOTAL CONVERTIBLE
CORPORATE BONDS ............... 4,309,801 4,378,571
-------------- --------------
SHARES
- -----------
WARRANTS -- 0.0%
AUTOMOTIVE: PARTS AND ACCESSORIES -- 0.0%
14,728 Federal-Mogul Corp.,
expire 12/27/14+ .............. 0 0
-------------- --------------
BROADCASTING -- 0.0%
2,109 Granite Broadcasting Corp.,
Ser. A, expire 06/04/12+ ...... 0 2,109
2,109 Granite Broadcasting Corp.,
Ser. B, expire 06/04/12+ ...... 0 2,109
-------------- --------------
0 4,218
-------------- --------------
ENERGY AND UTILITIES -- 0.0%
11,313 Mirant Corp., Ser. A,
expire 01/03/11+ .............. 149,058 208,386
-------------- --------------
HOTELS AND GAMING -- 0.0%
120,000 Indian Hotels Co.,
expire 12/27/10+ .............. 417,879 485,754
-------------- --------------
TOTAL WARRANTS ................... 566,937 698,358
-------------- --------------
PRINCIPAL
AMOUNT
- -----------
U.S. GOVERNMENT OBLIGATIONS -- 2.3%
U.S. TREASURY BILLS -- 1.5%
$43,814,000 U.S. Treasury Bills,
2.869% to 4.145%++,
01/03/08 to 06/12/08 .......... 43,546,631 43,530,610
-------------- --------------
PRINCIPAL MARKET
AMOUNT COST VALUE
- ----------- -------------- --------------
U.S. TREASURY NOTES -- 0.8%
U.S. Treasury Notes,
$15,000,000 3.375%, 02/15/08 .............. $ 14,969,779 $ 14,969,779
10,000,000 4.625%, 03/31/08 .............. 10,008,471 10,036,720
-------------- --------------
24,978,250 25,006,499
-------------- --------------
TOTAL U.S. GOVERNMENT
OBLIGATIONS ................... 68,524,881 68,537,109
-------------- --------------
TOTAL
INVESTMENTS -- 99.8% .......... $1,492,470,964 2,969,488,267
==============
OTHER ASSETS AND LIABILITIES
(NET) -- 0.2% ................. 4,554,446
--------------
NET ASSETS -- 100.0% ............. $2,974,042,713
==============
- ----------
(a) 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 December
31, 2007, the market value of Rule 144A securities amounted to $14,832,664
or 0.50% of total net assets.
(b) Securities fair valued under procedures established by the Board of
Trustees. The procedures may include reviewing available financial
information about the company and reviewing valuation of comparable
securities and other factors on a regular basis. At December 31, 2007, the
market value of fair valued securities amounted to $258,482 or 0.01% of
total net assets.
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
ADR American Depository Receipt
BDR Brazilian Depository Receipt
CVO Contingent Value Obligation
GDR Global Depository Receipt
See accompanying notes to financial statements.
11
THE GABELLI ASSET FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2007
- --------------------------------------------------------------------------------
ASSETS:
Investments, at value (cost $1,492,470,964) ............. $2,969,488,267
Foreign currency, at value (cost $6,525) ................ 6,679
Cash .................................................... 1,405
Receivable for investments sold ......................... 601,516
Receivable for Fund shares sold ......................... 6,888,102
Dividends and interest receivable ....................... 3,339,444
Prepaid expense ......................................... 129,328
--------------
TOTAL ASSETS ............................................ 2,980,454,741
--------------
LIABILITIES:
Payable for investments purchased ....................... 675,034
Payable for Fund shares redeemed ........................ 1,865,730
Payable for investment advisory fees .................... 2,542,118
Payable for distribution fees ........................... 640,555
Payable for accounting fees ............................. 11,126
Unrealized depreciation on swap contracts ............... 1,267
Other accrued expenses .................................. 676,198
--------------
TOTAL LIABILITIES ....................................... 6,412,028
--------------
NET ASSETS applicable to 59,712,177
shares outstanding ................................... $2,974,042,713
==============
NET ASSETS CONSIST OF:
Paid-in capital $1,502,134,728
Accumulated distributions in excess of net
investment income .................................... (122,031)
Accumulated distributions in excess of net
realized gain on investments and foreign
currency transactions ................................ (4,989,220)
Net unrealized appreciation on investments .............. 1,477,017,303
Net unrealized appreciation on foreign
currency translations ................................ 3,200
Net unrealized depreciation on swap contracts ........... (1,267)
--------------
NET ASSETS .............................................. $2,974,042,713
==============
SHARES OF BENEFICIAL INTEREST:
CLASS AAA:
Net Asset Value, offering and redemption price
per share ($2,953,453,943 / 59,293,945
shares outstanding; unlimited number of
shares authorized) ................................... $ 49.81
==============
CLASS A:
Net Asset Value and redemption price per share
($12,497,117 / 252,018 shares outstanding;
unlimited number of shares authorized) ............... $ 49.59
==============
Maximum offering price per share (NAV /9425,
based on maximum sales charge of 5.75%
of the offering price) ............................... $ 52.62
==============
CLASS B:
Net Asset Value and offering price per share
($1,608 / 32.95 shares outstanding;
unlimited number of shares authorized) ............... $ 48.80(a)
==============
CLASS C:
Net Asset Value and offering price per share
($8,090,045 / 166,181 shares outstanding;
unlimited number of shares authorized) ............... $ 48.68(a)
==============
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2007
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends (net of foreign taxes of $953,003) ............ $ 44,579,828
Interest ................................................ 2,954,221
--------------
TOTAL INVESTMENT INCOME ................................. 47,534,049
--------------
EXPENSES:
Investment advisory fees ................................ 28,588,149
Distribution fees - Class AAA ........................... 7,110,567
Distribution fees - Class A ............................. 22,671
Distribution fees - Class B ............................. 16
Distribution fees - Class C ............................. 55,184
Shareholder services fees ............................... 1,661,318
Shareholder communications expenses ..................... 570,071
Custodian fees .......................................... 425,535
Legal and audit fees .................................... 87,994
Trustees' fees .......................................... 53,948
Accounting fees ......................................... 45,000
Registration expenses ................................... 40,618
Interest expense ........................................ 13,306
Miscellaneous expenses .................................. 204,141
--------------
TOTAL EXPENSES .......................................... 38,878,518
Less: Custodian fee credits ............................. (58,133)
--------------
NET EXPENSES ............................................ 38,820,385
--------------
NET INVESTMENT INCOME ................................... 8,713,664
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS, SWAP CONTRACTS, AND
FOREIGN CURRENCY:
Net realized gain on investments ........................ 172,943,837
Net realized loss on swap contracts ..................... (2,075)
Net realized loss on foreign currency
transactions ......................................... (84,293)
--------------
Net realized gain on investments, swap contracts,
and foreign currency transactions .................... 172,857,469
--------------
Net change in unrealized appreciation/
depreciation on investments .......................... 125,889,111
Net change in unrealized appreciation/
depreciation on swap contracts ....................... (1,267)
Net change in unrealized appreciation/
depreciation on foreign currency translations ........ 1,893
--------------
Net change in unrealized appreciation/
depreciation on investments, swap contracts,
and foreign currency translations .................... 125,889,737
--------------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS, SWAP CONTRACTS, AND
FOREIGN CURRENCY ..................................... 298,747,206
--------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ...................................... $ 307,460,870
==============
- ----------
(a) Redemption price varies based on the length of time held.
See accompanying notes to financial statements.
12
THE GABELLI ASSET FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, 2007 DECEMBER 31, 2006
----------------- -----------------
OPERATIONS:
Net investment income .................................................................. $ 8,713,664 $ 15,609,218
Net realized gain on investments, swap contracts, and foreign currency transactions .... 172,857,469 123,052,407
Net change in unrealized appreciation/depreciation on investments,
swap contracts, and foreign currency translations ................................... 125,889,737 324,727,122
----------------- -----------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ................................... 307,460,870 463,388,747
----------------- -----------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income
Class AAA ........................................................................... (8,561,538) (15,507,490)
Class A ............................................................................. (42,720) (32,680)
Class C -- (1,640)
----------------- -----------------
(8,604,258) (15,541,810)
----------------- -----------------
Net realized gain on investments and foreign currency transactions
Class AAA ........................................................................... (169,880,744) (123,401,185)
Class A ............................................................................. (708,973) (235,506)
Class B ............................................................................. (94) (72)
Class C ............................................................................. (471,343) (166,895)
----------------- -----------------
(171,061,154) (123,803,658)
----------------- -----------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS .................................................... (179,665,412) (139,345,468)
----------------- -----------------
CAPITAL SHARE TRANSACTIONS:
Class AAA ........................................................................... 309,490,566 (53,691,894)
Class A ............................................................................. 7,687,239 2,459,100
Class B ............................................................................. 94 (105)
Class C ............................................................................. 4,805,662 734,082
----------------- -----------------
Net increase (decrease) in net assets from shares of beneficial interest transactions .. 321,983,561 (50,498,817)
----------------- -----------------
REDEMPTION FEES ........................................................................ 21,167 6,381
----------------- -----------------
NET INCREASE IN NET ASSETS ............................................................. 449,800,186 273,550,843
NET ASSETS:
Beginning of period .................................................................... 2,524,242,527 2,250,691,684
----------------- -----------------
End of period (including undistributed net investment income of
$0 and $42,728 respectively) ........................................................ $ 2,974,042,713 $ 2,524,242,527
================= =================
See accompanying notes to financial statements.
13
THE GABELLI ASSET
FUND NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. ORGANIZATION. The Gabelli Asset Fund (the "Fund") was organized on November
25, 1985 as a Massachusetts business trust. The Fund is a diversified open-end
management investment company registered under the Investment Company Act of
1940, as amended (the "1940 Act"). The Fund's primary objective is growth of
capital. The Fund commenced investment operations on March 3, 1986.
2. SIGNIFICANT ACCOUNTING POLICIES. The preparation of financial statements in
accordance with United States ("U.S.") generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amounts and disclosures in the financial statements. Actual results could differ
from those estimates. The following is a summary of significant accounting
policies followed by the Fund in the preparation of its financial statements.
SECURITY VALUATION. Portfolio securities listed or traded on a nationally
recognized securities exchange or traded in the U.S. over-the-counter market for
which market quotations are readily available are valued at the last quoted sale
price or a market's official closing price as of the close of business on the
day the securities are being valued. If there were no sales that day, the
security is valued at the average of the closing bid and asked prices or, if
there were no asked prices quoted on that day, then the security is valued at
the closing bid price on that day. If no bid or asked prices are quoted on such
day, the security is valued at the most recently available price or, if the
Board of Trustees (the "Board") so determines, by such other method as the Board
shall determine in good faith to reflect its fair market value. Portfolio
securities traded on more than one national securities exchange or market are
valued according to the broadest and most representative market, as determined
by Gabelli Funds, LLC (the "Adviser").
Portfolio securities primarily traded on a foreign market are generally valued
at the preceding closing values of such securities on the relevant market, but
may be fair valued pursuant to procedures established by the Board if market
conditions change significantly after the close of the foreign market but prior
to the close of business on the day the securities are being valued. Debt
instruments with remaining maturities of 60 days or less that are not credit
impaired are valued at amortized cost, unless the Board determines such amount
does not reflect the securities' fair value, in which case these securities will
be fair valued as determined by the Board. Debt instruments having a maturity
greater than 60 days for which market quotations are readily available are
valued at the average of the latest bid and asked prices. If there were no asked
prices quoted on such day, the security is valued using the closing bid price.
Futures contracts are valued at the closing settlement price of the exchange or
board of trade on which the applicable contract is traded.
Securities and assets for which market quotations are not readily available are
fair valued as determined by the Board. Fair valuation methodologies and
procedures may include, but are not limited to: analysis and review of available
financial and non-financial information about the company; comparisons to the
valuation and changes in valuation of similar securities, including a comparison
of foreign securities to the equivalent U.S. dollar value ADR securities at the
close of the U.S. exchange; and evaluation of any other information that could
be indicative of the value of the security.
In September 2006, the Financial Accounting Standards Board (the "FASB") issued
Statement of Financial Accounting Standards ("SFAS") 157, Fair Value
Measurements, which clarifies the definition of fair value and requires
companies to expand their disclosure about the use of fair value to measure
assets and liabilities in interim and annual periods subsequent to initial
recognition. Adoption of SFAS 157 requires the use of the price that would be
received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the
14
THE GABELLI ASSET FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
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.
SWAP AGREEMENTS. The Fund may enter into equity swap transactions. The use of
equity swaps is a highly specialized activity that involves investment
techniques and risks different from those associated with ordinary portfolio
security transactions. An equity swap is a swap where a set of future cash flows
are exchanged between two counterparties. One of these cash flow streams will
typically be based on a reference interest rate combined with the performance of
a notional value of shares of a stock. The other will be based on the
performance of the shares of a stock. There is no assurance that the swap
contract counterparties will be able to meet their obligations pursuant to the
swap contracts, or that, in the event of default, the Fund will succeed in
pursuing contractual remedies. The Fund thus assumes the risk that it may be
delayed in or prevented from obtaining payments owed to it pursuant to the swap
contracts. The creditworthiness of the swap contract counterparties is closely
monitored in order to minimize the risk. Depending on the general state of
short-term interest rates and the returns of the Fund's portfolio securities at
that point in time, such a default could negatively affect the Fund's ability to
make dividend payments. In addition, at the time an equity swap transaction
reaches its scheduled termination date, there is a risk that the Fund will not
be able to obtain a replacement transaction or that the terms of the replacement
will not be as favorable as on the expiring transaction. If this occurs, it
could have a negative impact on the Fund's ability to make dividend payments.
The use of derivative instruments involves, to varying degrees, elements of
market and counterparty risk in excess of the amount recognized below. The
change in value of swaps, including the accrual of periodic amounts of interest
to be paid or received on swaps, is reported as unrealized appreciation or
depreciation.
The Fund has entered into equity swaps with Bear, Stearns International Limited.
Details of the equity swaps at December 31, 2007 are as follows:
NET UNREALIZED
NOTIONAL EQUITY SECURITY INTEREST RATE/ TERMINATION APPRECIATION/
AMOUNT RECEIVED EQUITY SECURITY PAID DATE (DEPRECIATION)
-------- -------- -------------------- ---- --------------
Market Value Overnight LIBOR plus 40 bps plus
Appreciation on: Market Value Depreciation on:
$540,479 (50,000 Shares) Rolls-Royce Group Rolls-Royce Group 08/15/08 $ 5,908
370,460 (200,000 Shares) Rank Group plc Rank Group plc 11/17/08 (7,175)
-------
$(1,267)
=======
FORWARD FOREIGN EXCHANGE CONTRACTS. The Fund may engage in forward foreign
exchange contracts for hedging a specific transaction with respect to either the
currency in which the transaction is denominated or another currency as deemed
appropriate by the Adviser. Forward foreign exchange contracts are valued at the
forward rate and are marked-to-market daily. The change in market value is
included in unrealized appreciation/depreciation on investments and foreign
currency translations. When the contract is closed, the Fund records a realized
gain or loss equal to the difference between the value of the contract at the
time it was opened and the value at the time it was closed.
The use of forward foreign exchange contracts does not eliminate fluctuations in
the underlying prices of the Fund's portfolio securities, but it does establish
a rate of exchange that can be achieved in the future. Although forward foreign
exchange contracts limit the risk of loss due to a decline in the value of the
hedged currency,
15
THE GABELLI ASSET FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
they also limit any potential gain that might result should the value of the
currency increase. In addition, the Fund could be exposed to risks if the
counterparties to the contracts are unable to meet the terms of their contracts.
At December 31, 2007, there were no open forward foreign exchange contracts.
FOREIGN CURRENCY TRANSLATIONS. The books and records of the Fund are maintained
in U.S. dollars. Foreign currencies, investments, and other assets and
liabilities are translated into U.S. dollars at the current exchange rates.
Purchases and sales of investment securities, income, and expenses are
translated at the exchange rate prevailing on the respective dates of such
transactions. Unrealized gains and losses that result from changes in foreign
exchange rates and/or changes in market prices of securities have been included
in unrealized appreciation/depreciation on investments and foreign currency
translations. Net realized foreign currency gains and losses resulting from
changes in exchange rates include foreign currency gains and losses between
trade date and settlement date on investment securities transactions, foreign
currency transactions, and the difference between the amounts of interest and
dividends recorded on the books of the Fund and the amounts actually received.
The portion of foreign currency gains and losses related to fluctuation in
exchange rates between the initial trade date and subsequent sale trade date is
included in realized gain/(loss) on investments.
FOREIGN SECURITIES. The Fund may directly purchase securities of foreign
issuers. Investing in securities of foreign issuers involves special risks not
typically associated with investing in securities of U.S. issuers. The risks
include possible revaluation of currencies, the ability to repatriate funds,
less complete financial information about companies, and possible future adverse
political and economic developments. Moreover, securities of many foreign
issuers and their markets may be less liquid and their prices more volatile than
those of securities of comparable U.S. issuers.
FOREIGN TAXES. The Fund may be subject to foreign taxes on income, gains on
investments, or currency repatriation, a portion of which may be recoverable.
The Fund will accrue such taxes and recoveries as applicable, based upon its
current interpretation of tax rules and regulations that exist in the markets in
which it invests.
RESTRICTED AND ILLIQUID SECURITIES. The Fund may invest up to 10% of its net
assets in securities for which the markets are illiquid. Illiquid securities
include securities the disposition of which is subject to substantial legal or
contractual restrictions. The sale of illiquid securities often requires more
time and results in higher brokerage charges or dealer discounts and other
selling expenses than does the sale of securities eligible for trading on
national securities exchanges or in the over-the-counter markets. Restricted
securities may sell at a price lower than similar securities that are not
subject to restrictions on resale. Securities freely saleable among qualified
institutional investors under special rules adopted by the SEC may be treated as
liquid if they satisfy liquidity standards established by the Board. The
continued liquidity of such securities is not as well assured as that of
publicly traded securities, and accordingly the Board will monitor their
liquidity.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME. Securities transactions are
accounted for on the trade date with realized gain or loss on investments
determined by using the identified cost method. Interest income (including
amortization of premium and accretion of discount) is recorded on the accrual
basis. Premiums and discounts on debt securities are amortized using the
effective yield to maturity method. Dividend income is recorded on the
ex-dividend date except for certain dividends which are recorded as soon as the
Fund is informed of the dividend.
DETERMINATION OF NET ASSET VALUE AND CALCULATION OF EXPENSES. Certain
administrative expenses are common to, and allocated among, various affiliated
funds. Such allocations are made on the basis of each
16
THE GABELLI ASSET FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
Fund's average net assets or other criteria directly affecting the expenses as
determined by the Adviser pursuant to procedures established by the Board.
In calculating the NAV per share of each class, investment income, realized and
unrealized gains and losses, redemption fees, and expenses other than class
specific expenses are allocated daily to each class of shares based upon the
proportion of net assets of each class at the beginning of each day.
Distribution expenses are borne solely by the class incurring the expense.
CUSTODIAN FEE CREDITS AND INTEREST EXPENSE. When cash balances are maintained in
the custody account, the Fund receives credits which are used to offset
custodian fees. The gross expenses paid under the custody arrangement are
included in custodian fees in the Statement of Operations with the corresponding
expense offset, if any, shown as "custodian fee credits." When cash balances are
overdrawn, the Fund is charged an overdraft fee equal to 2.00% above the federal
funds rate on outstanding balances. This amount, if any, would be shown as
"interest expense" in the Statement of Operations.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions to shareholders are recorded on the
ex-dividend date. Distributions to shareholders are based on income and capital
gains as determined in accordance with federal income tax regulations, which may
differ from income and capital gains as determined under U.S. generally accepted
accounting principles. These differences are primarily due to differing
treatments of income and gains on various investment securities and foreign
currency transactions held by the Fund, timing differences, and differing
characterizations of distributions made by the Fund. Distributions from net
investment income include net realized gains on foreign currency transactions.
These book/tax differences are either temporary or permanent in nature. To the
extent these differences are permanent, adjustments are made to the appropriate
capital accounts in the period when the differences arise. Permanent differences
for the fiscal year ended December 31, 2007, were primarily attributable to
reclassifications for capital gain dividends from REIT's and underlying funds.
These reclassifications have no impact on the net asset value of the Fund. For
the year ended December 31, 2007, reclassifications were made to increase
accumulated distributions in excess of net investment income by $274,165 and to
decrease accumulated distributions in excess of net realized gain on investments
and foreign currency transactions by $274,165.
The tax character of distributions paid during the fiscal years ended December
31, 2007 and December 31, 2006 was as follows:
YEAR ENDED YEAR ENDED
DECEMBER 31, 2007 DECEMBER 31, 2006
---------------- -----------------
DISTRIBUTIONS PAID FROM:
Ordinary income
(inclusive of short-term capital gains) .... $ 12,547,077 $ 18,460,454
Net long-term capital gains ................... 167,118,335 120,885,014
----------------- -----------------
Total distributions paid ...................... $ 179,665,412 $ 139,345,468
================= =================
PROVISION FOR INCOME TAXES. The Fund intends to continue to qualify as a
regulated investment company under Subchapter M of the Internal Revenue Code of
1986, as amended (the "Code"). It is the policy of the Fund to comply with the
requirements of the Code applicable to regulated investment companies and to
distribute substantially all of its net investment company taxable income and
net capital gains. Therefore, no provision for federal income taxes is required.
17
THE GABELLI ASSET FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
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, basis adjustments on investments in real estate investment trusts, and
mark-to-market adjustments on passive foreign investment companies.
As of December 31, 2007, the components of accumulated earnings/(losses) on a
tax basis were as follows:
Undistributed ordinary income .................. $ 244,665
Undistributed long-term capital gains ........... 1,695,884
Net unrealized appreciation on investments and
foreign currency transactions ............... 1,469,962,555
Other temporary differences* .................... 4,881
---------------
Total ........................................... $ 1,471,907,985
===============
- ----------
* Other temporary differences is primarily due to the reversal of book
income from partnerships and mark-to-market adjustments on swaps.
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 ..... $ 1,499,527,645 $ 1,547,999,815 $ (78,039,193) $ 1,469,960,622
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,
aggregated $602,167,768 and $259,399,607, respectively.
18
THE GABELLI ASSET 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 $579,092 to Gabelli &
Company. Additionally, Gabelli & Company informed the Fund that it received
$34,120 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. At December 31, 2007, there were no borrowings outstanding under the
line of credit.
The average daily amount of borrowings outstanding from the line of credit
within the fiscal year ended December 31, 2007 was $138,786 with a weighted
average interest rate of 6.02%. The maximum amount borrowed at any time during
the fiscal year ended December 31, 2007 was $12,329,000.
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.
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 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 $21,167 and $6,381, respectively.
The redemption fee does not apply to redemptions of shares where (i) the shares
were purchased through automatic reinvestment of dividends or other
distributions, (ii) the redemption was initiated by the Fund, (iii) the shares
were purchased through programs that collect the redemption fee at the program
level and remit them to the Fund, or (iv) the shares were purchased through
programs that the Adviser determines to have appropriate anti-short-term trading
policies in place or as to which the Adviser has received assurances that
look-through redemption fee procedures or effective anti-short-term trading
policies and procedures are in place.
19
THE GABELLI ASSET 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 .......................................... 10,018,775 $ 514,184,963 4,386,829 $ 200,022,345
Shares issued upon reinvestment of distributions ..... 3,400,747 169,969,027 2,754,940 131,438,858
Shares redeemed ...................................... (7,231,506) (374,663,424) (8,657,022) (385,153,097)
----------- -------------- ---------- --------------
Net increase (decrease) ........................... 6,188,016 $ 309,490,566 (1,515,253) $ (53,691,894)
========== ============== ========== ==============
CLASS A CLASS A
---------------------------- ---------------------------
Shares sold .......................................... 171,292 $ 8,808,825 68,271 $ 3,117,967
Shares issued upon reinvestment of distributions ..... 14,283 710,716 5,392 256,308
Shares redeemed ...................................... (35,361) (1,832,302) (20,401) (915,175)
---------- -------------- ---------- --------------
Net increase ...................................... 150,214 $ 7,687,239 53,262 $ 2,459,100
========== ============== ========== ==============
CLASS B CLASS B
---------------------------- ---------------------------
Shares sold .......................................... -- -- 133 $ 5,658
Shares issued upon reinvestment of distributions ..... 2 $ 94 2 72
Shares redeemed ...................................... -- -- (133) (5,835)
---------- -------------- ---------- --------------
Net increase (decrease) ........................... 2 $ 94 2 $ (105)
========== ============== ========== ==============
CLASS C CLASS C
---------------------------- ---------------------------
Shares sold .......................................... 98,259 $ 5,011,883 17,459 $ 784,241
Shares issued upon reinvestment of distributions ..... 9,491 463,736 3,534 165,790
Shares redeemed ...................................... (13,440) (669,957) (4,903) (215,949)
---------- -------------- ---------- --------------
Net increase ...................................... 94,310 $ 4,805,662 16,090 $ 734,082
========== ============== ========== ==============
9. INDEMNIFICATIONS. The Fund enters into contracts that contain a variety of
indemnifications. The Fund's maximum exposure under these arrangements is
unknown. However, the Fund has not had prior claims or losses pursuant to these
contracts and expects the risk of loss to be remote.
10. OTHER MATTERS. The Adviser and/or affiliates received subpoenas from the
Attorney General of the State of New York and the SEC requesting information on
mutual fund share trading practices involving certain funds managed by the
Adviser. GAMCO Investors, Inc. ("GAMCO"), the Adviser's parent company,
responded to these requests for documents and testimony. In June 2006, GAMCO
began discussions with the SEC regarding a possible resolution of their inquiry.
In February 2007, the Adviser made an offer of settlement to the staff of the
SEC for communication to the Commission for its consideration to resolve this
matter. This offer of settlement is subject to agreement regarding the specific
language of the SEC's administrative order and other settlement documents. On a
separate matter, in September 2005, the Adviser was informed by the staff of the
SEC that the staff may recommend to the Commission that an administrative remedy
and a monetary penalty be sought from the Adviser in connection with the actions
of two of 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.
20
THE GABELLI ASSET FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period:
INCOME FROM INVESTMENT OPERATIONS DISTRIBUTIONS
-------------------------------------- ----------------------------------------
Net
Net Asset Net Realized and Total Net
Period Value, Investment Unrealized from Net Realized
Ended Beginning Income Gain on Investment Investment Gain on Total
December 31 of Period (Loss)(a) Investments Operations Income Investments Distributions
- ----------- --------- ---------- ------------ ---------- ---------- ----------- -------------
CLASS AAA
2007 $ 47.38 $ 0.16 $ 5.46 $ 5.62 $ (0.15) $ (3.04) $ (3.19)
2006 41.13 0.30 8.70 9.00 (0.31) (2.44) (2.75)
2005 41.45 0.12 1.73 1.85 (0.12) (2.05) (2.17)
2004 36.26 0.02 5.96 5.98 (0.03) (0.76) (0.79)
2003 28.25 0.04 8.60 8.64 (0.03) (0.60) (0.63)
CLASS A
2007 $ 47.21 $ 0.16 $ 5.44 $ 5.60 $ (0.18) $ (3.04) $ (3.22)
2006 41.01 0.32 8.66 8.98 (0.34) (2.44) (2.78)
2005 41.39 0.10 1.74 1.84 (0.17) (2.05) (2.22)
2004(c) 36.26 0.03 5.94 5.97 (0.08) (0.76) (0.84)
CLASS B
2007 $ 46.72 $ (0.26) $ 5.38 $ 5.12 -- $ (3.04) $ (3.04)
2006 40.64 0.18 8.34 8.52 -- (2.44) (2.44)
2005 41.16 (0.17) 1.70 1.53 -- (2.05) (2.05)
2004(c) 36.26 (0.25) 5.91 5.66 -- (0.76) (0.76)
CLASS C
2007 $ 46.58 $ (0.24) $ 5.38 $ 5.14 -- $ (3.04) $ (3.04)
2006 40.54 (0.03) 8.54 8.51 $ (0.03) (2.44) (2.47)
2005 41.14 (0.20) 1.71 1.51 (0.06) (2.05) (2.11)
2004(c) 36.26 (0.26) 5.92 5.66 (0.02) (0.76) (0.78)
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
------------------------------------------------
Net Asset Net Assets Net
Period Value, End of Investment Portfolio
Ended Redemption End of Total Period Income Operating Turnover
December 31 Fees(a) Period Return+ (in 000's) (Loss) Expenses Rate
- ----------- ---------- --------- ------- ------------ ---------- --------- ---------
CLASS AAA
2007 $ 0.00(b) $ 49.81 11.8% $ 2,953,454 0.31% 1.36% 9%
2006 0.00(b) 47.38 21.8 2,516,088 0.67 1.36 7
2005 0.00(b) 41.13 4.4 2,246,439 0.29 1.37 6
2004 0.00(b) 41.45 16.5 2,216,050 0.06 1.38 7
2003 -- 36.26 30.6 1,958,431 0.11 1.38 7
CLASS A
2007 $ 0.00(b) $ 49.59 11.8% $ 12,497 0.30% 1.36% 9%
2006 0.00(b) 47.21 21.9 4,806 0.71 1.35 7
2005 0.00(b) 41.01 4.4 1,991 0.23 1.38 6
2004(c) 0.00(b) 41.39 16.5 351 0.07 1.40 7
CLASS B
2007 $ 0.00(b) $ 48.80 10.9% $ 2 (0.52)% 2.11% 9%
2006 0.00(b) 46.72 20.9 1 0.41 2.11 7
2005 0.00(b) 40.64 3.7 1 (0.41) 2.02 6
2004(c) 0.00(b) 41.16 15.6 1 (0.67) 2.07 7
CLASS C
2007 $ 0.00(b) $ 48.68 11.0% $ 8,090 (0.47)% 2.11% 9%
2006 0.00(b) 46.58 20.9 3,348 (0.07) 2.11 7
2005 0.00(b) 40.54 3.6 2,261 (0.49) 2.13 6
2004(c) 0.00(b) 41.14 15.6 349 (0.68) 2.15 7
- ----------
+ Total return represents aggregate total return of a hypothetical $1,000
investment at the beginning of the period and sold at the end of the
period including reinvestment of distributions and does not reflect
applicable sales charges.
(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.
21
THE GABELLI ASSET FUND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
To the Board of Trustees and Shareholders of
The Gabelli Asset 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 Gabelli Asset 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 and brokers, provide a
reasonable basis for our opinion.
PricewaterhouseCoopers LLP
New York, New York
February 29, 2008
22
THE GABELLI ASSET 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 Gabelli Asset Fund at One Corporate Center, Rye, NY 10580-1422.
TERM OF
OFFICE AND NUMBER OF
NAME, POSITION(S) LENGTH OF FUNDS IN FUND
ADDRESS(1) TIME COMPLEX OVERSEEN PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIPS
AND AGE SERVED(2) BY TRUSTEE DURING PAST FIVE YEARS HELD BY TRUSTEE(4)
- ------------------------ ------------ ---------------- ------------------------------------- -------------------------------
INTERESTED TRUSTEES(3):
MARIO J. GABELLI Since 1986 26 Chairman and Chief Executive Officer Director of Morgan Group
Trustee and Chairman of GAMCO Investors, Inc. and Chief Holdings, Inc. (holding
Age: 65 Investment Officer - Value Portfolios company); Chairman of the Board
of Gabelli Funds, LLC and GAMCO Asset of LICT Corp. (multimedia and
Management Inc.; Director/Trustee or communication services company)
Chief Investment Officer of other
registered investment companies in
the Gabelli/GAMCO Funds complex;
Chairman and Chief Executive Officer
of GGCP, Inc.
JOHN D. GABELLI Since 1999 10 Senior Vice President of Gabelli & Director of GAMCO Investors,
Trustee Company, Inc. Inc.
Age: 63
INDEPENDENT TRUSTEES(5):
ANTHONY J. COLAVITA Since 1989 35 Partner in the law firm of Anthony J. --
Trustee Colavita P.C.
Age: 72
JAMES P. CONN Since 1992 16 Former Managing Director and Chief --
Trustee Investment Officer of Financial
Age: 69 Security Assurance Holdings Ltd.
(1992-1998) (insurance holding
company)
ANTHONY R. PUSTORINO Since 1986 14 Certified Public Accountant; Director of The LGL Group, Inc.
Trustee Professor Emeritus, Pace University (diversified manufacturing)
Age: 82
WERNER J. ROEDER, MD Since 2001 23 Medical Director of Lawrence Hospital --
Trustee and practicing private physician
Age: 67
ANTHONIE C. VAN EKRIS 1986-1989 19 Chairman of BALMAC International, --
Trustee 1992-present Inc. (commodities and futures
Age: 73 trading)
SALVATORE J. ZIZZA 1986-1996 26 Chairman of Zizza & Co., Ltd. Director of Hollis-Eden
Trustee 2000-present (consulting) Pharmaceuticals
Age: 62 (biotechnology); Director of
Earl Scheib, Inc. (automotive
services)
23
THE GABELLI ASSET 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 since
President 1988 and an officer of most of the registered investment companies in the
Age: 56 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. since 1999
Secretary and GAMCO Asset Management Inc. since 1993; Secretary of all of the registered
Age: 44 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 registered
Treasurer investment companies in the Gabelli/GAMCO Funds complex; Senior Vice President of
Age: 49 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
Chief Compliance Officer 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. 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.
- --------------------------------------------------------------------------------
2007 TAX NOTICE TO SHAREHOLDERS (Unaudited)
For the fiscal year ended December 31, 2007, the Fund paid to shareholders on
December 27, 2007 ordinary income dividends (comprised of net investment income
and short-term capital gains) totaling $0.223, $0.253, $0.070, and $0.070 per
share for Class AAA, Class A, Class B, and Class C, respectively, and a
long-term capital gains totaling $167,118,335 which is designated as a capital
gain dividend. For the fiscal year ended December 31, 2007, 100% of the ordinary
income distribution qualifies for the dividends received deduction available to
corporations and 100% of the ordinary income distribution was qualified dividend
income.
U.S. GOVERNMENT INCOME:
The percentage of the ordinary income dividend paid by the Fund during fiscal
year 2007 which was derived from U.S. Treasury securities was 3.84%. 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 Gabelli Asset Fund 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 as to the applicability of the information provided to your
specific situation.
- --------------------------------------------------------------------------------
24
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- --------------------------------------------------------------------------------
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 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.
THE GABELLI ASSET FUND
One Corporate Center
Rye, New York 10580-1422
800-GABELLI
800-422-3554
FAX: 914-921-5118
WEBSITE: WWW.GABELLI.COM
E-MAIL: INFO@GABELLI.COM
Net Asset Value per share available daily by calling
800-GABELLI after 6:00 P.M.
BOARD OF TRUSTEES
Mario J. Gabelli, CFA Anthony R. Pustorino
CHAIRMAN AND CHIEF CERTIFIED PUBLIC ACCOUNTANT,
EXECUTIVE OFFICER PROFESSOR EMERITUS
GAMCO INVESTORS, INC. PACE UNIVERSITY
Anthony J. Colavita Werner J. Roeder, MD
ATTORNEY-AT-LAW MEDICAL DIRECTOR
ANTHONY J. COLAVITA, P.C. LAWRENCE HOSPITAL
James P. Conn Anthonie C. van Ekris
FORMER CHIEF INVESTMENT OFFICER CHAIRMAN
FINANCIAL SECURITY ASSURANCE BALMAC INTERNATIONAL, INC.
HOLDINGS LTD.
Salvatore J. Zizza
John D. Gabelli CHAIRMAN
SENIOR VICE PRESIDENT ZIZZA & CO., LTD.
GABELLI & COMPANY, INC.
OFFICERS
Bruce N. Alpert James E. McKee
PRESIDENT SECRETARY
Agnes Mullady Peter D. Goldstein
TREASURER CHIEF COMPLIANCE OFFICER
DISTRIBUTOR
Gabelli & Company, Inc.
CUSTODIAN, TRANSFER AGENT, AND DIVIDEND AGENT
State Street Bank and Trust Company
LEGAL COUNSEL
Skadden, Arps, Slate, Meagher & Flom LLP
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This report is submitted for the general information of the shareholders of The
Gabelli Asset Fund. It is not authorized for distribution to prospective
investors unless preceded or accompanied by an effective prospectus.
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GAB405Q407SR
[GRAPHIC OMITTED] E P
Gabelli Triangle P M
MANAGEMENT S V
CASH FLOW
RESEARCH
THE
GABELLI
ASSET
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
$41,000 for 2006 and $43,000 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 Gabelli Asset Fund
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By (Signature and Title)* /s/ Bruce N. Alpert
-------------------------------------------------------
Bruce N. Alpert, Principal Executive Officer
Date 03/05/08
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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 03/05/08
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By (Signature and Title)* /s/ Agnes Mullady
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Agnes Mullady,
Principal Financial Officer and Treasurer
Date 03/05/08
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* Print the name and title of each signing officer under his or her signature.