Statement of Additional Info - Gabelli

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TABLE OF CONTENTS Page GENERAL INFORMATION AND HISTORY ............................................................................................... 3 INVESTMENT OBJECTIVES AND MANAGEMENT POLICIES ............................................................. 3 PORTFOLIO HOLDINGS INFORMATION ................................................................................................. 22 MANAGEMENT OF THE FUNDS .................................................................................................................. 24 CONTROL PERSONS AND PRINCIPAL SHAREHOLDERS .................................................................... 32 INVESTMENT ADVISORY AND OTHER SERVICES ................................................................................ 42 PORTFOLIO TRANSACTIONS AND BROKERAGE.................................................................................. 45 DISTRIBUTION PLANS ................................................................................................................................... 61 PURCHASE AND REDEMPTION OF SHARES ........................................................................................... 64 DETERMINATION OF NET ASSET VALUE ............................................................................................... 65 SHAREHOLDER SERVICES .......................................................................................................................... 66 TAXES ................................................................................................................................................................. 66 INFORMATION ABOUT THE FUNDS .......................................................................................................... 70 FINANCIAL STATEMENTS ............................................................................................................................ 71 APPENDIX.......................................................................................................................................................... A-1 2
GENERAL INFORMATION AND HISTORY The Trust is a diversified, open-end management investment company organized as a Massachusetts business trust on June 12, 1986. On September 7, 2012, the Trust’s Board of Trustees (collectively, the “Board” and individually, each a “Trustee”) approved a change in the name of the Trust from “The GAMCO Westwood Funds” to “The TETON Westwood Funds” and the names of each of the individual funds as follows: TETON Westwood Mighty Mites Fund, TETON Westwood SmallCap Equity Fund, TETON Westwood Income Fund, TETON Westwood Equity Fund, TETON Westwood Balanced Fund, and TETON Westwood Intermediate Bond Fund, effective on October 1, 2012. The TETON Westwood Mid-Cap Equity Fund commenced operations on May 31, 2013. The Trust operates a multi-class structure pursuant to Rule 18f-3 of the Investment Company Act of 1940, as amended (the "1940 Act"). INVESTMENT OBJECTIVES AND MANAGEMENT POLICIES The Prospectuses discuss the investment objectives of each Fund and the principal strategies to be employed to achieve those objectives. This section contains supplemental information concerning certain types of securities and other instruments in which each Fund may invest, additional strategies that each Fund may utilize, and certain risks associated with such investments and strategies. The Funds, except for the Mighty Mites Fund and Mid-Cap Equity Fund, will not engage in the short-selling of securities. The Funds, except for the Mighty Mites Fund, will not engage in arbitrage. In addition, as a fundamental policy, the Funds will not issue senior securities (collateral arrangements with regard to initial and variation margin on futures and options transactions shall not be considered the issuance of a senior security), except as set forth under "Investment Restrictions" below. Convertible Securities (All Funds). A convertible security is a fixed-income security, such as a bond or preferred stock, which may be converted at a stated price within a specified period of time into a specified number of shares of common stock of the same or a different issuer. Convertible securities are senior to common stock in a corporation's capital structure, but usually are subordinated to non-convertible debt securities. While providing a fixed stream of income (generally higher in yield than the income derivable from a common stock but lower than that afforded by a similar non-convertible debt security), a convertible security also affords an investor the opportunity, through its conversion feature, to participate in the capital appreciation of the common stock into which it is convertible. In general, the market value of a convertible security is the higher of its "investment value" (i.e., its value as a fixedincome security) or its "conversion value" (i.e., the value of the underlying shares of common stock if the security is converted). As a fixed-income security, the market value of a convertible security generally increases when interest rates decline and generally decreases when interest rates rise. However, the price of a convertible security also is influenced by the market value of the security's underlying common stock. U.S. Government Securities (All Funds). Securities issued or guaranteed by the U.S. government or its agencies or instrumentalities include U.S. Treasury securities, which differ only in their interest rates, maturities, and dates of issuance. Treasury Bills have initial maturities of one year or less; Treasury Notes have initial maturities of one to ten years; and Treasury Bonds generally have initial maturities of greater than ten years. Some obligations issued or guaranteed by U.S. government agencies and instrumentalities, for example, Government National Mortgage Association ("GNMA") pass-through certificates, are supported by the full faith and credit of the U.S. Treasury; others, such as those of the Federal Home Loan Banks, by the right of the issuer to borrow from the U.S. Treasury; others, such as those issued by the Federal National Mortgage Association ("FNMA"), by discretionary authority of the U.S. government to purchase certain obligations of the agency or instrumentality; and others, such as those issued by the Student Loan Marketing Association, only by credit of the agency or instrumentality. While the U.S. government provides financial support to such U.S. government-sponsored agencies or instrumentalities, no assurance can be given that it will always do so since it is not so obligated by law. A Fund will invest in such securities only when it is satisfied that the credit risk with respect to the issuer is minimal. Recent Events Regarding FNMA and FHLMC Securities. On September 6, 2008, the Federal Housing Finance Agency (“FHFA”) placed FNMA (“FNMA”) and FHLMC (“FHLMC”) into conservatorship. As the conservator, FHFA succeeded to all rights, titles, powers and privileges of FNMA and FHLMC and of any stockholder, officer or director of FNMA and FHLMC with respect to FNMA and FHLMC and the assets of FNMA and FHLMC. FHFA selected a new chief executive officer and chairman of the board of directors for each of FNMA and FHLMC. On September 7, 2008, the U.S. Treasury announced three additional steps taken by it in connection with the conservatorship. First, the U.S. 3
Page 1: Fund TETON Westwood Mighty Mites SM
Page 5 and 6: A Fund’s primary risk is that if
Page 7 and 8: A Fund may also buy variable rate m
Page 9 and 10: negotiated by the countries with wh
Page 11 and 12: during the option period, and (c) o
Page 13 and 14: and from the broker will be made da
Page 15 and 16: The Funds may use options on future
Page 17 and 18: Mortgage-Related Securities (the Mi
Page 19 and 20: Institutional investors depend on a
Page 21 and 22: 6. Purchase, hold, or deal in real
Page 23 and 24: Act (the “Independent Trustees”
Page 25 and 26: Name, Position(s) Address 1 and Age
Page 27 and 28: companies and previously served on
Page 29 and 30: Trustee Ownership of Trust Shares S
Page 31 and 32: the best interests of each Fund. No
Page 33 and 34: Name and Address of Holder of Recor
Page 43 and 44: The fees paid to the Adviser are al
Page 45 and 46: PORTFOLIO TRANSACTIONS AND BROKERAG
Page 47 and 48: TETON Westwood Mid-Cap Equity Fund
Page 49 and 50: Portfolio turnover may vary from ye
Page 51 and 52: EXCLUDES TETON WESTWOOD MIGHTY MITE
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EXCLUDES TETON WESTWOOD EQUITY FUND
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EXCLUDES WESTWOOD BALANCED FUND: Na
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Portfolio Manager’s decision as t
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Team Member Varun V. Singh Lisa Don
Page 61 and 62:
Fiscal Year Ended September 30, Sal
Page 63 and 64:
TETON Westwood Balanced Fund Class
Page 65 and 66:
other redress. If a Fund is unable
Page 67 and 68:
test, at the close of each quarter
Page 69 and 70:
nevertheless, would be taxable to t
Page 71 and 72:
portfolio within the Trust is separ
Page 73 and 74:
Should no rating be assigned, the r
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Statement of Additional Info - Gabelli

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