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 811-09397
The Gabelli Utilities 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 UTILITIES FUND
SEMI-ANNUAL REPORT
JUNE 30,2008
TO OUR SHAREHOLDERS,
During the second quarter of 2008, The Gabelli Utilities Fund's (the
"Fund") net asset value ("NAV") per share rose 4.6%, while the Standard & Poor's
("S&P") 500 Utilities Index was up 8.0% and the Lipper Utility Fund Average rose
6.4%. For the six month period ended June 30, 2008, the Fund was down 5.0%
versus declines of 2.8% and 4.6% for the S&P 500 Utilities Index and the Lipper
Utility Fund 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 (8/31/99)
------- ------- ------ ------ ------ ---------
GABELLI UTILITIES FUND CLASS AAA .. 4.57% (5.03)% (1.51)% 8.09% 11.96% 8.80%
S&P 500 Utilities Index............ 7.97 (2.76) 6.63 12.50 16.98 6.74
Lipper Utility Fund Average ....... 6.35 (4.57) 2.32 13.81 16.87 7.43
Class A ........................... 4.43 (5.12) (1.51) 8.10 11.94 8.82
(1.58)(b) (10.57)(b) (7.17)(b) 5.99(b) 10.62(b) 8.10(b)
Class B ........................... 4.31 (5.53) (2.30) 7.23 11.11 8.26
(0.69)(c) (10.25)(c) (7.19)(c) 6.36(c) 10.85(c) 8.26
Class C ........................... 4.41 (5.39) (2.17) 7.29 11.16 8.31
3.41(d) (6.33)(d) (3.15)(d) 7.29 11.16 8.31
Class I ........................... 4.57 (5.03) (1.51) 8.09 11.95 8.80
IN THE CURRENT PROSPECTUS, THE EXPENSE RATIOS FOR CLASS AAA, A, B, C, AND I
SHARES ARE 1.41%, 1.41%, 2.16%, 2.16%, AND 1.16%, 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 VALUE OF UTILITY STOCKS CHANGE AS LONG-TERM INTEREST RATES CHANGE.
FUNDS INVESTING IN A SINGLE SECTOR, SUCH AS UTILITIES, MAY BE SUBJECT TO
MORE VOLATILITY THAN FUNDS THAT INVEST MORE BROADLY. THE UTILITIES INDUSTRY
CAN BE SIGNIFICANTLY AFFECTED BY GOVERNMENT REGULATION, FINANCING
DIFFICULTIES, SUPPLY OR DEMAND OF SERVICES OR FUEL, AND NATURAL RESOURCES
CONSERVATION. 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, 2002 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. THE
S&P 500 UTILITIES INDEX IS AN UNMANAGED INDICATOR OF ELECTRIC AND GAS
UTILITY STOCK PERFORMANCE, WHILE THE LIPPER UTILITY FUND AVERAGE REFLECTS
THE AVERAGE PERFORMANCE OF MUTUAL FUNDS CLASSIFIED IN THIS PARTICULAR
CATEGORY. DIVIDENDS ARE CONSIDERED REINVESTED. YOU CANNOT INVEST DIRECTLY
IN AN INDEX.
(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 UTILITIES 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 UTILITIES FUND
ACTUAL FUND RETURN
Class AAA $1,000.00 $ 949.70 1.42% $ 6.88
Class A $1,000.00 $ 948.80 1.42% $ 6.88
Class B $1,000.00 $ 944.70 2.17% $10.49
Class C $1,000.00 $ 946.10 2.17% $10.50
Class I** $1,000.00 $ 949.70 1.17% $ 5.36
HYPOTHETICAL 5% RETURN
Class AAA $1,000.00 $1,017.80 1.42% $ 7.12
Class A $1,000.00 $1,017.80 1.42% $ 7.12
Class B $1,000.00 $1,014.07 2.17% $10.87
Class C $1,000.00 $1,014.07 2.17% $10.87
Class I $1,000.00 $1,019.05 1.17% $ 5.87
* 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 UTILITIES FUND
Energy and Utilities .................. 72.5%
Communications ........................ 13.8%
U.S.Government Obligations ............ 10.9%
Other ................................. 2.3%
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 UTILITIES FUND
SCHEDULE OF INVESTMENTS -- JUNE 30,2008 (UNAUDITED)
MARKET
SHARES COST VALUE
- ----------- ------------ ------------
COMMON STOCKS -- 88.1%
ENERGY AND UTILITIES -- 72.2%
ENERGY AND UTILITIES: ALTERNATE
ENERGY -- 0.1%
2,000 Ormat Industries Ltd. .............. $ 27,108 $ 26,008
21,000 Ormat Technologies Inc. ............ 1,015,578 1,032,780
------------ ------------
1,042,686 1,058,788
------------ ------------
ENERGY AND UTILITIES: ELECTRIC
INTEGRATED -- 39.7%
218,000 Allegheny Energy Inc. .............. 2,702,365 10,923,980
50,000 ALLETE Inc. ........................ 1,803,488 2,100,000
68,000 Alliant Energy Corp. ............... 1,889,326 2,329,680
100,000 Ameren Corp. ....................... 4,844,555 4,223,000
200,000 American Electric Power Co. Inc. ... 7,863,440 8,046,000
4,000,000 Aquila Inc.+ ....................... 16,444,368 15,080,000
205,000 Avista Corp. ....................... 4,709,375 4,399,300
150,000 Black Hills Corp. .................. 5,593,896 4,809,000
32,000 Central Vermont Public Service
Corp. ........................... 689,401 619,840
35,000 Cleco Corp. ........................ 721,890 816,550
70,000 CMS Energy Corp. ................... 490,736 1,043,000
55,000 Constellation Energy Group Inc. .... 2,718,966 4,515,500
95,000 Dominion Resources Inc. ............ 4,254,026 4,511,550
402,000 DPL Inc. ........................... 10,528,880 10,604,760
6,000 DTE Energy Co. ..................... 240,835 254,640
350,000 Duke Energy Corp. .................. 5,416,587 6,083,000
2,000 E.ON AG ............................ 392,495 403,533
62,000 Edison International ............... 1,214,037 3,185,560
170,000 El Paso Electric Co.+ .............. 3,015,331 3,366,000
90,000 Endesa SA .......................... 4,121,012 4,384,230
3,000 Entergy Corp. ...................... 114,480 361,440
50,000 FirstEnergy Corp. .................. 1,882,372 4,116,500
124,000 Florida Public Utilities Co. ....... 1,495,288 1,475,600
270,000 FPL Group Inc. ..................... 12,797,980 17,706,600
185,000 Great Plains Energy Inc. ........... 5,638,538 4,676,800
340,000 Hawaiian Electric Industries Inc. .. 8,601,917 8,408,200
265,000 Integrys Energy Group Inc. ......... 13,324,981 13,469,950
405,000 LSI Corp.+ ......................... 3,631,338 2,486,700
55,500 Maine & Maritimes Corp.+ ........... 1,593,275 2,353,200
248,000 MGE Energy Inc. .................... 8,068,578 8,089,760
178,000 NiSource Inc. ...................... 3,963,180 3,189,760
368,000 NorthWestern Corp. ................. 10,960,853 9,354,560
110,000 NRG Energy Inc.+ ................... 2,627,937 4,719,000
199,500 OGE Energy Corp. ................... 5,375,199 6,326,145
120,000 Otter Tail Corp. ................... 3,455,082 4,659,600
40,000 PG&E Corp. ......................... 907,078 1,587,600
150,000 Pinnacle West Capital Corp. ........ 6,469,706 4,615,500
470,000 PNM Resources Inc. ................. 6,487,223 5,621,200
46,000 PPL Corp. .......................... 1,030,117 2,404,420
202,000 Progress Energy Inc. ............... 8,993,355 8,449,660
MARKET
SHARES COST VALUE
- ----------- ------------ ------------
108,000 Public Service Enterprise Group
Inc. ............................ $ 2,905,745 $ 4,960,440
425,000 Puget Energy Inc. .................. 11,452,637 10,195,750
172,000 SCANA Corp. ........................ 7,013,725 6,364,000
240,000 Southern Co. ....................... 8,350,234 8,380,800
130,000 TECO Energy Inc. ................... 2,277,826 2,793,700
133,000 The Empire District Electric Co. ... 3,067,114 2,465,820
139,400 Unisource Energy Corp. ............. 3,418,500 4,322,794
104,200 Unitil Corp. ....................... 2,747,344 2,824,862
310,000 Vectren Corp. ...................... 8,725,769 9,675,100
665,000 Westar Energy Inc. ................. 15,353,516 14,304,150
200,000 Wisconsin Energy Corp. ............. 8,199,206 9,044,000
210,000 Xcel Energy Inc. ................... 3,695,022 4,214,700
------------ ------------
264,280,124 285,317,434
------------ ------------
ENERGY AND UTILITIES:
ELECTRIC TRANSMISSION AND
DISTRIBUTION -- 8.0%
264,640 CH Energy Group Inc. ............... 12,308,352 9,413,245
220,000 Consolidated Edison Inc. ........... 10,000,737 8,599,800
400,000 Energy East Corp. .................. 9,605,805 9,888,000
130,000 Exelon Corp. ....................... 7,887,294 11,694,800
180,000 Northeast Utilities ................ 3,677,238 4,595,400
275,000 NSTAR .............................. 7,568,212 9,300,500
110,000 Pepco Holdings Inc. ................ 2,267,877 2,821,500
6,000 Red Electrica de Espana ............ 352,056 390,622
16,666 UIL Holdings Corp. ................. 490,122 490,147
------------ ------------
54,157,693 57,194,014
------------ ------------
ENERGY AND UTILITIES: GLOBAL
UTILITIES -- 4.0%
4,000 Areva SA ........................... 1,690,915 4,679,283
24,000 Chubu Electric Power Co. Inc. ...... 574,288 585,393
195,000 Electric Power Development Co.
Ltd. ............................ 4,834,052 7,235,485
300 Electricite de France .............. 11,619 28,501
120,000 Enel SpA ........................... 825,681 1,141,166
4,000 Energias de Portugal SA, ADR ....... 112,064 208,918
100,000 Hera SpA ........................... 174,312 408,571
12,000 Hokkaido Electric Power Co. Inc. ... 238,323 244,102
24,000 Hokuriku Electric Power Co. ........ 442,615 570,702
37,000 Huaneng Power International Inc.,
ADR ............................. 1,487,500 1,023,050
55,028 Iberdrola SA ....................... 645,050 737,302
20,901 Iberdrola SA, ADR .................. 1,042,437 1,120,954
100,000 Korea Electric Power Corp., ADR .... 1,697,461 1,453,000
35,000 Kyushu Electric Power Co. Inc. ..... 765,331 731,742
8,775 National Grid plc, ADR ............. 386,383 578,887
2,000 Niko Resources Ltd. ................ 111,679 191,704
See accompanying notes to financial statements.
4
THE GABELLI UTILITIES FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- JUNE 30, 2008 (UNAUDITED)
MARKET
SHARES COST VALUE
- ----------- ------------ ------------
COMMON STOCKS (CONTINUED)
ENERGY AND UTILITIES (CONTINUED)
ENERGY AND UTILITIES: GLOBAL
UTILITIES (CONTINUED)
24,000 Shikoku Electric Power Co. Inc. .... $ 473,574 $ 659,980
2,000 Snam Rete Gas SpA .................. 10,803 13,674
24,000 The Chugoku Electric Power Co.
Inc. ............................ 457,538 511,937
100,000 The Kansai Electric Power Co.
Inc. ............................ 2,021,741 2,340,255
34,000 The Tokyo Electric Power Co. Inc. .. 847,546 874,135
140,000 Tohoku Electric Power Co. Inc. ..... 2,470,795 3,045,628
------------ ------------
21,321,707 28,384,369
------------ ------------
ENERGY AND UTILITIES: MERCHANT
ENERGY -- 0.4%
40,000 Mirant Corp.+ ...................... 708,818 1,566,000
15,000 Mirant Corp., Escrow+ (a) .......... 0 0
40,000 Mirant Corp., Escrow+ (a) .......... 0 0
85,000 The AES Corp.+ ..................... 409,407 1,632,850
------------ ------------
1,118,225 3,198,850
------------ ------------
ENERGY AND UTILITIES: NATURAL GAS
INTEGRATED -- 9.4%
500,000 El Paso Corp. ...................... 5,985,729 10,870,000
20,000 Energen Corp. ...................... 239,277 1,560,600
91,000 EnergySouth Inc. ................... 3,397,722 4,464,460
399,000 National Fuel Gas Co. .............. 15,673,908 23,732,520
178,000 ONEOK Inc. ......................... 4,741,203 8,691,740
310,000 Southern Union Co. ................. 8,024,005 8,376,200
330,000 Spectra Energy Corp. ............... 7,689,938 9,484,200
------------ ------------
45,751,782 67,179,720
------------ ------------
ENERGY AND UTILITIES: NATURAL GAS
UTILITIES -- 3.8%
110,000 Atmos Energy Corp. ................. 2,949,039 3,032,700
51,000 Chesapeake Utilities Corp. ......... 1,373,627 1,311,720
118,000 Corning Natural Gas Corp.+ ......... 1,914,104 1,932,250
10,300 Delta Natural Gas Co. Inc. ......... 259,238 269,036
25,000 Enagas ............................. 711,745 708,505
27,000 Nicor Inc. ......................... 889,090 1,149,930
65,000 Piedmont Natural Gas Co. Inc. ...... 1,571,813 1,700,400
1,500 RGC Resources Inc. ................. 46,980 42,518
65,000 South Jersey Industries Inc. ....... 1,827,745 2,428,400
290,000 Southwest Gas Corp. ................ 7,794,950 8,621,700
150,000 The Laclede Group Inc. ............. 4,681,467 6,055,500
------------ ------------
24,019,798 27,252,659
------------ ------------
ENERGY AND UTILITIES: NATURAL
RESOURCES -- 0.5%
14,000 Alliance Holdings GP LP ............ 276,626 417,340
10,000 Compania de Minas Buenaventura SA,
ADR ............................. 232,653 653,700
27,000 Peabody Energy Corp. ............... 976,718 2,377,350
MARKET
SHARES COST VALUE
- ----------- ------------ ------------
24,000 Uranium One Inc.+ .................. $ 295,039 $ 112,975
50,000 Uranium Resources Inc.+ ............ 263,029 184,500
------------ ------------
2,044,065 3,745,865
------------ ------------
ENERGY AND UTILITIES: SERVICES --
2.9%
230,000 ABB Ltd., ADR+ ..................... 3,067,767 6,513,600
6,000 Cameron International Corp.+ ....... 103,313 332,100
200,000 Halliburton Co ..................... 6,236,628 10,614,000
1,000 Pike Electric Corp.+ ............... 14,000 16,610
30,000 Tenaris SA, ADR .................... 1,346,777 2,235,000
28,000 Weatherford International Ltd.+ .... 595,171 1,388,520
------------ ------------
11,363,656 21,099,830
------------ ------------
ENERGY AND UTILITIES: WATER -- 0.9%
3,000 American States Water Co. .......... 75,431 104,820
100,000 American Water Works Co. Inc.+ ..... 2,150,000 2,218,000
44,000 Aqua America Inc. .................. 982,474 702,680
2,000 California Water Service Group ..... 70,055 65,540
2,000 Consolidated Water Co. Ltd. ........ 40,211 39,600
10,000 Middlesex Water Co. ................ 177,803 165,900
50,500 Pennichuck Corp. ................... 1,085,117 1,169,075
72,000 SJW Corp. .......................... 1,918,129 1,900,800
61,600 Suez SA, Strips+ ................... 0 970
10,000 United Utilities plc, ADR .......... 266,181 273,250
1,650 York Water Co. ..................... 20,543 24,040
------------ ------------
6,785,944 6,664,675
------------ ------------
DIVERSIFIED INDUSTRIAL -- 0.9%
6,000 Bouygues SA ........................ 453,715 398,274
210,000 General Electric Co. ............... 7,624,015 5,604,900
17,000 Mueller Water Products Inc.,
Cl. A ........................... 215,678 137,190
------------ ------------
8,293,408 6,140,364
------------ ------------
ENVIRONMENTAL SERVICES -- 0.0%
2,250 Veolia Environnement ............... 85,492 126,220
------------ ------------
EXCHANGE TRADED FUNDS -- 1.6%
85,000 Utilities HOLDRS Trust ............. 9,781,043 11,215,750
------------ ------------
TOTAL ENERGY AND UTILITIES ......... 450,045,623 518,578,538
------------ ------------
COMMUNICATIONS -- 13.6%
CABLE AND SATELLITE -- 3.0%
350,000 Cablevision Systems Corp., Cl. A+ .. 9,986,311 7,910,000
300,000 Charter Communications Inc.,
Cl. A+ .......................... 748,292 315,000
10,000 Cogeco Cable Inc. .................. 207,213 362,852
40,000 Cogeco Inc. ........................ 777,563 1,216,044
See accompanying notes to financial statements.
5
THE GABELLI UTILITIES FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- JUNE 30, 2008 (UNAUDITED)
MARKET
SHARES COST VALUE
- ----------- ------------ ------------
COMMON STOCKS (CONTINUED)
COMMUNICATIONS (CONTINUED)
CABLE AND SATELLITE (CONTINUED)
40,000 Comcast Corp., Cl. A ............... $ 710,829 $ 758,800
65,000 DISH Network Corp., Cl. A+ ......... 1,638,388 1,903,200
11,000 EchoStar Corp., Cl. A+ ............. 293,938 343,420
100,000 Liberty Global Inc., Cl. A+ ........ 2,650,611 3,143,000
6,000 Mediacom Communications Corp.,
Cl. A+ .......................... 35,001 32,040
40,000 Rogers Communications Inc., Cl. B .. 572,504 1,546,400
12,000 Shaw Communications Inc., Cl. B .... 148,195 244,320
90,000 The DIRECTV Group Inc.+ ............ 1,900,807 2,331,900
8,000 Time Warner Cable Inc., Cl. A+ ..... 198,444 211,840
33,000 Tokyo Broadcasting System Inc. ..... 877,535 626,218
42,396 Zon Multimedia Servicos de
Telecomunicacoes e Multimedia
SGPS SA ......................... 416,753 352,443
7,042 Zon Multimedia Servicos de
Telecomunicacoes e Multimedia
SGPS SA, ADR .................... 126,328 58,582
------------ ------------
21,288,712 21,356,059
------------ ------------
TELECOMMUNICATIONS -- 7.5%
240,000 AT&T Inc. .......................... 7,713,501 8,085,600
150,000 BCE Inc. ........................... 5,771,201 5,221,500
30,000 CenturyTel Inc. .................... 977,352 1,067,700
500,000 Cincinnati Bell Inc.+ .............. 2,421,085 1,990,000
290,000 Deutsche Telekom AG, ADR ........... 5,325,111 4,747,300
4,243 FairPoint Communications Inc. ...... 39,936 30,592
200 Hutchison Telecommunications
International Ltd.+ ............. 163 284
600 Mobistar SA ........................ 50,761 48,604
1,600 Nippon Telegraph & Telephone
Corp. ........................... 7,960,362 7,835,382
230,000 Nortel Networks Corp., New York+ ... 4,379,105 1,890,600
43,000 Philippine Long Distance Telephone
Co., ADR ........................ 2,228,260 2,297,060
220,000 Portugal Telecom SGPS SA ........... 2,824,802 2,497,402
40,000 Portugal Telecom SGPS SA, ADR ...... 464,600 449,600
200 PT Indosat Tbk ..................... 128 146
100,000 Rural Cellular Corp., Cl. A+ ....... 4,381,330 4,451,000
310,000 Sprint Nextel Corp. ................ 5,496,224 2,945,000
600 Tele2 AB, Cl. B .................... 8,180 11,756
15,000 Telecom Italia SpA, ADR ............ 430,416 299,400
1,066 Telefonica SA, ADR ................. 43,831 84,832
MARKET
SHARES COST VALUE
- ----------- ------------ ------------
30,000 Telephone & Data Systems Inc. ...... $ 1,379,662 $ 1,418,100
36,000 tw telecom inc.+ ................... 695,747 577,080
225,000 Verizon Communications Inc. ........ 7,947,199 7,965,000
------------ ------------
60,538,956 53,913,938
------------ ------------
WIRELESS COMMUNICATIONS -- 3.1%
7,000 America Movil SAB de CV,
Cl. L, ADR ......................... 120,792 369,250
16,000 China Mobile Ltd., ADR ............. 287,740 1,071,200
16,500 China Unicom Ltd., ADR ............. 137,530 305,580
23,000 Clearwire Corp., Cl. A+ ............ 383,766 298,080
22,000 Millicom International Cellular
SA .............................. 1,741,213 2,277,000
2,600 Mobile TeleSystems OJSC, ADR ....... 86,498 199,186
180 MobileOne Ltd. ..................... 210 249
4,800 NTT DoCoMo Inc. .................... 7,554,348 7,051,843
165,000 Price Communications Corp.,
Escrow+ (a) ..................... 0 0
28,000 SK Telecom Co. Ltd., ADR ........... 593,203 581,560
200 SmarTone Telecommunications
Holdings Ltd. ................... 207 206
70,000 United States Cellular Corp.+ ...... 3,536,764 3,958,500
95,000 Vimpel-Communications, ADR ......... 1,222,613 2,819,600
130,000 Vodafone Group plc, ADR ............ 3,715,810 3,829,800
------------ ------------
19,380,694 22,762,054
------------ ------------
TOTAL COMMUNICATIONS ............... 101,208,362 98,032,051
------------ ------------
OTHER -- 2.3%
AVIATION: PARTS AND SERVICES -- 1.0%
1,000,000 Rolls-Royce Group plc+ ............. 8,943,176 6,802,110
89,600,000 Rolls-Royce Group plc, Cl. B ....... 177,965 178,468
------------ ------------
9,121,141 6,980,578
------------ ------------
BUILDING AND CONSTRUCTION -- 0.1%
3,400 Acciona SA ......................... 1,003,577 807,523
------------ ------------
BUSINESS SERVICES -- 0.1%
33,000 Clear Channel Outdoor Holdings Inc.,
Cl. A+ .......................... 713,524 588,390
------------ ------------
ENTERTAINMENT -- 0.5%
100,000 Vivendi ............................ 3,202,412 3,794,439
------------ ------------
HEALTH CARE -- 0.0%
12,000 Tsumura & Co ....................... 261,956 309,083
------------ ------------
TRANSPORTATION -- 0.6%
90,000 GATX Corp .......................... 3,511,969 3,989,700
------------ ------------
TOTAL OTHER ........................ 17,814,579 16,469,713
------------ ------------
TOTAL COMMON STOCKS ................ 569,068,564 633,080,302
------------ ------------
See accompanying notes to financial statements.
6
THE GABELLI UTILITIES FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- JUNE 30,2008 (UNAUDITED)
MARKET
SHARES COST VALUE
- ----------- ------------ ------------
CONVERTIBLE PREFERRED STOCKS -- 0.3%
ENERGY AND UTILITIES -- 0.2%
ENERGY AND UTILITIES: NATURAL GAS
INTEGRATED -- 0.2%
800 El Paso Corp.,
4.990% Cv. Pfd. (b) ............. $ 758,731 $ 1,381,266
------------ ------------
COMMUNICATIONS -- 0.1%
TELECOMMUNICATIONS -- 0.1%
11,400 Cincinnati Bell Inc.,
6.750% Cv. Pfd., Ser. B ......... 477,317 458,280
------------ ------------
TOTAL CONVERTIBLE
PREFERRED STOCKS ................ 1,236,048 1,839,546
------------ ------------
WARRANTS -- 0.2%
ENERGY AND UTILITIES -- 0.1%
ENERGY AND UTILITIES: MERCHANT
ENERGY -- 0.1%
3,480 Mirant Corp., Ser. A,
expire 01/03/11+ ................ 33,641 62,397
38,363 Mirant Corp., Ser. B,
expire 01/03/11+ ................ 190,367 735,035
------------ ------------
224,008 797,432
------------ ------------
ENERGY AND UTILITIES: NATURAL GAS
UTILITIES -- 0.0%
56,700 Corning Natural Gas Corp.,
expire 08/17/11+ ................ 0 116,802
------------ ------------
224,008 914,234
------------ ------------
COMMUNICATIONS -- 0.1%
TELECOMMUNICATIONS -- 0.1%
18,000 Bharti Airtel Ltd.,
expire 12/15/16+ (b) ............ 399,310 302,558
------------ ------------
TOTAL WARRANTS ..................... 623,318 1,216,792
------------ ------------
PRINCIPAL
AMOUNT
- -----------
U.S. GOVERNMENT OBLIGATIONS -- 10.9%
U.S. TREASURY BILLS -- 10.8%
$78,317,000 U.S. Treasury Bills,
1.113% to 1.934%++,
07/03/08 to 10/16/08 ............ 78,074,645 78,021,217
------------ ------------
U.S. TREASURY NOTES -- 0.1%
640,000 U.S. Treasury Note,
5.000%, 07/31/08 ................ 641,509 641,509
------------ ------------
TOTAL U.S. GOVERNMENT
OBLIGATIONS ..................... 78,716,154 78,662,726
------------ ------------
TOTAL
INVESTMENTS -- 99.5% ............ $649,644,084 714,799,366
============
OTHER ASSETS AND LIABILITIES (NET)
-- 0.5% ......................... 3,605,891
------------
NET ASSETS -- 100.0% $718,405,257
============
- ----------
(a) Security fair valued under procedures established by the Board of Trustees.
The procedures may include reviewing available financial information about
the company and reviewing the valuation of comparable securities and other
factors on a regular basis. At June 30, 2008, the market value of fair
valued securities amounted to $0 or 0.00% of net assets.
(b) 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 $1,683,824 or
0.23% of net assets.
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
ADR American Depositary Receipt
See accompanying notes to financial statements.
7
THE GABELLI UTILITIES FUND
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2008 (UNAUDITED)
ASSETS:
Investments, at value (cost $649,644,084) .................... $714,799,366
Foreign currency, at value (cost $43,830) .................... 44,555
Cash ......................................................... 8,915
Receivable for investments sold .............................. 629,375
Receivable for Fund shares sold .............................. 3,487,842
Dividends and interest receivable ............................ 1,587,117
Unrealized appreciation on swap contracts .................... 5,449
Prepaid expenses ............................................. 68,439
------------
TOTAL ASSETS ................................................. 720,631,058
------------
LIABILITIES:
Payable for Fund shares redeemed ............................. 1,025,445
Payable for investment advisory fees ......................... 601,120
Payable for distribution fees ................................ 351,888
Payable for accounting fees .................................. 3,751
Payable for shareholder services fees ........................ 131,507
Other accrued expenses ....................................... 112,090
------------
TOTAL LIABILITIES ............................................ 2,225,801
------------
NET ASSETS applicable to 89,636,325 shares outstanding ....... $718,405,257
============
NET ASSETS CONSIST OF:
Paid-in capital, each class at $0.001 par value .............. $655,294,529
Accumulated net realized loss on investments, swap
contracts, and foreign currency transactions .............. (2,088,655)
Net unrealized appreciation on investments ................... 65,155,282
Net unrealized appreciation on swaps ......................... 5,449
Net unrealized appreciation on foreign
currency translations ..................................... 38,652
------------
NET ASSETS ................................................... $718,405,257
============
SHARES OF BENEFICIAL INTEREST:
CLASS AAA:
Net Asset Value, offering, and redemption price per
share ($140,538,833 / 17,147,495 shares outstanding;
unlimited number of shares authorized) .................... $ 8.20
============
CLASS A:
Net Asset Value and redemption price per share
($254,724,205 / 30,938,173 shares outstanding;
unlimited number of shares authorized) .................... $ 8.23
============
Maximum offering price per share (NAV / .9425,
based on maximum sales charge of 5.75%
of the offering price) .................................... $ 8.73
============
CLASS B:
Net Asset Value and offering price per share
($305,240 / 39,474 shares outstanding;
unlimited number of shares authorized) .................... $ 7.73(a)
============
CLASS C:
Net Asset Value and offering price per share
($321,776,851 / 41,381,935 shares outstanding;
unlimited number of shares authorized) .................... $ 7.78(a)
============
CLASS I:
Net Asset Value, offering, and redemption price per
share ($1,060,128 / 129,248 shares outstanding;
unlimited number of shares authorized) .................... $ 8.20
============
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2008 (UNAUDITED)
INVESTMENT INCOME:
Dividends (net of foreign taxes of $246,931) ................. $ 10,440,876
Interest ..................................................... 900,880
------------
TOTAL INVESTMENT INCOME ...................................... 11,341,756
------------
EXPENSES:
Investment advisory fees ..................................... 3,536,084
Distribution fees - Class AAA ................................ 181,876
Distribution fees - Class A .................................. 314,682
Distribution fees - Class B .................................. 1,575
Distribution fees - Class C .................................. 1,544,431
Shareholder services fees .................................... 316,881
Shareholder communications expenses .......................... 93,291
Custodian fees ............................................... 57,428
Legal and audit fees ......................................... 30,840
Registration expenses ........................................ 28,683
Accounting fees .............................................. 22,500
Trustees' fees ............................................... 11,443
Miscellaneous expenses ....................................... 39,678
------------
TOTAL EXPENSES ............................................... 6,179,392
Less: Custodian fee credits .................................. (1,263)
------------
NET EXPENSES ................................................. 6,178,129
------------
NET INVESTMENT INCOME ........................................ 5,163,627
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, SWAP
CONTRACTS,AND FOREIGN CURRENCY:
Net realized loss on investments ............................. (1,419,049)
Net realized loss on swap contracts .......................... (25,663)
Net realized gain on foreign currency transactions ........... 12,682
------------
Net realized loss on investments, swap contracts,
and foreign currency transactions ......................... (1,432,030)
------------
Net change in unrealized appreciation/depreciation
on investments ............................................ (43,403,608)
Net change in unrealized appreciation/depreciation
on swap contracts ......................................... 14,438
Net change in unrealized appreciation/depreciation
on foreign currency translations .......................... 37,419
------------
Net change in unrealized appreciation/depreciation
on investments, swap contracts, and foreign
currency translations ..................................... (43,351,751)
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS, SWAP CONTRACTS, AND FOREIGN CURRENCY ......... (44,783,781)
------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ......... $(39,620,154)
============
- ----------
(a) Redemption price varies based on the length of time held.
See accompanying notes to financial statements.
8
THE GABELLI UTILITIES FUND
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED
JUNE 30, 2008 YEAR ENDED
(UNAUDITED) DECEMBER 31, 2007
---------------- -----------------
OPERATIONS:
Net investment income .................................................... $ 5,163,627 $ 10,074,574
Net realized gain (loss) on investments, swap contracts, and foreign
currency transactions ................................................. (1,432,030) 19,828,787
Net change in unrealized appreciation/depreciation on investments,
swap contracts, and foreign currency translations ..................... (43,351,751) 21,175,110
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS .......... (39,620,154) 51,078,471
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income
Class AAA ............................................................. (1,045,729)* (2,345,569)
Class A ............................................................... (1,812,260)* (3,479,842)
Class B ............................................................... (2,395)* (5,267)
Class C ............................................................... (2,352,446)* (4,177,106)
Class I ............................................................... (5,995)* --
------------ ------------
(5,218,825) (10,007,784)
------------ ------------
Net realized gain on investments
Class AAA ............................................................. -- (4,682,214)
Class A ............................................................... -- (6,946,445)
Class B ............................................................... -- (10,514)
Class C ............................................................... -- (8,338,320)
------------ ------------
-- (19,977,493)
------------ ------------
Return of capital
Class AAA ............................................................. (6,229,706)* (7,778,858)
Class A ............................................................... (10,796,152)* (11,540,568)
Class B ............................................................... (14,269)* (17,467)
Class C ............................................................... (14,014,190)* (13,852,978)
Class I ............................................................... (35,715)* --
------------ ------------
(31,090,032) (33,189,871)
------------ ------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS ...................................... (36,308,857) (63,175,148)
------------ ------------
SHARES OF BENEFICIAL INTEREST TRANSACTIONS:
Class AAA ............................................................. (5,840,239) 6,022,104
Class A ............................................................... 19,437,309 63,460,301
Class B ............................................................... (2,289) 2,760
Class C ............................................................... 39,856,121 113,557,340
Class I ............................................................... 1,131,697 --
------------ ------------
NET INCREASE IN NET ASSETS FROM SHARES OF BENEFICIAL INTEREST
TRANSACTIONS .......................................................... 54,582,599 183,042,505
------------ ------------
REDEMPTION FEES .......................................................... 1,269 (2,545)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS .................................... (21,345,143) 170,943,283
NET ASSETS:
Beginning of period ...................................................... 739,750,400 568,807,117
------------ ------------
End of period (including undistributed net investment income of
$0 and $55,198, respectively) ......................................... $718,405,257 $739,750,400
============ ============
- ----------
* Based on fiscal year to date book income. Amounts are subject to change and
recharacterization at fiscal year end.
See accompanying notes to financial statements.
9
THE GABELLI UTILITIES FUND
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period:
INCOME FROM INVESTMENT OPERATIONS DISTRIBUTIONS
---------------------------------------- --------------------------------------------------
Net
Net Asset Realized and Total Net
Period Value, Net Unrealized from Net Realized Return
Ended Beginning Investment Gain/(Loss) on Investment Investment Gain on of Total
December 31 of Period Income (a) Investments Operations Income Investments Capital Distributions
- ----------- --------- ---------- -------------- ---------- ---------- ----------- ------- -------------
CLASS AAA
2008(b) $9.08 $0.07 $(0.53) $(0.46) $(0.06)* -- $(0.36)* $(0.42)
2007 9.16 0.16 0.60 0.76 (0.13) $(0.27) (0.44) (0.84)
2006 8.20 0.17 1.63 1.80 (0.16) (0.18) (0.50) (0.84)
2005 8.36 0.15 0.53 0.68 (0.15) (0.09) (0.60) (0.84)
2004 8.03 0.15 1.02 1.17 (0.13) (0.02) (0.69) (0.84)
2003 6.96 0.14 1.77 1.91 (0.14) -- (0.70) (0.84)
CLASS A
2008(b) $9.12 $0.08 $(0.55) $(0.47) $(0.06)* -- $(0.36)* $(0.42)
2007 9.19 0.16 0.61 0.77 (0.13) $(0.27) (0.44) (0.84)
2006 8.23 0.18 1.62 1.80 (0.16) (0.18) (0.50) (0.84)
2005 8.38 0.16 0.53 0.69 (0.15) (0.09) (0.60) (0.84)
2004 8.06 0.19 0.97 1.16 (0.11) (0.01) (0.72) (0.84)
2003 6.96 0.13 1.81 1.94 (0.13) -- (0.71) (0.84)
CLASS B
2008(b) $8.63 $0.04 $(0.52) $(0.48) $(0.06)* -- $(0.36)* $(0.42)
2007 8.80 0.09 0.58 0.67 (0.13) $(0.27) (0.44) (0.84)
2006 7.97 0.11 1.56 1.67 (0.12) (0.18) (0.54) (0.84)
2005 8.20 0.08 0.53 0.61 (0.09) (0.09) (0.66) (0.84)
2004 7.96 0.08 1.00 1.08 (0.08) (0.01) (0.75) (0.84)
2003 6.96 0.12 1.72 1.84 (0.12) -- (0.72) (0.84)
CLASS C
2008(b) $8.67 $0.04 $(0.51) $(0.47) $(0.06)* -- $(0.36)* $(0.42)
2007 8.84 0.09 0.58 0.67 (0.13) $(0.27) (0.44) (0.84)
2006 8.00 0.11 1.57 1.68 (0.12) (0.18) (0.54) (0.84)
2005 8.23 0.09 0.52 0.61 (0.09) (0.09) (0.66) (0.84)
2004 7.98 0.11 0.98 1.09 (0.06) (0.01) (0.77) (0.84)
2003 6.96 0.08 1.78 1.86 (0.08) -- (0.76) (0.84)
CLASS I
2008(g) $8.94 $0.08 $(0.40) $(0.32) $(0.06)* -- $(0.36)* $(0.42)
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
---------------------------------------------------------------------
Net Asset Net Assets Operating Operating
Period Value, End of Net Expenses Expenses Portfolio
Ended Redemption End of Total Period Investment Net of Before Turnover
December 31 Fees (a) Period Return+ (in 000's) Income Reimbursements Reimbursements Rate++
- ----------- ---------- --------- ------- ---------- ---------- -------------- -------------- ---------
CLASS AAA
2008(b) $0.00(c) $8.20 (5.0)% $140,539 1.78%(d) 1.42%(d)(e) 1.42%(d)(e) 8%
2007 0.00(c) 9.08 8.6 161,930 1.78 1.42(e) 1.41 19
2006 0.00(c) 9.16 23.1 157,645 2.02 1.44 1.44 24
2005 0.00(c) 8.20 8.4 124,437 1.79 1.50 1.50 18
2004 0.00(c) 8.36 15.6 81,471 1.85 1.82 1.82(f) 17
2003 -- 8.03 29.5 43,526 1.92 2.00 2.00 39
CLASS A
2008(b) $0.00(c) $8.23 (5.1)% $254,724 1.79%(d) 1.42%(d)(e) 1.42%(d)(e) 8%
2007 0.00(c) 9.12 8.7 261,468 1.78 1.42(e) 1.41 19
2006 0.00(c) 9.19 23.0 201,124 2.02 1.44 1.44 24
2005 0.00(c) 8.23 8.5 81,869 1.88 1.50 1.50 18
2004 0.00(c) 8.38 15.4 10,165 2.30 1.82 1.82(f) 17
2003 -- 8.06 29.9 307 1.67 2.00 2.00 39
CLASS B
2008(b) $0.00(c) $7.73 (5.5)% $ 305 1.04%(d) 2.17%(d)(e) 2.17%(d)(e) 8%
2007 0.00(c) 8.63 7.9 343 1.02 2.17(e) 2.16 19
2006 0.00(c) 8.80 22.1 347 1.28 2.19 2.19 24
2005 0.00(c) 7.97 7.6 331 1.01 2.25 2.25 18
2004 0.00(c) 8.20 14.5 333 1.08 2.57 2.57(f) 17
2003 -- 7.96 28.4 71 1.72 2.75 2.75 39
CLASS C
2008(b) $0.00(c) $7.78 (5.4)% $321,777 1.04%(d) 2.17%(d)(e) 2.17%(d)(e) 8%
2007 0.00(c) 8.67 7.8 316,009 1.04 2.17(e) 2.16 19
2006 0.00(c) 8.84 22.1 209,691 1.27 2.19 2.19 24
2005 0.00(c) 8.00 7.6 94,118 1.14 2.25 2.25 18
2004 0.00(c) 8.23 14.6 10,245 1.33 2.57 2.57(f) 17
2003 -- 7.98 28.7 307 1.11 2.75 2.75 39
CLASS I
2008(g) $0.00(c) $8.20 (5.0)% $ 1,060 2.14%(d) 1.17%(d)(e) 1.17%(d)(e) 8%
- ----------
+ 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 a 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 years
ended December 31, 2007, 2006, 2005, 2004, and 2003 would have been 47%,
37%, 33%, 36%, and 41%, respectively.
* Based on fiscal year to date book income. Amounts are subject to change and
recharacterization at fiscal year end.
(a) Per share data is calculated using the average shares outstanding method.
(b) For the six months ended June 30, 2008, unaudited.
(c) Amount represents less than $0.005 per share.
(d) Annualized.
(e) The ratio does not include a reduction of expenses for custodian fee
credits on cash balances maintained with the custodian. Including such
custodian fee credits, the expense ratio for the fiscal year ended December
31, 2007 would have been 1.41% (Class AAA and Class A) and 2.16% (Class B
and Class C). For the six months ended June 30, 2008, the effect of the
custodian fee credits was minimal.
(f) Under an expense deferral agreement with the Adviser, the Fund repaid the
Adviser $66,719 during 2004, representing previously reimbursed expenses
from the Adviser. During the fiscal year ended December 31, 2004, had such
payment not been made, the expense ratio would have been 1.71%, 1.71%,
2.46%, and 2.46% for Class AAA, Class A, Class B, and Class C,
respectively.
(g) From the commencement of offering Class I Shares on January 11, 2008
through June 30, 2008, unaudited.
See accompanying notes to financial statements.
10
THE GABELLI UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. ORGANIZATION. The Gabelli Utilities Fund (the "Fund") was organized on May
18, 1999 as a Delaware statutory 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 commenced operations on August 31,
1999. The Fund's primary objective is to provide a high level of total return
through a combination of capital appreciation and current income.
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.
11
THE GABELLI UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
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
- 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) APPRECIATION)*
- ---------------- -------------- -----------------------
Level 1 - Quoted Prices $636,136,640 --
Level 2 - Other Significant
Observable Inputs 78,662,726 $5,449
Level 3 - Significant
Unobservable Inputs 0 --
------------ ------
TOTAL $714,799,366 $5,449
============ ======
- ----------
* 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 $ 0
Accrued discounts/premiums --
Realized gain (loss) --
Change in unrealized appreciation/depreciation --
Net purchases (sales) --
Transfers in and/or out of Level 3 --
---
BALANCE AS OF 6/30/08 $ 0
===
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.
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements with
primary government securities dealers recognized by the Federal Reserve Board,
with member banks of the Federal Reserve System, or with other brokers or
dealers that meet credit guidelines established by the Adviser and reviewed
12
THE GABELLI UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
by the Board. Under the terms of a typical repurchase agreement, the Fund takes
possession of an underlying debt obligation subject to an obligation of the
seller to repurchase, and the Fund to resell, the obligation at an agreed-upon
price and time, thereby determining the yield during the Fund's holding period.
The Fund will always receive and maintain securities as collateral whose market
value, including accrued interest, will be at least equal to 102% of the dollar
amount invested by the Fund in each agreement. The Fund will make payment for
such securities only upon physical delivery or upon evidence of book entry
transfer of the collateral to the account of the custodian. To the extent that
any repurchase transaction exceeds one business day, the value of the collateral
is marked-to-market on a daily basis to maintain the adequacy of the collateral.
If the seller defaults and the value of the collateral declines or if bankruptcy
proceedings are commenced with respect to the seller of the security,
realization of the collateral by the Fund may be delayed or limited. At June 30,
2008, there were no open repurchase agreements.
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. In a swap, a set of future cash flows are
exchanged between two counterparties. One of these cash flow streams will
typically be based on a reference interest rate combined with the performance of
a notional value of shares of a stock. The other will be based on the
performance of the shares of a stock. There is no assurance that the swap
contract counterparties will be able to meet their obligations pursuant to the
swap contracts, or that, in the event of default, the Fund will succeed in
pursuing contractual remedies. The Fund thus assumes the risk that it may be
delayed in or prevented from obtaining payments owed to it pursuant to the swap
contracts. The creditworthiness of the swap contract counterparties is closely
monitored in order to minimize the risk. Depending on the general state of
short-term interest rates and the returns of the Fund's portfolio securities at
that point in time, such a default could negatively affect the Fund's ability to
make dividend payments. In addition, at the time 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 a contract for difference swap with Bear, Stearns
International Limited. Details of the swap at June 30, 2008 are as follows:
NOTIONAL EQUITY SECURITY INTEREST RATE/ TERMINATION NET UNREALIZED
AMOUNT RECEIVED EQUITY SECURITY PAID DATE APPRECIATION
- ------------------------ ----------------------- -------------------------------- ----------- --------------
Market Value Overnight LIBOR plus 40 bps plus
Appreciation on: Market Value Depreciation on:
$166,458 (20,000 Shares) International Power plc International Power plc 09/15/08 $5,449
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
13
THE GABELLI UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
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.
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 15% 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.
14
THE GABELLI UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
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 of 2.00% above the federal funds
rate on outstanding balances. This amount, if any, would be shown as "interest
expense" in the Statement of Operations.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions to shareholders are recorded on the
ex-dividend date. Distributions to shareholders are based on income and capital
gains as determined in accordance with federal income tax regulations, which may
differ from income and capital gains as determined under U.S. generally accepted
accounting principles. These differences are primarily due to differing
treatments of income and gains on various investment securities and foreign
currency transactions held by the Fund, timing differences, and differing
characterizations of distributions made by the Fund. Distributions made in
excess of current earnings and profits on a tax basis are treated as a
non-taxable return of capital. 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) .. $19,674,262
Net long-term capital gains ................. 10,311,015
Return of capital ........................... 33,189,871
-----------
Total distributions paid .................... $63,175,148
===========
15
THE GABELLI UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
Since January 2000, the Fund has had a fixed distribution policy. Under the
policy, the Fund declares and pays monthly distributions from net investment
income, capital gains, and paid-in capital. The actual source of the
distribution is determined after the end of the year. Pursuant to this policy,
distributions during the year are made in excess of required distributions. To
the extent such distributions are made from current earnings and profits, they
are considered ordinary income or long-term capital gains. The Fund's current
distribution policy may restrict the Fund's ability to pass through to
shareholders all of its net realized long-term capital gains as a Capital Gain
Dividend, subject to the maximum federal income tax rate of 15%, and may cause
such gains to be treated as ordinary income subject to a maximum federal income
tax rate of 35%. The Fund continues to evaluate its distribution policy in light
of ongoing economic and market conditions and may change the amount of the
monthly distributions in the future. The current annualized rate is $0.84 per
share.
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
UNREALIZED UNREALIZED NET UNREALIZED
COST APPRECIATION DEPRECIATION APPRECIATION
------------ ------------ ------------ --------------
Investments ..... $650,942,473 $101,118,055 $(37,261,162) $63,856,893
Swap contracts .. -- 5,449 -- 5,449
------------ ------------ ------------ -----------
$650,942,473 $101,123,504 $(37,261,162) $63,862,342
============ ============ ============ ===========
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.
The Fund pays each Trustee who is not considered to be an affiliated person an
annual retainer of $6,000 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. In addition, the
Audit
16
THE GABELLI UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
Committee Chairman receives an annual fee of $1,000, and 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 $70,944,132 and $37,924,302, 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
$648,800 and $14,675,000, respectively.
6. TRANSACTIONS WITH AFFILIATES. During the six months ended June 30, 2008, the
Fund paid brokerage commissions on security trades of $89,495 to Gabelli &
Company. Additionally, Gabelli & Company informed the Fund that it received
$265,142 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. During the
six months ended June 30, 2008, there were no borrowings under the line of
credit.
8. SHARES OF BENEFICIAL INTEREST. The Fund offers five classes of shares - Class
AAA Shares, Class A Shares, Class B Shares, Class C Shares, and Class I Shares.
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 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.
17
THE GABELLI UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
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 the fiscal year ended
December 31, 2007 amounted to $1,269 and $(2,545), 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 capital stock 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 ....................................... 2,634,108 $ 22,259,583 5,227,303 $ 48,327,421
Shares issued upon reinvestment of distributions .. 634,724 5,270,531 1,128,114 10,369,691
Shares redeemed ................................... (3,947,183) (33,370,353) (5,745,845) (52,675,008)
---------- ------------ ---------- ------------
Net increase (decrease) ........................ (678,351) $ (5,840,239) 609,572 $ 6,022,104
========== ============ ========== ============
CLASS A CLASS A
------------------------- -------------------------
Shares sold ....................................... 5,027,019 $ 42,736,037 12,159,549 $113,155,380
Shares issued upon reinvestment of distributions .. 757,441 6,316,832 1,320,585 12,182,769
Shares redeemed ................................... (3,506,366) (29,615,560) (6,701,549) (61,877,848)
---------- ------------ ---------- ------------
Net increase ................................... 2,278,094 $ 19,437,309 6,778,585 $ 63,460,301
========== ============ ========== ============
CLASS B CLASS B
------------------------- -------------------------
Shares issued upon reinvestment of distributions .. 190 $ 1,494 315 $ 2,770
Shares redeemed ................................... (470) (3,783) (1) (10)
---------- ------------ ---------- ------------
Net increase (decrease) ........................ (280) $ (2,289) 314 $ 2,760
========== ============ ========== ============
CLASS C CLASS C
------------------------- -------------------------
Shares sold ....................................... 6,670,554 $ 53,690,942 14,155,988 $126,262,431
Shares issued upon reinvestment of distributions .. 1,292,827 10,211,204 1,877,177 16,533,227
Shares redeemed ................................... (3,018,052) (24,046,025) (3,313,238) (29,238,318)
---------- ------------ ---------- ------------
Net increase ................................... 4,945,329 $ 39,856,121 12,719,927 $113,557,340
========== ============ ========== ============
CLASS I*
-------------------------
Shares sold 131,519 $ 1,150,370
Shares issued upon reinvestment of distributions .. 5,021 41,710
Shares redeemed ................................... (7,292) (60,383)
---------- ------------
Net increase ................................... 129,248 $ 1,131,697
========== ============
- ----------
* From the commencement of offering Class I Shares on January 11, 2008.
18
THE GABELLI UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
9.CONCENTRATION RISKS. The Fund invests a high percentage of its assets in the
utilities sector. As a result, the Fund may be more susceptible to economic,
political, and regulatory developments, positive or negative, and may experience
increased volatility to the Fund's NAV and a magnified effect in its total
return.
10. 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.
11. 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.
19
THE GABELLI UTILITIES FUND
BOARD CONSIDERATION AND RE-APPROVAL OF INVESTMENT ADVISORY AGREEMENT
(UNAUDITED)
At its meeting on May 21, 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 supervisory,
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 longer-term performance of the Fund since inception against a peer
group of large-cap value funds and against the customized peer group selected by
Lipper. The Independent Board Members noted that the Fund's performance was
within the top third of its peer groups in longer-term performance. The
Independent Board Members also noted that performance had been good on an
absolute basis and that the Fund had suffered in comparative rankings due to its
more intensive focus on smaller-capitalization companies.
PROFITABILITY. The Independent Board Members reviewed summary data regarding the
lack of profitability of the Fund to the Adviser both with an administrative
overhead charge and without a charge. The Independent Board Members also noted
that a substantial portion of the Fund's portfolio transactions were executed by
an affiliated broker, and that the affiliated broker received distribution fees
and commissions from the Fund. 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. The Independent Board Members noted that the Fund
needed significantly more assets before any potential economies of scale could
be realized.
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 historical losses or
diminished profitability of the Fund to the Adviser.
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 utilities funds and the
customized Lipper group and noted that the advisory fee includes substantially
all administrative services of the Fund as well as the investment advisory
services of the Adviser. The Independent Board Members noted that the Fund's
expense ratios were above average and the Fund's size was average within these
groups. 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 the Adviser.
CONCLUSIONS. The Independent Board Members concluded that the Fund enjoyed
highly experienced portfolio management services, good ancillary services, and
an excellent performance record. The Independent Board Members also concluded
that the Fund's expense ratios and low profitability to the Adviser of managing
the Fund were reasonable 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.
20
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GABELLI/GAMCO FUNDS AND YOUR PERSONAL PRIVACY
WHO ARE WE?
The Gabelli/GAMCO Funds are investment companies registered with the Securities
and Exchange Commission under the Investment Company Act of 1940. We are managed
by Gabelli Funds, LLC or Teton Advisors, Inc., which are affiliated with
GAMCO Investors, Inc. GAMCO Investors, Inc. is a publicly held company that has
subsidiaries that provide investment advisory or brokerage services for a
variety of clients.
WHAT KIND OF NON-PUBLIC INFORMATION DO WE COLLECT ABOUT YOU IF YOU BECOME A
SHAREHOLDER?
If you apply to open an account directly with us, you will be giving us some
non-public information about yourself. The non-public information we collect
about you is:
- - INFORMATION YOU GIVE US ON YOUR APPLICATION FORM. This could include your
name, address, telephone number, social security number, bank account
number, and other information.
- - INFORMATION ABOUT YOUR TRANSACTIONS WITH US, ANY TRANSACTIONS WITH OUR
AFFILIATES, AND TRANSACTIONS WITH THE ENTITIES WE HIRE TO PROVIDE SERVICES
TO YOU. This would include information about the shares that you buy or
redeem. If we hire someone else to provide services--like a transfer
agent--we will also have information about the transactions that you
conduct through them.
WHAT INFORMATION DO WE DISCLOSE AND TO WHOM DO WE DISCLOSE IT?
We do not disclose any non-public personal information about our customers or
former customers to anyone other than our affiliates, our service providers who
need to know such information, and as otherwise permitted by law. If you want to
find out what the law permits, you can read the privacy rules adopted by the
Securities and Exchange Commission. They are in volume 17 of the Code of Federal
Regulations, Part 248. The Commission often posts information about its
regulations on its website, www.sec.gov.
WHAT DO WE DO TO PROTECT YOUR PERSONAL INFORMATION?
We restrict access to non-public personal information about you to the people
who need to know that information in order to provide services to you or the
Fund and to ensure that we are complying with the laws governing the securities
business. We maintain physical, electronic, and procedural safeguards to keep
your personal information confidential.
GABELLI FAMILY OF FUNDS
VALUE
GABELLI ASSET FUND
Seeks to invest primarily in a diversified portfolio of common stocks selling at
significant discounts to their private market value. The Fund's primary
objective is growth of capital. (MULTICLASS)
PORTFOLIO MANAGER: MARIO J.GABELLI, CFA
GABELLI BLUE CHIP VALUE FUND
Seeks long term growth of capital through investment primarily in the common
stocks of established companies which are temporarily out of favor. The fund's
objective is to identify a catalyst or sequence of events that will return the
company to a higher value. (MULTICLASS)
PORTFOLIO MANAGER: BARBARA MARCIN, CFA
GAMCO WESTWOOD EQUITY FUND
Seeks to invest primarily in the common stock of well seasoned companies that
have recently reported positive earnings surprises and are trading below
Westwood's proprietary growth rate estimates. The Fund's primary objective is
capital appreciation. (MULTICLASS)
PORTFOLIO MANAGER: SUSAN M. BYRNE
FOCUSED VALUE
GABELLI VALUE FUND
Seeks to invest in securities of companies believed to be undervalued. The
Fund's primary objective is long-term capital appreciation. (MULTICLASS)
PORTFOLIO MANAGER: MARIO J. GABELLI, CFA
SMALL CAP VALUE
GABELLI SMALL CAP FUND
Seeks to invest primarily in common stock of smaller companies (market
capitalizations at the time of investment of $2 billion or less) believed to
have rapid revenue and earnings growth potential. The Fund's primary objective
is capital appreciation. (MULTICLASS)
PORTFOLIO MANAGER: MARIO J. GABELLI, CFA
GAMCO WESTWOOD SMALLCAP EQUITY FUND
Seeks to invest primarily in smaller capitalization equity securities - market
caps of $2.5 billion or less. The Fund's primary objective is long-term capital
appreciation. (MULTICLASS)
PORTFOLIO MANAGER: NICHOLAS F. GALLUCCIO
GABELLI WOODLAND SMALL CAP VALUE FUND
Seeks to invest primarily in the common stocks of smaller companies (market
capitalizations generally less than $3.0 billion) believed to be undervalued
with shareholder oriented management teams that are employing strategies to grow
the company's value. The Fund's primary objective is capital appreciation.
(MULTICLASS)
PORTFOLIO MANAGER: ELIZABETH M. LILLY, CFA
GROWTH
GAMCO GROWTH FUND
Seeks to invest primarily in large cap stocks believed to have favorable, yet
undervalued, prospects for earnings growth. The Fund's primary objective is
capital appreciation. (MULTICLASS)
PORTFOLIO MANAGER: HOWARD F. WARD, CFA
GAMCO INTERNATIONAL GROWTH FUND
Seeks to invest in the equity securities of foreign issuers with long-term
capital appreciation potential. The Fund offers investors global
diversification. (MULTICLASS)
PORTFOLIO MANAGER: CAESAR BRYAN
AGGRESSIVE GROWTH
GAMCO GLOBAL GROWTH FUND
Seeks capital appreciation through a disciplined investment program focusing on
the globalization and interactivity of the world's marketplace. The Fund invests
in companies at the forefront of accelerated growth. The Fund's primary
objective is capital appreciation. (MULTICLASS)
TEAM MANAGED
MICRO-CAP
GAMCO WESTWOOD MIGHTY MITES(SM) FUND
Seeks to invest in micro-cap companies that have market capitalizations of $300
million or less. The Fund's primary objective is long-term capital appreciation.
(MULTICLASS)
TEAM MANAGED
EQUITY INCOME
GABELLI EQUITY INCOME FUND
Seeks to invest primarily in equity securities with above average market yields.
The Fund pays monthly dividends and seeks a high level of total return with an
emphasis on income. (MULTICLASS)
PORTFOLIO MANAGER: MARIO J. GABELLI, CFA
GAMCO WESTWOOD BALANCED FUND
Seeks to invest in a balanced and diversified portfolio of stocks and bonds. The
Fund's primary objective is both capital appreciation and current income.
(MULTICLASS)
CO-PORTFOLIO MANAGERS: SUSAN M. BYRNE
MARK FREEMAN, CFA
GAMCO WESTWOOD INCOME FUND
Seeks to provide a high level of current income as well as long-term capital
appreciation by investing in income producing equity and fixed income
securities. (MULTICLASS)
PORTFOLIO MANAGER: BARBARA MARCIN, CFA
SPECIALTY EQUITY
GAMCO GLOBAL CONVERTIBLE SECURITIES FUND
Seeks to invest principally in bonds and preferred stocks which are convertible
into common stock of foreign and domestic companies. The Fund's primary
objective is total return through a combination of current income and capital
appreciation. (MULTICLASS)
TEAM MANAGED
GAMCO GLOBAL OPPORTUNITY FUND
Seeks to invest in common stock of companies which have rapid growth in revenues
and earnings and potential for above average capital appreciation or are
undervalued. The Fund's primary objective is capital appreciation. (MULTICLASS)
TEAM MANAGED
GABELLI SRI FUND
Seeks to invest in common and preferred stocks of companies that meet the Fund's
guidelines for social responsibility at the time of investment, looking to avoid
companies in tobacco, alcohol, and gaming, defense/weapons contractors, and
manufacturers of abortifacients. The Fund's primary objective is capital
appreciation. (MULTICLASS)
PORTFOLIO MANAGER: CHRISTOPHER C. DESMARAIS
SECTOR
GAMCO GLOBAL TELECOMMUNICATIONS FUND
Seeks to invest in telecommunications companies throughout the world - targeting
undervalued companies with strong earnings and cash flow dynamics. The Fund's
primary objective is capital appreciation. (MULTICLASS)
TEAM MANAGED
GAMCO GOLD FUND
Seeks to invest in a global portfolio of equity securities of gold mining and
related companies. The Fund's objective is long-term capital appreciation.
Investment in gold stocks is considered speculative and is affected by a variety
of worldwide economic, financial, and political factors. (MULTICLASS)
PORTFOLIO MANAGER: CAESAR BRYAN
GABELLI UTILITIES FUND
Seeks to provide a high level of total return through a combination of capital
appreciation and current income. (MULTICLASS)
TEAM MANAGED
MERGER AND ARBITRAGE
GABELLI ABC FUND
Seeks to invest in securities with attractive opportunities for appreciation or
investment income. The Fund's primary objective is total return in various
market conditions without excessive risk of capital loss. (NO-LOAD)
PORTFOLIO MANAGER: MARIO J. GABELLI, CFA
CONTRARIAN
GAMCO MATHERS FUND
Seeks long-term capital appreciation in various market conditions without
excessive risk of capital loss. (NO-LOAD)
PORTFOLIO MANAGER: HENRY VAN DER EB, CFA
COMSTOCK CAPITAL VALUE FUND
Seeks capital appreciation and current income. The Fund may use either long or
short positions to achieve its objective. (MULTICLASS)
PORTFOLIO MANAGER: MARTIN WEINER, CFA
COMSTOCK STRATEGY FUND
The Fund emphasizes investments in debt securities, which maximize total return
in light of credit risk, interest rate risk, and the risk associated with the
length of maturity of debt instruments. (MULTICLASS)
PORTFOLIO MANAGER: MARTIN WEINER, CFA
FIXED INCOME
GAMCO WESTWOOD INTERMEDIATE BOND FUND
Seeks to invest in a diversified portfolio of bonds with various maturities. The
Fund's primary objective is total return. (MULTICLASS)
PORTFOLIO MANAGER: MARK FREEMAN, CFA
CASH MANAGEMENT-MONEY MARKET
GABELLI U.S. TREASURY MONEY MARKET FUND
Seeks to invest exclusively in short-term U.S. Treasury securities. The Fund's
primary objective is to provide high current income consistent with the
preservation of principal and liquidity. (NO-LOAD)
CO-PORTFOLIO MANAGER: JUDITH A. RANERI
CO-PORTFOLIO MANAGER: RONALD S. EAKER
AN INVESTMENT IN THE ABOVE MONEY MARKET FUND IS NEITHER INSURED NOR GUARANTEED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY GOVERNMENT AGENCY. ALTHOUGH
THE FUND SEEKS TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00 PER SHARE, IT
IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUND.
THE FUNDS MAY INVEST IN FOREIGN SECURITIES WHICH INVOLVE RISKS NOT ORDINARILY
ASSOCIATED WITH INVESTMENTS IN DOMESTIC ISSUES, INCLUDING CURRENCY FLUCTUATION,
ECONOMIC, AND POLITICAL RISKS.
TO RECEIVE A PROSPECTUS, CALL 800-GABELLI (422-3554). INVESTORS SHOULD CAREFULLY
CONSIDER THE INVESTMENT OBJECTIVES, RISKS, CHARGES, AND EXPENSES OF THE FUND
BEFORE INVESTING. THE PROSPECTUS CONTAINS MORE INFORMATION ABOUT THIS AND OTHER
MATTERS AND SHOULD BE READ CAREFULLY BEFORE INVESTING.
THE GABELLI UTILITIES 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.
Vincent D. Enright
FORMER SENIOR VICE PRESIDENT
AND CHIEF FINANCIAL OFFICER
KEYSPAN CORP.
Mary E. Hauck
FORMER SENIOR PORTFOLIO MANAGER
GABELLI-O'CONNOR FIXED INCOME
MUTUAL FUND MANAGEMENT CO.
Werner J. Roeder, MD
MEDICAL DIRECTOR
LAWRENCE HOSPITAL
OFFICERS
Bruce N. Alpert
PRESIDENT
Agnes Mullady
SECRETARY AND 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 Utilities Fund. It is not authorized for distribution to prospective
investors unless preceded or accompanied by an effective prospectus.
GAB470Q208SR
(GRAPHIC)
THE
GABELLI
UTILITIES
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 Utilities Fund
-------------------------------------------------------------------
By (Signature and Title)* /s/ Bruce N. Alpert
-------------------------------------------------------
Bruce N. Alpert, Principal Executive Officer
Date 9/3/08
----------------------------------------------------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Bruce N. Alpert
-------------------------------------------------------
Bruce N. Alpert, Principal Executive Officer
Date 9/3/08
----------------------------------------------------------------------------
By (Signature and Title)* /s/ Agnes Mullady
-------------------------------------------------------
Agnes Mullady,
Principal Financial Officer & Treasurer
Date 9/3/08
----------------------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.