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
The Gabelli Asset Fund
(Exact name of registrant as specified in charter)
One Corporate Center
Rye, New York 10580-1422
(Address of principal executive offices) (Zip code)
Bruce N. Alpert
Gabelli Funds, LLC
One Corporate Center
Rye, New York 10580-1422
(Name and address of agent for service)
registrant's telephone number, including area code: 1-800-422-3554
Date of fiscal year end: December 31
Date of reporting period: June 30, 2008
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 100 F Street, NE,
Washington, DC 20549. The OMB has reviewed this collection of information under
the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
The Report to Shareholders is attached herewith.
THE GABELLI ASSET FUND
SEMI-ANNUAL REPORT
JUNE 30, 2008
TO OUR SHAREHOLDERS,
During the second quarter of 2008, The Gabelli Asset Fund's (the "Fund")
net asset value ("NAV") per share declined 1.3%, while the Standard & Poor's
("S&P") 500 Index was down 2.7% and the Dow Jones Industrial Average decreased
6.8%. For the six month period ended June 30, 2008, the Fund was down 11.0%
versus declines of 11.9% and 13.3% for the S&P 500 Index and the Dow Jones
Industrial Average, respectively.
Enclosed are the financial statements and the investment portfolio as of
June 30, 2008.
COMPARATIVE RESULTS
AVERAGE ANNUAL RETURNS THROUGH JUNE 30, 2008 (a)
Since
Year to Inception
Quarter Date 1 Year 3 Year 5 Year 10 Year 15 Year 20 Year (3/3/86)
------- ------- ------- ------ ------ ------- ------- ------- ---------
GABELLI ASSET FUND
CLASS AAA............... (1.33)% (10.96)% (10.74)% 7.69% 11.57% 7.73% 11.55% 12.12% 13.23%
S&P 500 Index.............. (2.72) (11.90) (13.11) 4.40 7.58 2.88 9.21 10.43 10.60
Dow Jones Industrial
Average................. (6.84) (13.29) (13.27) 5.81 7.23 4.54 10.48 11.45 11.71
Nasdaq Composite Index..... 0.61 (13.55) (11.92) 3.69 7.16 1.93 8.19 9.20 8.65
Class A.................... (1.34) (10.97) (10.73) 7.69 11.57 7.73 11.55 12.12 13.23
(7.01)(b) (16.09)(b) (15.87)(b) 5.59(b) 10.25(b) 7.09(b) 11.11(b) 11.79(b) 12.91(b)
Class B.................... (1.52) (11.33) (11.49) 6.85 10.81 7.36 11.29 11.93 13.05
(6.45)(c) (15.77)(c) (15.92)(c) 5.97(c) 10.54(c) 7.36 11.29 11.93 13.05
Class C.................... (1.51) (11.28) (11.39) 6.89 10.82 7.37 11.30 11.93 13.06
(2.49)(d) (12.16)(d) (12.27)(d) 6.89 10.82 7.37 11.30 11.93 13.06
Class I.................... (1.27) (10.84) (10.62) 7.74 11.60 7.74 11.56 12.13 13.23
IN THE CURRENT PROSPECTUS, THE EXPENSE RATIOS FOR CLASS AAA, A, B, C, AND I
SHARES ARE 1.36%, 1.36%, 2.11%, 2.11%, AND 1.11%, RESPECTIVELY. CLASS AAA AND
CLASS I SHARES DO NOT HAVE A SALES CHARGE. THE MAXIMUM SALES CHARGE FOR CLASS A,
B, AND C SHARES IS 5.75%, 5.00%, AND 1.00%, RESPECTIVELY.
(a) RETURNS REPRESENT PAST PERFORMANCE AND DO NOT GUARANTEE FUTURE RESULTS.
TOTAL RETURNS AND AVERAGE ANNUAL RETURNS REFLECT CHANGES IN SHARE PRICE AND
REINVESTMENT OF DISTRIBUTIONS AND ARE NET OF EXPENSES. INVESTMENT RETURNS
AND THE PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE. WHEN SHARES ARE
REDEEMED, THEY MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST.
PERFORMANCE RETURNS FOR PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED.
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA
PRESENTED. VISIT WWW.GABELLI.COM FOR PERFORMANCE INFORMATION AS OF THE MOST
RECENT MONTH END. INVESTORS SHOULD CAREFULLY CONSIDER THE INVESTMENT
OBJECTIVES, RISKS, CHARGES, AND EXPENSES OF THE FUND BEFORE INVESTING. THE
PROSPECTUS CONTAINS MORE INFORMATION ABOUT THIS AND OTHER MATTERS AND
SHOULD BE READ CAREFULLY BEFORE INVESTING. THE DOW JONES INDUSTRIAL AVERAGE
IS AN UNMANAGED INDEX OF 30 LARGE CAPITALIZATION STOCKS. THE S&P 500 INDEX
AND THE NASDAQ COMPOSITE INDEX ARE UNMANAGED INDICATORS OF STOCK MARKET
PERFORMANCE. DIVIDENDS ARE CONSIDERED REINVESTED EXCEPT FOR THE NASDAQ
COMPOSITE INDEX. YOU CANNOT INVEST DIRECTLY IN AN INDEX. THE CLASS AAA
SHARE NAVS 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 AND CLASS I SHARES ON JANUARY 11, 2008. THE ACTUAL
PERFORMANCE OF THE CLASS B SHARES AND CLASS C SHARES WOULD HAVE BEEN LOWER
DUE TO THE ADDITIONAL EXPENSES ASSOCIATED WITH THESE CLASSES OF SHARES. THE
ACTUAL PERFORMANCE OF THE CLASS I SHARES WOULD HAVE BEEN HIGHER DUE TO
LOWER EXPENSES RELATED TO THIS CLASS OF SHARES.
(b) INCLUDES THE EFFECT OF THE MAXIMUM 5.75% SALES CHARGE AT THE BEGINNING OF
THE PERIOD.
(c) PERFORMANCE RESULTS INCLUDE THE DEFERRED SALES CHARGES FOR THE CLASS B
SHARES UPON REDEMPTION AT THE END OF THE QUARTER, YEAR TO DATE, ONE YEAR,
THREE YEAR, AND FIVE YEAR PERIODS OF 5%, 5%, 5%, 3%, AND 2%, RESPECTIVELY,
OF THE FUND'S NAV 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, YEAR TO DATE, AND ONE
YEAR PERIODS OF 1% OF THE FUND'S NAV PER SHARE AT THE TIME OF PURCHASE OR
SALE, WHICHEVER IS LOWER.
We have separated the portfolio manager's commentary from the financial
statements and investment portfolio due to corporate governance regulations
stipulated by the Sarbanes-Oxley Act of 2002. We have done this to ensure that
the content of the portfolio manager's commentary is unrestricted. The financial
statements and investment portfolio are mailed separately from the commentary.
Both the commentary and the financial statements, including the portfolio of
investments, will be available on our website at www.gabelli.com/funds.
THE GABELLI ASSET FUND
DISCLOSURE OF FUND EXPENSES (UNAUDITED)
For the Six Month Period from January 1, 2008 through June 30, 2008
EXPENSE TABLE
We believe it is important for you to understand the impact of fees and expenses
regarding your investment. All mutual funds have operating expenses. As a
shareholder of a fund, you incur ongoing costs, which include costs for
portfolio management, administrative services, and shareholder reports (like
this one), among others. Operating expenses, which are deducted from a fund's
gross income, directly reduce the investment return of a fund. When a fund's
expenses are expressed as a percentage of its average net assets, this figure is
known as the expense ratio. The following examples are intended to help you
understand the ongoing costs (in dollars) of investing in your Fund and to
compare these costs with those of other mutual funds. The examples are based on
an investment of $1,000 made at the beginning of the period shown and held for
the entire period.
The Expense Table below illustrates your Fund's costs in two ways:
ACTUAL FUND RETURN: This section provides information about actual account
values and actual expenses. You may use this section to help you to estimate the
actual expenses that you paid over the period after any fee waivers and expense
reimbursements. The "Ending Account Value" shown is derived from the Fund's
ACTUAL return during the past six months, and the "Expenses Paid During Period"
shows the dollar amount that would have been paid by an investor who started
with $1,000 in the Fund. You may use this information, together with the amount
you invested, to estimate the expenses that you paid over the period.
To do so, simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
given for your Fund under the heading "Expenses Paid During Period" to estimate
the expenses you paid during this period.
HYPOTHETICAL 5% RETURN: This section provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio. It assumes a hypothetical annualized return of 5% before expenses during
the period shown. In this case - because the hypothetical return used is NOT the
Fund's actual return - the results do not apply to your investment and you
cannot use the hypothetical account value and expense to estimate the actual
ending account balance or expenses you paid for the period. This example is
useful in making comparisons of the ongoing costs of investing in the Fund and
other funds. To do so, compare this 5% hypothetical example with the 5%
hypothetical examples that appear in shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs such as sales
charges (loads), redemption fees, or exchange fees, if any, which are described
in the Prospectus. If these costs were applied to your account, your costs would
be higher. Therefore, the 5% hypothetical return is useful in comparing ongoing
costs only, and will not help you determine the relative total costs of owning
different funds.
Beginning Ending Annualized Expenses
Account Value Account Value Expense Paid During
01/01/08 06/30/08 Ratio Period*
------------- ------------- ---------- -----------
THE GABELLI ASSET FUND
ACTUAL FUND RETURN
Class AAA $1,000.00 $ 890.40 1.36% $ 6.39
Class A $1,000.00 $ 890.30 1.36% $ 6.39
Class B $1,000.00 $ 886.70 2.11% $ 9.90
Class C $1,000.00 $ 887.20 2.11% $ 9.90
Class I** $1,000.00 $ 891.60 1.11% $ 4.93
HYPOTHETICAL 5% RETURN
Class AAA $1,000.00 $1,018.10 1.36% $ 6.82
Class A $1,000.00 $1,018.10 1.36% $ 6.82
Class B $1,000.00 $1,014.37 2.11% $10.57
Class C $1,000.00 $1,014.37 2.11% $10.57
Class I $1,000.00 $1,019.34 1.11% $ 5.57
* 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
366.
** Class I Shares were first issued on January 11, 2008. Account values and
expense ratios for the Actual Fund Return are calculated from January 11,
2008 through June 30, 2008.
2
SUMMARY OF PORTFOLIO HOLDINGS (UNAUDITED)
The following table presents portfolio holdings as a percent of net assets as of
June 30, 2008:
THE GABELLI ASSET FUND
Food and Beverage ............................... 13.0%
Energy and Utilities ............................ 9.7%
Equipment and Supplies .......................... 7.5%
Financial Services .............................. 6.2%
Diversified Industrial .......................... 5.4%
Cable and Satellite ............................. 5.3%
Entertainment ................................... 4.9%
Telecommunications .............................. 4.6%
Consumer Products ............................... 4.3%
Publishing ...................................... 3.7%
U.S. Government Obligations ..................... 3.5%
Health Care ..................................... 3.4%
Machinery ....................................... 3.2%
Automotive: Parts and Accessories ............... 2.3%
Aviation: Parts and Services .................... 2.2%
Metals and Mining ............................... 2.1%
Business Services ............................... 1.9%
Retail .......................................... 1.8%
Hotels and Gaming ............................... 1.6%
Specialty Chemicals ............................. 1.6%
Automotive ...................................... 1.4%
Agriculture ..................................... 1.4%
Environmental Services .......................... 1.3%
Communications Equipment ........................ 1.3%
Electronics ..................................... 1.2%
Broadcasting .................................... 1.0%
Aerospace ....................................... 1.0%
Consumer Services ............................... 0.9%
Wireless Communications ......................... 0.8%
Computer Software and Services .................. 0.7%
Real Estate ..................................... 0.5%
Transportation .................................. 0.5%
Manufactured Housing and Recreational Vehicles... 0.2%
Closed-End Funds ................................ 0.1%
Computer Hardware ............................... 0.0%
Other Assets and Liabilities (Net) .............. (0.5)%
-----
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 MARCH 31,
2008. SHAREHOLDERS MAY OBTAIN THIS INFORMATION AT WWW.GABELLI.COM OR BY CALLING
THE FUND AT 800-GABELLI (800-422-3554). THE FUND'S FORM N-Q IS AVAILABLE ON THE
SEC'S WEBSITE AT WWW.SEC.GOV AND MAY ALSO BE REVIEWED AND COPIED AT THE SEC'S
PUBLIC REFERENCE ROOM IN WASHINGTON, DC. INFORMATION ON THE OPERATION OF THE
PUBLIC REFERENCE ROOM MAY BE OBTAINED BY CALLING 1-800-SEC-0330.
PROXY VOTING
The Fund files Form N-PX with its complete proxy voting record for the 12 months
ended June 30th, no later than August 31st of each year. A description of the
Fund's proxy voting policies, procedures, and how the Fund voted proxies
relating to portfolio securities is available without charge, upon request, by
(i) calling 800-GABELLI (800-422-3554); (ii) writing to The Gabelli Funds at One
Corporate Center, Rye, NY 10580-1422; or (iii) visiting the SEC's website at
www.sec.gov.
3
THE GABELLI ASSET FUND
SCHEDULE OF INVESTMENTS -- JUNE 30, 2008 (UNAUDITED)
MARKET
SHARES COST VALUE
- ------ -------------- --------------
COMMON STOCKS -- 96.9%
AEROSPACE -- 1.0%
77,000 Boeing Co. ........................................... $ 3,003,024 $ 5,060,440
100,000 Herley Industries Inc.+ .............................. 1,509,337 1,328,000
12,000 Lockheed Martin Corp. ................................ 354,600 1,183,920
67,845 Northrop Grumman Corp. ............................... 4,113,224 4,538,831
2,050,000 Rolls-Royce Group plc+ ............................... 15,200,621 13,944,325
181,888,000 Rolls-Royce Group plc, Cl. B ......................... 361,269 362,290
-------------- --------------
24,542,075 26,417,806
-------------- --------------
AGRICULTURE -- 1.4%
600,000 Archer-Daniels-Midland Co. ........................... 8,061,248 20,250,000
85,058 Monsanto Co. ......................................... 818,413 10,754,733
3,000 Potash Corp. of Saskatchewan Inc. .................... 41,184 685,710
36,000 The Mosaic Co.+ ...................................... 607,794 5,209,200
-------------- --------------
9,528,639 36,899,643
-------------- --------------
AUTOMOTIVE -- 1.4%
240,000 General Motors Corp. ................................. 6,445,481 2,760,000
400,000 Navistar International Corp.+ ........................ 7,339,853 26,328,000
101,250 PACCAR Inc. .......................................... 522,021 4,235,287
19,000 Volkswagen AG ........................................ 807,123 5,482,760
-------------- --------------
15,114,478 38,806,047
-------------- --------------
AUTOMOTIVE: PARTS AND ACCESSORIES -- 2.3%
192,000 BorgWarner Inc. ...................................... 1,888,822 8,520,960
240,000 CLARCOR Inc. ......................................... 1,718,044 8,424,000
260,000 Earl Scheib Inc.+ .................................... 1,603,290 773,500
500,000 Genuine Parts Co. .................................... 12,128,320 19,840,000
410,000 Johnson Controls Inc. ................................ 3,722,816 11,758,800
175,000 Midas Inc.+ .......................................... 2,332,651 2,362,500
290,000 Modine Manufacturing Co. ............................. 6,749,742 3,587,300
110,000 O'Reilly Automotive Inc.+ ............................ 2,856,681 2,458,500
120,000 Proliance International Inc.+ ........................ 767,190 114,000
270,000 Standard Motor Products Inc. ......................... 3,321,605 2,203,200
105,000 Superior Industries International Inc. ............... 2,466,656 1,772,400
30,000 Tenneco Inc.+ ........................................ 132,744 405,900
-------------- --------------
39,688,561 62,221,060
-------------- --------------
AVIATION: PARTS AND SERVICES -- 2.2%
484,000 Curtiss-Wright Corp. ................................. 3,280,977 21,654,160
570,000 GenCorp Inc.+ ........................................ 2,079,772 4,081,200
110,000 Kaman Corp. .......................................... 1,534,270 2,503,600
300,000 Precision Castparts Corp. ............................ 3,611,939 28,911,000
260,000 The Fairchild Corp., Cl. A+ .......................... 1,167,129 548,600
-------------- --------------
11,674,087 57,698,560
-------------- --------------
BROADCASTING -- 1.0%
400,000 CBS Corp., Cl. A ..................................... 7,019,670 7,792,000
50,000 CBS Corp., Cl. B ..................................... 1,257,800 974,500
MARKET
SHARES COST VALUE
- ------ -------------- --------------
36,000 Citadel Broadcasting Corp. ........................... $ 88,955 $ 43,920
10,000 Cogeco Inc. .......................................... 194,764 304,011
26,666 Corus Entertainment Inc., Cl. B, New York ............ 43,320 477,321
13,334 Corus Entertainment Inc., Cl. B, Toronto ............. 21,662 237,860
100,500 Fisher Communications Inc.+ .......................... 5,051,584 3,461,220
843 Granite Broadcasting Corp.+ .......................... 69,109 5,488
340,000 Gray Television Inc. ................................. 3,676,794 975,800
8,000 Gray Television Inc., Cl. A .......................... 76,930 36,000
230,000 Liberty Media Corp. - Capital, Cl. A+ ................ 732,557 3,312,000
510,000 Lin TV Corp., Cl. A+ ................................. 8,075,840 3,039,600
40,000 Sinclair Broadcast Group Inc., Cl. A ................. 358,285 304,000
400,000 Television Broadcasts Ltd. ........................... 1,815,551 2,308,506
200,000 Tokyo Broadcasting System Inc. ....................... 6,057,174 3,795,263
270,000 Young Broadcasting Inc., Cl. A+ ...................... 2,216,708 37,800
-------------- --------------
36,756,703 27,105,289
-------------- --------------
BUSINESS SERVICES -- 1.9%
25,851 ACCO Brands Corp.+ ................................... 152,168 290,307
470,000 ChoicePoint Inc.+ .................................... 21,189,725 22,654,000
32,000 Clear Channel Outdoor Holdings Inc., Cl. A+ .......... 667,286 570,560
195,000 Ecolab Inc. .......................................... 1,837,428 8,383,050
10,000 Imation Corp. ........................................ 203,344 229,200
65,000 Landauer Inc. ........................................ 402,818 3,655,600
21,500 MasterCard Inc., Cl. A ............................... 838,500 5,708,680
105,000 Monster Worldwide Inc.+ .............................. 2,589,893 2,164,050
30,000 Nashua Corp.+ ........................................ 297,230 300,000
4,000 The Brink's Co. ...................................... 230,429 261,680
660,000 The Interpublic Group of Companies Inc.+ ............. 6,542,519 5,676,000
12,000 Visa Inc., Cl. A+ .................................... 528,000 975,720
-------------- --------------
35,479,340 50,868,847
-------------- --------------
CABLE AND SATELLITE -- 5.3%
2,000,000 Cablevision Systems Corp., Cl. A+ .................... 5,941,308 45,200,000
208,000 Comcast Corp., Cl. A ................................. 3,373,231 3,945,760
52,000 Comcast Corp., Cl. A, Special ........................ 265,600 975,520
190,000 DISH Network Corp., Cl. A+ ........................... 5,177,634 5,563,200
37,540 EchoStar Corp., Cl. A+ ............................... 1,122,178 1,171,999
320,096 Liberty Global Inc., Cl. A+ .......................... 3,187,437 10,060,617
260,000 Liberty Global Inc., Cl. C+ .......................... 2,801,037 7,893,600
1,150,000 Rogers Communications Inc., Cl. B, New York .......... 6,170,739 44,459,000
See accompanying notes to financial statements.
4
THE GABELLI ASSET FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- JUNE 30, 2008 (UNAUDITED)
MARKET
SHARES COST VALUE
- ------ -------------- --------------
COMMON STOCKS (CONTINUED)
CABLE AND SATELLITE (CONTINUED)
50,000 Rogers Communications Inc., Cl. B, Toronto ........... $ 229,821 $ 1,939,786
120,000 Shaw Communications Inc., Cl. B ...................... 164,952 2,450,133
160,000 Shaw Communications Inc., Cl. B, Non-Voting .......... 312,647 3,257,600
600,000 The DIRECTV Group Inc.+ .............................. 13,607,653 15,546,000
10,000 Time Warner Cable Inc., Cl. A+ ....................... 266,305 264,800
-------------- --------------
42,620,542 142,728,015
-------------- --------------
CLOSED-END FUNDS -- 0.1%
79,920 Royce Value Trust Inc. ............................... 975,443 1,253,146
-------------- --------------
COMMUNICATIONS EQUIPMENT -- 1.2%
55,000 Alcatel-Lucent, ADR+ ................................. 560,623 332,200
565,000 Corning Inc. ......................................... 4,174,676 13,023,250
240,000 Motorola Inc. ........................................ 2,546,729 1,761,600
90,000 Nortel Networks Corp., New York+ ..................... 2,057,462 739,800
93,041 Nortel Networks Corp., Toronto+ ...................... 2,913,668 761,883
390,000 Thomas & Betts Corp.+ ................................ 7,650,700 14,761,500
-------------- --------------
19,903,858 31,380,233
-------------- --------------
COMPUTER HARDWARE -- 0.0%
1,000 Wincor Nixdorf AG .................................... 77,875 69,622
-------------- --------------
COMPUTER SOFTWARE AND SERVICES -- 0.7%
210,000 Diebold Inc. ......................................... 7,909,369 7,471,800
1,600 eBay Inc.+ ........................................... 24,652 43,728
40,000 Jupitermedia Corp.+ .................................. 175,878 56,000
100,000 Metavante Technologies Inc.+ ......................... 2,236,797 2,262,000
50,000 NCR Corp.+ ........................................... 1,275,073 1,260,000
40,000 Rockwell Automation Inc. ............................. 1,986,379 1,749,200
26,026 Telecom Italia Media SpA+ ............................ 26,184 3,995
275,000 Yahoo! Inc.+ ......................................... 8,871,380 5,681,500
-------------- --------------
22,505,712 18,528,223
-------------- --------------
CONSUMER PRODUCTS -- 4.3%
49,000 Alberto-Culver Co. ................................... 1,097,704 1,287,230
12,000 Altria Group Inc. .................................... 82,225 246,720
10,000 Avon Products Inc. ................................... 275,840 360,200
11,000 Christian Dior SA .................................... 307,335 1,134,396
280,000 Church & Dwight Co. Inc. ............................. 1,838,465 15,778,000
30,000 Clorox Co. ........................................... 1,664,894 1,566,000
17,000 Colgate-Palmolive Co. ................................ 901,179 1,174,700
100,000 Eastman Kodak Co. .................................... 1,786,216 1,443,000
268,000 Energizer Holdings Inc.+ ............................. 4,926,201 19,588,120
108,000 Fortune Brands Inc. .................................. 2,338,089 6,740,280
MARKET
SHARES COST VALUE
- ------ -------------- --------------
3,000 Givaudan SA .......................................... $ 1,028,013 $ 2,681,220
35,000 Harley-Davidson Inc. ................................. 88,156 1,269,100
40,000 Lenox Group Inc.+ .................................... 405,406 10,400
80,000 Mattel Inc. .......................................... 1,444,000 1,369,600
36,000 National Presto Industries Inc. ...................... 1,152,992 2,310,480
12,000 Philip Morris International Inc. ..................... 191,858 592,680
520,000 Procter & Gamble Co. ................................. 17,588,062 31,621,200
50,000 Reckitt Benckiser Group plc .......................... 1,570,345 2,534,608
120,000 Sally Beauty Holdings Inc.+ .......................... 980,508 775,200
60,000 Svenska Cellulosa AB, Cl. B .......................... 864,557 849,322
1,000,000 Swedish Match AB ..................................... 10,327,823 20,506,604
10,000 Syratech Corp.+ ...................................... 2,000 200
42,000 Wolverine World Wide Inc. ............................ 390,645 1,120,140
-------------- --------------
51,252,513 114,959,400
-------------- --------------
CONSUMER SERVICES -- 0.9%
350,000 IAC/InterActiveCorp+ ................................. 4,046,555 6,748,000
560,000 Liberty Media Corp. - Interactive, Cl. A+ ............ 3,352,351 8,265,600
500 Priceline.com Inc.+ .................................. 34,467 57,730
650,000 Rollins Inc. ......................................... 3,375,689 9,633,000
-------------- --------------
10,809,062 24,704,330
-------------- --------------
DIVERSIFIED INDUSTRIAL -- 5.4%
34,000 Acuity Brands Inc. ................................... 401,268 1,634,720
5,000 Anixter International Inc.+ .......................... 45,044 297,450
75,403 Contax Participacoes SA, ADR ......................... 30,974 108,565
490,000 Cooper Industries Ltd., Cl. A ........................ 12,041,804 19,355,000
450,000 Crane Co. ............................................ 7,844,551 17,338,500
110,000 Gardner Denver Inc.+ ................................. 901,088 6,248,000
412,000 Greif Inc., Cl. A .................................... 4,864,205 26,380,360
425,000 Honeywell International Inc. ......................... 13,849,486 21,369,000
580,000 ITT Corp. ............................................ 9,175,073 36,731,400
152,000 Katy Industries Inc.+ ................................ 1,233,425 296,400
200,000 Magnetek Inc.+ ....................................... 943,176 846,000
240,000 Myers Industries Inc. ................................ 1,460,520 1,956,000
52,000 Pentair Inc. ......................................... 762,065 1,821,040
53,333 Smiths Group plc ..................................... 880,170 1,153,663
110,000 Trinity Industries Inc. .............................. 916,097 3,815,900
165,000 Tyco International Ltd. .............................. 7,550,154 6,606,600
-------------- --------------
62,899,100 145,958,598
-------------- --------------
ELECTRONICS -- 1.2%
9,600 Chemring Group plc ................................... 125,113 452,417
3,000 Hitachi Ltd., ADR .................................... 172,200 215,040
120,000 Intel Corp. .......................................... 2,567,140 2,577,600
13,000 Kyocera Corp., ADR ................................... 448,063 1,222,650
See accompanying notes to financial statements.
5
THE GABELLI ASSET FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- JUNE 30, 2008 (UNAUDITED)
MARKET
SHARES COST VALUE
- ------ -------------- --------------
COMMON STOCKS (CONTINUED)
ELECTRONICS (CONTINUED)
400,000 LSI Corp.+ ........................................... $ 2,712,845 $ 2,456,000
22,000 Molex Inc., Cl. A .................................... 609,932 504,020
46,000 Samsung Electronics Co. Ltd., GDR (a) ................ 8,616,601 13,742,173
4,000 Samsung Electronics Co. Ltd., OTC, GDR (a) ........... 1,439,399 1,179,000
50,000 Sony Corp., ADR ...................................... 1,556,873 2,187,000
205,000 Texas Instruments Inc. ............................... 5,187,155 5,772,800
75,000 Tyco Electronics Ltd. ................................ 2,485,070 2,686,500
-------------- --------------
25,920,391 32,995,200
-------------- --------------
ENERGY AND UTILITIES -- 9.7%
30,000 AGL Resources Inc. ................................... 503,625 1,037,400
140,000 Allegheny Energy Inc. ................................ 1,418,678 7,015,400
1,800,000 Aquila Inc.+ ......................................... 7,327,573 6,786,000
250,000 BP plc, ADR .......................................... 7,151,966 17,392,500
4,000 Cameron International Corp.+ ......................... 69,450 221,400
25,000 CH Energy Group Inc. ................................. 1,040,745 889,250
352,000 Chevron Corp. ........................................ 13,515,000 34,893,760
355,000 ConocoPhillips ....................................... 10,144,011 33,508,450
18,000 Constellation Energy Group Inc. ...................... 436,827 1,477,800
122,000 Devon Energy Corp. ................................... 1,673,036 14,659,520
2,000 Diamond Offshore Drilling Inc. ....................... 234,464 278,280
120,000 DPL Inc. ............................................. 2,716,196 3,165,600
20,000 DTE Energy Co. ....................................... 832,127 848,800
170,000 Duke Energy Corp. .................................... 1,922,357 2,954,600
25,000 Edison International ................................. 425,000 1,284,500
330,000 El Paso Corp. ........................................ 2,738,857 7,174,200
250,000 El Paso Electric Co.+ ................................ 3,092,863 4,950,000
150,000 Energy East Corp. .................................... 3,072,446 3,708,000
105,000 EOG Resources Inc. ................................... 480,874 13,776,000
330,000 Exxon Mobil Corp. .................................... 8,011,545 29,082,900
15,000 FPL Group Inc. ....................................... 689,035 983,700
220,000 Halliburton Co. ...................................... 6,847,344 11,675,400
0 Mirant Corp.+ (b) .................................... 0 0
130,000 Mirant Corp., Escrow+ (b) ............................ 0 0
1,000 Niko Resources Ltd. .................................. 57,456 95,852
22,086 NiSource Inc. ........................................ 475,953 395,781
180,000 Northeast Utilities .................................. 3,429,763 4,595,400
30,000 NSTAR ................................................ 936,244 1,014,600
45,000 Oceaneering International Inc.+ ...................... 1,944,964 3,467,250
500 PetroChina Co. Ltd., ADR ............................. 30,266 64,430
4,000 Petroleo Brasileiro SA, ADR .......................... 257,741 283,320
100,000 Progress Energy Inc., CVO+ (b) ....................... 52,000 33,000
230,000 Rowan Companies Inc. ................................. 8,715,947 10,752,500
MARKET
SHARES COST VALUE
- ------ -------------- --------------
50,000 Royal Dutch Shell plc, Cl. A, ADR .................... $ 2,980,580 $ 4,085,500
118,000 SJW Corp. ............................................ 1,872,429 3,115,200
260,000 Southwest Gas Corp. .................................. 4,582,147 7,729,800
350,000 Spectra Energy Corp. ................................. 7,673,046 10,059,000
110,000 The AES Corp.+ ....................................... 434,151 2,113,100
50,000 Transocean Inc.+ ..................................... 4,024,163 7,619,500
16,666 UIL Holdings Corp. ................................... 426,371 490,147
148,000 Weatherford International Ltd.+ ...................... 3,301,489 7,339,320
-------------- --------------
115,538,729 261,017,160
-------------- --------------
ENTERTAINMENT -- 4.9%
8,010 Chestnut Hill Ventures+ (b) .......................... 218,000 225,481
749,000 Discovery Holding Co., Cl. A+ ........................ 6,481,280 16,448,040
45,000 DreamWorks Animation SKG Inc., Cl. A+ ................ 1,084,168 1,341,450
740,000 Grupo Televisa SA, ADR ............................... 7,693,671 17,478,800
1,050,000 Liberty Media Corp. - Entertainment, Cl. A+ .......... 7,356,127 25,441,500
65,276 Macrovision Solutions Corp.+ ......................... 1,086,844 976,529
3,000 Nintendo Co. Ltd. .................................... 931,854 1,692,329
350,000 Rank Group plc ....................................... 2,330,837 559,456
20,000 Regal Entertainment Group, Cl. A ..................... 283,108 305,600
75,000 Six Flags Inc.+ ...................................... 320,469 86,250
170,000 The Walt Disney Co. .................................. 3,225,581 5,304,000
1,630,000 Time Warner Inc. ..................................... 21,776,472 24,124,000
100,000 Triple Crown Media Inc.+ ............................. 642,789 47,000
518,100 Viacom Inc., Cl. A+ .................................. 16,109,582 15,859,041
550,000 Vivendi .............................................. 11,538,712 20,869,415
50,000 World Wrestling Entertainment Inc., Cl. A ............ 488,064 773,500
-------------- --------------
81,567,558 131,532,391
-------------- --------------
ENVIRONMENTAL SERVICES -- 1.3%
310,000 Allied Waste Industries Inc.+ ........................ 2,907,470 3,912,200
450,000 Republic Services Inc. ............................... 3,560,581 13,365,000
500,000 Waste Management Inc. ................................ 10,415,537 18,855,000
-------------- --------------
16,883,588 36,132,200
-------------- --------------
EQUIPMENT AND SUPPLIES -- 7.5%
699,000 AMETEK Inc. .......................................... 2,714,419 33,006,780
6,000 Amphenol Corp., Cl. A ................................ 23,163 269,280
104,000 CIRCOR International Inc. ............................ 915,444 5,094,960
150,000 Crown Holdings Inc.+ ................................. 676,245 3,898,500
170,000 CTS Corp. ............................................ 979,008 1,708,500
4,000 Danaher Corp. ........................................ 70,641 309,200
380,000 Donaldson Co. Inc. ................................... 1,470,210 16,963,200
See accompanying notes to financial statements.
6
THE GABELLI ASSET FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- JUNE 30, 2008 (UNAUDITED)
MARKET
SHARES COST VALUE
- ------ -------------- --------------
COMMON STOCKS (CONTINUED)
EQUIPMENT AND SUPPLIES (CONTINUED)
20,000 Fedders Corp.+ ....................................... $ 32,624 $ 140
400,000 Flowserve Corp. ...................................... 6,320,445 54,680,000
200,000 Gerber Scientific Inc.+ .............................. 1,964,548 2,276,000
210,000 GrafTech International Ltd.+ ......................... 2,229,118 5,634,300
780,000 IDEX Corp. ........................................... 2,958,676 28,735,200
24,000 Ingersoll-Rand Co. Ltd., Cl. A ....................... 484,440 898,320
175,000 Interpump Group SpA .................................. 687,765 1,642,158
200,000 Lufkin Industries Inc. ............................... 1,810,811 16,656,000
64,900 Met-Pro Corp. ........................................ 336,900 866,415
18,524 Mueller Water Products Inc., Cl. B ................... 246,018 158,195
20,000 Sealed Air Corp. ..................................... 168,679 380,200
140,000 Tenaris SA, ADR ...................................... 6,581,987 10,430,000
70,000 The Manitowoc Co. Inc. ............................... 127,596 2,277,100
120,000 The Weir Group plc ................................... 504,947 2,242,007
29,000 Valmont Industries Inc. .............................. 232,196 3,024,410
380,000 Watts Water Technologies Inc., Cl. A ................. 4,456,404 9,462,000
-------------- --------------
35,992,284 200,612,865
-------------- --------------
FINANCIAL SERVICES -- 6.2%
15,810 Alleghany Corp.+ ..................................... 2,688,224 5,249,711
430,000 American Express Co. ................................. 10,165,450 16,198,100
120,000 American International Group Inc. .................... 6,698,873 3,175,200
50,000 Ameriprise Financial Inc. ............................ 1,425,156 2,033,500
32,000 Argo Group International Holdings Ltd.+ .............. 1,167,431 1,073,920
30,000 Bank of America Corp. ................................ 1,073,107 716,100
218 Berkshire Hathaway Inc., Cl. A+ ...................... 849,349 26,323,500
75,500 BKF Capital Group Inc.+ .............................. 582,111 169,875
8,000 Calamos Asset Management Inc., Cl. A ................. 144,130 136,240
380,000 Citigroup Inc. ....................................... 18,937,956 6,368,800
35,000 Commerzbank AG ....................................... 624,519 1,038,196
110,000 Commerzbank AG, ADR .................................. 2,308,920 3,270,366
154,000 Deutsche Bank AG ..................................... 6,960,775 13,143,900
140,000 Federal National Mortgage Association ................ 4,670,109 2,731,400
30,000 Fortress Investment Group LLC, Cl. A ................. 479,824 369,600
90,000 Freddie Mac .......................................... 2,826,681 1,476,000
110,000 H&R Block Inc. ....................................... 1,807,491 2,354,000
24,000 Interactive Brokers Group Inc., Cl. A+ ............... 690,148 771,120
200,000 Janus Capital Group Inc. ............................. 4,953,709 5,294,000
38,051 JPMorgan Chase & Co. ................................. 1,059,576 1,305,530
80,000 Legg Mason Inc. ...................................... 6,443,104 3,485,600
MARKET
SHARES COST VALUE
- ------ -------------- --------------
14,000 Lehman Brothers Holdings Inc. ........................ $ 164,850 $ 277,340
75,000 Leucadia National Corp. .............................. 655,691 3,520,500
50,000 Loews Corp. .......................................... 2,352,157 2,345,000
12,000 M&T Bank Corp. ....................................... 997,993 846,480
180,000 Marsh & McLennan Companies Inc. ...................... 5,377,792 4,779,000
27,000 Merrill Lynch & Co. Inc. ............................. 1,139,452 856,170
170,000 NewAlliance Bancshares Inc. .......................... 2,487,566 2,121,600
30,000 PNC Financial Services Group Inc. .................... 1,456,850 1,713,000
2,500 Prudential Financial Inc. ............................ 68,750 149,350
97,000 SAFECO Corp. ......................................... 6,501,242 6,514,520
5,000 Seacoast Banking Corp. of Florida .................... 42,969 38,800
85,000 State Street Corp. ................................... 661,975 5,439,150
20,000 SunTrust Banks Inc. .................................. 424,879 724,400
60,000 T. Rowe Price Group Inc. ............................. 1,012,984 3,388,200
2,000 The Allstate Corp. ................................... 73,509 91,180
170,000 The Bank of New York Mellon Corp. .................... 5,902,236 6,431,100
35,000 The Blackstone Group LP .............................. 762,248 637,350
1,000 The Charles Schwab Corp. ............................. 22,259 20,540
4,500 The Goldman Sachs Group Inc. ......................... 854,078 787,050
155,000 The Phoenix Companies Inc. ........................... 2,266,603 1,179,550
40,000 The Travelers Companies Inc. ......................... 1,575,006 1,736,000
19,000 Unitrin Inc. ......................................... 498,464 523,830
8,500 Value Line Inc. ...................................... 136,515 282,625
90,100 Wachovia Corp. ....................................... 3,790,526 1,399,253
215,000 Waddell & Reed Financial Inc., Cl. A ................. 4,912,857 7,527,150
675,000 Wells Fargo & Co. .................................... 20,736,643 16,031,250
-------------- --------------
141,432,737 166,045,046
-------------- --------------
FOOD AND BEVERAGE -- 13.0%
345,000 Brown-Forman Corp., Cl. A ............................ 8,021,206 26,226,900
80,000 Cadbury plc, ADR ..................................... 3,214,256 4,025,600
135,000 Campbell Soup Co. .................................... 3,720,358 4,517,100
220,000 China Mengniu Dairy Co. Ltd. ......................... 712,093 623,553
60,000 Coca-Cola Enterprises Inc. ........................... 1,176,706 1,038,000
16,500 Coca-Cola Hellenic Bottling Co. SA, ADR .............. 268,442 446,655
170,000 Constellation Brands Inc., Cl. A+ .................... 3,992,037 3,376,200
330,000 Corn Products International Inc. ..................... 4,032,439 16,206,300
330,000 Davide Campari-Milano SpA ............................ 3,297,097 2,758,919
75,000 Dean Foods Co.+ ...................................... 1,613,811 1,471,500
See accompanying notes to financial statements.
7
THE GABELLI ASSET FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- JUNE 30, 2008 (UNAUDITED)
MARKET
SHARES COST VALUE
- ------ -------------- --------------
COMMON STOCKS (CONTINUED)
FOOD AND BEVERAGE (CONTINUED)
215,000 Del Monte Foods Co. .................................. $ 2,130,243 $ 1,526,500
318,000 Diageo plc, ADR ...................................... 11,903,832 23,490,660
100,000 Dr. Pepper Snapple Group Inc.+ ....................... 2,267,654 2,098,000
70,000 Farmer Brothers Co. .................................. 943,094 1,480,500
320,000 Flowers Foods Inc. ................................... 1,413,791 9,068,800
70,000 Fomento Economico Mexicano SAB de CV, ADR ............ 2,335,118 3,185,700
365,000 General Mills Inc. ................................... 12,840,535 22,181,050
375,000 Groupe Danone ........................................ 18,903,133 26,332,777
145,000 Groupe Danone, ADR ................................... 1,504,329 2,037,816
1,300,000 Grupo Bimbo SAB de CV, Cl. A ......................... 2,681,540 8,559,017
180,000 H.J. Heinz Co. ....................................... 6,572,778 8,613,000
10,000 Hain Celestial Group Inc.+ ........................... 141,134 234,800
40,000 Heineken NV .......................................... 2,194,434 2,041,755
250,000 ITO EN Ltd. .......................................... 5,990,393 3,936,526
76,000 ITO EN Ltd., Preference .............................. 1,623,911 808,777
95,000 Kellogg Co. .......................................... 2,540,500 4,561,900
95,000 Kerry Group plc, Cl. A ............................... 1,122,284 2,823,905
170,000 Kikkoman Corp. ....................................... 2,055,582 2,076,470
140,000 Kraft Foods Inc., Cl. A .............................. 4,211,871 3,983,000
33,000 LVMH Moet Hennessy Louis Vuitton SA .................. 1,150,670 3,459,300
100,000 Meiji Seika Kaisha Ltd. .............................. 505,816 426,614
210,000 Morinaga Milk Industry Co. Ltd. ...................... 769,502 545,840
90,000 Nestle SA ............................................ 1,868,526 4,066,761
360,000 Nissin Food Products Co. Ltd. ........................ 12,880,827 12,069,501
850,000 PepsiAmericas Inc. ................................... 13,438,079 16,813,000
320,000 PepsiCo Inc. ......................................... 8,492,806 20,348,800
80,000 Pernod-Ricard SA ..................................... 8,307,031 8,218,661
155,000 Ralcorp Holdings Inc.+ ............................... 2,450,803 7,663,200
70,000 Remy Cointreau SA .................................... 4,626,642 3,827,660
320,000 The Coca-Cola Co. .................................... 13,144,705 16,633,600
100,000 The Hershey Co. ...................................... 2,682,099 3,278,000
20,000 The J.M. Smucker Co. ................................. 547,733 812,800
167,745 Tootsie Roll Industries Inc. ......................... 2,005,293 4,215,432
100,000 Tyson Foods Inc., Cl. A .............................. 1,558,489 1,494,000
500,000 Wm. Wrigley Jr. Co. .................................. 25,643,812 38,890,000
63,750 Wm. Wrigley Jr. Co., Cl. B ........................... 1,658,999 4,959,750
420,000 YAKULT HONSHA Co. Ltd. ............................... 11,260,923 11,826,529
-------------- --------------
226,417,356 349,281,128
-------------- --------------
HEALTH CARE -- 3.4%
135,000 Advanced Medical Optics Inc.+ ........................ 3,992,539 2,529,900
52,444 Allergan Inc. ........................................ 2,458,117 2,729,710
MARKET
SHARES COST VALUE
- ------ -------------- --------------
55,000 Alpharma Inc., Cl. A+ ................................ $ 1,362,809 $ 1,239,150
44,000 Amgen Inc.+ .......................................... 203,194 2,075,040
100,000 AngioDynamics Inc.+ .................................. 1,546,465 1,362,000
3,000 Apria Healthcare Group Inc.+ ......................... 60,118 58,170
4,000 ArthroCare Corp.+ .................................... 133,290 163,240
30,000 Baxter International Inc. ............................ 1,794,110 1,918,200
4,000 Becton Dickinson & Co. ............................... 343,620 325,200
51,000 Biogen Idec Inc.+ .................................... 818,643 2,850,390
120,000 Boston Scientific Corp.+ ............................. 1,572,924 1,474,800
150,000 Bristol-Myers Squibb Co. ............................. 4,060,053 3,079,500
1,000 Cephalon Inc.+ ....................................... 65,289 66,690
70,000 Chemed Corp. ......................................... 1,121,991 2,562,700
56,000 CONMED Corp.+ ........................................ 1,210,759 1,486,800
10,000 DENTSPLY International Inc. .......................... 190,509 368,000
95,000 Eli Lilly & Co. ...................................... 5,486,914 4,385,200
40,000 Exactech Inc.+ ....................................... 612,866 1,028,400
160,000 Greatbatch Inc.+ ..................................... 3,698,598 2,768,000
40,000 Henry Schein Inc.+ ................................... 1,091,829 2,062,800
20,000 Hospira Inc.+ ........................................ 754,476 802,200
20,000 IMS Health Inc. ...................................... 526,733 466,000
15,000 Inverness Medical Innovations Inc.+ .................. 255,011 497,550
90,000 Invitrogen Corp.+ .................................... 2,307,565 3,533,400
140,000 Johnson & Johnson .................................... 5,840,162 9,007,600
10,000 Laboratory Corp. of America Holdings+ ................ 746,669 696,300
125,000 Medco Health Solutions Inc.+ ......................... 2,120,609 5,900,000
140,000 Merck & Co. Inc. ..................................... 4,318,176 5,276,600
10,000 Nobel Biocare Holding AG ............................. 285,863 326,563
15,000 Orthofix International NV+ ........................... 516,594 434,250
4,000 OrthoLogic Corp.+ .................................... 13,880 4,000
120,000 Pain Therapeutics Inc.+ .............................. 978,626 948,000
50,000 Patterson Companies Inc.+ ............................ 1,242,490 1,469,500
670,000 Pfizer Inc. .......................................... 13,266,826 11,704,900
130,000 Schering-Plough Corp. ................................ 2,409,430 2,559,700
2,000 Stryker Corp. ........................................ 65,440 125,760
230,000 Tenet Healthcare Corp.+ .............................. 1,270,580 1,278,800
55,000 Thoratec Corp.+ ...................................... 805,587 956,450
205,000 UnitedHealth Group Inc. .............................. 9,748,618 5,381,250
35,000 William Demant Holding A/S+ .......................... 1,644,239 2,305,451
5,000 Wright Medical Group Inc.+ ........................... 92,660 142,050
55,000 Wyeth ................................................ 2,169,854 2,637,800
4,000 Young Innovations Inc. ............................... 108,887 83,280
5,000 Zimmer Holdings Inc.+ ................................ 314,314 340,250
-------------- --------------
83,627,926 91,411,544
-------------- --------------
HOTELS AND GAMING -- 1.6%
5,000 Accor SA ............................................. 374,587 334,021
115,000 Aruze Corp. .......................................... 3,690,468 3,411,499
16,000 Churchill Downs Inc. ................................. 629,526 557,920
See accompanying notes to financial statements.
8
THE GABELLI ASSET FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- JUNE 30, 2008 (UNAUDITED)
MARKET
SHARES COST VALUE
- ------ -------------- --------------
COMMON STOCKS (CONTINUED)
HOTELS AND GAMING (CONTINUED)
340,000 Gaylord Entertainment Co.+ ........................... $ 9,356,448 $ 8,146,400
45,000 Home Inns & Hotels Management Inc., ADR+ ............. 1,164,678 855,450
22,000 Host Hotels & Resorts Inc. ........................... 449,790 300,300
200,000 International Game Technology ........................ 7,353,134 4,996,000
1,582,576 Ladbrokes plc ........................................ 15,136,688 8,093,343
38,000 Las Vegas Sands Corp.+ ............................... 2,242,244 1,802,720
4,070,000 Mandarin Oriental International Ltd. ................. 8,211,381 7,081,800
106,085 MGM Mirage+ .......................................... 5,555,537 3,595,221
14,000 Orient-Express Hotels Ltd., Cl. A .................... 690,528 608,160
92,200 Pinnacle Entertainment Inc.+ ......................... 2,598,414 967,178
90,000 Starwood Hotels & Resorts Worldwide Inc. ............. 1,823,635 3,606,300
20,000 Wyndham Worldwide Corp. .............................. 518,059 358,200
-------------- --------------
59,795,117 44,714,512
-------------- --------------
MACHINERY -- 3.2%
160,000 Baldor Electric Co. .................................. 5,404,630 5,596,800
140,000 Caterpillar Inc. ..................................... 927,858 10,334,800
420,000 CNH Global NV ........................................ 18,229,231 14,267,400
756,000 Deere & Co. .......................................... 6,205,077 54,530,280
-------------- --------------
30,766,796 84,729,280
-------------- --------------
MANUFACTURED HOUSING AND RECREATIONAL VEHICLES -- 0.2%
260,000 Cavalier Homes Inc.+ ................................. 948,684 512,200
32,000 Cavco Industries Inc.+ ............................... 605,460 1,047,360
120,000 Champion Enterprises Inc.+ ........................... 1,081,570 702,000
90,000 Coachmen Industries Inc.+ ............................ 648,504 190,800
110,000 Fleetwood Enterprises Inc.+ .......................... 1,252,012 288,200
73,000 Huttig Building Products Inc.+ ....................... 225,166 132,130
24,000 Nobility Homes Inc. .................................. 507,596 382,800
25,000 Palm Harbor Homes Inc.+ .............................. 401,517 138,250
80,000 Skyline Corp. ........................................ 3,054,493 1,880,000
-------------- --------------
8,725,002 5,273,740
-------------- --------------
METALS AND MINING -- 2.1%
75,000 Alcoa Inc. ........................................... 2,433,826 2,671,500
403,580 Barrick Gold Corp. ................................... 7,594,595 18,362,890
12,525 Freeport-McMoRan Copper & Gold Inc. .................. 272,500 1,467,805
100,000 Ivanhoe Mines Ltd.+ .................................. 775,931 1,091,000
8,000 James River Coal Co.+ ................................ 58,140 469,520
50,000 Kinross Gold Corp. ................................... 359,224 1,180,500
52,000 New Hope Corp. Ltd. .................................. 70,252 266,697
560,000 Newmont Mining Corp. ................................. 11,743,667 29,209,600
30,000 Peabody Energy Corp. ................................. 1,235,976 2,641,500
-------------- --------------
24,544,111 57,361,012
-------------- --------------
MARKET
SHARES COST VALUE
- ------ -------------- --------------
PUBLISHING -- 3.7%
40,000 AH Belo Corp., Cl. A ................................. $ 712,607 $ 228,000
220,000 Belo Corp., Cl. A .................................... 3,161,479 1,608,200
1,965,900 Il Sole 24 Ore ....................................... 16,485,966 11,475,540
220,000 Independent News & Media plc ......................... 674,635 540,353
70,000 Lee Enterprises Inc. ................................. 1,262,177 279,300
45,000 McClatchy Co., Cl. A ................................. 1,085,389 305,100
364,000 Media General Inc., Cl. A ............................ 10,175,790 4,349,800
80,000 Meredith Corp. ....................................... 1,650,283 2,263,200
3,600,000 News Corp., Cl. A .................................... 27,957,552 54,144,000
24,000 News Corp., Cl. B .................................... 227,346 368,400
90,000 PRIMEDIA Inc. ........................................ 1,416,771 419,400
20,300 Seat Pagine Gialle SpA+ .............................. 11,997 2,119
230,000 The E.W. Scripps Co., Cl. A .......................... 7,543,008 9,554,200
265,000 The McGraw-Hill Companies Inc. ....................... 2,463,949 10,631,800
132,000 The New York Times Co., Cl. A ........................ 1,094,267 2,031,480
-------------- --------------
75,923,216 98,200,892
-------------- --------------
REAL ESTATE -- 0.5%
2,000 Brookfield Asset Management Inc., Cl. A .............. 70,670 65,080
103,000 Griffin Land & Nurseries Inc. ........................ 1,479,146 3,162,100
36,000 ProLogis ............................................. 983,331 1,956,600
257,000 The St. Joe Co. ...................................... 1,964,571 8,820,240
-------------- --------------
4,497,718 14,004,020
-------------- --------------
RETAIL -- 1.8%
14,000 Aaron Rents Inc. ..................................... 45,200 312,620
60,750 Aaron Rents Inc., Cl. A .............................. 287,231 1,216,215
258,000 AutoNation Inc.+ ..................................... 2,471,084 2,585,160
20,000 AutoZone Inc.+ ....................................... 1,681,602 2,420,200
155,000 Coldwater Creek Inc.+ ................................ 1,123,458 818,400
110,000 Costco Wholesale Corp. ............................... 5,673,495 7,715,400
250,000 CSK Auto Corp.+ ...................................... 2,932,061 2,620,000
170,000 CVS Caremark Corp. ................................... 6,429,681 6,726,900
115,000 Macy's Inc. .......................................... 2,899,149 2,233,300
50,000 Safeway Inc. ......................................... 1,549,232 1,427,500
40,000 SUPERVALU Inc. ....................................... 1,155,671 1,235,600
170,000 The Great Atlantic & Pacific Tea Co. Inc.+ ........... 5,240,643 3,879,400
118,000 The Kroger Co. ....................................... 693,975 3,406,660
40,000 Wal-Mart Stores Inc. ................................. 1,834,244 2,248,000
140,000 Walgreen Co. ......................................... 5,333,817 4,551,400
70,000 Whole Foods Market Inc. .............................. 2,727,439 1,658,300
180,000 Winn-Dixie Stores Inc.+ .............................. 3,014,571 2,883,600
-------------- --------------
45,092,553 47,938,655
-------------- --------------
See accompanying notes to financial statements.
9
THE GABELLI ASSET FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- JUNE 30, 2008 (UNAUDITED)
MARKET
SHARES COST VALUE
- ------ -------------- --------------
COMMON STOCKS (CONTINUED)
SPECIALTY CHEMICALS -- 1.6%
400,000 Chemtura Corp. ....................................... $ 3,859,492 $ 2,336,000
480,000 Ferro Corp. .......................................... 7,925,912 9,004,800
2,000 FMC Corp. ............................................ 64,790 154,880
130,000 General Chemical Group Inc.+ ......................... 502,184 3,900
150,000 H.B. Fuller Co. ...................................... 1,353,523 3,366,000
220,000 Hercules Inc. ........................................ 3,241,328 3,724,600
180,000 International Flavors & Fragrances Inc. .............. 7,255,378 7,030,800
100,000 Material Sciences Corp.+ ............................. 934,840 810,000
648,000 Omnova Solutions Inc.+ ............................... 2,046,412 1,801,440
80,000 Rohm & Haas Co. ...................................... 3,945,190 3,715,200
345,000 Sensient Technologies Corp. .......................... 6,722,455 9,715,200
12,000 Tronox Inc., Cl. B ................................... 136,764 36,240
70,000 Zep Inc. ............................................. 732,324 1,041,600
-------------- --------------
38,720,592 42,740,660
-------------- --------------
TELECOMMUNICATIONS -- 4.6%
150,000 AT&T Inc. ............................................ 3,658,467 5,053,500
14,000 Brasil Telecom Participacoes SA, ADR ................. 810,959 1,027,180
200,000 BT Group plc ......................................... 753,355 796,335
15,000 BT Group plc, ADR .................................... 475,132 595,950
64,000 CenturyTel Inc. ...................................... 918,720 2,277,760
710,000 Cincinnati Bell Inc.+ ................................ 3,976,354 2,825,800
190,000 Citizens Communications Co. .......................... 2,789,200 2,154,600
25,000 Clearwire Corp., Cl. A+ .............................. 425,540 324,000
350,000 Deutsche Telekom AG, ADR ............................. 6,327,169 5,729,500
40,000 Embarq Corp. ......................................... 1,044,656 1,890,800
4,480 FairPoint Communications Inc. ........................ 37,986 32,301
35,000 France Telecom SA, ADR ............................... 683,990 1,037,050
1,625,000 Qwest Communications International Inc. .............. 4,860,819 6,386,250
1,150,000 Sprint Nextel Corp. .................................. 16,358,549 10,925,000
75,403 Tele Norte Leste Participacoes SA, ADR ............... 1,001,480 1,878,289
4,200,935 Telecom Italia SpA ................................... 2,397,072 8,466,160
250,000 Telecom Italia SpA, ADR .............................. 1,722,897 4,990,000
94,000 Telefonica SA, ADR ................................... 3,341,710 7,480,520
10,400 Telefonica SA, BDR ................................... 119,280 287,069
40,000 Telefonos de Mexico SAB de CV, Cl. L, ADR ............ 101,330 947,200
590,000 Telephone & Data Systems Inc. ........................ 12,260,483 27,889,300
495,000 Telephone & Data Systems Inc., Special ............... 9,961,936 21,829,500
40,000 Telmex Internacional SAB de CV, ADR+ ................. 70,416 644,000
MARKET
SHARES COST VALUE
- ------ -------------- --------------
25,000 tw telecom inc.+ ..................................... $ 456,239 $ 400,750
237,584 Verizon Communications Inc. .......................... 7,559,264 8,410,473
35,000 Windstream Corp. ..................................... 249,129 431,900
-------------- --------------
82,362,132 124,711,187
-------------- --------------
TRANSPORTATION -- 0.5%
85,000 AMR Corp.+ ........................................... 1,245,603 435,200
280,000 GATX Corp. ........................................... 6,764,603 12,412,400
63,000 Grupo TMM SA, Cl. A, ADR+ ............................ 411,039 117,810
4,000 Kansas City Southern+ ................................ 7,317 175,960
20,000 Providence and Worcester Railroad Co. ................ 332,439 401,500
-------------- --------------
8,761,001 13,542,870
-------------- --------------
WIRELESS COMMUNICATIONS -- 0.8%
95,000 America Movil SAB de CV, Cl. L, ADR .................. 593,308 5,011,250
3,200 NTT DoCoMo Inc. ...................................... 4,601,636 4,701,229
72,000 Price Communications Corp., Escrow+ (b) .............. 0 0
1,350 Tele Norte Celular Participacoes SA, ADR ............. 20,857 26,190
2,056 Telemig Celular Participacoes SA, ADR ................ 59,419 122,332
13,001 Tim Participacoes SA, ADR ............................ 157,722 369,618
182,700 United States Cellular Corp.+ ........................ 8,836,302 10,331,685
192 Vivo Participacoes SA+ ............................... 670 1,304
67,505 Vivo Participacoes SA, ADR+ .......................... 648,113 429,332
4,174 Vivo Participacoes SA, Preference+ ................... 66,001 26,558
4,375 Vodafone Group plc, ADR .............................. 43,962 128,888
-------------- --------------
15,027,990 21,148,386
-------------- --------------
TOTAL COMMON STOCKS .................................. 1,505,424,785 2,602,991,567
-------------- --------------
PRINCIPAL
AMOUNT
- ---------
CONVERTIBLE CORPORATE BONDS -- 0.1%
AUTOMOTIVE: PARTS AND ACCESSORIES -- 0.0%
$ 1,000,000 Standard Motor Products Inc., Sub. Deb. Cv.,
6.750%, 07/15/09 ..................................... 977,158 957,500
-------------- --------------
COMMUNICATIONS EQUIPMENT -- 0.1%
2,000,000 Agere Systems Inc., Sub. Deb. Cv.,
6.500%, 12/15/09 ..................................... 1,948,410 2,040,000
-------------- --------------
TOTAL CONVERTIBLE CORPORATE BONDS .................... 2,925,568 2,997,500
-------------- --------------
See accompanying notes to financial statements.
10
THE GABELLI ASSET FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- JUNE 30, 2008 (UNAUDITED)
MARKET
SHARES COST VALUE
- ------ -------------- --------------
WARRANTS -- 0.0%
AUTOMOTIVE: PARTS AND ACCESSORIES -- 0.0%
14,728 Federal-Mogul Corp., expire 12/27/14+ ................ $ 411,720 $ 20,619
-------------- --------------
BROADCASTING -- 0.0%
2,109 Granite Broadcasting Corp.,
Ser. A, expire 06/04/12+ ............................. 0 106
2,109 Granite Broadcasting Corp.,
Ser. B, expire 06/04/12+ ............................. 0 527
-------------- --------------
0 633
-------------- --------------
ENERGY AND UTILITIES -- 0.0%
11,313 Mirant Corp., Ser. A, expire 01/03/11+ ............... 149,058 202,842
-------------- --------------
HOTELS AND GAMING -- 0.0%
200,000 Indian Hotels Co., expire 12/27/10+ .................. 646,829 359,540
-------------- --------------
TOTAL WARRANTS ....................................... 1,207,607 583,634
-------------- --------------
PRINCIPAL
AMOUNT
- ---------
U.S. GOVERNMENT OBLIGATIONS -- 3.5%
$93,057,000 U.S. Treasury Bills,
1.132% to 1.895%++,
07/03/08 to 10/16/08 .............................. 92,855,089 92,813,479
-------------- --------------
TOTAL U.S. GOVERNMENT OBLIGATIONS .................... 92,855,089 92,813,479
-------------- --------------
TOTAL INVESTMENTS -- 100.5% .......................... $1,602,413,049 2,699,386,180
==============
OTHER ASSETS AND LIABILITIES (NET) -- (0.5)% ......... (13,484,439)
--------------
NET ASSETS -- 100.0% ................................. $2,685,901,741
==============
- ----------
(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 June 30,
2008, the market value of Rule 144A securities amounted to $14,921,173 or
0.56% of net assets.
(b) Security fair valued under procedures established by the Board of Trustees.
The procedures may include reviewing available financial information about
the company and reviewing valuation of comparable securities and other
factors on a regular basis. At June 30, 2008, the market value of fair
valued securities amounted to $258,481 or 0.01% of net assets.
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
ADR American Depositary Receipt
BDR Brazilian Depositary Receipt
CVO Contingent Value Obligation
GDR Global Depositary Receipt
See accompanying notes to financial statements.
11
THE GABELLI ASSET FUND
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2008 (UNAUDITED)
ASSETS:
Investments, at value (cost $ 1,602,413,049) ........... $2,699,386,180
Foreign currency, at value (cost $ 206,747) ............ 206,382
Cash ................................................... 11,105
Receivable for investments sold ........................ 778,244
Receivable for Fund shares sold ........................ 2,434,815
Dividends and interest receivable ...................... 2,893,097
Prepaid expense ........................................ 96,675
Unrealized appreciation on swap contracts .............. 25,901
--------------
TOTAL ASSETS ........................................... 2,705,832,399
--------------
LIABILITIES:
Payable for investments purchased ...................... 13,507,918
Payable for Fund shares redeemed ....................... 2,966,831
Unrealized depreciation on swap contracts .............. 28,042
Payable for investment advisory fees ................... 2,314,019
Payable for distribution fees .......................... 583,300
Payable for accounting fees ............................ 3,626
Payable for trustees' fees ............................. 338
Other accrued expenses ................................. 526,584
--------------
TOTAL LIABILITIES ...................................... 19,930,658
--------------
NET ASSETS applicable to 60,567,948
shares outstanding .................................. $2,685,901,741
==============
NET ASSETS CONSIST OF:
Paid-in capital ........................................ $1,541,648,604
Accumulated net investment income ...................... 6,967,935
Accumulated net realized gain on investments
and foreign currency transactions ................... 40,316,180
Net unrealized appreciation on investments ............. 1,096,973,131
Net unrealized depreciation on foreign
currency translations ............................... (1,968)
Net unrealized depreciation on swap contracts .......... (2,141)
--------------
NET ASSETS ............................................. $2,685,901,741
==============
SHARES OF BENEFICIAL INTEREST:
CLASS AAA:
Net Asset Value, offering and redemption price per
share ($2,658,101,728 / 59,934,456 shares
outstanding; unlimited number of share authorized) .. $ 44.35
==============
CLASS A:
Net Asset Value and redemption price per share
($15,553,900 / 352,269 shares outstanding;
unlimited number of shares authorized) .............. $ 44.15
==============
Maximum offering price per share (NAV / .9425,
based on maximum sales charge of 5.75%
of the offering price) .............................. $ 46.84
==============
CLASS B:
Net Asset Value and offering price per share
($1,426 / 32.956 shares outstanding; unlimited
number of shares authorized) ........................ $ 43.27(a)
==============
CLASS C:
Net Asset Value and offering price per share
($8,570,284 / 198,446 shares outstanding;
unlimited number of shares authorized) .............. $ 43.19(a)
==============
CLASS I:
Net Asset Value, offering and redemption price per
share ($3,674,403 / 82,744 shares outstanding;
unlimited number of share authorized) ............... $ 44.41
==============
- ----------
(a) Redemption price varies based on the length of time held.
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2008 (UNAUDITED)
INVESTMENT INCOME:
Dividends (net of foreign taxes of $ 1,083,543) $ 24,973,470
Interest ............................................... 1,151,056
--------------
TOTAL INVESTMENT INCOME ................................ 26,124,526
--------------
EXPENSES:
Investment advisory fees ............................... 13,954,984
Distribution fees - Class AAA .......................... 3,457,775
Distribution fees - Class A ............................ 17,392
Distribution fees - Class B ............................ 7
Distribution fees - Class C ............................ 41,465
Shareholder services fees .............................. 874,034
Shareholder communications expenses .................... 231,961
Custodian fees ......................................... 201,547
Legal and audit fees ................................... 58,135
Registration expenses .................................. 36,907
Trustees' fees ......................................... 26,713
Accounting fees ........................................ 22,500
Miscellaneous expenses ................................. 117,100
--------------
TOTAL EXPENSES ......................................... 19,040,520
Less: Custodian fee credits ............................ (5,960)
--------------
NET EXPENSES ........................................... 19,034,560
--------------
NET INVESTMENT INCOME .................................. 7,089,966
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS, SWAP CONTRACTS, AND
FOREIGN CURRENCY:
Net realized gain on investments ....................... 45,599,379
Net realized loss on swap contracts .................... (250,505)
Net realized loss on foreign currency
transactions ........................................ (43,474)
--------------
Net realized gain on investments, swap contracts,
and foreign currency transactions ................... 45,305,400
--------------
Net change in unrealized appreciation/
depreciation on investments ......................... (380,044,172)
Net change in unrealized appreciation/
depreciation on swap contracts ...................... (874)
Net change in unrealized appreciation/
depreciation on foreign currency translations ....... (5,168)
--------------
Net change in unrealized appreciation/
depreciation on investments, swap contracts,
and foreign currency translations ................... (380,050,214)
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
ON INVESTMENTS, SWAP CONTRACTS, AND
FOREIGN CURRENCY .................................... (334,744,814)
--------------
NET DECREASE IN NET ASSETS RESULTING
FROM OPERATIONS ..................................... $ (327,654,848)
==============
See accompanying notes to financial statements.
12
THE GABELLI ASSET FUND
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED
JUNE 30, 2008 YEAR ENDED
(UNAUDITED) DECEMBER 31, 2007
---------------- -----------------
OPERATIONS:
Net investment income ............................. $ 7,089,966 $ 8,713,664
Net realized gain on investments, swap
contracts, and foreign currency transactions ... 45,305,400 172,857,469
Net change in unrealized appreciation/depreciation
on investments, swap contracts, and foreign
currency translations .......................... (380,050,214) 125,889,737
-------------- ---------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS ................................ (327,654,848) 307,460,870
-------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income
Class AAA ...................................... -- (8,561,538)
Class A ........................................ -- (42,720)
-------------- ---------------
-- (8,604,258)
-------------- ---------------
Net realized gain on investments and foreign
currency transactions
Class AAA ...................................... -- (169,880,744)
Class A ........................................ -- (708,973)
Class B ........................................ -- (94)
Class C ........................................ -- (471,343)
-------------- ---------------
-- (171,061,154)
-------------- ---------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS ............... -- (179,665,412)
-------------- ---------------
SHARES OF BENEFICIAL INTEREST TRANSACTIONS:
Class AAA ...................................... 29,416,613 309,490,566
Class A ........................................ 4,640,224 7,687,239
Class B ........................................ -- 94
Class C ........................................ 1,479,524 4,805,662
Class I ........................................ 3,951,849 --
-------------- ---------------
Net increase in net assets from shares of
beneficial interest transactions ............... 39,488,210 321,983,561
-------------- ---------------
REDEMPTION FEES ................................... 25,666 21,167
-------------- ---------------
NET INCREASE (DECREASE) IN NET ASSETS ............. (288,140,972) 449,800,186
NET ASSETS:
Beginning of period ............................... 2,974,042,713 2,524,242,527
-------------- ---------------
End of period (including undistributed net
investment income of $6,967,935 and
$0, respectively) ........................... $2,685,901,741 $ 2,974,042,713
============== ===============
See accompanying notes to financial statements.
13
THE GABELLI ASSET FUND
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period:
INCOME FROM INVESTMENT OPERATIONS DISTRIBUTIONS
------------------------------------- ------------------------------------
Net
Net Asset Net Realized and Total Net
Period Value, Investment Unrealized from Net Realized
Ended Beginning Income Gain (Loss)on Investment Investment Gain on Total
December 31 of Period (Loss)(a) Investments Operations Income Investments Distributions
- ----------- --------- ---------- ------------- ---------- ---------- ----------- -------------
CLASS AAA
2008 (b) $ 49.81 $ 0.12 $(5.58) $ (5.46) -- -- --
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
2008 (b) $ 49.59 $ 0.13 $(5.57) $ (5.44) -- -- --
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 (e) 36.26 0.03 5.94 5.97 (0.08) (0.76) (0.84)
CLASS B
2008 (b) $ 48.80 $(0.06) $(5.47) $ (5.53) -- -- --
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 (e) 36.26 (0.25) 5.91 5.66 -- (0.76) (0.76)
CLASS C
2008 (b) $ 48.68 $(0.05) $(5.44) $ (5.49) -- -- --
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 (e) 36.26 (0.26) 5.92 5.66 (0.02) (0.76) (0.78)
CLASS I
2008 (f) $ 47.26 $ 0.18 $(3.03) $ (2.85) -- -- --
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
2008 (b) $0.00(c) $ 44.35 (11.0)% $2,658,102 0.51%(d) 1.36%(d) 6%
2007 0.00(c) 49.81 11.8 2,953,454 0.31 1.36 9
2006 0.00(c) 47.38 21.8 2,516,088 0.67 1.36 7
2005 0.00(c) 41.13 4.4 2,246,439 0.29 1.37 6
2004 0.00(c) 41.45 16.5 2,216,050 0.06 1.38 7
2003 -- 36.26 30.6 1,958,431 0.11 1.38 7
CLASS A
2008 (b) $ 0.00(c) $ 44.15 (11.0)% $ 15,554 0.56%(d) 1.36%(d) 6%
2007 0.00(c) 49.59 11.8 12,497 0.30 1.36 9
2006 0.00(c) 47.21 21.9 4,806 0.71 1.35 7
2005 0.00(c) 41.01 4.4 1,991 0.23 1.38 6
2004 (e) 0.00(c) 41.39 16.5 351 0.07 1.40 7
CLASS B
2008 (b) $0.00(c) $ 43.27 (11.3)% $ 2 (0.28)%(d) 2.11%(d) 6%
2007 0.00(c) 48.80 10.9 2 (0.52) 2.11 9
2006 0.00(c) 46.72 20.9 1 0.41 2.11 7
2005 0.00(c) 40.64 3.7 1 (0.41) 2.02 6
2004 (e) 0.00(c) 41.16 15.6 1 (0.67) 2.07 7
CLASS C
2008 (b) $0.00(c) $ 43.19 (11.3)% $ 8,570 (0.22)%(d) 2.11%(d) 6%
2007 0.00(c) 48.68 11.0 8,090 (0.47) 2.11 9
2006 0.00(c) 46.58 20.9 3,348 (0.07) 2.11 7
2005 0.00(c) 40.54 3.6 2,261 (0.49) 2.13 6
2004 (e) 0.00(c) 41.14 15.6 349 (0.68) 2.15 7
CLASS I
2008 (f) $0.00(c) $ 44.41 (10.8)% $ 3,674 0.84%(d) 1.11%(d) 6%
- ---------
+ Total return represents aggregate total return of a hypothetical $1,000
investment at the beginning of the period and sold at the end of the period
including reinvestment of distributions and does not reflect applicable
sales charges. Total return for a period of less than one year is not
annualized.
++ Effective in 2008, a change in accounting policy was adopted with regard to
the calculation of the portfolio turnover rate. Had this policy been
adopted retroactively, the portfolio turnover rate for the fiscal year
ended December 31, 2005 would have been 8.98%. The portfolio turnover rate
for the fiscal years ended 2007, 2006, 2004, and 2003 would have been as
shown.
(a) Per share amounts have been calculated using the average shares outstanding
method.
(b) For the six month period ended June 30, 2008, unaudited.
(c) Amount represents less than $0.005 per share.
(d) Annualized.
(e) Class A, Class B, and Class C Shares were initially offered on December 31,
2003.
(f) From the commencement of offering Class I Shares on January 11, 2008
through June 30, 2008, unaudited.
See accompanying notes to financial statements.
14
THE GABELLI ASSET FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. ORGANIZATION. The Gabelli Asset Fund (the "Fund") was organized on November
25, 1985 as a Massachusetts business trust. The Fund is a diversified open-end
management investment company registered under the Investment Company Act of
1940, as amended (the "1940 Act"). The Fund's primary objective is growth of
capital. The Fund commenced investment operations on March 3, 1986.
2. SIGNIFICANT ACCOUNTING POLICIES. The preparation of financial statements in
accordance with United States ("U.S.") generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amounts and disclosures in the financial statements. Actual results could differ
from those estimates. The following is a summary of significant accounting
policies followed by the Fund in the preparation of its financial statements.
SECURITY VALUATION. Portfolio securities listed or traded on a nationally
recognized securities exchange or traded in the U.S. over-the-counter market for
which market quotations are readily available are valued at the last quoted sale
price or a market's official closing price as of the close of business on the
day the securities are being valued. If there were no sales that day, the
security is valued at the average of the closing bid and asked prices or, if
there were no asked prices quoted on that day, then the security is valued at
the closing bid price on that day. If no bid or asked prices are quoted on such
day, the security is valued at the most recently available price or, if the
Board of Trustees (the "Board") so determines, by such other method as the Board
shall determine in good faith to reflect its fair market value. Portfolio
securities traded on more than one national securities exchange or market are
valued according to the broadest and most representative market, as determined
by Gabelli Funds, LLC (the "Adviser").
Portfolio securities primarily traded on a foreign market are generally valued
at the preceding closing values of such securities on the relevant market, but
may be fair valued pursuant to procedures established by the Board if market
conditions change significantly after the close of the foreign market but prior
to the close of business on the day the securities are being valued. Debt
instruments with remaining maturities of 60 days or less that are not credit
impaired are valued at amortized cost, unless the Board determines such amount
does not reflect the securities' fair value, in which case these securities will
be fair valued as determined by the Board. Debt instruments having a maturity
greater than 60 days for which market quotations are readily available are
valued at the average of the latest bid and asked prices. If there were no asked
prices quoted on such day, the security is valued using the closing bid price.
Futures contracts are valued at the closing settlement price of the exchange or
board of trade on which the applicable contract is traded.
Securities and assets for which market quotations are not readily available are
fair valued as determined by the Board. Fair valuation methodologies and
procedures may include, but are not limited to: analysis and review of available
financial and non-financial information about the company; comparisons to the
valuation and changes in valuation of similar securities, including a comparison
of foreign securities to the equivalent U.S. dollar value ADR securities at the
close of the U.S. exchange; and evaluation of any other information that could
be indicative of the value of the security.
On January 1, 2008, the Fund adopted Statement of Financial Accounting Standard
No. 157, "Fair Value Measurements" ("SFAS 157") that clarifies the definition of
fair value for financial reporting, establishes a framework for measuring fair
value, and requires additional disclosures about the use of fair value
measurements. The three levels of the fair value hierarchy under SFAS 157 are
described below:
- Level 1 - quoted prices in active markets for identical securities;
- Level 2 - other significant observable inputs (including quoted prices
for similar securities, interest rates, prepayment speeds, credit
risk, etc.); and
15
THE GABELLI ASSET FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- Level 3 - significant unobservable inputs (including the Fund's
determinations as to the fair value of investments).
The inputs or methodology used for valuing securities are not necessarily an
indication of the risk associated with investing in those securities. The
summary of inputs used to value the Fund's net assets as of June 30, 2008 is as
follows:
INVESTMENTS IN OTHER FINANCIAL
SECURITIES INSTRUMENTS (UNREALIZED
VALUATION INPUTS (MARKET VALUE) DEPRECIATION)*
- --------------------------------------------- -------------- -----------------------
Level 1 - Quoted Prices $2,604,274,020 --
Level 2 - Other Significant Observable Inputs 94,853,679 $(2,141)
Level 3 - Significant Unobservable Inputs 258,481 --
-------------- -------
TOTAL $2,699,386,180 $(2,141)
============== =======
- ----------
* Other financial instruments are derivative instruments not reflected in the
Schedule of Investments, such as futures, forwards, and swaps, which are
valued at the unrealized appreciation/depreciation on the investment.
The following is a reconciliation of Level 3 investments for which significant
unobservable inputs were used to determine fair value:
INVESTMENTS IN
SECURITIES
(MARKET VALUE)
--------------
BALANCE AS OF 12/31/07 $258,482
Accrued discounts/premiums --
Realized gain (loss) --
Change in unrealized appreciation/depreciation (1)
Net purchases (sales) --
Transfers in and/or out of Level 3 --
--------
BALANCE AS OF 6/30/08 $258,481
========
In March 2008, The Financial Accounting Standards Board (The "FASB") issued
Statement of Financial Accounting Standard No.161, "Disclosures about Derivative
Instruments and Hedging Activities" ("SFAS 161") that is effective for fiscal
years beginning after November 15, 2008. SFAS 161 is intended to improve
financial reporting for derivative instruments by requiring enhanced disclosure
that enables investors to understand how and why an entity uses derivatives, how
derivatives are accounted for, and how derivative instruments affect an entity's
results of operations and financial position. Management is currently evaluating
the implications of SFAS 161 on the Fund's financial statement disclosures.
SWAP AGREEMENTS. The Fund may enter into equity and contract for difference swap
transactions. The use of swaps is a highly specialized activity that involves
investment techniques and risks different from those associated with ordinary
portfolio security transactions. A swap is 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
16
THE GABELLI ASSET FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
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 a 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 contract for difference swaps with Bear, Stearns
International Limited. Details of the swaps at June 30, 2008 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:
$367,808 (50,000 Shares) Rolls-Royce Group Rolls-Royce Group 08/15/08 $ 25,901
302,294 (200,000 Shares) Rank Group plc Rank Group plc 11/17/08 (28,042)
--------
$ (2,141)
========
FORWARD FOREIGN EXCHANGE CONTRACTS. The Fund may engage in forward foreign
exchange contracts for hedging a specific transaction with respect to either the
currency in which the transaction is denominated or another currency as deemed
appropriate by the Adviser. Forward foreign exchange contracts are valued at the
forward rate and are marked-to-market daily. The change in market value is
included in unrealized appreciation/depreciation on investments and foreign
currency translations. When the contract is closed, the Fund records a realized
gain or loss equal to the difference between the value of the contract at the
time it was opened and the value at the time it was closed.
The use of forward foreign exchange contracts does not eliminate fluctuations in
the underlying prices of the Fund's portfolio securities, but it does establish
a rate of exchange that can be achieved in the future. Although forward foreign
exchange contracts limit the risk of loss due to a decline in the value of the
hedged currency, they also limit any potential gain that might result should the
value of the currency increase. In addition, the Fund could be exposed to risks
if the counterparties to the contracts are unable to meet the terms of their
contracts. At June 30, 2008, 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.
17
THE GABELLI ASSET FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
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 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
18
THE GABELLI ASSET FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
accounting principles. These differences are primarily due to differing
treatments of income and gains on various investment securities and foreign
currency transactions held by the Fund, timing differences, and differing
characterizations of distributions made by the Fund. Distributions from net
investment income include net realized gains on foreign currency transactions.
These book/tax differences are either temporary or permanent in nature. To the
extent these differences are permanent, adjustments are made to the appropriate
capital accounts in the period when the differences arise. These
reclassifications have no impact on the NAV of the Fund.
The tax character of distributions paid during the fiscal year ended December
31, 2007 was as follows:
DISTRIBUTIONS PAID FROM:
Ordinary income
(inclusive of short-term capital gains) ... $ 12,547,077
Net long-term capital gains .................. 167,118,335
------------
Total distributions paid ..................... $179,665,412
============
PROVISION FOR INCOME TAXES. The Fund intends to continue to qualify as a
regulated investment company under Subchapter M of the Internal Revenue Code of
1986, as amended (the "Code"). It is the policy of the Fund to comply with the
requirements of the Code applicable to regulated investment companies and to
distribute substantially all of its net investment company taxable income and
net capital gains. Therefore, no provision for federal income taxes is required.
The following summarizes the tax cost of investments and the related unrealized
appreciation/(depreciation) at June 30, 2008:
GROSS GROSS NET UNREALIZED
UNREALIZED UNREALIZED APPRECIATION/
COST APPRECIATION DEPRECIATION (DEPRECIATION)
-------------- -------------- ------------- --------------
Investments ..... $1,609,567,935 $1,251,432,298 $(161,614,053) $1,089,818,245
Swap contracts... -- 25,901 (28,042) (2,141)
-------------- -------------- ------------- --------------
$1,609,567,935 $1,251,458,199 $(161,642,095) $1,089,816,104
============== ============== ============= ==============
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.
For the six months ended June 30, 2008, the Fund did not have any liability for
any unrecognized tax benefits. The Fund recognizes interest and penalties, if
any, related to unrecognized tax benefits as income tax expenses in the
Statement of Operations. The Fund is not subject to examination by U.S. federal
tax authorities for tax years before 2004 and by state tax authorities for tax
years before 2003.
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.
19
THE GABELLI ASSET FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
The Fund pays each Trustee who is not considered to be an affiliated person an
annual retainer of $9,000 plus $1,000 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 as well as the Lead Trustee, receives an annual fee of $1,000.
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 except for Class I Shares, pursuant to Rule
12b-1 under the 1940 Act. Gabelli & Company, Inc. ("Gabelli & Company"), an
affiliate of the Adviser, serves as distributor of the Fund. Under the Class
AAA, Class A, Class B, and Class C Share Plans, payments are authorized to
Gabelli & Company at annual rates of 0.25%, 0.25%, 1.00%, and 1.00%,
respectively, of the average daily net assets of those classes, the annual
limitations under each Plan. Such payments are accrued daily and paid monthly.
5. PORTFOLIO SECURITIES. Purchases and proceeds from the sales of securities for
the six months ended June 30, 2008, other than short-term securities and U.S.
Government obligations, aggregated $191,922,705 and $150,420,971, respectively.
Purchases and proceeds from the sales of U.S. Government obligations for the six
months ended June 30, 2008, other than short-term obligations, aggregated
$1,783,936 and $26,763,000, respectively.
6. TRANSACTIONS WITH AFFILIATES. During the six months ended June 30, 2008, the
Fund paid brokerage commissions on security trades of $217,971 to Gabelli &
Company. Additionally, Gabelli & Company informed the Fund that it received
$22,539 from investors representing commissions (sales charges and underwriting
fees) on sales and redemptions of Fund shares.
The cost of calculating the Fund's NAV per share is a Fund expense pursuant to
the Advisory Agreement between the Fund and the Adviser. During the six months
ended June 30, 2008, the Fund paid or accrued $22,500 to the Adviser in
connection with the cost of computing the Fund's NAV.
7. LINE OF CREDIT. 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. Borrowings under this arrangement bear interest at
0.75% above the federal funds rate on outstanding balances. This amount, if any,
would be shown as "interest expense" in the Statement of Operations. At June 30,
2008, there were no borrowings outstanding under the line of credit.
The average daily amount of borrowings outstanding under the line of credit
within the six months ended June 30, 2008, was $1,484 with a weighted average
interest rate of 3.81%. The maximum amount borrowed at any time during the six
months ended June 30, 2008 was $270,000.
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 and Class I Shares are offered to investors without a front-end sales
charge. Class A Shares are subject to a maximum front-end sales charge of 5.75%.
Class B Shares are subject to a contingent deferred sales charge ("CDSC") upon
redemption within six years of purchase and automatically convert to Class A
Shares approximately eight years after the original purchase. The applicable
CDSC is equal to a declining percentage of the lesser of the NAV per share at
the date of the original purchase or at the date of redemption, based on the
length of time held. Class C Shares are subject to a 1.00% CDSC for one
20
THE GABELLI ASSET FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
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 all classes of shares that are
redeemed or exchanged on or before the seventh day after the date of a purchase.
The redemption fee is deducted from the proceeds otherwise payable to the
redeeming shareholders and is retained by the Fund. The redemption fees retained
by the Fund during the six months ended June 30, 2008 and fiscal year ended
December 31, 2007 amounted to $25,666 and $21,167, respectively.
The redemption fee does not apply to redemptions of shares where (i) the shares
were purchased through automatic reinvestment of 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.
Transactions in shares of beneficial interest were as follows:
SIX MONTHS ENDED
JUNE 30, 2008 YEAR ENDED
(UNAUDITED) DECEMBER 31, 2007
--------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ---------- -------------
CLASS AAA CLASS AAA
--------------------------- --------------------------
Shares sold ....................................... 5,412,381 $ 251,311,501 10,018,775 $ 514,184,963
Shares issued upon reinvestment of distributions... -- -- 3,400,747 169,969,027
Shares redeemed ................................... (4,771,870) (221,894,888) (7,231,506) (374,663,424)
----------- ------------- ---------- -------------
Net increase ................................... 640,511 $ 29,416,613 6,188,016 $ 309,490,566
=========== ============= ========== =============
CLASS A CLASS A
--------------------------- --------------------------
Shares sold ....................................... 137,753 $ 6,370,085 171,292 $ 8,808,825
Shares issued upon reinvestment of distributions... -- -- 14,283 710,716
Shares redeemed ................................... (37,502) (1,729,861) (35,361) (1,832,302)
----------- ------------- ---------- -------------
Net increase ................................... 100,251 $ 4,640,224 150,214 $ 7,687,239
=========== ============= ========== =============
CLASS B CLASS B
--------------------------- --------------------------
Shares issued upon reinvestment of distributions... -- -- 2 $ 94
----------- ------------- ---------- -------------
Net increase ................................... -- -- 2 $ 94
=========== ============= ========== =============
CLASS C CLASS C
--------------------------- --------------------------
Shares sold ....................................... 47,620 $ 2,174,872 98,259 $ 5,011,883
Shares issued upon reinvestment of distributions... -- -- 9,491 463,736
Shares redeemed ................................... (15,355) (695,348) (13,440) (669,957)
----------- ------------- ---------- -------------
Net increase ................................... 32,265 $ 1,479,524 94,310 $ 4,805,662
=========== ============= ========== =============
CLASS I*
---------------------------
Shares sold ....................................... 89,136 $ 4,244,339
Shares redeemed ................................... (6,392) (292,490)
----------- -------------
Net increase ................................... 82,744 $ 3,951,849
=========== =============
- ----------
* From the commencement of offering Class I Shares on January 11, 2008.
21
THE GABELLI ASSET FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
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. On April 24, 2008, the Adviser entered into an administrative
settlement with the SEC to resolve the SEC's inquiry regarding prior frequent
trading activity in shares of the GAMCO Global Growth Fund (the "Global Growth
Fund") by one investor who was banned from the Global Growth Fund in August
2002. In the settlement, the SEC found that the Adviser had violated Section
206(2) of the Investment Advisers Act, Section 17(d) of the 1940 Act and Rule
17d-1 thereunder, and had aided and abetted and caused violations of Section
12(d)(1)(B)(i) of the 1940 Act. Under the terms of the settlement, the Adviser,
while neither admitting nor denying the SEC's findings and allegations, agreed,
among other things, to pay the previously reserved total of $16 million
(including a $5 million penalty), of which at least $11 million will be
distributed to shareholders of the Global Growth Fund in accordance with a plan
to be developed by an independent distribution consultant and approved by the
independent directors of the Global Growth Fund and the staff of the SEC, and to
cease and desist from future violations of the above referenced federal
securities laws. The settlement will not have a material adverse impact on the
Adviser or its ability to fulfill its obligations under the Advisory Agreement.
On the same day, the SEC filed a civil action against the Executive Vice
President and Chief Operating Officer of the Adviser, alleging violations of
certain federal securities laws arising from the same matter. The officer is
also an officer of the Global Growth Fund and other funds in the Gabelli/GAMCO
fund complex. The officer denies the allegations and is continuing in his
positions with the Adviser and the funds. The Adviser currently expects that any
resolution of the action against the officer will not have a material adverse
impact on the Adviser or its ability to fulfill its obligations under the
Advisory Agreement.
On a separate matter, in August 2008, the Adviser made an offer to the staff of
the SEC to settle a previously disclosed matter concerning compliance with
Section 19(a) and Rule 19a-1 of the 1940 Act by two closed-end funds managed by
the Adviser. These provisions require registered investment companies to provide
written statements to shareholders when a distribution is made in the nature of
a dividend from a source other than net investment income. While the two funds
sent annual statements and provided other materials containing this information,
the funds did not send the notices required by Rule 19a-1 to shareholders with
each distribution in 2002 and 2003. The Adviser believes that the funds have
been in compliance with Rule 19a-1 since that time. The Adviser believes that
the settlement would have no effect on the funds or any material adverse effect
on the Adviser or its ability to manage the funds. This offer of settlement is
subject to final agreement regarding the specific language of the SEC's
administrative order and other settlement documents and approval by the SEC.
22
THE GABELLI ASSET FUND
BOARD CONSIDERATION AND RE-APPROVAL OF INVESTMENT ADVISORY
AGREEMENT (UNAUDITED)
At its meeting on February 27, 2008, the Board of Trustees ("Board") of the Fund
approved the continuation of the investment advisory agreement with the Adviser
for the Fund on the basis of the recommendation by the trustees who are not
"interested persons" of the Fund (the "Independent Board Members"). The
following paragraphs summarize the material information and factors considered
by the independent board members as well as their conclusions relative to such
factors.
NATURE, EXTENT, AND QUALITY OF SERVICES. The Independent Board Members
considered information regarding the portfolio manager, the depth of the analyst
pool available to the Adviser and the portfolio manager, the scope of
administrative, shareholder, and other services supervised or provided by the
Adviser, and the absence of significant service problems reported to the Board.
The Independent Board Members noted the experience, length of service, and
reputation of the portfolio manager.
INVESTMENT PERFORMANCE. The Independent Board Members reviewed the short,
medium, and long-term performance of the Fund against a peer group of large cap
growth funds chosen by Lipper as being comparable. The Independent Board Members
noted that the Fund's performance was in the top quartile of the funds in its
category for the one, three, and five year periods.
PROFITABILITY. The Independent Board Members reviewed summary data regarding the
profitability of the Fund to the Adviser both with an administrative overhead
charge and without such a charge. The Independent Board Members also noted that
a large portion of the Fund's portfolio transactions were executed by an
affiliated broker and that the affiliated broker received distribution fees and
minor amounts of sales commissions. The Independent Board Members also noted
that a substantial portion of the Fund's portfolio transactions were executed by
an affiliated broker, and that the affiliated broker received distribution fees
and commissions from the Fund, and the Adviser received a moderate amount of
soft dollar benefits (but no third party research services) from unaffiliated
brokers through the Fund's portfolio brokerage.
ECONOMIES OF SCALE. The Independent Board Members discussed the major elements
of the Adviser's cost structure and the relationship of those elements to
potential economies of scale.
SHARING OF ECONOMIES OF SCALE. The Independent Board Members noted that the
investment advisory fee schedule for the Fund does not take into account any
potential economies of scale that may develop or any losses or diminished
profitability to the Adviser in prior years.
SERVICE AND COST COMPARISONS. The Independent Board Members compared the expense
ratios of the investment advisory fee, other expenses, and total expenses of the
Fund to similar expense ratios of the peer group of multi-cap and core value
funds and noted that the advisory fee includes substantially all administrative
services of the Fund as well as investment advisory services of the Adviser. The
Independent Board Members noted that the Fund's expense ratios and the Fund's
size were above average within this group. The Independent Board Members also
noted that the advisory fee structure was the same as that in effect for most of
the Gabelli funds. The Independent Board Members were presented with, but did
not consider to be material to their decision, various information comparing the
advisory fee to the fee for other types of accounts managed by affiliates of the
Adviser.
CONCLUSIONS. The independent board members concluded that the Fund enjoyed
highly experienced portfolio management services, good ancillary services, and a
good performance record. The Independent Board Members also concluded that the
Fund's expense ratios and the profitability to the Adviser of managing the Fund
were reasonable in light of the Fund's performance and that economies of scale
were not a significant factor in their thinking at this time. The Independent
Board Members did not view the potential profitability of ancillary services as
material to their decision. On the basis of the foregoing and without assigning
particular weight to any single conclusion, the Independent Board Members
determined to recommend continuation of the investment advisory agreement to the
full Board.
23
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
CHAIRMAN AND CHIEF
EXECUTIVE OFFICER
GAMCO INVESTORS, INC.
Anthony J. Colavita
ATTORNEY-AT-LAW
ANTHONY J. COLAVITA, P.C.
James P. Conn
FORMER CHIEF INVESTMENT OFFICER
FINANCIAL SECURITY ASSURANCE
HOLDINGS LTD.
John D. Gabelli
SENIOR VICE PRESIDENT
GABELLI & COMPANY, INC.
Anthony R. Pustorino
CERTIFIED PUBLIC ACCOUNTANT,
PROFESSOR EMERITUS
PACE UNIVERSITY
Werner J. Roeder, MD
MEDICAL DIRECTOR
LAWRENCE HOSPITAL
Anthonie C. van Ekris
CHAIRMAN
BALMAC INTERNATIONAL, INC.
Salvatore J. Zizza
CHAIRMAN
ZIZZA & CO., LTD.
OFFICERS
Bruce N. Alpert
PRESIDENT AND SECRETARY
Agnes Mullady
TREASURER
Peter D. Goldstein
CHIEF COMPLIANCE OFFICER
DISTRIBUTOR
Gabelli & Company, Inc.
CUSTODIAN, TRANSFER AGENT, AND DIVIDEND AGENT
State Street Bank and Trust Company
LEGAL COUNSEL
Skadden, Arps, Slate, Meagher & Flom LLP
This report is submitted for the general information of the shareholders of The
Gabelli Asset Fund. It is not authorized for distribution to prospective
investors unless preceded or accompanied by an effective prospectus.
GAB405Q208SR
(GRAPHIC)
THE GABELLI ASSET FUND
SEMI ANNUAL REPORT
JUNE 30, 2008
ITEM 2. CODE OF ETHICS.
Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. INVESTMENTS.
(a) 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.
(b) Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which the shareholders
may recommend nominees to the registrant's Board of Trustees, where those
changes were implemented after the registrant last provided disclosure in
response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR
229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)),
or this Item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within
90 days of the filing date of the report that includes the disclosure
required by this paragraph, based on their evaluation of these controls
and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR
270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities
Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or
240.15d-15(b)).
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17
CFR 270.30a-3(d)) that occurred during the registrant's second fiscal
quarter of the period covered by this report that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) Not applicable.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and
Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.
(a)(3) Not applicable.
(b) Certifications pursuant to Rule 30a-2(b) under the 1940 Act and
Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(registrant) The Gabelli Asset Fund
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By (Signature and Title)* /s/ Bruce N. Alpert
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Bruce N. Alpert, Principal Executive Officer
Date 9/3/08
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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
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Bruce N. Alpert, Principal Executive Officer
Date 9/3/08
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By (Signature and Title)* /s/ Agnes Mullady
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Agnes Mullady,
Principal Financial Officer & Treasurer
Date 9/3/08
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* Print the name and title of each signing officer under his or her signature.