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 811-07896
GAMCO Global Series Funds, 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, 2020
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. § 3507.
Item 1. Reports to Stockholders.
(a) | The Report to Shareholders is attached herewith. |
The Gabelli Global Content & Connectivity Fund
Annual Report — December 31, 2020
(Y)our Portfolio Management Team
Evan D. Miller, CFA | Sergey Dluzhevskiy, CFA, CPA | |||
Portfolio Manager | Portfolio Manager | |||
BA, Northwestern University | BS, Case Western | |||
MBA, Booth School of Business, | Reserve University | |||
University of Chicago | MBA, The Wharton School, | |||
University of Pennsylvania |
To Our Shareholders,
For the year ended December 31, 2020, the net asset value (NAV) total return per Class AAA Share of The Gabelli Global Content & Connectivity Fund was 16.4% compared with a total return of 24.1% for the Morgan Stanley Capital International (MSCI) All Country (AC) World Communication Services Index. Other classes of shares are available. See page 3 for performance information for all classes.
Enclosed are the financial statements, including the schedule of investments, as of December 31, 2020.
Performance Discussion (Unaudited)
The Fund’s investment strategy is to invest its net assets in common stocks of companies in the telecommunications, media, and information technology industries which Gabelli Funds, LLC, the Adviser, believes are likely to have rapid growth in revenues and earnings and potential for above average capital appreciation or are undervalued. In accordance with its concentration policy, the Fund will invest at least 25% of the value of its total assets in the telecommunications related industry, and not invest more than 25% of the value of its total assets in any other particular industry.
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s annual and semiannual shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Fund’s website (www.gabelli.com), and you will be notified by mail each time a report is posted and provided with a website link to access the report. If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. To elect to receive all future reports on paper free of charge, please contact your financial intermediary, or, if you invest directly with the Fund, you may call 800-422-3554 or send an email request to info@gabelli.com. |
Global equities fell sharply in the first quarter of 2020, as the coronavirus outbreak spread to over 200 countries around the world and stringent “shelter in place” measures brought a number of industries to an abrupt halt. Investor debate shifted from evaluating the possibility of global recession to determining how long and deep it would be. The broad MSCI AC World IMI Index was down 22.4% in the quarter as COVID-19 spared no broad sectors of the economy since late February. The Communications Services Index exhibited its defensive qualities to a degree, with MSCI AC World Communication Services Index down 16.9%, finishing among the top five performing sectors, behind Healthcare, Consumer Staples, Information Technology, and Utilities.
Global equities rebounded strongly in the second quarter as major central banks and governments responded with massive stimulus packages to the COVID-19 pandemic and economies started to reopen. As lockdown measures eased, strong bounce-back in a number of economic indicators provided reasons for investor optimism. For example, U.S. retail trade sales were up 16.8% month-over-month in May, while Eurozone retail sales rose 17.8% during the same period. U.S. weekly jobless claims declined from 6.9 million for the week ended March 28 to 1.4 million for the week ending July 2. In addition, reports of positive trial data from potential coronavirus vaccines and therapeutics contributed to the market rebound. With that said, a re-acceleration in COVID-19 new cases in the United States in June and a relative lack of success in controlling the spread of the virus in several large emerging markets (Brazil, India, Russia) remained a concern.
Global equities gained in the third quarter, helped by gradual reopening of economies, with major central banks remaining largely accommodative, as well as optimism around progress made in the development of COVID-19 vaccines and therapeutics. The communication services sector was no exception, up 7.5% (moderately underperforming the broad index, as MSCI AC World IMI Index gained 8.1%). Sector performance was largely driven by Media & Entertainment (up 10.2%), led by gains in Facebook, Comcast, and Disney shares. On a regional basis, the sector exhibited divergent results, with solid gains, in U.S. dollar terms, in North America (+9.4%) and Japan (+12.8%), and relative softness in Europe (-3.1%) and Latin America (-1.5%).
Global equities continued to rally in the fourth quarter, with particular strength in November on positive COVID-19 vaccine announcements from Pfizer/BioNTech, Moderna, and AstraZeneca/Oxford. As a result, sectors that had previously been hit most severely by the pandemic, such as energy and financials (worst performers through the first nine months of 2020), led the market in the quarter. The communication services sector was up 15.0%, moderately underperforming the broad index, as MSCI AC World IMI Index gained 15.7%. Sector performance was largely driven by Media & Entertainment Industry Group (up 17.2%), helped by meaningful gains in Alphabet, Disney, and Comcast shares.
Selected holdings that contributed positively to performance in 2020 were:
T-Mobile US, Inc. (8.3% of net assets as of December 31, 2020) is the second largest wireless operator in the U.S., serving 98 million branded customers; Kinnevik AB (6.8%) is an investment company managing a portfolio of listed and unlisted holdings, with focus on e-commerce, healthcare, communications, and financial services; and SoftBank Group (5.7%) is an investment firm managing a portfolio of listed (including stakes in Alibaba, SoftBank Group Corp., and T-Mobile) and unlisted holdings (directly and through Vision Fund), with focus on artificial intelligence, robotics, and ride sharing.
Some of our weaker performing stocks during the year:
Telephone and Data Systems Inc. (1.7%) is a telecommunications company that provides communications services in the United States. It operates through three segments: U.S. Cellular, Wireline, and Cable; China Tower Corp., Ltd. (0.5%) provides telecommunication tower infrastructure services in the People’s Republic of
2
China; and ViacomCBS Inc. (No longer held as of December 31, 2020) is a globally-scaled content company with networks including CBS Showtime, Nickelodeon, MTV, Comedy Central, VH1, BET, thirty television stations, the Simon & Schuster publishing house and the Paramount movie studio.
Thank you for your investment in The Gabelli Global Content & Connectivity Fund.
We appreciate your confidence and trust.
Comparative Results
Average Annual Returns through December 31, 2020 (a) (Unaudited)
1 Year | 5 Year | 10 Year | 15 Year | Since Inception (11/1/93) | |||||||||||
Class AAA (GABTX) | 16.42 | % | 6.66 | % | 5.52 | % | 5.23 | % | 7.21 | % | |||||
MSCI AC World Telecommunication Services Index (b) | 24.08 | 9.96 | 7.92 | 8.00 | N/A | ||||||||||
MSCI AC World Index | 16.25 | 12.26 | 9.13 | 7.20 | 7.51 | (c) | |||||||||
Class A (GTCAX) | 16.43 | 6.63 | 5.50 | 5.22 | 7.21 | ||||||||||
With sales charge (d) | 9.74 | 5.37 | 4.88 | 4.81 | 6.98 | ||||||||||
Class C (GTCCX) | 16.44 | 6.03 | 4.82 | 4.50 | 6.64 | ||||||||||
With contingent deferred sales charge (e) | 15.44 | 6.03 | 4.82 | 4.50 | 6.64 | ||||||||||
Class I (GTTIX) | 16.42 | 7.17 | 5.91 | 5.54 | 7.39 |
In the current prospectuses dated April 29, 2020, the gross expense ratios for Class AAA, A, C, and I Shares are 1.76%, 1.76%, 2.51%, and 1.51%, respectively, and the net expense ratio for all share classes after contractual reimbursements by Gabelli Funds, LLC, (the Adviser) is 0.92%. See page 11 for the expense ratios for the year ended December 31, 2020. The contractual reimbursements are in effect through April 30, 2021. Class AAA and Class I Shares do not have a sales charge. The maximum sales charge for Class A Shares, and Class C Shares is 5.75%, 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, 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. 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. The Fund imposes a 2% redemption fee on shares sold or exchanged within seven days of purchase. Investors should carefully consider the investment objectives, risks, charges, and expenses of the Fund before investing. The prospectuses contain information about these and other matters and should be read carefully before investing. To obtain a prospectus, please visit our website at www.gabelli.com. Investing in foreign securities involves risks not ordinarily associated with investments in domestic issues, including currency fluctuation, economic, and political risks. The Class AAA Share NAVs are used to calculate performance for the periods prior to the issuance of Class A Shares, Class C Shares, and Class I Shares on March 12, 2000, June 2, 2000, and January 11, 2008, respectively. The actual performance for the Class A Shares and Class C Shares would have been lower due to the additional fees and 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 MSCI AC World Telecommunication Services Index is an unmanaged index that measures the performance of the global telecommunication securities from around the world. The MSCI AC World Index is an unmanaged market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets. The MSCI AC World Index consists of 45 country indices comprising 24 developed and 21 emerging market country indices. Dividends are considered reinvested. You cannot invest directly in an index. |
(b) | MSCI AC World Telecommunication Services Index name changed to MSCI AC World Communication Services Index. |
(c) | The MSCI AC World Index since inception performance is as of October 31, 1993. |
(d) | Performance results include the effect of the maximum 5.75% sales charge at the beginning of the period. |
(e) | Assuming payment of the 1% maximum contingent deferred sales charge imposed on redemptions made within one year of purchase. |
3
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN
THE GABELLI GLOBAL CONTENT & CONECTIVITY FUND (CLASS AAA SHARES)
AND MSCI AC WORLD INDEX (Unaudited)
* | 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. |
4
The Gabelli Global Content & Connectivity Fund
Disclosure of Fund Expenses (Unaudited)
For the Six Month Period from July 1, 2020 through December 31, 2020 | 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, 2020.
Beginning Account Value 07/01/20 | Ending Account Value 12/31/20 | Annualized Expense Ratio | Expenses Paid During Period* | |
The Gabelli Global Content & Connectivity Fund | ||||
Actual Fund Return | ||||
Class AAA | $1,000.00 | $1,250.80 | 0.90% | $5.09 |
Class A | $1,000.00 | $1,250.80 | 0.90% | $5.09 |
Class C | $1,000.00 | $1,250.70 | 0.90% | $5.09 |
Class I | $1,000.00 | $1,250.40 | 0.90% | $5.09 |
Hypothetical 5% Return | ||||
Class AAA | $1,000.00 | $1,020.61 | 0.90% | $4.57 |
Class A | $1,000.00 | $1,020.61 | 0.90% | $4.57 |
Class C | $1,000.00 | $1,020.61 | 0.90% | $4.57 |
Class I | $1,000.00 | $1,020.61 | 0.90% | $4.57 |
* | Expenses are equal to the Fund’s annualized expense ratio for the last six months multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half year (184 days), then divided by 366. |
5
Summary of Portfolio Holdings (Unaudited)
The following table presents portfolio holdings as a percent of net assets as of December 31, 2020:
The Gabelli Global Content & Connectivity Fund
Communication Services | 69.8 | % | |
Information Technology | 10.8 | % | |
Financials | 9.9 | % | |
Consumer Discretionary | 5.1 | % |
Real Estate | 3.9 | % | |
Other Assets and Liabilities (Net) | 0.5 | % | |
100.0 | % |
The Fund files a complete schedule of portfolio holdings with the Securities and Exchange Commission (the SEC) for the first and third quarters of each fiscal year on Form N-PORT. 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-PORT 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 800-SEC-0330.
Proxy Voting
The Fund files Form N-PX with its complete proxy voting record for the twelve months ended June 30, no later than August 31 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.
6
The Gabelli Global Content & Connectivity Fund
Schedule of Investments — December 31, 2020
Market | |||||||||
Shares | Cost | Value | |||||||
COMMON STOCKS — 97.6% | |||||||||
COMMUNICATION SERVICES — 69.8% | |||||||||
Telecommunication Services — 37.0% | |||||||||
Wireless Telecommunication Services — 25.6% | |||||||||
Wireless Telecommunication Services — 25.6% | |||||||||
60,000 | America Movil SAB de CV, Cl. L, | ||||||||
ADR | $ | 201,263 | $ | 872,400 | |||||
30,000 | Anterix Inc.† | 1,224,120 | 1,128,000 | ||||||
9,500 | China Mobile Ltd., ADR | 113,184 | 271,130 | ||||||
35,000 | KDDI Corp. | 254,810 | 1,039,272 | ||||||
37,500 | Millicom International Cellular SA, | ||||||||
SDR† | 1,373,841 | 1,475,825 | |||||||
100,000 | MTN Group | 424,151 | 409,595 | ||||||
14,000 | Rogers Communications Inc., | ||||||||
Cl. B | 122,391 | 652,260 | |||||||
160,000 | Sistema PJSC FC, GDR | 759,698 | 1,200,000 | ||||||
60,000 | SoftBank Group Corp | 2,355,685 | 4,682,388 | ||||||
50,000 | T-Mobile US Inc.† | 1,216,301 | 6,742,500 | ||||||
55,000 | Turkcell Iletisim Hizmetleri A/S, | ||||||||
ADR | 263,074 | 296,450 | |||||||
31,000 | United States Cellular Corp.† | 979,507 | 951,390 | ||||||
70,000 | Vodafone Group plc, ADR | 1,168,328 | 1,153,600 | ||||||
10,456,353 | 20,874,810 | ||||||||
Diversified Telecommunication Services — 11.4% | |||||||||
Integrated Telecommunication Services — 10.0% | |||||||||
17,000 | AT&T Inc. | 382,643 | 488,920 | ||||||
37,415,054 | Cable & Wireless Jamaica Ltd.†(a) | 499,070 | 304,671 | ||||||
2,750,000 | China Tower Corp. Ltd., Cl. H | 559,476 | 404,388 | ||||||
45,000 | Deutsche Telekom AG | 797,247 | 822,140 | ||||||
50,000 | Telenor ASA | 760,058 | 850,803 | ||||||
75,000 | Telephone and Data Systems Inc | 1,400,490 | 1,392,750 | ||||||
50,000 | TELUS Corp | 272,537 | 990,000 | ||||||
50,000 | Verizon Communications Inc | 1,547,765 | 2,937,500 | ||||||
6,219,286 | 8,191,172 | ||||||||
Alternative Carriers — 1.4% | |||||||||
120,000 | CenturyLink Inc.. | 1,431,139 | 1,170,000 | ||||||
Media & Entertainment — 32.8% | |||||||||
Media — 10.5% | |||||||||
Cable & Satellite — 10.5% | |||||||||
115,000 | WideOpenWest Inc.† | 653,192 | 1,227,050 | ||||||
100,000 | Comcast Corp., Cl. A | 3,192,600 | 5,240,000 | ||||||
25,000 | DISH Network Corp., Cl. A† | 465,925 | 808,500 | ||||||
55,000 | Liberty Global plc, Cl. C† | 617,751 | 1,300,750 | ||||||
4,929,468 | 8,576,300 | ||||||||
Interactive Media & Services — 14.6% | |||||||||
Interactive Media & Services — 14.6% | |||||||||
3,700 | Alphabet Inc., Cl. C† | 3,957,942 | 6,481,956 | ||||||
20,000 | Facebook Inc., Cl. A† | 3,288,074 | 5,463,200 | ||||||
7,246,016 | 11,945,156 |
Market | |||||||||
Shares | Cost | Value | |||||||
Entertainment — 7.7% | |||||||||
Movies & Entertainment — 5.9% | |||||||||
130,000 | Borussia Dortmund GmbH & Co | ||||||||
KGaA† | $ | 915,226 | $ | 863,951 | |||||
17,000 | Liberty Media Corp.- Liberty | ||||||||
Braves, Cl. C† | 315,483 | 422,960 | |||||||
4,000 | Madison Square Garden Sports | ||||||||
Corp.† | 335,768 | 736,400 | |||||||
35,000 | Manchester United plc, Cl. A | 516,494 | 585,900 | ||||||
135,000 | OL Groupe SA† | 399,329 | 356,233 | ||||||
10,000 | The Walt Disney Co.† | 1,008,300 | 1,811,800 | ||||||
3,490,600 | 4,777,244 | ||||||||
Interactive Home Entertainment — 1.8% | |||||||||
4,000 | Take-Two Interactive Software | ||||||||
Inc.† | 411,703 | 831,160 | |||||||
6,500 | Ubisoft Entertainment SA† | 472,844 | 626,047 | ||||||
884,547 | 1,457,207 | ||||||||
TOTAL COMMUNICATION SERVICES | 34,657,409 | 56,991,889 | |||||||
FINANCIALS — 9.8% | |||||||||
Diversified Financials — 9.8% | |||||||||
Diversified Financial Services — 9.8% | |||||||||
Multi-Sector Holdings — 9.8% | |||||||||
110,000 | Kinnevik AB, Cl. B | 2,525,063 | 5,555,083 | ||||||
4,460 | Old Mutual Ltd | 12,500 | 4,472 | ||||||
172,000 | VNV Global AB† | 1,265,874 | 2,445,914 | ||||||
12,000 | Waterloo Investment Holdings | ||||||||
Ltd.†(a) | 1,432 | 3,600 | |||||||
3,804,869 | 8,009,069 | ||||||||
TOTAL FINANCIALS | 3,804,869 | 8,009,069 | |||||||
INFORMATION TECHNOLOGY — 9.1% | |||||||||
Technology Hardware & Equipment — 3.1% | |||||||||
Technology Hardware, Storage & Peripherals — 1.9% | |||||||||
Technology Hardware, Storage & Peripherals — 1.9% | |||||||||
12,000 | Apple Inc. | 479,081 | 1,592,280 | ||||||
Electronic Equipment, Instruments & Components — 1.2% | |||||||||
Electronic Equipment & Instruments — 1.2% | |||||||||
9,500 | Sony Corp., ADR | 632,097 | 960,450 | ||||||
Software & Services — 6.0% | |||||||||
Software — 2.3% | |||||||||
Systems Software — 2.3% | |||||||||
8,500 | Microsoft Corp | 1,163,463 | 1,890,570 | ||||||
IT Services — 3.7% | |||||||||
Internet Services and Infrastructure — 0.7% | |||||||||
20,000 | GMO internet Inc. | 550,272 | 573,532 | ||||||
Data Processing & Outsourced Services — 3.0% | |||||||||
3,500 | Mastercard Inc., Cl. A | 687,702 | 1,249,290 |
See accompanying notes to financial statements.
7
The Gabelli Global Content & Connectivity Fund
Schedule of Investments (Continued) — December 31, 2020
Market | |||||||||
Shares | Cost | Value | |||||||
COMMON STOCKS (Continued) | |||||||||
INFORMATION TECHNOLOGY (Continued) | |||||||||
Software & Services (Continued) | |||||||||
IT Services (Continued) | |||||||||
Data Processing & Outsourced Services (Continued) | |||||||||
2,500 | PayPal Holdings Inc.† | $ | 226,636 | $ | 585,500 | ||||
2,500 | Visa Inc., Cl. A | 287,388 | 546,825 | ||||||
1,201,726 | 2,381,615 | ||||||||
TOTAL INFORMATION TECHNOLOGY | 4,026,639 | 7,398,447 | |||||||
CONSUMER DISCRETIONARY — 5.0% | |||||||||
Retailing — 5.0% | |||||||||
Internet & Direct Marketing Retail — 5.0% | |||||||||
Internet & Direct Marketing Retail — 5.0% | |||||||||
14,000 | Naspers Ltd., Cl. N | 2,666,537 | 2,876,550 | ||||||
11,500 | Prosus NV | 933,143 | 1,241,367 | ||||||
3,599,680 | 4,117,917 | ||||||||
TOTAL CONSUMER | |||||||||
DISCRETIONARY | 3,599,680 | 4,117,917 | |||||||
REAL ESTATE — 3.9% | |||||||||
Real Estate — 3.9% | |||||||||
Equity Real Estate Investment Trusts — 3.9% | |||||||||
Specialized REITs — 3.9% | |||||||||
4,500 | Crown Castle International Corp., | ||||||||
REIT | 627,376 | 716,355 | |||||||
7,500 | Digital Realty Trust Inc., REIT | 982,368 | 1,046,325 | ||||||
2,000 | Equinix Inc., REIT | 160,513 | 1,428,360 | ||||||
1,770,257 | 3,191,040 | ||||||||
TOTAL REAL ESTATE | 1,770,257 | 3,191,040 | |||||||
TOTAL COMMON STOCKS | 47,858,854 | 79,708,362 | |||||||
CLOSED-END FUNDS — 0.1% | |||||||||
CONSUMER DISCRETIONARY — 0.1% | |||||||||
Retailing — 0.1% | |||||||||
Internet & Direct Marketing Retail — 0.1% | |||||||||
Internet & Direct Marketing Retail — 0.1% | |||||||||
5,800 | Altaba Inc., Escrow† | 0 | 84,390 | ||||||
PREFERRED STOCKS — 1.7% | |||||||||
INFORMATION TECHNOLOGY — 1.7% | |||||||||
Technology - Hardware and Equipment — 1.7% | |||||||||
Technology Hardware, Storage & Peripherals — 1.7% | |||||||||
Technology Hardware, Storage & Peripherals — 1.7% | |||||||||
20,000 | Samsung Electronics Co. Ltd., | ||||||||
10.630%, | 816,577 | 1,355,058 |
Market | |||||||||
Shares | Cost | Value | |||||||
WARRANTS — 0.1% | |||||||||
FINANCIALS — 0.1% | |||||||||
Diversified Financials — 0.1% | |||||||||
Diversified Financial Services — 0.1% | |||||||||
Multi-Sector Holdings — 0.1% | |||||||||
31,463 | VNV Global AB, expire 08/10/23† | $ | 0 | $ | 82,218 | ||||
Principal | |||||||||||
Amount | |||||||||||
CORPORATE BONDS — 0.0% | |||||||||||
COMMUNICATION SERVICES — 0.0% | |||||||||||
Telecommunication Services — 0.0% | |||||||||||
Wireless Telecommunication Services — 0.0% | |||||||||||
Wireless Telecommunication Services — 0.0% | |||||||||||
$ | 32,808 | Econet Wireless Zimbabwe Ltd., | |||||||||
5.000%, 03/17/23(a) | 1,856 | 1,532 | |||||||||
TOTAL INVESTMENTS — 99.5% | $ | 48,677,287 | 81,231,560 | ||||||||
Other Assets and Liabilities (Net) — 0.5% | 409,031 | ||||||||||
NET ASSETS — 100.0% | $ | 81,640,591 |
(a) | Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy. |
† | Non-income producing security. |
ADR | American Depositary Receipt |
GDR | Global Depositary Receipt |
REIT | Real Estate Investment Trust |
SDR | Swedish Depositary Receipt |
% of | ||||||||
Market | Market | |||||||
Geographic Diversification | Value | Value | ||||||
North America | 59.8 | % | $ | 48,617,773 | ||||
Europe | 23.2 | 18,856,281 | ||||||
Japan | 8.9 | 7,255,641 | ||||||
South Africa | 4.1 | 3,290,617 | ||||||
Asia/Pacific. | 2.5 | 2,030,577 | ||||||
Latin America | 1.5 | 1,180,671 | ||||||
100.0 | % | $ | 81,231,560 | |||||
See accompanying notes to financial statements.
8
The Gabelli Global Content & Connectivity Fund
Statement of Assets and Liabilities
December 31,2020
Assets: | ||||
Investments, at value (cost $48,677,287) | $ | 81,231,560 | ||
Foreign currency, at value (cost $1,362) | 1,151 | |||
Cash | 953 | |||
Receivable for investments sold | 723,840 | |||
Receivable for Fund shares sold | 113 | |||
Receivable from Adviser | 44,207 | |||
Dividends receivable | 80,169 | |||
Prepaid expenses | 31,537 | |||
Total Assets | 82,113,530 | |||
Liabilities: | ||||
Line of credit payable | 128,000 | |||
Payable for Fund shares redeemed | 98,375 | |||
Payable for investment advisory fees | 68,355 | |||
Payable for distribution fees | 14,216 | |||
Payable for accounting fees | 3,750 | |||
Payable for legal and audit fees | 46,304 | |||
Payable for shareholder communications | ||||
expenses | 72,574 | |||
Payable for shareholder services fees | 26,615 | |||
Other accrued expenses. | 14,750 | |||
Total Liabilities | 472,939 | |||
Net Assets | ||||
(applicable to 3,682,898 shares outstanding) | $ | 81,640,591 | ||
Net Assets Consist of: | ||||
Paid-in capital | $ | 50,938,655 | ||
Total distributable earnings | 30,701,936 | |||
Net Assets | $ | 81,640,591 | ||
Shares of Capital Stock, each at $0.001 par value: | ||||
Class AAA: | ||||
Net Asset Value, offering, and redemption price per share | ||||
($67,238,994 ÷ 3,031,679 shares outstanding; | ||||
150,000,000 shares authorized) | $ | 22.18 | ||
Class A: | ||||
Net Asset Value and redemption price per share | ||||
($421,947 ÷ 18,854 shares outstanding; 50,000,000 | ||||
shares authorized) | $ | 22.38 | ||
Maximum offering price per share (NAV ÷ 0.9425, based | ||||
on maximum sales charge of 5.75% of the offering | ||||
price) | $ | 23.75 | ||
Class C: | ||||
Net Asset Value and offering price per share ($48,994 ÷ | ||||
2,269.70 shares outstanding; 50,000,000 shares | ||||
authorized) | $ | 21.59 | (a) | |
Class I: | ||||
Net Asset Value, offering, and redemption price per share | ||||
($13,930,656 ÷ 630,095 shares outstanding; | ||||
50,000,000 shares authorized) | $ | 22.11 | ||
(a) | Redemption price varies based on the length of time held. |
Statement of Operations
For the Year Ended December 31, 2020
Investment Income: | ||||
Dividends (net of foreign withholding taxes of | ||||
$83,342) | $ | 968,563 | ||
Non-cash dividends | 87,790 | |||
Interest | 5,378 | |||
Total Investment Income | 1,061,731 | |||
Expenses: | ||||
Investment advisory fees | 718,431 | |||
Distribution fees - Class AAA | 148,723 | |||
Distribution fees - Class A | 942 | |||
Distribution fees - Class C | 523 | |||
Shareholder services fees | 83,563 | |||
Shareholder communications expenses | 75,485 | |||
Registration expenses | 47,889 | |||
Legal and audit fees | 47,403 | |||
Accounting fees | 45,000 | |||
Custodian fees | 37,541 | |||
Directors’ fees | 15,006 | |||
Interest expense | 1,844 | |||
Miscellaneous expenses | 19,656 | |||
Total Expenses | 1,242,006 | |||
Less: | ||||
Expenses paid indirectly by broker | ||||
(See Note 6) | (2,356 | ) | ||
Expense reimbursements (See Note 3) | (591,218 | ) | ||
Total Credits and Reimbursements | (593,574 | ) | ||
Net Expenses | 648,432 | |||
Net Investment Income | 413,299 | |||
Net Realized and Unrealized Gain/(Loss) on | ||||
Investments and Foreign Currency: | ||||
Net realized gain on investments | 1,124,043 | |||
Net realized loss on foreign currency transactions | (163 | ) | ||
Net realized gain on investments and foreign | ||||
currency transactions | 1,123,880 | |||
Net change in unrealized appreciation/depreciation: | ||||
on investments | 9,707,720 | |||
on foreign currency translations | 914 | |||
Net change in unrealized appreciation/depreciation | ||||
on investments and foreign currency | ||||
translations | 9,708,634 | |||
Net Realized and Unrealized Gain/(Loss) on | ||||
Investments and Foreign Currency | 10,832,514 | |||
Net Increase in Net Assets Resulting from | ||||
Operations | $ | 11,245,813 |
See accompanying notes to financial statements.
9
The Gabelli Global Content & Connectivity Fund
Statement of Changes in Net Assets
Year Ended December 31, 2020 | Year Ended December 31, 2019 | |||||||
Operations: | ||||||||
Net investment income | $ | 413,299 | $ | 1,380,838 | ||||
Net realized gain on investments and foreign currency transactions | 1,123,880 | 3,387,223 | ||||||
Net change in unrealized appreciation/depreciation on investments and foreign currency translations | 9,708,634 | 6,765,125 | ||||||
Net Increase in Net Assets Resulting from Operations | 11,245,813 | 11,533,186 | ||||||
Distributions to Shareholders: | ||||||||
Accumulated earnings | ||||||||
Class AAA | (2,020,392 | ) | (3,972,615 | ) | ||||
Class A | (12,531 | ) | (22,666 | ) | ||||
Class C | (1,503 | ) | (3,829 | ) | ||||
Class I | (419,204 | ) | (855,412 | ) | ||||
Total Distributions to Shareholders | (2,453,630 | ) | (4,854,522 | ) | ||||
Capital Share Transactions: | ||||||||
Class AAA | (4,994,337 | ) | (3,728,999 | ) | ||||
Class A | (4,783 | ) | 127,427 | |||||
Class C | (36,787 | ) | (221,139 | ) | ||||
Class I | (93,032 | ) | (979,121 | ) | ||||
Net Decrease in Net Assets from Capital Share Transactions | (5,128,939 | ) | (4,801,832 | ) | ||||
Redemption Fees | 4 | 25 | ||||||
Net Increase in Net Assets | 3,663,248 | 1,876,857 | ||||||
Net Assets: | ||||||||
Beginning of year | 77,977,343 | 76,100,486 | ||||||
End of year | $ | 81,640,591 | $ | 77,977,343 |
See accompanying notes to financial statements.
10
The Gabelli Global Content & Connectivity Fund
Financial Highlights
Selected data for a share of capital stock outstanding throughout each year:
Income (Loss) from Investment Operations | Distributions | Ratios to Average Net Assets/ Supplemental Data | ||||||||||||||||||||||||||||||||||||||||||||||
Year Ended December 31 | Net Asset Value, Beginning of Year | Net Investment Income (Loss)(a) | Net Realized and Unrealized Gain (Loss) on Investments | Total from Investment Operations | Net Investment Income | Net Realized Gain | Return of Capital | Total Distributions | Redemption Fees(a)(b) | Net Asset Value, End of Year | Total Return† | Net Assets End of Year (in 000’s) | Net Investment Income (Loss) | Operating Expenses Before Reimbursement | Operating Expenses Net of Reimbursement(c) | Portfolio Turnover Rate | ||||||||||||||||||||||||||||||||
Class AAA | ||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 19.64 | $ | 0.11 | (d) | $ | 3.11 | $ | 3.22 | $ | (0.46 | ) | $ | (0.22 | ) | — | $ | (0.68 | ) | $ | 0.00 | $ | 22.18 | 16.4 | % | $ | 67,239 | 0.57 | %(d) | 1.77 | % | 0.90 | %(e) | 41 | % | |||||||||||||
2019 | 18.08 | 0.32 | 2.51 | 2.83 | (0.37 | ) | (0.90 | ) | — | (1.27 | ) | 0.00 | 19.64 | 15.6 | 65,024 | 1.63 | 1.74 | 1.69 | (e) | 14 | ||||||||||||||||||||||||||||
2018 | 21.77 | 0.16 | (2.76 | ) | (2.60 | ) | (0.15 | ) | (0.93 | ) | $ | (0.01 | ) | (1.09 | ) | 0.00 | 18.08 | (11.9 | ) | 63,196 | 0.78 | 1.72 | 1.72 | 19 | ||||||||||||||||||||||||
2017 | 20.43 | 0.11 | 2.63 | 2.74 | (0.14 | ) | (1.26 | ) | — | (1.40 | ) | — | 21.77 | 13.4 | 81,832 | 0.48 | 1.73 | 1.73 | 22 | |||||||||||||||||||||||||||||
2016 | 21.30 | 0.27 | 0.29 | 0.56 | (0.28 | ) | (1.13 | ) | (0.02 | ) | (1.43 | ) | 0.00 | 20.43 | 2.7 | 87,893 | 1.23 | 1.65 | 1.65 | (f) | 9 | |||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 19.81 | $ | 0.11 | (d) | $ | 3.14 | $ | 3.25 | $ | (0.46 | ) | $ | (0.22 | ) | — | $ | (0.68 | ) | $ | 0.00 | $ | 22.38 | 16.4 | % | $ | 422 | 0.59 | %(d) | 1.77 | % | 0.90 | %(e) | 41 | % | |||||||||||||
2019 | 18.23 | 0.36 | 2.50 | 2.86 | (0.38 | ) | (0.90 | ) | — | (1.28 | ) | 0.00 | 19.81 | 15.6 | 374 | 1.80 | 1.74 | 1.68 | (e) | 14 | ||||||||||||||||||||||||||||
2018 | 21.94 | 0.16 | (2.79 | ) | (2.63 | ) | (0.14 | ) | (0.93 | ) | $ | (0.01 | ) | (1.08 | ) | 0.00 | 18.23 | (11.9 | ) | 231 | 0.76 | 1.72 | 1.72 | 19 | ||||||||||||||||||||||||
2017 | 20.58 | 0.10 | 2.66 | 2.76 | (0.14 | ) | (1.26 | ) | — | (1.40 | ) | — | 21.94 | 13.4 | 576 | 0.43 | 1.73 | 1.73 | 22 | |||||||||||||||||||||||||||||
2016 | 21.29 | 0.15 | 0.38 | 0.53 | (0.09 | ) | (1.13 | ) | (0.02 | ) | (1.24 | ) | 0.00 | 20.58 | 2.5 | 661 | 0.68 | 1.65 | 1.65 | (f) | 9 | |||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 19.13 | $ | 0.10 | (d) | $ | 3.04 | $ | 3.14 | $ | (0.46 | ) | $ | (0.22 | ) | — | $ | (0.68 | ) | — | $ | 21.59 | 16.4 | % | $ | 49 | 0.54 | %(d) | 2.52 | % | 0.90 | %(e) | 41 | % | ||||||||||||||
2019 | 17.45 | 0.04 | 2.55 | 3 | (0.01 | ) | (0.90 | ) | — | (0.91 | ) | $ | 0.00 | 19.13 | 14.8 | 84 | 0.19 | 2.49 | 2.45 | (e) | 14 | |||||||||||||||||||||||||||
2018 | 21.08 | 0.02 | (2.68 | ) | (2.66 | ) | (0.03 | ) | (0.93 | ) | $ | (0.01 | ) | (0.97 | ) | 0.00 | 17.45 | (12.6 | ) | 279 | 0.08 | 2.47 | 2.47 | 19 | ||||||||||||||||||||||||
2017 | 19.85 | (0.06 | ) | 2.55 | 2.49 | — | (1.26 | ) | — | (1.26 | ) | — | 21.08 | 12.5 | 267 | (0.28 | ) | 2.48 | 2.48 | 22 | ||||||||||||||||||||||||||||
2016 | 20.71 | 0.09 | 0.30 | 0.39 | (0.10 | ) | (1.13 | ) | (0.02 | ) | (1.25 | ) | 0.00 | 19.85 | 1.9 | 328 | 0.42 | 2.40 | 2.40 | (f) | 9 | |||||||||||||||||||||||||||
Class I | ||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 19.58 | $ | 0.11 | (d) | $ | 3.10 | $ | 3.21 | $ | (0.46 | ) | $ | (0.22 | ) | — | $ | (0.68 | ) | $ | 0.00 | $ | 22.11 | 16.4 | % | $ | 13,931 | 0.58 | %(d) | 1.52 | % | 0.90 | %(e) | 41 | % | |||||||||||||
2019 | 18.03 | 0.46 | 2.51 | 2.97 | (0.52 | ) | (0.90 | ) | — | (1.42 | ) | 0.00 | 19.58 | 16.4 | 12,495 | 2.33 | 1.49 | 0.99 | (e) | 14 | ||||||||||||||||||||||||||||
2018 | 21.75 | 0.32 | (2.79 | ) | (2.47 | ) | (0.31 | ) | (0.93 | ) | $ | (0.01 | ) | (1.25 | ) | 0.00 | 18.03 | (11.3 | ) | 12,394 | 1.52 | 1.47 | 1.00 | (e) | 19 | |||||||||||||||||||||||
2017 | 20.40 | 0.28 | 2.62 | 2.90 | (0.29 | ) | (1.26 | ) | — | (1.55 | ) | — | 21.75 | 14.2 | 14,374 | 1.26 | 1.48 | 1.00 | (e) | 22 | ||||||||||||||||||||||||||||
2016 | 21.27 | 0.30 | 0.33 | 0.63 | (0.35 | ) | (1.13 | ) | (0.02 | ) | (1.50 | ) | 0.00 | 20.40 | 3.0 | 6,361 | 1.41 | 1.40 | 1.35 | (e)(f) | 9 |
† | Total return represents aggregate total return of a hypothetical investment at the beginning of the year and sold at the end of the year including reinvestment of distributions and does not reflect the applicable sales charges. |
(a) | Per share amounts have been calculated using the average shares outstanding method. |
(b) | Amount represents less than $0.005 per share. |
(c) | The Fund received credits from a designated broker who agreed to pay certain Fund operating expenses. For the years ended December 31, 2020, 2019, 2018, 2017 and 2016, there was no impact to the expense ratios. |
(d) | Includes income resulting from special dividends. Without these dividends, the per share income amounts would have been 0.09 (Class AAA and Class A), 0.08 (Class C), and 0.09 (Class I), and the net investment income ratio would have been 0.45% (Class AAA), 0.47% (Class A), 0.41% (Class C), and 0.46% (Class I), respectively. |
(e) | Under an expense reimbursement agreement with the Adviser, the Adviser reimbursed expenses of $591,218 and $91,150 for the years ended December 31, 2020 and 2019, and certain Class I expenses to the Fund of $70,600, $56,231, and $899 for the years ended 2018, 2017, and 2016, respectively. |
(f) | During the year ended December 31, 2016, the Fund received reimbursements of custody expenses paid in prior years. Had such reimbursement (allocated by relative net asset values of the Fund’s share classes) been included in that period, the expense ratios would have been 1.22% (Class AAA), 1.54% (Class A), 1.99% (Class C), and 0.95% (Class I). |
See accompanying notes to financial statements.
11
The Gabelli Global Content & Connectivity Fund
Notes to Financial Statements
1. Organization. The Gabelli Global Content & Connectivity Fund, a series of GAMCO Global Series Funds, Inc. (the Corporation), was incorporated on July 16, 1993 in Maryland. The Fund is a non-diversified open-end management investment company registered under the Investment Company Act of 1940, as amended (the 1940 Act), and is one of five separately managed portfolios (collectively, the Portfolios) of the Corporation. The Fund’s primary objective is capital appreciation. The Fund commenced investment operations on November 1, 1993.
The Fund may invest a high percentage of its assets in specific sectors of the market in order to achieve a potentially greater investment return. As a result, the Fund may be more susceptible to economic, political, and regulatory developments in a particular sector of the market, positive or negative, and may experience increased volatility to the Fund’s NAV and a magnified effect in its total return.
2. Significant Accounting Policies. As an investment company, the Fund follows the investment company accounting and reporting guidance, which is part of U.S. generally accepted accounting principles (GAAP) that may require the use of management estimates and assumptions in the preparation of its 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.
The global outbreak of the novel coronavirus disease, known as COVID-19, has caused adverse effects on many companies, sectors, nations, regions and the markets in general, and may continue for an unpredictable duration. The effects of this pandemic may materially impact the value and performance of the Fund, its ability to buy and sell fund investments at appropriate valuations, and its ability to achieve its investment objectives.
New Accounting Pronouncements. To improve the effectiveness of fair value disclosure requirements, the Financial Accounting Standards Board issued Accounting Standard Update (ASU) 2018-13, Fair Value Measurement Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement (ASU 2018-13), which added, removed and modified certain aspects relating to fair value disclosure. Management has fully adopted the ASU 2018-13 updates in these financial statements.
In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in the ASU provides optional temporary financial reporting relief from the effect of certain types of contract modifications due to the planned discontinuation of the London Interbank Offered Rate (LIBOR) and other interbank-offered based reference rates as of the end of 2021. The ASU is effective for certain reference rate-related contract modifications that occur during the period March 12, 2020 through December 31, 2022. Management has reviewed the requirements and believes the adoption of this ASU will not have a material impact on the 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
12
The Gabelli Global Content & Connectivity Fund
Notes to Financial Statements (Continued)
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 obligations 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. Such debt obligations are valued through prices provided by a pricing service approved by the Board. Certain securities are valued principally using dealer quotations.
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 American Depositary Receipt 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.
The inputs and valuation techniques used to measure fair value of the Fund’s investments are summarized into three levels as described in the hierarchy below:
● | Level 1 — quoted prices in active markets for identical securities; |
● | Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.); and |
● | Level 3 — significant unobservable inputs (including the Board’s determinations as to the fair value of investments). |
A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input both individually and in the aggregate that is significant to the fair value measurement. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
13
The Gabelli Global Content & Connectivity Fund
Notes to Financial Statements (Continued)
The summary of the Fund’s investments in securities by inputs used to value the Fund’s investments as of December 31, 2020 is as follows:
Valuation Inputs | |||||||
Level 1 Quoted Prices | Level 2 Other Significant Observable Inputs | Level 3 Significant Unobservable Inputs | Total Market Value at 12/31/20 | ||||
INVESTMENTS IN SECURITIES: | |||||||
ASSETS (Market Value): | |||||||
Common Stocks | |||||||
Communication Services | $56,687,218 | — | $304,671 | $56,991,889 | |||
Financials | 8,000,997 | $ 4,472 | 3,600 | 8,009,069 | |||
Other (a) | 14,707,404 | — | — | 14,707,404 | |||
Total Common Stocks | 79,395,619 | 4,472 | 308,271 | 79,708,362 | |||
Preferred Stock (a) | 1,355,058 | — | — | 1,355,058 | |||
Closed-End Funds (a) | — | 84,390 | — | 84,390 | |||
Warrants (a) | 82,218 | — | — | 82,218 | |||
Corporate Bonds (a) | — | — | 1,532 | 1,532 | |||
TOTAL INVESTMENTS IN SECURITIES – ASSETS | $80,832,895 | $88,862 | $309,803 | $81,231,560 |
(a) | Please refer to the Schedule of Investments for the industry classifications of these portfolio holdings. |
The Fund did not have any transfers into or out of Level 3 during the year ended December 31, 2020.
Additional Information to Evaluate Qualitative Information.
General. The Fund uses recognized industry pricing services – approved by the Board and unaffiliated with the Adviser – to value most of its securities, and uses broker quotes provided by market makers of securities not valued by these and other recognized pricing sources. Several different pricing feeds are received to value domestic equity securities, international equity securities, preferred equity securities, and fixed income securities. The data within these feeds are ultimately sourced from major stock exchanges and trading systems where these securities trade. The prices supplied by external sources are checked by obtaining quotations or actual transaction prices from market participants. If a price obtained from the pricing source is deemed unreliable, prices will be sought from another pricing service or from a broker/dealer that trades that security or similar securities.
Fair Valuation. Fair valued securities may be common or preferred equities, warrants, options, rights, or fixed income obligations. Where appropriate, Level 3 securities are those for which market quotations are not available, such as securities not traded for several days, or for which current bids are not available, or which are restricted as to transfer. When fair valuing a security, factors to consider include recent prices of comparable securities that are publicly traded, reliable prices of securities not publicly traded, the use of valuation models, current analyst reports, valuing the income or cash flow of the issuer, or cost if the preceding factors do not apply. A significant change in the unobservable inputs could result in a lower or higher value in Level 3 securities. The circumstances of Level 3 securities are frequently monitored to determine if fair valuation measures continue to apply.
The Adviser reports quarterly to the Board the results of the application of fair valuation policies and procedures. These may include backtesting the prices realized in subsequent trades of these fair valued securities to fair values previously recognized.
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 current exchange
14
The Gabelli Global Content & Connectivity Fund
Notes to Financial Statements (Continued)
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 purchase 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 inability 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 securities of comparable U.S. issuers.
Foreign Taxes. The Fund may be subject to foreign taxes on income, gains on investments, or currency repatriation, a portion of which may be recoverable. The Fund will accrue such taxes and recoveries as applicable, based upon its current interpretation of tax rules and regulations that exist in the markets in which it invests.
Restricted Securities. The Fund may invest up to 15% of its net assets in securities for which the markets are restricted. Restricted securities include securities whose disposition is subject to substantial legal or contractual restrictions. The sale of restricted securities often requires more time and results in higher brokerage charges or dealer discounts and other selling expenses than does the sale of securities eligible for trading on national securities exchanges or in the over-the-counter markets. Restricted securities may sell at a price lower than similar securities that are not subject to restrictions on resale. Securities freely saleable among qualified institutional investors under special rules adopted by the SEC may be treated as liquid if they satisfy liquidity standards established by the Board. The continued liquidity of such securities is not as well assured as that of publicly traded securities, and accordingly the Board will monitor their liquidity. As of December 31, 2020, the Fund did not hold any restricted securities.
Investments in other Investment Companies. The Fund may invest, from time to time, in shares of other investment companies (or entities that would be considered investment companies but are excluded from the definition pursuant to certain exceptions under the 1940 Act) (the Acquired Funds) in accordance with the 1940 Act and related rules. Shareholders in the Fund would bear the pro rata portion of the periodic expenses of the Acquired Funds in addition to the Fund’s expenses. For the year ended December 31, 2020, the Fund’s pro rata portion of the periodic expenses charged by the Acquired Funds was approximately less than one basis points.
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 an accrual basis. Premiums and discounts on debt securities are amortized using the effective yield to maturity method. Dividend income is recorded on
15
The Gabelli Global Content & Connectivity Fund
Notes to Financial Statements (Continued)
the ex-dividend date, except for certain dividends from foreign securities that are recorded as soon after the ex-dividend date as the Fund becomes aware of such dividends.
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.
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 GAAP. These differences are primarily due to differing treatments of income and gains on various investment securities and foreign currency transactions, timing differences, and differing characterizations of distributions made by the Fund. Distributions from net investment income for federal income tax purposes 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. Permanent differences were primarily due to the tax treatment of currency gains and losses, sales relating to investments considered no longer to be passive foreign investments, capital gain adjustment on sale of real estate investment trusts and redesignation of dividends paid. These reclassifications have no impact on the NAV of the Fund.
The tax character of distributions paid during the years ended December 31, 2020 and 2019 were was as follows:
Year Ended December 31, 2020 | Year Ended December 31, 2019 | |||||||||
Distributions paid from: | ||||||||||
Ordinary income (inclusive of short term capital gains | $ | 1,966,445 | $ | 1,903,819 | ||||||
Net long term capital gains. | 487,185 | 2,950,703 | ||||||||
Total distributions paid. | $ | 2,453,630 | $ | 4,854,522 |
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, 2020, the components of accumulated earnings/losses on a tax basis were as follows:
Undistributed ordinary income | $ | 233,968 | |
Net unrealized appreciation on investments and foreign currency translations | 30,467,968 | ||
Total | $ | 30,701,936 |
16
The Gabelli Global Content & Connectivity Fund
Notes to Financial Statements (Continued)
At December 31, 2020, the temporary differences between book basis and tax basis unrealized appreciation were primarily due to deferral of losses from wash sales for tax purposes and mark-to-market adjustments on investments considered to be a passive foreign investment company.
The following summarizes the tax cost of investments and the related net unrealized appreciation at December 31, 2020.
Cost | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Appreciation | ||||
Investments | $50,763,968 | $31,671,441 | $(1,203,849) | $30,467,592 |
The Fund is required to evaluate 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. Income tax and related interest and penalties would be recognized by the Fund as tax expense in the Statement of Operations if the tax positions were deemed not to meet the more-likely-than-not threshold. During the year ended December 31, 2020, the Fund did not incur any income tax, interest, or penalties. As of December 31, 2020, the Adviser has reviewed all open tax years and concluded that there was no impact to the Fund’s net assets or results of operations. The Fund’s federal and state tax returns for the prior three fiscal years remain open, subject to examination. On an ongoing basis, the Adviser will monitor the Fund’s tax positions to determine if adjustments to this conclusion are necessary.
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.
Through November 30, 2019, the Adviser had agreed to waive and/or to reimburse expenses of the Fund to the extent necessary to maintain the annualized total operating expenses of Class I (excluding brokerage costs, acquired fund fees and expenses, interest, taxes, and extraordinary expenses) at no more than an annual rate of 1.00% of the value of that class’s average daily net assets. Effective December 1, 2019, the Adviser amended its contractual agreement with respect to each share class of the Fund to waive its investment advisory fees and/or to reimburse expenses to the extent necessary to maintain the annualized total operating expenses of the Fund (excluding brokerage costs, acquired fund fees and expenses, interest, taxes, and extraordinary expenses) until at least April 30, 2021, at no more than 0.90% of the value of the Fund’s average daily net assets for each share class of the Fund. During the year ended December 31, 2020, the Adviser reimbursed expenses in the amount of $591,218. In addition, the Fund has agreed, during the two year period following any waiver or reimbursement by the Adviser, to repay such amount to the extent, that after giving effect to the repayment, such adjusted annualized total operating expenses of the Fund would not exceed 0.90% of the value of the Fund’s average daily net assets for each share class of the Fund. The agreement is renewable annually. At December 31, 2020, the cumulative amount which the Fund may repay the Adviser, subject to the terms above, is $682,368:
For the year ended December 31, 2019, expiring December 31, 2021 | $ | 91,150 | ||
For the year ended December 31, 2020, expiring December 31, 2022 | 591,218 | |||
$ | 682,368 |
17
The Gabelli Global Content & Connectivity Fund
Notes to Financial Statements (Continued)
The Corporation pays each Director who is not considered to be an affiliated person an annual retainer of $6,000 plus $1,000 for each Board meeting attended and they are reimbursed for any out of pocket expenses incurred in attending meetings. All Board committee members receive $1,000 per meeting attended. The Chairman of the Audit Committee receives an annual fee of $3,000, and the Lead Director receives an annual fee of $2,000. A Director may receive a single meeting fee, allocated among the participating funds, for attending certain meetings held on behalf of multiple funds. Directors who are directors or employees of the Adviser or an affiliated company receive no compensation or expense reimbursement from the Corporation.
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. Under the Class AAA, Class A, and Class C Share Plans, payments are authorized to G.distributors, LLC (the Distributor), an affiliate of the Adviser, at annual rates of 0.25%, 0.25%, 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 sales of securities during the year ended December 31, 2020, other than short term securities and U.S. Government obligations, aggregated $29,704,567 and $36,379,191, respectively.
6. Transactions with Affiliates and Other Arrangements. During the year ended December 31, 2020, the Fund paid brokerage commissions on security trades of $9,376 to G.research, LLC, an affiliate of the Adviser. Additionally, the Distributor retained a total of $77 from investors representing commissions (sales charges and underwriters fees) on sales and redemptions of Fund shares.
The Fund received credits from a designated broker who agreed to pay certain Fund operating expenses. The amount of such expenses paid through this directed brokerage arrangement during this period was $2,356.
The cost of calculating the Fund’s NAV per share is a Fund expense pursuant to the Advisory Agreement. Under the sub-administration agreement with Bank of New York Mellon, the fees paid include the cost of calculating the Fund’s NAV. The Fund reimburses the Adviser for this service. During the year ended December 31, 2020, the Fund accrued $45,000 in accounting fees in the Statement of Operations.
7. Line of Credit. The Fund participates in an unsecured line of credit which expires on March 3, 2021 and may be renewed annually, of up to $75,000,000 under 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 a floating rate equal to the higher of the overnight Federal Funds rate plus 125 basis points or the 30 day ICE LIBOR plus 125 basis points in effect on that day. This amount, if any, would be included in “Interest expense” in the Statement of Operations. At December 31, 2020, there was $128,000 outstanding under the line of credit.
The average daily amount of borrowings outstanding under the line of credit during the year ended December 31, 2020 was $72,825 with a weighted average interest rate of 1.99%. The maximum amount borrowed at anytime during the year ended December 31, 2020 was $2,145,000.
8. Capital Stock. The Fund currently offers three classes of shares – Class AAA Shares, Class A Shares, and Class I Shares. Effective January 27, 2020, (the Effective Date) the Fund’s Class AAA, Class A and Class C Shares “closed to purchases from new investors”. “Closed to purchases from new investors” means (i) with respect to the Class AAA and Class A shares, no new investors may purchase shares of such classes, but
18
The Gabelli Global Content & Connectivity Fund
Notes to Financial Statements (Continued)
existing shareholders may continue to purchase additional shares of such classes after the Effective Date, and (ii) with respect to Class C Shares, neither new investors nor existing shareholders may purchase any additional shares of such class after the Effective Date. These changes had no effect on existing shareholders’ ability to redeem shares of the Fund as described in the Fund’s Prospectus. Additionally, on the Effective Date Class I shares of the Fund became available to investors with a minimum initial investment amount of $1,000 when purchasing shares directly through the Distributor, or investors purchasing Class I shares through brokers or financial intermediaries that have entered into selling agreements with the Distributor specifically with respect to Class I shares.
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 as an increase in paid-in capital. The redemption fees retained by the Fund during the years ended December 31, 2020 and 2019, if any, can be found in the Statement of Changes in Net Assets under Redemption Fees.
Transactions in shares of capital stock were as follows:
Year Ended December 31, 2020 | Year Ended December 31, 2019 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Class AAA | ||||||||||||||||
Shares sold | 9,747 | $ | 184,252 | 18,269 | $ | 359,384 | ||||||||||
Shares issued upon reinvestment of distributions | 87,160 | 1,928,858 | 192,809 | 3,794,424 | ||||||||||||
Shares redeemed | (376,417 | ) | (7,107,447 | ) | (395,781 | ) | (7,882,807 | ) | ||||||||
Net decrease | (279,510 | ) | $ | (4,994,337 | ) | (184,703 | ) | $ | (3,728,999 | ) | ||||||
Class A | ||||||||||||||||
Shares sold | 2,153 | $ | 38,059 | 11,470 | $ | 233,058 | ||||||||||
Shares issued upon reinvestment of distributions | 425 | 9,480 | 879 | 17,451 | ||||||||||||
Shares redeemed | (2,584 | ) | (52,322 | ) | (6,170 | ) | (123,082 | ) | ||||||||
Net increase/(decrease). | (6 | ) | $ | (4,783 | ) | 6,179 | $ | 127,427 | ||||||||
Class C | ||||||||||||||||
Shares sold | — | — | 957 | $ | 18,383 | |||||||||||
Shares issued upon reinvestment of distributions | 70 | $ | 1,500 | 186 | 3,567 | |||||||||||
Shares redeemed | (2,220 | ) | (38,287 | ) | (12,687 | ) | (243,089 | ) | ||||||||
Net decrease | (2,150 | ) | $ | (36,787 | ) | (11,544 | ) | $ | (221,139 | ) | ||||||
Class I | ||||||||||||||||
Shares sold | 19,112 | $ | 362,606 | 18,555 | $ | 366,674 | ||||||||||
Shares issued upon reinvestment of distributions | 16,760 | 369,729 | 40,293 | 790,553 | ||||||||||||
Shares redeemed | (43,988 | ) | (825,367 | ) | (108,204 | ) | (2,136,348 | ) | ||||||||
Net decrease | (8,116 | ) | $ | (93,032 | ) | (49,356 | ) | $ | (979,121 | ) |
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. Management has reviewed the Fund’s existing contracts and expects the risk of loss to be remote.
19
The Gabelli Global Content & Connectivity Fund
Notes to Financial Statements (Continued)
10. Subsequent Events. Management has evaluated the impact on the Fund of all subsequent events occurring through the date the financial statements were issued and has determined that there were no subsequent events requiring recognition or disclosure in the financial statements.
20
The Gabelli Global Content & Connectivity Fund
Report of Independent Registered Public Accounting Firm
To the Shareholders of The Gabelli Global Content & Connectivity Fund
and the Board of Directors of GAMCO Global Series Funds, Inc.
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of The Gabelli Global Content & Connectivity Fund (the “Fund”) (one of the funds constituting GAMCO Global Series Funds, Inc. (the “Corporation”)), including the schedule of investments, as of December 31, 2020, 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, the financial highlights for each of the five years in the period then ended and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund (one of the funds constituting GAMCO Global Series Funds, Inc.) at December 31, 2020, 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 its financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements are the responsibility of the Corporation’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Corporation in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Corporation is not required to have, nor were we engaged to perform, an audit of the Corporation’s internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Corporation’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2020, by correspondence with the custodian. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
We have served as the auditor of one or more Gabelli/GAMCO Funds investment companies since 1992.
Philadelphia, Pennsylvania
February 26, 2021
21
The Gabelli Global Content & Connectivity Fund
Board Consideration and Re-Approval of Investment Advisory Agreement (Unaudited)
During the six months ended December 31, 2020, the Board of Directors of the Corporation approved the continuation of the investment advisory agreement with the Adviser for the Fund on the basis of the recommendation by the directors (the Independent Board Members) who are not interested persons of the Fund. The following paragraphs summarize the material information and factors considered by the Independent Board Members as well as their conclusions relative to such factors.
Nature, Extent, and Quality of Services. The Independent Board Members considered information regarding the Fund’s portfolio managers, the depth of the analyst pool available to the Adviser and the Fund’s portfolio managers, the scope of supervisory, administrative, shareholder, and other services supervised or provided by the Adviser, and the absence of significant service problems reported to the Board. The Independent Board Members noted the experience, length of service, and reputation of the Fund’s portfolio managers.
Investment Performance. The Independent Board Members reviewed the short, medium, and long term performance of the Fund (as of September 30, 2020) against a peer group of six other comparable funds prepared by the Adviser (the Adviser Peer Group), and against a peer group prepared by Broadridge (the Broadridge Performance Peer Group) consisting of all retail and institutional telecommunication funds, regardless of asset size or primary channel of distribution, as represented by the Lipper Telecom Fund Index. The Independent Board Members noted that the Fund’s performance was in the fourth (lowest) quartile for the one, three, five year, and ten year periods, as measured against the Adviser Peer Group. Against the Broadridge Performance Peer Group, the Independent Board Members noted that the Fund’s performance was in the fourth quintile for the one and three year periods and in the fifth quintile for the five and ten year periods. The Independent Board Members discussed the reasons for the Fund’s underperformance.
Profitability. The Independent Board Members reviewed summary data regarding the profitability of the Fund to the Adviser both with a pro rata administrative charge and with a standalone administrative charge and noted the impact of the expense limitation agreement. The Independent Board Members also noted that a substantial portion of the Fund’s portfolio transactions were executed by an affiliated broker of the Adviser and that another affiliated broker received distribution fees and minor amounts of sales commissions.
Economies of Scale. The Independent Board Members discussed the major elements of the Adviser’s cost structure and the relationship of those elements to potential economies of scale and reviewed data provided by the Adviser.
Sharing of Economies of Scale. The Independent Board Members noted that the investment management fee schedule for the Fund does not take into account any potential economies of scale that may develop.
Service and Cost Comparisons. The Independent Board Members compared the expense ratios of the investment management fee, other expenses, and total expenses of the Fund with similar expense ratios of the Adviser Peer Group and a peer group of four other telecommunications funds selected by Broadridge (the Broadridge Expense Peer Group), and noted that the Adviser’s management fee includes substantially all administrative services of the Fund as well as investment advisory services of the Adviser. The Independent Board Members noted the effect of the expense limitation agreement in place for the Fund. The Independent Board Members noted that the Fund’s total expense ratio was the second highest in the Adviser Peer Group and the lowest in the Broadridge Expense Peer Group, and that the Fund’s size was generally smaller than average within both peer groups. The Independent Board Members also noted that the advisory fee structure was the same as that in effect for most of the Gabelli funds. The Independent Board Members were presented with, but did not consider
22
The Gabelli Global Content & Connectivity Fund
Board Consideration and Re-Approval of Investment Advisory Agreement (Unaudited) (Continued)
to be material to their decision, various information comparing the advisory fee with the fee for other types of accounts managed by the Adviser.
Conclusions. The Independent Board Members concluded that the Fund enjoyed highly experienced portfolio management services and good ancillary services. The Independent Board Members noted the reasons for the Fund’s underperformance and the steps the Adviser was taking to improve performance. The Independent Board Members requested that the Adviser present at the next regular meeting of the Board a report on steps the Adviser has taken to improve the Fund’s performance and noted that the Adviser’s ongoing efforts to improve Fund performance will be an important factor in the Board’s review of the Advisory Agreement next year. The Independent Board Members also concluded that the Fund’s expense ratios and the profitability to the Adviser of managing the Fund were acceptable, and that economies of scale were not a significant factor in their thinking at this time. In this regard, the Independent Board Members noted that the Board approved amendments to the contractual Expense Deferral Agreement between the Adviser and the Corporation, on behalf of each Fund, pursuant to which the net expense ratio for each share class of each Fund was reduced to 0.90%, effective December 1, 2019. The Independent Board Members did not view the potential profitability of ancillary services as material to their decision. On the basis of the foregoing and without assigning particular weight to any single conclusion, the Independent Board Members determined to recommend continuation of the investment management agreement to the full Board.
23
The Gabelli Global Content & Connectivity Fund Additional Fund Information (Unaudited)
The business and affairs of the Fund are managed under the direction of the Corporation’s Board of Directors. Information pertaining to the Directors and officers of the Fund is set forth below. The Corporation’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 Gabelli Global Content & Connectivity Fund at One Corporate Center, Rye, NY 10580-1422.
Name, Position(s) Address1 and Age | Term of Office and Length of Time Served2 | Number of Funds in Fund Complex Overseen by Director | Principal Occupation(s) During Past Five Years | Other Directorships Held by Director3 | ||||
INTERESTED DIRECTORS4: | ||||||||
Mario J. Gabelli, CFA Director and Chief Investment Officer Age: 78 | Since 1993 | 33 | Chairman, Chief Executive Officer, and Chief Investment Officer– Value Portfolios of GAMCO Investors, Inc. and Chief Investment Officer– Value Portfolios of Gabelli Funds, LLC and GAMCO Asset Management Inc.; Director/Trustee or Chief Investment Officer of other registered investment companies within the Fund Complex; Chief Executive Officer of GGCP, Inc.; Executive Chairman of Associated Capital Group, Inc. | Chairman of the Board and Chief Executive Officer of LICT Corp. (multimedia and communication services company); Director of CIBL, Inc. (broadcasting and wireless communications); Director of ICTC Group Inc. (communications) (2013-2018) | ||||
John D. Gabelli Director Age: 76 | Since 1993 | 12 | Former Senior Vice President of G.research, LLC | — | ||||
INDEPENDENT DIRECTORS5: | ||||||||
E. Val Cerutti Director Age: 81 | Since 2001 | 7 | Chief Executive Officer of Cerutti Consultants, Inc. | Director of The LGL Group, Inc. (diversified manufacturing) (1990-2009) | ||||
Anthony J. Colavita6 Director Age: 85 | Since 1993 | 20 | President of the law firm of Anthony J. Colavita, P.C. | — | ||||
Werner J. Roeder Director Age: 80 | Since 1993 | 20 | Retired physician; Former Vice President of Medical Affairs (Medical Director) of New York Presbyterian/Lawrence Hospital (1999-2014) | — | ||||
Anthonie C. van Ekris6 Director Age: 86 | Since 1993 | 23 | Chairman and Chief Executive Officer of BALMAC International, Inc. (global import/ export company) | — | ||||
Salvatore J. Zizza7 Director Age: 75 | Since 2004 | 31 | President of Zizza & Associates Corp. (private holding company); President of Bergen Cove Realty Inc.; Chairman of Harbor Diversified, Inc. (pharmaceuticals) (2009-2018); Chairman of BAM (semiconductor and aerospace manufacturing)(2000-2018); Chairman of Metropolitan Paper Recycling Inc. (recycling) (2005-2014) | Director and Chairman of Trans-Lux Corporation (business services); Director and Chairman of Harbor Diversified Inc. (pharmaceuticals) (2009-2018) |
24
The Gabelli Global Content & Connectivity Fund
Additional Fund Information (Continued) (Unaudited)
Name, Position(s) Address1 and Age | Term of Office and Length of Time Served2 | Principal Occupation(s) During Past Five Years | ||
OFFICERS: | ||||
Bruce N. Alpert President Age: 69 | Since 1993 | Executive Vice President and Chief Operating Officer of Gabelli Funds, LLC since 1988; Officer of registered investment companies within the Fund Complex; Senior Vice President of GAMCO Investors, Inc. since 2008; Chief Executive Officer of G.distributors, LLC (January 2020-November 2020) | ||
John C. Ball Treasurer Age: 44 | Since 2017 | Treasurer of registered investment companies within the Fund Complex since 2017; Vice President and Assistant Treasurer of AMG Funds, 2014-2017 | ||
Peter Goldstein Secretary Age: 67 | Since 2020 | General Counsel, Gabelli Funds, LLC since July 2020; General Counsel and Chief Compliance Officer, Buckingham Capital Management, Inc. (2012-2020); Chief Legal Officer and Chief Compliance Officer, The Buckingham Research Group, Inc. (2012-2020) | ||
Richard J. Walz Chief Compliance Officer Age: 61 | Since 2013 | Chief Compliance Officer of registered investment companies within the Fund Complex since 2013; Chief Compliance Office for Gabelli Funds, LLC since 2015 |
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 Corporation’s By-Laws and Articles of Incorporation. For officers, includes time served in prior officer positions with the Fund. 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 | 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. |
4 | “Interested person” of the Corporation as defined in the 1940 Act. Messrs. Mario J. Gabelli and John D. Gabelli, who are brothers, are each considered an “interested person” because of their affiliation with Gabelli Funds, LLC which acts as the Corporation’s investment adviser. |
5 | Directors who are not interested persons are considered “Independent” Directors. |
6 | Mr. Colavita’s son, Anthony S. Colavita, serves as a director of other funds in the Gabelli/GAMCO Fund Complex. Mr. van Ekris is an independent director of Gabelli International Ltd., Gabelli Fund LDC, GAMA Capital Opportunities Master Ltd., and GAMCO International SICAV, which may be deemed to be controlled by Mario J. Gabelli and/or affiliates and, in that event, would be deemed to be under common control with the Fund’s Adviser. |
7 | Mr. Zizza is an independent director of Gabelli International Ltd., which may be deemed to be controlled by Mario J. Gabelli and/or affiliates and in that event would be deemed to be under common control with the Fund’s Adviser. On September 9, 2015, Mr. Zizza entered into a settlement with the SEC to resolve an inquiry relating to an alleged violation regarding the making of false statements or omissions to the accountants of a company concerning a related party transaction. The company in question is not an affiliate of, nor has any connection to, the Fund. Under the terms of the settlement, Mr. Zizza, without admitting or denying the SEC’s findings and allegation, paid $150,000 and agreed to cease and desist committing or causing any future violations of Rule 13b2-2 of the Securities Exchange Act of 1934, as amended. The Board has discussed this matter and has determined that it does not disqualify Mr. Zizza from serving as an Independent Director. |
25
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, which is affiliated with GAMCO Investors, Inc., a publicly held company with subsidiaries and affiliates that provide investment advisory services for a variety of clients.
What kind of non-public information do we collect about you if you become a fund 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.
THE GABELLI GLOBAL CONTENT & CONNECTIVITY FUND
One Corporate Center
Rye, NY 10580-1422
Portfolio Management Team Biographies
Evan D. Miller, CFA, joined G.research, LLC in 2002 as a research analyst following the telecommunications industry on a global basis. Currently, he continues to specialize in the industry and also serves as a portfolio manager of Gabelli Funds, LLC and the Fund. Prior to joining Gabelli, his career spanned nearly a quarter century in the telecommunications industry with corporate strategy and business development positions. Mr. Miller holds an MBA in Finance from the University of Chicago and a BA in Economics from Northwestern University.
Sergey Dluzhevskiy, CFA, CPA, joined G.research, LLC in 2005 as a research analyst covering the North American telecommunications industry. Currently, he continues to specialize in the industry and also serves as a portfolio manager of Gabelli Funds, LLC and the Fund. Prior to joining Gabelli, Mr. Dluzhevskiy was a senior accountant at Deloitte. He received his undergraduate degree from Case Western Reserve University and an MBA at the Wharton School of the University of Pennsylvania.
2020 TAX NOTICE TO SHAREHOLDERS (Unaudited)
For the year ended December 31, 2020, the Fund paid to shareholders ordinary income distributions (comprised of net investment income and short term capital gains) totaling $0.5042, $0.5042, $0.5042, and $0.5042, per share for Class AAA, Class A, Class C, and Class I Shares, respectively, and long term capital gains totaling $487,185, or the maximum allowable. The distribution of long term capital gains has been designated as a capital gain dividend by the Fund’s Board of Directors. For the year ended December 31, 2020, 20.40% of the ordinary income distribution qualifies for the dividends received deduction available to corporations. The Fund designates 44.45% of the ordinary income distribution as qualified dividend income pursuant to the Jobs and Growth Tax Relief Reconciliation Act of 2003. The Fund designates 0.19% of the ordinary income distribution as qualified interest income pursuant to the Tax Relief, Unemployment Reauthorization, and Job Creation Act of 2010. Also for the year of 2020, the Fund did not have foreign tax credits.
U.S. Government Income:
The percentage of the ordinary income distribution paid by the Fund during the year ended December 31, 2020 which was derived from U.S. Treasury securities was 0.09%. 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 Fund did not meet this strict requirement in 2020. The percentage of U.S. Government securities held as of December 31, 2020 was 0.00%. 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.
We have separated the portfolio managers’ 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 managers’ commentary is unrestricted. Both the commentary and the financial statements, including the portfolio of investments, will be available on our website at www.gabelli.com.
GAMCO Global Series Funds, Inc.
THE GABELLI GLOBAL CONTENT & CONNECTIVITY FUND
One Corporate Center
Rye, New York 10580-1422
t | 800-GABELLI (800-422-3554) |
f | 914-921-5118 |
e | info@gabelli.com |
GABELLI.COM
Net Asset Value per share available daily by calling 800-GABELLI after 7:00 P.M. | |
BOARD OF DIRECTORS Mario J. Gabelli, CFA Chairman and Chief Executive Officer, GAMCO Investors, Inc. Executive Chairman, Associated Capital Group, Inc.
E. Val Cerutti Chief Executive Officer, Cerutti Consultants, Inc.
Anthony J. Colavita President, Anthony J. Colavita, P.C.
John D. Gabelli Former Senior Vice President, G.research, LLC
Werner J. Roeder Former Medical Director, Lawrence Hospital
Anthonie C. van Ekris Chairman, BALMAC International, Inc.
Salvatore J. Zizza Chairman, Zizza & Associates Corp. | OFFICERS Bruce N. Alpert President
John C. Ball Treasurer
Peter Goldstein Secretary
Richard J. Walz Chief Compliance Officer
DISTRIBUTOR G.distributors, LLC
CUSTODIAN State Street Bank and Trust Company
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT DST Asset Manager Solutions, Inc.
LEGAL COUNSEL Skadden, Arps, Slate, Meagher & Flom LLP
|
This report is submitted for the general information of the shareholders of The Gabelli Global Content & Connectivity Fund. It is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus.
GAB401Q420AR
The Gabelli Global Growth Fund
Annual Report — December 31, 2020
(Y)our Portfolio Management Team
Caesar M. P. Bryan Portfolio Manager | Howard F. Ward, CFA Portfolio Manager | Christopher D. Ward, CFA Associate Portfolio Manager |
To Our Shareholders,
For the year ended December 31, 2020, the net asset value (NAV) total return per Class I Share of The Gabelli Global Growth Fund was 35.4% compared with a total return of 16.3% for the Morgan Stanley Capital International (MSCI) All Country (AC) World Index. Other classes of shares are available. See page 3 for performance information for all classes.
Enclosed are the financial statements, including the schedule of investments, as of December 31, 2020.
Performance Discussion (Unaudited)
The Fund’s investment objective is to provide investors with appreciation of capital. Current income is a secondary objective of the Fund.
The Fund’s investment strategy is to invest at least 65% of its total assets in common stocks of companies, which the portfolio managers believe are likely to have rapid growth in revenues and earnings and potential for above average capital appreciation or are undervalued. The Global Growth Fund invests primarily in common stocks of foreign and domestic small-capitalization, mid-capitalization, and large-capitalization issuers. As a “global” fund, the Fund invests in securities of issuers, or related investments thereof, located in at least three countries, and at least 40% of the Fund’s total net assets is invested in securities of non-U.S. issuers.
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s annual and semiannual shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Fund’s website (www.gabelli.com), and you will be notified by mail each time a report is posted and provided with a website link to access the report. If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. To elect to receive all future reports on paper free of charge, please contact your financial intermediary, or, if you invest directly with the Fund, you may call 800-422-3554 or send an email request to info@gabelli.com. |
The market was on fragile footing entering the New Year. Various measures of risk suggested the market was priced for perfection. Corporate credit spreads, high yield credit default swap spreads and volatility (CBOE Volatility Index) sat at historic lows. March nonfarm payrolls fell by 701,000 driving the unemployment rate from 3.5% to 4.4%. The steepness of the employment decline was unprecedented. The 35% decline in the S&P 500 from February 19 to March 23, marked the steepest bear market in history.
The steepest bear market in history was followed by the sharpest rebound in history. Yet, three months later, the path forward remained murky. Businesses that were fortunate enough to muddle through with the help of the Paycheck Protection Programs loans were now facing the threat of a delayed reopening. Meanwhile, we witnessed a tectonic shift in consumer and business behavior. COVID-19 has served as a force function for consumers to experiment with new shopping channels, payment methods, and in-home entertainment. The U.S. unemployment rate improved to 11.1% in June from a peak of 14.7% in April with the tech sector continuing to be the source of employment growth. Meanwhile, low mortgage rates, pent up demand, and lean inventories drove a surge in mortgage applications.
The whipsaw price action of the market through the third quarter 2020 was a great lesson in market timing. The unprecedented one month 35% decline in the S&P 500 was followed by a 60% rise, the best 6-month stretch on record. Even a few days’ worth of holding cash could have severely impaired performance. As COVID-19 breached our shores, the market sell-off catalyzed the Fed to respond with unprecedented easy money. Though multiple contraction in the stock market was widespread, it was cyclical stocks that received the biggest hit to both multiples and earnings estimates.
Asset class returns for calendar 2020 exemplify why aggregates can be misleading. Returns for the year show distinct outperformance of large cap over small cap and growth over value. The top performing factors for the year were sales growth, momentum, and high price to earnings ratios. However, returns off the March market low tell a different story. Small caps and cyclicals led the recovery, with the news of over 90% efficacy rates for Pfizer and Moderna vaccines serving as a clear inflection point. Though it will take time to deliver widespread inoculation, the discounting mechanism of the market now has a firmer timetable for economic recovery.
Selected holdings that contributed positively to performance in 2020 were: Amazon.com Inc. (4.5% of net assets as of December 31, 2020) launched in 1995 as an online book retailer and has evolved into a dominant e-commerce platform and public cloud provider; Adyen NV. (3.2%), operates a global payments platform that integrates the full payments stack – gateway, risk management, processing, acquiring and settlement into a single integrated platform; and Nvidia Corp. (2.6%) designs graphics processing units for the gaming and professional markets, as well as system on a chip units for the mobile computing and automotive market.
Some of our weaker performing holdings during the year were: Jardine Matheson Holdings Ltd. (No longer held as December 31, 2020), whose businesses range from automobile and hotels to supermarkets all around Asia; Aon PLC. (No longer held) is a large Anglo-American-Irish global professional services firm that sells a range of financial risk-mitigation products, including insurance, pension administration, and health-insurance plan; and HDFC Bank Ltd-ADR (No longer held), an Indian banking and financial services company.
Thank you for your investment in The Gabelli Global Growth Fund.
We appreciate your confidence and trust.
2
Comparative Results
Average Annual Returns through December 31, 2020 (a) (Unaudited)
1 Year | 5 Year | 10 Year | 15 Year | Since Inception (2/7/94) | ||||||||||||||||
Class I (GGGIX) | 35.39 | % | 18.05 | % | 13.31 | % | 10.12 | % | 10.40 | % | ||||||||||
Class AAA (GICPX) | 35.43 | 17.58 | 12.87 | 9.77 | 10.20 | |||||||||||||||
MSCI AC World Index | 16.25 | 12.26 | .9.13 | 7.20 | 7.37 | (b) | ||||||||||||||
Lipper Global Large-Cap Growth Fund Classification | .27.59 | 15.43 | 11.31 | 8.64 | N/A | |||||||||||||||
Class A (GGGAX) | 35.38 | 17.57 | 12.87 | 9.77 | 10.21 | |||||||||||||||
With sales charge (c) | 27.60 | 16.19 | 12.20 | 9.34 | 9.96 | |||||||||||||||
Class C (GGGCX) | 35.41 | 16.88 | 12.12 | 9.01 | 9.60 | |||||||||||||||
With contingent deferred sales charge (d) | 34.41 | 16.88 | 12.12 | 9.01 | 9.60 |
In the current prospectuses dated April 29, 2020, the gross expense ratios for Class AAA, A, C, and I Shares are 1.63%, 1.63%, 2.38%, and 1.38%, respectively, and the net expense ratio for all share classes after contractual reimbursements by Gabelli Funds, LLC, (the “Adviser”) is 0.90%. See page 10 for the expense ratios for the year ended December 31, 2020. The contractual reimbursements are in effect through April 30, 2021. Class AAA and Class I Shares do not have a sales charge. The maximum sales charge for Class A Shares and Class C Shares is 5.75% 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, 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. 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. Returns would have been lower had the Adviser not reimbursed certain expenses. The Fund imposes a 2% redemption fee on shares sold or exchanged within seven days after the date of purchase. Investors should carefully consider the investment objectives, risks, charges, and expenses of the Fund before investing. The prospectuses contain information about these and other matters and should be read carefully before investing. To obtain a prospectus, please visit our website at www.gabelli.com. Investing in foreign securities involves risks not ordinarily associated with investments in domestic issues, including currency fluctuation, economic, and political risks. The Class AAA Share NAVs are used to calculate performance for the periods prior to the issuance of Class A Shares, Class C Shares, and Class I Shares on March 2, 2000, March 12, 2000, and January 11, 2008, respectively. The actual performance of the Class A and Class C Shares would have been lower due to the additional fees and expenses associated with these classes of shares. The actual performance of Class I Shares would have been higher due to lower expenses related to this class of shares. The MSCI AC World Index is an unmanaged market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets. The MSCI AC World Index consists of 45 country indices comprising 24 developed and 21 emerging market country indices. The Lipper Global Large-Cap Growth Fund Classification reflects the performance of mutual funds classified in this particular category. Dividends are considered reinvested. You cannot invest directly in an index. |
(b) | The MSCI AC World Index since inception performance is as of January 31, 1994. |
(c) | Performance results include the effect of the maximum 5.75% sales charge at the beginning of the period. |
(d) | Assuming payment of the 1% maximum contingent deferred sales charge imposed on redemptions made within one year of purchase. |
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN
THE GABELLI GLOBAL GROWTH FUND (CLASS AAA SHARES), MSCI AC WORLD INDEX, AND
LIPPER GLOBAL LARGE-CAP GROWTH FUND CLASSIFICATION (Unaudited)
* | 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. |
3
The Gabelli Global Growth Fund | |
Disclosure of Fund Expenses (Unaudited) | |
For the Six Month Period from July 1, 2020 through December 31, 2020 | 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, 2020.
Beginning | Ending | Annualized | Expenses | |
Account Value | Account Value | Expense | Paid During | |
07/01/20 | 12/31/20 | Ratio | Period* | |
The Gabelli Global Growth Fund | ||||
Actual Fund Return | ||||
Class AAA | $1,000.00 | $1,243.50 | 0.90% | $5.08 |
Class A | $1,000.00 | $1,243.30 | 0.90% | $5.08 |
Class C | $1,000.00 | $1,243.50 | 0.90% | $5.08 |
Class I | $1,000.00 | $1,243.40 | 0.90% | $5.08 |
Hypothetical 5% Return | ||||
Class AAA | $1,000.00 | $1,020.61 | 0.90% | $4.57 |
Class A | $1,000.00 | $1,020.61 | 0.90% | $4.57 |
Class C | $1,000.00 | $1,020.61 | 0.90% | $4.57 |
Class I | $1,000.00 | $1,020.61 | 0.90% | $4.57 |
* | Expenses are equal to the Fund’s annualized expense ratio for the last six months multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half year (184 days), then divided by 366. |
4
Summary of Portfolio Holdings (Unaudited)
The following table presents portfolio holdings as a percent of net assets as of December 31, 2020:
The Gabelli Global Growth Fund
Information Technology | 42.5 | % | ||
Consumer Discretionary | 17.2 | % | ||
Communication Services | 11.9 | % | ||
Health Care | 10.1 | % | ||
Consumer Staples | 5.3 | % | ||
Industrials | 4.5 | % | ||
Financials | 2.9 | % |
Utilities | 2.1 | % | ||
Real Estate | 1.6 | % | ||
Materials | 0.8 | % | ||
Other Assets and Liabilities (Net) | 1.1 | % | ||
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-PORT. 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-PORT 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 800-SEC-0330.
Proxy Voting
The Fund files Form N-PX with its complete proxy voting record for the twelve months ended June 30, no later than August 31 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.
5
The Gabelli Global Growth Fund
Schedule of Investments — December 31, 2020
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS — 98.9% | ||||||||||||
INFORMATION TECHNOLOGY — 42.5% | ||||||||||||
5,400 | Adobe Inc. † | $ | 799,715 | $ | 2,700,648 | |||||||
2,680 | Adyen NV† | 1,775,779 | 6,227,092 | |||||||||
40,000 | Anaplan Inc.† | 2,350,718 | 2,874,000 | |||||||||
57,040 | Apple Inc | 3,285,365 | 7,568,638 | |||||||||
12,470 | ASML Holding NV | 4,014,439 | 6,081,868 | |||||||||
14,200 | Atlassian Corp. plc, Cl. A† | 1,790,049 | 3,320,954 | |||||||||
36,000 | Cloudflare Inc., Cl. A† | 2,015,978 | 2,735,640 | |||||||||
16,800 | CrowdStrike Holdings Inc., Cl. A† | 2,573,941 | 3,558,576 | |||||||||
5,700 | Datadog Inc., Cl. A† | 625,357 | 561,108 | |||||||||
12,890 | Keyence Corp | 2,755,850 | 7,250,845 | |||||||||
4,700 | Lam Research Corp | 1,247,970 | 2,219,669 | |||||||||
8,500 | Lasertec Corp | 947,272 | 997,670 | |||||||||
6,700 | Mastercard Inc., Cl. A | 93,730 | 2,391,498 | |||||||||
41,300 | Microsoft Corp | 1,765,756 | 9,185,946 | |||||||||
16,700 | Murata Manufacturing Co. Ltd. | 1,439,050 | 1,511,843 | |||||||||
9,600 | NVIDIA Corp. | 2,223,258 | 5,013,120 | |||||||||
14,000 | PayPal Holdings Inc.† | 1,263,317 | 3,278,800 | |||||||||
21,500 | QUALCOMM Inc. | 2,523,054 | 3,275,310 | |||||||||
7,000 | ServiceNow Inc.† | 2,060,836 | 3,853,010 | |||||||||
4,000 | Snowflake Inc., Cl. A† | 844,370 | 1,125,600 | |||||||||
25,500 | Taiwan Semiconductor Manufacturing Co. Ltd., ADR | 1,348,393 | 2,780,520 | |||||||||
17,000 | Visa Inc., Cl. A | 301,339 | 3,718,410 | |||||||||
TOTAL INFORMATION TECHNOLOGY | 38,045,536 | 82,230,765 | ||||||||||
CONSUMER DISCRETIONARY — 17.2% | ||||||||||||
9,200 | adidas AG† | 2,327,270 | 3,347,006 | |||||||||
11,355 | Alibaba Group Holding Ltd., ADR† | 2,096,322 | 2,642,649 | |||||||||
2,660 | Amazon.com Inc.† | 3,541,389 | 8,663,434 | |||||||||
11,000 | Aptiv plc | 1,406,078 | 1,433,190 | |||||||||
2,000 | Christian Dior SE | 290,698 | 1,110,781 | |||||||||
4,020 | Kering SA | 2,512,007 | 2,917,450 | |||||||||
7,300 | Lululemon Athletica Inc.† | 984,970 | 2,540,619 | |||||||||
4,400 | LVMH Moet Hennessy Louis Vuitton SE | 738,860 | 2,754,406 | |||||||||
46,000 | Puma SE† | 2,812,317 | 5,176,238 | |||||||||
9,700 | The Home Depot Inc. | 2,334,892 | 2,576,514 | |||||||||
TOTAL CONSUMER DISCRETIONARY | 19,044,803 | 33,162,287 | ||||||||||
COMMUNICATION SERVICES — 11.9% | ||||||||||||
810 | Alphabet Inc., Cl. A† | 238,018 | 1,419,638 | |||||||||
1,716 | Alphabet Inc., Cl. C† | 1,992,787 | 3,006,226 | |||||||||
17,200 | Facebook Inc., Cl. A† | 3,234,791 | 4,698,352 | |||||||||
9,000 | Netflix Inc.† | 3,567,800 | 4,866,570 | |||||||||
12,300 | Take-Two Interactive Software Inc.† | 2,114,811 | 2,555,817 | |||||||||
66,500 | Tencent Holdings Ltd. | 3,294,940 | 4,784,928 |
Shares | Cost | Market Value | ||||||||||
9,000 | The Walt Disney Co.† | $ | 1,217,304 | $ | 1,630,620 | |||||||
TOTAL COMMUNICATION SERVICES | 15,660,451 | 22,962,151 | ||||||||||
HEALTH CARE — 10.1% | ||||||||||||
7,900 | Danaher Corp | 694,381 | 1,754,906 | |||||||||
23,200 | Edwards Lifesciences Corp | 1,226,764 | 2,116,536 | |||||||||
10,400 | M3 Inc. | 941,183 | 982,460 | |||||||||
20,000 | Medtronic plc | 2,309,372 | 2,342,800 | |||||||||
19,500 | PerkinElmer Inc | 2,275,337 | 2,798,250 | |||||||||
11,850 | Thermo Fisher Scientific Inc | 3,005,432 | 5,519,493 | |||||||||
5,600 | UnitedHealth Group Inc | 1,633,101 | 1,963,808 | |||||||||
12,600 | Zoetis Inc | 716,245 | 2,085,300 | |||||||||
TOTAL HEALTH CARE | 12,801,815 | 19,563,553 | ||||||||||
CONSUMER STAPLES — 5.3% | ||||||||||||
4,300 | Costco Wholesale Corp. | 674,475 | 1,620,154 | |||||||||
244,000 | Davide Campari-Milano NV | 1,587,841 | 2,796,809 | |||||||||
11,200 | L’Oreal SA | 2,058,684 | 4,273,384 | |||||||||
7,756 | Pernod Ricard SA | 917,464 | 1,489,513 | |||||||||
TOTAL CONSUMER STAPLES | 5,238,464 | 10,179,860 | ||||||||||
INDUSTRIALS — 4.5% | ||||||||||||
15,500 | FANUC Corp | 3,274,402 | 3,826,161 | |||||||||
33,100 | IHS Markit Ltd. | 1,767,935 | 2,973,373 | |||||||||
15,400 | Nidec Corp | 1,908,666 | 1,948,223 | |||||||||
TOTAL INDUSTRIALS | 6,951,003 | 8,747,757 | ||||||||||
FINANCIALS — 2.9% | ||||||||||||
34,000 | Investor AB, Cl. B | 1,614,108 | 2,474,634 | |||||||||
45,800 | Morgan Stanley | 2,791,363 | 3,138,674 | |||||||||
TOTAL FINANCIALS | 4,405,471 | 5,613,308 | ||||||||||
UTILITIES — 2.1% | ||||||||||||
34,000 | NextEra Energy Inc | 1,719,002 | 2,623,100 | |||||||||
21,000 | NextEra Energy Partners LP | 1,406,910 | 1,408,050 | |||||||||
TOTAL UTILITIES | 3,125,912 | 4,031,150 | ||||||||||
REAL ESTATE — 1.6% | ||||||||||||
6,500 | American Tower Corp | 1,025,270 | 1,458,990 | |||||||||
10,350 | Crown Castle International Corp., REIT | 1,255,632 | 1,647,617 | |||||||||
TOTAL REAL ESTATE | 2,280,902 | 3,106,607 | ||||||||||
MATERIALS — 0.8% | ||||||||||||
2,140 | The Sherwin-Williams Co | 1,049,693 | 1,572,707 | |||||||||
TOTAL COMMON STOCKS | 108,604,050 | 191,170,145 | ||||||||||
TOTAL INVESTMENTS — 98.9% | $ | 108,604,050 | 191,170,145 | |||||||||
Other Assets and Liabilities (Net) — 1.1% | 2,107,441 | |||||||||||
NET ASSETS — 100.0% | $ | 193,277,586 |
† | Non-income producing security. |
ADR | American Depositary Receipt |
REIT | Real Estate Investment Trust |
See accompanying notes to financial statements.
6
The Gabelli Global Growth Fund
Schedule of Investments (Continued) — December 31, 2020
Geographic Diversification | % of Market Value | Market Value | ||||||
United States | 59.2 | % | $ | 113,184,729 | ||||
Europe | 23.8 | 45,398,544 | ||||||
Japan | 8.6 | 16,517,202 | ||||||
Asia/Pacific | 7.1 | 13,529,051 | ||||||
Canada | 1.3 | 2,540,619 | ||||||
100.0 | % | $ | 191,170,145 |
See accompanying notes to financial statements.
7
The Gabelli Global Growth Fund
Statement of Assets and Liabilities December 31, 2020 | ||||
Assets: | ||||
Investments, at value (cost $108,604,050) | $ | 191,170,145 | ||
Cash | 102 | |||
Receivable for investments sold | 4,006,838 | |||
Receivable for Fund shares sold | 151,038 | |||
Receivable from Adviser | �� | 94,080 | ||
Dividends receivable | 101,623 | |||
Prepaid expenses | 47,712 | |||
Total Assets | 195,571,538 | |||
Liabilities: | ||||
Line of credit payable | 691,000 | |||
Payable for investments purchased | 1,188,805 | |||
Payable for Fund shares redeemed | 45,067 | |||
Payable for investment advisory fees | 159,926 | |||
Payable for distribution fees | 27,284 | |||
Payable for accounting fees | 3,750 | |||
Other accrued expenses | 178,120 | |||
Total Liabilities | 2,293,952 | |||
Net Assets (applicable to 4,083,326 shares outstanding) | $ | 193,277,586 | ||
Net Assets Consist of: | ||||
Paid-in capital | $ | 111,030,833 | ||
Total distributable earnings | 82,246,753 | |||
Net Assets | $ | 193,277,586 | ||
Shares of Capital Stock, each at $0.001 par value: | ||||
Class AAA: | ||||
Net Asset Value, offering, and redemption price per share ($115,210,032 ÷ 2,449,323 shares outstanding; 75,000,000 shares authorized) | $ | 47.04 | ||
Class A: | ||||
Net Asset Value and redemption price per share ($4,803,630 ÷ 102,180 shares outstanding; 50,000,000 shares authorized) | $ | 47.01 | ||
Maximum offering price per share (NAV ÷ 0.9425, based on maximum sales charge of 5.75% of the offering price) | $ | 49.88 | ||
Class C: | ||||
Net Asset Value and offering price per share ($2,376,431 ÷ 62,051 shares outstanding; 25,000,000 shares authorized) | $ | 38.30 | (a) | |
Class I: | ||||
Net Asset Value, offering, and redemption price per share ($70,887,493 ÷ 1,469,772 shares outstanding; 25,000,000 shares authorized) | $ | 48.23 |
(a) | Redemption price varies based on the length of time held. |
Statement of Operations For the Year Ended December 31, 2020 | ||||
Investment Income: | ||||
Dividends (net of foreign withholding taxes of $55,943) | $ | 1,065,374 | ||
Interest | 3,037 | |||
Total Investment Income | 1,068,411 | |||
Expenses: | ||||
Investment advisory fees | 1,419,282 | |||
Distribution fees - Class AAA | 240,610 | |||
Distribution fees - Class A | 12,602 | |||
Distribution fees - Class C | 22,835 | |||
Shareholder services fees | 105,212 | |||
Shareholder communications expenses | 88,941 | |||
Registration expenses | 58,775 | |||
Legal and audit fees | 58,588 | |||
Accounting fees | 45,000 | |||
Directors’ fees | 31,293 | |||
Custodian fees | 28,755 | |||
Interest expense | 539 | |||
Miscellaneous expenses. | 41,714 | |||
Total Expenses | 2,154,146 | |||
Less: | ||||
Expense reimbursements (See Note 3) | (876,253 | ) | ||
Net Expenses | 1,277,893 | |||
Net Investment Loss | (209,482 | ) | ||
Net Realized and Unrealized Gain on Investments and Foreign Currency: | ||||
Net realized gain on investments | 4,420,962 | |||
Net realized gain on foreign currency transactions | 1,175 | |||
Net realized gain on investments and foreign currency transactions | 4,422,137 | |||
Net change in unrealized appreciation/depreciation: | ||||
on investments | 42,111,979 | |||
on foreign currency translations | 5,877 | |||
Net change in unrealized appreciation/depreciation on investments and foreign currency translations | 42,117,856 | |||
Net Realized and Unrealized Gain on Investments and Foreign Currency | 46,539,993 | |||
Net Increase in Net Assets Resulting from Operations | $ | 46,330,511 |
See accompanying notes to financial statements.
8
The Gabelli Global Growth Fund
Statement of Changes in Net Assets
Year Ended December 31, 2020 | Year Ended December 31, 2019 | |||||||
Operations: | ||||||||
Net investment loss | $ | (209,482 | $ | (197,454 | ) | |||
Net realized gain on investments and foreign currency transactions | 4,422,137 | 10,426,884 | ||||||
Net change in unrealized appreciation/depreciation on investments and foreign currency translations | 42,117,856 | 16,292,298 | ||||||
Net Increase in Net Assets Resulting from Operations | 46,330,511 | 26,521,728 | ||||||
Distributions to Shareholders: | ||||||||
Accumulated earnings | ||||||||
Class AAA | (2,676,732 | (8,172,493 | ) | |||||
Class A | (111,792 | (495,166 | ) | |||||
Class C | (67,412 | (263,622 | ) | |||||
Class I | (1,600,736 | (1,497,399 | ) | |||||
Total Distributions to Shareholders | (4,456,672 | (10,428,680 | ) | |||||
Capital Share Transactions: | ||||||||
Class AAA | (687,182 | 2,959,549 | ||||||
Class A | (1,870,229 | 725,983 | ||||||
Class C | (802,712 | 831,343 | ||||||
Class I | 41,980,393 | 6,601,878 | ||||||
Net Increase in Net Assets from Capital Share Transactions | 38,620,270 | 11,118,753 | ||||||
Redemption Fees | 274 | 409 | ||||||
Net Increase in Net Assets | 80,494,383 | 27,212,210 | ||||||
Net Assets: | ||||||||
Beginning of year | 112,783,203 | 85,570,993 | ||||||
End of year | $ | 193,277,586 | $ | 112,783,203 | ||||
See accompanying notes to financial statements. |
9
The Gabelli Global Growth Fund
Financial Highlights
Income (Loss) from Investment Operations | Distributions | Ratios to Average Net Assets/ Supplemental Data | |||||||||||||||||||||||||||||||||||||||||||||||
Year Ended December 31 | Net Asset Value, Beginning of Year | Net Investment Income (Loss)(a) | Net Realized and Unrealized Gain (Loss) on Investments | Total from Investment Operations | Net Investment Income | Net Realized Gain | Return of Capital | Total Distributions | Redemption Fees (a)(b) | Net Asset Value, End of Year | Total Return† | Net Assets End of Year (in 000’s) | Net Investment Income (Loss) | Operating Expenses Before Reimbursement | Operating Expenses Net of Reimbursement | Portfolio Turnover Rate | |||||||||||||||||||||||||||||||||
Class AAA | |||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 35.56 | $ | (0.05 | ) | $ | 12.64 | $ | 12.59 | $ | (0.09 | ) | $ | (1.02 | ) | — | $ | (1.11 | ) | $ | 0.00 | $ | 47.04 | 35.4 | % | $ | 115,210 | (0.14 | )% | 1.57 | % | 0.90 | %(c) | 50 | % | ||||||||||||||
2019 | 29.94 | (0.07 | ) | 9.29 | 9.22 | — | (3.60 | ) | — | (3.60 | ) | 0.00 | 35.56 | 30.7 | 88,287 | (0.21 | ) | 1.63 | 1.22 | (c) | 78 | ||||||||||||||||||||||||||||
2018 | 33.42 | (0.05 | ) | (0.91 | ) | (0.96 | ) | — | (2.52 | ) | — | (2.52 | ) | 0.00 | 29.94 | (2.8 | ) | 71,877 | (0.14 | ) | 1.68 | 1.42 | (c)(d) | 58 | |||||||||||||||||||||||||
2017 | 26.72 | (0.13 | ) | 7.89 | 7.76 | — | (1.05 | ) | $ | (0.01 | ) | (1.06 | ) | 0.00 | 33.42 | 29.0 | 77,829 | (0.42 | ) | 1.67 | 1.67 | (d) | 43 | ||||||||||||||||||||||||||
2016 | 28.27 | 0.12 | 0.22 | 0.34 | (0.13 | ) | (1.76 | ) | — | (1.89 | ) | — | 26.72 | 1.2 | 64,574 | 0.44 | 1.72 | 1.72 | (d)(e) | 63 | |||||||||||||||||||||||||||||
Class A | |||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 35.55 | $ | (0.05 | ) | $ | 12.62 | $ | 12.57 | $ | (0.09 | ) | $ | (1.02 | ) | — | $ | (1.11 | ) | $ | 0.00 | $ | 47.01 | 35.4 | % | $ | 4,804 | (0.12 | )% | 1.57 | % | 0.90 | %(c) | 50 | % | ||||||||||||||
2019 | 29.93 | (0.08 | ) | 9.30 | 9.22 | — | (3.60 | ) | — | (3.60 | ) | 0.00 | 35.55 | 30.7 | 5,332 | (0.21 | ) | 1.63 | 1.22 | (c) | 78 | ||||||||||||||||||||||||||||
2018 | 33.41 | (0.05 | ) | (0.91 | ) | (0.96 | ) | — | (2.52 | ) | — | (2.52 | ) | 0.00 | 29.93 | (2.8 | ) | 3,861 | (0.14 | ) | 1.68 | 1.41 | (c)(d) | 58 | |||||||||||||||||||||||||
2017 | 26.72 | (0.13 | ) | 7.88 | 7.75 | — | (1.05 | ) | $ | (0.01 | ) | (1.06 | ) | 0.00 | 33.41 | 29.0 | 3,652 | (0.43 | ) | 1.67 | 1.67 | (d) | 43 | ||||||||||||||||||||||||||
2016 | 28.26 | 0.12 | 0.23 | 0.35 | (0.14 | ) | (1.75 | ) | — | (1.89 | ) | — | 26.72 | 1.3 | 3,143 | 0.44 | 1.72 | 1.72 | (d)(e) | 63 | |||||||||||||||||||||||||||||
Class C | |||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 29.11 | $ | (0.04 | ) | $ | 10.34 | $ | 10.30 | $ | (0.09 | ) | $ | (1.02 | ) | — | $ | (1.11 | ) | $ | 0.00 | $ | 38.30 | 35.4 | % | $ | 2,376 | (0.12 | )% | 2.32 | % | 0.90 | %(c) | 50 | % | ||||||||||||||
2019 | 25.18 | (0.25 | ) | 7.78 | 7.53 | — | (3.60 | ) | — | (3.60 | ) | 0.00 | 29.11 | 29.8 | 2,598 | (0.84 | ) | 2.38 | 1.87 | (c) | 78 | ||||||||||||||||||||||||||||
2018 | 28.73 | (0.28 | ) | (0.75 | ) | (1.03 | ) | — | (2.52 | ) | — | (2.52 | ) | 0.00 | 25.18 | (3.5 | ) | 1,561 | (0.93 | ) | 2.43 | 2.15 | (c)(d) | 58 | |||||||||||||||||||||||||
2017 | 23.26 | (0.32 | ) | 6.85 | 6.53 | — | (1.05 | ) | $ | (0.01 | ) | (1.06 | ) | 0.00 | 28.73 | 28.0 | 1,479 | (1.19 | ) | 2.42 | 2.42 | (d) | 43 | ||||||||||||||||||||||||||
2016 | 24.91 | (0.07 | ) | 0.18 | 0.11 | — | (1.76 | ) | — | (1.76 | ) | — | 23.26 | 0.4 | 1,232 | (0.30 | ) | 2.47 | 2.47 | (d)(e) | 63 | ||||||||||||||||||||||||||||
Class I | |||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 36.45 | $ | (0.08 | ) | $ | 12.97 | $ | 12.89 | $ | (0.09 | ) | $ | (1.02 | ) | — | $ | (1.11 | ) | $ | 0.00 | $ | 48.23 | 35.4 | % | $ | 70,888 | (0.18 | )% | 1.32 | % | 0.90 | %(c) | 50 | % | ||||||||||||||
2019 | 30.55 | 0.01 | 9.49 | 9.50 | — | (3.60 | ) | — | (3.60 | ) | 0.00 | 36.45 | 31.0 | 16,566 | 0.03 | 1.38 | 0.99 | (c) | 78 | ||||||||||||||||||||||||||||||
2018 | 33.90 | 0.09 | (0.92 | ) | (0.83 | ) | — | (2.52 | ) | — | (2.52 | ) | 0.00 | 30.55 | (2.4 | ) | 8,272 | 0.26 | 1.43 | 1.00 | (c)(d) | 58 | |||||||||||||||||||||||||||
2017 | 26.92 | 0.07 | 7.97 | 8.04 | — | (1.05 | ) | $ | (0.01 | ) | (1.06 | ) | 0.00 | 33.90 | 29.8 | 5,667 | 0.24 | 1.42 | 1.00 | (c)(d) | 43 | ||||||||||||||||||||||||||||
2016 | 28.47 | 0.33 | 0.23 | 0.56 | (0.35 | ) | (1.76 | ) | — | (2.11 | ) | — | 26.92 | 2.0 | 2,975 | 1.18 | 1.47 | 1.00 | (c)(d)(e) | 63 |
† | Total return represents aggregate total return of a hypothetical investment at the beginning of the year and sold at the end of the year including reinvestment of distributions and does not reflect the applicable sales charges. |
(a) | Per share amounts have been calculated using the average shares outstanding method. |
(b) | Amount represents less than $0.005 per share. |
(c) | Under an expense reimbursement agreement with the Adviser, the Adviser reimbursed expenses of $876,253, $412,641, and $261,050 for the years ended December 31, 2020, 2019, and 2018 and certain Class I expenses to the Fund of $19,466 and $14,648 for the years ended December 31, 2017 and 2016, respectively. |
(d) | The Fund received credits from a designated broker who agreed to pay certain Fund operating expenses. For the years ended December 31, 2018, 2017, and 2016, there was no impact to the expense ratios. |
(e) | During the year ended December 31, 2016, the Fund received reimbursements of custody expenses paid in prior years. Had such reimbursement (allocated by relative net asset values of the Fund’s share classes) been included in that period, the expense ratios would have been 1.20% (Class AAA), 1.21% (Class A), 1.96% (Class C), and 0.47% (Class I). |
See accompanying notes to financial statements.
10
The Gabelli Global Growth Fund
Notes to Financial Statements
1. Organization. The Gabelli Global Growth Fund, a series of GAMCO Global Series Funds, Inc. (the Corporation), was incorporated on July 16, 1993 in Maryland. The Fund is a non-diversified open-end management investment company registered under the Investment Company Act of 1940, as amended (the 1940 Act), and is one of five separately managed portfolios (collectively, the Portfolios) of the Corporation. The Fund’s primary objective is capital appreciation. The Fund commenced investment operations on February 7, 1994.
2. Significant Accounting Policies. As an investment company, the Fund follows the investment company accounting and reporting guidance, which is part of U.S. generally accepted accounting principles (GAAP) that may require the use of management estimates and assumptions in the preparation of its 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.
The global outbreak of the novel coronavirus disease, known as COVID-19, has caused adverse effects on many companies, sectors, nations, regions and the markets in general, and may continue for an unpredictable duration. The effects of this pandemic may materially impact the value and performance of the Fund, its ability to buy and sell fund investments at appropriate valuations, and its ability to achieve its investment objectives.
New Accounting Pronouncements. To improve the effectiveness of fair value disclosure requirements, the Financial Accounting Standards Board issued Accounting Standard Update (ASU) 2018-13, Fair Value Measurement Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement (ASU 2018-13), which added, removed, and modified certain aspects relating to fair value disclosure. Management has fully adopted the ASU 2018-13 updates in these financial statements.
In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in the ASU provides optional temporary financial reporting relief from the effect of certain types of contract modifications due to the planned discontinuation of the London Interbank Offered Rate (LIBOR) and other interbank-offered based reference rates as of the end of 2021. The ASU is effective for certain reference rate-related contract modifications that occur during the period March 12, 2020 through December 31, 2022. Management has reviewed the requirements and believes the adoption of this ASU will not have a material impact on the 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
11
The Gabelli Global Growth Fund
Notes to Financial Statements (Continued)
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 obligations 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. Such debt obligations are valued through prices provided by a pricing service approved by the Board. Certain securities are valued principally using dealer quotations.
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 American Depositary Receipt 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.
The Fund employs a fair value model to adjust prices to reflect events affecting the values of certain portfolio securities which occur between the close of trading on the principal market for such securities (foreign exchanges and over-the-counter markets) at the time when net asset values of the Fund are determined. If the Fund’s valuation committee believes that a particular event would materially affect net asset value, further adjustment is considered. Such securities are classified as Level 2 in the fair value hierarchy presented below.
The inputs and valuation techniques used to measure fair value of the Fund’s investments are summarized into three levels as described in the hierarchy below:
● | Level 1 — quoted prices in active markets for identical securities; |
● | Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.); and |
● | Level 3 — significant unobservable inputs (including the Board’s determinations as to the fair value of investments). |
A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input both individually and in the aggregate that is significant to the fair value measurement. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
12
The Gabelli Global Growth Fund
Notes to Financial Statements (Continued)
The summary of the Fund’s investments in securities by inputs used to value the Fund’s investments as of December 31, 2020 is as follows:
Valuation Inputs | ||||||||||||
Level 1 Quoted Prices | Level 2 Other Significant Observable Inputs | Total Market Value at 12/31/20 | ||||||||||
INVESTMENTS IN SECURITIES: | ||||||||||||
ASSETS (Market Value): | ||||||||||||
Common Stocks: | ||||||||||||
Communication Services | $ | 18,177,223 | $ | 4,784,928 | $ | 22,962,151 | ||||||
Consumer Discretionary | 17,856,406 | 15,305,881 | 33,162,287 | |||||||||
Consumer Staples | 1,620,154 | 8,559,706 | 10,179,860 | |||||||||
Financials | 3,138,674 | 2,474,634 | 5,613,308 | |||||||||
Health Care | 18,581,093 | 982,460 | 19,563,553 | |||||||||
Industrials | 2,973,373 | 5,774,384 | 8,747,757 | |||||||||
Information Technology | 66,243,315 | 15,987,450 | 82,230,765 | |||||||||
Other Industries (a) | 8,710,464 | — | 8,710,464 | |||||||||
TOTAL INVESTMENTS IN SECURITIES – ASSETS | $ | 137,300,702 | $ | 53,869,443 | $ | 191,170,145 |
(a) | Please refer to the Schedule of Investments for the industry classifications of these portfolio holdings. |
The Fund held no level 3 investments at December 31, 2020 and 2019.
Additional Information to Evaluate Qualitative Information.
General. The Fund uses recognized industry pricing services – approved by the Board and unaffiliated with the Adviser – to value most of its securities, and uses broker quotes provided by market makers of securities not valued by these and other recognized pricing sources. Several different pricing feeds are received to value domestic equity securities, international equity securities, preferred equity securities, and fixed income securities. The data within these feeds are ultimately sourced from major stock exchanges and trading systems where these securities trade. The prices supplied by external sources are checked by obtaining quotations or actual transaction prices from market participants. If a price obtained from the pricing source is deemed unreliable, prices will be sought from another pricing service or from a broker/dealer that trades that security or similar securities.
Fair Valuation. Fair valued securities may be common or preferred equities, warrants, options, rights, or fixed income obligations. Where appropriate, Level 3 securities are those for which market quotations are not available, such as securities not traded for several days, or for which current bids are not available, or which are restricted as to transfer. When fair valuing a security, factors to consider include recent prices of comparable securities that are publicly traded, reliable prices of securities not publicly traded, the use of valuation models, current analyst reports, valuing the income or cash flow of the issuer, or cost if the preceding factors do not apply. The circumstances of Level 3 securities are frequently monitored to determine if fair valuation measures continue to apply.
The Adviser reports quarterly to the Board the results of the application of fair valuation policies and procedures. These may include backtesting the prices realized in subsequent trades of these fair valued securities to fair values previously recognized.
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 current exchange rates. Purchases and sales of investment securities, income, and expenses are translated at the exchange
13
The Gabelli Global Growth Fund
Notes to Financial Statements (Continued)
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 purchase 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 inability 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 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 an accrual basis. Premiums and discounts on debt securities are amortized using the effective yield to maturity method or amortized to earliest call date, if applicable. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities that are recorded as soon after the ex-dividend date as the Fund becomes aware of such dividends.
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 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.
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 GAAP. 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 for federal income tax purposes 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
14
The Gabelli Global Growth Fund
Notes to Financial Statements (Continued)
the period when the differences arise. Permanent differences were primarily due to prior year post financial statement write-off of net operating losses. These reclassifications have no impact on the NAV of the Fund. For the year ended December 31, 2020, reclassifications were made to decrease paid-in capital by $17,464, with an offsetting adjustment to total distributable earnings.
The tax character of distributions paid during the years ended December 31, 2020 and 2019 was as follows:
Year Ended | Year Ended | |||||
December 31, 2020 | December 31, 2019 | |||||
Distributions paid from: | ||||||
Ordinary income | $ | 368,195 | — | |||
Net long term capital gains | 4,088,477 | $ | 10,428,680 | |||
Total distributions paid | $ | 4,456,672 | $ | 10,428,680 |
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, 2020, the components of accumulated earnings/losses on a tax basis were as follows:
Undistributed ordinary income | $ | 105,543 | |
Undistributed long term capital gains | 601,111 | ||
Net unrealized appreciation on investments and foreign currency translations | 81,540,099 | ||
Total | $ | 82,246,753 |
At December 31, 2020, the temporary differences between book basis and tax basis net unrealized appreciation/depreciation on investments were due to losses from wash sales for tax purposes, mark-to-market adjustments on investments considered a passive foreign investment company, investments no longer considered a passive foreign investment company and basis adjustments for litigation gains.
The following summarizes the tax cost of investments and the related net unrealized appreciation at December 31, 2020:
Cost | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Appreciation | ||||
Investments | $109,636,513 | $81,955,577 | $(421,945) | $81,533,632 |
The Fund is required to evaluate 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. Income tax and related interest and penalties would be recognized by the Fund as tax expense in the Statement of Operations if the tax positions were deemed not to meet the more-likely-than-not threshold. During the year ended December 31, 2020, the Fund did not incur any income tax, interest, or penalties. As of December 31, 2020, the Adviser has reviewed all open tax years and concluded that there was no impact to the Fund’s net assets or results of operations. The Fund’s federal and state tax returns for the prior three fiscal years remain open, subject to examination. On an ongoing basis, the Adviser will monitor the Fund’s tax positions to determine if adjustments to this conclusion are necessary.
15
The Gabelli Global Growth Fund
Notes to Financial Statements (Continued)
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.
Through November 30, 2019, the Adviser had agreed to waive and/or to reimburse expenses of the Fund to the extent necessary to maintain the annualized total operating expenses of the Fund (excluding brokerage costs, acquired fund fees and expenses, interest, taxes, and extraordinary expenses) at no more than 1.25%, 1.25%, 2.00%, and 1.00% of the value of the Fund’s average daily net assets for Class AAA, Class A, Class C, and Class I Shares, respectively. Effective December 1, 2019, the Adviser amended its contractual agreement with respect to each share class of the Fund to waive its investment advisory fees and/or to reimburse expenses to the extent necessary to maintain the annualized total operating expenses of the Fund (excluding brokerage costs, acquired fund fees and expenses, interest, taxes, and extraordinary expenses) until at least April 30, 2021, at no more than 0.90% of the value of the Fund’s average daily net assets for each share class of the Fund. During the year ended December 31, 2020, the Adviser reimbursed the Fund in the amount of $876,253. In addition, the Fund has agreed, during the two year period following any waiver or reimbursement by the Adviser, to repay such amount to the extent, that after giving effect to the repayment, such adjusted annualized total operating expenses of the Fund would not exceed 0.90% of the value of the Fund’s average daily net assets for each share class of the Fund. The agreement is renewable annually. At December 31, 2020, the cumulative amount which the Fund may repay the Adviser, subject to the terms above, is $1,288,894:
For the year ended December 31, 2019, expiring December 31, 2021 | $ | 412,641 | |||
For the year ended December 31, 2020, expiring December 31, 2022 | 876,253 | ||||
$ | 1,288,894 |
The Corporation pays each Director who is not considered to be an affiliated person an annual retainer of $6,000 plus $1,000 for each Board meeting attended and they are reimbursed for any out of pocket expenses incurred in attending meetings. All Board committee members receive $1,000 per meeting attended. The Chairman of the Audit Committee receives an annual fee of $3,000, and the Lead Director receives an annual fee of $2,000. A Director may receive a single meeting fee, allocated among the participating funds, for attending certain meetings held on behalf of multiple funds. Directors who are directors or employees of the Adviser or an affiliated company receive no compensation or expense reimbursement from the Corporation.
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. Under the Class AAA, Class A, and Class C Share Plans, payments are authorized to G.distributors, LLC (the Distributor), an affiliate of the Adviser, at annual rates of 0.25%, 0.25%, 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 sales of securities during the year ended December 31, 2020, other than short term securities and U.S. Government obligations, aggregated $103,270,921 and $71,026,238, respectively.
16
The Gabelli Global Growth Fund
Notes to Financial Statements (Continued)
6. Transactions with Affiliates and Other Arrangements. During the year ended December 31, 2020, the Distributor retained a total of $1,184 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. Under the sub-administration agreement with Bank of New York Mellon, the fees paid include the cost of calculating the Fund’s NAV. The Fund reimburses the Adviser for this service. During the year ended December 31, 2020, the Fund accrued $45,000 in accounting fees in the Statement of Operations.
7. Line of Credit. The Fund participates in an unsecured line of credit which expires on March 3, 2021 and may be renewed annually, of up to $75,000,000 under 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 a floating rate equal to the higher of the overnight Federal Funds rate plus 125 basis points or the 30 day ICE LIBOR plus 125 basis points in effect on that day. This amount, if any, would be included in “Interest expense” in the Statement of Operations. At December 31, 2020, there was $691,000 outstanding under the line of credit.
The average daily amount of borrowings outstanding under the line of credit for the five days of borrowings during the year ended December 31, 2020 was $604,200, with a weighted average interest rate of 1.42%. The maximum amount borrowed at any time during the year ended December 31, 2020 was $919,000.
8. Capital Stock. The Fund currently offers three classes of shares – Class AAA Shares, Class A Shares, and Class I Shares. Effective January 27, 2020, (the Effective Date) the Fund’s Class AAA, Class A and Class C Shares “closed to purchases from new investors”. “Closed to purchases from new investors” means (i) with respect to the Class AAA and Class A shares, no new investors may purchase shares of such classes, but existing shareholders may continue to purchase additional shares of such classes after the Effective Date, and (ii) with respect to Class C Shares, neither new investors nor existing shareholders may purchase any additional shares of such class after the Effective Date. These changes had no effect on existing shareholders’ ability to redeem shares of the Fund as described in the Fund’s Prospectus. Additionally, on the Effective Date Class I shares of the Fund became available to investors with a minimum initial investment amount of $1,000 when purchasing shares directly through the Distributor, or investors purchasing Class I shares through brokers or financial intermediaries that have entered into selling agreements with the Distributor specifically with respect to Class I shares.
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 as an increase in paid-in capital. The redemption fees retained by the Fund during the years ended December 31, 2020 and 2019, if any, can be found in the Statement of Changes in Net Assets under Redemption Fees.
17
The Gabelli Global Growth Fund
Notes to Financial Statements (Continued)
Transactions in shares of capital stock were as follows:
Year Ended | Year Ended | |||||||||||||||
December 31, 2020 | December 31, 2019 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Class AAA | ||||||||||||||||
Shares sold | 177,763 | $ | 6,767,352 | 137,319 | $ | 4,874,691 | ||||||||||
Shares issued upon reinvestment of distributions | 54,963 | 2,578,876 | 218,229 | 7,797,329 | ||||||||||||
Shares redeemed | (265,814 | ) | (10,033,410 | ) | (273,816 | ) | (9,712,471 | ) | ||||||||
Net increase/(decrease) | (33,088 | ) | $ | (687,182 | ) | 81,732 | $ | 2,959,549 | ||||||||
Class A | ||||||||||||||||
Shares sold | 6,971 | $ | 291,564 | 46,943 | $ | 1,656,674 | ||||||||||
Shares issued upon reinvestment of distributions | 2,281 | 106,948 | 13,558 | 484,299 | ||||||||||||
Shares redeemed | (57,053 | ) | (2,268,741 | ) | (39,502 | ) | (1,414,990 | ) | ||||||||
Net increase/(decrease) | (47,801 | ) | $ | (1,870,229 | ) | 20,999 | $ | 725,983 | ||||||||
Class C | ||||||||||||||||
Shares sold | 4,377 | $ | 133,352 | 58,617 | $ | 1,748,319 | ||||||||||
Shares issued upon reinvestment of distributions | 1,765 | 67,412 | 8,440 | 246,854 | ||||||||||||
Shares redeemed | (33,353 | ) | (1,003,476 | ) | (39,783 | ) | (1,163,830 | ) | ||||||||
Net increase/(decrease) | (27,211 | ) | $ | (802,712 | ) | 27,274 | $ | 831,343 | ||||||||
Class I | ||||||||||||||||
Shares sold | 1,091,679 | $ | 45,100,661 | 182,452 | $ | 6,544,921 | ||||||||||
Shares issued upon reinvestment of distributions | 32,673 | 1,571,925 | 40,122 | 1,469,262 | ||||||||||||
Shares redeemed | (109,025 | ) | (4,692,193 | ) | (38,894 | ) | (1,412,305 | ) | ||||||||
Net increase | 1,015,327 | $ | 41,980,393 | 183,680 | $ | 6,601,878 |
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. Management has reviewed the Fund’s existing contracts and expects the risk of loss to be remote.
10. Subsequent Events. Management has evaluated the impact on the Fund of all subsequent events occurring through the date the financial statements were issued and has determined that there were no subsequent events requiring recognition or disclosure in the financial statements.
18
The Gabelli Global Growth Fund
Report of Independent Registered Public Accounting Firm
To the Shareholders of The Gabelli Global Growth Fund
and the Board of Directors of GAMCO Global Series Funds, Inc.
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of The Gabelli Global Growth Fund (the “Fund”) (one of the funds constituting GAMCO Global Series Funds, Inc. (the “Corporation”)), including the schedule of investments, as of December 31, 2020, 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, the financial highlights for each of the five years in the period then ended and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund (one of the funds constituting GAMCO Global Series Funds, Inc.) at December 31, 2020, 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 its financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements are the responsibility of the Corporation’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Corporation in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Corporation is not required to have, nor were we engaged to perform, an audit of the Corporation’s internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Corporation’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2020, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
We have served as the auditor of one or more Gabelli/GAMCO Funds investment companies since 1992.
Philadelphia, Pennsylvania
February 26, 2021
19
The Gabelli Global Growth Fund
Board Consideration and Re-Approval of Investment Advisory Agreement (Unaudited)
During the six months ended December 31, 2020, the Board of Directors of the Corporation approved the continuation of the investment advisory agreement with the Adviser for the Fund on the basis of the recommendation by the directors (the Independent Board Members) who are not interested persons of the Fund. The following paragraphs summarize the material information and factors considered by the Independent Board Members as well as their conclusions relative to such factors.
Nature, Extent, and Quality of Services. The Independent Board Members considered information regarding the Fund’s portfolio managers, the depth of the analyst pool available to the Adviser and the portfolio managers, the scope of supervisory, administrative, shareholder, and other services supervised or provided by the Adviser and the absence of significant service problems reported to the Board. The Independent Board Members noted the experience, length of service, and reputation of the Fund’s portfolio managers.
Investment Performance. The Independent Board Members reviewed the short, medium, and long term performance of the Fund (as of September 30, 2020) against a peer group of six other comparable funds prepared by the Adviser (the Adviser Peer Group), and against a peer group prepared by Broadridge (the Broadridge Performance Peer Group) consisting of all global large cap growth funds, regardless of asset size or primary channel of distribution, as represented by the Lipper Global Large-Cap Growth Index. The Independent Board Members noted that the Fund’s performance was in the first (highest) quartile for the one, three, five, and ten year periods, as measured against the Adviser Peer Group. Against the Broadridge Performance Peer Group, the Independent Board Members noted that the Fund’s performance was in the first quintile for the one, three, five, and ten year periods.
Profitability. The Independent Board Members reviewed summary data regarding the profitability of the Fund to the Adviser both with a pro rata administrative overhead charge and with a stand alone administrative charge and noted the effect of the expense limitation agreement. The Independent Board Members also noted that a portion of the Fund’s portfolio transactions were executed by an affiliated broker of the Adviser and that another affiliated broker of the Adviser received distribution fees and minor amounts of sales commissions.
Economies of Scale. The Independent Board Members discussed the major elements of the Adviser’s cost structure and the relationship of those elements to potential economies of scale and reviewed data provided by the Adviser.
Sharing of Economies of Scale. The Independent Board Members noted that the investment management fee schedule for the Fund does not take into account any potential economies of scale that may develop.
Service and Cost Comparisons. The Independent Board Members compared the expense ratios of the investment management fee, other expenses, and total expenses of the Fund with similar expense ratios of the Adviser Peer Group and a peer group of nine other global large cap growth funds selected by Broadridge, and noted that the Adviser’s management fee includes substantially all administrative services of the Fund as well as investment advisory services. The Independent Board Members noted the effect of the expense limitation agreement in place for the Fund. The Independent Board Members noted that the Fund’s total expense ratio was the fifth lowest in some of the categories for the Broadridge peer group and the fourth lowest for the Advisor peer group, but that the Fund’s size was below average within each peer group. The Independent Board Members also noted that the advisory fee structure was the same as that in effect for most of the Gabelli funds. The Independent
20
The Gabelli Global Growth Fund
Board Consideration and Re-Approval of Investment Advisory Agreement (Unaudited) (Continued)
Board Members were presented with, but did not consider to be material to their decision, various information comparing the advisory fee with the fee for other types of accounts managed by the Adviser.
Conclusions. The Independent Board Members concluded that the Fund enjoyed highly experienced portfolio management services and good ancillary services and an acceptable performance record. The Independent Board Members noted that the Board approved amendments to the contractual Expense Deferral Agreement between the Adviser and the Corporation, on behalf of each Fund, pursuant to which the net expense ratio for each share class of each Fund was reduced to 0.90%, effective December 1, 2019. The Independent Board Members also concluded that the Fund’s expense ratios and the profitability to the Adviser of managing the Fund were reasonable, and that economies of scale were not a significant factor in their thinking at this time. The Independent Board Members did not view the potential profitability of ancillary services as material to their decision. On the basis of the foregoing and without assigning particular weight to any single conclusion, the Independent Board Members determined to recommend continuation of the investment management agreement to the full Board.
21
The Gabelli Global Growth Fund
Additional Fund Information (Unaudited)
The business and affairs of the Fund are managed under the direction of the Corporation’s Board of Directors. Information pertaining to the Directors and officers of the Fund is set forth below. The Corporation’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 Gabelli Global Growth Fund at One Corporate Center, Rye, NY 10580-1422.
Name, Position(s) Address1 and Age | Term of Office and Length of Time Served2 | Number of Funds in Fund Complex Overseen by Director | Principal Occupation(s) During Past Five Years | Other Directorships Held by Director3 | ||||
INTERESTED DIRECTORS4: | ||||||||
Mario J. Gabelli, CFA Director and Chief Investment Officer Age: 78 | Since 1993 | 33 | Chairman, Chief Executive Officer, and Chief Investment Officer– Value Portfolios of GAMCO Investors, Inc. and Chief Investment Officer– Value Portfolios of Gabelli Funds, LLC and GAMCO Asset Management Inc.; Director/ Trustee or Chief Investment Officer of other registered investment companies within the Fund Complex; Chief Executive Officer of GGCP, Inc.; Executive Chairman of Associated Capital Group, Inc. | Chairman of the Board and Chief Executive Officer of LICT Corp. (multimedia and communication services company); Director of CIBL, Inc. (broadcasting and wireless communications); Director of ICTC Group Inc. (communications) (2013-2018) | ||||
John D. Gabelli Director Age: 76 | Since 1993 | 12 | Former Senior Vice President of G.research, LLC | — | ||||
INDEPENDENT DIRECTORS5: | ||||||||
E. Val Cerutti Director Age: 81 | Since 2001 | 7 | Chief Executive Officer of Cerutti Consultants, Inc. | Director of The LGL Group, Inc. (diversified manufacturing) (1990-2009) | ||||
Anthony J. Colavita6 Director Age: 85 | Since 1993 | 20 | President of the law firm of Anthony J. Colavita, P.C. | — | ||||
Werner J. Roeder Director Age: 80 | Since 1993 | 20 | Retired physician; Former Vice President of Medical Affairs (Medical Director) of New York Presbyterian/Lawrence Hospital (1999-2014) | — | ||||
Anthonie C. van Ekris6 Director Age: 86 | Since 1993 | 23 | Chairman and Chief Executive Officer of BALMAC International, Inc. (global import/ export company) | — | ||||
Salvatore J. Zizza7 Director Age: 75 | Since 2004 | 31 | President of Zizza & Associates Corp. (private holding company); President of Bergen Cove Realty Inc.; Chairman of Harbor Diversified, Inc. (pharmaceuticals) (2009-2018); Chairman of BAM (semiconductor and aerospace manufacturing)(2000-2018); Chairman of Metropolitan Paper Recycling Inc. (recycling) (2005-2014) | Director and Chairman of Trans- Lux Corporation (business services); Director and Chairman of Harbor Diversified Inc. (pharmaceuticals) (2009-2018) |
22
The Gabelli Global Growth Fund
Additional Fund Information (Continued) (Unaudited)
Name, Position(s) Address1 and Age | Term of Office and Length of Time Served2 | Principal Occupation(s) During Past Five Years | ||
OFFICERS: | ||||
Bruce N. Alpert President Age: 69 | Since 1993 | Executive Vice President and Chief Operating Officer of Gabelli Funds, LLC since 1988; Officer of registered investment companies within the Fund Complex; Senior Vice President of GAMCO Investors, Inc. since 2008; Chief Executive Officer of G.distributors, LLC (January 2020-November 2020) | ||
John C. Ball Treasurer Age: 44 | Since 2017 | Treasurer of registered investment companies within the Fund Complex since 2017; Vice President and Assistant Treasurer of AMG Funds, 2014-2017 | ||
Peter Goldstein Secretary Age: 67 | Since 2020 | General Counsel, Gabelli Funds, LLC since July 2020; General Counsel and Chief Compliance Officer, Buckingham Capital Management, Inc. (2012-2020); Chief Legal Officer and Chief Compliance Officer, The Buckingham Research Group, Inc. (2012-2020) | ||
Richard J. Walz Chief Compliance Officer Age: 61 | Since 2013 | Chief Compliance Officer of registered investment companies within the Fund Complex since 2013; Chief Compliance Office for Gabelli Funds, LLC since 2015 |
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 By-Laws and Articles of Incorporation. For officers, includes time served in prior officer positions with the Fund. 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 | 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. |
4 | “Interested person” of the Corporation as defined in the 1940 Act. Messrs. Mario J. Gabelli and John D. Gabelli, who are brothers, are each considered an “interested person” because of their affiliation with Gabelli Funds, LLC which acts as the Corporation’s investment adviser. |
5 | Directors who are not interested persons are considered “Independent” Directors. |
6 | Mr. Colavita’s son, Anthony S. Colavita, serves as a director of other funds in the Gabelli/GAMCO Fund Complex. Mr. van Ekris is an independent director of Gabelli International Ltd., Gabelli Fund LDC, GAMA Capital Opportunities Master Ltd., and GAMCO International SICAV, which may be deemed to be controlled by Mario J. Gabelli and/or affiliates and, in that event, would be deemed to be under common control with the Fund’s Adviser. |
7 | Mr. Zizza is an independent director of Gabelli International Ltd., which may be deemed to be controlled by Mario J. Gabelli and/or affiliates and in that event would be deemed to be under common control with the Fund’s Adviser. On September 9, 2015, Mr. Zizza entered into a settlement with the SEC to resolve an inquiry relating to an alleged violation regarding the making of false statements or omissions to the accountants of a company concerning a related party transaction. The company in question is not an affiliate of, nor has any connection to, the Fund. Under the terms of the settlement, Mr. Zizza, without admitting or denying the SEC’s findings and allegation, paid $150,000 and agreed to cease and desist committing or causing any future violations of Rule 13b2-2 of the Securities Exchange Act of 1934, as amended. The Board has discussed this matter and has determined that it does not disqualify Mr. Zizza from serving as an Independent Director. |
23
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, which is affiliated with GAMCO Investors, Inc., a publicly held company with subsidiaries and affiliates that provide investment advisory services for a variety of clients.
What kind of non-public information do we collect about you if you become a fund 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.
This page was intentionally left blank.
This page was intentionally left blank.
THE GABELLI GLOBAL GROWTH FUND
One Corporate Center
Rye, NY 10580-1422
Portfolio Management Team Biographies
Caesar M. P. Bryan joined GAMCO Asset Management in 1994. He is a member of the global investment team of Gabelli Funds, LLC and portfolio manager of several funds within the Fund Complex. Prior to joining Gabelli, Mr. Bryan was a portfolio manager at Lexington Management. He began his investment career at Samuel Montagu Company, the London based merchant bank. Mr. Bryan graduated from the University of Southampton in England with a Bachelor of Law and is a member of the English Bar.
Howard F. Ward, CFA, joined Gabelli Funds in 1995 and currently serves as GAMCO’s Chief Investment Officer of Growth Equities as well as a Gabelli Funds, LLC portfolio manager for several funds within the Fund Complex. Prior to joining Gabelli, Mr. Ward served as Managing Director and Lead Portfolio Manager for several Scudder mutual funds. He also was an Investment Officer in the Institutional Investment Department with Brown Brothers, Harriman & Co. Mr. Ward received his BA in Economics from Northwestern University.
Christopher D. Ward, CFA, joined the GAMCO Growth Team in 2015 as Vice President and Research Analyst. Prior to joining Gabelli Funds, Mr. Ward spent five years at Morgan Stanley Private Wealth Management where he served as Director of Business Strategy for The Apollo Group. Before joining Morgan Stanley, he was with the GFI Group, Inc., a wholesale institutional brokerage firm. Mr. Ward is a Chartered Financial Analyst and a member of the New York Society of Security Analysts. He graduated from Boston College with a BA in Economics.
2020 TAX NOTICE TO SHAREHOLDERS (Unaudited)
During the year ended December 31, 2020, the Fund paid ordinary income distributions of $0.09220 to each Class of shares. The distribution of long term capital gains has been designated as a capital gain dividend by the Fund’s Board of Directors. For the year ended December 31, 2020, 100% 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 0.17% of the ordinary income distribution as qualified interest income pursuant to the Tax Relief, Unemployment Reauthorization, and Job Creation Act of 2010. Also for the year of 2020, the Fund did not have foreign tax credits.
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.
We have separated the portfolio managers’ 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 managers’ commentary is unrestricted. Both the commentary and the financial statements, including the portfolio of investments, will be available on our website at www.gabelli.com.
GAMCO Global Series Funds, Inc.
THE GABELLI GLOBAL GROWTH FUND
One Corporate Center
Rye, New York 10580-1422
t | 800-GABELLI (800-422-3554) |
f | 914-921-5118 |
e | info@gabelli.com |
GABELLI.com
Net Asset Value per share available daily by calling 800-GABELLI after 7:00 P.M. | |
BOARD OF DIRECTORS Mario J. Gabelli, CFA Chairman and Chief Executive Officer, GAMCO Investors, Inc. Executive Chairman, Associated Capital Group, Inc.
E. Val Cerutti Chief Executive Officer, Cerutti Consultants, Inc.
Anthony J. Colavita President, Anthony J. Colavita, P.C.
John D. Gabelli Former Senior Vice President, G.research, LLC
Werner J. Roeder Former Medical Director, Lawrence Hospital
Anthonie C. van Ekris Chairman, BALMAC International, Inc.
Salvatore J. Zizza Chairman, Zizza & Associates Corp. | OFFICERS Bruce N. Alpert President
John C. Ball Treasurer
Peter Goldstein Secretary
Richard J. Walz Chief Compliance Officer
DISTRIBUTOR G.distributors, LLC
CUSTODIAN State Street Bank and Trust Company
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT DST Asset Manager Solutions, Inc.
LEGAL COUNSEL Skadden, Arps, Slate, Meagher & Flom LLP |
This report is submitted for the general information of the shareholders of The Gabelli Global Growth Fund. It is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus.
GAB442Q420AR
The Gabelli Global Rising Income and Dividend Fund
Annual Report — December 31, 2020
To Our Shareholders,
For the year ended December 31, 2020, the net asset value (NAV) total return per Class AAA Share of The Gabelli Global Rising Income and Dividend Fund was 11.7% compared with a total return of 15.9% for the Morgan Stanley Capital International (MSCI) World Index. Other classes of shares are available. See page 3 for performance information for all classes.
Enclosed are the financial statements, including the schedule of investments, as of December 31, 2020.
Performance Discussion (Unaudited)
The Fund’s investment objective is to provide investors with a high level of total return through a combination of current income and appreciation of capital.
The Fund’s investment strategy is to invest 80% of its net assets in dividend paying securities (such as common and preferred stock) or other income producing securities (such as fixed-income securities and securities that are convertible into common stock). The Fund will primarily invest in common stocks of foreign and domestic issuers that the Fund’s portfolio manager believes are likely to pay dividends and income and have the potential for above average capital appreciation and dividend increases.
The first quarter of 2020 was one of the worst in stock market history, with the novel coronavirus that causes COVID-19 spreading rapidly around the globe, and societies everywhere responding with various forms of “social distancing”, culminating with most of the global economy being effectively shut down. While this one was especially painful due to its quickness and severity, we are reminded that bear markets, like recessions, are necessary to the capitalist system, cleansing its excesses. Over the four decade plus history of our firm, there have been five bear markets ranging in length from three to thirty months. We had been anticipating a correction for some time, though the trigger for and pace of the decline – one of the most rapid in history –took us by surprise.
Through June 30, the S&P 500 was off a mere 3%, having rallied almost 40% from its March low. Growth stocks continued their winning streak, powered by Facebook, Amazon, Netflix, Google/Alphabet, Microsoft, and Apple. At mid-year, these six stocks had an aggregate market capitalization of $6.3 trillion, comprising 23% of the S&P 500 and contributing 5.4 points of positive year-to-date return. A preview of what recovery may ultimately bring for stocks occurred briefly in late May/early June when smaller capitalization and value stocks snatched market leadership before reversing.
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s annual and semiannual shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Fund’s website (www.gabelli.com), and you will be notified by mail each time a report is posted and provided with a website link to access the report. If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. To elect to receive all future reports on paper free of charge, please contact your financial intermediary, or, if you invest directly with the Fund, you may call 800-422-3554 or send an email request to info@gabelli.com. |
Stocks continued to rise during the third quarter of 2020, with the S&P 500 up 8.9%, as gains in July and August were partially offset by a decline in September. The main issues still facing the markets remained largely around the COVID-19 pandemic: how long will it persist? Will “second wave” cases spike significantly higher, leading to a return to more dramatic economic shutdowns? When will therapeutics and vaccines be ready for development and distribution?
It took COVID-19 to end the United States’ longest bull market at 131 months, only to give way to its shortest bear market at just over one month. After declining 34% peak-to-trough February to March, the S&P 500 Index ended up 18% for the year, 65% off its March low. Unfortunately, even in the face of rising asset prices and an overall increased savings rate, an extended economic shutdown has strained the balance sheets of small business owners and impaired the skills of many employees.
Selected holdings that contributed positively to performance in 2020 were: Sony Corp. (6.1% of net assets as of December 31, 2020) designs, develops, produces, and sells electronic equipment, instruments, and devices for the consumer, professional, and industrial markets worldwide; Remy Cointreau SA (4.1%) together with its subsidiaries, produces and distributes liqueurs and spirits; and T-Mobile US, Inc. (1.8%), through its subsidiaries, provides wireless services for branded postpaid and prepaid, and wholesale customers in the United States, Puerto Rico, and the United States Virgin Islands.
Some of our weaker performing securities were: Landis+Gyr Group AG (1.7%) provides metering solutions for electricity, heat/cold, and gas utilities worldwide; Millicom International Cellular SA (1.0%) provides cable and mobile services in Latin America and Africa. The company offers mobile services, including mobile data and voice; and Citigroup Inc. (0.9%) is a diversified financial services holding company, providing various financial products and services to consumers, corporations, governments, and institutions in North America, Latin America, Asia, Europe, the Middle East, and Africa.
Thank you for your investment in the Gabelli Global Rising Income and Dividend Fund.
We appreciate your confidence and trust.
2
Comparative Results
Average Annual Returns through December 31, 2020 (a) (Unaudited) | |||||||||||||||||
1 Year | 5 Year | 10 Year | 15 Year | Since Inception (2/3/94) | |||||||||||||
Class AAA (GAGCX) | 11.68 | % | 6.96 | % | 4.78 | % | 3.54 | % | 4.80 | % | |||||||
MSCI World Index | 15.90 | 12.19 | 9.87 | 7.33 | 7.37 | (b) | |||||||||||
Class A (GAGAX) | 11.69 | 6.95 | 4.77 | 3.54 | 4.82 | ||||||||||||
With sales charge (c) | 5.27 | 5.70 | 4.15 | 3.13 | 4.58 | ||||||||||||
Class C (GACCX) | 11.65 | 6.32 | 3.73 | 2.57 | 4.15 | ||||||||||||
With contingent deferred sales charge (d) | 10.65 | 6.32 | 3.73 | 2.57 | 4.15 | ||||||||||||
Class I (GAGIX) | 11.67 | 7.44 | 5.15 | 3.83 | 4.97 | ||||||||||||
In the current prospectuses dated April 29, 2020, the gross expense ratios for Class AAA, A, C, and I Shares are 1.71%, 1.71%, 2.46%, and 1.46%, respectively, and the net expense ratio for all share classes after contractual reimbursements by Gabelli Funds, LLC, (the “Adviser”) is 0.91%. See page 11 for the expense ratios for the year ended December 31, 2020. The contractual reimbursements are in effect through April 30, 2021. Class AAA and Class I Shares do not have a sales charge. The maximum sales charge for Class A Shares and Class C Shares is 5.75% 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, 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. 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. Returns would have been lower had the Adviser not reimbursed certain expenses of the Fund. The Fund imposes a 2% redemption fee on shares sold or exchanged within seven days after the date of purchase. Investors should carefully consider the investment objectives, risks, charges, and expenses of the Fund before investing. The prospectuses contain information about these and other matters and should be read carefully before investing. To obtain a prospectus, please visit our website at www.gabelli.com. Investing in foreign securities involves risks not ordinarily associated with investments in domestic issues, including currency fluctuation, economic, and political risks. The Class AAA Share NAVs are used to calculate performance for the periods prior to the issuance of Class A Shares, Class C Shares, and Class I Shares on May 2, 2001, November 26, 2001, and January 11, 2008, respectively. The actual performance of the Class A Shares and Class C Shares would have been lower due to the additional fees and 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 MSCI World Index is a free float adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets. Dividends are considered reinvested. You cannot invest directly in an index. (b) MSCI World Index since inception performance is as of January 31, 1994. (c) Performance results include the effect of the maximum 5.75% sales charge at the beginning of the period. (d) Assuming payment of the 1% maximum contingent deferred sales charge imposed on redemptions made within one year of purchase. | |||||||||||||||||
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN
THE GABELLI GLOBAL RISING INCOME AND DIVIDEND FUND (CLASS AAA SHARES),
LIPPER CONVERTIBLE SECURITIES FUND AVERAGE, AND MSCI WORLD INDEX (Unaudited)
* | 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. |
3
The Gabelli Global Rising Income and Dividend Fund
Disclosure of Fund Expenses (Unaudited)
For the Six Month Period from July 1, 2020 through December 31, 2020 | 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, 2020.
Beginning Account Value 07/01/20 | Ending Account Value 12/31/20 | Annualized Expense Ratio | Expenses Paid During Period* | |
The Gabelli Global Rising Income and Dividend Fund | ||||
Actual Fund Return | ||||
Class AAA | $1,000.00 | $1,301.70 | 0.90% | $5.21 |
Class A | $1,000.00 | $1,301.50 | 0.90% | $5.21 |
Class C | $1,000.00 | $1,301.60 | 0.90% | $5.21 |
Class I | $1,000.00 | $1,301.40 | 0.90% | $5.21 |
Hypothetical 5% Return | ||||
Class AAA | $1,000.00 | $1,020.61 | 0.90% | $4.57 |
Class A | $1,000.00 | $1,020.61 | 0.90% | $4.57 |
Class C | $1,000.00 | $1,020.61 | 0.90% | $4.57 |
Class I | $1,000.00 | $1,020.61 | 0.90% | $4.57 |
* | Expenses are equal to the Fund’s annualized expense ratio for the last six months multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half year (184 days), then divided by 366. |
4
Summary of Portfolio Holdings (Unaudited)
The following table presents portfolio holdings as a percent of net assets as of December 31, 2020:
The Gabelli Global Rising Income and Dividend Fund
Food and Beverage | 19.6 | % | |
Electronics | 11.1 | % | |
Financial Services | 10.5 | % | |
Consumer Products | 7.8 | % | |
Diversified Industrial | 6.7 | % | |
Telecommunications | 4.3 | % | |
Energy and Utilities | 4.1 | % | |
Machinery | 4.0 | % | |
Entertainment | 3.9 | % | |
Health Care | 3.2 | % | |
Hotels and Gaming | 3.0 | % | |
Wireless Communications | 2.8 | % | |
Building and Construction | 2.7 | % | |
Cable and Satellite | 1.9 | % | |
Energy and Energy Services | 1.9 | % |
U.S. Government Obligations | 1.7 | % | |
Automotive: Parts and Accessories | 1.6 | % | |
Equipment and Supplies | 1.4 | % | |
Aerospace and Defense | 1.3 | % | |
Business Services | 1.3 | % | |
Consumer Services | 1.1 | % | |
Publishing | 0.9 | % | |
Computer Software and Services | 0.9 | % | |
Specialty Chemicals | 0.9 | % | |
Automotive | 0.6 | % | |
Retail | 0.4 | % | |
Aviation: Parts and Services | 0.3 | % | |
Other Assets and Liabilities (Net) | 0.1 | % | |
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-PORT. 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-PORT 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 800-SEC-0330.
Proxy Voting
The Fund files Form N-PX with its complete proxy voting record for the twelve months ended June 30, no later than August 31 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.
5
The Gabelli Global Rising Income and Dividend Fund
Schedule of Investments — December 31, 2020
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS — 97.8% | ||||||||||||
Aerospace and Defense — 1.3% | ||||||||||||
5,000 | Aerojet Rocketdyne Holdings Inc.† | $ | 49,073 | $ | 264,250 | |||||||
1,600 | L3Harris Technologies Inc. | 126,334 | 302,432 | |||||||||
6,000 | Ultra Electronics Holdings plc | 125,298 | 170,008 | |||||||||
300,705 | 736,690 | |||||||||||
Automotive — 0.6% | ||||||||||||
4,000 | Traton SE | 105,636 | 110,462 | |||||||||
1,000 | Volkswagen AG | 167,644 | 207,803 | |||||||||
273,280 | 318,265 | |||||||||||
Automotive: Parts and Accessories — 1.6% | ||||||||||||
18,000 | Dana Inc. | 283,027 | 351,360 | |||||||||
2,000 | Genuine Parts Co. | 179,604 | 200,860 | |||||||||
900 | Linamar Corp. | 42,219 | 47,669 | |||||||||
40,000 | Uni-Select Inc. | 523,529 | 254,851 | |||||||||
1,000 | Veoneer Inc.† | 41,535 | 21,300 | |||||||||
1,069,914 | 876,040 | |||||||||||
Aviation: Parts and Services — 0.3% | ||||||||||||
200 | Curtiss-Wright Corp. | 17,951 | 23,270 | |||||||||
32,000 | Signature Aviation plc† | 165,734 | 169,351 | |||||||||
183,685 | 192,621 | |||||||||||
Building and Construction — 2.7% | ||||||||||||
333 | Arcosa Inc. | 7,045 | 18,292 | |||||||||
500 | Chofu Seisakusho Co. Ltd. | 11,059 | 10,082 | |||||||||
16,000 | GCP Applied Technologies Inc.† | 397,521 | 378,400 | |||||||||
11,000 | Herc Holdings Inc.† | 352,842 | 730,510 | |||||||||
6,000 | Johnson Controls International plc | 211,053 | 279,540 | |||||||||
1,600 | Lennar Corp., Cl. B | 60,113 | 97,920 | |||||||||
1,039,633 | 1,514,744 | |||||||||||
Business Services — 1.3% | ||||||||||||
17,000 | JCDecaux SA† | 468,282 | 386,909 | |||||||||
11,500 | Matthews International Corp., Cl. A | 349,866 | 338,100 | |||||||||
818,148 | 725,009 | |||||||||||
Cable and Satellite — 1.9% | ||||||||||||
514 | DISH Network Corp., Cl. A† | 19,055 | 16,623 | |||||||||
800 | EchoStar Corp., Cl. A† | 33,391 | 16,952 | |||||||||
2,000 | Liberty Global plc, Cl. A† | 45,760 | 48,440 | |||||||||
2,000 | Liberty Global plc, Cl. C† | 53,195 | 47,300 | |||||||||
2,000 | Liberty Latin America Ltd., Cl. A† | 21,252 | 22,260 | |||||||||
595 | Liberty Latin America Ltd., Cl. C† | 4,248 | 6,598 | |||||||||
19,000 | Rogers Communications Inc., Cl. B | 667,343 | 885,210 | |||||||||
844,244 | 1,043,383 | |||||||||||
Computer Software and Services — 0.9% | ||||||||||||
1,777 | AVEVA Group plc | 55,460 | 77,810 | |||||||||
34,000 | Hewlett Packard Enterprise Co. | 466,526 | 402,900 | |||||||||
521,986 | 480,710 |
Shares | Cost | Market Value | ||||||||||
Consumer Products — 7.8% | ||||||||||||
1,200 | Energizer Holdings Inc. | $ | 50,611 | $ | 50,616 | |||||||
21,000 | Essity AB, Cl. A | 557,317 | 690,420 | |||||||||
13,034 | Hunter Douglas NV† | 716,088 | 1,022,256 | |||||||||
2,000 | L’Oreal SA | 335,032 | 759,378 | |||||||||
2,000 | Salvatore Ferragamo SpA† | 36,074 | 38,751 | |||||||||
13,000 | Scandinavian Tobacco Group A/S | 195,312 | 222,129 | |||||||||
4,500 | Svenska Cellulosa AB SCA, Cl. A† | 29,603 | 80,838 | |||||||||
9,500 | Swedish Match AB | 325,275 | 736,436 | |||||||||
7,000 | Terminix Global Holdings Inc.† | 247,846 | 357,070 | |||||||||
7,000 | Unicharm Corp. | 139,942 | 331,645 | |||||||||
2,633,100 | 4,289,539 | |||||||||||
Consumer Services — 1.1% | ||||||||||||
12,000 | Ashtead Group plc | 239,543 | 564,176 | |||||||||
200 | Boyd Group Services Inc. | 14,694 | 34,498 | |||||||||
254,237 | 598,674 | |||||||||||
Diversified Industrial — 6.7% | ||||||||||||
600 | Aker ASA, Cl. A | 34,010 | 39,187 | |||||||||
11,571 | Ampco-Pittsburgh Corp.† | 50,157 | 63,409 | |||||||||
2,500 | Ardagh Group SA | 33,285 | 43,025 | |||||||||
8,000 | Bouygues SA | 332,884 | 328,868 | |||||||||
500 | Crane Co. | 37,572 | 38,830 | |||||||||
16,700 | EnPro Industries Inc. | 1,144,802 | 1,261,184 | |||||||||
7,000 | Jardine Matheson Holdings Ltd. | 373,578 | 392,000 | |||||||||
17,000 | Jardine Strategic Holdings Ltd. | 580,912 | 422,960 | |||||||||
3,500 | Macquarie Infrastructure Corp. | 96,886 | 131,425 | |||||||||
14,500 | Myers Industries Inc. | 224,775 | 301,310 | |||||||||
11,000 | Nilfisk Holding A/S† | 184,824 | 237,607 | |||||||||
500 | Park-Ohio Holdings Corp. | 6,484 | 15,450 | |||||||||
1,200 | Sulzer AG | 102,272 | 126,194 | |||||||||
5,000 | Textron Inc. | 183,806 | 241,650 | |||||||||
3,000 | Trinity Industries Inc. | 57,151 | 79,170 | |||||||||
3,443,398 | 3,722,269 | |||||||||||
Electronics — 11.1% | ||||||||||||
34,000 | Sony Corp. | 944,436 | 3,386,664 | |||||||||
26,500 | Sony Corp., ADR | 547,225 | 2,679,150 | |||||||||
2,000 | Stratasys Ltd.† | 36,878 | 41,440 | |||||||||
1,528,539 | 6,107,254 | |||||||||||
Energy and Energy Services — 1.9% | ||||||||||||
4,000 | BP plc, ADR | 122,349 | 82,080 | |||||||||
12,000 | Landis+Gyr Group AG | 731,326 | 940,698 | |||||||||
853,675 | 1,022,778 | |||||||||||
Energy and Utilities — 3.7% | ||||||||||||
8,000 | Cameco Corp. | 82,995 | 107,200 | |||||||||
600 | Cheniere Energy Inc.† | 23,332 | 36,018 | |||||||||
7,000 | National Fuel Gas Co. | 358,846 | 287,910 | |||||||||
15,000 | National Grid plc, ADR | 1,025,217 | 885,450 | |||||||||
10,000 | Royal Dutch Shell plc, Cl. B | 219,577 | 172,223 |
See accompanying notes to financial statements.
6
The Gabelli Global Rising Income and Dividend Fund
Schedule of Investments (Continued) — December 31, 2020
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS (Continued) | ||||||||||||
Energy and Utilities (Continued) | ||||||||||||
18,000 | Severn Trent plc | $ | 485,728 | $ | 563,437 | |||||||
2,195,695 | 2,052,238 | |||||||||||
Entertainment — 3.9% | ||||||||||||
10,000 | Discovery Inc., Cl. A† | 257,740 | 300,900 | |||||||||
30,000 | Grupo Televisa SAB, ADR† | 322,299 | 247,200 | |||||||||
30,000 | International Game Technology plc | 469,663 | 508,200 | |||||||||
120,000 | ITV plc† | 265,636 | 175,259 | |||||||||
11,155 | ViacomCBS Inc., Cl. B | 412,471 | 415,635 | |||||||||
15,000 | Vivendi SA | 371,240 | 483,407 | |||||||||
2,099,049 | 2,130,601 | |||||||||||
Equipment and Supplies — 1.4% | ||||||||||||
4,500 | Graco Inc. | 100,232 | 325,575 | |||||||||
12,500 | Mueller Industries Inc. | 353,268 | 438,875 | |||||||||
453,500 | 764,450 | |||||||||||
Financial Services — 10.5% | ||||||||||||
1,000 | American Express Co. | 80,155 | 120,910 | |||||||||
5,000 | American International Group Inc. | 171,387 | 189,300 | |||||||||
3,000 | Bank of America Corp. | 85,175 | 90,930 | |||||||||
3 | Berkshire Hathaway Inc., Cl. A† | 358,105 | 1,043,445 | |||||||||
8,000 | Citigroup Inc. | 453,300 | 493,280 | |||||||||
3,200 | Comerica Inc. | 134,262 | 178,752 | |||||||||
8,000 | Deutsche Bank AG† | 59,019 | 87,200 | |||||||||
100 | Eaton Vance Corp. | 6,121 | 6,793 | |||||||||
4,200 | EXOR NV | 156,204 | 339,770 | |||||||||
27,000 | FinecoBank Banca Fineco SpA† | 182,261 | 441,993 | |||||||||
80,000 | GAM Holding AG† | 431,323 | 195,549 | |||||||||
1,600 | Julius Baer Group Ltd. | 75,332 | 92,172 | |||||||||
15,800 | Kinnevik AB, Cl. A | 495,663 | 814,235 | |||||||||
5,000 | Morgan Stanley | 122,102 | 342,650 | |||||||||
32,000 | Resona Holdings Inc. | 149,202 | 111,692 | |||||||||
2,500 | State Street Corp. | 144,305 | 181,950 | |||||||||
1,000 | T. Rowe Price Group Inc. | 71,771 | 151,390 | |||||||||
10,000 | The Bank of New York Mellon Corp. | 315,339 | 424,400 | |||||||||
1,500 | The PNC Financial Services Group Inc. | 102,907 | 223,500 | |||||||||
7,000 | UBS Group AG | 70,979 | 98,910 | |||||||||
5,000 | Wells Fargo & Co. | 165,445 | 150,900 | |||||||||
3,830,357 | 5,779,721 | |||||||||||
Food and Beverage — 19.6% | ||||||||||||
2,000 | Campbell Soup Co. | 68,687 | 96,700 | |||||||||
7,500 | Chr. Hansen Holding A/S† | 343,823 | 771,125 | |||||||||
7,500 | Danone SA | 528,728 | 492,569 | |||||||||
80,000 | Davide Campari-Milano NV | 285,906 | 912,817 | |||||||||
6,000 | Diageo plc, ADR | 665,409 | 952,860 | |||||||||
4,000 | Fomento Economico Mexicano SAB de CV, ADR | 320,374 | 303,080 | |||||||||
2,000 | Heineken NV | 133,144 | 222,878 | |||||||||
2,500 | Kellogg Co. | 127,291 | 155,575 |
Shares | Cost | Market Value | ||||||||||
4,000 | Kerry Group plc, Cl. A | $ | 300,765 | $ | 578,573 | |||||||
10,600 | Kikkoman Corp. | 345,380 | 736,061 | |||||||||
5,000 | Maple Leaf Foods Inc., Toronto | 101,615 | 110,849 | |||||||||
3,000 | McCormick & Co. Inc., Cl. V | 133,799 | 286,710 | |||||||||
3,000 | McCormick & Co. Inc., Non-Voting | 106,428 | 286,800 | |||||||||
800 | National Beverage Corp. | 32,665 | 67,920 | |||||||||
14,000 | Nestlé SA | 1,013,818 | 1,648,752 | |||||||||
3,500 | Pernod Ricard SA | 398,941 | 670,441 | |||||||||
12,100 | Remy Cointreau SA | 892,126 | 2,251,293 | |||||||||
6,000 | The Kraft Heinz Co. | 175,646 | 207,960 | |||||||||
1,000 | Yakult Honsha Co. Ltd. | 63,025 | 50,361 | |||||||||
300,000 | Yashili International Holdings Ltd.† | 85,349 | 32,506 | |||||||||
6,122,919 | 10,835,830 | |||||||||||
Health Care — 3.2% | ||||||||||||
20,000 | Achaogen Inc.† | 4,200 | 132 | |||||||||
4,000 | Bristol-Myers Squibb Co. | 177,668 | 248,120 | |||||||||
18,000 | Clovis Oncology Inc.† | 158,948 | 86,400 | |||||||||
8,000 | Cutera Inc.† | 151,156 | 192,880 | |||||||||
700 | ICU Medical Inc.† | 39,966 | 150,143 | |||||||||
4,666 | Idorsia Ltd.† | 57,775 | 134,504 | |||||||||
1,600 | Johnson & Johnson | 182,234 | 251,808 | |||||||||
2,500 | Patterson Cos. Inc. | 60,687 | 74,075 | |||||||||
6,000 | Pfizer Inc. | 143,046 | 220,860 | |||||||||
5,000 | Roche Holding AG, ADR | 93,345 | 219,200 | |||||||||
9,000 | Viatris Inc.† | 146,399 | 168,660 | |||||||||
1,215,424 | 1,746,782 | |||||||||||
Hotels and Gaming — 3.0% | ||||||||||||
225,000 | Mandarin Oriental International Ltd.† | 365,250 | 382,500 | |||||||||
190,000 | The Hongkong & Shanghai Hotels Ltd. | 280,200 | 169,108 | |||||||||
275,000 | William Hill plc† | 543,670 | 1,015,745 | |||||||||
800 | Wynn Resorts Ltd. | 83,623 | 90,264 | |||||||||
1,272,743 | 1,657,617 | |||||||||||
Machinery — 4.0% | ||||||||||||
104,000 | CNH Industrial NV, Borsa Italiana† | 994,865 | 1,311,808 | |||||||||
50,000 | CNH Industrial NV, New York† | 444,471 | 642,000 | |||||||||
1,200 | Mueller Water Products Inc., Cl. A | 13,587 | 14,856 | |||||||||
2,666 | NKT A/S† | 52,701 | 118,676 | |||||||||
19,000 | Twin Disc Inc.† | 329,549 | 149,150 | |||||||||
1,835,173 | 2,236,490 | |||||||||||
Publishing — 0.9% | ||||||||||||
34,000 | The E.W. Scripps Co., Cl. A | 566,527 | 519,860 | |||||||||
Retail — 0.4% | ||||||||||||
2,600 | Nathan’s Famous Inc. | 158,596 | 143,572 | |||||||||
2,000 | Walgreens Boots Alliance Inc. | 121,996 | 79,760 | |||||||||
280,592 | 223,332 | |||||||||||
Specialty Chemicals — 0.9% | ||||||||||||
700 | Ashland Global Holdings Inc. | 35,829 | 55,440 |
See accompanying notes to financial statements.
7
The Gabelli Global Rising Income and Dividend Fund
Schedule of Investments (Continued) — December 31, 2020
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS (Continued) | ||||||||||||
Specialty Chemicals (Continued) | ||||||||||||
3,000 | International Flavors & Fragrances Inc. | $ | 312,534 | $ | 326,520 | |||||||
200 | The Chemours Co. | 1,720 | 4,958 | |||||||||
4,000 | Valvoline Inc. | 83,077 | 92,560 | |||||||||
433,160 | 479,478 | |||||||||||
Telecommunications — 4.3% | ||||||||||||
1,600 | CenturyLink Inc. | 19,485 | 15,600 | |||||||||
3,000 | Deutsche Telekom AG | 54,464 | 54,809 | |||||||||
10,000 | Deutsche Telekom AG, ADR | 176,502 | 182,700 | |||||||||
50,000 | Koninklijke KPN NV | 139,515 | 151,912 | |||||||||
60,000 | Pharol SGPS SA, ADR† | 30,852 | 8,700 | |||||||||
2,400 | Proximus SA | 65,242 | 47,527 | |||||||||
130,000 | Sistema PJSC FC, GDR | 672,709 | 975,000 | |||||||||
63,000 | Telefonica Deutschland Holding AG | 331,481 | 173,554 | |||||||||
85,000 | VEON Ltd., ADR | 282,282 | 128,350 | |||||||||
3,000 | Verizon Communications Inc | 144,345 | 176,250 | |||||||||
29,000 | Vodafone Group plc, ADR | 748,908 | 477,920 | |||||||||
2,665,785 | 2,392,322 | |||||||||||
Wireless Communications — 2.8% | ||||||||||||
14,000 | Millicom International Cellular SA, SDR† | 792,064 | 550,975 | |||||||||
7,500 | T-Mobile US Inc.† | 622,425 | 1,011,375 | |||||||||
1,414,489 | 1,562,350 | |||||||||||
TOTAL COMMON STOCKS | 38,149,957 | 54,009,047 | ||||||||||
WARRANTS — 0.0% | ||||||||||||
Diversified Industrial — 0.0% | ||||||||||||
8,000 | Ampco-Pittsburgh Corp., expire 08/01/25† | 5,466 | 7,040 |
Principal Amount | Cost | Market Value | ||||||||||
CONVERTIBLE CORPORATE BONDS — 0.4% | ||||||||||||
Energy and Utilities — 0.4% | ||||||||||||
$ | 100,000 | Chart Industries Inc., 1.000%, 11/15/24(a) | $ | 100,000 | $ | 209,982 | ||||||
U.S. GOVERNMENT OBLIGATIONS — 1.7% | ||||||||||||
935,000 | U.S. Treasury Bills, 0.065% to 0.087%††, 02/04/21 to 03/18/21 | 934,906 | 934,931 | |||||||||
TOTAL INVESTMENTS — 99.9% | $ | 39,190,329 | 55,161,000 | |||||||||
Other Assets and Liabilities (Net) — 0.1% | 37,647 | |||||||||||
NET ASSETS — 100.0% | $ | 55,198,647 |
(a) | Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. This security may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
† | Non-income producing security. |
†† | Represents annualized yields at dates of purchase. |
ADR | American Depositary Receipt |
GDR | Global Depositary Receipt |
SDR | Swedish Depositary Receipt |
Geographic Diversification | % of Market Value | Market Value | ||||||
Europe | 47.5 | % | $ | 26,195,719 | ||||
United States | 33.1 | 18,269,995 | ||||||
Japan | 13.3 | 7,305,655 | ||||||
Canada | 2.6 | 1,440,277 | ||||||
Asia/Pacific | 2.5 | 1,399,074 | ||||||
Latin America | 1.0 | 550,280 | ||||||
100.0 | % | $ | 55,161,000 |
See accompanying notes to financial statements.
8
The Gabelli Global Rising Income and Dividend Fund
Statement of Assets and Liabilities
December 31, 2020
Assets: | ||||
Investments, at value (cost $39,190,329) | $ | 55,161,000 | ||
Foreign currency, at value (cost $533) | 534 | |||
Receivable for Fund shares sold | 692 | |||
Receivable from Adviser | 34,483 | |||
Dividends and interest receivable | 133,149 | |||
Prepaid expenses | 24,834 | |||
Total Assets | 55,354,692 | |||
Liabilities: | ||||
Payable to custodian | 9,639 | |||
Payable for investment advisory fees | 45,628 | |||
Payable for accounting fees | 3,750 | |||
Payable for distribution fees | 2,033 | |||
Payable for legal and audit fees | 31,804 | |||
Payable for shareholder communications expenses | 45,737 | |||
Other accrued expenses | 17,454 | |||
Total Liabilities | 156,045 | |||
Net Assets | ||||
(applicable to 1,900,684 shares outstanding) | $ | 55,198,647 | ||
Net Assets Consist of: | ||||
Paid-in capital | $ | 41,200,860 | ||
Total distributable earnings | 13,997,787 | |||
Net Assets | $ | 55,198,647 | ||
Shares of Capital Stock, each at $0.001 par value: | ||||
Class AAA: | ||||
Net Asset Value, offering, and redemption price per share ($5,156,750 ÷ 177,580 shares outstanding; 75,000,000 shares authorized) | $ | 29.04 | ||
Class A: | ||||
Net Asset Value and redemption price per share ($840,027 ÷ 28,868 shares outstanding; 50,000,000 shares authorized) | $ | 29.10 | ||
Maximum offering price per share (NAV ÷ 0.9425, based on maximum sales charge of 5.75% of the offering price) | $ | 30.88 | ||
Class C: | ||||
Net Asset Value and offering price per share ($968,157 ÷ 39,837 shares outstanding; 25,000,000 shares authorized) | $ | 24.30 | (a) | |
Class I: | ||||
Net Asset Value, offering, and redemption price per share ($48,233,713 ÷ 1,654,399 shares outstanding; 25,000,000 shares authorized) | $ | 29.15 |
(a) | Redemption price varies based on the length of time held. |
Statement of Operations
For the Year Ended December 31, 2020
Investment Income: | ||||
Dividends (net of foreign withholding taxes of $42,936) | $ | 788,888 | ||
Interest | 8,550 | |||
Total Investment Income | 797,438 | |||
Expenses: | ||||
Investment advisory fees. | 472,167 | |||
Distribution fees - Class AAA | 12,290 | |||
Distribution fees - Class A | 2,644 | |||
Distribution fees - Class C | 11,601 | |||
Shareholder communications expenses | 52,609 | |||
Legal and audit fees | 45,142 | |||
Registration expenses | 42,803 | |||
Custodian fees | 22,902 | |||
Shareholder services fees | 20,746 | |||
Directors’ fees | 12,436 | |||
Accounting fees | 11,250 | |||
Interest expense | 509 | |||
Miscellaneous expenses | 15,540 | |||
Total Expenses | 722,639 | |||
Less: | ||||
Expense reimbursements (See Note 3) | (295,855 | ) | ||
Expenses paid indirectly by broker (See Note 6) | (1,326 | ) | ||
Total Reimbursements and Credits. | (297,181 | ) | ||
Net Expenses | 425,458 | |||
Net Investment Income | 371,980 | |||
Net Realized and Unrealized Gain/(Loss) on Investments and Foreign Currency: | ||||
Net realized loss on investments | (1,471,417 | ) | ||
Net realized loss on foreign currency transaction | (338 | ) | ||
Net realized loss on investments and foreign currency transactions | (1,471,755 | ) | ||
Net change in unrealized appreciation/depreciation: | ||||
on investments | 6,401,854 | |||
on foreign currency translations | 4,149 | |||
Net change in unrealized appreciation/depreciation on investments and foreign currency translations | 6,406,003 | |||
Net Realized and Unrealized Gain/(Loss) on Investments and Foreign Currency | 4,934,248 | |||
Net Increase in Net Assets Resulting from Operations | $ | 5,306,228 |
See accompanying notes to financial statements.
9
The Gabelli Global Rising Income and Dividend Fund
Statement of Changes in Net Assets
Year Ended December 31, 2020 | Year Ended December 31, 2019 | |||||||
Operations: | ||||||||
Net investment income | $ | 371,980 | $ | 437,184 | ||||
Net realized loss on investments and foreign currency transactions | (1,471,755 | ) | (54,961 | ) | ||||
Net change in unrealized appreciation/depreciation on investments and foreign currency translations | 6,406,003 | 6,630,692 | ||||||
Net Increase in Net Assets Resulting from Operations | 5,306,228 | 7,012,915 | ||||||
Distributions to Shareholders: | ||||||||
Accumulated earnings | ||||||||
Class AAA | (34,786 | ) | (29,111 | ) | ||||
Class A | (5,661 | ) | (6,320 | ) | ||||
Class C | (7,808 | ) | (2,980 | ) | ||||
Class I | (324,679 | ) | (478,972 | ) | ||||
Total Distributions to Shareholders | (372,934 | ) | (517,383 | ) | ||||
Capital Share Transactions: | ||||||||
Class AAA | (1,361,295 | ) | 578,125 | |||||
Class A | (624,036 | ) | (211,815 | ) | ||||
Class C | (845,808 | ) | (662,838 | ) | ||||
Class I | (554,404 | ) | (121,263 | ) | ||||
Net Decrease in Net Assets from Capital Share Transactions | (3,385,543 | ) | (417,791 | ) | ||||
Redemption Fees | 107 | 2 | ||||||
Net Increase in Net Assets | 1,547,858 | 6,077,743 | ||||||
Net Assets: | ||||||||
Beginning of year | 53,650,789 | 47,573,046 | ||||||
End of year | $ | 55,198,647 | $ | 53,650,789 |
See accompanying notes to financial statements.
10
The Gabelli Global Rising Income and Dividend Fund
Financial Highlights
Selected data for a share of capital stock outstanding throughout each year:
Income (Loss) from Investment Operations | Distributions | Ratios to Average Net Assets/ Supplemental Data | ||||||||||||||||||||||||||||||||||||||||||||||||
Year Ended December 31 | Net Asset Value, Beginning of Year | Net Investment Income (Loss)(a) | Net Realized and Unrealized Gain (Loss) on Investments | Total from Investment Operations | Net Investment Income | Net Realized Gain | Return of Capital | Total Distributions | Redemption Fees (a)(b) | Net Asset Value, End of Year | Total Return† | Net Assets End of Year (in 000’s) | Net Investment Income (Loss) | Operating Expenses Before Reimburse- ment | Operating Expenses Net of Reimburse- ment(c)(d) | Portfolio Turnover Rate | ||||||||||||||||||||||||||||||||||
Class AAA | ||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 26.18 | $ | 0.19 | $ | 2.87 | $ | 3.06 | $ | (0.20 | ) | — | — | $ | (0.20 | ) | $ | 0.00 | $ | 29.04 | 11.7 | % | $ | 5,157 | 0.79 | % | 1.72 | % | 0.90 | %(e) | 8 | % | ||||||||||||||||||
2019 | 23.00 | 0.08 | (f) | 3.22 | 3.30 | (0.08 | ) | $ | (0.04 | ) | — | (0.12 | ) | 0.00 | 26.18 | 14.4 | 6,194 | 0.34 | (f) | 1.70 | 1.65 | (e) | 5 | |||||||||||||||||||||||||||
2018 | 27.20 | 0.16 | (3.98 | ) | (3.82 | ) | (0.20 | ) | (0.18 | ) | — | (0.38 | ) | — | 23.00 | (14.0 | ) | 4,929 | 0.60 | 1.67 | 1.67 | 20 | ||||||||||||||||||||||||||||
2017 | 22.80 | 0.03 | 4.74 | 4.77 | (0.07 | ) | (0.28 | ) | $ | (0.02 | ) | (0.37 | ) | 0.00 | 27.20 | 20.9 | 7,672 | 0.12 | 1.62 | 1.62 | 24 | |||||||||||||||||||||||||||||
2016 | 21.85 | 0.27 | 0.91 | 1.18 | (0.23 | ) | — | — | (0.23 | ) | — | 22.80 | 5.4 | 4,598 | 1.21 | 1.61 | 1.61 | (g) | 52 | |||||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 26.23 | $ | 0.18 | $ | 2.89 | $ | 3.07 | $ | (0.20 | ) | — | — | $ | (0.20 | ) | $ | 0.00 | $ | 29.10 | 11.7 | % | $ | 840 | 0.76 | % | 1.72 | % | 0.90 | %(e) | 8 | % | ||||||||||||||||||
2019 | 23.04 | 0.09 | (f) | 3.21 | 3.30 | (0.07 | ) | $ | (0.04 | ) | — | (0.11 | ) | 0.00 | 26.23 | 14.4 | 1,441 | 0.35 | (f) | 1.70 | 1.66 | (e) | 5 | |||||||||||||||||||||||||||
2018 | 27.26 | 0.16 | (3.99 | ) | (3.83 | ) | (0.21 | ) | (0.18 | ) | — | (0.39 | ) | — | 23.04 | (14.0 | ) | 1,465 | 0.61 | 1.67 | 1.67 | 20 | ||||||||||||||||||||||||||||
2017 | 22.86 | 0.05 | 4.74 | 4.79 | (0.09 | ) | (0.28 | ) | $ | (0.02 | ) | (0.39 | ) | 0.00 | 27.26 | 20.9 | 1,178 | 0.18 | 1.62 | 1.62 | 24 | |||||||||||||||||||||||||||||
2016 | 21.90 | 0.25 | 0.93 | 1.18 | (0.22 | ) | — | — | (0.22 | ) | — | 22.86 | 5.4 | 480 | 1.15 | 1.61 | 1.61 | (g) | 52 | |||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 21.94 | $ | 0.15 | $ | 2.41 | $ | 2.56 | $ | (0.20 | ) | — | — | $ | (0.20 | ) | $ | 0.00 | $ | 24.30 | 11.6 | % | $ | 968 | 0.74 | % | 2.47 | % | 0.90 | %(e) | 8 | % | ||||||||||||||||||
2019 | 19.35 | (0.09 | )(f) | 2.72 | 2.63 | — | $ | (0.04 | ) | — | (0.04 | ) | 0.00 | 21.94 | 13.6 | 1,836 | (0.43 | )(f) | 2.45 | 2.37 | (e) | 5 | ||||||||||||||||||||||||||||
2018 | 22.93 | (0.02 | ) | (3.35 | ) | (3.37 | ) | (0.03 | ) | (0.18 | ) | — | (0.21 | ) | — | 19.35 | (14.7 | ) | 2,245 | (0.09 | ) | 2.42 | 2.42 | 20 | ||||||||||||||||||||||||||
2017 | 19.36 | (0.14 | ) | 4.01 | 3.87 | — | (0.28 | ) | $ | (0.02 | ) | (0.30 | ) | 0.00 | 22.93 | 20.0 | 2,127 | (0.62 | ) | 2.37 | 2.37 | 24 | ||||||||||||||||||||||||||||
2016 | 18.61 | 0.06 | 0.80 | 0.86 | (0.11 | ) | — | — | (0.11 | ) | — | 19.36 | 4.6 | 721 | 0.31 | 2.36 | 2.36 | (g) | 52 | |||||||||||||||||||||||||||||||
Class I | ||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 26.28 | $ | 0.19 | $ | 2.88 | $ | 3.07 | $ | (0.20 | ) | — | — | $ | (0.20 | ) | $ | 0.00 | $ | 29.15 | 11.7 | % | $ | 48,234 | 0.79 | % | 1.47 | % | 0.90 | %(e) | 8 | % | ||||||||||||||||||
2019 | 23.08 | 0.25 | (f) | 3.24 | 3.49 | (0.25 | ) | $ | (0.04 | ) | — | (0.29 | ) | 0.00 | 26.28 | 15.1 | 44,180 | 1.01 | (f) | 1.45 | 0.99 | (e) | 5 | |||||||||||||||||||||||||||
2018 | 27.35 | 0.35 | (4.04 | ) | (3.69 | ) | (0.40 | ) | (0.18 | ) | — | (0.58 | ) | — | 23.08 | (13.40 | ) | 38,934 | 1.32 | 1.42 | 1.00 | (e) | 20 | |||||||||||||||||||||||||||
2017 | 22.89 | 0.19 | 4.78 | 4.97 | (0.21 | ) | (0.28 | ) | $ | (0.02 | ) | (0.51 | ) | 0.00 | 27.35 | 21.7 | 59,555 | 0.74 | 1.37 | 1.00 | (e) | 24 | ||||||||||||||||||||||||||||
2016 | 21.94 | 0.31 | 0.95 | 1.26 | (0.31 | ) | — | — | (0.31 | ) | — | 22.89 | 5.8 | 37,344 | 1.39 | 1.36 | 1.27 | (e)(g) | 52 |
† | Total return represents aggregate total return of a hypothetical investment at the beginning of the year and sold at the end of the year including reinvestment of distributions and does not reflect the applicable sales charges. |
(a) | Per share amounts have been calculated using the average shares outstanding method. |
(b) | Amount represents less than $0.005 per share. |
(c) | The Fund received credits from a designated broker who agreed to pay certain Fund operating expenses. For all years presented, there was no impact on the expense ratios. |
(d) | In each year presented, the Fund incurred interest expense, the effect of which was minimal. |
(e) | Under an expense reimbursement agreement with the Adviser, the Adviser reimbursed expenses of $295,855 and $196,584 for the years ended December 31, 2020 and 2019 and certain Class I expenses to the Fund of $211,071, $175,468, and $36,018 for the years ended December 31, 2018, 2017, and 2016, respectively. |
(f) | Includes income resulting from special dividends. Without these dividends, the per share income amounts would have been 0.03 (Class AAA), 0.04 (Class A), (0.13) (Class C), and 0.20 (Class I), and the net investment income ratio would have been 0.14% (Class AAA and Class A), (0.64%) (Class C), and 0.80% (Class I), respectively. |
(g) | During the year ended December 31, 2016, the Fund received reimbursements of custody expenses paid in prior years. Had such reimbursement (allocated by relative net asset values of the Fund’s share classes) been included in this period, the expense ratios would have been 1.46% (Class AAA), 1.44% (Class A), 2.20% (Class C), and 1.10% (Class I). |
See accompanying notes to financial statements.
11
The Gabelli Global Rising Income and Dividend Fund
Notes to Financial Statements
1. Organization. The Gabelli Global Rising Income and Dividend Fund, a series of GAMCO Global Series Funds, Inc. (the Corporation), was incorporated on July 16, 1993 in Maryland. The Fund is a non-diversified open-end management investment company registered under the Investment Company Act of 1940, as amended (the 1940 Act), and is one of five separately managed portfolios (collectively, the Portfolios) of the Corporation. The Fund’s primary objective is to obtain a high level of total return through a combination of income and capital appreciation. The Fund commenced investment operations on February 3, 1994.
2. Significant Accounting Policies. As an investment company, the Fund follows the investment company accounting and reporting guidance, which is part of U.S. generally accepted accounting principles (GAAP) that may require the use of management estimates and assumptions in the preparation of its 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.
The global outbreak of the novel coronavirus disease, known as COVID-19, has caused adverse effects on many companies, sectors, nations, regions and the markets in general, and may continue for an unpredictable duration. The effects of this pandemic may materially impact the value and performance of the Fund, its ability to buy and sell fund investments at appropriate valuations, and its ability to achieve its investment objectives.
New Accounting Pronouncements. To improve the effectiveness of fair value disclosure requirements, the Financial Accounting Standards Board issued Accounting Standard Update (ASU) 2018-13, Fair Value Measurement Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement (ASU 2018-13), which added, removed, and modified certain aspects relating to fair value disclosure. Management has fully adopted the ASU 2018-13 updates in these financial statements.
In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in the ASU provides optional temporary financial reporting relief from the effect of certain types of contract modifications due to the planned discontinuation of the London Interbank Offered Rate (LIBOR) and other interbank-offered based reference rates as of the end of 2021. The ASU is effective for certain reference rate-related contract modifications that occur during the period March 12, 2020 through December 31, 2022. Management has reviewed the requirements and believes the adoption of this ASU will not have a material impact on the 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).
12
The Gabelli Global Rising Income and Dividend Fund
Notes to Financial Statements (Continued)
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 obligations 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. Such debt obligations are valued through prices provided by a pricing service approved by the Board. Certain securities are valued principally using dealer quotations.
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 American Depositary Receipt 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.
The Fund employs a fair value model to adjust prices to reflect events affecting the values of certain portfolio securities which occur between the close of trading on the principal market for such securities (foreign exchanges and over-the-counter markets) at the time when net asset values of the Fund are determined. If the Fund’s valuation committee believes that a particular event would materially affect net asset value, further adjustment is considered.
The inputs and valuation techniques used to measure fair value of the Fund’s investments are summarized into three levels as described in the hierarchy below:
● | Level 1 — quoted prices in active markets for identical securities; |
● | Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.); and |
● | Level 3 — significant unobservable inputs (including the Board’s determinations as to the fair value of investments). |
A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input both individually and in the aggregate that is significant to the fair value measurement. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
13
The Gabelli Global Rising Income and Dividend Fund
Notes to Financial Statements (Continued)
The summary of the Fund’s investments in securities by inputs used to value the Fund’s investments as of December 31, 2020 is as follows:
Valuation Inputs | ||||||||||||
Level 1 Quoted Prices | Level 2 Other Significant Observable Inputs | Total Market Value at 12/31/20 | ||||||||||
INVESTMENTS IN SECURITIES: | ||||||||||||
ASSETS (Market Value): | ||||||||||||
Common Stocks | ||||||||||||
Telecommunications | $ | 2,383,622 | $ | 8,700 | $ | 2,392,322 | ||||||
Other Industries(a) | 51,616,725 | — | 51,616,725 | |||||||||
Total Common Stocks | 54,000,347 | 8,700 | 54,009,047 | |||||||||
Convertible Corporate Bonds (a) | — | 209,982 | 209,982 | |||||||||
Warrants (a) | 7,040 | — | 7,040 | |||||||||
U.S. Government Obligations | — | 934,931 | 934,931 | |||||||||
TOTAL INVESTMENTS IN SECURITIES – ASSETS | $ | 54,007,387 | $ | 1,153,613 | $ | 55,161,000 |
(a) | Please refer to the Schedule of Investments for the industry classifications of these portfolio holdings. |
The Fund held no level 3 investments at December 31, 2020 and 2019.
Additional Information to Evaluate Qualitative Information.
General. The Fund uses recognized industry pricing services – approved by the Board and unaffiliated with the Adviser – to value most of its securities, and uses broker quotes provided by market makers of securities not valued by these and other recognized pricing sources. Several different pricing feeds are received to value domestic equity securities, international equity securities, preferred equity securities, and fixed income securities. The data within these feeds are ultimately sourced from major stock exchanges and trading systems where these securities trade. The prices supplied by external sources are checked by obtaining quotations or actual transaction prices from market participants. If a price obtained from the pricing source is deemed unreliable, prices will be sought from another pricing service or from a broker/dealer that trades that security or similar securities.
Fair Valuation. Fair valued securities may be common or preferred equities, warrants, options, rights, or fixed income obligations. Where appropriate, Level 3 securities are those for which market quotations are not available, such as securities not traded for several days, or for which current bids are not available, or which are restricted as to transfer. When fair valuing a security, factors to consider include recent prices of comparable securities that are publicly traded, reliable prices of securities not publicly traded, the use of valuation models, current analyst reports, valuing the income or cash flow of the issuer, or cost if the preceding factors do not apply. A significant change in the unobservable inputs could result in a lower or higher value in Level 3 securities. The circumstances of Level 3 securities are frequently monitored to determine if fair valuation measures continue to apply.
The Adviser reports quarterly to the Board the results of the application of fair valuation policies and procedures. These may include backtesting the prices realized in subsequent trades of these fair valued securities to fair values previously recognized.
Derivative Financial Instruments. The Fund may engage in various portfolio investment strategies by investing in derivative financial instruments for the purposes of increasing the income of the Fund, hedging against changes
14
The Gabelli Global Rising Income and Dividend Fund
Notes to Financial Statements (Continued)
in the value of its portfolio securities and in the value of securities it intends to purchase, or hedging against a specific transaction with respect to either the currency in which the transaction is denominated or another currency. Investing in certain derivative financial instruments, including participation in the options, futures, or swap markets, entails certain execution, liquidity, hedging, tax, and securities, interest, credit, or currency market risks. Losses may arise if the Adviser’s prediction of movements in the direction of the securities, foreign currency, and interest rate markets is inaccurate. Losses may also arise if the counterparty does not perform its duties under a contract, or that, in the event of default, the Fund may be delayed in or prevented from obtaining payments or other contractual remedies owed to it under derivative contracts. The creditworthiness of the counterparties is closely monitored in order to minimize these risks. Participation in derivative transactions involves investment risks, transaction costs, and potential losses to which the Fund would not be subject absent the use of these strategies. The consequences of these risks, transaction costs, and losses may have a negative impact on the Fund’s ability to pay distributions.
Collateral requirements differ by type of derivative. Collateral requirements are set by the broker or exchange clearing house for exchange traded derivatives, while collateral terms are contract specific for derivatives traded over-the-counter. Securities pledged to cover obligations of the Fund under derivative contracts, if any, are noted in the Schedule of Investments. Cash collateral, if any, pledged for the same purpose will be reported separately in the Statement of Assets and Liabilities.
The Fund’s policy with respect to offsetting is that, absent an event of default by the counterparty or a termination of the agreement, the master agreement does not result in an offset of reported amounts of financial assets and financial liabilities in the Statement of Assets and Liabilities across transactions between the Fund and the applicable counterparty. The enforceability of the right to offset may vary by jurisdiction.
The Fund’s derivative contracts held at December 31, 2020, if any, are not accounted for as hedging instruments under GAAP and are disclosed in the Schedule of Investments together with the related counterparty.
Forward Foreign Exchange Contracts. The Fund may engage in forward foreign exchange contracts for the purpose of hedging a specific transaction with respect to either the currency in which the transaction is denominated or another currency as deemed appropriate by the Adviser. Forward foreign exchange contracts are valued at the forward rate and are marked-to-market daily. The change in market value is included in unrealized appreciation/depreciation on investments and foreign currency translations. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed.
The use of forward foreign exchange contracts does not eliminate fluctuations in the underlying prices of the Fund’s portfolio securities, but it does establish a rate of exchange that can be achieved in the future. Although forward foreign exchange contracts limit the risk of loss due to a decline in the value of the hedged currency, they also limit any potential gain that might result should the value of the currency increase. As of December 31, 2020, the Fund held no forward foreign exchange contracts.
Securities Sold Short. The Fund may enter into short sale transactions. Short selling involves selling securities that may or may not be owned and, at times, borrowing the same securities for delivery to the purchaser, with an obligation to replace such borrowed securities at a later date. The proceeds received from short sales are recorded as liabilities and the Fund records an unrealized gain or loss to the extent of the difference between
15
The Gabelli Global Rising Income and Dividend Fund
Notes to Financial Statements (Continued)
the proceeds received and the value of an open short position on the day of determination. The Fund records a realized gain or loss when the short position is closed out. By entering into a short sale, the Fund bears the market risk of an unfavorable change in the price of the security sold short. Dividends on short sales are recorded as an expense by the Fund on the ex-dividend date and interest expense is recorded on the accrual basis. The broker retains collateral for the value of the open positions, which is adjusted periodically as the value of the position fluctuates. At December 31, 2020, there were no short sales outstanding.
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 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 purchase 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 inability to repatriate funds, less complete financial information about companies, and possible future adverse political and economic developments. Moreover, securities of many foreign issuers and their markets may be less liquid and their prices more volatile than those of securities of comparable U.S. issuers.
Foreign Taxes. The Fund may be subject to foreign taxes on income, gains on investments, or currency repatriation, a portion of which may be recoverable. The Fund will accrue such taxes and recoveries as applicable, based upon its current interpretation of tax rules and regulations that exist in the markets in which it invests.
Restricted Securities. The Fund may invest up to 15% of its net assets in securities for which the markets are restricted. Restricted securities include securities whose disposition is subject to substantial legal or contractual restrictions. The sale of restricted securities often requires more time and results in higher brokerage charges or dealer discounts and other selling expenses than does the sale of securities eligible for trading on national securities exchanges or in the over-the-counter markets. Restricted securities may sell at a price lower than similar securities that are not subject to restrictions on resale. Securities freely saleable among qualified institutional investors under special rules adopted by the SEC may be treated as liquid if they satisfy liquidity standards established by the Board. The continued liquidity of such securities is not as well assured as that of publicly traded securities, and accordingly the Board will monitor their liquidity. For the restricted securities the Fund held as of December 31, 2020, if any, refer to the Schedule of Investments.
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
16
The Gabelli Global Rising Income and Dividend Fund
Notes to Financial Statements (Continued)
the ex-dividend date, except for certain dividends from foreign securities that are recorded as soon after the ex-dividend date as the Fund becomes aware of such dividends.
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.
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 GAAP. 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 for federal income tax purposes 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. Permanent differences were primarily due to reclasses of realized foreign currency and sales relating to investments considered no longer to be passive foreign investments. These reclassifications have no impact on the NAV of the Fund. For the year ended December 31, 2020, reclassifications were made to decrease paid-in capital by $917, with an offsetting adjustment to total distributable earnings.
The tax character of distributions paid during the years ended December 31, 2020 and 2019 was as follows:
Year Ended December 31, 2020 | Year Ended December 31, 2019 | |||||||||
Distributions paid from: | ||||||||||
Ordinary income (inclusive of short term capital gains) | $ | 372,934 | $ | 502,720 | ||||||
Net long term capital gains | — | 14,663 | ||||||||
Total distributions paid | $ | 372,934 | $ | 517,383 |
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, 2020, the components of accumulated earnings/losses on a tax basis were as follows:
Accumulated capital loss carryforwards | $ | (1,296,991 | ) | |
Net unrealized appreciation on investments and foreign currency translations | 15,294,778 | |||
Total | $ | 13,997,787 |
The Fund is permitted to carry capital losses forward for an unlimited period. Capital losses that are carried forward will retain their character as either short term or long term capital losses. At December 31, 2020, the
17
The Gabelli Global Rising Income and Dividend Fund
Notes to Financial Statements (Continued)
Fund had net long term capital loss carryforwards for federal income tax purposes of $1,296,991 which are available to reduce future required distributions of net capital gains to shareholders for an unlimited period.
At December 31, 2020, the temporary differences between book basis and tax basis unrealized appreciation/depreciation were primarily due to deferral of losses from wash sales for tax purposes, and mark-to-market adjustments on investments in passive foreign investment companies.
The following summarizes the tax cost of investments and the related net unrealized appreciation at December 31, 2020:
Cost | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Appreciation | |||||
Investments | $39,870,902 | $19,026,031 | $(3,735,933) | $15,290,098 |
The Fund is required to evaluate 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. Income tax and related interest and penalties would be recognized by the Fund as tax expense in the Statement of Operations if the tax positions were deemed not to meet the more-likely-than-not threshold. As of December 31, 2020, the Adviser has reviewed all open tax years and concluded that there was no impact to the Fund’s net assets or results of operations. The Fund’s federal and state tax returns for the prior three fiscal years remain open, subject to examination. On an ongoing basis, the Adviser will monitor the Fund’s tax positions to determine if adjustments to this conclusion are necessary.
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.
Through November 30, 2019, the Adviser had agreed to waive and/or to reimburse expenses of the Fund to the extent necessary to maintain the annualized total operating expenses of the Fund (excluding brokerage costs, acquired fund fees and expenses, interest, taxes, and extraordinary expenses) at no more than 2.00%, 2.00%, 2.75%, and 1.00% of the value of the Fund’s average daily net assets for Class AAA, Class A, Class C, and Class I Shares, respectively. Effective December 1, 2019, the Adviser amended its contractual agreement with respect to each share class of the Fund to waive its investment advisory fees and/or to reimburse expenses to the extent necessary to maintain the annualized total operating expenses of the Fund (excluding brokerage costs, acquired fund fees and expenses, interest, taxes, and extraordinary expenses) until at least April 30, 2021, at no more than 0.90% of the value of the Fund’s average daily net assets for each share class of the Fund. During the year ended December 31, 2020, the Adviser reimbursed expenses in the amount of $295,855. In addition, the Fund has agreed, during the two year period following any waiver or reimbursement by the Adviser, to repay such amount to the extent, after giving effect to the repayment, such adjusted annualized total operating expenses of the Fund would not exceed 0.90% of the value of the Fund’s average daily net assets for each share class of the Fund. The agreement is renewable annually. At December 31, 2020, the cumulative amount which the Fund may repay the Adviser, subject to the terms above, is $492,439:
18
The Gabelli Global Rising Income and Dividend Fund
Notes to Financial Statements (Continued)
For the year ended December 31, 2019, expiring December 31, 2021 | $ | 196,584 | |||
For the year ended December 31, 2020, expiring December 31, 2022 | 295,855 | ||||
$ | 492,439 |
The Corporation pays each Director who is not considered to be an affiliated person an annual retainer of $6,000 plus $1,000 for each Board meeting attended, and they are reimbursed for any out of pocket expenses incurred in attending meetings. All Board committee members receive $1,000 per meeting attended. The Chairman of the Audit Committee receives an annual fee of $3,000, and the Lead Director receives an annual fee of $2,000. A Director may receive a single meeting fee, allocated among the participating funds, for attending certain meetings held on behalf of multiple funds. Directors who are directors or employees of the Adviser or an affiliated company receive no compensation or expense reimbursement from the Corporation.
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. Under the Class AAA, Class A, and Class C Share Plans, payments are authorized to G.distributors, LLC (the Distributor), an affiliate of the Adviser, at annual rates of 0.25%, 0.25%, 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 sales of securities during the year ended December 31, 2020, other than short term securities and U.S. Government obligations, aggregated $3,464,532 and $5,669,103, respectively.
6. Transactions with Affiliates and Other Arrangements. During the year ended December 31, 2020, the Fund paid brokerage commissions on security trades of $3,427 to G.research, LLC, an affiliate of the Adviser. Additionally, the Distributor retained a total of $417 from investors representing commissions (sales charges and underwriting fees) on sales and redemptions of Fund shares.
The Fund received credits from a designated broker who agreed to pay certain Fund operating expenses. The amount of such expenses paid through this directed brokerage arrangement during this period was $1,326.
The cost of calculating the Fund’s NAV per share is a Fund expense pursuant to the Advisory Agreement. Under the sub-administration agreement with Bank of New York Mellon, the fees paid include the cost of calculating the Fund’s NAV. The Fund reimburses the Adviser for this service. During the year ended December 31, 2020, the Fund accrued $11,250 in accounting fees in the Statement of Operations.
7. Line of Credit. The Fund participates in an unsecured line of credit which expires on March 3, 2021 and may be renewed annually, of up to $75,000,000 under 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 a floating rate equal to the higher of the overnight Federal Funds rate plus 125 basis points or the 30 day ICE LIBOR plus 125 basis points in effect on that day. This amount, if any, would be included in “Interest expense” in the Statement of Operations. During the year ended December 31, 2020, there were no borrowings under the line of credit.
8. Capital Stock. The Fund currently offers three classes of shares – Class AAA Shares, Class A Shares, and Class I Shares. Effective January 27, 2020, (the Effective Date) the Fund’s Class AAA, Class A and Class C Shares “closed to purchases from new investors”. “Closed to purchases from new investors” means (i) with respect to the Class AAA and Class A shares, no new investors may purchase shares of such classes, but
19
The Gabelli Global Rising Income and Dividend Fund
Notes to Financial Statements (Continued)
existing shareholders may continue to purchase additional shares of such classes after the Effective Date, and (ii) with respect to Class C Shares, neither new investors nor existing shareholders may purchase any additional shares of such class after the Effective Date. These changes had no effect on existing shareholders’ ability to redeem shares of the Fund as described in the Fund’s Prospectus. Additionally, on the Effective Date Class I shares of the Fund became available to investors with a minimum initial investment amount of $1,000 when purchasing shares directly through the Distributor, or investors purchasing Class I shares through brokers or financial intermediaries that have entered into selling agreements with the Distributor specifically with respect to Class I shares.
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 as an increase in paid-in capital. The redemption fees retained by the Fund during the years ended December 31, 2020 and 2019, if any, can be found in the Statement of Changes in Net Assets under Redemption Fees.
Transactions in shares of capital stock were as follows:
Year Ended December 31, 2020 | Year Ended December 31, 2019 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Class AAA | ||||||||||||||||
Shares sold | 7,755 | $ | 203,820 | 55,209 | $ | 1,412,343 | ||||||||||
Shares issued upon reinvestment of distributions | 1,134 | 32,991 | 1,071 | 28,072 | ||||||||||||
Shares redeemed | (67,890 | ) | (1,598,106 | ) | (34,012 | ) | (862,290 | ) | ||||||||
Net increase/(decrease) | (59,001 | ) | $ | (1,361,295 | ) | 22,268 | $ | 578,125 | ||||||||
Class A | ||||||||||||||||
Shares sold | 1,570 | $ | 36,448 | 14,445 | $ | 363,666 | ||||||||||
Shares issued upon reinvestment of distributions | 185 | 5,383 | 235 | 6,170 | ||||||||||||
Shares redeemed | (27,824 | ) | (665,867 | ) | (23,320 | ) | (581,651 | ) | ||||||||
Net decrease | (26,069 | ) | $ | (624,036 | ) | (8,640 | ) | $ | (211,815 | ) | ||||||
Class C | ||||||||||||||||
Shares sold | 1,836 | $ | 40,437 | 19,741 | $ | 423,760 | ||||||||||
Shares issued upon reinvestment of distributions | 321 | 7,808 | 133 | 2,922 | ||||||||||||
Shares redeemed | (46,001 | ) | (894,053 | ) | (52,188 | ) | (1,089,520 | ) | ||||||||
Net decrease | (43,844 | ) | $ | (845,808 | ) | (32,314 | ) | $ | (662,838 | ) | ||||||
Class I | ||||||||||||||||
Shares sold | 27,263 | $ | 666,547 | 51,137 | $ | 1,300,988 | ||||||||||
Shares issued upon reinvestment of distributions | 7,134 | 208,392 | 11,724 | 308,583 | ||||||||||||
Shares redeemed | (60,877 | ) | (1,429,343 | ) | (69,005 | ) | (1,730,834 | ) | ||||||||
Net decrease | (26,480 | ) | $ | (554,404 | ) | (6,144 | ) | $ | (121,263 | ) |
9. Significant Shareholder. As of December 31, 2020, approximately 69.4% of the Fund was beneficially owned by the Adviser and its affiliates, including managed accounts for which the affiliates of the Adviser have voting control but disclaim pecuniary interest.
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. Management has reviewed the Fund’s existing contracts and expects the risk of loss to be remote.
20
The Gabelli Global Rising Income and Dividend Fund
Notes to Financial Statements (Continued)
11. Subsequent Events. Management has evaluated the impact on the Fund of all subsequent events occurring through the date the financial statements were issued and has determined that there were no subsequent events requiring recognition or disclosure in the financial statements.
21
The Gabelli Global Rising Income and Dividend Fund
Report of Independent Registered Public Accounting Firm
To the Shareholders of The Gabelli Global Rising Income and Dividend Fund
and the Board of Directors of GAMCO Global Series Funds, Inc.
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of The Gabelli Global Rising Income and Dividend Fund (the “Fund”) (one of the funds constituting GAMCO Global Series Funds, Inc. (the “Corporation”)), including the schedule of investments, as of December 31, 2020, 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, the financial highlights for each of the five years in the period then ended and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund (one of the funds constituting GAMCO Global Series Funds, Inc.) at December 31, 2020, 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 its financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements are the responsibility of the Corporation’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Corporation in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Corporation is not required to have, nor were we engaged to perform, an audit of the Corporation’s internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Corporation’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2020, by correspondence with the custodian. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
We have served as the auditor of one or more Gabelli/GAMCO Funds investment companies since 1992.
Philadelphia, Pennsylvania
February 26, 2021
22
The Gabelli Global Rising Income and Dividend Fund
Board Consideration and Re-Approval of Investment Advisory Agreement (Unaudited)
During the six months ended December 31, 2020, the Board of Directors of the Corporation approved the continuation of the investment advisory agreement with the Adviser for the Fund on the basis of the recommendation by the directors (the Independent Board Members) who are not interested persons of the Fund. The following paragraphs summarize the material information and factors considered by the Independent Board Members as well as their conclusions relative to such factors.
Nature, Extent, and Quality of Services. The Independent Board Members considered information regarding the portfolio managers, the depth of the analyst pool available to the Adviser and the Fund’s portfolio managers, the scope of supervisory, administrative, shareholder and other services supervised or provided by the Adviser and the absence of significant service problems reported to the Board. The Independent Board Members noted the experience, length of service and reputation of the Fund’s portfolio managers.
Investment Performance. The Independent Board Members reviewed the short, medium, and long term performance of the Fund (as of September 30, 2020) against a peer group of seven other comparable funds prepared by the Adviser (the Adviser Peer Group), and against a peer group prepared by Broadridge (the Broadridge Performance Peer Group) consisting of all retail and institutional global equity income funds, regardless of asset size or primary channel of distribution, as represented by the Lipper Global Equity Income Fund Index. The Independent Board Members noted that the Fund’s performance was in the second quartile for the one year period and in the fourth (lowest) quartile for the three, five, and ten year periods, as measured against the Adviser Peer Group. Against the Broadridge Performance Peer Group, the Independent Board Members noted that the Fund’s performance was in the third quintile for the one year period and in the fifth quintile for the three, five, and ten year periods. The Independent Board Members discussed the peer groups in relation to the Fund’s shift in strategy several years ago.
Profitability. The Independent Board Members reviewed summary data regarding the profitability of the Fund to the Adviser both with a pro rata administrative overhead charge and with a stand alone administrative charge and noted the effect of the expense limitation agreement. The Independent Board Members also noted that a portion of the Fund’s portfolio transactions were executed by an affiliated broker of the Adviser and that another affiliated broker of the Adviser received distribution fees and minor amounts of sales commissions.
Economies of Scale. The Independent Board Members discussed the major elements of the Adviser’s cost structure and the relationship of those elements to potential economies of scale and reviewed data provided by the Adviser.
Sharing of Economies of Scale. The Independent Board Members noted that the investment management fee schedule for the Fund does not take into account any potential economies of scale that may develop.
Service and Cost Comparisons. The Independent Board Members compared the expense ratios of the investment management fee, other expenses and total expenses of the Fund to similar expense ratios of the Adviser Peer Group and a peer group of eleven other global equity income funds selected by Broadridge (the Broadridge Expense Peer Group), and noted that the Adviser’s management fee includes substantially all administrative services of the Fund as well as investment advisory services. The Independent Board Members noted the effect of the expense limitation agreement in place for the Fund. The Board Members noted that the Fund’s total expense ratio was the highest for the Adviser Peer Group and the lowest for the Broadridge Expense Peer Group and that, the Fund’s size was significantly lower than the average of the Adviser Peer Group, and lower
23
The Gabelli Global Rising Income and Dividend Fund
Board Consideration and Re-Approval of Investment Advisory Agreement (Unaudited) (Continued)
than the average of the Broadridge Expense Peer Group. The Independent Board Members also noted that the advisory fee structure was the same as that in effect for most of the Gabelli funds. The Independent Board Members were presented with, but did not consider to be material to their decision, various information comparing the advisory fee to the fee for other types of accounts managed by the Adviser.
Conclusions. The Independent Board Members concluded that the Fund enjoyed highly experienced portfolio management services and good ancillary services. The Independent Board Members noted the reasons for the Fund’s underperformance and the steps the Adviser was taking to improve performance. The Independent Board Members noted that the Board approved amendments to the contractual Expense Deferral Agreement between the Adviser and the Corporation, on behalf of each Fund, pursuant to which the net expense ratio for each share class of each Fund was reduced to 0.90%, effective December 1, 2019. The Independent Board Members also concluded that the Fund’s expense ratios and profitability to the Adviser were reasonable, and that economies of scale were not a significant factor in their thinking at this time. The Board Members did not view the potential profitability of ancillary services as material to their decision. On the basis of the foregoing and without assigning particular weight to any single conclusion, the Independent Board Members determined to recommend continuation of the investment management agreement to the full Board.
24
The Gabelli Global Rising Income and Dividend Fund
Additional Fund Information (Unaudited)
The business and affairs of the Fund are managed under the direction of the Corporation’s Board of Directors. Information pertaining to the Directors and officers of the Fund is set forth below. The Corporation’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 Gabelli Global Rising Income and Dividend Fund at One Corporate Center, Rye, NY 10580-1422.
Name, Position(s) Address1 and Age | Term of Office and Length of Time Served2 | Number of Funds in Fund Complex Overseen by Director | Principal Occupation(s) During Past Five Years | Other Directorships Held by Director3 | ||||
INTERESTED DIRECTORS4: | ||||||||
Mario J. Gabelli, CFA Director and Chief Investment Officer Age: 78 | Since 1993 | 33 | Chairman, Chief Executive Officer, and Chief Investment Officer– Value Portfolios of GAMCO Investors, Inc. and Chief Investment Officer– Value Portfolios of Gabelli Funds, LLC and GAMCO Asset Management Inc.; Director/ Trustee or Chief Investment Officer of other registered investment companies within the Fund Complex; Chief Executive Officer of GGCP, Inc.; Executive Chairman of Associated Capital Group, Inc. | Chairman of the Board and Chief Executive Officer of LICT Corp. (multimedia and communication services company); Director of CIBL, Inc. (broadcasting and wireless communications); Director of ICTC Group Inc. (communications) (2013-2018) | ||||
John D. Gabelli Director Age: 76 | Since 1993 | 12 | Former Senior Vice President of G.research, LLC | — | ||||
INDEPENDENT DIRECTORS5: | ||||||||
E. Val Cerutti Director Age: 81 | Since 2001 | 7 | Chief Executive Officer of Cerutti Consultants, Inc. | Director of The LGL Group, Inc. (diversified manufacturing) (1990-2009) | ||||
Anthony J. Colavita6 | Since 1993 | 20 | President of the law firm of Anthony J. Colavita, P.C. | — | ||||
Werner J. Roeder Director Age: 80 | Since 1993 | 20 | Retired physician; Former Vice President of Medical Affairs (Medical Director) of New York Presbyterian/Lawrence Hospital (1999-2014) | — | ||||
Anthonie C. van Ekris6
| Since 1993 | 23 | Chairman and Chief Executive Officer of BALMAC International, Inc. (global import/ export company) | — | ||||
Salvatore J. Zizza7 Director | Since 2004 | 31 | President of Zizza & Associates Corp. (private holding company); President of Bergen Cove Realty Inc.; Chairman of Harbor Diversified, Inc. (pharmaceuticals) (2009-2018); Chairman of BAM (semiconductor and aerospace manufacturing)(2000-2018); Chairman of Metropolitan Paper Recycling Inc. (recycling) (2005-2014) | Director and Chairman of Trans-Lux Corporation (business services); Director and Chairman of Harbor Diversified Inc. (pharmaceuticals) (2009-2018) |
25
The Gabelli Global Rising Income and Dividend Fund
Additional Fund Information (Continued) (Unaudited)
Name, Position(s) Address1 and Age | Term of Office and Length of Time Served2 | Principal Occupation(s) During Past Five Years | ||
OFFICERS: | ||||
Bruce N. Alpert President | Since 1993 | Executive Vice President and Chief Operating Officer of Gabelli Funds, LLC since 1988; Officer of registered investment companies within the Fund Complex; Senior Vice President of GAMCO Investors, Inc. since 2008; Chief Executive Officer of G.distributors, LLC (January 2020-November 2020) | ||
John C. Ball Treasurer | Since 2017 | Treasurer of registered investment companies within the Fund Complex since 2017; Vice President and Assistant Treasurer of AMG Funds, 2014-2017 | ||
Peter Goldstein Secretary | Since 2020 | General Counsel, Gabelli Funds, LLC since July 2020; General Counsel and Chief Compliance Officer, Buckingham Capital Management, Inc. (2012-2020); Chief Legal Officer and Chief Compliance Officer, The Buckingham Research Group, Inc. (2012-2020) | ||
Richard J. Walz Chief Compliance Officer | Since 2013 | Chief Compliance Officer of registered investment companies within the Fund Complex since 2013; Chief Compliance Office for Gabelli Funds, LLC since 2015 |
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 Corporation’s By-Laws and Articles of Incorporation. For officers, includes time served in prior officer positions with the Fund. 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 | 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. |
4 | “Interested person” of the Corporation as defined in the 1940 Act. Messrs. Mario J. Gabelli and John D. Gabelli, who are brothers, are each considered an “interested person” because of their affiliation with Gabelli Funds, LLC which acts as the Corporation’s investment adviser. |
5 | Directors who are not interested persons are considered “Independent” Directors. |
6 | Mr. Colavita’s son, Anthony S. Colavita, serves as a director of other funds in the Gabelli/GAMCO Fund Complex. Mr. van Ekris is an independent director of Gabelli International Ltd., Gabelli Fund LDC, GAMA Capital Opportunities Master Ltd., and GAMCO International SICAV, all of which may be deemed to be controlled by Mario J. Gabelli and/or affiliates and, in that event, would be deemed to be under common control with the Fund’s Adviser. |
7 | Mr. Zizza is an independent director of Gabelli International Ltd., which may be deemed to be controlled by Mario J. Gabelli and/or affiliates and in that event would be deemed to be under common control with the Fund’s Adviser. On September 9, 2015, Mr. Zizza entered into a settlement with the SEC to resolve an inquiry relating to an alleged violation regarding the making of false statements or omissions to the accountants of a company concerning a related party transaction. The company in question is not an affiliate of, nor has any connection to, the Fund. Under the terms of the settlement, Mr. Zizza, without admitting or denying the SEC’s findings and allegation, paid $150,000 and agreed to cease and desist committing or causing any future violations of Rule 13b2-2 of the Securities Exchange Act of 1934, as amended. The Board has discussed this matter and has determined that it does not disqualify Mr. Zizza from serving as an Independent Director. |
26
THE GABELLI GLOBAL RISING INCOME AND DIVIDEND FUND
One Corporate Center
Rye, NY 10580-1422
Portfolio Manager Biography
Mario J. Gabelli, CFA, is Chairman, Chief Executive Officer, and Chief Investment Officer - Value Portfolios of GAMCO Investors, Inc. that he founded in 1977, and Chief Investment Officer - Value Portfolios of Gabelli Funds, LLC and GAMCO Asset Management Inc. He is also Executive Chairman of Associated Capital Group, Inc. Mr. Gabelli is a summa cum laude graduate of Fordham University and holds an MBA degree from Columbia Business School and Honorary Doctorates from Fordham University and Roger Williams University.
2020 TAX NOTICE TO SHAREHOLDERS (Unaudited)
During the year ended December 31, 2020, the Fund $0.21361 per share to shareholders in each Class of shares. For the year ended December 31, 2020, 68.79% 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 1.01% of the ordinary income distribution as qualified interest income pursuant to the Tax Relief, Unemployment Reauthorization, and Job Creation Act of 2010. Also during 2020, the Fund passed through foreign tax credits of $0.01651 per share to each Class of shares.
U.S. Government Income: The percentage of the ordinary income distribution paid by the Fund during the year ended December 31, 2020 which was derived from U.S. Treasury securities was 0.82%. 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 Fund did not meet this strict requirement in 2020. The percentage of U.S. Government securities held as of December 31, 2020 was 1.69%. 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.
|
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. Both the commentary and the financial statements, including the portfolio of investments, will be available on our website at www.gabelli.com. |
GAMCO Global Series Funds, Inc.
THE GABELLI GLOBAL RISING INCOME
AND DIVIDEND FUND
One Corporate Center
Rye, New York 10580-1422
t | 800-GABELLI (800-422-3554) |
f | 914-921-5118 |
e | info@gabelli.com |
GABELLI.com
Net Asset Value per share available daily
by calling 800-GABELLI after 7:00 P.M.
BOARD OF DIRECTORS Mario J. Gabelli, CFA Chairman and Chief Executive Officer, GAMCO Investors, Inc. Executive Chairman, Associated Capital Group, Inc.
E. Val Cerutti Chief Executive Officer, Cerutti Consultants, Inc.
Anthony J. Colavita President, Anthony J. Colavita, P.C.
John D. Gabelli Former Senior Vice President, G.research, LLC
Werner J. Roeder Former Medical Director, Lawrence Hospital
Anthonie C. van Ekris Chairman, BALMAC International, Inc.
Salvatore J. Zizza Chairman, Zizza & Associates Corp. | OFFICERS Bruce N. Alpert President
John C. Ball Treasurer
Peter Golstein Secretary
Richard J. Walz Chief Compliance Officer
DISTRIBUTOR G.distributors, LLC
CUSTODIAN
State Street Bank and Trust Company
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
DST Asset Manager Solutions, Inc.
LEGAL COUNSEL Skadden, Arps, Slate, Meagher & Flom LLP |
This report is submitted for the general information of the shareholders of The Gabelli Global Rising Income and Dividend Fund. It is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus.
GAB441Q420AR |
The Gabelli Global Mini Mites Fund
Annual Report — December 31, 2020
To Our Shareholders,
For the year ended December 31, 2020, the net asset value (NAV) total return per Class AAA Share of The Gabelli Global Mini Mites Fund was 15.9% compared with a total return of 16.2% for the S&P Developed Small Cap Index. Other classes of shares are available. See page 3 for performance information for all classes.
Enclosed are the financial statements, including the schedule of investments, as of December 31, 2020.
Performance Discussion (Unaudited)
The Gabelli Global Mini Mites Fund, a series of GAMCO Global Series Funds, Inc. commenced investment operations on October 1, 2018. The Fund is a non-diversified open end management investment company whose investment objective is to provide investors with long term capital appreciation by investing primarily in micro-capitalization equity securities.
The Fund’s investment strategy is to invest in common stocks of smaller companies that have a market capitalization (defined as shares outstanding times current market price) of $250 million or less at the time of the Fund’s initial investment. These companies are called micro-cap companies. As a “global” fund, the Fund invests in securities of issuers located in at least three countries and at least 40% of its net assets are invested in securities of non U.S. issuers.
Markets were blindsided by the rapid spread of the Coronavirus which became fully apparent to investors in February. As governments around the world took action to slow its spread, it became clear that the pandemic would have a major economic impact. On the fiscal front, Congress passed legislation to help alleviate the hardship caused by the shutdown of large segments of the economy. Most global markets suffered the quickest bear market on record. For the first quarter, overseas markets lost nearly 25% of their value. Some did better, such as Japan, which fell by 17.7%, and some worse like the United Kingdom, Spain, and Italy which lost nearly 30%. While investors were dealing with the impact of the growing health crisis, the oil market collapsed when Saudi Arabia and Russia failed to agree on oil production. The price of Brent oil fell from $64.08 per barrel to $26.35 during the quarter.
In the second quarter, equity markets continued their recovery which began during the third week of March. Like the decline, the recovery was rapid and largely due to the massive fiscal and monetary response by the authorities to the crisis. Most economies stabilized and some have recovered slightly but activity remained depressed with unemployment at high levels. For the quarter, the U.S. rose by 21.2% and outperformed overseas markets. The leading performers among developed overseas markets were Australia, up by 28.6%, Germany by 24.5%, and the Netherlands by 24%. Japan rallied by 11.5% while Europe, in aggregate, rose by 14.3%. The price of Brent oil rallied to end the quarter at $41.32 per barrel, a rise of 56.8%.
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s annual and semiannual shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Fund’s website (www.gabelli.com), and you will be notified by mail each time a report is posted and provided with a website link to access the report. If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. To elect to receive all future reports on paper free of charge, please contact your financial intermediary, or, if you invest directly with the Fund, you may call 800-422-3554 or send an email request to info@gabelli.com. |
The third quarter saw new habits forming around the work-from-home, learn-from-home, play-from-home, and shop-from-home dynamic. Stocks rose during the third quarter of 2020, with the S&P 500 up 8.9%, as gains in July and August were partially offset by a decline in September. The main issues still facing the global markets remained largely around the COVID-19 pandemic and how long it will persist.
Asset class returns for calendar 2020 exemplify why aggregates can be misleading. Returns for the year show distinct outperformance of large cap over small cap and growth over value. The top performing factors for the year were sales growth, momentum, and high price-to-earnings ratio. However, returns off the March market low tell a different story. Small caps and cyclicals led the recovery, with the news of over 90% efficacy rates for Pfizer and Moderna vaccines serving as a clear inflection point. Though it will take time to deliver widespread inoculation, the discounting mechanism of the market now has a more firm timetable for economic recovery.
Selected holdings that contributed positively to performance in 2020 were: Modine Manufacturing Co. (4.3% of net assets as of December 31, 2020), which provides engineered heat transfer systems and heat transfer components for use in on- and off-highway original equipment manufacturer (OEM) vehicular applications. Core Molding Technologies Inc. (3.5%) is a manufacturer of sheet molding compounds, primarily for the transportation, marine, and other commercial industries. Owens & Minor Inc. (no longer held) which together with its subsidiaries, operates as a healthcare solutions company in the United States and internationally. It operates through two segments, Global Solutions and Global Products.
Some of our weaker performing holdings during the year were: Farmer Brothers Co. (1.1%), a manufacturer and distributor of coffee and related products, primarily to foodservice customers including restaurants, hotels/casinos, offices and convenience stores; Trinity Place Holdings Inc. (0.4%), a real estate holding, investment, and asset management company, engages in commercial real estate business in the United States; and Cineplex Inc. (no longer held), through its subsidiaries, operates as an entertainment and media company in Canada and internationally.
Thank you for your investment in The Gabelli Global Mini Mites Fund.
We appreciate your confidence and trust.
2
Comparative Results
Average Annual Returns through December 31, 2020 (a) (Unaudited) | ||||||
1 Year | Since Inception (10/1/18) | |||||
Class AAA (GAMNX) | 15.87 | % | 4.94 | % | ||
S&P Developed SmallCap Index | 16.20 | 8.66 | ||||
Class A (GMNAX) | 15.76 | 4.93 | ||||
With sales charge (b) | 9.21 | 2.21 | ||||
Class C (GMNCX) | 15.81 | 4.56 | ||||
With contingent deferred sales charge (c) | 14.81 | 4.56 | ||||
Class I (GGMMX ) | 15.87 | 5.06 |
In the current prospectuses dated April 29, 2020, the gross expense ratios for Class AAA, A, C, and I Shares are 10.81%, 10.81%, 11.56%, and 10.56%, respectively, and the net expense ratios for all share classes after contractual reimbursements by Gabelli Funds, LLC, (the Adviser) is 0.91%. See page 11 for the expense ratios for the year ended December 31, 2020. The contractual reimbursements are in effect through April 30, 2021. Class AAA and Class I Shares do not have a sales charge. The maximum sales charge for Class A Shares and Class C Shares is 5.75% 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, 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. 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. Returns would have been lower had the Adviser not reimbursed certain expenses of the Fund. The Fund imposes a 2% redemption fee on shares sold or exchanged within seven days of purchase. Performance returns for periods of less than one year are not annualized. Investors should carefully consider the investment objectives, risks, charges, and expenses of the Fund before investing. The prospectuses contain information about these and other matters and should be read carefully before investing. To obtain a prospectus, please visit our website at www.gabelli.com. Investing in foreign securities involves risks not ordinarily associated with investments in domestic issues, including currency fluctuation, economic, and political risks. The S&P Developed SmallCap Index is a float adjusted market capitalization weighted index designed to measure the equity market performance of small capitalization companies located in developed markets. The index is composed of companies within the bottom 15% of the cumulative market capitalization in developed markets. The index covers all publicly listed equities with float adjusted market values of U.S. $100 million or more and annual dollar value traded of at least U.S. $50 million in all included countries. You cannot invest directly in an index. |
(b) | Performance results include the effect of the maximum 5.75% sales charge at the beginning of the period. |
(c) | Assuming payment of the 1% maximum contingent deferred sales charge imposed on redemptions made within the period of purchase. |
3
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN
THE GABELLI GLOBAL MINI MITES FUND (CLASS AAA SHARES)
AND S&P DEVELOPED SMALLCAP INDEX (Unaudited)
* | 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. |
4
The Gabelli Global Mini Mites Fund Disclosure of Fund Expenses (Unaudited) For the Six Month Period from July 1, 2020 through December 31, 2020 | 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 period, 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, 2020.
Beginning Account Value 07/01/20 | Ending Account Value 12/31/20 | Annualized Expense Ratio | Expenses Paid During Period* | |
The Gabelli Global Mini Mites | ||||
Actual Fund Return | ||||
Class AAA | $1,000.00 | $1,448.00 | 0.90% | $5.54 |
Class A | $1,000.00 | $1,449.60 | 0.90% | $5.54 |
Class C | $1,000.00 | $1,448.40 | 0.90% | $5.54 |
Class I | $1,000.00 | $1,448.00 | 0.90% | $5.54 |
Hypothetical 5% Return | ||||
Class AAA | $1,000.00 | $1,020.61 | 0.90% | $4.57 |
Class A | $1,000.00 | $1,020.61 | 0.90% | $4.57 |
Class C | $1,000.00 | $1,020.61 | 0.90% | $4.57 |
Class I | $1,000.00 | $1,020.61 | 0.90% | $4.57 |
* | Expenses are equal to the Fund’s annualized expense ratio for the last six months multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half year (184 days), then divided by 366. |
5
Summary of Portfolio Holdings
The following table presents portfolio holdings as a percent of net assets as of December 31, 2020:
The Gabelli Global Mini Mites Fund
Diversified Industrial | 20.6 | % | |
Automotive: Parts and Accessories | 10.4 | % | |
Telecommunications | 6.9 | % | |
Health Care | 6.9 | % | |
Financial Services | 6.3 | % | |
Real Estate | 5.7 | % | |
Consumer Products | 5.4 | % | |
Machinery | 5.1 | % | |
Hotels and Gaming | 3.9 | % | |
Computer Software and Services | 3.5 | % | |
Food and Beverage | 3.3 | % | |
Business Services | 3.0 | % | |
Building and Construction | 2.6 | % | |
Entertainment | 2.5 | % |
Specialty Chemicals | 2.2 | % | |
Consumer Services | 1.7 | % | |
Equipment and Supplies | 1.3 | % | |
Wireless Telecommunications Services | 1.2 | % | |
Aerospace and Defense | 1.0 | % | |
Paper and Forest Products | 0.9 | % | |
Broadcasting | 0.8 | % | |
Retail | 0.3 | % | |
Energy and Utilities | 0.2 | % | |
Other Assets and Liabilities (Net) | 4.3 | % | |
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-PORT. 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-PORT 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 800-SEC-0330.
Proxy Voting
The Fund files Form N-PX with its complete proxy voting record for the twelve months ended June 30, no later than August 31 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.
6
The Gabelli Global Mini Mites Fund
Schedule of Investments — December 31, 2020
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS — 94.7% | ||||||||||||
Aerospace and Defense — 1.0% | ||||||||||||
2,500 | Avio SpA† | $ | 33,380 | $ | 34,634 | |||||||
1,000 | CPI Aerostructures Inc.† | 2,388 | 3,831 | |||||||||
35,768 | 38,465 | |||||||||||
Automotive: Parts and Accessories — 10.4% | ||||||||||||
2,000 | Garrett Motion Inc.† | 3,040 | 8,860 | |||||||||
14,000 | Modine Manufacturing Co.† | 84,914 | 175,840 | |||||||||
300 | Motorcar Parts of America Inc.† | 4,686 | 5,886 | |||||||||
60,000 | Opus Group AB† | 48,743 | 77,009 | |||||||||
1,000 | Smart Eye AB† | 10,418 | 26,375 | |||||||||
1,531 | Strattec Security Corp. | 34,546 | 75,570 | |||||||||
500 | Superior Industries International Inc.† | 2,095 | 2,045 | |||||||||
8,000 | Uni-Select Inc. | 48,053 | 50,970 | |||||||||
236,495 | 422,555 | |||||||||||
Broadcasting — 0.8% | ||||||||||||
5,000 | Beasley Broadcast Group Inc., Cl. A | 10,193 | 7,450 | |||||||||
7,000 | Corus Entertainment Inc., Cl. B | 29,178 | 23,537 | |||||||||
39,371 | 30,987 | |||||||||||
Building and Construction — 2.6% | ||||||||||||
6,500 | Armstrong Flooring Inc.† | 24,097 | 24,830 | |||||||||
3,600 | Gencor Industries Inc.† | 43,803 | 44,280 | |||||||||
500 | The Monarch Cement Co. | 27,680 | 34,700 | |||||||||
95,580 | 103,810 | |||||||||||
Business Services — 2.9% | ||||||||||||
20,000 | B Intressenter AB†(a) | 453 | 486 | |||||||||
5,000 | Diebold Nixdorf Inc.† | 34,949 | 53,300 | |||||||||
4,000 | eWork Group AB† | 33,432 | 39,282 | |||||||||
1,500 | MIND Technology Inc.† | 4,884 | 3,360 | |||||||||
2,200 | MoneyGram International Inc.† | 5,551 | 12,023 | |||||||||
200 | Team Inc.† | 1,066 | 2,180 | |||||||||
50,102 | Trans-Lux Corp.† | 12,475 | 9,018 | |||||||||
92,810 | 119,649 | |||||||||||
Computer Software and Services — 3.5% | ||||||||||||
1,000 | A10 Networks Inc.† | 7,030 | 9,860 | |||||||||
6,000 | Alithya Group Inc., Cl. A† | 19,817 | 12,600 | |||||||||
1,200 | Asetek A/S† | 4,635 | 15,227 | |||||||||
9,000 | GTY Technology Holdings Inc.† | 46,417 | 46,620 | |||||||||
6,000 | Infront ASA† | 25,755 | 24,492 | |||||||||
70,000 | Pacific Online Ltd. | 14,777 | 11,287 | |||||||||
1,500 | Rubicon Technology Inc.† | 12,393 | 13,575 | |||||||||
10,000 | Steel Connect Inc.† | 5,611 | 7,870 | |||||||||
136,435 | 141,531 | |||||||||||
Consumer Products — 5.4% | ||||||||||||
2,800 | CompX International Inc. | 39,656 | 39,844 | |||||||||
5,000 | Dorel Industries Inc., Cl. B† | 55,458 | 58,646 | |||||||||
5,000 | Landec Corp.† | 53,356 | 54,250 | |||||||||
1,800 | Lifetime Brands Inc. | 15,873 | 27,360 |
Shares | Cost | Market Value | ||||||||||
1,200 | Nobility Homes Inc. | $ | 26,164 | $ | 29,850 | |||||||
71,000 | Playmates Holdings Ltd. | 10,621 | 8,334 | |||||||||
201,128 | 218,284 | |||||||||||
Consumer Services — 1.7% | ||||||||||||
150,000 | AA plc† | 66,334 | 69,127 | |||||||||
Diversified Industrial — 19.7% | ||||||||||||
34,000 | Ampco-Pittsburgh Corp.† | 84,777 | 186,320 | |||||||||
29,000 | Commercial Vehicle Group Inc.† | 249,276 | 250,850 | |||||||||
10,000 | Core Molding Technologies Inc.† | 43,362 | 140,800 | |||||||||
31,000 | Fluence Corp. Ltd.† | 7,941 | 5,377 | |||||||||
5,500 | Graham Corp. | 68,116 | 83,490 | |||||||||
300 | Lawson Products Inc.† | 9,486 | 15,273 | |||||||||
2,500 | Myers Industries Inc. | 41,104 | 51,950 | |||||||||
4,000 | Tredegar Corp. | 63,838 | 66,800 | |||||||||
567,900 | 800,860 | |||||||||||
Energy and Utilities — 0.2% | ||||||||||||
800 | Consolidated Water Co. Ltd. | 8,168 | 9,640 | |||||||||
Entertainment — 2.5% | ||||||||||||
200 | Du-Art Film Laboratories Inc.† | 23,004 | 15,225 | |||||||||
4,200 | Engine Media Holdings Inc.† | 29,443 | 33,919 | |||||||||
2,000 | GAN Ltd.† | 34,336 | 40,560 | |||||||||
1,500 | Reading International Inc., Cl. A† | 7,917 | 7,530 | |||||||||
100 | Xilam Animation SA† | 4,332 | 5,723 | |||||||||
99,032 | 102,957 | |||||||||||
Equipment and Supplies — 1.3% | ||||||||||||
2,200 | The Eastern Co. | 43,143 | 53,020 | |||||||||
Financial Services — 6.3% | ||||||||||||
500 | dMY Technology Group Inc. II, Cl. A† | 7,402 | 8,795 | |||||||||
8,000 | GAM Holding AG† | 19,821 | 19,555 | |||||||||
21,000 | Steel Partners Holdings LP† | 115,472 | 225,750 | |||||||||
142,695 | 254,100 | |||||||||||
Food and Beverage — 3.3% | ||||||||||||
10,000 | Clearwater Seafoods Inc. | 62,991 | 64,498 | |||||||||
10,000 | Farmer Brothers Co.† | 66,640 | 46,700 | |||||||||
400 | Nathan’s Famous Inc. | 22,231 | 22,088 | |||||||||
151,862 | 133,286 | |||||||||||
Health Care — 6.9% | ||||||||||||
40,000 | Achaogen Inc.† | 488 | 264 | |||||||||
2,000 | Cutera Inc.† | 27,131 | 48,220 | |||||||||
1,000 | Electromed Inc.† | 9,649 | 9,810 | |||||||||
5,800 | IntriCon Corp.† | 72,577 | 104,980 | |||||||||
4,370 | IRRAS AB† | 6,339 | 4,435 | |||||||||
4,200 | Neuronetics Inc.† | 21,226 | 46,662 | |||||||||
4,000 | Oncimmune Holdings plc† | 4,931 | 8,998 | |||||||||
1,750 | Option Care Health Inc.† | 17,134 | 27,370 | |||||||||
1,600 | Paratek Pharmaceuticals Inc.† | 12,398 | 10,016 | |||||||||
4,000 | Surgalign Holdings Inc.† | 18,380 | 8,760 |
See accompanying notes to financial statements.
7
The Gabelli Global Mini Mites Fund
Schedule of Investments (Continued) — December 31, 2020
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS (Continued) | ||||||||||||
Health Care (Continued) | ||||||||||||
1,300 | Tristel plc | $ | 4,856 | $ | 9,369 | |||||||
195,109 | 278,884 | |||||||||||
Hotels and Gaming — 3.9% | ||||||||||||
3,600 | Canterbury Park Holding Corp. | 46,556 | 42,840 | |||||||||
4,000 | Cherry AB, Cl. B†(a) | 38,858 | 42,297 | |||||||||
24,000 | Dover Motorsports Inc. | 49,085 | 54,480 | |||||||||
5,000 | Full House Resorts Inc.† | 11,082 | 19,650 | |||||||||
145,581 | 159,267 | |||||||||||
Machinery — 5.1% | ||||||||||||
100 | Astec Industries Inc. | 2,925 | 5,788 | |||||||||
6,000 | CFT SpA† | 33,163 | 33,278 | |||||||||
4,286 | L.B. Foster Co., Cl. A† | 67,899 | 64,504 | |||||||||
16,020 | The L.S. Starrett Co., Cl. A† | 59,797 | 67,765 | |||||||||
4,500 | Twin Disc Inc.† | 39,754 | 35,325 | |||||||||
203,538 | 206,660 | |||||||||||
Paper and Forest Products — 0.9% | ||||||||||||
2,000 | Canfor Corp.† | 18,980 | 36,107 | |||||||||
Real Estate — 5.7% | ||||||||||||
6,500 | Atrium European Real Estate Ltd. | 26,820 | 19,892 | |||||||||
65,000 | Corem Property Group AB, Cl. B | 149,987 | 148,524 | |||||||||
750 | Indus Realty Trust Inc.† | 34,128 | 46,875 | |||||||||
14,000 | Trinity Place Holdings Inc.† | 30,005 | 17,500 | |||||||||
240,940 | 232,791 | |||||||||||
Retail — 0.3% | ||||||||||||
400 | RumbleON Inc., Cl. B† | 12,188 | 12,080 | |||||||||
1,000 | Tuesday Morning Corp.† | 817 | 1,820 | |||||||||
13,005 | 13,900 | |||||||||||
Specialty Chemicals — 2.2% | ||||||||||||
8,000 | Treatt plc | 43,363 | 89,708 | |||||||||
Telecommunications — 6.9% | ||||||||||||
20,000 | A3 Allmanna IT-och Telekomakti | 43,436 | 45,700 | |||||||||
500 | Alaska Communications Systems Group Inc. | 1,830 | 1,845 | |||||||||
700 | Bittium Oyj† | 4,945 | 4,951 | |||||||||
17,000 | Communications Systems Inc. | 78,392 | 77,690 | |||||||||
5,000 | Consolidated Communications Holdings Inc.† | 18,143 | 24,450 | |||||||||
4,800 | EXFO Inc.† | 16,745 | 16,368 | |||||||||
24,000 | HC2 Holdings Inc.† | 65,626 | 78,240 |
Shares | Cost | Market Value | ||||||||||
1,200 | Nuvera Communications Inc. | $ | 21,471 | $ | 23,160 | |||||||
400 | Otelco Inc., Cl. A† | 4,599 | 4,588 | |||||||||
10,000 | RXP Services Ltd. | 3,811 | 4,125 | |||||||||
258,998 | 281,117 | |||||||||||
Wireless Telecommunications Services — 1.2% | ||||||||||||
22,877 | NII Holdings Inc., Escrow† | 42,645 | 49,643 | |||||||||
TOTAL COMMON STOCKS | 3,078,880 | 3,846,348 | ||||||||||
WARRANTS — 1.0% | ||||||||||||
Business Services — 0.1% | ||||||||||||
4 | Internap Corp., expire 05/08/24† | 0 | 2,608 | |||||||||
Diversified Industrial — 0.9% | ||||||||||||
44,000 | Ampco-Pittsburgh Corp., expire 08/01/25† | 30,056 | 38,720 | |||||||||
Energy and Utilities — 0.0% | ||||||||||||
693 | Weatherford International plc, expire 12/13/23† | 0 | 123 | |||||||||
TOTAL WARRANTS | 30,056 | 41,451 | ||||||||||
TOTAL INVESTMENTS — 95.7% | $ | 3,108,936 | 3,887,799 | |||||||||
Other Assets and Liabilities (Net) — 4.3% | 175,885 | |||||||||||
NET ASSETS — 100.0% | $ | 4,063,684 |
(a) | Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy. |
† | Non-income producing security. |
Geographic Diversification | % of Market Value | Market Value | ||||
United States | 71.7 | % | $2,789,286 | |||
Europe | 19.8 | 768,482 | ||||
Canada | 7.6 | 296,645 | ||||
Asia/Pacific | 0.6 | 23,746 | ||||
Latin America | 0.3 | 9,640 | ||||
100.0 | % | $3,887,799 |
See accompanying notes to financial statements.
8
The Gabelli Global Mini Mites Fund
Statement of Assets and Liabilities
December 31, 2020
Assets: | ||||
Investments, at value (cost $3,108,936) | $ | 3,887,799 | ||
Foreign currency, at value (cost $76,043) | 76,214 | |||
Cash | 81,092 | |||
Receivable for investments sold | 61,703 | |||
Receivable for Fund shares sold | 1,402 | |||
Receivable from Adviser | 19,657 | |||
Dividends and interest receivable | 1,230 | |||
Prepaid expenses | 29,420 | |||
Total Assets | 4,158,517 | |||
Liabilities: | ||||
Payable for investments purchased | 25,811 | |||
Payable for investment advisory fees | 3,222 | |||
Payable for distribution fees | 36 | |||
Payable for legal and audit fees | 28,204 | |||
Payable for shareholder communications expenses | 26,799 | |||
Other accrued expenses | 10,761 | |||
Total Liabilities | 94,833 | |||
Net Assets | ||||
(applicable to 381,016 shares outstanding) | $ | 4,063,684 | ||
Net Assets Consist of: | ||||
Paid-in capital | $ | 3,477,944 | ||
Total distributable earnings | 585,740 | |||
Net Assets | $ | 4,063,684 | ||
Shares of Capital Stock, each at $0.001 par value: | ||||
Class AAA: | ||||
Net Asset Value, offering, and redemption price per share ($119,774 ÷ 11,229 shares outstanding; 75,000,000 shares authorized) | $ | 10.67 | ||
Class A: | ||||
Net Asset Value and redemption price per share ($11,135 ÷ 1,045 shares outstanding; 50,000,000 shares authorized) | $ | 10.66 | ||
Maximum offering price per share (NAV ÷ 0.9425, based on maximum sales charge of 5.75% of the offering price) | $ | 11.31 | ||
Class C: | ||||
Net Asset Value and offering price per share ($11,053 ÷ 1,040 shares outstanding; 25,000,000 shares authorized) | $ | 10.63 | (a) | |
Class I: | ||||
Net Asset Value, offering, and redemption price per share ($3,921,722 ÷ 367,702 shares outstanding; 25,000,000 shares authorized) | $ | 10.67 |
(a) Redemption price varies based on the length of time held.
Statement of Operations
For the Year Ended December 31, 2020
Investment Income: | ||||
Dividends (net of foreign withholding taxes of $267) | $ | 39,243 | ||
Interest | 93 | |||
Total Investment Income | 39,336 | |||
Expenses: | ||||
Investment advisory fees | 19,866 | |||
Distribution fees - Class AAA | 242 | |||
Distribution fees - Class A | 21 | |||
Distribution fees - Class C | 84 | |||
Registration expenses | 58,177 | |||
Legal and audit fees | 41,265 | |||
Shareholder communications expenses | 30,614 | |||
Shareholder services fees | 11,928 | |||
Custodian fees | 5,527 | |||
Directors’ fees | 412 | |||
Miscellaneous expenses | 14,041 | |||
Total Expenses | 182,177 | |||
Less: | ||||
Expenses paid indirectly by broker (See Note 6) | (1,189 | ) | ||
Expense reimbursements (See Note 3) | (163,109 | ) | ||
Net Expenses | 17,879 | |||
Net Investment Income | 21,457 | |||
Net Realized and Unrealized Gain/(Loss) on Investments and Foreign Currency: | ||||
Net realized loss on investments | (186,756 | ) | ||
Net realized gain on foreign currency transactions | 35 | |||
Net realized loss on investments and foreign currency transactions | (186,721 | ) | ||
Net change in unrealized appreciation/depreciation: | ||||
on investments | 816,832 | |||
on foreign currency translations | 505 | |||
Net change in unrealized appreciation/depreciation on investments and foreign currency translations | 817,337 | |||
Net Realized and Unrealized Gain/(Loss) on Investments and Foreign Currency | 630,616 | |||
Net Increase in Net Assets Resulting from Operations | $ | 652,073 |
See accompanying notes to financial statements.
9
The Gabelli Global Mini Mites Fund
Statement of Changes in Net Assets
Year Ended December 31, 2020 | Year Ended December 31, 2019 | |||||||
Operations: | ||||||||
Net investment income | $ | 21,457 | $ | 10,702 | ||||
Net realized gain/(loss) on investments and foreign currency transactions | (186,721 | ) | 48,685 | |||||
Net change in unrealized appreciation/depreciation on investments and foreign currency translations | 817,337 | 31,772 | ||||||
Net Increase in Net Assets Resulting from Operations | 652,073 | 91,159 | ||||||
Distributions to Shareholders: | ||||||||
Accumulated earnings | ||||||||
Class AAA | (649 | ) | (4,122 | ) | ||||
Class A | (60 | ) | (351 | ) | ||||
Class C | (60 | ) | (305 | ) | ||||
Class | (21,243 | ) | (61,048 | ) | ||||
Total Distributions to Shareholders | (22,012 | ) | (65,826 | ) | ||||
Capital Share Transactions: | ||||||||
Class AAA | (7,555 | ) | 38,276 | |||||
Class A | 60 | 351 | ||||||
Class C | 60 | 305 | ||||||
Class | 1,703,485 | 1,092,568 | ||||||
Net Increase in Net Assets from Capital Share Transactions | 1,696,050 | 1,131,500 | ||||||
Net Increase in Net Assets | 2,326,111 | 1,156,833 | ||||||
Net Assets: | ||||||||
Beginning of year | 1,737,573 | 580,740 | ||||||
End of year | $ | 4,063,684 | $ | 1,737,573 |
See accompanying notes to financial statements.
10
The Gabelli Global Mini Mites Fund
Financial Highlights
Selected data for a share of capital stock outstanding throughout the period:
Income (Loss) from Investment Operations | Distributions | Ratios to Average Net Assets/ Supplemental Data | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Period Ended December 31 | Net Asset Value, Beginning of Period | Net Investment Income (Loss)(a) | Net Realized and Unrealized Gain (Loss) on Investments | Total from Investment Operations | Net Investment Income | Net Realized Gain | Total Distributions | Net Asset Value, End of Period | Total Return† | Net Assets End of Period (in 000’s) | Net Investment Income (Loss) | Operating Expenses Before Reimbursement | Operating Expenses Net of Reimbursement(b) | Portfolio Turnover Rate | ||||||||||||||||||||||||||||||||||||||||||
Class AAA | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 9.26 | $ | 0.05 | $ | 1.42 | $ | 1.47 | $ | (0.06 | ) | — | $ | (0.06 | ) | $ | 10.67 | 15.9 | % | $ | 120 | 0.61 | % | 9.40 | % | 0.90 | %(c) | 63 | % | |||||||||||||||||||||||||||
2019 | 8.62 | 0.05 | 0.94 | 0.99 | (0.04 | ) | $ | (0.31 | ) | (0.35 | ) | 9.26 | 11.5 | 114 | 0.53 | 10.81 | 1.23 | (d) | 131 | |||||||||||||||||||||||||||||||||||||
2018(e) | 10.00 | 0.01 | (1.38 | ) | (1.37 | ) | (0.01 | ) | (0.00 | )(f) | (0.01 | ) | 8.62 | (13.7 | ) | 70 | 0.45 | (g) | 44.14 | (g) | 1.25 | (g) | 6 | |||||||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 9.26 | $ | 0.05 | $ | 1.41 | $ | 1.46 | $ | (0.06 | ) | — | $ | (0.06 | ) | $ | 10.66 | 15.8 | % | $ | 11 | 0.66 | % | 9.40 | % | 0.90 | %(c) | 63 | % | |||||||||||||||||||||||||||
2019 | 8.62 | 0.04 | 0.95 | 0.99 | (0.04 | ) | $ | (0.31 | ) | (0.35 | ) | 9.26 | 11.5 | 10 | 0.43 | 10.81 | 1.23 | (d) | 131 | |||||||||||||||||||||||||||||||||||||
2018(e) | 10.00 | 0.01 | (1.38 | ) | (1.37 | ) | (0.01 | ) | (0.00 | )(f) | (0.01 | ) | 8.62 | (13.7 | ) | 9 | 0.41 | (g) | 44.14 | (g) | 1.25 | (g) | 6 | |||||||||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 9.23 | $ | 0.05 | $ | 1.41 | $ | 1.46 | $ | (0.06 | ) | — | $ | (0.06 | ) | $ | 10.63 | 15.8 | % | $ | 11 | 0.66 | % | 10.15 | % | 0.90 | %(c) | 63 | % | |||||||||||||||||||||||||||
2019 | 8.61 | (0.02 | ) | 0.95 | 0.93 | (0.00 | )(f) | $ | (0.31 | ) | (0.31 | ) | 9.23 | 10.8 | 9 | (0.25 | ) | 11.56 | 1.92 | (d) | 131 | |||||||||||||||||||||||||||||||||||
2018(e) | 10.00 | (0.01 | ) | (1.38 | ) | (1.39 | ) | — | (0.00 | )(f) | (0.00 | ) | 8.61 | (13.9 | ) | 8 | (0.34 | )(g) | 44.89 | (g) | 2.00 | (g) | 6 | |||||||||||||||||||||||||||||||||
Class I | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 9.26 | $ | 0.09 | $ | 1.38 | $ | 1.47 | $ | (0.06 | ) | — | $ | (0.06 | ) | $ | 10.67 | 15.9 | % | $ | 3,922 | 1.11 | % | 9.15 | % | 0.90 | %(c) | 63 | % | |||||||||||||||||||||||||||
2019 | 8.61 | 0.08 | 0.94 | 1.02 | (0.06 | ) | $ | (0.31 | ) | (0.37 | ) | 9.26 | 11.8 | 1,605 | 0.84 | 10.56 | 1.00 | (d) | 131 | |||||||||||||||||||||||||||||||||||||
2018(e) | 10.00 | 0.02 | (1.40 | ) | (1.38 | ) | (0.01 | ) | (0.00 | )(f) | (0.01 | ) | 8.61 | (13.8 | ) | 494 | 0.79 | (g) | 43.89 | (g) | 1.00 | (g) | 6 |
† | Total return represents aggregate total return of a hypothetical investment at the beginning of the period and sold at the end of the period including reinvestment of distributions and does not reflect the applicable sales charges. Total return for a period of less than one year is not annualized. |
(a) | Per share amounts have been calculated using the average shares outstanding method. |
(b) | Under an expense reimbursement agreement with the Adviser, the Adviser reimbursed expenses of $163,109, $126,588, and $43,899 for the years ended December 31, 2020 and 2019 and the period ended December 31, 2018, respectively. |
(c) | The Fund received credits from a designated broker who agreed to pay certain Fund operating expenses for the year ended December 31, 2020. If credits had not been received, the ratios of operating expenses to average net assets would have been 0.96% for each Class of stock. |
(d) | The Fund incurred interest expense for the year ended December 31, 2019. If interest expense had not been incurred, the ratio of operating expenses to average net assets would have been 1.22% (Class AAA and Class A),1.90% (Class C), and 0.99% (Class I), respectively. |
(e) | The Fund commenced investment operations on October 1, 2018. |
(f) | Amount represents less than $0.005 per share. | |
(g) | Annualized. |
See accompanying notes to financial statements.
11
The Gabelli Global Mini Mites Fund
Notes to Financial Statements
1. Organization. The Gabelli Global Mini Mites Fund, a series of GAMCO Global Series Funds, Inc. (the Corporation), was incorporated on July 16, 1993 in Maryland. The Fund is a non-diversified open-end management investment company registered under the Investment Company Act of 1940, as amended (the 1940 Act), and is one of five separately managed portfolios (collectively, the Portfolios) of the Corporation. The Fund’s primary objective is long term capital appreciation by investing primarily in micro-capitalization equity securities. The Fund commenced investment operations on October 1, 2018.
2. Significant Accounting Policies. As an investment company, the Fund follows the investment company accounting and reporting guidance, which is part of U.S. generally accepted accounting principles (GAAP) that may require the use of management estimates and assumptions in the preparation of its 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.
The global outbreak of the novel coronavirus disease, known as COVID-19, has caused adverse effects on many companies, sectors, nations, regions and the markets in general, and may continue for an unpredictable duration. The effects of this pandemic may materially impact the value and performance of the Fund, its ability to buy and sell fund investments at appropriate valuations, and its ability to achieve its investment objectives.
New Accounting Pronouncements. To improve the effectiveness of fair value disclosure requirements, the Financial Accounting Standards Board issued Accounting Standard Update (ASU) 2018-13, Fair Value Measurement Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement (ASU 2018-13), which added, removed, and modified certain aspects relating to fair value disclosure. Management has fully adopted the ASU 2018-13 updates in these financial statements.
In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in the ASU provides optional temporary financial reporting relief from the effect of certain types of contract modifications due to the planned discontinuation of the London Interbank Offered Rate (LIBOR) and other interbank-offered based reference rates as of the end of 2021. The ASU is effective for certain reference rate-related contract modifications that occur during the period March 12, 2020 through December 31, 2022. Management has reviewed the requirements and believes the adoption of this ASU will not have a material impact on the 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).
12
The Gabelli Global Mini Mites Fund
Notes to Financial Statements (Continued)
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 obligations 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. Such debt obligations are valued through prices provided by a pricing service approved by the Board. Certain securities are valued principally using dealer quotations.
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 American Depositary Receipt 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.
The Fund employs a fair value model to adjust prices to reflect events affecting the values of certain portfolio securities which occur between the close of trading on the principal market for such securities (foreign exchanges and over-the-counter markets) at the time when net asset values of the Fund are determined. If the Fund’s valuation committee believes that a particular event would materially affect net asset value, further adjustment is considered.
The inputs and valuation techniques used to measure fair value of the Fund’s investments are summarized into three levels as described in the hierarchy below:
● | Level 1 — quoted prices in active markets for identical securities; |
● | Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.); and |
● | Level 3 — significant unobservable inputs (including the Board’s determinations as to the fair value of investments). |
13
The Gabelli Global Mini Mites Fund
Notes to Financial Statements (Continued)
A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input both individually and in the aggregate that is significant to the fair value measurement. 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 in securities by inputs used to value the Fund’s investments as of December 31, 2020 is as follows:
Valuation Inputs | ||||||||||||||||||||
Level 1 Quoted Prices | Level 2 Other Significant Observable Inputs | Level 3 Significant Unobservable Inputs | Total Market Value at 12/31/20 | |||||||||||||||||
INVESTMENTS IN SECURITIES: | ||||||||||||||||||||
ASSETS (Market Value): | ||||||||||||||||||||
Common Stocks: | ||||||||||||||||||||
Automotive: Parts and Accessories | $ | 345,546 | $ | 77,009 | — | $ | 422,555 | |||||||||||||
Business Services | 119,163 | — | $ | 486 | 119,649 | |||||||||||||||
Consumer Products | 188,434 | 29,850 | — | 218,284 | ||||||||||||||||
Entertainment | 87,732 | 15,225 | — | 102,957 | ||||||||||||||||
Hotels and Gaming | 116,970 | — | 42,297 | 159,267 | ||||||||||||||||
Telecommunications | 235,417 | 45,700 | — | 281,117 | ||||||||||||||||
Wireless Telecommunications Services | — | 49,643 | — | 49,643 | ||||||||||||||||
Other Industries (a) | 2,492,876 | — | — | 2,492,876 | ||||||||||||||||
Total Common Stocks | 3,586,138 | 217,427 | 42,783 | 3,846,348 | ||||||||||||||||
Warrants (a) | 38,843 | 2,608 | — | 41,451 | ||||||||||||||||
TOTAL INVESTMENTS IN SECURITIES – ASSETS | $ | 3,624,981 | $ | 220,035 | $ | 42,783 | $ | 3,887,799 | ||||||||||||
(a) | Please refer to the Schedule of Investments for the industry classifications of these portfolio holdings. |
During the year ended December 31, 2020, the Fund did not have material transfers into or out of Level 3.
The following table reconciles Level 3 investments:
Balance as of 12/31/19 | Accrued discounts/ (premiums) | Realized gain/ (loss) | Net Change in unrealized appreciation/ depreciation† | Purchases | Sales | Transfers into Level 3†† | Transfers out of Level 3†† | Balance as of 12/31/20 | Net change in unrealized appreciation/ depreciation during the period on Level 3 investments still held at 12/31/20† | |||||||||||||||||||||||||||||||
INVESTMENTS IN SECURITIES: | ||||||||||||||||||||||||||||||||||||||||
ASSETS (Market Value): | ||||||||||||||||||||||||||||||||||||||||
Common Stocks (a) | $37,154 | — | — | $5,176 | $453 | — | — | — | $42,783 | $5,176 | ||||||||||||||||||||||||||||||
Warrants (a) | 0 | — | — | — | — | — | — | 0 | — | — | ||||||||||||||||||||||||||||||
TOTAL INVESTMENTS IN SECURITIES | $37,154 | — | — | $5,176 | $453 | — | — | — | $42,783 | (b) | $5,176 |
(a) | Please refer to the Schedule of Investments for the industry classifications of these portfolio holdings. |
(b) | The Level 3 common stock was valued at the price of the proposed merger transaction and net realizable value of corporate action. |
The total value of these securities at December 31, 2020 was $42,783. The inputs for the valuation of these securities were based on the judgement of the Adviser according to procedures approved by the Board.
† | Net change in unrealized appreciation/depreciation on investments is included in the related amounts in the Statement of Operations. |
†† | The Fund’s policy is to recognize transfers into and out of Level 3 as of the beginning of the reporting period. |
14
The Gabelli Global Mini Mites Fund
Notes to Financial Statements (Continued)
Additional Information to Evaluate Qualitative Information.
General. The Fund uses recognized industry pricing services – approved by the Board and unaffiliated with the Adviser – to value most of its securities, and uses broker quotes provided by market makers of securities not valued by these and other recognized pricing sources. Several different pricing feeds are received to value domestic equity securities, international equity securities, preferred equity securities, and fixed income securities. The data within these feeds are ultimately sourced from major stock exchanges and trading systems where these securities trade. The prices supplied by external sources are checked by obtaining quotations or actual transaction prices from market participants. If a price obtained from the pricing source is deemed unreliable, prices will be sought from another pricing service or from a broker/dealer that trades that security or similar securities.
Fair Valuation. Fair valued securities may be common or preferred equities, warrants, options, rights, or fixed income obligations. Where appropriate, Level 3 securities are those for which market quotations are not available, such as securities not traded for several days, or for which current bids are not available, or which are restricted as to transfer. Among the factors to be considered to fair value a security are recent prices of comparable securities that are publicly traded, reliable prices of securities not publicly traded, the use of valuation models, current analyst reports, valuing the income or cash flow of the issuer, or cost if the preceding factors do not apply. The circumstances of Level 3 securities are frequently monitored to determine if fair valuation measures continue to apply.
The Adviser reports quarterly to the Board the results of the application of fair valuation policies and procedures. These may include backtesting the prices realized in subsequent trades of these fair valued securities to fair values previously recognized.
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 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 purchase 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 inability 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 securities of comparable U.S. issuers.
15
The Gabelli Global Mini Mites Fund
Notes to Financial Statements (Continued)
Foreign Taxes. The Fund may be subject to foreign taxes on income, gains on investments, or currency repatriation, a portion of which may be recoverable. The Fund will accrue such taxes and recoveries as applicable, based upon its current interpretation of tax rules and regulations that exist in the markets in which it invests.
Restricted Securities. The Fund may invest up to 15% of its net assets in securities for which the markets are restricted. Restricted securities include securities whose disposition is subject to substantial legal or contractual restrictions. The sale of restricted securities often requires more time and results in higher brokerage charges or dealer discounts and other selling expenses than does the sale of securities eligible for trading on national securities exchanges or in the over-the-counter markets. Restricted securities may sell at a price lower than similar securities that are not subject to restrictions on resale. Securities freely saleable among qualified institutional investors under special rules adopted by the SEC may be treated as liquid if they satisfy liquidity standards established by the Board. The continued liquidity of such securities is not as well assured as that of publicly traded securities, and accordingly the Board will monitor their liquidity. As of December 31, 2020, the Fund did not hold any restricted securities.
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 an accrual basis. Premiums and discounts on debt securities are amortized using the effective yield to maturity method or amortized to earliest call date, if applicable. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities that are recorded as soon after the ex-dividend date as the Fund becomes aware of such dividends.
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.
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 GAAP. 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 for federal income tax purposes 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. Permanent differences were primarily due to prior year post financial statement adjustments. These reclassifications have no impact on the NAV of the Fund. For the year ended December 31, 2020, reclassifications were made to decrease paid-in capital by $207, with an offsetting adjustment to total distributable earnings.
16
The Gabelli Global Mini Mites Fund
Notes to Financial Statements (Continued)
The tax character of distributions paid during the years ended December 31, 2020 and 2019 was as follows:
Year Ended December 31, 2020 | Year Ended December 31, 2019 | |||||||||
Distributions paid from: | ||||||||||
Ordinary income (inclusive of short term capital gains) | $ | 22,012 | $ | 65,826 | ||||||
Total. | $ | 22,012 | $ | 65,826 |
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, 2020, the components of accumulated earnings/losses on a tax basis were as follows:
Undistributed ordinary income | $ | 8,067 | ||
Accumulated capital loss carryforwards | (143,801 | ) | ||
Net unrealized appreciation on investments and foreign currency translations | 721,474 | |||
Total | $ | 585,740 |
At December 31, 2020, the Fund had net capital loss carryforwards for federal income tax purposes which are available to reduce future required distributions of net capital gains to shareholders for an unlimited period. These capital losses will retain their character as short term or long term capital losses.
Short term capital loss carryforward with no expiration | $ | 83,875 | ||
Long term capital loss carryforward with no expiration | 59,926 | |||
Total capital loss carryforward with no expiration | $ | 143,801 |
At December 31, 2020, the temporary difference between book basis and tax basis unrealized appreciation was primarily due to deferral of losses from wash sales for tax purposes and mark-to-market adjustments on investments in passive foreign investment companies.
The following summarizes the tax cost of investments and the related net unrealized appreciation at December 31, 2020:
Cost | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Appreciation | |||||
Investments | $3,166,840 | $889,818 | $(168,859) | $720,959 |
The Fund is required to evaluate 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. Income tax and related interest and penalties would be recognized by the Fund as tax expense in the Statement of Operations if the tax positions were deemed not to meet the more-likely-than-not threshold. During the year ended December 31, 2020, the Fund did not incur any income tax, interest, or penalties. As of December 31, 2020, the Adviser has reviewed all open tax years and concluded that there was no impact to the Fund’s net assets or results of operations. The Fund’s federal and state tax returns will remain subject to examination for three years. On an ongoing basis, the Adviser will monitor the Fund’s tax positions to determine if adjustments to this conclusion are necessary.
17
The Gabelli Global Mini Mites Fund
Notes to Financial Statements (Continued)
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.
Through November 30, 2019, the Adviser had agreed to waive and/or to reimburse expenses of the Fund to the extent necessary to maintain the annualized total operating expenses of the Fund (excluding brokerage costs, acquired fund fees and expenses, interest, taxes, and extraordinary expenses) at no more than an annual rate of 1.25%, 1.25%, 2.00%, and 1.00% of the value of the Fund’s average daily net assets for Class AAA, Class A, Class C, and Class I. Effective December 1, 2019, the Adviser amended its contractual agreement with respect to each share class of the Fund to waive its investment advisory fees and/or to reimburse expenses to the extent necessary to maintain the annualized total operating expenses of the Fund (excluding brokerage costs, acquired fund fees and expenses, interest, taxes, and extraordinary expenses) until at least April 30, 2021, at no more than 0.90% of the value of the Fund’s average daily net assets for each share class of the Fund. During the year ended December 31, 2020, the Adviser reimbursed the Fund in the amount of $163,109. In addition, the Fund has agreed, during the two year period following any waiver or reimbursement by the Adviser, to repay such amount to the extent, that after giving effect to the repayment, such adjusted annualized total operating expenses (continuing the same foregoing exclusions as above) of the Fund would not exceed 0.90% of the value of the Fund’s average daily net assets for each share class of the Fund. The agreement is renewable annually. At December 31, 2020, the cumulative amount which the Fund may repay the Adviser, subject to the terms above, is $289,697:
For the year ended December 31, 2019, expiring December 31, 2021 | $ | 126,588 | |||
For the year ended December 31, 2020, expiring December 31, 2022 | 163,109 | ||||
$ | 289,697 |
The Corporation pays each Director who is not considered to be an affiliated person an annual retainer of $6,000 plus $1,000 for each Board meeting attended and they are reimbursed for any out of pocket expenses incurred in attending meetings. All Board committee members receive $1,000 per meeting attended. The Chairman of the Audit Committee receives an annual fee of $3,000, and the Lead Director receives an annual fee of $2,000. A Director may receive a single meeting fee, allocated among the participating funds, for attending certain meetings held on behalf of multiple funds. Directors who are directors or employees of the Adviser or an affiliated company receive no compensation or expense reimbursement from the Corporation.
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. Under the Class AAA, Class A, and Class C Share Plans, payments are authorized to G.distributors, LLC (the Distributor), an affiliate of the Adviser, at annual rates of 0.25%, 0.25%, 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 sales of securities during the year ended December 31, 2020, other than short term securities and U.S. Government obligations, aggregated $2,808,418 and $1,214,757, respectively.
18
The Gabelli Global Mini Mites Fund
Notes to Financial Statements (Continued)
6. Transactions with Affiliates and Other Arrangements. During the year ended December 31, 2020, the Fund paid brokerage commissions on security trades of $5,564 to G.research, LLC, an affiliate of the Adviser.
During the year ended December 31, 2020, the Fund received credits from a designated broker who agreed to pay certain Fund operating expenses. The amount of such expenses paid through this directed brokerage arrangement during this period was $1,189.
The cost of calculating the Fund’s NAV per share is a Fund expense pursuant to the Advisory Agreement. Under the sub-administration agreement with Bank of New York Mellon, the fees paid include the cost of calculating the Fund’s NAV. The Fund reimburses the Adviser for this service. During the year ended December 31, 2020, the Adviser did not seek reimbursements for this expense.
7. Line of Credit. The Fund participates in an unsecured line of credit which expires on March 3, 2021 and may be renewed annually, of up to $75,000,000 under 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 a floating rate equal to the higher of the overnight Federal Funds rate plus 125 basis points or the 30 day ICE LIBOR plus 125 basis points in effect on that day. This amount, if any, would be included in “Interest expense” in the Statement of Operations. During the year ended December 31, 2020, there were no borrowings under the line of credit.
8. Capital Stock. The Fund currently offers three classes of shares – Class AAA Shares, Class A Shares, and Class I Shares. Effective January 27, 2020, (the Effective Date) the Fund’s Class AAA, Class A and Class C Shares “closed to purchases from new investors”. “Closed to purchases from new investors” means (i) with respect to the Class AAA and Class A shares, no new investors may purchase shares of such classes, but existing shareholders may continue to purchase additional shares of such classes after the Effective Date, and (ii) with respect to Class C Shares, neither new investors nor existing shareholders may purchase any additional shares of such class after the Effective Date. These changes had no effect on existing shareholders’ ability to redeem shares of the Fund as described in the Fund’s Prospectus. Additionally, on the Effective Date Class I shares of the Fund became available to investors with a minimum initial investment amount of $1,000 when purchasing shares directly through the Distributor, or investors purchasing Class I shares through brokers or financial intermediaries that have entered into selling agreements with the Distributor specifically with respect to Class I shares.
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 as an increase in paid-in capital. The redemption fees retained by the Fund during the years ended December 31, 2020 and 2019, if any, can be found in the Statement of Changes in Net Assets under Redemption Fees.
19
The Gabelli Global Mini Mites Fund
Notes to Financial Statements (Continued)
Transactions in shares of capital stock were as follows:
Year Ended December 31, 2020 | Year Ended December 31, 2019 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Class AAA | ||||||||||||||||
Shares sold | 424 | $ | 3,649 | 7,140 | $ | 65,719 | ||||||||||
Shares issued upon reinvestment of distributions | 62 | 643 | 448 | 4,122 | ||||||||||||
Shares redeemed | (1,553 | ) | (11,847 | ) | (3,402 | ) | (31,565 | ) | ||||||||
Net increase/(decrease) | (1,067 | ) | $ | (7,555 | ) | 4,186 | $ | 38,276 | ||||||||
Class A | ||||||||||||||||
Shares issued upon reinvestment of distributions | 6 | $ | 60 | 39 | $ | 351 | ||||||||||
Net increase | 6 | $ | 60 | 39 | $ | 351 | ||||||||||
Class C | ||||||||||||||||
Shares issued upon reinvestment of distributions | 6 | $ | 60 | 33 | $ | 305 | ||||||||||
Net increase | 6 | $ | 60 | 33 | $ | 305 | ||||||||||
Class I | ||||||||||||||||
Shares sold | 208,543 | $ | 1,788,894 | 133,571 | $ | 1,256,583 | ||||||||||
Shares issued upon reinvestment of distributions | 2,037 | 21,243 | 6,643 | 61,048 | ||||||||||||
Shares redeemed | (16,159 | ) | (106,652 | ) | (24,252 | ) | (225,063 | ) | ||||||||
Net increase | 194,421 | $ | 1,703,485 | 115,962 | $ | 1,092,568 |
9. Significant Shareholder. As of December 31, 2020, approximately 47.7% of the Fund was beneficially owned by the Adviser and its affiliates, including managed accounts for which the affiliates of the Adviser have voting control but disclaim pecuniary interest.
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. Management has reviewed the Fund’s existing contracts and expects the risk of loss to be remote.
11. Subsequent Events. Management has evaluated the impact on the Fund of all subsequent events occurring through the date the financial statements were issued and has determined that there were no subsequent events requiring recognition or disclosure in the financial statements.
20
The Gabelli Global Mini Mites Fund
Report of Independent Registered Public Accounting Firm
To the Shareholders of The Gabelli Global Mini Mites Fund and the Board of Directors of GAMCO Global Series Funds, Inc.
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of The Gabelli Global Mini Mites Fund (the “Fund”) (one of the funds constituting GAMCO Global Series Funds, Inc. (the “Corporation”)), including the schedule of investments, as of December 31, 2020, 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, the financial highlights for each of the two years in the period then ended and the period from October 1, 2018 (commencement of operations) through December 31, 2018 and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund (one of the funds constituting GAMCO Global Series Funds, Inc.) at December 31, 2020, 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 its financial highlights for each of the two years in the period then ended and the period from October 1, 2018 (commencement of operations) through December 31, 2018, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements are the responsibility of the Corporation’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Corporation in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Corporation is not required to have, nor were we engaged to perform, an audit of the Corporation’s internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Corporation’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2020, by correspondence with the custodians and brokers or by other appropriate auditing procedures where replies from brokers were not received. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
We have served as the auditor of one or more Gabelli/GAMCO Funds investment companies since 1992.
Philadelphia, Pennsylvania
February 26, 2021
21
The Gabelli Global Mini Mites Fund
Board Consideration and Re-Approval of Investment Advisory Agreement (Unaudited)
During the six months ended December 31, 2020, the Board of Directors of the Corporation approved the continuation of the investment advisory agreement with the Adviser for the Fund on the basis of the recommendation by the directors (the Independent Board Members) who are not interested persons of the Fund. The following paragraphs summarize the material information and factors considered by the Independent Board Members as well as their conclusions relative to such factors.
Nature, Extent, and Quality of Services. The Independent Board Members considered information regarding the portfolio managers, the depth of the analyst pool available to the Adviser and the Fund’s portfolio managers, the scope of supervisory, administrative, shareholder and other services supervised or provided by the Adviser and the absence of significant service problems reported to the Board. The Independent Board Members noted the experience, length of service and reputation of the Fund’s portfolio managers.
Investment Performance. The Independent Board Members reviewed the short term performance of the Fund (as of September 30, 20) against a peer group of seven other comparable funds prepared by the Adviser (the Adviser Peer Group), and against a peer group prepared by Broadridge (the Broadridge Performance Peer Group) consisting of all retail and institutional global small/mid cap fund, regardless of asset size or primary channel of distribution, as represented by the Lipper Global Small/Mid Cap Index. The Independent Board Members noted that the Fund’s performance was in the fourth (lowest) quartile for the one year period, as measured against the Adviser Peer Group. Against the Broadridge Performance Peer Group, the Independent Board Members noted that the Fund’s performance was in the fifth quintile for the one year period. The Independent Board Members noted that at its current size, the Fund was not competitive among its peer groups and encouraged the Adviser to continue to explore ways to increase the size of the Fund. The Independent Board Members also noted that it was important to provide the portfolio management team sufficient time to establish a performance history.
Profitability. The Independent Board Members reviewed summary data regarding the profitability of the Fund to the Adviser both with a pro rata administrative overhead charge and with a stand alone administrative charge and noted the effect of the expense limitation agreement. The Independent Board Members also noted that a portion of the Fund’s portfolio transactions were executed by an affiliated broker of the Adviser and that another affiliated broker of the Adviser received distribution fees and minor amounts of sales commissions.
Economies of Scale. The Independent Board Members discussed the major elements of the Adviser’s cost structure and the relationship of those elements to potential economies of scale and reviewed data provided by the Adviser.
Sharing of Economies of Scale. The Independent Board Members noted that the investment management fee schedule for the Fund does not take into account any potential economies of scale that may develop.
Service and Cost Comparisons. The Independent Board Members compared the expense ratios of the investment management fee, other expenses and total expenses of the Fund to similar expense ratios of the Adviser Peer Group and a peer group of ten other global small/mid cap funds selected by Broadridge (the Broadridge Expense Peer Group), and noted that the Adviser’s management fee includes substantially all administrative services of the Fund as well as investment advisory services. The Independent Board Members noted the effect of the expense limitation agreement in place for the Fund. The Board Members noted that the Fund’s total expense ratio was the third lowest for the Adviser Peer Group and the second lowest for the Broadridge Expense Peer Group. The Independent Board Members also noted that the advisory fee structure was the same as that in effect for most of the Gabelli funds. The Independent Board Members were presented with, but did not consider
22
The Gabelli Global Mini Mites Fund
Board Consideration and Re-Approval of Investment Advisory Agreement (Unaudited) (Continued)
to be material to their decision, various information comparing the advisory fee to the fee for other types of accounts managed by the Adviser.
Conclusions. The Independent Board Members concluded that the Fund enjoyed highly experienced portfolio management services and good ancillary services. The Independent Board Members noted the reasons for the Fund’s underperformance and the steps the Adviser was taking to improve performance. The Independent Board Members noted that they would need to revaluate the Fund’s performance in the future after the Fund has been in operation for a longer period of time. The Independent Board Members also requested that the Adviser present at the regular Board member to be held in second quarter of 2021 a report on steps the Adviser has taken to improve the Fund’s performance and increase the size of the Fund. The Independent Board Members noted that the Board approved amendments to the contractual Expense Deferral Agreement between the Adviser and the Corporation, on behalf of each Fund, pursuant to which the net expense ratio for each share class of each Fund was reduced to 0.90%, effective December 1, 2019. The Independent Board Members noted that these fee waiver and expense reimbursement arrangements are in effect through April 30, 2021 and may be terminated only by the Board. The Independent Board Members also concluded that the Fund’s expense ratios and profitability to the Adviser were acceptable, and that economies of scale were not a significant factor in their thinking at this time. The Board Members did not view the potential profitability of ancillary services as material to their decision. On the basis of the foregoing and without assigning particular weight to any single conclusion, the Independent Board Members determined to recommend continuation of the investment management agreement to the full Board.
Based on a consideration of all these factors in their totality, the Board Members, including all of the Independent Board Members, determined that each Fund’s advisory fee was appropriate in light of the quality of services provided and in light of the other factors described above that the Board deemed relevant. Accordingly, the Board Members determined to approve the continuation of each Fund’s Advisory Agreement. The Board Members based their decision on evaluations of all these factors as a whole and did not consider any one factor as all-important or controlling.
23
The Gabelli Global Mini Mites Fund
Additional Fund Information (Unaudited)
The business and affairs of the Fund are managed under the direction of the Corporation’s Board of Directors. Information pertaining to the Directors and officers of the Fund is set forth below. The Corporation’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 Gabelli Global Mini Mites Fund at One Corporate Center, Rye, NY 10580-1422.
Name, Position(s) Address1 and Age | Term of Office and Length of Time Served2 | Number of Funds in Fund Complex Overseen by Director | Principal Occupation(s) During Past Five Years | Other Directorships Held by Director3 | ||||
INTERESTED DIRECTORS4: | ||||||||
Mario J. Gabelli, CFA Director and Chief Investment Officer Age: 78 | Since 1993 | 33 | Chairman, Chief Executive Officer, and Chief Investment Officer– Value Portfolios of GAMCO Investors, Inc. and Chief Investment Officer– Value Portfolios of Gabelli Funds, LLC and GAMCO Asset Management Inc.; Director/ Trustee or Chief Investment Officer of other registered investment companies within the Fund Complex; Chief Executive Officer of GGCP, Inc.; Executive Chairman of Associated Capital Group, Inc. | Chairman of the Board and Chief Executive Officer of LICT Corp. (multimedia and communication services company); Director of CIBL, Inc. (broadcasting and wireless communications); Director of ICTC Group Inc. (communications) (2013-2018) | ||||
John D. Gabelli Director Age: 76 | Since 1993 | 12 | Former Senior Vice President of G.research, LLC | — | ||||
INDEPENDENT DIRECTORS5: | ||||||||
E. Val Cerutti Director Age: 81 | Since 2001 | 7 | Chief Executive Officer of Cerutti Consultants, Inc. | Director of The LGL Group, Inc. (diversified manufacturing) (1990-2009) | ||||
Anthony J. Colavita6 Director Age: 85 | Since 1993 | 20 | President of the law firm of Anthony J. Colavita, P.C. | — | ||||
Werner J. Roeder Director Age: 80 | Since 1993 | 20 | Retired physician; Former Vice President of Medical Affairs (Medical Director) of New York Presbyterian/Lawrence Hospital (1999-2014) | — | ||||
Anthonie C. van Ekris6 Director Age: 86 | Since 1993 | 23 | Chairman and Chief Executive Officer of BALMAC International, Inc. (global import/ export company) | — | ||||
Salvatore J. Zizza7 Director Age: 75 | Since 2004 | 31 | President of Zizza & Associates Corp. (private holding company); President of Bergen Cove Realty Inc.; Chairman of Harbor Diversified, Inc. (pharmaceuticals) (2009-2018); Chairman of BAM (semiconductor and aerospace manufacturing)(2000-2018); Chairman of Metropolitan Paper Recycling Inc. (recycling) (2005-2014) | Director and Chairman of Trans- Lux Corporation (business services); Director and Chairman of Harbor Diversified Inc. (pharmaceuticals) (2009-2018) |
24
The Gabelli Global Mini Mites Fund
Additional Fund Information (Continued) (Unaudited)
Name, Position(s) Address1 and Age | Term of Office and Length of Time Served2 | Principal Occupation(s) During Past Five Years | ||
OFFICERS: | ||||
Bruce N. Alpert President Age: 69 | Since 1993 | Executive Vice President and Chief Operating Officer of Gabelli Funds, LLC since 1988; Officer of registered investment companies within the Fund Complex; Senior Vice President of GAMCO Investors, Inc. since 2008; Chief Executive Officer of G.distributors, LLC (January 2020-November 2020) | ||
John C. Ball Treasurer Age: 44 | Since 2017 | Treasurer of registered investment companies within the Fund Complex since 2017; Vice President and Assistant Treasurer of AMG Funds, 2014-2017 | ||
Peter Goldstein Secretary Age: 67 | Since 2020 | General Counsel, Gabelli Funds, LLC since July 2020; General Counsel and Chief Compliance Officer, Buckingham Capital Management, Inc. (2012-2020); Chief Legal Officer and Chief Compliance Officer, The Buckingham Research Group, Inc. (2012-2020) | ||
Richard J. Walz Chief Compliance Officer Age: 61 | Since 2013 | Chief Compliance Officer of registered investment companies within the Fund Complex since 2013; Chief Compliance Office for Gabelli Funds, LLC since 2015 |
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 Corporation’s By-Laws and Articles of Incorporation. For Officers, includes time served in other officer positions with the corporation. 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 | 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. |
4 | “Interested person” of the Corporation as defined in the 1940 Act. Messrs. Mario J. Gabelli and John D. Gabelli, who are brothers, are each considered an “interested person” because of their affiliation with Gabelli Funds, LLC which acts as the Corporation’s investment adviser. |
5 | Directors who are not interested persons are considered “Independent” Directors. |
6 | Mr. Colavita’s son, Anthony S. Colavita, serves as a director of other funds in the Gabelli/GAMCO Fund Complex. Mr. van Ekris is an independent director of Gabelli International Ltd., Gabelli Fund LDC, GAMA Capital Opportunities Master Ltd., and GAMCO International SICAV, all of which may be deemed to be controlled by Mario J. Gabelli and/or affiliates and, in that event, would be deemed to be under common control with the Fund’s Adviser. |
7 | Mr. Zizza is an independent director of Gabelli International Ltd., which may be deemed to be controlled by Mario J. Gabelli and/or affiliates and in that event would be deemed to be under common control with the Fund’s Adviser. On September 9, 2015, Mr. Zizza entered into a settlement with the SEC to resolve an inquiry relating to an alleged violation regarding the making of false statements or omissions to the accountants of a company concerning a related party transaction. The company in question is not an affiliate of, nor has any connection to, the Fund. Under the terms of the settlement, Mr. Zizza, without admitting or denying the SEC’s findings and allegation, paid $150,000 and agreed to cease and desist committing or causing any future violations of Rule 13b2-2 of the Securities Exchange Act of 1934, as amended. The Board has discussed this matter and has determined that it does not disqualify Mr. Zizza from serving as an Independent Director. |
25
THE GABELLI GLOBAL MINI MITES FUND
One Corporate Center
Rye, NY 10580-1422
Portfolio Management Team Biographies
Mario J. Gabelli, CFA, is Chairman, Chief Executive Officer, and Chief Investment Officer - Value Portfolios of GAMCO Investors, Inc. that he founded in 1977, and Chief Investment Officer - Value Portfolios of Gabelli Funds, LLC and GAMCO Asset Management Inc. He is also Executive Chairman of Associated Capital Group, Inc. Mr. Gabelli is a summa cum laude graduate of Fordham University and holds an MBA degree from Columbia Business School and Honorary Doctorates from Fordham University and Roger Williams University.
Sarah Donnelly joined Gabelli in 1999 as a junior research analyst working with the consumer staples and media analysts. Currently she is a portfolio manager of Gabelli Funds, LLC, a Senior Vice President, and the Food, Household, and Personal Care products research analyst for Gabelli & Company. In 2013, she was named the Health & Wellness research platform leader. Ms. Donnelly received a BS in Business Administration with a concentration in Finance and minor in History from Fordham University.
Ashish Sinha joined GAMCO UK in 2012 as a research analyst. Prior to joining the Firm, Mr. Sinha was a research analyst at Morgan Stanley in London for seven years and has covered European Technology, Mid-Caps and Business Services. He also worked in planning and strategy at Birla Sun Life Insurance in India. Currently Mr. Sinha is a portfolio manager of Gabelli Funds, LLC and an Assistant Vice President of GAMCO Asset Management UK. Mr. Sinha has a BSBA degree from the Institute of Management Studies and an MB from IIFT.
Hendi Susanto joined Gabelli in 2007 as the lead technology research analyst. He spent his early career in supply chain management consulting and operations in the technology industry. He currently is a portfolio manager of Gabelli Funds, LLC and a Vice President of Associated Capital Group Inc. Mr. Susanto received a BS degree summa cum laude from the University of Minnesota, an MS from Massachusetts Institute of Technology, and an MBA from the Wharton School of Business.
Chong-Min Kang joined the Gabelli in 2007 as a research analyst. He currently is a portfolio manager of Gabelli Funds, LLC and a Senior Vice President of GAMCO Investors Inc. Mr. Kang received a BA degree from Boston College and an MBA from the Columbia Business School.
2020 TAX NOTICE TO SHAREHOLDERS (Unaudited)
For the year ended December 31, 2020, the Fund paid each share class $0.0581 per share of ordinary income (comprised of net investment income). For the year ended December 31, 2020, 100% 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 0.20% of the ordinary income distribution as qualified interest income pursuant to the Tax Relief, Unemployment Reauthorization, and Job Creation Act of 2010.
U.S. Government Income
The percentage of the ordinary income distribution paid by the Fund during 2020 which was derived from U.S. Treasury securities was 0.17%. 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 Fund did not meet this strict requirement in 2020. The percentage of U.S. Government securities held as of December 31, 2020 was 0.00%. 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.
We have separated the portfolio managers’ 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 managers’ commentary is unrestricted. Both the commentary and the financial statements, including the portfolio of investments, will be available on our website at www.gabelli.com.
GAMCO Global Series Funds, Inc.
THE GABELLI GLOBAL MINI MITES FUND
One Corporate Center
Rye, New York 10580-1422
t | 800-GABELLI (800-422-3554) |
f | 914-921-5118 |
e | info@gabelli.com GABELLI.COM |
Net Asset Value per share available daily
by calling 800-GABELLI after 7:00 P.M.
BOARD OF DIRECTORS Mario J. Gabelli, CFA Chairman and Chief Executive Officer, GAMCO Investors, Inc. Executive Chairman, Associated Capital Group, Inc.
E. Val Cerutti Chief Executive Officer, Cerutti Consultants, Inc.
Anthony J. Colavita President, Anthony J. Colavita, P.C.
John D. Gabelli Former Senior Vice President, G.research, LLC
Werner J. Roeder Former Medical Director, Lawrence Hospital
Anthonie C. van Ekris Chairman, BALMAC International, Inc.
Salvatore J. Zizza Chairman, Zizza & Associates Corp. | OFFICERS Bruce N. Alpert President John C. Ball Treasurer Peter Goldstein Secretary Richard J. Walz Chief Compliance Officer
DISTRIBUTOR G.distributors, LLC
CUSTODIAN State Street Bank and Trust Company
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT DST Asset Manager Solutions, Inc.
LEGAL COUNSEL Skadden, Arps, Slate, Meagher & Flom LLP |
This report is submitted for the general information of the shareholders of The Gabelli Global Mini Mites Fund. It is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. |
GAB3634Q420AR
The Gabelli International Small Cap Fund
| |
Caesar M. P. Bryan Portfolio Manager |
To Our Shareholders,
For the year ended December 31, 2020, the net asset value (NAV) total return per Class AAA Share of The Gabelli International Small Cap Fund was 19.2% compared with a total return of 12.3% for the Morgan Stanley Capital International (MSCI) Europe, Australasia and Far East (EAFE) Small Cap Index. Other classes of shares are available. See page 3 for performance information for all classes.
Enclosed are the financial statements, including the schedule of investments, as of December 31, 2020.
Performance Discussion (Unaudited)
The Fund’s objective is to provide investors with appreciation of capital. Current income is a secondary objective of the Fund.
The Fund’s investment strategy is to invest primarily in a portfolio of common stocks of non-U.S. companies. Under normal market conditions, the Fund will invest at least 80% of its net assets in the stocks of “small cap companies.” Gabelli Funds, LLC, the Adviser, currently characterizes small capitalization companies as those with total common stock market values of $3 billion or less at the time of investment.
The Fund may invest in non-U.S. markets throughout the world, including emerging markets. Ordinarily, the Fund will invest in the securities of at least five countries outside the U.S.
In selecting investments, the Adviser seeks issuers with a dominant market share or niche franchise in growing and/or consolidating industries. The Adviser considers for purchase the stocks of small capitalization companies with experienced management, strong balance sheets, and rising free cash flow and earnings. The Adviser’s goal is to invest long term in the stocks of companies trading at reasonable market valuations relative to perceived economic worth.
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s annual and semiannual shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Fund’s website (www.gabelli.com), and you will be notified by mail each time a report is posted and provided with a website link to access the report. If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. To elect to receive all future reports on paper free of charge, please contact your financial intermediary, or, if you invest directly with the Fund, you may call 800-422-3554 or send an email request to info@gabelli.com. |
Global equities fell sharply in the first quarter of 2020, as the coronavirus outbreak spread to over 200 countries around the world and stringent “shelter in place” measures brought a number of industries to an abrupt halt. Investor debate shifted from evaluating the possibility of global recession to determining how long and deep it would be.
Global equities rebounded strongly in the second quarter as major central banks and governments responded with massive stimulus packages to the COVID-19 pandemic and economies started to reopen. As lockdown measures eased, strong bounce-back in a number of economic indicators provided reasons for investor optimism. For example, U.S. retail trade sales were up 16.8% month-over-month in May, while Eurozone retail sales rose 17.8% during the same period. U.S. weekly jobless claims declined from 6.9 million for the week ended March 28 to 1.4 million for the week ending July 2. In addition, reports of positive trial data from potential coronavirus vaccines and therapeutics contributed to the market rebound. With that said, a re-acceleration in COVID-19 new cases in the United States in June and a relative lack of success in controlling the spread of the virus in several large emerging markets (Brazil, India, Russia) remained a concern.
Global equities gained in the third quarter, helped by gradual reopening of economies, with major central banks remaining largely accommodative, as well as optimism around progress made in the development of COVID-19 vaccines and therapeutics. On a regional basis, the sector exhibited divergent results, with solid gains, in U.S. dollar terms, in North America (+9.4%) and Japan (+12.8%), and relative softness in Europe (-3.1%) and Latin America (-1.5%).
Global equities continued to rally in the fourth quarter, with particular strength in November on positive COVID-19 vaccine announcements from Pfizer/BioNTech, Moderna, and AstraZeneca/Oxford. As a result, sectors that had previously been hit most severely by the pandemic, such as energy and financials (worst performers through the first nine months of 2020), led the market in the quarter.
Selected holdings that contributed positively to performance in 2020 were: Bachem Holding AG (2.4% of net assets as of December 31, 2020) is a leading manufacturer and supplier of peptides and oligonucleotides based APIs to pharma including generics and research organizations; Addlife AB (2.2%) operates within the Nordic life sciences sector. The Company primarily focuses on selected niches in the market areas of diagnostics, medical technology, and biomedical research and laboratory analysis; and Kinnevik AB (1.1%) is a venture capital firm specializing in investments in growth capital.
Some of our weaker performing holdings during the year were: Loomis AB (1.0%), provides solutions for the distribution, handling, storage, and recycling of cash and other valuables. The company offers a range of solutions for cash in transit, cash management services, and international valuables logistics; Raccoon Holdings Inc. (0.6%), operates online retailing platform businesses. The Company provides super delivery, cloud-based ordering system, payment, assurance, and matching service between manufacturers and brands; and Yushin Precision Equipment Co., Ltd. (No longer held as December 31, 2020), develops, produces, sells, and maintains take-out robots for injection-molded products and peripheral equipment in Japan, Europe, China, Taiwan, North America, rest of Asia, and internationally.
Thank you for your investment in The Gabelli International Small Cap Fund.
We appreciate your confidence and trust.
2
Comparative Results
Average Annual Returns through December 31, 2020 (a) (Unaudited) | ||||||||||||||||||||
1 Year | 5 Year | 10 Year | 15 Year | Since Inception (5/11/98) | ||||||||||||||||
Class AAA (GABOX) | 19.16 | % | 8.99 | % | 6.55 | % | 5.91 | % | 6.95 | % | ||||||||||
MSCI EAFE Small Cap Index | 12.34 | 9.40 | 7.85 | 6.14 | 8.33 | (b) | ||||||||||||||
MSCI All Country (AC) World Index | 16.25 | 12.26 | 9.13 | 7.20 | 6.02 | (c) | ||||||||||||||
Lipper Global Large-Cap Growth Fund Classification | 27.59 | 15.43 | 11.31 | 8.64 | 7.60 | |||||||||||||||
Lipper Global Multi-Cap Growth Fund Classification | 33.26 | 15.36 | 11.60 | 8.57 | 9.23 | (d) | ||||||||||||||
Class A (GOCAX) | 19.13 | 8.51 | 6.31 | 5.75 | 6.85 | |||||||||||||||
With sales charge (e) | 12.28 | 7.23 | 5.68 | 5.33 | 6.57 | |||||||||||||||
Class C (GGLCX) | 19.19 | 7.98 | 5.65 | 5.04 | 6.39 | |||||||||||||||
With contingent deferred sales charge (f) | 18.19 | 7.98 | 5.65 | 5.04 | 6.39 | |||||||||||||||
Class I (GLOIX) | 19.11 | 9.23 | 6.91 | 6.20 | 7.15 |
In the current prospectuses dated April 29, 2020, the gross expense ratios for Class AAA, A, C, and I Shares are 3.42%, 3.42%, 4.17%, and 3.17%, respectively, and the net expense ratio for all share classes after contractual reimbursements by Gabelli Funds, LLC, (the Adviser) is 0.91%. See page 11 for the expense ratios for the year ended December 31, 2020. The contractual reimbursements are in effect through April 30, 2021. Class AAA and Class I Shares do not have a sales charge. The maximum sales charge for Class A Shares and Class C Shares is 5.75% 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, 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. 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. Returns would have been lower had the Adviser not reimbursed certain expenses of the Fund. The Fund imposes a 2% redemption fee on shares sold or exchanged within seven days of purchase. Investors should carefully consider the investment objectives, risks, charges, and expenses of the Fund before investing. The prospectuses contain information about these and other matters and should be read carefully before investing. To obtain a prospectus, please visit our website at www.gabelli.com. Investing in foreign securities involves risks not ordinarily associated with investments in domestic issues, including currency fluctuation, economic, and political risks. The Class AAA Share NAVs are used to calculate performance for the periods prior to the issuance of Class A Shares, Class C Shares, and Class I Shares on March 12, 2000, November 23, 2001, and January 11, 2008, respectively. The actual performance of the Class A Shares and Class C Shares would have been lower due to the additional fees and 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 MSCI EAFE Small Cap Index has 2,304 constituents and captures small cap representation across Developed Markets countries around the world, excluding the U.S. and Canada. The MSCI AC World Index is an unmanaged market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets. The MSCI AC World Index consists of 45 country indices comprising 24 developed and 21 emerging market country indices. The Lipper Global Large-Cap Growth Fund Classification and the Lipper Global Multi-Cap Growth Fund Classification reflect the average performance of mutual funds classified in those particular categories. Dividends are considered reinvested. You cannot invest directly in an index. |
(b) | MSCI EAFE Small Cap Index inception date is December 31, 1998. |
(c) | The MSCI AC World Index since inception performance is as of April 30, 1994. |
(d) | Lipper Global Multi-Cap Growth Fund Classification since inception performance is as of September 30, 1998. (e) Performance results include the effect of the maximum 5.75% sales charge at the beginning of the period. |
(f) | Assuming payment of the 1% maximum contingent deferred sales charge imposed on redemptions made within one year of purchase. |
3
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN
THE GABELLI INTERNATIONAL SMALL CAP FUND (CLASS AAA SHARES), LIPPER GLOBAL
MULTI-CAP GROWTH FUND CLASSIFICATION, MSCI AC WORLD INDEX, AND MSCI EAFE SMALL CAP INDEX (Unaudited)
* | 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. |
4
The Gabelli International Small Cap Fund
Disclosure of Fund Expenses (Unaudited)
For the Six Month Period from July 1, 2020 through December 31, 2020 | 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, 2020.
Beginning Account Value 07/01/20 | Ending Account Value 12/31/20 | Annualized Expense Ratio | Expenses Paid During Period* | |||||
The Gabelli International Small Cap Fund | ||||||||
Actual Fund Return | ||||||||
Class AAA | $1,000.00 | $1,310.00 | 0.91% | $5.28 | ||||
Class A | $1,000.00 | $1,309.90 | 0.91% | $5.28 | ||||
Class C | $1,000.00 | $1,310.20 | 0.91% | $5.28 | ||||
Class I | $1,000.00 | $1,310.30 | 0.91% | $5.28 | ||||
Hypothetical 5% Return | ||||||||
Class AAA | $1,000.00 | $1,020.56 | 0.91% | $4.62 | ||||
Class A | $1,000.00 | $1,020.56 | 0.91% | $4.62 | ||||
Class C | $1,000.00 | $1,020.56 | 0.91% | $4.62 | ||||
Class I | $1,000.00 | $1,020.56 | 0.91% | $4.62 |
* | 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 (184 days), then divided by 366. |
5
Summary of Portfolio Holdings (Unaudited)
The following table presents portfolio holdings as a percent of net assets as of December 31, 2020:
The Gabelli International Small Cap Fund |
Consumer Staples | 18.8 | % | ||
Health Care | 15.0 | % | ||
Consumer Discretionary | 14.8 | % | ||
Materials | 13.9 | % | ||
Information Technology | 9.4 | % | ||
Industrials | 9.2 | % | ||
Communication Services | 7.4 | % |
Financials | 7.3 | % | ||
Real Estate | 3.3 | % | ||
U.S. Government Obligations | 1.9 | % | ||
Other Assets and Liabilities (Net) | (1.0 | )% | ||
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-PORT. 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-PORT 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 800-SEC-0330.
Proxy Voting
The Fund files Form N-PX with its complete proxy voting record for the twelve months ended June 30, no later than August 31 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.
6
The Gabelli International Small Cap Fund
Schedule of Investments — December 31, 2020
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS — 98.1% | ||||||||||||
CONSUMER STAPLES — 18.8% | ||||||||||||
15,000 | Austevoll Seafood ASA | $ | 129,584 | $ | 153,189 | |||||||
4,500 | Fevertree Drinks plc | 126,414 | 155,676 | |||||||||
14,000 | Glanbia plc | 153,874 | 177,805 | |||||||||
30,000 | Hotel Chocolat Group plc† | 131,832 | 173,331 | |||||||||
2,662 | Interparfums SA† | 82,577 | 139,675 | |||||||||
2,700 | Kameda Seika Co. Ltd. | 123,760 | 126,778 | |||||||||
4,000 | Kobe Bussan Co. Ltd. | 62,798 | 122,900 | |||||||||
2,000 | Laurent-Perrier | 181,836 | 183,429 | |||||||||
2,500 | Milbon Co. Ltd. | 101,252 | 159,290 | |||||||||
3,000 | Nomad Foods Ltd.† | 74,970 | 76,260 | |||||||||
80,000 | Premier Foods plc† | 43,658 | 109,619 | |||||||||
32,000 | PZ Cussons plc | 121,541 | 100,613 | |||||||||
4,000 | Sakata Seed Corp. | 118,342 | 138,717 | |||||||||
35,000 | Stock Spirits Group plc | 126,796 | 128,364 | |||||||||
2,000 | Viscofan SA | 121,711 | 141,582 | |||||||||
TOTAL CONSUMER STAPLES | 1,700,945 | 2,087,228 | ||||||||||
CONSUMER DISCRETIONARY — 14.8% | ||||||||||||
27,000 | 888 Holdings plc | 58,355 | 105,674 | |||||||||
5,555 | AcadeMedia AB | 39,150 | 57,506 | |||||||||
5,500 | Beneteau SA | 102,689 | 63,151 | |||||||||
30,000 | boohoo Group plc† | 127,609 | 140,829 | |||||||||
11,820 | Entain plc† | 107,595 | 183,338 | |||||||||
7,300 | Gamesys Group plc | 84,421 | 113,637 | |||||||||
1,900 | Hunter Douglas NV† | 140,051 | 148,776 | |||||||||
2,200 | JINS Holdings Inc. | 125,148 | 144,733 | |||||||||
50,000 | Mandarin Oriental International Ltd.† | 107,060 | 85,090 | |||||||||
90,000 | NagaCorp. Ltd. | 59,863 | 118,210 | |||||||||
4,000 | Raccoon Holdings Inc. | 89,115 | 66,236 | |||||||||
2,000 | Tod’s SpA† | 132,379 | 69,893 | |||||||||
15,000 | Treatt plc | 96,439 | 167,786 | |||||||||
10,000 | Zojirushi Corp. | 93,734 | 178,939 | |||||||||
TOTAL CONSUMER DISCRETIONARY | 1,363,608 | 1,643,798 | ||||||||||
HEALTH CARE — 14.0% | ||||||||||||
13,712 | AddLife AB, Cl. B | 66,615 | 239,988 | |||||||||
600 | Bachem Holding AG, Cl. B | 84,777 | 268,330 | |||||||||
1,400 | Gerresheimer AG | 136,090 | 150,974 | |||||||||
23,000 | IRRAS AB† | 47,176 | 23,258 | |||||||||
3,300 | MedPeer Inc.† | 156,496 | 261,548 | |||||||||
15,000 | Nanosonics Ltd.† | 32,031 | 92,800 | |||||||||
230 | Siegfried Holding AG | 76,088 | 169,276 | |||||||||
15,000 | Tristel plc | 71,265 | 108,101 | |||||||||
1,300 | Vetoquinol SA | 81,468 | 132,513 | |||||||||
600 | Ypsomed Holding AG | 100,294 | 100,440 | |||||||||
TOTAL HEALTH CARE | 852,300 | 1,547,228 | ||||||||||
MATERIALS — 13.9% | ||||||||||||
6,000 | Alamos Gold Inc., Cl. A | 44,345 | 52,500 | |||||||||
13,850 | Alamos Gold Inc., Toronto, Cl. A | 102,362 | 120,993 |
Shares | Cost | Market Value | ||||||||||
18,000 | B2Gold Corp. | $ | 51,262 | $ | 100,825 | |||||||
20,000 | Centamin plc | 41,669 | 33,855 | |||||||||
6,500 | Centerra Gold Inc. | 78,632 | 75,269 | |||||||||
10,000 | Eldorado Gold Corp.† | 108,334 | 132,700 | |||||||||
5,844 | Endeavour Mining Corp.† | 115,856 | 135,988 | |||||||||
5,000 | Labrador Iron Ore Royalty Corp. | 90,519 | 128,093 | |||||||||
4,000 | MAG Silver Corp.† | 51,468 | 81,892 | |||||||||
9,000 | Osisko Gold Royalties Ltd. | 108,792 | 114,047 | |||||||||
75,000 | Perseus Mining Ltd.† | 76,499 | 75,187 | |||||||||
7,000 | Pretium Resources Inc.† | 78,698 | 80,360 | |||||||||
2,000 | Sumitomo Bakelite Co. Ltd. | 87,393 | 68,973 | |||||||||
5,000 | T. Hasegawa Co. Ltd. | 97,468 | 105,241 | |||||||||
10,000 | Teranga Gold Corp.† | 38,044 | 107,314 | |||||||||
65,000 | Westgold Resources Ltd.†. | 110,777 | 132,561 | |||||||||
TOTAL MATERIALS | 1,282,118 | 1,545,798 | ||||||||||
INFORMATION TECHNOLOGY — 9.4% | ||||||||||||
20,000 | F-Secure OYJ† | 93,894 | 93,872 | |||||||||
7,500 | GMO internet Inc. | 198,867 | 215,362 | |||||||||
12,000 | Infomart Corp. | 106,047 | 114,603 | |||||||||
20,000 | NCC Group plc | 57,230 | 69,308 | |||||||||
30,000 | Network International Holdings plc† | 116,006 | 135,171 | |||||||||
3,000 | Nynomic AG† | 78,031 | 133,771 | |||||||||
75,000 | Oxford Metrics plc | 83,687 | 96,922 | |||||||||
6,000 | PSI Software AG | 157,350 | 177,714 | |||||||||
TOTAL INFORMATION TECHNOLOGY. | 891,112 | 1,036,723 | ||||||||||
INDUSTRIALS — 9.2% | ||||||||||||
15,000 | Aida Engineering Ltd. | 152,919 | 140,623 | |||||||||
40,000 | Chemring Group plc | 100,043 | 155,736 | |||||||||
2,000 | Clarkson plc | 78,000 | 73,807 | |||||||||
4,000 | Loomis AB | 148,615 | 110,306 | |||||||||
8,000 | Maruwa Unyu Kikan Co. Ltd. | 122,710 | 170,739 | |||||||||
11,000 | Qleanair Holding AB† | 52,139 | 70,107 | |||||||||
20,000 | Rotork plc | 68,941 | 86,997 | |||||||||
22,000 | Signature Aviation plc† | 72,928 | 115,948 | |||||||||
23,000 | Teraoka Seisakusho Co. Ltd. | 139,576 | 90,956 | |||||||||
TOTAL INDUSTRIALS | 935,871 | 1,015,219 | ||||||||||
COMMUNICATION SERVICES — 7.4% | ||||||||||||
2,600 | Akatsuki Inc. | 133,334 | 104,391 | |||||||||
1,000 | Bengo4.com Inc.† | 108,546 | 98,943 | |||||||||
2,000 | Blue Prism Group plc† | 45,014 | 46,969 | |||||||||
9,000 | Manchester United plc, Cl. A | 159,353 | 150,660 | |||||||||
4,190 | Modern Times Group MTG AB, Cl. B† | 66,034 | 74,494 | |||||||||
4,190 | Nordic Entertainment Group AB, Cl. B† | 92,012 | 234,450 | |||||||||
2,000 | Xilam Animation SA† | 100,466 | 114,621 | |||||||||
TOTAL COMMUNICATION SERVICES | 704,759 | 824,528 | ||||||||||
FINANCIALS — 7.3% | ||||||||||||
45,000 | Brewin Dolphin Holdings plc | 188,042 | 187,310 | |||||||||
2,500 | Kinnevik AB, Cl. B | 57,571 | 125,592 |
See accompanying notes to financial statements.
7
The Gabelli International Small Cap Fund
Schedule of Investments (Continued) — December 31, 2020
Shares | Cost | Market Value | ||||||||||
COMMON STOCKS (Continued) | ||||||||||||
FINANCIALS (Continued) | ||||||||||||
15,000 | Polar Capital Holdings plc | $ | 94,682 | $ | 143,295 | |||||||
4,000 | Rothschild & Co.† | 142,628 | 125,256 | |||||||||
20,000 | Tamburi Investment Partners SpA | 139,176 | 167,683 | |||||||||
31,538 | XPS Pensions Group plc | 76,002 | 55,701 | |||||||||
TOTAL FINANCIALS | 698,101 | 804,837 | ||||||||||
REAL ESTATE — 3.3% | ||||||||||||
25,000 | Impact Healthcare Reit plc | 34,145 | 37,264 | |||||||||
4,000 | PATRIZIA AG | 88,694 | 128,495 | |||||||||
7,000 | Tosei Corp. | 70,534 | 80,339 | |||||||||
3,500 | Warehouses De Pauw CVA, REIT | 56,435 | 121,340 | |||||||||
TOTAL REAL ESTATE | 249,808 | 367,438 | ||||||||||
TOTAL COMMON STOCKS | 8,678,622 | 10,872,797 | ||||||||||
PREFERRED STOCKS — 1.0% | ||||||||||||
HEALTH CARE — 1.0% | ||||||||||||
1,400 | Draegerwerk AG & Co. KGaA, 0.190% | 123,037 | 108,365 |
Principal Amount | Cost | Market Value | ||||||||||
U.S. GOVERNMENT OBLIGATIONS — 1.9% | ||||||||||||
$ | 215,000 | U.S. Treasury Bills, 0.070% to 0.082%††, 02/25/21 to 03/11/21 | $ | 214,972 | $ | 214,979 | ||||||
TOTAL INVESTMENTS — 101.0 | $ | 9,016,631 | 11,196,141 | |||||||||
Other Assets and Liabilities (Net — (1.0)% | (107,835 | ) | ||||||||||
NET ASSETS — 100.0% | $ | 11,088,306 |
† | Non-income producing security. |
†† | Represents annualized yields at dates of purchase. |
REIT | Real Estate Investment Trust |
Geographic Diversification | % of Market Value | Market Value | ||||||
Europe | 62.1 | % | $ | 6,958,019 | ||||
Japan | 21.3 | 2,389,313 | ||||||
Canada | 8.9 | 993,993 | ||||||
Asia/Pacific. | 3.5 | 385,639 | ||||||
Latin America | 2.3 | 254,198 | ||||||
United States | 1.9 | 214,979 | ||||||
100.0 | % | $ | 11,196,141 |
See accompanying notes to financial statements.
8
The Gabelli International Small Cap Fund
Statement of Assets and Liabilities
December 31, 2020
Assets: | ||||
Investments, at value (cost $9,016,631) | $ | 11,196,141 | ||
Foreign currency, at value (cost $81) | 82 | |||
Receivable for Fund shares sold | 780 | |||
Receivable from Adviser | 20,687 | |||
Dividends receivable | 21,527 | |||
Prepaid expenses | 20,477 | |||
Total Assets | 11,259,694 | |||
Liabilities: | ||||
Payable to custodian | 44,611 | |||
Payable for Fund shares redeemed | 2,036 | |||
Payable for investment advisory fees | 9,045 | |||
Payable for distribution fees | 1,397 | |||
Payable for legal and audit fees | 30,804 | |||
Payable for shareholder communications expenses | 28,653 | |||
Other accrued expenses. | 54,842 | |||
Total Liabilities | 171,388 | |||
Net Assets (applicable to 711,169 shares outstanding) | $ | 11,088,306 | ||
Net Assets Consist of: | ||||
Paid-in capital | $ | 9,436,382 | ||
Total distributable earnings | 1,651,924 | |||
Net Assets | $ | 11,088,306 | ||
Shares of Capital Stock, each at $0.001 par value: | ||||
Class AAA: | ||||
Net Asset Value, offering, and redemption price per share ($6,616,634 ÷ 428,534 shares outstanding; 75,000,000 shares authorized) | $ | 15.44 | ||
Class A: | ||||
Net Asset Value and redemption price per share ($101,424 ÷ 6,585 shares outstanding; 50,000,000 shares authorized) | $ | 15.40 | ||
Maximum offering price per share (NAV ÷ 0.9425, based on maximum sales charge of 5.75% of the offering price) | $ | 16.34 | ||
Class C: | ||||
Net Asset Value and offering price per share ($28,176 ÷ 2,032 shares outstanding; 25,000,000 shares authorized) | $ | 13.87 | (a) | |
Class I: | ||||
Net Asset Value, offering, and redemption price per share ($4,342,072 ÷ 274,018 shares outstanding; 25,000,000 shares authorized) | $ | 15.85 |
(a) | Redemption price varies based on the length of time held. |
Statement of Operations
For the Year Ended December 31, 2020
Investment Income: | ||||
Dividends (net of foreign withholding taxes of $13,010) | $ | 107,867 | ||
Interest | 836 | |||
Total Investment Income | 108,703 | |||
Expenses: | ||||
Investment advisory fees | 78,510 | |||
Distribution fees - Class AAA | 14,355 | |||
Distribution fees - Class A | 208 | |||
Distribution fees - Class C | 233 | |||
Legal and audit fees | 44,138 | |||
Administration out-of-pocket fees | 33,724 | |||
Shareholder communications expenses | 33,156 | |||
Registration expenses | 32,567 | |||
Shareholder services fees | 21,404 | |||
Custodian fees | 6,970 | |||
Directors’ fees | 1,853 | |||
Interest expense | 686 | |||
Miscellaneous expenses | 13,601 | |||
Total Expenses | 281,405 | |||
Less: | ||||
Expenses reimbursements (See Note 3) | (210,061 | ) | ||
Net Expenses | 71,344 | |||
Net Investment Income | 37,359 | |||
Net Realized and Unrealized Gain/(Loss) on Investments and Foreign Currency: | ||||
Net realized loss on investments | (468,728 | ) | ||
Net realized gain on foreign currency transactions | 586 | |||
Net realized loss on investments and foreign currency transactions | (468,142 | ) | ||
Net change in unrealized appreciation/depreciation: | ||||
on investments | 2,059,615 | |||
on foreign currency translations | 362 | |||
Net change in unrealized appreciation/depreciation on investments and foreign currency translations | 2,059,977 | |||
Net Realized and Unrealized Gain/(Loss) on Investments and Foreign Currency | 1,591,835 | |||
Net Increase in Net Assets Resulting from Operations | $ | 1,629,194 |
See accompanying notes to financial statements.
9
The Gabelli International Small Cap Fund
Statement of Changes in Net Assets
Year Ended December 31, 2020 | Year Ended December 31, 2019 | |||||||
Operations: | ||||||||
Net investment income | $ | 37,359 | $ | 116,308 | ||||
Net realized gain/(loss) on investments and foreign currency transactions | (468,142 | ) | 379,899 | |||||
Net change in unrealized appreciation on investments and foreign currency translations | 2,059,977 | 1,293,938 | ||||||
Net Increase in Net Assets Resulting from Operations | 1,629,194 | 1,790,145 | ||||||
Distributions to Shareholders: | ||||||||
Accumulated earnings | ||||||||
Class AAA | (52,265 | ) | (413,625 | ) | ||||
Class A | (803 | ) | (5,111 | ) | ||||
Class C | (247 | ) | (1,466 | ) | ||||
Class I | (33,373 | ) | (84,650 | ) | ||||
Total Distributions to Shareholders | (86,688 | ) | (504,852 | ) | ||||
Capital Share Transactions: | ||||||||
Class AAA | (735,124 | ) | (627,085 | ) | ||||
Class A | (3,141 | ) | (3,385 | ) | ||||
Class C | (2,268 | ) | (8,781 | ) | ||||
Class I | 2,491,024 | (474,101 | ) | |||||
Net Increase/(Decrease) in Net Assets from Capital Share Transactions | 1,750,491 | (1,113,352 | ) | |||||
Redemption Fees | 5 | 109 | ||||||
Net Increase in Net Assets | 3,293,002 | 172,050 | ||||||
Net Assets: | ||||||||
Beginning of year | 7,795,304 | 7,623,254 | ||||||
End of year | $ | 11,088,306 | $ | 7,795,304 |
See accompanying notes to financial statements.
10
The Gabelli International Small Cap Fund
Financial Highlights
Selected data for a share of capital stock outstanding throughout each year:
Income (Loss) from Investment Operations | Distributions | Ratios to Average Net Assets/ Supplemental Data | ||||||||||||||||||||||||||||||||||||||||||||||
Year Ended December 31 | Net Asset Value, Beginning of Year | Net Investment Income (Loss)(a) | Net Realized and Unrealized Gain (Loss) on Investments | Total from Investment Operations | Net Investment Income | Net Realized Gain | Return of Capital | Total Distributions | Redemption Fees(a)(b) | Net Asset Value, End of Year | Total Return† | Net Assets End of Year (in 000’s) | Net Investment Income (Loss) | Operating Expenses Before Reimburse- ment | Operating Expenses Net of Reimburse- ment(c)(d) | Portfolio Turnover Rate | ||||||||||||||||||||||||||||||||
Class AAA | ||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $13.06 | $0.06 | $2.44 | $2.50 | $(0.12 | ) | — | — | $(0.12 | ) | $0.00 | $15.44 | 19.2 | % | $6,617 | 0.51 | % | 3.65 | % | 0.91 | % | 22 | % | |||||||||||||||||||||||||
2019 | 11.09 | 0.19 | (e) | 2.68 | 2.87 | (0.22 | ) | $(0.68 | ) | — | (0.90 | ) | 0.00 | 13.06 | 25.9 | 6,366 | 1.50 | (e) | 3.41 | 1.00 | 9 | |||||||||||||||||||||||||||
2018 | 18.55 | 0.19 | (4.13 | ) | (3.94 | ) | (0.19 | ) | (3.32 | ) | $(0.01 | ) | (3.52 | ) | 0.00 | 11.09 | (20.9 | ) | 5,954 | 1.07 | 3.11 | 1.00 | (f) | 26 | ||||||||||||||||||||||||
2017 | 22.41 | 0.04 | 6.19 | 6.23 | (0.13 | ) | (9.96 | ) | — | (10.09 | ) | — | 18.55 | 28.1 | 8,599 | 0.16 | 3.01 | 1.67 | 71 | |||||||||||||||||||||||||||||
2016 | 23.45 | 0.27 | (0.02 | ) | 0.25 | (0.28 | ) | (1.01 | ) | — | (1.29 | ) | 0.00 | 22.41 | 1.1 | 7,764 | 1.14 | 2.80 | 1.38 | (g)(h) | 4 | |||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $13.03 | $0.06 | $2.43 | $2.49 | $(0.12 | ) | — | — | $(0.12 | ) | $0.00 | $15.40 | 19.1 | % | $101 | 0.50 | % | 3.65 | % | 0.91 | % | 22 | % | |||||||||||||||||||||||||
2019 | 11.05 | 0.07 | (e) | 2.67 | 2.74 | (0.08 | ) | $(0.68 | ) | — | (0.76 | ) | 0.00 | 13.03 | 24.9 | 91 | 0.60 | (e) | 3.41 | 1.91 | 9 | |||||||||||||||||||||||||||
2018 | 18.44 | 0.01 | (4.08 | ) | (4.07 | ) | — | (3.32 | ) | — | (3.32 | ) | 0.00 | 11.05 | (21.7 | ) | 81 | 0.04 | 3.11 | 2.01 | (f) | 26 | ||||||||||||||||||||||||||
2017 | 22.33 | (0.05 | ) | 6.18 | 6.13 | (0.06 | ) | (9.96 | ) | — | (10.02 | ) | — | 18.44 | 27.7 | 155 | (0.19 | ) | 3.01 | 2.00 | 71 | |||||||||||||||||||||||||||
2016 | 23.35 | 0.27 | (0.01 | ) | 0.26 | (0.27 | ) | (1.01 | ) | — | (1.28 | ) | 0.00 | 22.33 | 1.1 | 166 | 1.14 | 2.80 | 1.39 | (g)(h) | 4 | |||||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $11.74 | $0.05 | $2.20 | $2.25 | $(0.12 | ) | — | — | $(0.12 | ) | $0.00 | $13.87 | 19.2 | % | $28 | 0.48 | % | 4.40 | % | 0.91 | % | 22 | % | |||||||||||||||||||||||||
2019 | 10.02 | (0.01 | )(e) | 2.41 | 2.40 | — | $(0.68 | ) | — | (0.68 | ) | 0.00 | 11.74 | 24.0 | 26 | (0.12 | )(e) | 4.16 | 2.61 | 9 | ||||||||||||||||||||||||||||
2018 | 17.26 | (0.11 | ) | (3.81 | ) | (3.92 | ) | — | (3.32 | ) | — | (3.32 | ) | 0.00 | 10.02 | (22.3 | ) | 31 | (0.67 | ) | 3.86 | 2.76 | (f) | 26 | ||||||||||||||||||||||||
2017 | 21.52 | (0.23 | ) | 5.93 | 5.70 | — | (9.96 | ) | — | (9.96 | ) | — | 17.26 | 26.8 | 43 | (0.92 | ) | 3.76 | 2.75 | 71 | ||||||||||||||||||||||||||||
2016 | 22.60 | 0.20 | (0.01 | ) | 0.19 | (0.26 | ) | (1.01 | ) | — | (1.27 | ) | 0.00 | 21.52 | 0.9 | 39 | 0.87 | 3.55 | 1.66 | (g)(h) | 4 | |||||||||||||||||||||||||||
Class I | ||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $13.41 | $0.05 | $2.51 | $2.56 | $(0.12 | ) | — | — | $(0.12 | ) | $0.00 | $15.85 | 19.1 | % | $4,342 | 0.39 | % | 3.40 | % | 0.91 | % | 22 | % | |||||||||||||||||||||||||
2019 | 11.39 | 0.19 | (e) | 2.77 | 2.96 | (0.26 | ) | $(0.68 | ) | — | (0.94 | ) | 0.00 | 13.41 | 26.0 | 1,312 | 1.52 | (e) | 3.16 | 1.00 | 9 | |||||||||||||||||||||||||||
2018 | 18.93 | 0.19 | (4.22 | ) | (4.03 | ) | (0.18 | ) | (3.32 | ) | $(0.01 | ) | (3.51 | ) | 0.00 | 11.39 | (20.9 | ) | 1,557 | 1.07 | 2.86 | 1.00 | (f) | 26 | ||||||||||||||||||||||||
2017 | 22.68 | 0.21 | 6.31 | 6.52 | (0.31 | ) | (9.96 | ) | — | (10.27 | ) | — | 18.93 | 29.0 | 2,031 | 0.82 | 2.76 | 1.00 | 71 | |||||||||||||||||||||||||||||
2016 | 23.71 | 0.36 | (0.01 | ) | 0.35 | (0.37 | ) | (1.01 | ) | — | (1.38 | ) | 0.00 | 22.68 | 1.5 | 1,246 | 1.50 | 2.55 | 1.01 | (g)(h) | 4 |
† | Total return represents aggregate total return of a hypothetical investment at the beginning of the year and sold at the end of the year including reinvestment of distributions and does not reflect the applicable sales charges. |
(a) | Per share amounts have been calculated using the average shares outstanding method. |
(b) | Amount represents less than $0.005 per share. |
(c) | Under an expense reimbursement agreement with the Adviser, the Adviser reimbursed expenses of $210,061, $184,323, $201,091, $144,403, and $137,877 for the years ended December 31, 2020, 2019, 2018, 2017, and 2016, respectively. |
(d) | The Fund incurred interest expense. If interest expense had not been incurred, the ratio of operating expenses to average net assets would have been 0.90% for each Class for the year ended December 31, 2020, and 2.00% (Class A), 2.75% (Class C) and with no impact to Class AAA and Class I for the year ended December 31, 2018. For the years ended December 31, 2019, 2017, and 2016, the effect of interest expense was minimal. |
(e) | Includes income resulting from special dividends. Without these dividends, the per share income amounts would have been 0.15 (Class AAA), 0.04 (Class A), (0.05) (Class C), and 0.15 (Class I), and the net investment income ratio would have been 1.19% (Class AAA), 0.29% (Class A), (0.43%) (Class C), and 1.21% (Class I), respectively. |
(f) | The Fund received credits from a designated broker who agreed to pay certain Fund operating expenses. For the year ended December 31, 2018, the effect of expense reimbursements was minimal. |
(g) | The Fund incurred tax expense for the year ended December 31, 2016. If tax expense had not been incurred, the ratios of operating expenses to average net assets would have been 1.37% and (Class AAA), 1.38% (Class A), 1.65% (Class C), and 1.00% (Class I), respectively. |
(h) | During the year ended December 31, 2016, the Fund received reimbursements of custody expenses paid in prior years. Had such reimbursement (allocated by relative net asset values of the Fund’s share classes) been included in this period, the expense ratios would have been 1.17% (Class AAA), 1.18% (Class A), 1.45% (Class C), and 0.80% (Class I). |
See accompanying notes to financial statements.
11
The Gabelli International Small Cap Fund
Notes to Financial Statements
1. Organization. The Gabelli International Small Cap Fund, a series of GAMCO Global Series Funds, Inc. (the Corporation), was incorporated on July 16, 1993 in Maryland. The Fund is a non-diversified open-end management investment company registered under the Investment Company Act of 1940, as amended (the 1940 Act), and is one of five separately managed portfolios (collectively, the Portfolios) of the Corporation. The Fund’s primary objective is capital appreciation. The Fund commenced investment operations on May 11, 1998.
2. Significant Accounting Policies. As an investment company, the Fund follows the investment company accounting and reporting guidance, which is part of U.S. generally accepted accounting principles (GAAP) that may require the use of management estimates and assumptions in the preparation of its 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.
The global outbreak of the novel coronavirus disease, known as COVID-19, has caused adverse effects on many companies, sectors, nations, regions and the markets in general, and may continue for an unpredictable duration. The effects of this pandemic may materially impact the value and performance of the Fund, its ability to buy and sell fund investments at appropriate valuations, and its ability to achieve its investment objectives.
New Accounting Pronouncements. To improve the effectiveness of fair value disclosure requirements, the Financial Accounting Standards Board issued Accounting Standard Update (ASU) 2018-13, Fair Value Measurement Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement (ASU 2018-13), which added, removed, and modified certain aspects relating to fair value disclosure. Management has fully adopted the ASU 2018-13 updates in these financial statements.
In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in the ASU provides optional temporary financial reporting relief from the effect of certain types of contract modifications due to the planned discontinuation of the London Interbank Offered Rate (LIBOR) and other interbank-offered based reference rates as of the end of 2021. The ASU is effective for certain reference rate-related contract modifications that occur during the period March 12, 2020 through December 31, 2022. Management has reviewed the requirements and believes the adoption of this ASU will not have a material impact on the 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
12
The Gabelli International Small Cap Fund
Notes to Financial Statements (Continued)
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 obligations 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. Such debt obligations are valued through prices provided by a pricing service approved by the Board. Certain securities are valued principally using dealer quotations.
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 American Depositary Receipt 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.
The Fund employs a fair value model to adjust prices to reflect events affecting the values of certain portfolio securities which occur between the close of trading on the principal market for such securities (foreign exchanges and over-the-counter markets) at the time when net asset values of the Fund are determined. If the Fund’s valuation committee believes that a particular event would materially affect net asset value, further adjustment is considered. Such securities are classified as Level 2 in the fair value hierarchy presented below.
The inputs and valuation techniques used to measure fair value of the Fund’s investments are summarized into three levels as described in the hierarchy below:
● | Level 1 — quoted prices in active markets for identical securities; |
● | Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.); and |
● | Level 3 — significant unobservable inputs (including the Board’s determinations as to the fair value of investments). |
A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input both individually and in the aggregate that is significant to the fair value measurement. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
13
The Gabelli International Small Cap Fund
Notes to Financial Statements (Continued)
The summary of the Fund’s investments in securities by inputs used to value the Fund’s investments as of December 31, 2020 is as follows:
Valuation Inputs | ||||||||||||
Level 1 Quoted Prices | Level 2 Other Significant Observable Inputs | Total at 12/31/20 | ||||||||||
INVESTMENTS IN SECURITIES: | ||||||||||||
ASSETS (Market Value): | ||||||||||||
Common Stocks: | ||||||||||||
Communication Services | $ | 150,660 | $ | 673,868 | $ | 824,528 | ||||||
Consumer Discretionary | — | 1,643,798 | 1,643,798 | |||||||||
Consumer Staples | 498,885 | 1,588,343 | 2,087,228 | |||||||||
Financials | — | 804,837 | 804,837 | |||||||||
Health Care | 448,529 | 1,098,699 | 1,547,228 | |||||||||
Industrials | — | 1,015,219 | 1,015,219 | |||||||||
Information Technology | 230,693 | 806,030 | 1,036,723 | |||||||||
Materials | 1,129,981 | 415,817 | 1,545,798 | |||||||||
Real Estate | 37,264 | 330,174 | 367,438 | |||||||||
Total Common Stocks | 2,496,012 | 8,376,785 | 10,872,797 | |||||||||
Preferred Stocks (a) | — | 108,365 | 108,365 | |||||||||
U.S. Government Obligations | — | 214,979 | 214,979 | |||||||||
TOTAL INVESTMENTS IN SECURITIES – ASSETS | $ | 2,496,012 | $ | 8,700,129 | $ | 11,196,141 |
(a) | Please refer to the Schedule of Investments for the industry classifications of these portfolio holdings. |
The Fund held no level 3 investments at December 31, 2020 and 2019.
Additional Information to Evaluate Qualitative Information.
General. The Fund uses recognized industry pricing services – approved by the Board and unaffiliated with the Adviser – to value most of its securities, and uses broker quotes provided by market makers of securities not valued by these and other recognized pricing sources. Several different pricing feeds are received to value domestic equity securities, international equity securities, preferred equity securities, and fixed income securities. The data within these feeds are ultimately sourced from major stock exchanges and trading systems where these securities trade. The prices supplied by external sources are checked by obtaining quotations or actual transaction prices from market participants. If a price obtained from the pricing source is deemed unreliable, prices will be sought from another pricing service or from a broker/dealer that trades that security or similar securities.
Fair Valuation. Fair valued securities may be common or preferred equities, warrants, options, rights, or fixed income obligations. Where appropriate, Level 3 securities are those for which market quotations are not available, such as securities not traded for several days, or for which current bids are not available, or which are restricted as to transfer. When fair valuing a security, factors to consider include recent prices of comparable securities that are publicly traded, reliable prices of securities not publicly traded, the use of valuation models, current analyst reports, valuing the income or cash flow of the issuer, or cost if the preceding factors do not apply. A significant change in the unobservable inputs could result in a lower or higher value in Level 3 securities. The circumstances of Level 3 securities are frequently monitored to determine if fair valuation measures continue to apply.
14
The Gabelli International Small Cap Fund
Notes to Financial Statements (Continued)
The Adviser reports quarterly to the Board the results of the application of fair valuation policies and procedures. These may include backtesting the prices realized in subsequent trades of these fair valued securities to fair values previously recognized.
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 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 purchase 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 inability 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 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 an accrual basis. Premiums and discounts on debt securities are amortized using the effective yield to maturity method or amortized to earliest call date if applicable. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities that are recorded as soon after the ex-dividend date as the Fund becomes aware of such dividends.
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.
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
15
The Gabelli International Small Cap Fund
Notes to Financial Statements (Continued)
regulations, which may differ from income and capital gains as determined under GAAP. 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 for federal income tax purposes 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. Permanent differences were primarily due to reclasses of realized foreign currency and sales relating to investments considered no longer to be passive foreign investments. These reclassifications have no impact on the NAV of the Fund.
The tax character of distributions paid during the years ended December 31, 2020 and 2019 was as follows:
Year Ended December 31, 2020 | Year Ended December 31, 2019 | |||||||
Distributions paid from: | ||||||||
Ordinary income (inclusive of short term capital gains) | $ | 86,688 | $ | 128,707 | ||||
Net long term capital gains | — | 376,145 | ||||||
Total distributions paid | $ | 86,688 | $ | 504,852 |
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.
As of December 31, 2020, the components of accumulated earnings/losses on a tax basis were as follows:
Undistributed ordinary income | $ | 58,688 | ||
Accumulated capital loss carryforwards | (468,992 | ) | ||
Net unrealized appreciation on investments and foreign currency translations | 2,062,281 | |||
Current year business interest expense limitation | (53 | ) | ||
Total | $ | 1,651,924 |
At December 31, 2020, the Fund had net capital loss carryforwards for federal income tax purposes which are available to reduce future required distributions of net capital gains to shareholders for an unlimited period. These capital losses will retain their character as short term or long term capital losses.
Short term capital loss carryforward with no expiration | $ | 27,565 | ||
Long term capital loss carryforward with no expiration | 441,427 | |||
Total capital loss carryforward with no expiration | $ | 468,992 |
At December 31, 2020, the temporary differences between book basis and tax basis unrealized appreciation were primarily due to mark-to-market adjustments on investments in passive foreign investment companies.
16
The Gabelli International Small Cap Fund
Notes to Financial Statements (Continued)
The following summarizes the tax cost of investments and the related net unrealized appreciation at December 31, 2020:
Cost | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Appreciation | ||||
Investments | $9,134,532 | $2,579,129 | $(517,520) | $2,061,609 |
The Fund is required to evaluate 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. Income tax and related interest and penalties would be recognized by the Fund as tax expense in the Statement of Operations if the tax positions were deemed not to meet the more-likely-than-not threshold. During the year ended December 31, 2020, the Fund did not incur any income tax, interest, or penalties. As of December 31, 2020, the Adviser has reviewed all open tax years and concluded that there was no impact to the Fund’s net assets or results of operations. The Fund’s federal and state tax returns for the prior three fiscal years remain open, subject to examination. On an ongoing basis, the Adviser will monitor the Fund’s tax positions to determine if adjustments to this conclusion are necessary.
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.
Through November 30, 2019, the Adviser had agreed to waive and/or to reimburse expenses of the Fund to the extent necessary to maintain the annualized total operating expenses of the Fund (excluding brokerage costs, acquired fund fees and expenses, interest, taxes, and extraordinary expenses) at no more than 1.00%, 2.00%, 2.75%, and 1.00% of the value of the Fund’s average daily net assets for Class AAA, Class A, Class C, and Class I, respectively. Effective December 1, 2019, the Adviser amended its contractual agreement with respect to each share class of the Fund to waive its investment advisory fees and/or to reimburse expenses to the extent necessary to maintain the annualized total operating expenses of the Fund (excluding brokerage costs, acquired fund fees and expenses, interest, taxes, and extraordinary expenses) until at least April 30, 2021, at no more than 0.90% of the value of the Fund’s average daily net assets for each of share class. During the year ended December 31, 2020, the Adviser reimbursed the Fund in the amount of $210,061. In addition, the Fund has agreed, during the two year period following any waiver or reimbursement by the Adviser, to repay such amount to the extent, that after giving effect to the repayment, such adjusted annualized total operating expenses of the Fund would not exceed 0.90% of the value of the Fund’s average daily net assets for each share class of the Fund. The arrangement is renewable annually. At December 31, 2020, the cumulative amount which the Fund may repay the Adviser, subject to the terms above, is $394,384:
For the year ended December 31, 2019, expiring December 31, 2021 | $ | 184,323 | |||
For the year ended December 31, 2020, expiring December 31, 2022 | 210,061 | ||||
$ | 394,384 |
The Corporation pays each Director who is not considered to be an affiliated person an annual retainer of $6,000 plus $1,000 for each Board meeting attended, and they are reimbursed for any out of pocket expenses
17
The Gabelli International Small Cap Fund
Notes to Financial Statements (Continued)
incurred in attending meetings. All Board committee members receive $1,000 per meeting attended. The Chairman of the Audit Committee receives an annual fee of $3,000 and the Lead Director receives an annual fee of $2,000. A Director may receive a single meeting fee, allocated among the participating funds, for attending certain meetings held on behalf of multiple funds. Directors who are directors or employees of the Adviser or an affiliated company receive no compensation or expense reimbursement from the Corporation.
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. Under the Class AAA, Class A, and Class C Share Plans, payments are authorized to G.distributors, LLC (the Distributor), an affiliate of the Adviser, at annual rates of 0.25%, 0.25%, 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 sales of securities during the year ended December 31, 2020, other than short term securities and U.S. Government obligations, aggregated $3,384,976 and $1,655,579, respectively.
6. Transactions with Affiliates and Other Arrangements. The cost of calculating the Fund’s NAV per share is a Fund expense pursuant to the Advisory Agreement. Under the sub-administration agreement with Bank of New York Mellon, the fees paid include the cost of calculating the Fund’s NAV. The Fund reimburses the Adviser for this service. The Adviser did not seek a reimbursement during the year ended December 31, 2020.
7. Line of Credit. The Fund participates in an unsecured line of credit which expires on March 3, 2021 and may be renewed annually, of up to $75,000,000 under 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 a floating rate equal to the higher of the overnight Federal Funds rate plus 125 basis points or the 30 day ICE LIBOR plus 125 basis points in effect on that day. This amount, if any, would be included in “Interest expense” in the Statement of Operations. At December 31, 2020, there were no borrowings outstanding under the line of credit.
The average daily amount of borrowings under the line of credit for the six days of borrowings during the year ended December 31, 2020 was $211,000 with a weighted average interest rate of 1.41%. The maximum amount borrowed at any time during the year ended December 31, 2020 was $254,000.
8. Capital Stock. The Fund currently offers three classes of shares – Class AAA Shares, Class A Shares, and Class I Shares. Effective January 27, 2020, (the Effective Date) the Fund’s Class AAA, Class A and Class C Shares “closed to purchases from new investors”. “Closed to purchases from new investors” means (i) with respect to the Class AAA and Class A shares, no new investors may purchase shares of such classes, but existing shareholders may continue to purchase additional shares of such classes after the Effective Date, and (ii) with respect to Class C Shares, neither new investors nor existing shareholders may purchase any additional shares of such class after the Effective Date. These changes had no effect on existing shareholders’ ability to redeem shares of the Fund as described in the Fund’s Prospectus. Additionally, on the Effective Date Class I shares of the Fund became available to investors with a minimum initial investment amount of $1,000 when purchasing shares directly through the Distributor, or investors purchasing Class I shares through brokers or financial intermediaries that have entered into selling agreements with the Distributor specifically with respect to Class I shares.
18
The Gabelli International Small Cap Fund
Notes to Financial Statements (Continued)
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 as an increase in paid-in capital. The redemption fees retained by the Fund during the years ended December 31, 2020 and 2019, if any, can be found in the Statement of Changes in Net Assets under Redemption Fees.
Transactions in shares of capital stock were as follows:
Year Ended December 31, 2020 | Year Ended December 31, 2019 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Class AAA | ||||||||||||||||
Shares sold | 15,624 | $ | 195,087 | 15,135 | $ | 188,463 | ||||||||||
Shares issued upon reinvestment of distributions | 3,259 | 50,245 | 30,728 | 399,469 | ||||||||||||
Shares redeemed | (77,589 | ) | (980,456 | ) | (95,721 | ) | (1,215,017 | ) | ||||||||
Net decrease | (58,706 | ) | $ | (735,124 | ) | (49,858 | ) | $ | (627,085 | ) | ||||||
Class A | ||||||||||||||||
Shares sold | 275 | $ | 3,530 | 1,468 | $ | 17,835 | ||||||||||
Shares issued upon reinvestment of distributions | 37 | 570 | 299 | 3,875 | ||||||||||||
Shares redeemed | (724 | ) | (7,241 | ) | (2,114 | ) | (25,095 | ) | ||||||||
Net decrease | (412 | ) | $ | (3,141 | ) | (347 | ) | $ | (3,385 | ) | ||||||
Class C | ||||||||||||||||
Shares sold | – | – | 333 | $ | 3,675 | |||||||||||
Shares issued upon reinvestment of distributions | 18 | $ | 247 | 125 | 1,466 | |||||||||||
Shares redeemed | (257 | ) | (2,515 | ) | (1,263 | ) | (13,922 | ) | ||||||||
Net decrease | (239 | ) | $ | (2,268 | ) | (805 | ) | $ | (8,781 | ) | ||||||
Class I | ||||||||||||||||
Shares sold | 282,729 | $ | 3,955,674 | 17,785 | $ | 227,429 | ||||||||||
Shares issued upon reinvestment of distributions | 2,109 | 33,373 | 6,346 | 84,650 | ||||||||||||
Shares redeemed | (108,667 | ) | (1,498,023 | ) | (63,035 | ) | (786,180 | ) | ||||||||
Net increase/(decrease) | 176,171 | $ | 2,491,024 | (38,904 | ) | $ | (474,101 | ) |
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. Management has reviewed the Fund’s existing contracts and expects the risk of loss to be remote.
10. Subsequent Events. Management has evaluated the impact on the Fund of all subsequent events occurring through the date the financial statements were issued and has determined that there were no subsequent events requiring recognition or disclosure in the financial statements.
19
The Gabelli International Small Cap Fund
Report of Independent Registered Public Accounting Firm
To the Shareholders of The Gabelli International Small Cap Fund
and the Board of Directors of GAMCO Global Series Funds, Inc.
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of The Gabelli International Small Cap Fund (the “Fund”) (one of the funds constituting GAMCO Global Series Funds, Inc. (the “Corporation”)), including the schedule of investments, as of December 31, 2020, 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, the financial highlights for each of the five years in the period then ended and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund (one of the funds constituting GAMCO Global Series Funds, Inc.) at December 31, 2020, 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 its financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements are the responsibility of the Corporation’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Corporation in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Corporation is not required to have, nor were we engaged to perform, an audit of the Corporation’s internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Corporation’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2020, by correspondence with the custodian. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
We have served as the auditor of one or more Gabelli/GAMCO Funds investment companies since 1992.
Philadelphia, Pennsylvania
February 26, 2021
20
The Gabelli International Small Cap Fund
Board Consideration and Re-Approval of Investment Advisory Agreement (Unaudited)
During the six months ended December 31, 2020, the Board of Directors of the Corporation approved the continuation of the investment advisory agreement with the Adviser for the Fund on the basis of the recommendation by the directors (the Independent Board Members) who are not interested persons of the Fund. The following paragraphs summarize the material information and factors considered by the Independent Board Members as well as their conclusions relative to such factors.
Nature, Extent, and Quality of Services. The Independent Board Members considered information regarding the Fund’s portfolio managers, the depth of the analyst pool available to the Adviser and the portfolio manager, the scope of supervisory, administrative, shareholder, and other services supervised or provided by the Adviser, and the absence of significant service problems reported to the Board. The Independent Board Members noted the experience, length of service, and reputation of the Fund’s portfolio manager.
Investment Performance. The Independent Board Members reviewed the short, medium, and long term performance of the Fund (as of September 30, 2020) against a peer group of seven other comparable funds prepared by the Adviser (the Adviser Peer Group), and against a peer group prepared by Broadridge (the Broadridge Performance Peer Group) consisting of all international multi-cap growth funds, regardless of asset size or primary channel of distribution, as represented by the Lipper International Small Multi-Cap Growth Index. The Independent Board Members noted that the Fund’s performance was in the second quartile for the one year period and in the third quartile for the three, five, and ten year periods, as measured against the Adviser Peer Group. Against the Broadridge Performance Peer Group, the Independent Board Members noted that the Fund’s performance was in the second quintile for the one year period, and in the third quintile for the three, five, and ten year periods. The Independent Board Members noted that at its current size, the Fund was not competitive among its peer group and encouraged the Adviser to continue to explore ways to increase the size of the Fund.
Profitability. The Independent Board Members reviewed summary data regarding the profitability of the Fund to the Adviser both with a pro rata administrative overhead charge and with a stand alone administrative charge and noted the effect of the expense limitation agreement. The Independent Board Members also noted that a portion of the Fund’s portfolio transactions were executed by an affiliated broker of the Adviser and that another affiliated broker of the Adviser received distribution fees and minor amounts of sales commissions.
Economies of Scale. The Independent Board Members discussed the major elements of the Adviser’s cost structure and the relationship of those elements to potential economies of scale and reviewed data provided by the Adviser.
Sharing of Economies of Scale. The Independent Board Members noted that the investment management fee schedule for the Fund does not take into account any potential economies of scale that may develop or any losses or diminished profitability to the Adviser in prior years.
Service and Cost Comparisons. The Independent Board Members compared the expense ratios of the investment management fee, other expenses, and total expenses of the Fund with similar expense ratios of the Adviser Peer Group and a peer group of eight other international multi-cap growth funds selected by Broadridge (the Broadridge Expense Peer Group), and noted that the Adviser’s management fee includes substantially all administrative services of the Fund as well as investment advisory services. The Independent Board Members noted the effect of the expense limitation agreement in place for the Fund. The Independent Board Members noted that the Fund’s total expense ratio after waivers was the second lowest compared to the Adviser Peer Group, and the
21
The Gabelli International Small Cap Fund
Board Consideration and Re-Approval of Investment Advisory Agreement (Unaudited) (Continued)
lowest compared to all of the funds included in the Broadridge Expense Peer Group. The Independent Board Members discussed how the Fund’s size was significantly lower than average within both peer groups and that the Adviser had been waiving substantial portions of its fees in order to make the Fund a more attractive investment, and noted the Adviser’s recent determination to waive fees even further. The Independent Board Members also noted that the advisory fee structure was the same as that in effect for most of the Gabelli funds. The Independent Board Members were presented with, but did not consider to be material to their decision, various information comparing the advisory fee to the fee for other types of accounts managed by the Adviser.
Conclusions. The Independent Board Members concluded that the Fund enjoyed highly experienced portfolio management services and good ancillary services. The Independent Board Members noted the reasons for the Fund’s underperformance and the steps the Adviser was taking to improve performance and indicated that they would continue to evaluate the Fund. The Independent Board Members noted that the Board approved amendments to the contractual Expense Deferral Agreement between the Adviser and the Corporation, on behalf of each Fund, pursuant to which the net expense ratio for each share class of each Fund was reduced to 0.90%, effective December 1, 2019. The Independent Board Members did not view the potential profitability of ancillary services as material to their decision. On the basis of the foregoing and without assigning particular weight to any single conclusion, the Independent Board Members determined to recommend continuation of the investment management agreement to the full Board.
22
The Gabelli International Small Cap Fund
Additional Fund Information (Unaudited)
The business and affairs of the Fund are managed under the direction of the Corporation’s Board of Directors. Information pertaining to the Directors and officers of the Fund is set forth below. The Corporation’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 Gabelli International Small Cap Fund at One Corporate Center, Rye, NY 10580-1422.
Name, Position(s) Address1 and Age | Term of Office and Length of Time Served2 | Number of Funds in Fund Complex Overseen by Director | Principal Occupation(s) During Past Five Years | Other Directorships Held by Director3 | ||||
INTERESTED DIRECTORS4: | ||||||||
Mario J. Gabelli, CFA Director and Chief Investment Officer Age: 78 | Since 1993 | 33 | Chairman, Chief Executive Officer, and Chief Investment Officer– Value Portfolios of GAMCO Investors, Inc. and Chief Investment Officer– Value Portfolios of Gabelli Funds, LLC and GAMCO Asset Management Inc.; Director/ Trustee or Chief Investment Officer of other registered investment companies within the Fund Complex; Chief Executive Officer of GGCP, Inc.; Executive Chairman of Associated Capital Group, Inc. | Chairman of the Board and Chief Executive Officer of LICT Corp. (multimedia and communication services company); Director of CIBL, Inc. (broadcasting and wireless communications); Director of ICTC Group Inc. (communications) (2013-2018) | ||||
John D. Gabelli Director Age: 76 | Since 1993 | 12 | Former Senior Vice President of G.research, LLC | — | ||||
INDEPENDENT DIRECTORS5: | ||||||||
E. Val Cerutti Director Age: 81 | Since 2001 | 7 | Chief Executive Officer of Cerutti Consultants, Inc. | Director of The LGL Group, Inc. (diversified manufacturing) (1990-2009) | ||||
Anthony J. Colavita6 Director Age: 85 | Since 1993 | 20 | President of the law firm of Anthony J. Colavita, P.C. | — | ||||
Werner J. Roeder Director Age: 80 | Since 1993 | 20 | Retired physician; Former Vice President of Medical Affairs (Medical Director) of New York Presbyterian/Lawrence Hospital (1999-2014) | — | ||||
Anthonie C. van Ekris6 Director Age: 86 | Since 1993 | 23 | Chairman and Chief Executive Officer of BALMAC International, Inc. (global import/ export company) | — | ||||
Salvatore J. Zizza7 Director Age: 75 | Since 2004 | 31 | President of Zizza & Associates Corp. (private holding company); President of Bergen Cove Realty Inc.; Chairman of Harbor Diversified, Inc. (pharmaceuticals) (2009-2018); Chairman of BAM (semiconductor and aerospace manufacturing)(2000-2018); Chairman of Metropolitan Paper Recycling Inc. (recycling) (2005-2014) | Director and Chairman of Trans- Lux Corporation (business services); Director and Chairman of Harbor Diversified Inc. (pharmaceuticals) (2009-2018) |
23
The Gabelli International Small Cap Fund
Additional Fund Information (Continued) (Unaudited)
Name, Position(s) Address1 and Age | Term of Office and Length of Time Served2 | Principal Occupation(s) During Past Five Years | ||
OFFICERS: | ||||
Bruce N. Alpert President Age: 69 | Since 1993 | Executive Vice President and Chief Operating Officer of Gabelli Funds, LLC since 1988; Officer of registered investment companies within the Fund Complex; Senior Vice President of GAMCO Investors, Inc. since 2008; Chief Executive Officer of G.distributors, LLC (January 2020-November 2020) | ||
John C. Ball Treasurer Age: 44 | Since 2017 | Treasurer of registered investment companies within the Fund Complex since 2017; Vice President and Assistant Treasurer of AMG Funds, 2014-2017 | ||
Peter Goldstein Secretary and Vice President Age: 67 | Since 2020 | General Counsel, Gabelli Funds, LLC since July 2020; General Counsel and Chief Compliance Officer, Buckingham Capital Management, Inc. (2012-2020); Chief Legal Officer and Chief Compliance Officer, The Buckingham Research Group, Inc. (2012-2020) | ||
Richard J. Walz Chief Compliance Officer Age: 61 | Since 2013 | Chief Compliance Officer of registered investment companies within the Fund Complex since 2013; Chief Compliance Office for Gabelli Funds, LLC since 2015 |
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 By-Laws and Articles of Incorporation. For officers, includes time served in prior officer positions with the Fund. 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 | 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. |
4 | “Interested person” of the Corporation as defined in the 1940 Act. Messrs. Mario J. Gabelli and John D. Gabelli, who are brothers, are each considered an “interested person” because of their affiliation with Gabelli Funds, LLC which acts as the Corporation’s investment adviser. |
5 | Directors who are not interested persons are considered “Independent” Directors. |
6 | Mr. Colavita’s son, Anthony S. Colavita, serves as a director of other funds in the Gabelli/GAMCO Fund Complex. Mr. van Ekris is an independent director of Gabelli International Ltd., Gabelli Fund LDC, GAMA Capital Opportunities Master Ltd., and GAMCO International SICAV, all of which may be deemed to be controlled by Mario J. Gabelli and/or affiliates and, in that event, would be deemed to be under common control with the Fund’s Adviser. |
7 | Mr. Zizza is an independent director of Gabelli International Ltd., which may be deemed to be controlled by Mario J. Gabelli and/or affiliates and in that event would be deemed to be under common control with the Fund’s Adviser. On September 9, 2015, Mr. Zizza entered into a settlement with the SEC to resolve an inquiry relating to an alleged violation regarding the making of false statements or omissions to the accountants of a company concerning a related party transaction. The company in question is not an affiliate of, nor has any connection to, the Fund. Under the terms of the settlement, Mr. Zizza, without admitting or denying the SEC’s findings and allegation, paid $150,000 and agreed to cease and desist committing or causing any future violations of Rule 13b2-2 of the Securities Exchange Act of 1934, as amended. The Board has discussed this matter and has determined that it does not disqualify Mr. Zizza from serving as an Independent Director. |
24
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, which is affiliated with GAMCO Investors, Inc., a publicly held company with subsidiaries and affiliates that provide investment advisory services for a variety of clients.
What kind of non-public information do we collect about you if you become a fund 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.
This page was intentionally left blank.
THE GABELLI INTERNATIONAL SMALL CAP FUND
One Corporate Center
Rye, NY 10580-1422
Portfolio Manager Biography
Caesar M. P. Bryan joined GAMCO Asset Management in 1994. He is a member of the global investment team of Gabelli Funds, LLC and portfolio manager of several funds within the Fund Complex. Prior to joining Gabelli, Mr. Bryan was a portfolio manager at Lexington Management. He began his investment career at Samuel Montagu Company, the London based merchant bank. Mr. Bryan graduated from the University of Southampton in England with a Bachelor of Law and is a member of the English Bar.
2020 TAX NOTICE TO SHAREHOLDERS (Unaudited)
During the year ended December 31, 2020, the Fund paid to each Class of shareholders ordinary income distributions (comprised of net investment income) totaling $0.13976 per share. For the year ended December 31, 2020, 0.00% of the ordinary income distribution qualifies for the dividends received deduction available to corporations. The Fund designates 59.79% of the ordinary income distribution as qualified dividend income pursuant to the Jobs and Growth Tax Relief Reconciliation Act of 2003. The Fund designates 0.44% of the ordinary income distribution as qualified interest income pursuant to the Tax Relief, Unemployment Reauthorization, and Job Creation Act of 2010. Also during the year ended December 31, 2020, the Fund passed through foreign tax credits of $0.01716 per share to each Class of shares.
U.S. Government Income:
The percentage of the ordinary income distribution paid by the Fund during the year ended December 31, 2020 which was derived from U.S. Treasury securities was 0.27%. 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 Fund did not meet this strict requirement in 2020. The percentage of U.S. Government securities held as of December 31, 2020 was 1.94%. 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.
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. Both the commentary and the financial statements, including the portfolio of investments, will be available on our website at www.gabelli.com.
GAMCO Global Series Funds, Inc.
THE GABELLI INTERNATIONAL SMALL CAP FUND
One Corporate Center
Rye, New York 10580-1422
t | 800-GABELLI (800-422-3554) |
f | 914-921-5118 |
e | info@gabelli.com |
GABELLI.com
Net Asset Value per share available daily
by calling 800-GABELLI after 7:00 P.M.
BOARD OF DIRECTORS
Mario J. Gabelli, CFA Chairman and Chief Executive Officer, GAMCO Investors, Inc. Executive Chairman, Associated Capital Group, Inc.
E. Val Cerutti Chief Executive Officer, Cerutti Consultants, Inc.
Anthony J. Colavita President, Anthony J. Colavita, P.C.
John D. Gabelli Former Senior Vice President, G.research, LLC
Werner J. Roeder Former Medical Director, Lawrence Hospital
Anthonie C. van Ekris Chairman, BALMAC International, Inc.
Salvatore J. Zizza Chairman, Zizza & Associates Corp. | OFFICERS
Bruce N. Alpert President
John C. Ball Treasurer
Peter Goldstein Secretary and Vice President
Richard J. Walz Chief Compliance Officer
DISTRIBUTOR
G.distributors, LLC
CUSTODIAN
State Street Bank and Trust Company
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
DST Asset Manager Solutions, Inc.
LEGAL COUNSEL
Skadden, Arps, Slate, Meagher & Flom LLP |
This report is submitted for the general information of the shareholders of The Gabelli International Small Cap Fund. It is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus.
GAB403Q420AR
(b) | Not applicable. |
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 $130,900 for 2019 and $130,900 for 2020. |
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 2019 and $0 for 2020. |
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 $19,000 for 2019 and $19,000 for 2020. 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 $6,238 for 2019 and $5,404 for 2020. The fees relate to Passive Foreign Investment Company identification database subscription fees billed on an annual basis. |
(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) N/A
(c) 0%
(d) 0%
(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 less than fifty percent. |
(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 $68,798 for 2019 and $59,750 for 2020. |
(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(a) of this form. |
(b) | Not applicable due to no such divestments during the semi-annual period covered since the previous Form N-CSR filing. |
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 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. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.
Not applicable.
Item 13. 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. |
(a)(4) | 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 Global Series Funds, Inc.
By (Signature and Title)* /s/ Bruce N. Alpert
Bruce N. Alpert, Principal Executive Officer
Date March 8, 2021
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By (Signature and Title)* /s/ Bruce N. Alpert
Bruce N. Alpert, Principal Executive Officer
Date March 8, 2021
By (Signature and Title)* /s/ John C. Ball
John C. Ball, Principal Financial Officer and Treasurer
Date March 8, 2021
* Print the name and title of each signing officer under his or her signature.