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 811-08560
GAMCO International Growth Fund, Inc.
(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: December 31, 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.
GAMCO INTERNATIONAL GROWTH FUND, INC.
ANNUAL REPORT
DECEMBER 31, 2008
TO OUR SHAREHOLDERS,
The Sarbanes-Oxley Act requires a fund's principal executive and financial
officers to certify the entire contents of the semi-annual and annual
shareholder reports in a filing with the Securities and Exchange Commission on
Form N-CSR. This certification would cover the portfolio manager's commentary
and subjective opinions if they are attached to or a part of the financial
statements. Many of these comments and opinions would be difficult or impossible
to certify.
Because we do not want our portfolio managers to eliminate their opinions
and/or restrict their commentary to historical facts, we have separated their
commentary from the financial statements and investment portfolio and have sent
it to you separately. Both the commentary and the financial statements,
including the portfolio of investments, will be available on our website at
www.gabelli.com/funds.
Enclosed are the audited financial statements and the investment portfolio
as of December 31, 2008 with a description of factors that affected the
performance during the past year.
PERFORMANCE DISCUSSION (UNAUDITED)
For the year ended December 31, 2008 the net asset value of the GAMCO
International Growth Fund (the "Fund") (Class AAA) depreciated 43.21% which
compares with declines of 46.85% for the Lipper International Multi-Cap Growth
Fund Average and 43.06% for the Morgan Stanley Capital International ("MSCI")
Europe, Australasia, and the Far East ("EAFE") Index.
It is disheartening to report that for the year ending December 2008, there
were only four companies which posted positive returns. The top performer was
the agricultural company based in Switzerland, Syngenta (1.2% of net assets as
of December 31, 2008), followed by another Materials company Harmony Gold Mining
Co. (1.9%). Closing out the group were two of our Healthcare holdings,
AstraZeneca (1.4%) and GlaxoSmithKline (1.6%).
The largest losers for 2008 were mostly Energy and Material holdings. They
were Xstrata (0.9%), Rio Tinto (1.3%), Tokai Carbon Co. (1.0%), Technip (0.8%),
Petroleo Brasilerio (2.4%), and Saipem (2.0%) as well as the machining company,
CNH Global (0.4%) and the Coke bottler, Hellenic Bottling (1.4%). Others to
disappoint were the Egyptian telecommunications company, Orascom Telecom Holding
(0.9%) and the watch company, The Swatch Group (1.6%).
Sincerely yours,
/s/ Bruce N. Alpert
Bruce N. Alpert
President
February 20, 2009
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE GAMCO
INTERNATIONAL GROWTH FUND CLASS AAA SHARES, THE LIPPER INTERNATIONAL
MULTI-CAP GROWTH FUND AVERAGE, AND THE MSCI EAFE INDEX
(PERFOREMANCE GRAPH)
GAMCO LIPPER
INTERNATIONAL INTERNATIONAL
GROWTH FUND MULTI-CAP GROWTH MSCI
CLASS AAA SHARES FUND AVERAGE EAFE INDEX
---------------- ---------------- ------------
6/30/1995 10,000 10,000 10,000
12/31/1995 10,980 10,605 10,855
12/31/1996 13,420 12,132 11,545
12/31/1997 14,399 12,799 11,783
12/31/1998 16,901 14,466 14,179
12/31/1999 25,760 20,377 18,050
12/31/2000 21,512 17,198 15,530
12/31/2001 16,409 13,464 12,236
12/31/2002 14,092 11,220 10,320
12/31/2003 19,260 15,116 14,362
12/31/2004 22,496 17,632 17,335
12/31/2005 24,856 20,336 19,765
12/31/2006 30,120 25,207 25,074
12/31/2007 33,394 29,094 27,991
12/31/2008 18,964 17,135 15,938
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. The performance
tables and graph do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares.
COMPARATIVE RESULTS
AVERAGE ANNUAL RETURNS THROUGH DECEMBER 31, 2008(A)
Since
Inception
Quarter 1 Year 3 Year 5 Year 10 Year (6/30/95)
------- ------ ------ ------ ------- ---------
GAMCO INTERNATIONAL GROWTH FUND CLASS AAA .... (18.68)% (43.21)% (8.62)% (0.31)% 1.16% 4.85%
MSCI EAFE Index .............................. (19.90) (43.06) (6.92) 2.10 1.18 3.51
Lipper International Multi-Cap Growth Fund
Average ................................... (23.24) (46.85) (8.38) 1.14 1.46 4.07
Class A ...................................... (18.48) (43.04) (8.54) (0.24) 1.32 4.98
(23.16)(b) (46.32)(b) (10.32)(b) (1.42)(b) 0.73(b) 4.52(b)
Class B ...................................... (18.82) (43.65) (9.32) (1.06) 0.55 4.38
(22.88)(c) (46.47)(c) (10.24)(c) (1.46)(c) 0.55 4.38
Class C ...................................... (18.87) (43.65) (9.32) (1.01) 0.47 4.32
(19.68)(d) (44.21)(d) (9.32) (1.01) 0.47 4.32
Class I ...................................... (18.59) (43.05) (8.54) (0.25) 1.19 4.87
IN THE CURRENT PROSPECTUS, THE EXPENSE RATIOS FOR CLASS AAA, A, B, C, AND I
SHARES ARE 1.91%, 1.91%, 2.66%, 2.66%, AND 1.66%, 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 OF 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.
INVESTING IN FOREIGN SECURITIES INVOLVES RISKS NOT ORDINARILY ASSOCIATED
WITH INVESTMENTS IN DOMESTIC ISSUES, INCLUDING CURRENCY FLUCTUATION,
ECONOMIC, AND POLITICAL RISKS. THE CLASS AAA SHARES NET ASSET VALUES
("NAVS") PER SHARE ARE USED TO CALCULATE PERFORMANCE FOR THE PERIODS 0
PRIOR TO THE ISSUANCE OF CLASS A SHARES, CLASS B SHARES, CLASS C SHARES,
AND CLASS I SHARES ON JULY 25, 2001, JANUARY 17, 2001, DECEMBER 17 2000,
AND JANUARY 11, 2008, RESPECTIVELY .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 MORGAN STANLEY CAPITAL INTERNATIONAL ("MSCI")
EUROPE, AUSTRALASIA, AND THE FAR EAST ("EAFE") INDEX IS AN UNMANAGED
INDICATOR OF INTERNATIONAL STOCK MARKET PERFORMANCE, WHILE THE LIPPER
INTERNATIONAL MULTI-CAP GROWTH 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, ONE YEAR, THREE YEAR, AND
FIVE YEAR PERIODS OF 5%, 5%, 3%, AND 2%, RESPECTIVELY, OF THE FUND'S NAV
PER SHARE AT THE TIME OF PURCHASE OR SALE, WHICHEVER IS LOWER. CLASS B
SHARES ARE NOT AVAILABLE FOR NEW PURCHASES.
(d) PERFORMANCE RESULTS INCLUDE THE DEFERRED SALES CHARGES FOR THE CLASS C
SHARES UPON REDEMPTION AT THE END OF THE QUARTER AND ONE YEAR PERIODS OF 1%
OF THE FUND'S NAV PER SHARE AT THE TIME OF PURCHASE OR SALE, WHICHEVER IS
LOWER.
2
GAMCO INTERNATIONAL GROWTH FUND, INC.
DISCLOSURE OF FUND EXPENSES (UNAUDITED)
For the Six Month Period from July 1, 2008 through December 31, 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. The "Annualized Expense Ratio" represents the actual expenses
for the last six months and may be different from the expense ratio in the
Financial Highlights which is for the year ended December 31, 2008.
Beginning Ending
Account Account Annualized Expenses
Value Value Expense Paid During
07/01/08 12/31/08 Ratio Period*
--------- --------- ---------- -----------
GAMCO INTERNATIONAL GROWTH FUND, INC.
ACTUAL FUND RETURN
Class AAA $1,000.00 $ 621.30 2.02% $ 8.23
Class A $1,000.00 $ 623.10 2.02% $ 8.24
Class B $1,000.00 $ 618.90 2.76% $11.23
Class C $1,000.00 $ 618.80 2.76% $11.23
Class I $1,000.00 $ 622.20 1.76% $ 7.18
HYPOTHETICAL 5% RETURN
Class AAA $1,000.00 $1,014.98 2.02% $10.23
Class A $1,000.00 $1,014.98 2.02% $10.23
Class B $1,000.00 $1,011.26 2.76% $13.95
Class C $1,000.00 $1,011.26 2.76% $13.95
Class I $1,000.00 $1,016.29 1.76% $ 8.92
* 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.
3
SUMMARY OF PORTFOLIO HOLDINGS (UNAUDITED)
The following table presents portfolio holdings as a percent of total net assets
as of December 31, 2008:
GAMCO INTERNATIONAL GROWTH FUND, INC.
Health Care ............................ 21.2%
Consumer Staples ....................... 19.2%
Materials .............................. 12.9%
Energy ................................. 10.6%
Industrials. ........................... 9.5%
Consumer Discretionary ................. 9.3%
Information Technology ................. 8.1%
Financials. ............................ 4.9%
Telecommunication Services ............. 3.4%
Other Assets and Liabilities (Net) ..... 0.9%
-----
100.0%
=====
THE FUND FILES A COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS WITH THE SECURITIES AND
EXCHANGE COMMISSION (THE "SEC") FOR THE FIRST AND THIRD QUARTERS OF EACH FISCAL
YEAR ON FORM N-Q, THE LAST OF WHICH WAS FILED FOR THE QUARTER ENDED SEPTEMBER
30, 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.
4
GAMCO INTERNATIONAL GROWTH FUND, INC.
SCHEDULE OF INVESTMENTS -- DECEMBER 31, 2008
MARKET
SHARES COST VALUE
- ------ ----------- -----------
COMMON STOCKS -- 99.1%
HEALTH CARE -- 21.2%
9,126 AstraZeneca plc ..................... $ 365,568 $ 371,315
11,000 Bayer AG ............................ 462,774 640,953
6,000 Cochlear Ltd. ....................... 291,000 232,436
23,140 GlaxoSmithKline plc ................. 668,097 430,352
19,000 Novartis AG ......................... 740,906 951,548
7,500 Roche Holding AG .................... 760,421 1,161,128
4,000 Sanofi-Aventis ...................... 275,633 255,853
45,000 Smith & Nephew plc .................. 410,040 287,393
5,500 Synthes Inc. ........................ 372,080 689,341
9,000 Takeda Pharmaceutical Co. Ltd. ...... 440,091 469,101
3,000 William Demant Holding A/S+ ......... 136,249 125,606
----------- -----------
TOTAL HEALTH CARE ................... 4,922,859 5,615,026
----------- -----------
CONSUMER STAPLES -- 19.2%
30,000 Ajinomoto Co. Inc. .................. 353,088 327,424
25,728 British American Tobacco plc ........ 747,820 667,488
35,200 Cadbury plc ......................... 402,382 311,043
25,000 Coca-Cola Hellenic Bottling Co. SA .. 224,682 363,516
50,000 Diageo plc .......................... 445,045 702,543
6,600 Dr. Pepper Snapple Group Inc.+ ...... 164,353 107,250
5,000 Heineken NV ......................... 199,278 153,083
100 Japan Tobacco Inc. .................. 577,985 331,234
10,000 Nestle SA ........................... 443,695 395,981
10,400 Pernod-Ricard SA .................... 314,505 772,593
50,000 Tesco plc ........................... 436,369 260,352
37,000 Woolworths Ltd. ..................... 515,363 689,909
----------- -----------
TOTAL CONSUMER STAPLES .............. 4,824,565 5,082,416
----------- -----------
MATERIALS -- 12.9%
20,930 Anglo American plc .................. 825,999 488,446
10,000 BHP Billiton Ltd. ................... 421,111 212,442
36,000 CRH plc ............................. 460,464 912,190
45,500 Harmony Gold Mining Co. Ltd.+ ....... 334,413 492,552
10,000 Impala Platinum Holdings Ltd. ....... 385,797 147,372
16,000 Rio Tinto plc ....................... 708,546 355,626
1,700 Syngenta AG ......................... 497,160 330,251
60,000 Tokai Carbon Co. Ltd. ............... 268,826 253,261
24,500 Xstrata plc ......................... 577,211 229,256
----------- -----------
TOTAL MATERIALS ..................... 4,479,527 3,421,396
----------- -----------
MARKET
SHARES COST VALUE
- ------ ----------- -----------
ENERGY -- 10.6%
45,000 BP plc .............................. $ 556,109 $ 347,375
15,000 Galp Energia SGPS SA, Cl. B ......... 396,063 150,603
18,000 Imperial Oil Ltd. ................... 673,425 597,667
26,400 Petroleo Brasileiro SA, ADR ......... 293,925 646,536
31,000 Saipem SpA .......................... 583,777 528,723
7,000 Technip SA .......................... 246,175 214,927
6,000 Total SA ............................ 244,247 329,875
----------- -----------
TOTAL ENERGY ........................ 2,993,721 2,815,706
----------- -----------
INDUSTRIALS -- 9.5%
4,000 Bouygues SA ......................... 145,073 169,694
6,000 CNH Global NV ....................... 318,256 93,600
6,400 Fanuc Ltd. .......................... 650,281 458,699
10,880 Finmeccanica SpA .................... 281,105 168,519
20,000 Jardine Matheson Holdings Ltd. ...... 494,307 370,000
15,000 Mitsui & Co. Ltd. ................... 346,589 154,206
13,000 Secom Co. Ltd. ...................... 543,997 670,832
3,500 SMC Corp. ........................... 446,762 360,560
20,000 Toll Holdings Ltd. .................. 187,146 86,411
----------- -----------
TOTAL INDUSTRIALS ................... 3,413,516 2,532,521
----------- -----------
CONSUMER DISCRETIONARY -- 9.3%
30,000 British Sky Broadcasting Group plc .. 333,660 211,858
9,500 Christian Dior SA ................... 564,302 537,122
29,000 Compagnie Financiere
Richemont SA, Cl. A .............. 360,895 552,563
10,000 Hennes & Mauritz AB, Cl. B .......... 410,303 397,751
15,000 The Swatch Group AG ................. 842,050 413,373
11,000 Vivendi ............................. 268,125 358,534
----------- -----------
TOTAL CONSUMER DISCRETIONARY 2,779,335 2,471,201
----------- -----------
INFORMATION TECHNOLOGY -- 8.1%
18,000 Canon Inc. .......................... 700,674 570,322
3,800 Keyence Corp. ....................... 719,306 780,945
17,000 Square Enix Holdings Co. Ltd. ....... 457,695 548,548
600 Yahoo! Japan Corp. .................. 226,444 246,188
----------- -----------
TOTAL INFORMATION TECHNOLOGY ........ 2,104,119 2,146,003
----------- -----------
FINANCIALS -- 4.9%
1,500 Allianz SE .......................... 205,454 159,601
70,000 AXA Asia Pacific Holdings Ltd. ...... 418,637 243,309
40,000 Cheung Kong (Holdings) Ltd. ......... 466,028 381,585
3,969 Reinet Investments SCA+ ............. 307,429 38,620
12,000 Schroders plc ....................... 318,908 150,956
10,000 Standard Chartered plc .............. 205,207 127,961
30,000 Swire Pacific Ltd., Cl. A ........... 338,222 207,817
----------- -----------
TOTAL FINANCIALS .................... 2,259,885 1,309,849
----------- -----------
See accompanying notes to financial statements.
5
GAMCO INTERNATIONAL GROWTH FUND, INC.
SCHEDULE OF INVESTMENTS (CONTINUED) -- DECEMBER 31, 2008
MARKET
SHARES COST VALUE
- ------ ----------- -----------
COMMON STOCKS (CONTINUED)
TELECOMMUNICATION SERVICES -- 3.4%
34,000 China Mobile Ltd. ................... $ 416,725 $ 344,968
8,500 Orascom Telecom Holding SAE, GDR .... 596,452 231,965
10,000 Tele2 AB, Cl. B ..................... 166,941 90,494
90,000 Telstra Corp. Ltd. .................. 386,506 240,933
----------- -----------
TOTAL TELECOMMUNICATION SERVICES .... 1,566,624 908,360
----------- -----------
TOTAL COMMON STOCKS ................. 29,344,151 26,302,478
----------- -----------
TOTAL INVESTMENTS -- 99.1% .......... $29,344,151 26,302,478
===========
OTHER ASSETS AND LIABILITIES
(NET) -- 0.9% .................... 244,816
-----------
NET ASSETS -- 100.0% ................ $26,547,294
===========
- ----------
+ Non-income producing security.
ADR American Depositary Receipt
GDR Global Depositary Receipt
% OF
MARKET MARKET
GEOGRAPHIC DIVERSIFICATION VALUE VALUE
- -------------------------- ------ -----------
Europe ................... 57.8% $15,208,665
Japan .................... 19.7 5,171,320
Asia/Pacific ............. 11.4 3,009,810
North America ............ 5.3 1,394,258
Latin America ............ 2.5 646,536
South Africa ............. 2.4 639,924
Africa/Middle East ....... 0.9 231,965
------ -----------
100.0% $26,302,478
====== ===========
See accompanying notes to financial statements.
6
GAMCO INTERNATIONAL GROWTH FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2008
ASSETS:
Investments, at value (cost $29,344,151) ............ $ 26,302,478
Foreign currency, at value (cost $5,070) ............ 5,677
Cash ................................................ 639
Receivable for investments sold ..................... 878,443
Receivable for Fund shares sold ..................... 5,147
Dividends receivable ................................ 59,075
Prepaid expenses .................................... 23,450
------------
TOTAL ASSETS ........................................ 27,274,909
------------
LIABILITIES:
Payable for Fund shares redeemed .................... 4,521
Payable for investments purchased ................... 84,054
Payable for investment advisory fees ................ 21,633
Payable for distribution fees ....................... 5,227
Payable for legal and audit fees .................... 46,317
Line of credit payable .............................. 509,000
Other accrued expenses .............................. 56,863
------------
TOTAL LIABILITIES ................................... 727,615
------------
NET ASSETS applicable to 1,880,035
shares outstanding ............................... $ 26,547,294
============
NET ASSETS CONSIST OF:
Paid-in capital, each class at $0.001 par value ..... $ 29,651,699
Accumulated distributions in excess of
net investment income ............................ (61,639)
Accumulated distributions in excess of net
realized gain on investments and foreign
currency transactions ............................ (154)
Net unrealized depreciation on investments .......... (3,041,673)
Net unrealized depreciation on foreign
currency translations ............................ (939)
------------
NET ASSETS .......................................... $ 26,547,294
============
SHARES OF CAPITAL STOCK:
CLASS AAA:
Net Asset Value, offering, and redemption price
per share ($25,355,361 / 1,795,613 shares
outstanding; 375,000,000 shares authorized) ...... $ 14.12
============
CLASS A:
Net Asset Value and redemption price per share
($153,278 / 10,694 shares outstanding;
250,000,000 shares authorized) ................... $ 14.33
============
Maximum offering price per share
(NAV / .9425, based on maximum sales
charge of 5.75% of the offering price) ........... $ 15.20
============
CLASS B:
Net Asset Value and offering price per share
($6,538 / 471 shares outstanding;
125,000,000 shares authorized) ................... $ 13.88(a)
============
CLASS C:
Net Asset Value and offering price per share
($24,342 / 1,781 shares outstanding;
125,000,000 shares authorized) ................... $ 13.67(a)
============
CLASS I:
Net Asset Value, offering, and redemption price
per share ($1,007,775 / 71,476 shares
outstanding; 125,000,000 shares authorized) ...... $ 14.10
============
- ----------
(a) Redemption price varies based on the length of time held.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2008
INVESTMENT INCOME:
Dividends (net of foreign taxes of $57,193) ......... $ 1,470,731
Interest ............................................ 1,258
------------
TOTAL INVESTMENT INCOME ............................. 1,471,989
------------
EXPENSES:
Investment advisory fees ............................ 429,988
Distribution fees -- Class AAA ...................... 103,387
Distribution fees -- Class A ........................ 827
Distribution fees -- Class B ........................ 96
Distribution fees -- Class C ........................ 597
Legal and audit fees ................................ 69,524
Custodian fees ...................................... 67,183
Shareholder communications expenses ................. 42,623
Shareholder services fees ........................... 37,281
Registration expenses ............................... 33,303
Accounting fees ..................................... 15,000
Directors' fees ..................................... 12,581
Interest expense .................................... 5,827
Miscellaneous expenses .............................. 42,974
------------
TOTAL EXPENSES ...................................... 861,191
Less: Custodian fee credits ......................... (22)
------------
NET EXPENSES ........................................ 861,169
------------
NET INVESTMENT INCOME ............................... 610,820
------------
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY:
Net realized gain on investments .................... 663,359
Net realized loss on foreign
currency transactions ............................ (22,206)
------------
Net realized gain on investments and
foreign currency transactions .................... 641,153
------------
Net change in unrealized appreciation/
(depreciation) on investments .................... (23,911,667)
Net change in unrealized appreciation/
(depreciation) on foreign currency translations .. (677)
------------
Net change in unrealized appreciation/
(depreciation) on investments and foreign
currency translations ............................ (23,912,344)
------------
NET REALIZED AND UNREALIZED GAIN/(LOSS)
ON INVESTMENTS AND FOREIGN CURRENCY .............. (23,271,191)
------------
NET DECREASE IN NET ASSETS RESULTING
FROM OPERATIONS .................................. $(22,660,371)
============
See accompanying notes to financial statements.
7
GAMCO INTERNATIONAL GROWTH FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
DECEMBER 31, 2008 DECEMBER 31, 2007
----------------- -----------------
OPERATIONS:
Net investment income ............................................ $ 610,820 $ 775,653
Net realized gain on investments
and foreign currency transactions ............................. 641,153 7,292,784
Net change in unrealized appreciation/(depreciation)
on investments and foreign currency translations .............. (23,912,344) (1,731,429)
------------ ------------
NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS .. (22,660,371) 6,337,008
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income
Class AAA ..................................................... (548,187) (738,886)
Class A ....................................................... (2,636) (6,336)
Class B ....................................................... (78) --
Class C ....................................................... (58) (1,095)
Class I ....................................................... (25,524) --
------------ ------------
(576,483) (746,317)
------------ ------------
Net realized gain
Class AAA ..................................................... (704,527) (1,464,957)
Class A ....................................................... (4,255) (12,184)
Class B ....................................................... (188) (317)
Class C ....................................................... (708) (2,896)
Class I ....................................................... (27,608) --
------------ ------------
(737,286) (1,480,354)
------------ ------------
Return of capital
Class AAA ..................................................... (18,811) --
Class A ....................................................... (114) --
Class B ....................................................... (5) --
Class C ....................................................... (19) --
Class I ....................................................... (737) --
------------ ------------
(19,686) --
------------ ------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS .............................. (1,333,455) (2,226,671)
------------ ------------
CAPITAL SHARE TRANSACTIONS:
Class AAA ..................................................... (8,288,279) (11,984,744)
Class A ....................................................... (140,758) 119,418
Class B ....................................................... 154 (49,216)
Class C ....................................................... (56,593) 57,951
Class I ....................................................... 1,752,965 --
------------ ------------
NET DECREASE IN NET ASSETS FROM CAPITAL SHARE TRANSACTIONS ....... (6,732,511) (11,856,591)
------------ ------------
REDEMPTION FEES .................................................. 1,770 614
------------ ------------
NET DECREASE IN NET ASSETS ....................................... (30,724,567) (7,745,640)
NET ASSETS:
Beginning of period .............................................. 57,271,861 65,017,501
------------ ------------
End of period (including undistributed net investment income
of $0 and $3,667 respectively) ................................ $ 26,547,294 $ 57,271,861
============ ============
See accompanying notes to financial statements.
8
GAMCO INTERNATIONAL GROWTH FUND, INC.
FINANCIAL HIGHLIGHTS
Selected data for a share of capital stock outstanding throughout each period:
INCOME FROM INVESTMENT OPERATIONS DISTRIBUTIONS
---------------------------------------- ----------------------------------------------------
Net
Net Asset Net Realized and Total Net
Period Value, Investment Unrealized from Net Realized
Ended Beginning Income Gain (Loss) on Investment Investment Gain on Return of Total
December 31 of Period (Loss)(a) Investments Operations Income Investments Capital Distributions
- ----------- --------- ---------- -------------- ---------- ---------- ----------- --------- -------------
CLASS AAA
2008 $26.19 $0.30 $(11.63) $(11.33) $(0.32) $(0.41) $(0.01) $(0.74)
2007 24.57 0.33 2.34 2.67 (0.35) (0.70) -- (1.05)
2006 20.63 0.38 3.99 4.37 (0.43) -- -- (0.43)
2005 18.75 0.09 1.88 1.97 (0.09) -- -- (0.09)
2004 16.10 0.06 2.62 2.68 (0.05) -- -- (0.05)
CLASS A
2008 $26.45 $0.30 $(11.70) $(11.40) $(0.30) $(0.41) $(0.01) $(0.72)
2007 24.82 0.36 2.33 2.69 (0.36) (0.70) -- (1.06)
2006 20.84 0.36 4.05 4.41 (0.43) -- -- (0.43)
2005 18.92 0.11 1.88 1.99 (0.07) -- -- (0.07)
2004 16.28 0.07 2.61 2.68 (0.06) -- -- (0.06)
CLASS B
2008 $25.70 $0.15 $(11.38) $(11.23) $(0.17) $(0.41) $(0.01) $(0.59)
2007 24.00 0.13 2.27 2.40 0.00(b) (0.70) -- (0.70)
2006 20.18 0.20 3.89 4.09 (0.27) -- -- (0.27)
2005 18.40 (0.06) 1.84 1.78 -- -- -- --
2004 15.87 (0.04) 2.55 2.51 -- -- -- --
CLASS C
2008 $25.08 $0.05 $(11.01) $(10.96) $(0.03) $(0.41) $(0.01) $(0.45)
2007 23.67 0.27 2.10 2.37 (0.26) (0.70) -- (0.96)
2006 20.00 0.00(b) 4.06 4.06 (0.39) -- -- (0.39)
2005 18.24 (0.18) 1.98 1.80 (0.04) -- -- (0.04)
2004 15.73 (0.07) 2.56 2.49 -- -- -- --
CLASS I
2008(d) $24.96 $0.41 $(10.47) $(10.06) $(0.38) $(0.41) $(0.01) $(0.80)
RATIOS TO AVERAGE NET ASSETS/
SUPPLEMENTAL DATA
------------------------------------------------
Operating
Net Asset Net Assets Net Expense
Period Value, End of Investment Ratio (Net Portfolio
Ended Redemption End of Total Period Income Operating of Interest Turnover
December 31 Fees(a) Period Return+ (in 000's) (Loss) Expenses Expense) Rate++
- ----------- ---------- --------- ------- ---------- ---------- --------- ----------- ---------
CLASS AAA
2008 $0.00(b) $14.12 (43.2)% $25,355 1.41% 2.01% 2.00% 9%
2007 0.00(b) 26.19 10.9 56,678 1.26 1.91 1.87 18
2006 0.00(b) 24.57 21.2 64,573 1.70 1.79 1.78 18
2005 0.00(b) 20.63 10.5 59,554 0.48 1.89 1.88 19
2004 0.02 18.75 16.8 55,427 0.35 1.84 1.84 16
CLASS A
2008 $0.00(b) $14.33 (43.0)% $ 153 1.37% 2.01% 2.00% 9%
2007 0.00(b) 26.45 10.9 473 1.34 1.91 1.87 18
2006 0.00(b) 24.82 21.1 334 1.60 1.79 1.78 18
2005 0.00(b) 20.84 10.5 253 0.56 1.89 1.88 19
2004 0.02 18.92 16.8 202 0.40 1.84 1.84 16
CLASS B
2008 $0.00(b) $13.88 (43.7)% $ 7 0.73% 2.76% 2.75% 9%
2007 0.00(b) 25.70 10.0 12 0.51 2.66 2.62 18
2006 0.00(b) 24.00 20.2 59 0.91 2.54 2.53 18
2005 0.00(b) 20.18 9.7 49 (0.31) 2.63 2.62 19
2004 0.02 18.40 15.9 84 (0.23) 2.59 2.59 16
CLASS C
2008 $0.00(b) $13.67 (43.7)% $ 24 0.22% 2.76% 2.75% 9%
2007 0.00(b) 25.08 10.1 109 1.05 2.66 2.62 18
2006 0.00(b) 23.67 20.2 52 (0.01) 2.54 2.53 18
2005 0.00(b) 20.00 9.9 15 (0.95) 2.62 2.61 19
2004 0.02 18.24 16.0 5 (0.40) 2.59 2.59 16
CLASS I
2008(d) $0.00(b) $14.10 (40.2)% $ 1,008 2.01%(c) 1.76%(c) 1.75%(c) 9%
- ----------
+ Total return represents aggregate total return of a hypothetical $1,000
investment at the beginning of the period and sold at the end of the period
including reinvestment of distributions and does not reflect applicable
sales charges. Total return for a period of less than one year is not
annualized.
++ Effective in 2008, a change in accounting policy was adopted with regard to
the calculation of the portfolio turnover rate to include cash proceeds due
to mergers. Had this policy been adopted retroactively, the portfolio
turnover rate for the years ended December 31, 2007, 2006, 2005, and 2004
would have been as shown.
(a) Per share amounts have been calculated using the average shares outstanding
method.
(b) Amount represents less than $0.005 per share.
(c) Annualized.
(d) From the commencement of offering Class I Shares on January 11, 2008
through December 31, 2008.
See accompanying notes to financial statements.
9
GAMCO INTERNATIONAL GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION. GAMCO International Growth Fund, Inc. (the "Fund") was
organized on May 25, 1994 as a Maryland corporation. The Fund is a diversified
open-end management investment company registered under the Investment Company
Act of 1940, as amended (the "1940 Act"). The Fund's primary objective is
long-term capital appreciation. The Fund commenced investment operations on June
30, 1995.
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 Directors (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 with the
valuation and changes in valuation of similar securities, including a comparison
of foreign securities with 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.
Statement of Financial Accounting Standard No. 157, "Fair Value Measurements"
("SFAS 157") 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;
10
GAMCO INTERNATIONAL GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- 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 the Fund's investments, by inputs used to value the Fund's
investments as of December 31, 2008 is, as follows:
INVESTMENTS IN
SECURITIES
(MARKET VALUE)
VALUATION INPUTS ASSETS
- ---------------- --------------
Level 1 - Quoted Prices $ 3,786,334
Level 2 - Other Significant Observable Inputs 22,516,144
-----------
TOTAL $26,302,478
===========
There were no Level 3 investments held at December 31, 2007 or 2008.
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 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.
It is the policy of the Fund to always receive and maintain securities as
collateral whose market value, including accrued interest, are 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 December 31, 2008, there were no open repurchase agreements.
FORWARD FOREIGN EXCHANGE CONTRACTS. The Fund may engage in forward foreign
exchange contracts for hedging a specific transaction with respect to either the
currency in which the transaction is denominated or another currency as deemed
appropriate by the Adviser. Forward foreign exchange contracts are valued at the
forward rate and are marked-to-market daily. The change in market value is
included in unrealized appreciation/ depreciation on investments and foreign
currency translations. When the contract is closed, the Fund records a realized
gain or loss equal to the difference between the value of the contract at the
time it was opened and the value at the time it was closed.
11
GAMCO INTERNATIONAL GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 December 31, 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.
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.
12
GAMCO INTERNATIONAL GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
CUSTODIAN FEE CREDITS AND INTEREST EXPENSE. When cash balances are maintained in
the custody account, the Fund receives credits which are used to offset
custodian fees. The gross expenses paid under the custody arrangement are
included in custodian fees in the Statement of Operations with the corresponding
expense offset, if any, shown as "custodian fee credits." When cash balances are
overdrawn, the Fund is charged an overdraft fee equal to 2.00% above the federal
funds rate on outstanding balances. This amount, if any, would be included in
"interest expense" in the Statement of Operations.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions to shareholders are recorded on the
ex-dividend date. Distributions to shareholders are based on income and capital
gains as determined in accordance with federal income tax regulations, which may
differ from income and capital gains as determined under U.S. generally accepted
accounting principles. These differences are primarily due to differing
treatments of income and gains on various investment securities and foreign
currency transactions held by the Fund, timing differences, and differing
characterizations of distributions made by the Fund. Distributions from net
investment income include net realized gains on foreign currency transactions.
These book/tax differences are either temporary or permanent in nature. To the
extent these differences are permanent, adjustments are made to the appropriate
capital accounts in the period when the differences arise. These
reclassifications have no impact on the NAV of the Fund. For the year ended
December 31, 2008, reclassifications were made to increase accumulated
distributions in excess of net investment income by $99,643 and decrease
accumulated distributions in excess of net realized gain on investments and
foreign currency transactions by $99,643.
The tax character of distributions paid during the years ended December 31, 2008
and December 31, 2007 was as follows:
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
2008 2007
------------ ------------
DISTRIBUTIONS PAID FROM:
Ordinary income ................ $ 653,920 $ 746,760
Net long-term capital gains .... 659,849 1,479,911
Return of capital .............. 19,686 --
---------- ----------
Total distributions paid ....... $1,333,455 $2,226,671
========== ==========
PROVISION FOR INCOME TAXES. The Fund intends to continue to qualify as a
regulated investment company under Subchapter M of the Internal Revenue Code of
1986, as amended (the "Code"). It is the policy of the Fund to comply with the
requirements of the Code applicable to regulated investment companies and to
distribute substantially all of its net investment company taxable income and
net capital gains. Therefore, no provision for federal income taxes is required.
At December 31, 2008, the difference between book basis and tax basis unrealized
depreciation was primarily due to deferral of losses from wash sales for tax
purposes and mark-to-market adjustments on passive foreign investment companies.
As of December 31, 2008, the components of accumulated earning/losses on a tax
basis were as follows:
Net unrealized depreciation on investments $(3,103,466)
Net unrealized depreciation on foreign
currency translations ................. (939)
-----------
Total .................................... $(3,104,405)
===========
13
GAMCO INTERNATIONAL GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The following summarizes the tax cost of investments and the related unrealized
appreciation/depreciation at December 31, 2008:
GROSS GROSS NET
UNREALIZED UNREALIZED UNREALIZED
COST APPRECIATION DEPRECIATION DEPRECIATION
----------- ------------ ------------ ------------
Investments ...... $29,405,944 $3,839,406 $(6,942,872) $(3,103,466)
FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes" ("FIN
48") provides guidance for how uncertain tax positions should be recognized,
measured, presented, and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Fund's tax returns to determine whether the tax positions are
"more-likely-than-not" of being sustained by the applicable tax authority. Tax
positions not deemed to meet the "more-likely-than-not" threshold are recorded
as a tax benefit or expense in the current year. In accordance with FIN 48,
management has analyzed the Fund's tax positions taken on the federal and state
income tax returns for all open tax years (the current and prior three tax
years) and has concluded that no provision for income tax is required in the
Fund's financial statements. Management's determination regarding FIN 48 may be
subject to review and adjustment at a later date based on factors including, but
not limited to, an on-going analysis of tax laws, regulations, and
interpretations thereof.
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 Directors of the Fund who are affiliated
persons of the Adviser.
If total net assets of the Fund are below $100 million, the Fund pays each
Director who is not considered to be an affiliated person an annual retainer of
$1,000 plus $250 for each Board meeting attended and they are reimbursed for any
out of pocket expenses incurred in attending meetings. If total net assets of
the Fund are in excess of $100 million, the Fund pays each Independent Director
an annual retainer of $3,000 plus $500 for each Board meeting attended and they
are reimbursed for any out of pocket expenses incurred in attending meetings.
All Board committee members receive $500 per meeting attended and the Chairman
of the Audit Committee and the Lead Director each receives an annual fee of
$1,000. Directors 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.
14
GAMCO INTERNATIONAL GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
5. PORTFOLIO SECURITIES. Purchases and proceeds from the sales of securities
during 2008, other than short-term securities and U.S. Government obligations,
aggregated $4,062,093 and $12,683,432, respectively.
6.TRANSACTIONS WITH AFFILIATES. During 2008 the Fund paid brokerage commissions
on security trades of $280 to Gabelli & Company. Additionally, Gabelli & Company
informed the Fund that it retained $331 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 2008, the Fund
paid or accrued $15,000 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 from which it 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 included in "interest expense" in the Statement of
Operations. At December 31, 2008, borrowings outstanding under the line of
credit amounted to $509,000.
The average daily amount of borrowings outstanding under the line of credit in
2008 was $132,574 with a weighted average interest rate of 3.05%. The maximum
amount borrowed at any time during 2008 was $1,876,000.
8. CAPITAL STOCK. The Fund currently offers five classes of shares -- Class AAA
Shares, Class A Shares, Class B Shares, Class C Shares, and Class I Shares.
Class AAA Shares are offered without a sales charge only to investors who
acquire them directly from Gabelli & Company, or through selected
broker/dealers, or the transfer agent. Class I Shares are offered to
foundations, endowments, institutions, and employee benefit plans without a
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.
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 years ended December 31, 2008 and December 31, 2007
amounted to $1,770 and $614, respectively.
15
GAMCO INTERNATIONAL GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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:
YEAR ENDED YEAR ENDED
DECEMBER 31, 2008 DECEMBER 31, 2007
---------------------- -----------------------
SHARES AMOUNT SHARES AMOUNT
-------- ----------- -------- ------------
CLASS AAA CLASS AAA
---------------------- -----------------------
Shares sold ....................................................... 124,387 $ 2,724,485 165,211 $ 4,293,115
Shares issued upon reinvestment of distributions .................. 81,926 1,133,114 77,246 2,020,742
Shares redeemed ................................................... (574,682) (12,145,878) (706,713) (18,298,601)
-------- ----------- -------- ------------
Net decrease ................................................... (368,369) $(8,288,279) (464,256) $(11,984,744)
======== =========== ======== ============
CLASS A CLASS A
---------------------- -----------------------
Shares sold ....................................................... 5,398 $ 131,551 5,980 $ 159,760
Shares issued upon reinvestment of distributions .................. 292 3,866 434 11,472
Shares redeemed ................................................... (12,871) (276,175) (1,997) (51,814)
-------- ----------- -------- ------------
Net increase/(decrease) ........................................ (7,181) $ (140,758) 4,417 $ 119,418
======== =========== ======== ============
CLASS B CLASS B
---------------------- -----------------------
Shares issued upon reinvestment of distributions .................. 11 $ 154 7 $ 172
Shares redeemed ................................................... -- -- (2,001) (49,388)
-------- ----------- -------- ------------
Net increase/(decrease) ........................................ 11 $ 154 (1,994) $ (49,216)
======== =========== ======== ============
CLASS C CLASS C
---------------------- -----------------------
Shares sold ....................................................... 32 $ 627 2,128 $ 56,429
Shares issued upon reinvestment of distributions .................. 18 241 145 3,638
Shares redeemed ................................................... (2,636) (57,461) (81) (2,116)
-------- ----------- -------- ------------
Net increase/(decrease) ........................................ (2,586) $ (56,593) 2,192 $ 57,951
======== =========== ======== ============
CLASS I*
----------------------
Shares sold ....................................................... 73,714 $ 1,816,910
Shares issued upon reinvestment of distributions .................. 3,901 53,869
Shares redeemed ................................................... (6,139) (117,814)
-------- -----------
Net increase ................................................... 71,476 $ 1,752,965
======== ===========
- ----------
* From the commencement of offering Class I Shares on January 11, 2008.
9. INDEMNIFICATIONS. The Fund enters into contracts that contain a variety of
indemnifications. The Fund's maximum exposure under these arrangements is
unknown. However, the Fund has not had prior claims or losses pursuant to these
contracts and expects the risk of loss to be remote.
16
GAMCO INTERNATIONAL GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
10. OTHER MATTERS. On April 24, 2008, the Adviser entered into an administrative
settlement with the SEC to resolve the SEC's inquiry regarding prior frequent
trading activity in shares of the GAMCO Global Growth Fund (the "Global Growth
Fund") by one investor who was banned from the Global Growth Fund in August
2002. In the settlement, the SEC found that the Adviser had violated Section
206(2) of the Investment Advisers Act, Section 17(d) of the 1940 Act, and Rule
17d-1 thereunder and had aided and abetted and caused violations of Section
12(d)(1)(B)(i) of the 1940 Act. Under the terms of the settlement, the Adviser,
while neither admitting nor denying the SEC's findings and allegations, agreed,
among other things, to pay the previously reserved total of $16 million
(including a $5 million penalty), of which at least $11 million will be
distributed to shareholders of the Global Growth Fund in accordance with a plan
to be developed by an independent distribution consultant and approved by the
independent directors of the Global Growth Fund and the staff of the SEC and to
cease and desist from future violations of the above referenced federal
securities laws. The settlement is not expected to impact the Fund and 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 including the Fund. 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.
In a separate matter, on January 12, 2009, the SEC issued an administrative
action approving a final settlement of a previously disclosed matter with the
Adviser involving compliance with Section 19(a) of the Investment Company Act of
1940 and Rule 19a-1 thereunder by two closed-end funds. These provisions require
registered investment companies when making a distribution in the nature of a
dividend from sources other than net investment income to contemporaneously
provide written statements to shareholders, which adequately disclose the source
or sources of such distribution. While the two funds sent annual statements and
provided other materials containing this information, the shareholders did not
receive the notices required by Rule 19a-1 with any of the distributions that
were made for 2002 and 2003. The Adviser believes that the funds have been in
compliance with Section 19(a) and Rule 19a-1 since the beginning of 2004. As
part of the settlement, in which the Adviser neither admits nor denies the
findings by the SEC, the Adviser agreed to pay a civil monetary penalty of
$450,000 and to cease and desist from causing violations of Section 19(a) and
Rule 19a-1. In connection with the settlement, the SEC noted the remedial
actions previously undertaken by the Adviser.
17
GAMCO INTERNATIONAL GROWTH FUND, INC.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors of
GAMCO International Growth Fund, Inc.
We have audited the accompanying statement of assets and liabilities of GAMCO
International Growth Fund, Inc. (the "Fund"), including the schedule of
investments, as of December 31, 2008, and the related statement of operations
for the year then ended, the statements of changes in net assets for each of the
two years in the period then ended, and the financial highlights for each of the
five years in the period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. We were
not engaged to perform an audit of the Fund's internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Fund's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall
financial statement presentation. Our procedures included confirmation of
securities owned as of December 31, 2008, by correspondence with the custodian
and brokers or by other appropriate auditing procedures where replies from
brokers were not received. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of GAMCO
International Growth Fund, Inc. at December 31, 2008, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the five years in the period then ended, in conformity with U.S. generally
accepted accounting principles.
/s/ Ernst & Young LLP
Philadelphia, Pennsylvania
February 24, 2009
18
GAMCO INTERNATIONAL GROWTH FUND, INC.
ADDITIONAL FUND INFORMATION (UNAUDITED)
The business and affairs of the Fund are managed under the direction of the
Fund's Board of Directors. Information pertaining to the Directors and officers
of the Fund is set forth below. The Fund's Statement of Additional Information
includes additional information about the Fund's Directors and is available
without charge, upon request, by calling 800-GABELLI (800-422-3554) or by
writing to the GAMCO International Growth Fund, Inc. at One Corporate Center,
Rye, NY 10580-1422.
TERM OF NUMBER OF
NAME, POSITION(S) OFFICE AND FUNDS IN FUND
ADDRESS(1) LENGTH OF COMPLEX OVERSEEN PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIPS
AND AGE TIME SERVED(2) BY DIRECTOR DURING PAST FIVE YEARS HELD BY DIRECTOR(4)
- ------------------------- -------------- ---------------- --------------------------------------- ------------------------------
INTERESTED DIRECTORS(3):
MARIO J. GABELLI Since 1994 26 Chairman and Chief Executive Officer of Director of Morgan Group
Director GAMCO Investors, Inc. and Chief Holdings, Inc. (holding
Age: 66 Investment Officer - Value Portfolios company); Chairman of the
of Gabelli Funds, LLC and GAMCO Asset Board of LICT Corp.
Management Inc.; Director/Trustee or (multimedia and communication
Chief Investment Officer of other services company)
registered investment companies in the
Gabelli/GAMCO Funds complex; Chairman
and Chief Executive Officer of GGCP,
Inc.
INDEPENDENT DIRECTORS(5):
ANTHONY J. COLAVITA Since 1994 36 Partner in the law firm of --
Director Anthony J. Colavita, P.C.
Age: 73
WERNER J. ROEDER, MD Since 1994 22 Medical Director of Lawrence Hospital --
Director and practicing private physician
Age: 68
ANTHONIE C. VAN EKRIS Since 1994 20 Chairman of BALMAC International, Inc. --
Director (commodities and futures trading)
Age: 74
SALVATORE J. ZIZZA Since 2004 28 Chairman of Zizza & Co., Ltd. Director of Hollis-Eden
Director (consulting) Pharmaceuticals
Age: 63 (biotechnology); Director of
Earl Scheib, Inc. (automotive
services)
19
GAMCO INTERNATIONAL GROWTH FUND, INC.
ADDITIONAL FUND INFORMATION (CONTINUED) (UNAUDITED)
TERM OF
NAME, POSITION(S) OFFICE AND
ADDRESS(1) LENGTH OF PRINCIPAL OCCUPATION(S)
AND AGE TIME SERVED(2) DURING PAST FIVE YEARS
- ------------------------- -------------- ---------------------------------------------------------
OFFICERS:
BRUCE N. ALPERT Since 1994 Executive Vice President and Chief Operating Officer of
President and Secretary Gabelli Funds, LLC since 1988 and an officer of all of
Age: 57 the registered investment companies in the Gabelli/GAMCO
Funds complex. Director and President of Teton Advisors,
Inc. (formerly Gabelli Advisers, Inc.) since 1998
AGNES MULLADY Since 2006 Vice President of Gabelli Funds, LLC since 2007; Officer
Treasurer of all of the registered investment companies in the
Age: 50 Gabelli/GAMCO Funds complex; Senior Vice President of
U.S. Trust Company, N.A. and Treasurer and Chief
Financial Officer of Excelsior Funds from 2004 through
2005; Chief Financial Officer of AMIC Distribution
Partners from 2002 through 2004
PETER D. GOLDSTEIN Since 2004 Director of Regulatory Affairs at GAMCO Investors, Inc.
Chief Compliance Officer since 2004; Chief Compliance Officer of all of the
Age: 55 registered investment companies in the Gabelli/GAMCO
Funds complex; Vice President of Goldman Sachs Asset
Management from 2000 through 2004
- ----------
(1) Address: One Corporate Center, Rye, NY 10580-1422, unless otherwise noted.
(2) Each Director will hold office for an indefinite term until the earliest of
(i) the next meeting of shareholders, if any, called for the purpose of
considering the election or re-election of such Director and until the
election and qualification of his or her successor, if any, elected at such
meeting, or (ii) the date a Director resigns or retires, or a Director is
removed by the Board of Directors or shareholders, in accordance with the
Fund's ByLaws and Articles of Incorporation. Each officer will hold office
for an indefinite term until the date he or she resigns or retires or until
his or her successor is elected and qualified.
(3) "Interested person" of the Fund as defined in the 1940 Act. Mr. Gabelli is
considered an "interested person" because of his affiliation with Gabelli
Funds, LLC which acts as the Fund's investment adviser.
(4) This column includes only directorships of companies required to report to
the SEC under the Securities Exchange Act of 1934, as amended (i.e. public
companies) or other investment companies registered under the 1940 Act.
(5) Directors who are not interested persons are considered "Independent"
Directors.
20
GAMCO INTERNATIONAL GROWTH FUND, INC.
ADDITIONAL FUND INFORMATION (CONTINUED) (UNAUDITED)
2008 TAX NOTICE TO SHAREHOLDERS (Unaudited)
For the year ended December 31, 2008, the Fund paid to shareholders ordinary
income distributions (comprised of net investment income) totaling $0.361,
$0.287, $0.192, $0.038, and $0.429 per share for Class AAA, Class A, Class B,
Class C, and Class I, respectively, and long-term capital gains totaling
$659,849. The distributions of long-term capital gains have been designated as a
capital gain dividend by the Fund's Board of Directors. For the year ended
December 31, 2008, 1.30% of the ordinary income distribution qualifies for the
dividends received deduction available to corporations. The Fund designates 100%
of the ordinary income distribution as qualified dividend income pursuant to the
Jobs and Growth Tax Relief Reconciliation Act of 2003. The Fund designates 0.07%
of the ordinary income distribution as qualified interest income pursuant to the
American Jobs Creation Act of 2004. Also for the year 2008, the Fund passed
through foreign tax credits of $0.033 per share to Class AAA, Class A, Class B,
Class C, and Class I.
U.S. GOVERNMENT INCOME:
The percentage of the ordinary income distribution paid by the Fund during 2008
which was derived from U.S. Treasury securities was 0.08%. Such income is exempt
from state and local tax in all states. However, many states, including New York
and California, allow a tax exemption for a portion of the income earned only if
a mutual fund has invested at least 50% of its assets at the end of each quarter
of the Fund's fiscal year in U.S. Government securities. The GAMCO International
Growth Fund, Inc. did not meet this strict requirement in 2008. Due to the
diversity in state and local tax law, it is recommended that you consult your
personal tax adviser as to the applicability of the information provided to your
specific situation.
- ----------
All designations are based on financial information available as of the date of
this annual report and, accordingly, are subject to change. For each item, it is
the intention of the Fund to designate the maximum amount permitted under the
Internal Revenue Code and the regulations thereunder.
21
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
GABELLI ENTERPRISE MERGERS AND ACQUISITIONS FUND
Seeks to invest in securities believed to be likely acquisition targets within
12-18 months or in arbitrage transactions of publicly announced mergers or other
corporate reorganizations. The Fund's primary objective is capital appreciation.
(MULTICLASS)
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
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 MANAGERS: JUDITH A. RANERI
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.
GAMCO
GAMCO INTERNATIONAL GROWTH FUND, INC.
ANNUAL REPORT
DECEMBER 31, 2008
GAMCO INTERNATIONAL GROWTH FUND, INC.
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 DIRECTORS
Mario J. Gabelli, CFA
CHAIRMAN AND CHIEF
EXECUTIVE OFFICER
GAMCO INVESTORS, INC.
Anthony J. Colavita
ATTORNEY-AT-LAW
ANTHONY J. COLAVITA, P.C.
Salvatore J. Zizza
CHAIRMAN
ZIZZA & CO., LTD.
Werner J. Roeder, MD
MEDICAL DIRECTOR
LAWRENCE HOSPITAL
Anthonie C. van Ekris
CHAIRMAN
BALMAC INTERNATIONAL, INC.
OFFICERS AND PORTFOLIO MANAGER
Caesar Bryan
PORTFOLIO MANAGER
Peter D. Goldstein
CHIEF COMPLIANCE OFFICER
Bruce N. Alpert
PRESIDENT AND SECRETARY
Agnes Mullady
TREASURER
DISTRIBUTOR
Gabelli & Company, Inc.
CUSTODIAN, TRANSFER AGENT, AND DIVIDEND AGENT
State Street Bank and Trust Company
LEGAL COUNSEL
Paul, Hastings, Janofsky & Walker LLP
This report is submitted for the general information of the shareholders of
GAMCO International Growth Fund, Inc. It is not authorized for distribution to
prospective investors unless preceded or accompanied by an effective prospectus.
GAB009Q408SR
ITEM 2. CODE OF ETHICS.
(a) The registrant, as of the end of the period covered by this report, has
adopted a code of ethics that applies to the registrant's principal
executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions,
regardless of whether these individuals are employed by the registrant
or a third party.
(c) There have been no amendments, during the period covered by this
report, to a provision of the code of ethics that applies to the
registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing
similar functions, regardless of whether these individuals are employed
by the registrant or a third party, and that relates to any element of
the code of ethics description.
(d) The registrant has not granted any waivers, including an implicit
waiver, from a provision of the code of ethics that applies to the
registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing
similar functions, regardless of whether these individuals are employed
by the registrant or a third party, that relates to one or more of the
items set forth in paragraph (b) of this item's instructions.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
As of the end of the period covered by the report, the registrant's Board of
Directors has determined that Salvatore J. Zizza is qualified to serve as an
audit committee financial expert serving on its audit committee and that he is
"independent," as defined by Item 3 of Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
AUDIT FEES
(a) The aggregate fees billed for each of the last two fiscal years for
professional services rendered by the principal accountant for the
audit of the registrant's annual financial statements or services that
are normally provided by the accountant in connection with statutory
and regulatory filings or engagements for those fiscal years are
$39,200 for 2007 and $39,200 for 2008.
AUDIT-RELATED FEES
(b) The aggregate fees billed in each of the last two fiscal years for
assurance and related services by the principal accountant that are
reasonably related to the performance of the audit of the registrant's
financial statements and are not reported under paragraph (a) of this
Item are $0 for 2007 and $0 for 2008.
TAX FEES
(c) The aggregate fees billed in each of the last two fiscal years for
professional services rendered by the principal accountant for tax
compliance, tax advice, and tax planning are $4,100 for 2007 and $4,300
for 2008. Tax fees represent tax compliance services provided in
connection with the review of the Registrant's tax returns.
ALL OTHER FEES
(d) The aggregate fees billed in each of the last two fiscal years for
products and services provided by the principal accountant, other than
the services reported in paragraphs (a) through (c) of this Item are $0
for 2007 and $0 for 2008.
(e)(1) Disclose the audit committee's pre-approval policies and procedures
described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
Pre-Approval Policies and Procedures. The Audit Committee ("Committee")
of the registrant is responsible for pre-approving (i) all audit and
permissible non-audit services to be provided by the independent
registered public accounting firm to the registrant and (ii) all
permissible non-audit services to be provided by the independent
registered public accounting firm to the Adviser, Gabelli Funds, LLC,
and any affiliate of Gabelli Funds, LLC ("Gabelli") that provides
services to the registrant (a "Covered Services Provider") if the
independent registered public accounting firm's engagement related
directly to the operations and financial reporting of the registrant.
The Committee may delegate its responsibility to pre-approve any such
audit and permissible non-audit services to the Chairperson of the
Committee, and the Chairperson must report to the Committee, at its
next regularly scheduled meeting after the Chairperson's pre-approval
of such services, his or her decision(s). The Committee may also
establish detailed pre-approval policies and procedures for
pre-approval of such services in accordance with applicable laws,
including the delegation of some or all of the Committee's pre-approval
responsibilities to the other persons (other than Gabelli or the
registrant's officers). Pre-approval by the Committee of any
permissible non-audit services is not required so long as: (i) the
permissible non-audit services were not recognized by the registrant at
the time of the engagement to be non-audit services; and (ii) such
services are promptly brought to the attention of the Committee and
approved by the Committee or Chairperson prior to the completion of the
audit.
(e)(2) The percentage of services described in each of paragraphs (b) through
(d) of this Item that were approved by the audit committee pursuant to
paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X are as follows:
(b) Not applicable
(c) 100%
(d) Not applicable
(f) The percentage of hours expended on the principal accountant's
engagement to audit the registrant's financial statements for the most
recent fiscal year that were attributed to work performed by persons
other than the principal accountant's full-time, permanent employees
was zero percent (0%).
(g) The aggregate non-audit fees billed by the registrant's accountant for
services rendered to the registrant, and rendered to the registrant's
investment adviser (not including any sub-adviser whose role is
primarily portfolio management and is subcontracted with or overseen by
another investment adviser), and any entity controlling, controlled by,
or under common control with the adviser that provides ongoing services
to the registrant for each of the last two fiscal years of the
registrant was $69,100 for 2007 and $4,300 for 2008.
(h) The registrant's audit committee of the board of directors has
considered whether the provision of non-audit services that were
rendered to the registrant's investment adviser (not including any
sub-adviser whose role is primarily portfolio management and is
subcontracted with or overseen by another investment adviser), and any
entity controlling, controlled by, or under common control with the
investment adviser that provides ongoing services to the registrant
that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule
2-01 of Regulation S-X is compatible with maintaining the principal
accountant's independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. 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 Directors, where those
changes were implemented after the registrant last provided disclosure in
response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR
229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)),
or this Item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within
90 days of the filing date of the report that includes the disclosure
required by this paragraph, based on their evaluation of these controls
and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR
270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities
Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or
240.15d-15(b)).
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17
CFR 270.30a-3(d)) that occurred during the registrant's second fiscal
quarter of the period covered by this report that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) Code of ethics, or any amendment thereto, that is the subject of
disclosure required by Item 2 is attached hereto.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and
Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.
(a)(3) Not applicable.
(b) Certifications pursuant to Rule 30a-2(b) under the 1940 Act and
Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(registrant) GAMCO International Growth Fund, Inc.
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By (Signature and Title)* /s/ Bruce N. Alpert
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Bruce N. Alpert, Principal Executive Officer
Date 3/6/09
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Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Bruce N. Alpert
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Bruce N. Alpert, Principal Executive Officer
Date 3/6/09
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By (Signature and Title)* /s/ Agnes Mullady
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Agnes Mullady,
Principal Financial Officer and Treasurer
Date 3/6/09
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* Print the name and title of each signing officer under his or her signature.