Recent Annual Report - Gabelli

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Comparative Results Average Annual Returns through December 31, 2012 (a) Since Inception Quarter ————— 1 Year ———— 5 Year ———— 10 Year ———— (9/29/89) ————— Class A (GABVX) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.30% 16.95% 3.36% 8.35% 10.51% With sales charge (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3.59) 10.23 2.14 7.71 10.22 S&P 500 Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.38) 16.00 1.66 7.10 8.55 Dow Jones Industrial Average . . . . . . . . . . . . . . . . . . . . . . . . . (1.81) 10.14 2.60 7.32 9.73 Nasdaq Composite Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2.48) 17.60 3.77 9.43 8.29 Class AAA (GVCAX) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.29 16.97 3.37 8.36 10.51 Class B (GVCBX) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.08 16.06 2.55 7.53 10.04 With contingent deferred sales charge (c) . . . . . . . . . . . . . . . . (2.92) 11.06 2.19 7.53 10.04 Class C (GVCCX) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.07 16.09 2.57 7.54 10.06 With contingent deferred sales charge (d) . . . . . . . . . . . . . . . . 1.07 15.09 2.57 7.54 10.06 Class I (GVCIX) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.29 17.17 3.62 8.49 10.57 In the current prospectus dated April 27, 2012, the expense ratios for Class AAA, A, B, C, and I Shares are 1.43%, 1.43%, 2.18%, 2.18%, and 1.18%, respectively. Class AAA and Class I Shares do not have a sales charge. The maximum sales charge for Class A, B, and C Shares is 5.75%, 5.00%, and 1.00%, respectively. (a) Returns represent past performance and do not guarantee future results. Total returns and average annual returns reflect changes in share prices, 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. The Fund imposes a 2% redemption fee on shares sold or exchanged within seven days after the date of purchase. Performance returns for periods of less than one year are not annualized. Current performance may be lower or higher than the performance data presented. Visit www.gabelli.com for performance information as of the most recent month end. Investors should carefully consider the investment objectives, risks, charges, and expenses of the Fund before investing. The prospectus contains information about these and other matters and should be read carefully before investing. The Class A Share NAVs are used to calculate performance for the periods prior to the issuance of Class AAA Shares on April 30, 2010, Class B Shares and Class C Shares on March 15, 2000, and the Class I Shares on January 11, 2008. The actual performance of the Class B Shares and Class C Shares would have been lower due to the additional expenses associated with these classes of shares. The actual performance of the Class I Shares would have been higher due to lower expenses related to this class of shares. The S&P 500 Index is a market capitalization weighted index of 500 large capitalization stocks commonly used to represent the U.S. equity market. The Dow Jones Industrial Average and the Nasdaq Composite Index are unmanaged indicators of stock market performance. Dividends are considered reinvested, except for the Nasdaq Composite Index. 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 maximum contingent deferred sales charge (“CDSC”). The maximum CDSC for Class B Shares is 5% which is gradually reduced to 0% after six years. (d) Assuming payment of the 1% maximum CDSC imposed on redemptions made within one year of purchase. 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. The financial statements and investment portfolio are mailed separately from the commentary. Both the commentary and the financial statements, including the portfolio of investments, are available on our website at www.gabelli.com. 2
Barron’s 2013 Roundtable Mario J. Gabelli, our Chief Investment Officer, has appeared in the prestigious Barron’s Roundtable discussion annually since 1980. Many of our readers enjoyed the inclusion of selected and edited comments from Barron’s Roundtable in previous reports to shareholders. As is our custom, we are including selected comments of Mario Gabelli from Barron’s 2013 Roundtable, published on January 21, 2013. B arron’s: The stock market is coming off a good year, which some of you even predicted. What do you think of stocks now? Mario, start us off. Gabelli: Investors have been withdrawing money from the stock market. We have seen a negative flow of funds. But let’s look at China and Japan, which account for 20% of the $75 trillion global economy. They have a pretty good shot at starting their engines and reaccelerating. Europe is about 20% of the world economy, and is still a work in progress. The U.S. is 21%. The U.S. consumer’s net worth is at an all-time high. He is reducing debt. This is owed to a combination of Bernanke, Bernanke, Bernanke – in other words, the Federal Reserve [under Chairman Ben Bernanke] has been printing money, which has geared to drive financial assets and real estate prices higher. Barron’s: Get to the point. Are you bullish or bearish? Gabelli: I’m getting there. Corporate earnings will be okay in 2013, and 2014 looks even better. Interest rates might rise, but the market has discounted that. Given the negative flow of funds and the market’s relatively low price/earnings multiple, you have to be positive. The BARRON’S ROUNDTABLE MARIO J. GABELLI Chairman and Chief Investment Officer – Value Portfolios GAMCO Investors, Inc. Here’s What’s Cooking for 2013 The members of the Barron’s Roundtable see a year of modest gains for U.S. stocks, trouble for bonds, and good news for gold. Also featured this week: the best investment bets of Felix Zulauf and Mario Gabelli. How to play deal stocks, and Japan. Excerpted from January 21, 2013 by Lauren R. Rublin stock market could face a lot of potholes in the near term, and on balance, I don’t expect the market to rise more than 5% this year. But I have never been more excited about specific stocks. This year, you will be able to make a lot of money as a result of financial engineering – companies engaging in deals, takeovers, split-ups, spinoffs, and such. It is a phenomenal time to make money in the market. You get stocks like SodaStream International (ticker: SODA), which I’m not recommending, rising to $48 from $36. It will be a fantastic year to pick individual stocks. Barron’s: Then why will the broader indices see only modest gains? Gabelli: Our financial system has structural problems, and at some point the Fed will have to start withdrawing all the money it has poured into the system. Gross: Whenever somebody says, “I’ve never been more excited,” I run the other way. Gabelli: Well, I’m also excited about being short bonds. Barron’s: Mario, what did you bring us today? Gabelli: If you had been sitting here 12 years ago, you wouldn’t have heard of Twitter or Facebook [FB] or Google [GOOG]. If you were here 15 years ago, 3 you were focused on Cisco and a bunch of tech companies. I am going to talk about something that has been around much, much longer. Homer’s Odyssey mentioned one of the oldest forms of processed food: sausages. The city of Frankfurt, in Germany, honored the creation of the hot dog at its 500th anniversary. Sausages will be around for the next couple of hundred years, too. Abby and I have discussed how you should be able to make money this year from spinoffs, split-ups, and oldfashioned mergers and acquisitions. She suggested M&A activity will pick up because companies want to grow. So, how do you combine sausages and spinoffs? Barron’s: We haven’t a clue. Gabelli: Hillshire Brands [HSH] makes sausages and hot dogs. It was spun out of Sara Lee, which I recommended in the past. Hillshire has 122 million shares outstanding. Investors got one share for every five shares of Sara Lee. Hillshire had $694 million of net debt as of Sept. 29. It could generate $4.1 billion of revenue in the fiscal year ending June 30. Earnings will be $1.60 to $1.65 a share. Three or four companies were looking to buy Hillshire from Sara Lee before it was spun off. It is about a $2.5 billion market. The sausage market is growing by about 5% a year in the U.S. Breakfast sausages
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Recent Annual Report - Gabelli

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