N-CSRS 1 growth.txt SEMI-ANNUAL REPORT 06/30/05 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 811-04873 --------- The Gabelli Growth Fund -------------------------------------------- (Exact name of registrant as specified in charter) One Corporate Center Rye, New York 10580-1422 -------------------------------------------- (Address of principal executive offices) (Zip code) Bruce N. Alpert Gabelli Funds, LLC One Corporate Center Rye, New York 10580-1422 -------------------------------------------- (Name and address of agent for service) registrant's telephone number, including area code: 1-800-422-3554 -------------- Date of fiscal year end: December 31 --------------- Date of reporting period: June 30, 2005 --------------- 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, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507. ITEM 1. REPORTS TO STOCKHOLDERS. The Report to Shareholders is attached herewith. THE GABELLI GROWTH FUND SEMI-ANNUAL REPORT JUNE 30, 2005 TO OUR SHAREHOLDERS, During the second quarter of 2005, the Gabelli Growth Fund (the "Fund") rose 2.3%, while the Standard & Poor's ("S&P") 500 Index and the Russell 1000 Growth Index rose 1.4% and 2.5%, respectively. For the six month period ended June 30, 2005, the Fund declined 0.2% versus declines of 0.8% and 1.7% for the S&P 500 Index and the Russell 1000 Growth Index, respectively. Enclosed are the financial statements and the investment portfolio as of June 30, 2005. COMPARATIVE RESULTS -------------------------------------------------------------------------------- AVERAGE ANNUAL RETURNS THROUGH JUNE 30, 2005 (A)
Since Year to Inception Quarter Date 1 Year 3 Year 5 Year 10 Year 15 Year (4/10/87) --------------------------------------------------------------------------------------------------------------------- GABELLI GROWTH FUND CLASS AAA .. 2.32% (0.23)% 4.62% 7.07% (10.42)% 8.52% 9.22% 11.48% S&P 500 Index .................. 1.37 (0.81) 6.32 8.28 (2.37) 9.94 10.64 10.41 Russell 1000 Growth Index ...... 2.46 (1.72) 1.68 7.26 (10.36) 7.40 N/A* N/A* Class A ........................ 2.36 (0.23) 4.66 7.09 (10.39) 8.51 9.21 11.47 (3.52)(b) (5.95)(b) (1.36)(b) 4.98(b) (11.45)(b) 7.87(b) 8.78(b) 11.11(b) Class B ........................ 2.14 (0.62) 3.83 6.67 (10.62) 8.40 9.13 11.41 (2.86)(c) (5.59)(c) (1.17)(c) 5.79(c) (10.98)(c) 8.40(c) 9.13(c) 11.41(c) Class C ........................ 2.14 (0.62) 3.87 6.67 (10.62) 8.40 9.13 11.41 1.14(c) (1.61)(c) 2.87(c) 6.67(c) (10.62)(c) 8.40(c) 9.13(c) 11.41(c)
(a) RETURNS REPRESENT PAST PERFORMANCE AND DO NOT GUARANTEE FUTURE RESULTS. TOTAL RETURNS AND AVERAGE ANNUAL RETURNS REFLECT CHANGES IN SHARE PRICES AND REINVESTMENT OF DIVIDENDS AND ARE NET OF EXPENSES. INVESTMENT RETURNS AND THE PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE. WHEN SHARES ARE REDEEMED, THEY MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE RETURNS FOR PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA PRESENTED. VISIT WWW.GABELLI.COM FOR PERFORMANCE INFORMATION AS OF THE MOST RECENT MONTH END. INVESTORS SHOULD CONSIDER THE INVESTMENT OBJECTIVES, RISKS AND CHARGES AND EXPENSES OF THE FUND CAREFULLY BEFORE INVESTING. THE PROSPECTUS CONTAINS MORE COMPLETE INFORMATION ABOUT THIS AND OTHER MATTERS AND SHOULD BE READ CAREFULLY BEFORE INVESTING. THE CLASS AAA SHARES' NET ASSET VALUES ARE USED TO CALCULATE PERFORMANCE FOR THE PERIODS PRIOR TO THE ISSUANCE OF CLASS A SHARES, CLASS B SHARES AND CLASS C SHARES ON DECEMBER 31, 2003. THE ACTUAL PERFORMANCE FOR THE CLASS B SHARES AND CLASS C SHARES WOULD HAVE BEEN LOWER DUE TO THE ADDITIONAL EXPENSES ASSOCIATED WITH THESE CLASSES OF SHARES. THE S&P 500 INDEX AND THE RUSSELL 1000 GROWTH INDEX ARE UNMANAGED INDICATORS OF STOCK MARKET PERFORMANCE. DIVIDENDS ARE REINVESTED. (b) INCLUDES THE EFFECT OF THE MAXIMUM 5.75% SALES CHARGE AT THE BEGINNING OF THE PERIOD. (c) INCLUDES THE EFFECT OF THE APPLICABLE CONTINGENT DEFERRED SALES CHARGE AT THE END OF THE PERIOD SHOWN FOR CLASS B AND CLASS C SHARES, RESPECTIVELY. CLASS B SHARES ARE NOT AVAILABLE FOR NEW PURCHASES. * THERE IS NO DATA AVAILABLE FOR THE RUSSELL 1000 GROWTH INDEX PRIOR TO AUGUST 31, 1992. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- We have separated the portfolio manager's commentary from the financial statements and investment portfolio due to corporate governance regulations stipulated by the Sarbanes-Oxley Act of 2002. We have done this to ensure that the content of the portfolio manager's commentary is unrestricted. The financial statements and investment portfolio are mailed separately. Both the commentary and the financial statements, including the portfolio of investments, will be available on our website at www.gabelli.com/funds. -------------------------------------------------------------------------------- THE GABELLI GROWTH FUND DISCLOSURE OF FUND EXPENSES (UNAUDITED) For the Six Month Period from January 1, 2005 through June 30, 2005 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 six months ended June 30, 2005. Beginning Ending Annualized Expenses Account Value Account Value Expense Paid During 01/01/05 06/30/05 Ratio Period* -------------------------------------------------------------------------------- GABELLI GROWTH FUND -------------------------------------------------------------------------------- ACTUAL FUND RETURN Class AAA $1,000.00 $ 997.70 1.53% $ 7.58 Class A $1,000.00 $ 997.70 1.53% $ 7.58 Class B $1,000.00 $ 993.80 2.28% $11.27 Class C $1,000.00 $ 993.80 2.29% $11.32 HYPOTHETICAL 5% RETURN Class AAA $1,000.00 $1,017.21 1.53% $ 7.65 Class A $1,000.00 $1,017.21 1.53% $ 7.65 Class B $1,000.00 $1,013.49 2.28% $11.38 Class C $1,000.00 $1,013.44 2.29% $11.43 * Expenses are equal to the Fund's annualized expense ratio for the last six months multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, then divided by 365. 2 SUMMARY OF PORTFOLIO HOLDINGS (UNAUDITED) The following table presents portfolio holdings as a percent of total net assets. THE GABELLI GROWTH FUND Industrial ........................................ 14.3% Health Care Equipment & Services .................. 11.8% Consumer Staples .................................. 11.1% Energy ............................................ 8.9% Retail ............................................ 8.6% Pharmaceuticals & Biotechnology ................... 8.6% Financial ......................................... 8.0% Software and Services ............................. 7.3% Semiconductors .................................... 7.3% Media ............................................. 3.6% Materials ......................................... 3.0% U.S. Government Obligations ....................... 2.3% Communications Equipment .......................... 2.1% Computers & Peripheral ............................ 1.7% Auto & Components ................................. 0.6% Other Assets and Liabilities - Net ................ 0.8% ------ 100.0% ====== THE FUND FILES A COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS WITH 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 ENDING MARCH 31, 2005. 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 COMMISSION'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 and procedures are available without charge, upon request, (i) by calling 800-GABELLI (800-422-3554); (ii) by writing to The Gabelli Funds at One Corporate Center, Rye, NY 10580-1422; and (iii) by visiting the Securities and Exchange Commission's website at www.sec.gov. 3 THE GABELLI GROWTH FUND SCHEDULE OF INVESTMENTS -- JUNE 30, 2005 (UNAUDITED) -------------------------------------------------------------------------------- MARKET SHARES COST VALUE ------ ---- ----- COMMON STOCKS -- 96.9% CONSUMER DISCRETIONARY -- 12.8% AUTO & COMPONENTS -- 0.6% 145,000 Harley-Davidson Inc. ...... $ 6,596,157 $ 7,192,000 --------------- -------------- MEDIA -- 3.6% 320,000 McGraw-Hill Companies Inc.. 7,684,823 14,160,000 590,000 News Corp., Cl. B ......... 11,170,696 9,947,400 1,310,000 Time Warner Inc.+ ......... 22,286,121 21,890,100 --------------- -------------- 41,141,640 45,997,500 --------------- -------------- RETAIL -- 8.6% 350,000 Bed Bath & Beyond Inc.+ ... 12,844,089 14,623,000 125,000 Best Buy Co. Inc. ......... 6,764,011 8,568,750 245,000 Cheesecake Factory Inc.+ .. 5,881,024 8,508,850 470,000 Coach Inc.+ ............... 10,753,349 15,777,900 180,000 Costco Wholesale Corp. .... 7,597,403 8,067,600 220,000 eBay Inc.+ ................ 7,365,978 7,262,200 140,000 Starbucks Corp.+ .......... 3,512,917 7,232,400 245,000 Target Corp. .............. 9,903,021 13,330,450 316,577 The Home Depot Inc. ....... 8,747,621 12,314,846 443,400 Tiffany & Co. ............. 11,115,736 14,525,784 --------------- -------------- 84,485,149 110,211,780 --------------- -------------- TOTAL CONSUMER DISCRETIONARY ........... 132,222,946 163,401,280 --------------- -------------- CONSUMER STAPLES -- 11.1% 510,000 PepsiCo Inc. .............. 25,132,563 27,504,300 535,000 Procter & Gamble Co. ...... 28,823,553 28,221,250 455,000 Sysco Corp. ............... 13,275,943 16,466,450 400,000 Wal-Mart Stores Inc. ...... 21,862,499 19,280,000 655,000 Walgreen Co. .............. 20,624,303 30,123,450 170,000 Whole Foods Market Inc. ... 9,511,440 20,111,000 --------------- -------------- TOTAL CONSUMER STAPLES 119,230,301 141,706,450 --------------- -------------- ENERGY -- 8.9% 145,000 Anadarko Petroleum Corp. .. 9,865,510 11,911,750 176,000 Apache Corp. .............. 5,524,718 11,369,600 220,000 Baker Hughes Inc. ......... 10,299,383 11,255,200 185,000 Burlington Resources Inc... 5,668,456 10,219,400 140,000 Devon Energy Corp. ........ 5,667,098 7,095,200 260,000 Murphy Oil Corp. .......... 5,930,352 13,579,800 190,000 Occidental Petroleum Corp. 6,380,705 14,616,700 190,000 Schlumberger Ltd. ......... 7,955,593 14,428,600 170,000 Suncor Energy Inc. ........ 5,425,055 8,044,400 190,000 Transocean Inc.+ .......... 7,244,034 10,254,300 --------------- -------------- TOTAL ENERGY .............. 69,960,904 112,774,950 --------------- -------------- MARKET SHARES COST VALUE ------ ---- ----- FINANCIAL -- 8.0% 250,000 American Express Co. ...... $ 10,699,292 $ 13,307,500 665,000 Citigroup Inc. ............ 29,938,551 30,742,950 70,000 Goldman Sachs Group Inc. .. 7,056,718 7,141,400 360,000 Merrill Lynch & Co. Inc. .. 14,624,091 19,803,600 275,900 Northern Trust Corp. ...... 15,903,744 12,578,281 373,800 State Street Corp. ........ 18,417,575 18,035,850 --------------- -------------- TOTAL FINANCIAL ........... 96,639,971 101,609,581 --------------- -------------- HEALTH CARE -- 20.4% HEALTH CARE EQUIPMENT & SERVICES -- 11.8% 120,000 Alcon Inc. ................ 9,536,498 13,122,000 170,000 Biomet Inc. ............... 7,217,796 5,888,800 305,000 Caremark Rx Inc.+ ......... 11,356,812 13,578,600 205,000 Edwards Lifesciences Corp.+ 8,098,853 8,819,100 140,000 Express Scripts Inc.+ ..... 5,459,075 6,997,200 100,000 Fisher Scientific International Inc.+ 6,178,123 6,490,000 70,000 IDEXX Laboratories Inc.+ .. 4,523,156 4,363,100 100,000 Invitrogen Corp.+ ......... 7,429,011 8,329,000 425,000 Medtronic Inc. ............ 20,544,452 22,010,750 330,000 St. Jude Medical Inc.+ .... 10,749,340 14,391,300 225,000 Stryker Corp. ............. 11,067,366 10,701,000 340,000 UnitedHealth Group Inc. ... 8,811,088 17,727,600 235,000 Zimmer Holdings Inc.+ ..... 18,629,660 17,899,950 --------------- -------------- 129,601,230 150,318,400 --------------- -------------- PHARMACEUTICALS & BIOTECHNOLOGY -- 8.6% 120,000 Affymetrix Inc.+ .......... 4,246,369 6,471,600 418,000 Amgen Inc.+ ............... 25,747,689 25,272,280 175,000 Eli Lilly & Co. ........... 10,362,687 9,749,250 225,000 Genentech Inc.+ ........... 11,637,359 18,063,000 155,000 Genzyme Corp.+ ............ 8,619,588 9,313,950 314,000 Johnson & Johnson ......... 16,834,447 20,410,000 707,500 Pfizer Inc. ............... 26,002,488 19,512,850 --------------- -------------- 103,450,627 108,792,930 --------------- -------------- TOTAL HEALTH CARE ......... 233,051,857 259,111,330 --------------- -------------- See accompanying notes to financial statements. 4 THE GABELLI GROWTH FUND SCHEDULE OF INVESTMENTS (CONTINUED) -- JUNE 30, 2005 (UNAUDITED) -------------------------------------------------------------------------------- MARKET SHARES COST VALUE ------ ---- ----- COMMON STOCKS (CONTINUED) INDUSTRIAL -- 14.3% 270,000 3M Co. .................... $ 22,002,293 $ 19,521,000 155,000 C.H. Robinson Worldwide Inc. .......... 6,631,131 9,021,000 145,000 Caterpillar Inc. .......... 12,114,449 13,819,950 140,000 Deere & Co. ............... 9,321,024 9,168,600 125,000 Expeditors International of Washington Inc. ......... 5,856,676 6,226,250 215,000 Fluor Corp. ............... 9,150,403 12,381,850 118,500 General Dynamics Corp. .... 8,263,037 12,980,490 250,000 General Electric Co. ...... 9,108,748 8,662,500 195,000 Ingersoll-Rand Co. Ltd., Cl. A ................... 15,635,169 13,913,250 205,000 ITT Industries Inc. ....... 18,083,637 20,014,150 195,000 L-3 Communications Holdings Inc. ........... 8,875,601 14,933,100 160,000 Rockwell Automation Inc. .. 9,845,044 7,793,600 120,000 United Parcel Service Inc., Cl. B ................... 8,540,295 8,299,200 480,000 United Technologies Corp... 21,811,886 24,648,000 --------------- -------------- TOTAL INDUSTRIAL .......... 165,239,393 181,382,940 --------------- -------------- INFORMATION TECHNOLOGY -- 18.4% COMMUNICATIONS EQUIPMENT -- 2.1% 691,000 Cisco Systems Inc.+ ....... 8,827,045 13,205,010 85,000 Harman International Industries Inc. ......... 7,485,865 6,915,600 206,000 QUALCOMM Inc. ............. 3,351,283 6,800,060 --------------- -------------- 19,664,193 26,920,670 --------------- -------------- COMPUTERS & PERIPHERAL -- 1.7% 560,000 Dell Inc.+ ................ 13,731,850 22,125,600 --------------- -------------- SEMICONDUCTORS -- 7.3% 320,000 Altera Corp.+ ............. 7,060,735 6,342,400 140,000 Analog Devices Inc. ....... 7,409,489 5,223,400 410,000 Applied Materials Inc. .... 6,016,131 6,633,800 200,000 Broadcom Corp., Cl. A+ .... 6,448,965 7,102,000 840,000 Intel Corp. ............... 42,419,786 21,890,400 135,000 KLA-Tencor Corp. .......... 5,994,023 5,899,500 530,000 Linear Technology Corp. ... 16,838,784 19,445,700 275,000 Microchip Technology Inc... 6,497,793 8,145,500 201,000 Texas Instruments Inc. .... 5,573,547 5,642,070 240,000 Xilinx Inc. ............... 6,515,341 6,120,000 --------------- -------------- 110,774,594 92,444,770 --------------- -------------- MARKET SHARES COST VALUE ------ ---- ----- SOFTWARE & SERVICES -- 7.3% 320,000 Adobe Systems Inc. ........ $ 8,352,216 $ 9,158,400 255,000 CheckFree Corp.+ .......... 8,382,574 8,685,300 205,000 Citrix Systems Inc.+ ...... 4,825,412 4,440,300 170,000 Electronic Arts Inc.+ ..... 8,493,455 9,623,700 450,100 EMC Corp.+ ................ 5,899,732 6,170,871 35,000 Google Inc., Cl. A+ ....... 7,644,083 10,295,250 50,000 International Game Technology ............. 1,426,864 1,407,500 1,360,000 Microsoft Corp. ........... 35,379,556 33,782,400 50,000 NAVTEQ Corp.+ ............. 1,905,333 1,859,000 225,000 Yahoo! Inc.+ .............. 7,642,044 7,796,250 --------------- -------------- 89,951,269 93,218,971 --------------- -------------- TOTAL INFORMATION TECHNOLOGY .............. 234,121,906 234,710,011 --------------- -------------- MATERIALS -- 3.0% 385,000 AK Steel Holding Corp.+ ... 6,518,656 2,467,850 120,000 Alcoa Inc. ................ 3,980,793 3,135,600 250,000 Allegheny Technologies Inc. 6,146,836 5,515,000 240,000 Commercial Metals Co. ..... 7,778,340 5,716,800 225,000 Freeport-McMoRan Copper & Gold Inc., Cl. B ...... 8,621,600 8,424,000 340,000 Newmont Mining Corp. ...... 15,686,092 13,270,200 --------------- -------------- TOTAL MATERIALS ........... 48,732,317 38,529,450 --------------- -------------- TOTAL COMMON STOCKS ....... 1,099,199,595 1,233,225,992 --------------- -------------- PRINCIPAL AMOUNT ------- SHORT-TERM OBLIGATIONS -- 2.3% U.S. GOVERNMENT OBLIGATIONS -- 2.3% $28,787,000 U.S. Treasury Bills, 2.778% to 3.001%++, 07/07/05 to 09/08/05 .... 28,649,805 28,646,996 --------------- -------------- TOTAL SHORT-TERM OBLIGATIONS ............. 28,649,805 28,646,996 --------------- -------------- TOTAL INVESTMENTS -- 99.2% .... $ 1,127,849,400 1,261,872,988 ============== OTHER ASSETS AND LIABILITIES (NET) -- 0.8% 10,522,544 -------------- NET ASSETS -- 100.0% ....................... $1,272,395,532 ============== ---------------- + Non-income producing security. ++ Represents annualized yield at date of purchase. See accompanying notes to financial statements. 5 THE GABELLI GROWTH FUND STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 2005 (UNAUDITED) -------------------------------------------------------------------------------- ASSETS: Investments, at value (cost $1,127,849,400) ............... $ 1,261,872,988 Cash ...................................................... 29,450 Receivable for investments sold ........................... 12,309,357 Dividends receivable ...................................... 718,682 Receivable for Fund shares sold ........................... 388,454 Other assets .............................................. 23,516 --------------- TOTAL ASSETS .............................................. 1,275,342,447 --------------- LIABILITIES: Payable for investment advisory fees ...................... 1,070,830 Payable for shareholder services fees ..................... 890,818 Payable for shareholder communication fees ................ 401,548 Payable for distribution fees ............................. 268,111 Payable for Fund shares redeemed .......................... 237,357 Other accrued expenses .................................... 78,251 --------------- TOTAL LIABILITIES ......................................... 2,946,915 --------------- NET ASSETS applicable to 48,819,115 shares outstanding ...................................... $ 1,272,395,532 =============== NET ASSETS CONSIST OF: Shares of beneficial interest, at $0.01 par value ...................................... $ 488,191 Additional paid-in capital ................................ 2,294,017,623 Accumulated net investment loss ........................... (3,250,432) Accumulated net realized loss on investments .............. (1,152,883,438) Net unrealized appreciation on investments ................ 134,023,588 --------------- NET ASSETS ................................................ $ 1,272,395,532 =============== SHARES OF BENEFICIAL INTEREST: CLASS AAA: Net Asset Value, offering and redemption price per share ($1,271,644,081 / 48,789,995 shares outstanding; unlimited number of shares authorized of $0.01 par value) .......................... $26.06 ====== CLASS A: Net Asset Value and redemption price per share ($83,018 / 3,185 shares outstanding; unlimited number of shares authorized of $0.01 par value) ........................................ $26.07 ====== Maximum offering price per share (NAV / 0.9425, based on maximum sales charge of 5.75% of the offering price) ............................ $27.66 ====== CLASS B: Net Asset Value and offering price per share ($248,917 / 9,658 shares outstanding; unlimited number of shares authorized of $0.01 par value) ........................................ $25.77(a) ====== CLASS C: Net Asset Value and offering price per share ($419,516 / 16,277 shares outstanding; unlimited number of shares authorized of $0.01 par value) ........................................ $25.77(a) ====== ---------- (a) Redemption price varies based on length of time held. STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2005 (UNAUDITED) -------------------------------------------------------------------------------- INVESTMENT INCOME: Dividends (net of foreign taxes of $24,867) ............... $ 6,683,281 Interest .................................................. 194,475 ------------ TOTAL INVESTMENT INCOME ................................... 6,877,756 ------------ EXPENSES: Investment advisory fees .................................. 6,619,946 Distribution fees -- Class AAA ............................ 1,654,224 Distribution fees -- Class A .............................. 98 Distribution fees -- Class B .............................. 1,220 Distribution fees -- Class C .............................. 1,441 Shareholder services fees ................................. 1,216,036 Shareholder communications expenses ....................... 352,158 Custodian fees ............................................ 100,484 Legal and audit fees ...................................... 39,183 Trustees' fees ............................................ 35,223 Registration fees ......................................... 27,421 Miscellaneous expenses .................................... 80,844 ------------ TOTAL EXPENSES ............................................ 10,128,278 Less: Custodian fee credits ............................... (90) ------------ NET EXPENSES .............................................. 10,128,188 ------------ NET INVESTMENT LOSS ....................................... (3,250,432) ------------ NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain on investments .......................... 25,600,680 Net change in unrealized appreciation/ depreciation on investments ............................. (27,800,537) ------------ NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS .......................................... (2,199,857) ------------ NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ......................................... $ (5,450,289) ============ See accompanying notes to financial statements. 6 THE GABELLI GROWTH FUND STATEMENT OF CHANGES IN NET ASSETS --------------------------------------------------------------------------------
SIX MONTHS ENDED JUNE 30, 2005 YEAR ENDED (UNAUDITED) DECEMBER 31, 2004 ---------------- ----------------- OPERATIONS: Net investment loss ....................................................... $ (3,250,432) $ (7,501,356) Net realized gain on investments .......................................... 25,600,680 6,104,056 Net change in unrealized appreciation/depreciation on investments ......... (27,800,537) 62,086,843 -------------- -------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ........... (5,450,289) 60,689,543 -------------- -------------- SHARES OF BENEFICIAL INTEREST TRANSACTIONS: Class AAA ................................................................. (170,579,132) (494,470,178) Class A ................................................................... 10,304 66,824 Class B ................................................................... -- 242,719 Class C ................................................................... 188,933 211,422 -------------- -------------- NET DECREASE IN NET ASSETS FROM SHARES OF BENEFICIAL INTEREST TRANSACTIONS (170,379,895) (493,949,213) -------------- -------------- REDEMPTION FEES ........................................................... 21,407 6,601 -------------- -------------- NET DECREASE IN NET ASSETS ................................................ (175,808,777) (433,253,069) NET ASSETS: Beginning of period ....................................................... 1,448,204,309 1,881,457,378 -------------- -------------- End of period ............................................................. $1,272,395,532 $1,448,204,309 ============== ==============
See accompanying notes to financial statements. THE GABELLI GROWTH FUND NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -------------------------------------------------------------------------------- 1. ORGANIZATION. The Gabelli Growth Fund (the "Fund") was organized on October 24, 1986 as a Massachusetts business trust. The Fund is a diversified, open-end management investment company registered under the Investment Company Act of 1940, as amended (the "1940 Act"). The Fund's primary objective is capital appreciation. The Fund commenced investment operations on April 10, 1987. 2. SIGNIFICANT ACCOUNTING POLICIES. The preparation of financial statements in accordance with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. SECURITY VALUATION. Portfolio securities listed or traded on a nationally recognized securities exchange or traded in the U.S. over-the-counter market for which market quotations are readily available are valued at the last quoted sale price or a market's official closing price as of the close of business on the day the securities are being valued. If there were no sales that day, the security is valued at the average of the closing bid and asked prices or, if there were no asked prices quoted on that day, then the security is valued at the closing bid price on that day. If no bid or asked prices are quoted on such day, the security is valued at the most recently available price or, if the Board of Trustees (the "Board") so determines, by such other method as the Board shall determine in good faith, to reflect its fair market value. Portfolio securities traded on more than one national securities exchange or market are valued according to the broadest and most representative market, as determined by Gabelli Funds, LLC (the "Adviser"). Portfolio securities primarily traded on foreign markets are generally valued at the preceding closing values of such securities on their respective exchanges or if after the close of the foreign markets, but prior to the close of business on the day the securities are being valued, market conditions change significantly, certain foreign 7 THE GABELLI GROWTH FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) -------------------------------------------------------------------------------- securities may be fair valued pursuant to procedures established by the Board. Debt instruments that are not credit impaired with remaining maturities of 60 days or less 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 valued at their fair value 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 latest average of the 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 valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Board. Fair valuation methodologies and procedures may include, but are not limited to: analysis and review of available financial and non-financial information about the company; comparisons to the valuation and changes in valuation of similar securities, including a comparison of foreign securities to the equivalent U.S. dollar value ADR securities at the close of the U.S. exchange; and evaluation of any other information that could be indicative of the value of the security. 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 as earned. Dividend income is recorded on the ex-dividend date. 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 net asset value 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 solely borne by the class incurring the expense. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders are recorded on the ex-dividend date. Distributions to shareholders are based on ordinary income and long-term 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 held by the Fund, timing differences and differing characterizations of distributions made by the Fund. For the year ended December 31, 2004, reclassifications were made to increase accumulated net investment income by $7,501,356, with an offsetting adjustment to additional paid-in capital. No distributions were made during the year ended December 31, 2004. 8 THE GABELLI GROWTH FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) -------------------------------------------------------------------------------- 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, 2004, the difference between book basis and tax basis unrealized appreciation was attributable primarily to the tax deferral of losses on wash sales. As of December 31, 2004, the components of accumulated earnings/(losses) on a tax basis were as follows: Accumulated capital loss carryforward ................ $(1,163,304,151) Net unrealized appreciation .......................... 146,644,157 --------------- Total accumulated loss ............................... $(1,016,659,994) =============== At December 31, 2004, the Fund has net capital loss carryforwards for Federal income tax purposes of $1,163,304,151, which are available to reduce future required distributions of net capital gains to shareholders. $68,961,980 of the loss carryforward is available through 2009; $743,150,002 is available through 2010; $350,050,494 is available through 2011; and $1,141,675 is available through 2012. The following summarizes the tax cost of investments and related unrealized appreciation/depreciation at June 30, 2005:
GROSS GROSS NET UNREALIZED UNREALIZED UNREALIZED APPRECIATION/ COST APPRECIATION DEPRECIATION (DEPRECIATION) ---- ------------ ------------ -------------- Investments ............. $1,138,052,220 $196,644,288 $(72,823,520) $123,820,768
3. INVESTMENT ADVISORY AGREEMENT. The Fund has entered into an investment advisory agreement (the "Advisory Agreement") with the Adviser which provides that the Fund will pay the Adviser a fee, computed daily and paid monthly, at the annual rate of 1.00% of the value of its average daily net assets. In accordance with the Advisory Agreement, the Adviser provides a continuous investment program for the Fund's portfolio, oversees the administration of all aspects of the Fund's business and affairs and pays the compensation of all Officers and Trustees of the Fund who are the Adviser's affiliates. 4. DISTRIBUTION PLAN. The Fund's Board has adopted a distribution plan (the "Plan") for each class of shares pursuant to Rule 12b-1 under the 1940 Act. Gabelli & Company, Inc. ("Gabelli & Company"), an affiliate of the Adviser, serves as distributor of the Fund. Under the Class AAA, Class A, Class B and Class C Share Plans, payments are authorized to Gabelli & Company at annual rates of 0.25%, 0.25%, 1.00% and 1.00%, respectively, of the average daily net assets of those classes, the annual limitations under each Plan. Such payments are accrued daily and paid monthly. 5. PORTFOLIO SECURITIES. Purchases and proceeds from the sales of securities for the six months ended June 30, 2005, other than short term securities, aggregated $202,007,548 and $408,139,083, respectively. 6. TRANSACTIONS WITH AFFILIATES. During the six months ended June 30, 2005, the Fund paid brokerage commissions of $500 to Gabelli & Company. During the six months ended June 30, 2005, Gabelli & Company informed the Fund that it received $153 from investors representing commissions (sales charges and underwriting fees) on sales and redemptions of Fund shares. 9 THE GABELLI GROWTH FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) -------------------------------------------------------------------------------- The cost of calculating the Fund's net asset value per share is a Fund expense pursuant to the Advisory Agreement between the Fund and the Adviser. During the six months ended June 30, 2005, the Fund reimbursed the Adviser $22,500 in connection with the cost of computing the Fund's net asset value, which is included in miscellaneous expenses in the Statement of Operations. 7. LINE OF CREDIT. The Fund has access to an unsecured line of credit of up to $25,000,000 from the custodian for temporary borrowing purposes. Borrowings under this arrangement bear interest at 0.75% above the Federal Funds rate on outstanding balances. During the six months ended June 30, 2005 there were no borrowings from the line of credit. 8. SHARES OF BENEFICIAL INTEREST. The Fund offers four classes of shares -- Class AAA Shares, Class A Shares, Class B Shares and Class C Shares. Class AAA Shares are offered only to investors who acquire them directly from Gabelli & Company or through selected broker/dealers 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 after eight years of the original purchase. The applicable CDSC is equal to a declining percentage of the lesser of the net asset value 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% CDSC for one year after purchase. As of July 27, 2004, Class B Shares are available only through exchange of Class B Shares of other Funds distributed by Gabelli & Company. The Board has approved Class I Shares which have not been offered publicly. Effective June 15, 2005, the Fund imposed a redemption fee of 2.00% on Class AAA Shares, Class A Shares, Class B Shares and Class C Shares that are redeemed or exchanged on or before the seventh day after the date of a purchase. (Prior to June 15, 2005, the Fund imposed a redemption fee on shares that were redeemed or exchanged within the sixtieth day after the date of a purchase.) The redemption fee is deducted from the proceeds otherwise payable to the redeeming shareholders and is retained by the Fund. The redemption fees retained by the Fund during the six months ended June 30, 2005 amounted to $21,407. The redemption fee does not apply to shares purchased through programs that the Adviser determined to have appropriate short-term trading policies in place. Additionally, certain recordkeepers for qualified and non-qualified retirement plans that could not collect the redemption fee at the participant level due to systems limitations have received an extension to implement such systems. 10 THE GABELLI GROWTH FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) -------------------------------------------------------------------------------- Transactions in shares of beneficial interest were as follows:
SIX MONTHS ENDED JUNE 30, 2005 YEAR ENDED (UNAUDITED) DECEMBER 31, 2004 ---------------------------- ---------------------------- SHARES AMOUNT SHARES AMOUNT -------- --------- -------- ------- CLASS AAA CLASS AAA --------------------------- ---------------------------- Shares sold ....................................... 2,320,688 $ 59,514,713 7,724,349 $ 191,537,714 Shares redeemed ................................... (8,946,824) (230,093,845) (27,719,706) (686,007,892) ---------- ------------- ----------- ------------- Net decrease .................................... (6,626,136) $(170,579,132) (19,995,357) $(494,470,178) ========== ============= =========== ============= CLASS A CLASS A ---------------------------- ---------------------------- Shares sold ....................................... 482 $ 12,454 2,747 $ 66,849 Shares redeemed ................................... (83) (2,150) (1) (25) ---------- ------------- ----------- ------------- Net increase .................................... 399 $ 10,304 2,746 $ 66,824 ========== ============= =========== ============= CLASS B CLASS B ---------------------------- ---------------------------- Shares sold ....................................... -- -- 9,618 $ 242,719 Shares redeemed ................................... -- -- -- -- ---------- ------------- ----------- ------------- Net increase .................................... -- -- 9,618 $ 242,719 ========== ============= =========== ============= CLASS C CLASS C ---------------------------- ---------------------------- Shares sold ....................................... 8,587 $ 215,694 8,810 $ 214,167 Shares redeemed ................................... (1,045) (26,761) (115) (2,745) ---------- ------------- ----------- ------------- Net increase .................................... 7,542 $ 188,933 8,695 $ 211,422 ========== ============= =========== =============
9. OTHER MATTERS. The Adviser and/or affiliates have received subpoenas from the Attorney General of the State of New York and the SEC requesting information on mutual fund shares trading practices. Gabelli Asset Management Inc., the Adviser's parent company, is responding to these requests for documents and testimony. The Fund does not believe that these matters will have a material adverse effect on the Fund's financial position or the results of its operations. 10. INDEMNIFICATIONS. The Fund enters into contracts that contain a variety of indemnifications. The Fund's maximum exposure under these arrangements is unknown. However, the Fund has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote. 11 THE GABELLI GROWTH FUND FINANCIAL HIGHLIGHTS -------------------------------------------------------------------------------- Selected data for a share of beneficial interest outstanding throughout each period:
INCOME FROM INVESTMENT OPERATIONS DISTRIBUTIONS ---------------------------------------------------- --------------------------- Net Net Asset Realized and Total Net Period Value, Net Unrealized from Realized Ended Beginning Investment Gain/(Loss) on Investment Gain on Total December 31 of Period Loss(d) Investments Operations Investments Distributions ----------- --------- ---------- -------------- ---------- ----------- ------------- CLASS AAA 2005(e) $26.12 $(0.06) -- $(0.06) -- -- 2004 24.95 (0.11) $1.28 1.17 -- -- 2003 18.99 (0.14) 6.10 5.96 -- -- 2002 28.68 (0.17) (9.52) (9.69) -- -- 2001 37.79 (0.23) (8.88) (9.11) $(0.00)(a) $(0.00)(a) 2000 46.51 (0.24) (4.64) (4.88) (3.84) (3.84) CLASS A 2005(e) $26.13 $(0.06) -- $(0.06) -- -- 2004(b) 24.95 (0.02) $1.20 1.18 -- -- CLASS B 2005(e) $25.93 $(0.16) -- $(0.16) -- -- 2004(b) 24.95 (0.28) $1.26 0.98 -- -- CLASS C 2005(e) $25.93 $(0.15) $(0.01) $(0.16) -- -- 2004(b) 24.95 (0.21) 1.19 0.98 -- --
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA ----------------------------------------------------- Net Asset Net Assets Period Value, End of Net Portfolio Ended Redemption End of Total Period Investment Operating Turnover December 31 Fees(d) Period Return+ (in 000's) Income/(Loss) Expenses(f) Rate ----------- ---------- ------ ------- ---------- ------------- ----------- ---------- CLASS AAA 2005(e) $0.00(a) $26.06 (0.2)% $1,271,644 (0.49)%(c) 1.53%(c) 15% 2004 0.00(a) 26.12 4.7 1,447,655 (0.46) 1.53 31 2003 -- 24.95 31.4 1,881,457 (0.60) 1.47 42 2002 -- 18.99 (33.8) 1,675,816 (0.68) 1.43 30 2001 -- 28.68 (24.1) 2,948,390 (0.71) 1.40 26 2000 -- 37.79 (10.6) 3,833,807 (0.63) 1.38 55 CLASS A 2005(e) $0.00(a) $26.07 (0.2)% $ 83 (0.49)%(c) 1.53%(c) 15% 2004(b) 0.00(a) 26.13 4.7 73 (0.09) 1.60 31 CLASS B 2005(e) $0.00(a) $25.77 (0.6)% $ 249 (1.24)%(c) 2.28%(c) 15% 2004(b) 0.00(a) 25.93 3.9 250 (1.12) 2.30 31 CLASS C 2005(e) $0.00(a) $25.77 (0.6)% $ 420 (1.22)%(c) 2.29%(c) 15% 2004(b) 0.00(a) 25.93 3.9 226 (0.88) 2.37 31
---------- + 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 dividends and does not reflect applicable sales charges. Total return for the period of less than one year is not annualized. (a) Amount represents less than $0.005 per share. (b) Class A, Class B and Class C Shares were initially offered on December 31, 2003. (c) Annualized. (d) Per share amounts have been calculated using the average shares outstanding method. (e) For the six months ended June 30, 2005, unaudited. (f) The ratios do not include a reduction of expenses for custodian fee credits on cash balances maintained with the custodian. For the six months ended June 30, 2005, the effect of the custodian fee credits was minimal. See accompanying notes to financial statements. 12 THE GABELLI GROWTH FUND BOARD CONSIDERATION AND RE-APPROVAL OF MANAGEMENT AGREEMENT (UNAUDITED) At its meeting on February 16, 2005, the Board of Trustees ("Board") of the Trust approved the continuation of the investment advisory agreement with the Adviser for the Trust on the basis of the recommendation by the trustees (the "independent trustees") who are not "interested persons" of the Trust. The following paragraphs summarize the material information and factors considered by the independent trustees as well as their conclusions relative to such factors. NATURE, EXTENT AND QUALITY OF SERVICES. The independent trustees considered information regarding the portfolio manager, the depth of the analyst pool available to the Adviser and the portfolio manager, the scope of administrative, shareholder and other services supervised or provided by the Adviser and the absence of significant service problems reported to the Board. The independent trustees noted the experience, length of service and reputation of the portfolio manager. INVESTMENT PERFORMANCE. The independent trustees reviewed the short, medium and long-term performance of the Trust against a peer group of large-cap growth funds. The trustees noted that the Trust's performance was near the top 25% of the funds in its category for the prior ten years but was in or near the lowest 25% of the funds in its category for shorter one, three, and five year periods. The trustees also noted that relative performance had shown substantial improvement in recent months. PROFITABILITY. The independent trustees reviewed summary data regarding the profitability of the Trust to the Adviser both with an administrative overhead charge and without such a charge. The trustees also noted that the Adviser's affiliated broker received distribution fees and minor amounts of sales commissions and that the Adviser received a moderate level of soft dollar research benefits through the Trust's portfolio brokerage. ECONOMIES OF SCALE. The independent trustees discussed the major elements of the Adviser's cost structure and the relationship of those elements to potential economies of scale. The independent trustees agreed that the Adviser should gather and provide them with information regarding possible ways of measuring potential economies of scale so that they would be in a position to review this potential issue in greater detail if the Trust grew substantially on an inflation adjusted basis beyond its previous largest aggregate asset value. SHARING OF ECONOMIES OF SCALE. The independent trustees noted that the investment management fee schedule for the Trust does not take into account any potential economies of scale that may develop or any losses or diminished profitability to the Adviser in prior years. SERVICE AND COST COMPARISONS. The independent trustees compared the expense ratios of the investment management fee, other expenses and total expenses of the Trust to similar expense ratios of the peer group of large-cap growth funds and noted that the Adviser's management fee includes substantially all administrative services of the Trust as well as investment advisory services. The trustees noted that the Trust's expense ratios were above and the Trust's size was below average within this group. The trustees also noted that the management fee structure was the same as that in effect for most of the Gabelli funds. The trustees did not compare the management fee to the fee for other types of accounts managed by the Adviser. CONCLUSIONS. The independent trustees concluded that the Trust enjoyed highly experienced portfolio management services and good ancillary services but that the intermediate performance record was poor and that the expense ratios were significantly higher than those of the peer group. The trustees also noted that the portfolio manager had previously achieved excellent performance and that near-term relative performance was also improving although not yet as good as the trustees would like to see. They concluded that the positive trend and long-term record of the portfolio manager were sufficient in relation to the performance factor to warrant renewal of the investment management agreement at this time and that the fee structure of the Trust in relation to its peer group should be revisited if both the long-term and short-term performance record were not strong. The trustees concluded that the profitability to the Adviser of managing the Trust was reasonable and that economies of scale were not a significant factor in their thinking at this time. The trustees did not view the potential profitability of ancillary services as material to their decision. On the basis of the foregoing and without assigning particular weight to any single conclusion, the independent trustees determined to recommend continuation of the investment management agreement to the full Board of Trustees. 13 -------------------------------------------------------------------------------- GABELLI FUNDS AND YOUR PERSONAL PRIVACY -------------------------------------------------------------------------------- WHO ARE WE? The Gabelli 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, Gabelli Advisers, Inc. and Gabelli Fixed Income, LLC, which are affiliated with Gabelli Asset Management Inc. Gabelli Asset Management 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 GABELLI CUSTOMER? If you apply to open an account directly with us, you will be giving us some non-public information about yourself. The non-public information we collect about you is: o INFORMATION YOU GIVE US ON YOUR APPLICATION FORM. This could include your name, address, telephone number, social security number, bank account number, and other information. o INFORMATION ABOUT YOUR TRANSACTIONS WITH US, ANY TRANSACTIONS WITH OUR AFFILIATES AND TRANSACTIONS WITH THE ENTITIES WE HIRE TO PROVIDE SERVICES TO YOU. This would include information about the shares that you buy or redeem, and the deposits and withdrawals that you make. 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 web site, 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 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 less than $1 billion) believed to have rapid revenue and earnings growth potential. The Fund's primary objective is capital appreciation. (MULTICLASS) PORTFOLIO MANAGER: MARIO J. GABELLI, CFA 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) TEAM MANAGED GABELLI WOODLAND SMALL CAP VALUE FUND Seeks to invest primarily in the common stocks of smaller companies (market capitalizations less than $1.5 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 ______________________________________ GABELLI 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 GABELLI 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 _________________________ GABELLI 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 ___________________________________ 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 market average 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 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 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: SUSAN M. BYRNE SPECIALTY EQUITY ____________________________ GABELLI 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 GABELLI 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 SECTOR ______________________________________ GABELLI 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 GABELLI 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 world-wide economic, financial and political factors. (MULTICLASS) PORTFOLIO MANAGER: CAESAR BRYAN GABELLI UTILITIES FUND Seeks to provide a high level of total return through a combination of capital appreciation and current income. (MULTICLASS) TEAM MANAGED MERGER AND ARBITRAGE _____________________ GABELLI ABC FUND Seeks to invest in securities with attractive opportunities for appreciation or investment income. The Fund's primary objective is total return in various market conditions without excessive risk of capital loss. (NO-LOAD) PORTFOLIO MANAGER: MARIO J. GABELLI, CFA CONTRARIAN_________________________________ GABELLI MATHERS FUND Seeks long-term capital appreciation in various market conditions without excessive risk of capital loss. (CLASS AAA-NO-LOAD) PORTFOLIO MANAGER: HENRY VAN DER EB, CFA COMSTOCK CAPITAL VALUE FUND Seeks capital appreciation and current income. The Fund may use either long or short positions to achieve its objective. (MULTICLASS) PORTFOLIO MANAGER: MARTIN WEINER, CFA COMSTOCK STRATEGY FUND The Fund emphasizes investments in debt securities, which maximize total return in light of credit risk, interest rate risk, and the risk associated with the length of maturity of the debt instrument. (MULTICLASS) PORTFOLIO MANAGER: MARTIN WEINER, CFA QUANTITATIVE_________________________________ NED DAVIS RESEARCH ASSET ALLOCATION FUND Seeks to achieve returns greater then the weighted composite benchmark consisting of 60% in the S&P 500 Index and 40% in the Lehman Long Term U.S. Government Bond Index through a flexible asset allocation strategy. The Fund's primary objective is capital appreciation. (MULTICLASS) TEAM MANAGED FIXED INCOME ________________________________ WESTWOOD INTERMEDIATE BOND FUND Seeks to invest in a diversified portfolio of bonds with various maturities. The Fund's primary objective is total return. (MULTICLASS) PORTFOLIO MANAGER: MARK FREEMAN, CFA CASH MANAGEMENT-MONEY MARKET __________ GABELLI U.S. TREASURY MONEY MARKET FUND Seeks to invest exclusively in short-term U.S. Treasury securities. The Fund's primary objective is to provide high current income consistent with the preservation of principal and liquidity. (NO-LOAD) PORTFOLIO MANAGER: JUDITH A. RANERI THE TREASURER'S FUND Three money market portfolios designed to generate superior returns without compromising portfolio safety. U.S. Treasury Money Market seeks to invest in U.S. Treasury securities and repurchase agreements. Tax Exempt Money Market seeks to invest in municipal securities. Domestic Prime Money Market seeks to invest in prime quality, domestic money market instruments. (NO-LOAD) PORTFOLIO MANAGER: JUDITH A. RANERI THE GLOBAL FUNDS INVEST IN FOREIGN SECURITIES WHICH INVOLVE RISKS NOT ORDINARILY ASSOCIATED WITH INVESTMENTS IN DOMESTIC ISSUES, INCLUDING CURRENCY FLUCTUATION, ECONOMIC AND POLITICAL RISKS. AN INVESTMENT IN THE ABOVE MONEY MARKET FUNDS IS NEITHER INSURED NOR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY GOVERNMENT AGENCY. ALTHOUGH THE FUNDS SEEK TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUNDS. TO RECEIVE A PROSPECTUS, CALL 800-GABELLI (422-3554). INVESTORS SHOULD CONSIDER THE INVESTMENT OBJECTIVES, RISKS AND CHARGES AND EXPENSES OF THE FUND CAREFULLY BEFORE INVESTING. THE PROSPECTUS CONTAINS MORE COMPLETE INFORMATION ABOUT THIS AND OTHER MATTERS AND SHOULD BE READ CAREFULLY BEFORE INVESTING. THE GABELLI GROWTH FUND One Corporate Center Rye, New York 10580-1422 800-GABELLI 800-422-3554 FAX: 914-921-5118 WEBSITE: WWW.GABELLI.COM E-MAIL: INFO@GABELLI.COM Net Asset Value available daily by calling 800-GABELLI after 6:00 P.M. BOARD OF TRUSTEES Mario J. Gabelli, CFA Karl Otto Pohl CHAIRMAN AND CHIEF FORMER PRESIDENT EXECUTIVE OFFICER DEUTSCHE BUNDESBANK GABELLI ASSET MANAGEMENT INC. Anthony J. Colavita Anthony R. Pustorino ATTORNEY-AT-LAW CERTIFIED PUBLIC ACCOUNTANT ANTHONY J. COLAVITA, P.C. PROFESSOR EMERITUS PACE UNIVERSITY James P. Conn Anthony Torna FORMER CHIEF INVESTMENT OFFICER MAXIM GROUP LLC FINANCIAL SECURITY ASSURANCE HOLDINGS LTD. Dugald A. Fletcher Anthonie C. van Ekris PRESIDENT MANAGING DIRECTOR FLETCHER & COMPANY, INC. BALMAC INTERNATIONAL, INC. John D. Gabelli Salvatore J. Zizza SENIOR VICE PRESIDENT CHAIRMAN, HALLMARK ELECTRICAL GABELLI & COMPANY, INC. SUPPLIES CORP. Robert J. Morrissey ATTORNEY-AT-LAW MORRISSEY, HAWKINS & LYNCH OFFICERS AND PORTFOLIO MANAGER Bruce N. Alpert Howard F. Ward, CFA PRESIDENT AND TREASURER PORTFOLIO MANAGER James E. McKee Peter D. Goldstein SECRETARY CHIEF COMPLIANCE OFFICER DISTRIBUTOR Gabelli & Company, Inc. CUSTODIAN, TRANSFER AGENT AND DIVIDEND AGENT State Street Bank and Trust Company LEGAL COUNSEL Skadden, Arps, Slate, Meagher & Flom LLP -------------------------------------------------------------------------------- This report is submitted for the general information of the shareholders of The Gabelli Growth Fund. It is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. -------------------------------------------------------------------------------- GAB406Q205SR [GRAPHIC OMITTED] Mario J. Gabelli THE GABELLI GROWTH FUND SEMI-ANNUAL REPORT JUNE 30, 2005 ITEM 2. CODE OF ETHICS. Not applicable. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not applicable. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable. ITEM 6. SCHEDULE OF INVESTMENTS Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period is included as part of the report to shareholders filed under Item 1 of this form. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. There have been no material changes to the procedures by which the shareholders may recommend nominees to the registrant's Board of Trustees, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A (17 CFR 240.14a-101), or this Item. ITEM 11. CONTROLS AND PROCEDURES. (a) The registrant's principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the "1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)). (b) There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the registrant's second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 12. EXHIBITS. (a)(1) Not applicable. (a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto. (a)(3) Not applicable. (b) Certifications pursuant to Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (registrant) The Gabelli Growth Fund -------------------------------------------------------------------- By (Signature and Title)* /s/ Bruce N. Alpert ------------------------------------------------------- Bruce N. Alpert, Principal Executive Officer Date September 7, 2005 ---------------------------------------------------------------------------- Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title)* /s/ Bruce N. Alpert ------------------------------------------------------- Bruce N. Alpert, Principal Executive Office & Principal Financial Officer Date September 7, 2005 ---------------------------------------------------------------------------- * Print the name and title of each signing officer under his or her signature.