Filed Pursuant to Rule 497(e)
                                                        Registration No. 33-1719

                             THE GABELLI ASSET FUND
                                  (THE "FUND")

                       SUPPLEMENT DATED DECEMBER 23, 2004
                      TO THE PROSPECTUSES DATED MAY 1, 2004

THE FOLLOWING  SUPPLEMENT TO THE FUND'S  PROSPECTUSES  SUPERSEDES THE SUPPLEMENT
DATED NOVEMBER 1, 2004.

The Fund is intended for long-term investors and not for those who wish to trade
frequently in Fund shares.  The Fund believes that excessive  short-term trading
of Fund  shares,  such as by traders  seeking  short-term  profits  from  market
momentum, time zone arbitrage and other timing strategies, creates risks for the
Fund and its  long-term  shareholders,  including  interference  with  efficient
portfolio management, increased administrative and brokerage costs and potential
dilution in the value of shares.


In order to discourage frequent short-term trading in Fund shares, the Fund will
impose a 2.00%  redemption fee  (short-term  trading fee) on Class AAA, Class A,
Class B and Class C shares that are redeemed or  exchanged  within 60 days after
the date of a purchase.  This fee is calculated  based on the shares'  aggregate
net asset  value on the date of  redemption  and  deducted  from the  redemption
proceeds.  The redemption fee is not a sales charge;  it is retained by the Fund
and does not benefit the Fund's  Adviser or any other third party.  For purposes
of computing  the  redemption  fee,  shares will be redeemed in reverse order of
purchase (the latest shares  acquired will be treated as being redeemed  first).
Redemptions to which the fee applies include redemption of shares resulting from
an exchange made pursuant to the Fund's exchange  privilege.  The redemption fee
will not apply to Class AAA,  Class A, Class B or Class C shares  currently held
by shareholders  that were purchased before November 1, 2004. The redemption fee
also will not apply to redemptions of shares where (i) the shares were purchased
through  automatic  reinvestment of dividends or other  distributions,  (ii) the
redemption  is  initiated  by the Fund,  (iii)  shares  were  purchased  through
programs that collect the  redemption fee at the program level and remit them to
the Fund,  or (iv)  shares  were  purchased  through  programs  that the Adviser
determines 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 will be
in place prior to January 1, 2005.  In addition,  recordkeepers  for  retirement
plan  participants  who  cannot  implement  redemption  fees  because of systems
limitations and who can provide verification to that effect, may be permitted to
delay,  temporarily,  the implementation of redemption fees.  However,  all such
recordkeepers  must apply to the Adviser for an  extension  by December 31, 2004
and are expected to implement the redemption fees by March 31, 2005.



Any shareholder  purchasing  shares of the Fund through an  intermediary  should
check with the intermediary or the Fund to determine  whether the shares will be
subject to the redemption fee.

The Fund reserves the right to refuse any purchase request or exchange order.

In  connection  with  this  change,  the  following  revisions  are  made to the
Prospectus  for the Class AAA  shares of the Fund.  Under the  section  entitled
"Fees and Expenses of the Fund," the following line item is added:

SHAREHOLDER FEES
    (fees paid directly from your investment):
Redemption Fee................................................        2.00%
    (as a percentage of amount
    redeemed for shares held less than
    60 days payable to the Fund)*
* The redemption fee applies to shares purchased on or after November 1, 2004.


In the  Prospectus  for the Class A, Class B and Class C Shares of the Fund,  in
the section  entitled,  "Fees and  Expenses of the Fund,"  under the  subheading
entitled, "Shareholder Fees," the following line item is added:




                                                                      Class A      Class B      Class C
                                                                      Shares       Shares       Shares
                                                                     ---------   ----------   ----------
                                                                                       
Redemption Fee................................................        2.00%        2.00%        2.00%
    (as a percentage of amount
    redeemed for shares held less than
    60 days payable to the Fund)*
* The redemption fee applies to shares purchased on or after November 1, 2004.