The Gabelli Equity Income Fund
Shareholder Commentary
December 31, 2008
To Our Shareholders,
For the fourth quarter of 2008, the net asset value (“NAV”) per share of The Gabelli Equity Income Fund
fell 20.88% versus a decline of 21.95% for the Standard & Poor’s (“S&P”) 500 Index. The Fund’s annualized total
returns for the since inception, fifteen year, ten year, five year, and one year periods are 8.70%, 8.04%, 3.78%,
0.30%, and (34.96)%, respectively, outperforming the S&P 500 Index total return for each of these periods.
COMMENTARY
The Economy
The fourth quarter of 2008 was among the most challenging for the economy since the Great Depression.
Markets around the world ended the year down 30% to 60%, credit spreads spiked to unprecedented levels,
and extreme volatility became the norm. For the last five quarters, we have chronicled a deteriorating situation
in the U.S. and abroad. Chapters in our narrative have included a peak in the real estate bubble in 2006, rising
energy prices, an overextended consumer in late 2007, and the failure of large financial institutions and forced
liquidations by asset holders, including leveraged hedge funds in 2008.
Credit – or rather the destruction of credit – appears to have been the transmission mechanism for financial
distress. Without readily available credit, it becomes difficult for consumers to purchase homes and cars and for
businesses to invest and acquire. Hence the Treasury and Federal Reserve’s initial focus was on providing
liquidity to the system and on bolstering the balance sheets of insolvent banks via the TARP (Troubled Asset
Relief Program) and TALF (Term Asset-Backed Securities Loan Facility). Normally the creation of so much
money could be expected to stoke inflation (more dollars chasing the same amount of goods); it is quite evident
that in the short term, the deflationary forces from macro-economic dynamics, asset price devaluation, and job
losses have trumped monetary dynamics and inflation is in check. Indeed, we sit at the fulcrum of a deflationary
spiral and an inflationary spike. Inflation may be a problem for tomorrow and it is one we try to monitor closely.
Comparative Results
Average Annual Returns through December 31, 2008 (a)(b)
Since
Inception
3 Year 5 Year 10 Year 15 Year (1/2/92)
Quarter 1 Year
Gabelli Equity Income Fund Class AAA . . . . . . . (20.88)% (34.96)% (5.48)% 0.30% 3.78%
8.04%
8.70%
S&P 500 Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (21.95) (36.99)
(8.36)
(2.19) (1.38)
6.46
6.74
Nasdaq Composite Index . . . . . . . . . . . . . . . . . . . . . . (24.61) (40.54) (10.58)
(4.67) (3.24)
4.83
5.99
Lipper Equity Income Fund Average . . . . . . . . . . . . . (19.53) (33.77)
(6.69)
(0.73)
1.08
6.07
6.91
The expense ratio in the current prospectus is 1.43% for the Fund’s Class AAA Shares. Class AAA Shares do
not have a sales charge.
(a) Returns represent past performance and do not guarantee future results. Total returns and average annual returns
reflect changes in share price and 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. 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 more information about this and other matters and
should be read carefully before investing. See page 11 for performance of other classes of shares. The S&P 500
Index and the Nasdaq Composite Index are unmanaged indicators of stock market performance, while the Lipper Equity
Income Fund Average reflects the average performance of mutual funds classified in this particular category. Dividends
are considered reinvested (except for the Nasdaq Composite Index). You cannot invest directly in an index.
(b) The Fund’s fiscal year ends September 30.
THE GABELLI EQUITY INCOME FUND INVESTMENT RESULTS (CLASS AAA SHARES) (a)(c)
2008: Net Asset Value . . . . . . . . . . . . . . . .
Total Return . . . . . . . . . . . . . . . . . . .
2007: Net Asset Value . . . . . . . . . . . . . . . .
Total Return . . . . . . . . . . . . . . . . . . .
2006: Net Asset Value . . . . . . . . . . . . . . . .
Total Return . . . . . . . . . . . . . . . . . . .
2005: Net Asset Value . . . . . . . . . . . . . . . .
Total Return . . . . . . . . . . . . . . . . . . .
2004: Net Asset Value . . . . . . . . . . . . . . . .
Total Return . . . . . . . . . . . . . . . . . . .
2003: Net Asset Value . . . . . . . . . . . . . . . .
Total Return . . . . . . . . . . . . . . . . . . .
2002: Net Asset Value . . . . . . . . . . . . . . . . .
Total Return . . . . . . . . . . . . . . . . . . . .
2001: Net Asset Value . . . . . . . . . . . . . . . . .
Total Return . . . . . . . . . . . . . . . . . . . .
2000: Net Asset Value . . . . . . . . . . . . . . . . .
Total Return . . . . . . . . . . . . . . . . . . . .
1999: Net Asset Value . . . . . . . . . . . . . . . . .
Total Return . . . . . . . . . . . . . . . . . . . .
1998: Net Asset Value . . . . . . . . . . . . . . . . .
Total Return . . . . . . . . . . . . . . . . . . . .
1997: Net Asset Value . . . . . . . . . . . . . . . . .
Total Return . . . . . . . . . . . . . . . . . . . .
1996: Net Asset Value . . . . . . . . . . . . . . . . .
Total Return . . . . . . . . . . . . . . . . . . . .
1995: Net Asset Value . . . . . . . . . . . . . . . . .
Total Return . . . . . . . . . . . . . . . . . . . .
1994: Net Asset Value . . . . . . . . . . . . . . . . .
Total Return . . . . . . . . . . . . . . . . . . . .
1993: Net Asset Value . . . . . . . . . . . . . . . . .
Total Return . . . . . . . . . . . . . . . . . . . .
1992: Net Asset Value . . . . . . . . . . . . . . . . .
Total Return . . . . . . . . . . . . . . . . . . . .
Quarter
—————————–Calendar
–––––––––––––—
—–––––––––————————
2nd
3rd
4th
1st
$20.28
$19.83
$18.00
$14.15
(8.2)%
(1.8)%
(8.8)%
(20.9)%
$21.36
$22.71
$22.98
$22.19
1.9%
6.8%
1.6%
(1.4)%
$19.34
$19.51
$20.23
$21.06
5.5%
1.35%
4.2%
7.0%
$17.79
$18.00
$18.72
$18.41
0.2%
1.7%
4.5%
(0.2)%
$16.77
$16.90
$16.73
$17.84
2.8%
1.3%
(0.5)%
9.0%
$12.59
$14.47
$14.60
$16.40
(3.3)%
15.7%
1.5%
13.0%
$14.91
$13.86
$11.93
$13.02
4.2%
(6.6)%
(13.5)%
9.7%
$14.50
$15.07
$13.88
$14.37
(2.3)%
4.4%
(7.5)%
5.1%
$15.86
$15.86
$16.35
$14.91
0.8%
0.8%
3.8%
5.6%
$16.39
$18.26
$17.58
$15.80
(1.5)%
11.7%
(3.4)%
2.8%
$17.70
$17.72
$15.97
$16.70
10.1%
0.5%
(9.7)%
12.7%
$14.27
$16.03
$17.39
$16.12
1.2%
12.7%
8.8%
3.0%
$13.47
$13.54
$13.81
$14.16
5.5%
1.0%
2.5%
8.0%
$11.56
$11.99
$12.65
$12.84
8.5%
4.3%
6.1%
6.9%
$11.26
$11.08
$11.54
$10.72
(2.2)%
(0.8)%
4.9%
(0.7)%
$11.35
$11.72
$12.15
$11.57
7.4%
3.8%
4.2%
1.5%
$10.19
$10.36
$10.40
$10.64
2.4%(b)
2.3%
1.1%
3.7%
Average Annual Returns – December 31, 2008 (a)
1 Year . . . . . . . . . . . . . . . . . . . . . . . . (34.96)%
5 Year . . . . . . . . . . . . . . . . . . . . . . . .
0.30
10 Year . . . . . . . . . . . . . . . . . . . . . . .
3.78
Life of Fund (b) . . . . . . . . . . . . . . . . .
8.70
Current Expense Ratio . . . . . . . . . . 1.43
No sales charge for Class AAA Shares.
Year
$14.15
(35.0)%
$22.19
8.9%
$21.06
19.2%
$18.41
6.4%
$17.84
13.0%
$16.40
28.3%
$13.02
(7.7)%
$14.37
(0.9)%
$14.91
11.3%
$15.80
9.3%
$16.70
12.6%
$16.12
27.9%
$14.16
17.9%
$12.84
28.3%
$10.72
1.1%
$11.57
17.9%
$10.64
9.8%(b)
(a) Returns represent past performance and do not guarantee
future results. Investment returns and the principal value of an
investment will fluctuate. Total returns and average annual returns
reflect changes in share price and reinvestment of dividends and are
net of expenses. 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. Investors should carefully consider the investment
objectives, risks, charges, and expenses of the Fund before
investing. The prospectus contains more complete information
about this and other matters and should be read carefully before
investing. See page 11 for performance of other classes of shares.
(b) From commencement of investment operations on January 2, 1992.
(c) The Fund’s fiscal year ends on September 30.
Monthly Distributions — $0.03 per share
The Gabelli Equity Income Fund has a $0.03 per share monthly distribution policy in place. For more specific
dividend and tax information, please visit our website at www.gabelli.com or call 800-GABELLI (800-422-3554).
Shareholders should be aware that a portion of the distribution may represent a non-taxable return of capital. Such
distributions will reduce the cost basis of your shares if you hold them in a taxable account.
2
Barron’s 2009 Roundtable
Mario 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 2009 Roundtable, published on January 26, 2009.
BARRON’S
ROUNDTABLE
MARIO GABELLI
Chairman and Chief Investment Officer – Value Portfolios
GAMCO Investors, Inc.
Good Thoughts
Our third installment: four wise guys, 40 stocks,
seven funds and the short of the century
By Lauren R. Rublin
B
arron’s: Mario, care
to say something?
Gabelli: In fifteen days we will have a
new leader who is going to re-brand
America. His first priority as CEO of the
country is to create jobs and insure that
no adult is left behind in this economic
system.
The consumer is getting an enormous
cash flow benefit from lower oil prices.
There are 240 million cars in the U.S. and
800 million in the world that are saving
around $2.50 a gallon on gasoline. People
with high credit scores and equity in their
homes are saving money. The missing
element is confidence. New tax laws are
going to help with that. The working
person is going to get a financial
stimulus, and even under the most bearish
scenarios, 91% of those who can will be
working in December 2009. You’re going
to see an investment tax credit and a
change in depreciation, encouraging
small businesses to make capital investments. On September 15, somebody shut
off the lights for the business person. It has
been hell since. We need to go from this
hell for businesses to a kind of purgatory.
More spending on investments and the
possibility of a lower tax rate
for corporations would send an interesting
message to the business world.
As far as corporate earnings go, an
enormous tsunami hit the economic
world. It is no different from labor strikes
in the 1960s. When the steelworkers
struck, did you base stock multiples on
the absence of earnings, or step back and
ask what normalized earnings would be
over an economic cycle? And shouldn’t
the P/E multiple expand to account for
depressed earnings?
Barron’s: That’s nice, but what
happens now?
Barron’s: Is this a good year to
buy stocks?
Gabelli: Come April or May, the numbers will be a lot better than in the fourth
quarter. Car dealers tell us they are starting to sell cars, but the buyers still need
financing. Yes, unemployment is going
to rise. But once a new president comes
in and enacts fiscal stimulus and promises tax cuts, things will start changing.
Once businesses see some stability, they
can start planning and looking at cost
efficiencies.
Gabelli: I’m going back to what I think
will work: POSP. Plain Old Stock
Picking. It will be a good trading market.
The markets won’t do much more than
5% up or 5% down, but there are plenty
of opportunities for financial engineering
and value enhancement – buying and
selling, spinning off companies, selling
divisions.
3
Barron’s: Mario, you’re on.
Gabelli: Barack Obama will be
president in two weeks. He will
articulate how he is going to
create jobs. Government spending will
go to workers and business.
Infrastructure spending will mean not
only bridges but broadband and a smart
grid. The uptick rule [regulating short
sales of stocks] should be reinstated.
Hedge funds should be regulated and
transparent about their leverage. Under
current regulations, companies can be
taken over by entities that buy their debt
without reporting ownership. There
should be transparency about this to
eliminate backdoor raids.
There are 240 million cars on the road in
the U.S. The average age per vehicle is
roughly 9.5 years. The sweet spot for
repairs is six to nine years. Last year I
talked about Genuine Parts [GPC].
Now I’m recommending O’Reilly
Automotive [ORLY], an auto parts
distributor that sells to the do-it-for-me
market. It has 135 million shares, trading
at about $30. Debt is $650 million. It
closed a deal in July to buy CSK Auto,
which gives it a presence in the West.
Combined revenue is $5 billion.
Barron’s: What about earnings?
Gabelli: They could go from $1.50 a
share in 2008 to $1.80 in ’09. Annual
earnings growth is 14% or 15%. They’ll
have no debt in four years, when they’ll
earn $3.25 a share. There is a 6.75% note
convertible into common with a 2010 put
date that sells around par. It is an
intriguing investment.
Telephone & Data Systems [TDS]
sells for $32 a share. There are about 115
million shares outstanding – 53 million
common, 55 million special common, six
million that get 10 votes apiece. It is
believed TDS got a fully financed bid at a
50% premium to its then-price of $65.
Only two companies could do it: AT&T
[T] and Verizon Communications
[VZ]. On January 9 Verizon closes on its
purchase of Alltel for seven or eight times
EBITDA. AT&T recently announced
the
purchase
of
Centennial
Communications [CYCL] for 7.5
times EBITDA. TDS owns 70 million of
U.S. Cellular’s [USM] 87 million
shares, equal to $26 per TDS share. TDS
may be a double, or a triple.
Today I brought you chocolate bars and
gum [distributes around room]. Since we
met last, Cadbury has spun off Dr
Pepper Snapple [DPS]. Mars teamed
up with Warren Buffett to buy Wrigley.
The global confectionary market is $140
billion – $78 billion is chocolate, $44
billion candy, and $20 billion chewing
gum. Cadbury has 10% of the non-U.S.
chocolate market, and through Dentyne,
27% of the global gum market. There are
337 million American depositary
receipts, trading for $36. They have $2.4
billion of debt and $15.8 billion, or 10
billion pounds, of enterprise value.
Earnings this year will be 36 pence, and
next year, 42. The stock sells at a modest
multiple of earnings. As Cadbury focuses
on revenue and margin expansion,
earnings could grow by 15% a year.
Barron’s: Why did the the stock
lose 33% after you recommended
it here last year?
Gabelli: There was no buyout deal. The
confectionary business is in flux. They
could merge with Hershey [HSY] or do
something with Kraft Foods [KFT].
Cadbury has excellent global distribution. It isn’t going to stand on its own.
You could make 40% or 50% on
Cadbury.
Gabelli: We like Dr Pepper Snapple,
too. It sells for $16. There are 253 million shares, about $3.6 billion of debt,
and $8 billion in enterprise value. They
4
could earn $1.75 a share for 2008.
Results will be flat this year. The
company sells concentrate and is a
bottler. It could get bought out, and even
if it doesn’t, the business generates cash.
Ascent Media [ASCMA] has 13.4
million A shares, 660,000 B shares, and
a $320 million market value. There is
$356 million in cash, so you’re getting
the company at a discount to cash.
Ascent specializes in platforms and
techniques for enhancing digital
technology and media. It has about $50
million of EBITDA. Apply a multiple of
four and you get $200 million, or
$15 a share, on top of $25 of cash, for a
total price of $40. John Malone controls
31%. The company, spun out of
Discovery Holding in September, could
be an acquisition vehicle. Liberty
Entertainment [LMDIA] is another
Malone company, with 517 million
shares. Debt is $2 billion, and they have
$700 million in cash. Liberty was a
tracking stock. Malone is spinning off its
assets, including DIRECTV [DTV], into
a new company. Liberty trades for $18,
but you’re getting $22 a share in net
assets, plus $10 from a spinoff, plus
indirect control of DIRECTV.
Schafer: Have Malone’s stocks done
well?
MacAllaster: They’ve been awful.
Gabelli: Discovery
Communications [DISCA] and DIRECTV have
done well. Like Oscar, I like Time
Warner. As he noted, you get a quarter of
a share of Cable for every share of Time,
and the Cable dividend will help Time
reduce debt. Time Warner’s earnings will
be down this year, but the company is a
terrific cash generator. Its businesses
generate about $7 billion to $8 billion of
EBITDA. In three years it will have no
debt, $1.5 billion of cash, and earnings of
close to $1.20 a share. At $10 a share,
plus the cable stub, it is an interesting
buy.
Mario Gabelli’s Picks
Company
Ticker
O’Reilly Automotive
Telephone & Data
Systems
Cadbury
Dr Pepper Snapple
Ascent Media
Liberty Entertainment
Time Warner
Maine & Maritimes
Alberto-Culver
Energizer Holdings
ORLY
TDS
1/2/09 Price
CBY
DPS
ASCMA
LMDIA
TWX
MAM
ACV
ENR
$31.43
32.92
36.09
16.55
22.62
18.86
10.63
37.65
25.41
58.11
Source: Bloomberg
Maine & Maritimes [MAM] is a
utility. On the border of Maine and
Canada, there is a lot of wind, but
it’s landlocked. The company is working
on approvals to construct a transmission
line. Rates of return are about 13%.
MAM will be able to distribute wind
power through independent service
operators in New England, plus there’s
the basic utility. The wind business will
be unlocked by Obama’s investment in
the grid and green power. The stock is
$37. There are 1.7 million shares. The
existing business earns around $2 a
share, but the interesting play is their
partnership with Central Maine Power,
another utility, to build a 345 kilovolt
transmission line. This will connect the
power from where it is generated to the
New England grid. Maine & Maritime’s
share of the cost is $180 million. It will
add significantly to the company’s
earnings power, bringing earnings to $4
per share.
Alberto-Culver [ACV], the hair care
company, spun off Sally Beauty
Holdings [SBH] about two years ago.
Alberto holders got $25 a share in cash
and a share of Sally. Alberto trades at
$25. There are 98 million shares. They
have $438 million in cash and no debt.
They just spent $81 million to buy
Noxzema from Procter & Gamble
[PG]. They have 14.5% of the facial
cleanser market. Today people aren’t
replenishing products until they get to
the end of the bottle. Like everything else,
business stopped in the past three months.
Revenue should be $1.5 billion for the
September 30 year. EBITDA is about
$210 million, and earnings per share,
$1.35. Earnings can grow 10% or 12%,
but the product line fits with a larger
company.
Energizer Holdings [ENR] makes
batteries. The price of zinc collapsed to
54 cents a pound late last year from
$1.95. They consume about 70 million
pounds of zinc. It bought Schick and then
Playtex about a year ago. For the
September ’09 year they’ll have $4
billion of revenue, growing 3% or 4%.
EBITDA will be about $750 million,
down from $850 million. Consumers are
running down their inventories, even of
consumables, and earnings will drop to
about $5 a share from $6.12. From the
lower base, they’ll grow 20% a year for
the next five years. The company will pay
down $2.8 billion of net debt. The stock
trades for $58. Three years from now it
may be $130 or $140.
Barron’s: Thank you, Mario, and
everyone. Mario J. Gabelli is the Chairman and Chief Investment Officer – Value Portfolios of GAMCO Investors, Inc. and Portfolio Manager
of various investment products at the Firm. The securities mentioned in the article are not representative of any portfolio, and the
views expressed are subject to change at any time. As of December 31, 2008, the Gabelli Equity Income Fund held, as a percentage
of its net assets, the following companies mentioned in this article: AT&T 1.2%, Cadbury 0.6%, DIRECTV 0.2%, Dr Pepper Snapple
0.2%, Energizer Holdings 0.4%, Genuine Parts 1.0%, Hershey 0.3%, Kraft Foods 1.3%, O’Reilly Automotive 0.6%, Procter &
Gamble 1.4%, Telephone & Data Systems 0.5%, and Verizon Communications 0.8%.
A complete listing of the Fund’s portfolio holdings as of December 31, 2008 is available by calling the Fund at 800-GABELLI
(800-422-3554) or by visiting our website at www.gabelli.com. Investors should carefully consider the investment objectives, risks,
charges, and expenses of the Fund before investing. The prospectus contains more information about this and other matters. Read
the prospectus carefully before investing. When shares are sold, they may be worth more or less than their original cost.
The views expressed in this article reflect those of the Portfolio Manager only through the date of the interview. Minor edits were made.
The Portfolio Manager’s views are subject to change at any time based on market and other conditions. Favorable earnings or EBITDA
(earnings before interest, taxes, depreciation, and amortization) growth prospects do not necessarily translate into higher stock prices,
but they do express a positive trend which we believe will develop over time. The information contained in this article is not an offer to
sell or a solicitation to buy any security. No security or other product is offered or will be sold in any jurisdiction in which such offer
or solicitation, purchase or sale would be unlawful under the securities, or other laws of the jurisdiction.
5
COMMENTARY (continued)
The Economy (continued)
Monetary policy needs to be coupled with fiscal stimulus. A useful analytical framework is to break gross
domestic product (GDP) into its four components: consumption (C) + investment (I) + government spending (G)
+ net exports (NX). In the fourth quarter of 2008, consumption is likely to have been deeply negative with
investment and net exports relatively flat, leaving government spending as the sole growth driver of the
economy. Fiscal policy can directly address “G”, but it can also influence “C” and “I” through changes in tax
policy. It should not be forgotten that “NX” can also be influenced, in the case of the Great Depression severely
diminished, by flawed protectionist policies. Today some countries appear to be using currency as a
protectionist tool (e.g. China). The President and Congress appear well aware of these policy prescriptions and,
at this writing, are contemplating a stimulus of $825 of spending and tax incentives totaling over 5% of GDP.
The economy and the markets will heal. Credit and functioning capital markets need to be restored while
consumers and businesses need to regain the confidence to spend and invest, albeit more wisely. We fear that
this process may take time, but we remain cautiously optimistic that the entrepreneurial spirit that got us this
far will see us out of this crisis.
Deals… Deals… And More Deals
As anticipated, anticipated global M&A volume was predictably weak in the fourth quarter, declining 38%
to $588 billion. U.S. volume fell 53% to $115 billion. Notwithstanding ongoing constraints in the credit markets,
this is not a trend we necessarily expect to continue, however. Strategic buyers with the financial wherewithal
will continue to improve their market positions through acquisition activity. We also expect to see an increase
in financial engineering – spins and split-offs – as companies reposition themselves and seek to maximize
value.
Investment Scorecard
Gold miner Newmont Mining (0.9% of net assets as of December 31, 2008) appreciated as the price of
gold rose throughout the year as the metal played its historical role of safe haven and inflation hedge. Vivendi
SA (0.7%), Archer-Daniels-Midland (0.3%), and Genuine Parts (1.0%), each of which possess several
recession resistant characteristics, rounded out the top five contributors. Two other best performing securities,
Verizon (0.8%) and AT&T (1.2%) also benefited from investors’ flight to defensive sectors.
Cablevision (0.4%), one of the third quarter’s larger positive contributors, fell over worries about its
liquidity situation. The stock rebounded strongly in January 2009 after issuing bonds to address debt maturities
this year. American Express (0.5%), a premier credit card issuer, showed that even its customers were not
immune to consumer stress. Sprint Nextel (0.3%) continues to struggle with a heavy debt load, strained
consumers, and fierce competition.
Let’s Talk Stocks
The following are stock specifics on selected holdings of our Fund. Favorable earnings prospects do not
necessarily translate into higher stock prices, but they do express a positive trend that we believe will develop
over time. Individual securities mentioned are not necessarily representative of the entire portfolio. For the
following holdings, the percentage of net assets and their share prices stated in U.S. dollar equivalent terms
are presented as of December 31, 2008.
6
Bank of New York Mellon Corp. (1.4%) (BK - $28.33 - NYSE) is a global financial services company with
approximately $928 billion of assets under management and $20.2 trillion of assets under custody and
administration as of December 31, 2008. Bank of New York Mellon provides asset and wealth management, asset
servicing, issuer services, clearing and execution services, and treasury services to institutions, corporations, and
high-net-worth individuals. The company is the global leader in asset servicing, and benefits from cross selling
additional services to existing customers and has leading market share in most of its businesses. In 2008, the
company had the largest market share in six of its nine largest businesses, including the #1 global Corporate Trust
business and over 50% market share in the U.S. for Broker Dealer Services.
Deere & Co. (1.4%) (DE - $38.32 - NYSE) was founded in 1837 and is headquartered in Moline, Illinois. DE
manufactures and distributes agricultural and commercial equipment worldwide. It operates in four segments:
Agricultural Equipment, Commercial and Consumer Equipment, Construction and Forestry, and Credit.
Although there has been recent concern regarding the availability of credit in the current credit crisis, we
continue to believe in continued growth of the global agricultural markets.
IBM Corp. (1.6%) (IBM - $84.16 - NYSE) The defining value that IBM has provided over the years has been the
way the company thinks. Today, as in the past, when people turn to IBM they are looking for how IBMers
approach problems, as well as for the types of problems they choose to approach. IBM clients seek a kind of
relationship, in addition to the outcomes of that relationship. And they are drawn to a set of values that reflect
their own. A strong fourth quarter of 2008 capped an outstanding year. In 2008 IBM performed well in an
extremely difficult economic environment. Its strategic transformation – migrating to the more profitable
segments of the industry, investing in growth regions of the world, and driving productivity through global
integration – is continuing to pay dividends. Income from continuing operations for the year ended December 31,
2008 was $12.3 billion compared with $10.4 billion in 2007, an increase of 18%. Diluted earnings were $8.93
per share compared with $7.18 per diluted share in 2007, an increase of 24%. IBM is ahead of pace on the
company’s set roadmap for $10 to $11 per share.
Johnson & Johnson (1.9%) (JNJ - $59.83 - NYSE) is the largest and most diversified healthcare company in
the world. The company’s leading positions across pharmaceuticals, medical devices, and consumer
healthcare make it a steady performer and defensive name in these challenging times. Johnson & Johnson’s
strong cash flow and credit rating will allow the company to make accretive acquisitions at attractive prices
during the downturn, while continuing to buy back stock. With a reasonable valuation of 12x earnings and a
3.3% dividend yield, JNJ should be able to weather the storm and generate attractive total returns for investors.
Newmont Mining Corp. (0.9%) (NEM - $40.70 - NYSE) engages in the production of gold from its properties in
the United States, Australia, Peru, Indonesia, Ghana, Canada, Bolivia, New Zealand, and Mexico. NEM had
2008 equity gold sales of approximately 5.2 million ounces at costs applicable to sales of $440 per ounce. With
the start up of the Boddington project in Australia in mid 2009, the Company expects continued operating
performance improvements in 2009, with an equity gold sales outlook of between 5.2 and 5.5 million ounces
at costs applicable to sales of between $400 and $440 per ounce. The 2009 expectations assume ownership
of 100% of the Boddington project, reflecting the expected completion of the acquisition of the remaining
33.33% interest from AngloGold Ashanti Ltd., announced recently. The Company reported year end 2008
proven and probable gold reserves of 85.0 million equity ounces, compared with 86.5 million equity ounces at
the end of 2007. Year end 2008 reserves would have been 91.6 million equity ounces, an increase of
approximately 6% over year end 2007, if the expected acquisition of the remaining 33.33% interest in the
Boddington project had occurred at the end of 2008.
7
Rohm and Haas (2.1%) (ROH - $61.79 - NYSE), based in Philadelphia, PA, is a global producer of specialty
chemicals that serve the building and construction, electronics, paints and coatings, and packaging markets.
On July 10, 2008, Dow Chemical bid $78 per share to acquire all of the outstanding common stock of Rohm
and Haas. While the deal has cleared all regulatory hurdles and financing remains in place to close the
transaction, Dow refuses to do so given the uncertain economic environment and recent collapse of its
proposed joint venture with PIC of Kuwait. Unless Rohm and Haas and Dow renegotiate the transaction, the
fate of the deal rests in the hands of a Delaware Court, which will hear the case in early March.
Swedish Match AB (2.0%) (SWMA.ST - $14.13 - Stockholm Stock Exchange) produces tobacco products that
include snuff, chewing tobacco, cigars, and pipe tobacco. The company’s products are sold in more than 150
countries and it is a leader in its categories. The company has been benefiting from the growth of the
smokeless tobacco market in both Scandinavia and the U.S., as public smoking bans and health concerns are
driving consumers to seek alternative tobacco products to cigarettes. In response to excise tax increases in
2007 and 2008, the company raised prices in Sweden, demonstrating that the company can utilize its pricing
power in order to increase profits for its snuff division. In February 2009, Swedish Match created a joint venture
with Philip Morris International in order to sell Swedish snus in markets around the world, taking advantage of
Swedish Match’s brands and production capabilities and Philip Morris International’s distribution network.
Wells Fargo & Co. (1.6%) (WFC - $29.84 - NYSE) is a diversified financial services company with $1.3 trillion in
assets funded by $745 billion in core deposits, giving it the second highest deposit market share in the U.S. of
11.2%. These deposits and loans are gathered and managed through a nationwide network of 6,610 retail stores
and the Internet (wellsfargo.com) providing banking, insurance, investments, mortgages, and consumer finance.
Wells Fargo’s recent merger with Wachovia has given it a nationwide presence, and is expected to generate
annual cost savings of $5 billion. Through the merger, Wells Fargo was able to write-off much of Wachovia’s most
toxic assets, leaving current shareholders with a much cleaner balance sheet going forward.
Conclusion
Through the turmoil of the last year, our investment principles have remained our touchstone. Our process
is to seek opportunities through in-depth, bottom-up research. We buy good businesses with an adequate
margin of safety and remain patient as intrinsic value is surfaced.
A recovery in stocks will likely come long before a recovery in the economy as the market catches a
glimpse of light at the end of the tunnel. It is difficult to see that light at the moment. But, we do not call bottoms
– we pick stocks. We see unprecedented values today that should result in profitable investments tomorrow.
Sincerely,
Mario J. Gabelli, CFA
Portfolio Manager and
Chief Investment Officer
January 20, 2009
8
Note: The views expressed in this Shareholder Commentary reflect those of the Portfolio Manager only
through the end of the period stated in this Shareholder Commentary. The Portfolio Manager’s views are subject
to change at any time based on market and other conditions. The information in this Portfolio Manager’s
Shareholder Commentary represents the opinions of the individual Portfolio Manager and is not intended to be
a forecast of future events, a guarantee of future results, or investment advice. Views expressed are those of
the Portfolio Manager and may differ from those of other portfolio managers or of the Firm as a whole. This
Shareholder Commentary does not constitute an offer of any transaction in any securities. Any
recommendation contained herein may not be suitable for all investors. Information contained in this
Shareholder Commentary has been obtained from sources we believe to be reliable, but cannot be guaranteed.
Portfolio Manager Compensation
Mr. Gabelli’s incentive-based, variable compensation structure and dollar amount have been fully
disclosed each year since April of 2000 in GAMCO Investors, Inc.’s (NYSE: GBL) annual proxy statement.
Mr. Gabelli receives no base salary, no annual bonus, and no options.
As founder and portfolio manager of The Gabelli Equity Income Fund, Mr. Gabelli received $3,390,948
in calendar 2007. In 1992, the Fund’s first year of operation starting in January, Mr. Gabelli received less
than $165,000. As beneficial owner, he had $4,491,004 invested in The Gabelli Equity Income Fund as of
December 31, 2008, which includes the holdings of GBL and GGCP, Inc., GBL’s parent holding company.
Minimum Initial Investment – $1,000
The Fund’s minimum initial investment for regular accounts is $1,000. There are no subsequent
investment minimums. No initial minimum is required for those establishing an Automatic Investment Plan.
Additionally, the Fund and other Gabelli/GAMCO Funds are available through the no-transaction fee programs
at many major brokerage firms. The Fund imposes a 2% redemption fee on shares sold in seven days or less
of a purchase. See the prospectus for more details.
9
www.gabelli.com
Please visit us on the Internet. Our homepage at www.gabelli.com contains information about GAMCO
Investors, Inc., the Gabelli/GAMCO Mutual Funds, IRAs, 401(k)s, current and historical quarterly reports,
closing prices, and other current news. We welcome your comments and questions via e-mail at
info@gabelli.com.
You may sign up for our e-mail alerts at www.gabelli.com and receive early notice of quarterly report
availability, news events, media sightings, and mutual fund prices and performance.
The Fund’s daily net asset value is available in the financial press and each evening after 6:00 PM
(Eastern Time) by calling 800-GABELLI (800-422-3554). The Fund’s NASDAQ symbol is GABEX for Class AAA
Shares. Please call us during the business day for further information.
e-delivery
We are pleased to offer electronic delivery of Gabelli Funds documents. Direct shareholders of our openend mutual funds can now elect to receive their Annual, Semiannual, and Quarterly Fund Reports, Manager
Commentaries, and Prospectuses via e-delivery. For more information or to sign up for e-delivery, please visit
our website at www.gabelli.com.
Top Ten Holdings (Percent of Net Assets)
December 31, 2008
Rohm and Haas Co. 2.1%
Swedish Match AB 2.0%
Johnson & Johnson 1.9%
The Coca-Cola Co. 1.8%
Pfizer Inc. 1.7%
International Business Machines Corp. 1.6%
Chevron Corp. 1.6%
Wells Fargo & Co. 1.6%
Procter & Gamble Co. 1.4%
The Bank Of New York Mellon Corp. 1.4%
10
Multi-Class Shares
The Gabelli Equity Income Fund began offering additional classes of Fund shares on December 31, 2003.
Class AAA Shares are no-load shares offered directly by selected broker/dealers. Class A and Class C Shares
are targeted to the needs of investors who seek advice through financial consultants. Class I Shares are
available solely to certain institutions which initially invest directly with the Fund. The minimum initial investment
amount for Class I Shares is $500,000. The Board of Directors determined that expanding the types of Fund
shares available through various distribution options will enhance the ability of the Fund to attract additional
investors.
Average Annual Returns – December 31, 2008 (a)(f)
Class AAA Shares
1 Year
Class A Shares
Class B Shares
Class C Shares
Class I Shares
. . . . . . . . . . . . . . . .(34.96)%
(34.93)%
(35.46)%
(35.48)%
(34.73)%
(38.67)(c)
(38.69)(d)
(36.13)(e)
5 Year . . . . . . . . . . . . . . . . 0.30
0.28
(0.46)
(0.44)
0.37
(0.90)(c)
(0.86)(d)
(0.44)
10 Year . . . . . . . . . . . . . . . 3.78
3.77
3.39
3.40
3.82
3.16(c)
3.39
3.40
Life of Fund (b) . . . . . . . . . . 8.70
8.70
8.46
8.47
8.72
8.32(c)
8.46
8.47
Current Expense Ratio . . 1.43
1.43
2.18
2.18
1.18
Maximum Sales Charge . . None
5.75
5.00
1.00
None
(a) Returns represent past performance and do not guarantee future results. Total returns and average annual
returns reflect changes in share price and 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. Investors should carefully consider
the investment objectives, risks, charges, and expenses of the Fund before investing. The prospectus
contains more information about this and other matters and should be read carefully before investing.
The Class AAA Shares’ net asset values (“NAV”) per share are used to calculate performance for the periods prior to
the issuance of Class A Shares, Class B Shares, and Class C Shares on December 31, 2003 and Class I Shares on
January 11, 2008. The actual performance for the Class B Shares and Class C Shares would have been lower and
Class I Shares would have been higher due to the differences in expenses associated with these classes of shares.
(b) Performance is calculated from inception of Class AAA Shares on January 2, 1992.
(c) Includes the effect of the maximum 5.75% sales charge at the beginning of the period.
(d) Performance results include the deferred sales charges for the Class B Shares upon redemption at the end of the one
year and five year periods of 5% and 2%, respectively, of the Fund’s NAV per share at the time of purchase or sale,
whichever is lower. Class B Shares are not available for new purchases.
(e) Performance results include the deferred sales charges for the Class C Shares upon redemption at the end of the one
year period of 1% of the Fund’s NAV per share at the time of purchase or sale, whichever is lower.
(f) The Fund’s fiscal year ends September 30.
We have separated the portfolio manager’s commentary from the financial statements and investment portfolio
due to corporate governance regulations stipulated by the Sarbanes-Oxley Act of 2002. We have done this to
ensure that the content of the portfolio manager’s commentary is unrestricted. The financial statements and
investment portfolio are mailed separately from the commentary. Both the commentary and the financial
statements, including the portfolio of investments, will be available on our website at www.gabelli.com/funds.
11
Gabelli Equity Series Funds, Inc.
The Gabelli Equity Income Fund
One Corporate Center
Rye, New York 10580-1422
E
P
S
800-GABELLI
800-422-3554
fax: 914-921-5118
P
M
V
MANAGEMENT
website: www.gabelli.com
e-mail: info@gabelli.com
Net Asset Value per share available daily by calling
800-GABELLI after 6:00 P.M.
CASH FLOW
RE S E A R C H
Board of Directors
Mario J. Gabelli, CFA
Chairman and Chief
Executive Officer
GAMCO Investors, Inc.
Robert J. Morrissey
Attorney-at-Law
Morrissey, Hawkins & Lynch
Anthony J. Colavita
Attorney-at-Law
Anthony J. Colavita, P.C.
Anthony R. Pustorino
Certified Public Accountant,
Professor Emeritus
Pace University
Vincent D. Enright
Former Senior Vice President
and Chief Financial Officer
KeySpan Corp.
Anthonie C. van Ekris
Chairman
BALMAC International, Inc.
John D. Gabelli
Senior Vice President
Gabelli & Company, Inc.
Salvatore J. Zizza
Chairman
Zizza & Co., Ltd.
Officers
Bruce N. Alpert
President and Secretary
Agnes Mullady
Treasurer
Peter D. Goldstein
Chief Compliance Officer
Distributor
Gabelli & Company, Inc.
Custodian, Transfer Agent, and Dividend Agent
State Street Bank and Trust Company
The
Gabelli
Equity
Income
Fund
Legal Counsel
Skadden, Arps, Slate, Meagher & Flom LLP
This report is submitted for the general information of the
shareholders of The Gabelli Equity Income Fund. It is not authorized
for distribution to prospective investors unless preceded or
accompanied by an effective prospectus.
GAB444Q408SC
SHAREHOLDER COMMENTARY
DECEMBER 31, 2008
The Gabelli Equity Income Fund
First Quarter Report (a)
December 31, 2008
To Our Shareholders,
During the quarter ended December 31, 2008, The Gabelli Equity Income Fund (the “Fund”) was
down 20.88%, while the Standard & Poor’s (“S&P”) 500 Index and the Lipper Equity Income Fund Average
declined 21.95% and 19.53%, respectively.
Enclosed is the investment portfolio as of December 31, 2008.
Comparative Results
Average Annual Returns through December 31, 2008 (a)(b)
Since
Six
Inception
Months
1 Year
3 Year
5 Year
10 Year 15 Year
(1/2/92)
Quarter
Gabelli Equity Income Fund
Class AAA . . . . . . . . . . . . . . . . . . .(20.88)% (27.85)% (34.96)% (5.48)% 0.30%
3.78% 8.04%
8.70%
S&P 500 Index . . . . . . . . . . . . . . . . . .(21.95)
(28.48) (36.99)
(8.36)
(2.19)
(1.38)
6.46
6.74
Nasdaq Composite Index . . . . . . . . . .(24.61)
(31.22) (40.54) (10.58)
(4.67)
(3.24)
4.83
5.99
Lipper Equity Income Fund Average . .(19.53)
(25.30) (33.77)
(6.69)
(0.73)
1.08
6.07
6.91
Class A . . . . . . . . . . . . . . . . . . . . . . . .(20.88)
(27.83) (34.93)
(5.47)
0.28
3.77
8.04
8.70
(25.43)(c) (31.98)(c) (38.67)(c) (7.32)(c) (0.90)(c) 3.16(c) 7.61(c)
8.32(c)
Class B . . . . . . . . . . . . . . . . . . . . . . . .(21.04)
(28.08) (35.46)
(6.17)
(0.46)
3.39
7.77
8.46
(24.99)(d) (31.68)(d)(38.69)(d) (7.12)(d) (0.86)(d) 3.39
7.77
8.46
Class C . . . . . . . . . . . . . . . . . . . . . . . .(21.05)
(28.13) (35.48)
(6.19)
(0.44)
3.40
7.78
8.47
(21.84)(e) (28.85)(e)(36.13)(e) (6.19)
(0.44)
3.40
7.78
8.47
Class I . . . . . . . . . . . . . . . . . . . . . . . .(20.78)
(27.67) (34.73)
(5.37)
0.37
3.82
8.07
8.72
In the current prospectus, 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 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) The Fund’s fiscal year ends September 30.
(b) Returns represent past performance and do not guarantee future results. Total returns and average annual
returns reflect changes in share price and 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. 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 more information
about this and other matters and should be read carefully before investing.
The Class AAA Shares net asset values (“NAVs”) per share are used to calculate performance for the periods prior to
the issuance of Class A Shares, Class B Shares, and Class C Shares on December 31, 2003 and Class I Shares on
January 11, 2008. The actual performance for the Class B Shares and Class C Shares would have been lower and
Class I Shares would have been higher due to the differences in expenses associated with these classes of shares. The
S&P 500 Index of the largest U.S. companies and the Nasdaq Composite Index (measures all Nasdaq domestic and
international common type stocks under an unmanaged market capitalization weighted methodology) are unmanaged
indicators of stock market performance, while the Lipper Equity Income Fund Average reflects the average performance
of mutual funds classified in this particular category. Dividends are considered reinvested (except for the Nasdaq
Composite Index). You cannot invest directly in an index.
(c) Includes the effect of the maximum 5.75% sales charge at the beginning of the period.
(d) Performance results include the deferred sales charges for the Class B Shares upon redemption at the end of the
quarter, six months, one year, three year, and five year periods of 5%, 5%, 5%, 3%, and 2%, respectively, of the Fund’s
NAV per share at the time of purchase or sale, whichever is lower. Class B Shares are not available for new purchases.
(e) Performance results include the deferred sales charges for the Class C Shares upon redemption at the end of the quarter,
six months, and one year periods of 1% of the Fund’s NAV per share at the time of purchase or sale, whichever is lower.
We have separated the portfolio manager’s commentary from the financial statements and investment portfolio due to
corporate governance regulations stipulated by the Sarbanes-Oxley Act of 2002. We have done this to ensure that the
content of the portfolio manager’s commentary is unrestricted. The financial statements and investment portfolio are
mailed separately from the commentary. Both the commentary and the financial statements, including the portfolio of
investments, will be available on our website at www.gabelli.com/funds.
The Gabelli Equity Income Fund
Schedule of Investments — December 31, 2008 (Unaudited)
Shares
165,000
2,000
3,500
10,000
355,000
2,000
1,300,000
72,072,000
100,000
133,000
12,000
800,000
20,000
2,000
3,000
250,000
6,000
50,000
170,000
140,000
5,000
51,192
35,000
21,000
190,000
45,000
132
5,000
918
4,000
150,000
4,000
Market
Value
Shares
Market
Value
7,500 MasterCard Inc., Cl. A . . . . . . . . . . . . . . . . . . $
1,071,975
20,000 R. H. Donnelley Corp.† . . . . . . . . . . . . . . . . . .
7,400
------------------------------------------5,743,435
------------------------------------------Cable and Satellite — 0.8%
190,000 Cablevision Systems Corp., Cl. A . . . . . . . . . .
3,199,600
100,000 DISH Network Corp., Cl. A† . . . . . . . . . . . . . .
1,109,000
16,000 EchoStar Corp., Cl. A† . . . . . . . . . . . . . . . . . .
237,920
55,000 Scripps Networks Interactive Inc., Cl. A . . . . .
1,210,000
60,000 The DIRECTV Group Inc.† . . . . . . . . . . . . . . .
1,374,600
------------------------------------------7,131,120
------------------------------------------Communications Equipment — 0.7%
300,000 Corning Inc. . . . . . . . . . . . . . . . . . . . . . . . . . .
2,859,000
100,000 Motorola Inc. . . . . . . . . . . . . . . . . . . . . . . . . .
443,000
120,000 Thomas & Betts Corp.† . . . . . . . . . . . . . . . . .
2,882,400
------------------------------------------6,184,400
------------------------------------------Computer Hardware — 1.9%
174,500 International Business Machines Corp. . . . . .
14,685,920
350,000 Xerox Corp. . . . . . . . . . . . . . . . . . . . . . . . . . .
2,789,500
------------------------------------------17,475,420
------------------------------------------Computer Software and Services — 0.9%
2,000 EMC Corp.† . . . . . . . . . . . . . . . . . . . . . . . . . .
20,940
115,000 Metavante Technologies Inc.† . . . . . . . . . . . .
1,852,650
230,000 Microsoft Corp. . . . . . . . . . . . . . . . . . . . . . . .
4,471,200
154 Telecom Italia Media SpA† . . . . . . . . . . . . . . .
19
170,000 Yahoo! Inc.† . . . . . . . . . . . . . . . . . . . . . . . . . .
2,074,000
------------------------------------------8,418,809
------------------------------------------Consumer Products — 8.2%
55,000 Altria Group Inc. . . . . . . . . . . . . . . . . . . . . . . .
828,300
180,000 Avon Products Inc. . . . . . . . . . . . . . . . . . . . . .
4,325,400
4,278 British American Tobacco plc . . . . . . . . . . . . .
110,713
15,000 Clorox Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
833,400
8,000 Colgate-Palmolive Co. . . . . . . . . . . . . . . . . . .
548,320
8,000 Compagnie Financiere Richemont SA, Cl. A . .
152,431
660,000 Eastman Kodak Co. . . . . . . . . . . . . . . . . . . . .
4,342,800
63,000 Energizer Holdings Inc.† . . . . . . . . . . . . . . . .
3,410,820
74,000 Fortune Brands Inc. . . . . . . . . . . . . . . . . . . . .
3,054,720
5,000 Hanesbrands Inc.† . . . . . . . . . . . . . . . . . . . . .
63,750
33,000 Harman International Industries Inc. . . . . . . .
552,090
150,000 Kimberly-Clark Corp. . . . . . . . . . . . . . . . . . . .
7,911,000
7,000 National Presto Industries Inc. . . . . . . . . . . . .
539,000
10,000 Pactiv Corp.† . . . . . . . . . . . . . . . . . . . . . . . . .
248,800
50,000 Philip Morris International Inc. . . . . . . . . . . . .
2,175,500
210,000 Procter & Gamble Co. . . . . . . . . . . . . . . . . . .
12,982,200
100,000 Reckitt Benckiser Group plc . . . . . . . . . . . . . .
3,706,527
1,300,000 Swedish Match AB . . . . . . . . . . . . . . . . . . . . .
18,370,753
78,000 Unilever NV, ADR . . . . . . . . . . . . . . . . . . . . . .
1,914,900
120,000 UST Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8,325,600
------------------------------------------74,397,024
------------------------------------------See accompanying notes to schedule of investments.
COMMON STOCKS — 98.9%
Aerospace — 2.8%
Boeing Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . $
7,040,550
Lockheed Martin Corp. . . . . . . . . . . . . . . . . . .
168,160
Northrop Grumman Corp. . . . . . . . . . . . . . . .
157,640
Raytheon Co. . . . . . . . . . . . . . . . . . . . . . . . . .
510,400
Rockwell Automation Inc. . . . . . . . . . . . . . . . .
11,445,200
Rockwell Collins Inc. . . . . . . . . . . . . . . . . . . .
78,180
Rolls-Royce Group plc† . . . . . . . . . . . . . . . . .
6,270,760
Rolls-Royce Group plc, Cl. C† . . . . . . . . . . . .
103,622
------------------------------------------25,774,512
------------------------------------------Agriculture — 1.4%
Archer-Daniels-Midland Co. . . . . . . . . . . . . . .
2,883,000
Monsanto Co. . . . . . . . . . . . . . . . . . . . . . . . . .
9,356,550
The Mosaic Co. . . . . . . . . . . . . . . . . . . . . . . . .
415,200
------------------------------------------12,654,750
------------------------------------------Automotive — 0.3%
General Motors Corp. . . . . . . . . . . . . . . . . . . .
2,560,000
Navistar International Corp.† . . . . . . . . . . . . .
427,600
------------------------------------------2,987,600
------------------------------------------Automotive: Parts and Accessories — 1.8%
ArvinMeritor Inc. . . . . . . . . . . . . . . . . . . . . . .
5,700
BERU AG . . . . . . . . . . . . . . . . . . . . . . . . . . . .
308,590
Genuine Parts Co. . . . . . . . . . . . . . . . . . . . . . .
9,465,000
Johnson Controls Inc. . . . . . . . . . . . . . . . . . .
108,960
Modine Manufacturing Co. . . . . . . . . . . . . . . .
243,500
O’Reilly Automotive Inc.† . . . . . . . . . . . . . . . .
5,225,800
The Pep Boys - Manny, Moe & Jack . . . . . . .
578,200
------------------------------------------15,935,750
------------------------------------------Aviation: Parts and Services — 0.3%
Barnes Group Inc. . . . . . . . . . . . . . . . . . . . . .
72,500
Curtiss-Wright Corp. . . . . . . . . . . . . . . . . . . .
1,709,301
GenCorp Inc.† . . . . . . . . . . . . . . . . . . . . . . . .
128,800
United Technologies Corp. . . . . . . . . . . . . . . .
1,125,600
------------------------------------------3,036,201
------------------------------------------Broadcasting — 0.2%
CBS Corp., Cl. A . . . . . . . . . . . . . . . . . . . . . . .
1,565,600
CBS Corp., Cl. B . . . . . . . . . . . . . . . . . . . . . . .
368,550
Granite Broadcasting Corp.† . . . . . . . . . . . . .
132
Societe Television Francaise 1 . . . . . . . . . . . .
72,560
------------------------------------------2,006,842
------------------------------------------Building and Construction — 0.0%
Colas SA . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
181,201
------------------------------------------Business Services — 0.6%
Automatic Data Processing Inc. . . . . . . . . . . .
157,360
Diebold Inc. . . . . . . . . . . . . . . . . . . . . . . . . . .
4,213,500
Landauer Inc. . . . . . . . . . . . . . . . . . . . . . . . . .
293,200
2
The Gabelli Equity Income Fund
Schedule of Investments (Continued) — December 31, 2008 (Unaudited)
Shares
Market
Value
Market
Value
Shares
400,000
29,000
6,269
25,000
80,000
75,000
100,000
80,000
15,000
7,200
38,000
21,000
55,000
140,000
COMMON STOCKS (Continued)
Consumer Services — 0.1%
67,500 Rollins Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . $
1,220,400
------------------------------------------Diversified Industrial — 3.1%
5,000 3M Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
287,700
5,000 Acuity Brands Inc. . . . . . . . . . . . . . . . . . . . . .
174,550
3,500 Alstom SA . . . . . . . . . . . . . . . . . . . . . . . . . . .
204,240
55,000 Baldor Electric Co. . . . . . . . . . . . . . . . . . . . . .
981,750
110,000 Cooper Industries Ltd., Cl. A . . . . . . . . . . . . .
3,215,300
100,000 Crane Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,724,000
500,000 General Electric Co. . . . . . . . . . . . . . . . . . . . .
8,100,000
200,000 Honeywell International Inc. . . . . . . . . . . . . . .
6,566,000
25,100 ITT Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,154,349
45,300 National Patent Development Corp.† . . . . . . .
58,890
379,703 National Patent Development Corp.† (a)(b) . .
470,108
6,000 Trinity Industries Inc. . . . . . . . . . . . . . . . . . . .
94,560
185,650 Tyco International Ltd. . . . . . . . . . . . . . . . . . .
4,010,040
1,500 Walter Industries Inc. . . . . . . . . . . . . . . . . . . .
26,265
103,710 WHX Corp.† . . . . . . . . . . . . . . . . . . . . . . . . . .
829,680
------------------------------------------27,897,432
------------------------------------------Electronics — 1.7%
600,000 Intel Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8,796,000
340,000 LSI Corp.† . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,118,600
190,000 Texas Instruments Inc. . . . . . . . . . . . . . . . . . .
2,948,800
5,000 Thermo Fisher Scientific Inc.† . . . . . . . . . . . .
170,350
130,750 Tyco Electronics Ltd. . . . . . . . . . . . . . . . . . . .
2,119,457
------------------------------------------15,153,207
------------------------------------------Energy and Utilities: Electric — 1.8%
30,000 American Electric Power Co. Inc. . . . . . . . . . .
998,400
14,000 DTE Energy Co. . . . . . . . . . . . . . . . . . . . . . . .
499,380
85,000 El Paso Electric Co.† . . . . . . . . . . . . . . . . . . .
1,537,650
90,000 FPL Group Inc. . . . . . . . . . . . . . . . . . . . . . . . .
4,529,700
99,784 Great Plains Energy Inc. . . . . . . . . . . . . . . . . .
1,928,825
60,000 Korea Electric Power Corp., ADR . . . . . . . . . .
696,600
56,087 Mirant Corp.† . . . . . . . . . . . . . . . . . . . . . . . . .
1,058,362
1,200,000 Mirant Corp., Escrow† (a) . . . . . . . . . . . . . . .
0
150,000 Northeast Utilities . . . . . . . . . . . . . . . . . . . . . .
3,609,000
80,000 The AES Corp.† . . . . . . . . . . . . . . . . . . . . . . .
659,200
13,333 UIL Holdings Corp. . . . . . . . . . . . . . . . . . . . . .
400,390
------------------------------------------15,917,507
------------------------------------------Energy and Utilities: Integrated — 3.7%
42,000 Allegheny Energy Inc. . . . . . . . . . . . . . . . . . . .
1,422,120
44,000 BP plc, ADR . . . . . . . . . . . . . . . . . . . . . . . . . .
2,056,560
46,000 CH Energy Group Inc. . . . . . . . . . . . . . . . . . . .
2,363,940
70,000 Constellation Energy Group Inc. . . . . . . . . . . .
1,756,300
48,000 Dominion Resources Inc. . . . . . . . . . . . . . . . .
1,720,320
120,000 DPL Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,740,800
200,000 Duke Energy Corp. . . . . . . . . . . . . . . . . . . . . .
3,002,000
17,000
38,000
70,000
70,000
24,000
110,000
65,000
200,000
145,000
38,000
192,000
187,000
20,000
49,000
149,000
35,000
30,000
2,000
94,000
45,000
11,000
120,000
33,000
120,000
25,000
17,518
28,000
170,000
40,000
El Paso Corp. . . . . . . . . . . . . . . . . . . . . . . . . . $
3,132,000
ENI SpA . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
674,812
Iberdrola SA, ADR . . . . . . . . . . . . . . . . . . . . .
225,684
Integrys Energy Group Inc. . . . . . . . . . . . . . .
1,074,500
NSTAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,919,200
OGE Energy Corp. . . . . . . . . . . . . . . . . . . . . . .
1,933,500
PNM Resources Inc. . . . . . . . . . . . . . . . . . . . .
1,008,000
Progress Energy Inc. . . . . . . . . . . . . . . . . . . .
3,188,000
Progress Energy Inc., CVO† (a) . . . . . . . . . . .
4,950
Public Service Enterprise Group Inc. . . . . . . .
210,024
Suncor Energy Inc., New York . . . . . . . . . . . .
741,000
Suncor Energy Inc., Toronto . . . . . . . . . . . . . .
403,499
TECO Energy Inc. . . . . . . . . . . . . . . . . . . . . . .
679,250
Westar Energy Inc. . . . . . . . . . . . . . . . . . . . . .
2,871,400
------------------------------------------34,127,859
------------------------------------------Energy and Utilities: Natural Gas — 1.4%
AGL Resources Inc. . . . . . . . . . . . . . . . . . . . .
532,950
Atmos Energy Corp. . . . . . . . . . . . . . . . . . . . .
900,600
National Fuel Gas Co. . . . . . . . . . . . . . . . . . . .
2,193,100
ONEOK Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,038,400
Piedmont Natural Gas Co. Inc. . . . . . . . . . . . .
760,080
Southern Union Co. . . . . . . . . . . . . . . . . . . . .
1,434,400
Southwest Gas Corp. . . . . . . . . . . . . . . . . . . .
1,639,300
Spectra Energy Corp. . . . . . . . . . . . . . . . . . . .
3,148,000
------------------------------------------12,646,830
------------------------------------------Energy and Utilities: Oil — 7.3%
Anadarko Petroleum Corp. . . . . . . . . . . . . . . .
5,589,750
Canadian Oil Sands Trust . . . . . . . . . . . . . . . .
649,494
Chevron Corp. . . . . . . . . . . . . . . . . . . . . . . . .
14,202,240
ConocoPhillips . . . . . . . . . . . . . . . . . . . . . . . .
9,686,600
Denbury Resources Inc.† . . . . . . . . . . . . . . . .
218,400
Devon Energy Corp. . . . . . . . . . . . . . . . . . . . .
3,219,790
Exxon Mobil Corp. . . . . . . . . . . . . . . . . . . . . .
11,894,670
Marathon Oil Corp. . . . . . . . . . . . . . . . . . . . . .
957,600
Nexen Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . .
521,264
Niko Resources Ltd. . . . . . . . . . . . . . . . . . . . .
68,838
Occidental Petroleum Corp. . . . . . . . . . . . . . .
5,639,060
OPTI Canada Inc.† . . . . . . . . . . . . . . . . . . . . .
65,614
PetroChina Co. Ltd., ADR . . . . . . . . . . . . . . . .
978,780
Petroleo Brasileiro SA, ADR . . . . . . . . . . . . . .
2,938,800
Repsol YPF SA, ADR . . . . . . . . . . . . . . . . . . .
709,830
Royal Dutch Shell plc, Cl. A, ADR . . . . . . . . .
6,352,800
StatoilHydro ASA, ADR . . . . . . . . . . . . . . . . . .
416,500
Total SA, ADR . . . . . . . . . . . . . . . . . . . . . . . . .
968,745
Transocean Ltd.† . . . . . . . . . . . . . . . . . . . . . .
1,323,000
UTS Energy Corp.† . . . . . . . . . . . . . . . . . . . . .
110,166
WesternZagros Resources Ltd.† . . . . . . . . . .
19,441
------------------------------------------66,531,382
-------------------------------------------
See accompanying notes to schedule of investments.
3
The Gabelli Equity Income Fund
Schedule of Investments (Continued) — December 31, 2008 (Unaudited)
Shares
30,000
52,000
38,182
375,000
40,000
40,000
175,000
26,000
60,000
100,000
2,000
350,000
260,000
185,000
200,000
12,000
10,000
115,000
6,000
1,500
40,000
7,609
12,000
110,000
1,000,000
320,000
6,324
220,000
15,000
23,990
25,000
2,000
18,000
225,000
8,825
900,000
40,000
Market
Value
Market
Value
Shares
COMMON STOCKS (Continued)
Energy and Utilities: Services — 1.4%
ABB Ltd., ADR . . . . . . . . . . . . . . . . . . . . . . . . $
450,300
Cameron International Corp.† . . . . . . . . . . . .
1,066,000
GDF Suez† . . . . . . . . . . . . . . . . . . . . . . . . . . .
53
Halliburton Co. . . . . . . . . . . . . . . . . . . . . . . . .
6,817,500
Oceaneering International Inc.† . . . . . . . . . . .
1,165,600
Schlumberger Ltd. . . . . . . . . . . . . . . . . . . . . .
1,693,200
Weatherford International Ltd.† . . . . . . . . . . .
1,893,500
------------------------------------------13,086,153
------------------------------------------Energy and Utilities: Water — 0.1%
Aqua America Inc. . . . . . . . . . . . . . . . . . . . . .
535,340
------------------------------------------Entertainment — 1.7%
Grupo Televisa SA, ADR . . . . . . . . . . . . . . . . .
896,400
Rank Group plc† . . . . . . . . . . . . . . . . . . . . . . .
97,408
The Walt Disney Co. . . . . . . . . . . . . . . . . . . . .
45,380
Time Warner Inc. . . . . . . . . . . . . . . . . . . . . . .
3,521,000
Viacom Inc., Cl. A† . . . . . . . . . . . . . . . . . . . . .
5,231,200
Vivendi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,982,798
------------------------------------------15,774,186
------------------------------------------Environmental Services — 0.7%
Waste Management Inc. . . . . . . . . . . . . . . . . .
6,628,000
------------------------------------------Equipment and Supplies — 1.4%
A.O. Smith Corp. . . . . . . . . . . . . . . . . . . . . . .
354,240
Danaher Corp. . . . . . . . . . . . . . . . . . . . . . . . .
566,100
Flowserve Corp. . . . . . . . . . . . . . . . . . . . . . . .
5,922,500
Ingersoll-Rand Co. Ltd., Cl. A . . . . . . . . . . . . .
104,100
Minerals Technologies Inc. . . . . . . . . . . . . . . .
61,350
Mueller Industries Inc. . . . . . . . . . . . . . . . . . .
1,003,200
Mueller Water Products Inc., Cl. B . . . . . . . . .
64,220
Parker Hannifin Corp. . . . . . . . . . . . . . . . . . . .
510,480
Tenaris SA, ADR . . . . . . . . . . . . . . . . . . . . . . .
2,307,800
Tomkins plc . . . . . . . . . . . . . . . . . . . . . . . . . .
1,768,436
------------------------------------------12,662,426
------------------------------------------Exchange Traded Funds — 0.2%
PROSHARES ULTRA FINANCIALS . . . . . . . . .
1,926,400
------------------------------------------Financial Services — 12.2%
Alleghany Corp.† . . . . . . . . . . . . . . . . . . . . . .
1,783,368
American Express Co. . . . . . . . . . . . . . . . . . .
4,081,000
Ameriprise Financial Inc. . . . . . . . . . . . . . . . .
350,400
Argo Group International Holdings Ltd.† . . . .
813,741
Banco Popular Espanol SA . . . . . . . . . . . . . . .
211,287
Banco Santander Chile SA, ADR . . . . . . . . . . .
70,060
Banco Santander SA, ADR . . . . . . . . . . . . . . .
170,820
Bank of America Corp. . . . . . . . . . . . . . . . . . .
3,168,000
BNP Paribas . . . . . . . . . . . . . . . . . . . . . . . . . .
371,082
Citigroup Inc. . . . . . . . . . . . . . . . . . . . . . . . . .
6,039,000
Commerzbank AG, ADR . . . . . . . . . . . . . . . . .
388,400
45,000
100,000
200,300
29,145
40,000
190,000
24,000
65,000
210,199
12,000
350,000
31,000
102,000
82,000
2,000
424,000
160,000
10,000
100,000
6,000
40,000
45,000
40,000
500
958
160,000
500,000
200,000
12,000
50,000
80,000
2,000
445,509
5,000
2,000
11,000
50,000
5,000
36,000
40,000
180,000
480,000
100,000
30,000
52,000
13,000
150,000
95,000
40,000
Deutsche Bank AG . . . . . . . . . . . . . . . . . . . . . $
1,831,050
Discover Financial Services . . . . . . . . . . . . . .
953,000
Federal National Mortgage Association . . . . .
152,228
Fidelity Southern Corp. . . . . . . . . . . . . . . . . . .
105,213
Freddie Mac . . . . . . . . . . . . . . . . . . . . . . . . . .
29,200
H&R Block Inc. . . . . . . . . . . . . . . . . . . . . . . . .
4,316,800
Huntington Bancshares Inc. . . . . . . . . . . . . . .
183,840
Janus Capital Group Inc. . . . . . . . . . . . . . . . .
521,950
JPMorgan Chase & Co. . . . . . . . . . . . . . . . . .
6,627,574
KeyCorp . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
102,240
Legg Mason Inc. . . . . . . . . . . . . . . . . . . . . . . .
7,668,500
Leucadia National Corp.† . . . . . . . . . . . . . . . .
613,800
Loews Corp. . . . . . . . . . . . . . . . . . . . . . . . . . .
2,881,500
M&T Bank Corp. . . . . . . . . . . . . . . . . . . . . . . .
4,707,620
Manulife Financial Corp. . . . . . . . . . . . . . . . . .
34,060
Marsh & McLennan Companies Inc. . . . . . . .
10,290,480
Merrill Lynch & Co., Inc. . . . . . . . . . . . . . . . .
1,862,400
Moody’s Corp. . . . . . . . . . . . . . . . . . . . . . . . .
200,900
Morgan Stanley . . . . . . . . . . . . . . . . . . . . . . .
1,604,000
Northern Trust Corp. . . . . . . . . . . . . . . . . . . .
312,840
NYSE Euronext . . . . . . . . . . . . . . . . . . . . . . . .
1,095,200
PNC Financial Services Group Inc. . . . . . . . . .
2,205,000
Popular Inc. . . . . . . . . . . . . . . . . . . . . . . . . . .
206,400
Raiffeisen International Bank Holding AG . . . .
13,414
Reinet Investments SCA† . . . . . . . . . . . . . . . .
9,322
SLM Corp.† . . . . . . . . . . . . . . . . . . . . . . . . . .
1,424,000
Sovereign Bancorp Inc.† . . . . . . . . . . . . . . . .
1,490,000
Sterling Bancorp . . . . . . . . . . . . . . . . . . . . . . .
2,806,000
SunTrust Banks Inc. . . . . . . . . . . . . . . . . . . . .
354,480
T. Rowe Price Group Inc. . . . . . . . . . . . . . . . .
1,772,000
TD Ameritrade Holding Corp.† . . . . . . . . . . . .
1,140,000
The Allstate Corp. . . . . . . . . . . . . . . . . . . . . . .
65,520
The Bank of New York Mellon Corp. . . . . . . . .
12,621,270
The Charles Schwab Corp. . . . . . . . . . . . . . . .
80,850
The Dun & Bradstreet Corp. . . . . . . . . . . . . . .
154,400
The Goldman Sachs Group Inc. . . . . . . . . . . .
928,290
The Phoenix Companies Inc. . . . . . . . . . . . . .
163,500
The Student Loan Corp. . . . . . . . . . . . . . . . . .
205,000
The Travelers Companies Inc. . . . . . . . . . . . .
1,627,200
Unitrin Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . .
637,600
Waddell & Reed Financial Inc., Cl. A . . . . . . .
2,782,800
Wells Fargo & Co. . . . . . . . . . . . . . . . . . . . . .
14,150,400
Wilmington Trust Corp. . . . . . . . . . . . . . . . . .
2,224,000
------------------------------------------110,602,999
------------------------------------------Food and Beverage — 12.5%
Anheuser-Busch InBev NV† . . . . . . . . . . . . . .
691,409
Brown-Forman Corp., Cl. A . . . . . . . . . . . . . .
2,632,240
Brown-Forman Corp., Cl. B . . . . . . . . . . . . . .
669,370
Cadbury plc, ADR . . . . . . . . . . . . . . . . . . . . . .
5,350,500
Campbell Soup Co. . . . . . . . . . . . . . . . . . . . . .
2,850,950
Coca-Cola Amatil Ltd., ADR . . . . . . . . . . . . . .
509,600
See accompanying notes to schedule of investments.
4
The Gabelli Equity Income Fund
Schedule of Investments (Continued) — December 31, 2008 (Unaudited)
Shares
10,000
30,000
16,000
260,000
75,000
60,000
120,000
132,000
150,000
125,000
900,000
100,000
105,000
200,000
30,000
3,000
440,000
15,000
100,000
135,000
150,000
12,000
28,008
35,000
50,000
365,000
75,000
55,600
340,000
5,000
135,000
15,000
180,000
25,000
114,000
100,000
300,000
72,000
57,000
140,000
11,276
22,000
105,000
295,000
6,000
35,000
Market
Value
Market
Value
Shares
110,000
5,000
140,000
30,000
880,000
150,000
60,000
760,000
260,000
18,000
40,000
COMMON STOCKS (Continued)
Food and Beverage (Continued)
Coca-Cola Femsa SAB de CV, ADR . . . . . . . . . $
435,100
Constellation Brands Inc., Cl. A† . . . . . . . . . .
473,100
Corn Products International Inc. . . . . . . . . . .
461,600
Dean Foods Co.† . . . . . . . . . . . . . . . . . . . . . .
4,672,200
Del Monte Foods Co. . . . . . . . . . . . . . . . . . . .
535,500
Diageo plc, ADR . . . . . . . . . . . . . . . . . . . . . . .
3,404,400
Dr. Pepper Snapple Group Inc.† . . . . . . . . . . .
1,950,000
Fomento Economico Mexicano
SAB de CV, ADR . . . . . . . . . . . . . . . . . . . . . .
3,977,160
General Mills Inc. . . . . . . . . . . . . . . . . . . . . . .
9,112,500
Groupe Danone . . . . . . . . . . . . . . . . . . . . . . .
7,502,780
Grupo Bimbo SAB de CV, Cl. A . . . . . . . . . . . .
3,788,858
H.J. Heinz Co. . . . . . . . . . . . . . . . . . . . . . . . . .
3,760,000
Heineken NV . . . . . . . . . . . . . . . . . . . . . . . . . .
3,196,414
ITO EN Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,916,713
ITO EN Ltd., Preference . . . . . . . . . . . . . . . . .
298,180
Kellogg Co. . . . . . . . . . . . . . . . . . . . . . . . . . . .
131,550
Kraft Foods Inc., Cl. A . . . . . . . . . . . . . . . . . .
11,814,000
Metro Inc., Cl. A . . . . . . . . . . . . . . . . . . . . . . .
449,575
Nestle’ SA . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,908,489
Nissin Foods Holdings Co. Ltd. . . . . . . . . . . .
4,646,442
PepsiAmericas Inc. . . . . . . . . . . . . . . . . . . . . .
3,054,000
PepsiCo Inc. . . . . . . . . . . . . . . . . . . . . . . . . . .
657,240
Pernod-Ricard SA . . . . . . . . . . . . . . . . . . . . . .
2,062,252
Remy Cointreau SA . . . . . . . . . . . . . . . . . . . .
1,441,549
Sapporo Holdings Ltd. . . . . . . . . . . . . . . . . . .
308,329
The Coca-Cola Co. . . . . . . . . . . . . . . . . . . . . .
16,523,550
The Hershey Co. . . . . . . . . . . . . . . . . . . . . . . .
2,605,500
Tootsie Roll Industries Inc. . . . . . . . . . . . . . . .
1,423,916
Tyson Foods Inc., Cl. A . . . . . . . . . . . . . . . . . .
2,978,400
Wimm-Bill-Dann Foods OJSC, ADR† . . . . . . .
131,550
YAKULT HONSHA Co. Ltd. . . . . . . . . . . . . . . .
2,842,967
------------------------------------------114,167,883
------------------------------------------Health Care — 10.1%
Abbott Laboratories . . . . . . . . . . . . . . . . . . . .
800,550
Advanced Medical Optics Inc.† . . . . . . . . . . .
1,189,800
Aetna Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
712,500
Baxter International Inc. . . . . . . . . . . . . . . . . .
6,109,260
Becton Dickinson & Co. . . . . . . . . . . . . . . . . .
6,839,000
Boston Scientific Corp.† . . . . . . . . . . . . . . . . .
2,322,000
Bristol-Myers Squibb Co. . . . . . . . . . . . . . . . .
1,674,000
Covidien Ltd. . . . . . . . . . . . . . . . . . . . . . . . . .
2,065,680
Eli Lilly & Co. . . . . . . . . . . . . . . . . . . . . . . . . .
5,637,800
GlaxoSmithKline plc, ADR . . . . . . . . . . . . . . .
420,257
Henry Schein Inc.† . . . . . . . . . . . . . . . . . . . . .
807,180
Hospira Inc.† . . . . . . . . . . . . . . . . . . . . . . . . .
2,816,100
Johnson & Johnson . . . . . . . . . . . . . . . . . . . .
17,649,850
Laboratory Corp. of America Holdings† . . . . .
386,460
Medco Health Solutions Inc.† . . . . . . . . . . . .
1,466,850
110,000
529,411
320,000
320,000
60,000
9,000
6,000
320,400
250,000
250,000
7,000
130,000
195,000
45,000
6,615
5,000
40,000
6,016
60,000
406
30,633
35,000
22,000
1,200
2,000
Merck & Co. Inc. . . . . . . . . . . . . . . . . . . . . . . $
3,344,000
Nobel Biocare Holding AG . . . . . . . . . . . . . . .
100,625
Novartis AG, ADR . . . . . . . . . . . . . . . . . . . . . .
6,966,400
Patterson Companies Inc.† . . . . . . . . . . . . . .
562,500
Pfizer Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15,584,800
Schering-Plough Corp. . . . . . . . . . . . . . . . . . .
2,554,500
St. Jude Medical Inc.† . . . . . . . . . . . . . . . . . .
1,977,600
Tenet Healthcare Corp.† . . . . . . . . . . . . . . . . .
874,000
UnitedHealth Group Inc. . . . . . . . . . . . . . . . . .
6,916,000
William Demant Holding A/S† . . . . . . . . . . . .
734,502
Zimmer Holdings Inc.† . . . . . . . . . . . . . . . . . .
1,616,800
------------------------------------------92,129,014
------------------------------------------Hotels and Gaming — 1.2%
International Game Technology . . . . . . . . . . .
1,307,900
Ladbrokes plc . . . . . . . . . . . . . . . . . . . . . . . . .
1,408,150
Las Vegas Sands Corp.† . . . . . . . . . . . . . . . .
1,897,600
MGM Mirage† . . . . . . . . . . . . . . . . . . . . . . . .
4,403,200
Starwood Hotels & Resorts Worldwide Inc. . .
1,074,000
Wynn Resorts Ltd.† . . . . . . . . . . . . . . . . . . . .
380,340
------------------------------------------10,471,190
------------------------------------------Machinery — 1.4%
Caterpillar Inc. . . . . . . . . . . . . . . . . . . . . . . . .
268,020
Deere & Co. . . . . . . . . . . . . . . . . . . . . . . . . . .
12,277,728
------------------------------------------12,545,748
------------------------------------------Manufactured Housing — 0.0%
Champion Enterprises Inc.† . . . . . . . . . . . . . .
140,000
------------------------------------------Metals and Mining — 1.7%
Alcoa Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,815,000
Carpenter Technology Corp. . . . . . . . . . . . . . .
143,780
Freeport-McMoRan Copper & Gold Inc. . . . . .
3,177,200
Newmont Mining Corp. . . . . . . . . . . . . . . . . .
7,936,500
Peabody Energy Corp. . . . . . . . . . . . . . . . . . .
1,023,750
Teck Cominco Ltd., Cl. B . . . . . . . . . . . . . . . .
32,258
------------------------------------------15,128,488
------------------------------------------Publishing — 0.3%
Idearc Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . .
425
Lee Enterprises Inc. . . . . . . . . . . . . . . . . . . . .
16,400
News Corp., Cl. B . . . . . . . . . . . . . . . . . . . . . .
57,633
PagesJaunes Groupe SA . . . . . . . . . . . . . . . .
586,322
Seat Pagine Gialle SpA† . . . . . . . . . . . . . . . . .
33
The E.W. Scripps Co., Cl. A . . . . . . . . . . . . . .
67,699
The McGraw-Hill Companies Inc. . . . . . . . . . .
811,650
The New York Times Co., Cl. A . . . . . . . . . . . .
161,260
The Washington Post Co., Cl. B . . . . . . . . . . .
468,300
Value Line Inc. . . . . . . . . . . . . . . . . . . . . . . . .
69,040
------------------------------------------2,238,762
-------------------------------------------
See accompanying notes to schedule of investments.
5
The Gabelli Equity Income Fund
Schedule of Investments (Continued) — December 31, 2008 (Unaudited)
Shares/
Units
Market
Value
Market
Value
Shares
COMMON STOCKS (Continued)
Real Estate — 0.0%
7,000 Griffin Land & Nurseries Inc. . . . . . . . . . . . . . $
258,020
------------------------------------------Retail — 5.9%
18,000 Copart Inc.† . . . . . . . . . . . . . . . . . . . . . . . . . .
489,420
210,000 Costco Wholesale Corp. . . . . . . . . . . . . . . . . .
11,025,000
350,000 CVS Caremark Corp. . . . . . . . . . . . . . . . . . . . .
10,059,000
50,000 Ingles Markets Inc., Cl. A . . . . . . . . . . . . . . . .
879,500
340,000 Macy’s Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,519,000
170,000 Safeway Inc. . . . . . . . . . . . . . . . . . . . . . . . . . .
4,040,900
500 Sears Holdings Corp.† . . . . . . . . . . . . . . . . . .
19,435
100,000 SUPERVALU Inc. . . . . . . . . . . . . . . . . . . . . . .
1,460,000
190,000 The Great Atlantic & Pacific Tea Co. Inc.† . . .
1,191,300
75,000 The Home Depot Inc. . . . . . . . . . . . . . . . . . . .
1,726,500
60,000 Tractor Supply Co.† . . . . . . . . . . . . . . . . . . . .
2,168,400
225,000 Wal-Mart Stores Inc. . . . . . . . . . . . . . . . . . . .
12,613,500
120,000 Walgreen Co. . . . . . . . . . . . . . . . . . . . . . . . . .
2,960,400
10,000 Weis Markets Inc. . . . . . . . . . . . . . . . . . . . . . .
336,300
110,000 Whole Foods Market Inc. . . . . . . . . . . . . . . . .
1,038,400
------------------------------------------53,527,055
------------------------------------------Specialty Chemicals — 3.2%
44,000 Albemarle Corp. . . . . . . . . . . . . . . . . . . . . . . .
981,200
437 Arkema, ADR . . . . . . . . . . . . . . . . . . . . . . . . .
7,464
51,000 Ashland Inc. . . . . . . . . . . . . . . . . . . . . . . . . . .
536,010
210,000 Chemtura Corp. . . . . . . . . . . . . . . . . . . . . . . .
294,000
75,000 E.I. du Pont de Nemours & Co. . . . . . . . . . . .
1,897,500
120,000 Ferro Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . .
846,000
2,000 FMC Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . .
89,460
20,000 H.B. Fuller Co. . . . . . . . . . . . . . . . . . . . . . . . .
322,200
72,000 International Flavors & Fragrances Inc. . . . . .
2,139,840
3,500 NewMarket Corp. . . . . . . . . . . . . . . . . . . . . . .
122,185
100,000 Omnova Solutions Inc.† . . . . . . . . . . . . . . . . .
65,000
4,000 Quaker Chemical Corp. . . . . . . . . . . . . . . . . . .
65,800
315,000 Rohm and Haas Co. . . . . . . . . . . . . . . . . . . . .
19,463,850
50,000 Sensient Technologies Corp. . . . . . . . . . . . . .
1,194,000
85,000 The Dow Chemical Co. . . . . . . . . . . . . . . . . . .
1,282,650
4,000 Zep Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
77,240
------------------------------------------29,384,399
------------------------------------------Telecommunications — 5.0%
370,000 AT&T Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10,545,000
450,000 BCE Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9,220,500
4,495 Bell Aliant Regional Communications
Income Fund (a)(b) . . . . . . . . . . . . . . . . . . .
85,749
200,000 BT Group plc . . . . . . . . . . . . . . . . . . . . . . . . .
388,768
30,000 BT Group plc, ADR . . . . . . . . . . . . . . . . . . . . .
599,400
140,000 Cable & Wireless plc . . . . . . . . . . . . . . . . . . .
315,012
45,000 CenturyTel Inc. . . . . . . . . . . . . . . . . . . . . . . . .
1,229,850
350,000 Cincinnati Bell Inc.† . . . . . . . . . . . . . . . . . . . .
675,500
335,000 Deutsche Telekom AG, ADR . . . . . . . . . . . . . .
5,125,500
5,360
15,000
140,000
1,500,000
3,300
8,195
144,500
12,000
18,000
225,000
5,000
5,000
115,000
2,600
1,100
300
3,000
33,000
330
330
FairPoint Communications Inc. . . . . . . . . . . . $
17,581
France Telecom SA, ADR . . . . . . . . . . . . . . . .
421,050
Qwest Communications International Inc. . . .
509,600
Sprint Nextel Corp.† . . . . . . . . . . . . . . . . . . . .
2,745,000
Telecom Italia SpA, ADR . . . . . . . . . . . . . . . . .
53,625
Telefonica SA, ADR . . . . . . . . . . . . . . . . . . . . .
552,261
Telephone & Data Systems Inc. . . . . . . . . . . .
4,587,875
TELUS Corp. . . . . . . . . . . . . . . . . . . . . . . . . . .
361,312
TELUS Corp., Non-Voting . . . . . . . . . . . . . . . .
511,560
Verizon Communications Inc. . . . . . . . . . . . . .
7,627,500
Windstream Corp. . . . . . . . . . . . . . . . . . . . . .
46,000
------------------------------------------45,618,643
------------------------------------------Transportation — 0.4%
Burlington Northern Santa Fe Corp. . . . . . . . .
378,550
GATX Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,561,550
------------------------------------------3,940,100
------------------------------------------Wireless Communications — 0.6%
NTT DoCoMo Inc. . . . . . . . . . . . . . . . . . . . . . .
5,059,459
------------------------------------------TOTAL COMMON STOCKS . . . . . . . . . . . . . . . .
901,245,946
------------------------------------------CONVERTIBLE PREFERRED STOCKS — 0.1%
Communications Equipment — 0.0%
Lucent Technologies Capital Trust I,
7.750% Cv. Pfd. . . . . . . . . . . . . . . . . . . . . . .
374,000
------------------------------------------Energy and Utilities: Integrated — 0.0%
El Paso Corp., 4.990% Cv. Pfd. (b) . . . . . . . .
191,709
------------------------------------------Entertainment — 0.0%
Metromedia International Group Inc.,
7.250% Cv. Pfd.† . . . . . . . . . . . . . . . . . . . . .
43,500
------------------------------------------Telecommunications — 0.1%
Cincinnati Bell Inc., 6.750% Cv. Pfd., Ser. B . .
759,000
------------------------------------------TOTAL CONVERTIBLE PREFERRED STOCKS . .
1,368,209
------------------------------------------WARRANTS — 0.0%
Broadcasting — 0.0%
Granite Broadcasting Corp.,
Ser. A, expire 06/04/12† . . . . . . . . . . . . . . .
3
Granite Broadcasting Corp.,
Ser. B, expire 06/04/12† . . . . . . . . . . . . . . .
3
------------------------------------------TOTAL WARRANTS . . . . . . . . . . . . . . . . . . . . .
6
-------------------------------------------
Principal
Amount
--------------------------CORPORATE BONDS — 1.0%
Automotive: Parts and Accessories — 0.1%
$ 800,000 Standard Motor Products Inc., Sub. Deb. Cv.,
6.750%, 07/15/09 . . . . . . . . . . . . . . . . . . . .
See accompanying notes to schedule of investments.
6
732,000
-------------------------------------------
The Gabelli Equity Income Fund
Schedule of Investments (Continued) — December 31, 2008 (Unaudited)
Principal
Amount
Market
Value
CORPORATE BONDS (Continued)
Broadcasting — 0.1%
$2,200,000 Sinclair Broadcast Group Inc.,
Sub. Deb. Cv.,
6.000%, 09/15/12 . . . . . . . . . . . . . . . . . . . . $
1,012,000
350,000 Sinclair Broadcast Group Inc.,
Sub. Deb. Cv. (STEP),
4.875%, 07/15/18 . . . . . . . . . . . . . . . . . . . .
173,250
200,000 Young Broadcasting Inc., Sub. Deb.,
10.000%, 03/01/11 . . . . . . . . . . . . . . . . . . .
3,000
------------------------------------------1,188,250
------------------------------------------Business Services — 0.0%
100,000 BBN Corp., Sub. Deb. Cv.,
6.000%, 04/01/12† (a) . . . . . . . . . . . . . . . .
0
------------------------------------------Communications Equipment — 0.5%
4,000,000 Agere Systems Inc., Sub. Deb. Cv.,
6.500%, 12/15/09 . . . . . . . . . . . . . . . . . . . .
3,945,000
------------------------------------------Computer Hardware — 0.0%
400,000 SanDisk Corp., Cv.,
1.000%, 05/15/13 . . . . . . . . . . . . . . . . . . . .
162,000
------------------------------------------Energy and Utilities — 0.0%
100,000 Texas Competitive Electric Holdings Co. LLC (STEP),
10.500%, 11/01/15 (b) . . . . . . . . . . . . . . . .
71,500
------------------------------------------Financial Services — 0.0%
300,000 M-Systems Finance NV,
1.000%, 03/15/35 . . . . . . . . . . . . . . . . . . . .
252,000
------------------------------------------Retail — 0.3%
4,400,000 The Great Atlantic & Pacific Tea Co. Inc., Cv.,
5.125%, 06/15/11 . . . . . . . . . . . . . . . . . . . .
2,271,500
------------------------------------------Specialty Chemicals — 0.0%
500,000 Ferro Corp., Cv.,
6.500%, 08/15/13 . . . . . . . . . . . . . . . . . . . .
244,375
------------------------------------------Telecommunications — 0.0%
200,000 Williams Communications Group Inc., Escrow,
10.875%, 10/01/09† (a) . . . . . . . . . . . . . . .
0
------------------------------------------TOTAL CORPORATE BONDS . . . . . . . . . . . . . .
8,866,625
------------------------------------------TOTAL INVESTMENTS — 100.0%
(Cost $1,141,895,701) . . . . . . . . . . . . . . . . . $ 911,480,786
-------------------------------------------------------------------------------------Aggregate book cost . . . . . . . . . . . . . . . . . . $1,141,895,701
-------------------------------------------------------------------------------------Gross unrealized appreciation . . . . . . . . . . . $ 76,325,603
Gross unrealized depreciation . . . . . . . . . . .
(306,740,518)
------------------------------------------Net unrealized appreciation/depreciation . . . $ (230,414,915)
--------------------------------------------------------------------------------------
-------------------------------------------------------------(a) Securities fair valued under procedures established by the Board of
Directors. The procedures may include reviewing available financial
information about the company and reviewing valuation of comparable
securities and other factors on a regular basis. At December 31, 2008,
the market value of fair valued securities amounted to $560,807 or
0.06% of total investments.
(b) Security exempt from registration under Rule 144A of the Securities Act
of 1933, as amended. These securities may be resold in transactions
exempt from registration, normally to qualified institutional buyers. At
December 31, 2008, the market value of Rule 144A securities amounted
to $819,066 or 0.09% of total investments.
†
Non-income producing security.
ADR American Depositary Receipt
CVO Contingent Value Obligation
STEP Step coupon bond. The rate disclosed is that in effect at December 31,
2008.
See accompanying notes to schedule of investments.
7
The Gabelli Equity Income Fund
Notes to Schedule of Investments (Unaudited)
1. 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 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 instruments with remaining maturities of 60 days or less that
are not credit impaired are valued at amortized cost, unless the Board determines such amount does not reflect
the securities’ fair value, in which case these securities will be fair valued as determined by the Board. Debt
instruments having a maturity greater than 60 days for which market quotations are readily available are valued
at the 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. Futures contracts are valued at the closing settlement price of the exchange
or board of trade on which the applicable contract is traded.
Securities and assets for which market quotations are not readily available are fair valued as determined by the
Board.
On October 1, 2008, the Fund adopted Statement of Financial Accounting Standard No. 157, “Fair Value
Measurements” (“SFAS 157”) that clarifies the definition of fair value for financial reporting, establishes a
framework for measuring fair value, and requires additional disclosures about the use of fair value
measurements. The three levels of the fair value hierarchy under SFAS 157 are described 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 Fund’s determinations as to the fair value of
investments).
8
The Gabelli Equity Income Fund
Notes to Schedule of Investments (Continued) (Unaudited)
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 and other financial instruments, by inputs
used to value the Fund’s investments as of December 31, 2008 is, as follows:
Investments in
Securities
(Market Value)
Assets
————————
$901,949,732
9,526,104
4,950
—————–——
$911,480,786
—
——
——
——
——
—–
–—
——
—
Valuation Inputs
—————————
Level 1 – Quoted Prices
Level 2 – Other Significant Observable Inputs
Level 3 – Significant Unobservable Inputs
Total
Other Financial
Instruments (Unrealized
Appreciation)*
Assets
————–—————————
—
$19,439
—
————
$19,439
————
————
* Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards, and swaps,
which are valued at the unrealized appreciation/depreciation on the investment.
The following is a reconciliation of Level 3 investments for which significant unobservable inputs were used to
determine fair value:
Investments in
Securities
(Market Value)
————————
$4,950
—
—
0
—
—
–—–—––––—
$4,950
–—
—–
–—
—–
––
––
––
–—
—
–
Balance as of 12/31/07
Accrued discounts/(premiums)
Realized gain/(loss)
Change in unrealized appreciation/(depreciation)
Net purchases/(sales)
Transfers in and/or out of Level 3
Balance as of 12/31/08
Net change in unrealized appreciation/(depreciation) during
the period on Level 3 investments held at 12/31/08
$
0
–—–—––––—
In March 2008, the Financial Accounting Standards Board (the “FASB”) issued Statement of Financial
Accounting Standard No.161, “Disclosures about Derivative Instruments and Hedging Activities” (“SFAS 161”)
that is effective for fiscal years beginning after November 15, 2008. SFAS 161 is intended to improve financial
reporting for derivative instruments by requiring enhanced disclosure that enables investors to understand how
and why an entity uses derivatives, how derivatives are accounted for, and how derivative instruments affect an
entity’s results of operations and financial position. Management is currently evaluating the implications of SFAS
161 on the Fund’s financial statement disclosures.
9
The Gabelli Equity Income Fund
Notes to Schedule of Investments (Continued) (Unaudited)
2. Swap Agreements. The Fund may enter into equity and contract for difference swap transactions. The use
of swaps is a highly specialized activity that involves investment techniques and risks different from those
associated with ordinary portfolio security transactions. In a swap a set of future cash flows are exchanged
between two counterparties. One of these cash flow streams will typically be based on a reference interest rate
combined with the performance of a notional value of shares of a stock. The other will be based on the
performance of the shares of a stock. There is no assurance that the swap contract counterparties will be able
to meet their obligations pursuant to the swap contracts, or that, in the event of default, the Fund will succeed in
pursuing contractual remedies. The Fund thus assumes the risk that it may be delayed in or prevented from
obtaining payments owed to it pursuant to the swap contracts. The creditworthiness of the swap contract
counterparties is closely monitored in order to minimize the risk. Depending on the general state of short-term
interest rates and the returns of the Fund’s portfolio securities at that point in time, such a default could negatively
affect the Fund’s ability to make dividend payments. In addition, at the time a swap transaction reaches its
scheduled termination date, there is a risk that the Fund will not be able to obtain a replacement transaction or
that the terms of the replacement will not be as favorable as on the expiring transaction. If this occurs, it could
have a negative impact on the Fund’s ability to make dividend payments.
The use of derivative instruments involves, to varying degrees, elements of market and counterparty risk in
excess of the amount recognized below. The change in value of swaps, including the accrual of periodic amounts
of interest to be paid or received on swaps, is reported as unrealized appreciation or depreciation.
Effective March 16, 2008, Bear, Stearns International Limited entered into a Guaranty Agreement with JPMorgan
Chase & Co., whereby JPMorgan Chase & Co. unconditionally guarantees the due and punctual payment of
certain liabilities of Bear, Stearns International Limited, including the current liabilities of Bear, Stearns
International Limited to the Fund. As of December 31, 2008, the Fund held contract for difference swaps with
Bear, Stearns International Limited which are covered by the JPMorgan Chase & Co. Guaranty Agreement as
of the date of the report. Details of the swaps at December 31, 2008 are as follows:
Notional
Amount
$87,814 (20,000 shares)
125,534 (140,000 shares)
Equity Security
Received
Interest Rate/
Equity Security Paid
Termination
Date
Net Unrealized
Appreciation
Market Value
Appreciation on:
Rolls-Royce Group plc
Rank Group plc
Overnight LIBOR plus 40 bps plus
Market Value Depreciation on:
Rolls-Royce Group plc
Rank Group plc
02/17/09
05/15/09
$10,814
8,625
——————
$19,439
—
——
——
——
——
——
—
3. Tax Information. Under the current tax law, capital losses related to securities and foreign currency realized
after October 31 and prior to the Fund’s fiscal year end may be treated as occurring on the first day of the
following year. For the year ended September 30, 2008, the Fund deferred capital losses of $5,378,169.
10
Gabelli/GAMCO Funds and Your Personal Privacy
Who are we?
The Gabelli/GAMCO 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 or
Teton Advisors, Inc., which are affiliated with GAMCO Investors, Inc. GAMCO Investors, Inc. is a publicly
held company that has subsidiaries that provide investment advisory or brokerage services for a variety
of clients.
What kind of non-public information do we collect about you if you become a 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.
Gabelli Equity Series Funds, Inc.
The Gabelli Equity Income Fund
One Corporate Center
Rye, New York 10580-1422
E
P
S
800-GABELLI
800-422-3554
fax: 914-921-5118
P
M
V
MANAGEMENT
website: www.gabelli.com
e-mail: info@gabelli.com
Net Asset Value per share available daily by calling
800-GABELLI after 6:00 P.M.
CASH FLOW
RE S E A R C H
Board of Directors
Mario J. Gabelli, CFA
Chairman and Chief
Executive Officer
GAMCO Investors, Inc.
Robert J. Morrissey
Attorney-at-Law
Morrissey, Hawkins & Lynch
Anthony J. Colavita
Attorney-at-Law
Anthony J. Colavita, P.C.
Anthony R. Pustorino
Certified Public Accountant,
Professor Emeritus
Pace University
Vincent D. Enright
Former Senior Vice President
and Chief Financial Officer
KeySpan Corp.
Anthonie C. van Ekris
Chairman
BALMAC International, Inc.
John D. Gabelli
Senior Vice President
Gabelli & Company, Inc.
Salvatore J. Zizza
Chairman
Zizza & Co., Ltd.
Officers
Bruce N. Alpert
President and Secretary
Agnes Mullady
Treasurer
Peter D. Goldstein
Chief Compliance Officer
The
Gabelli
Equity
Income
Fund
Distributor
Gabelli & Company, Inc.
Custodian, Transfer Agent, and Dividend Agent
State Street Bank and Trust Company
Legal Counsel
Skadden, Arps, Slate, Meagher & Flom LLP
This report is submitted for the general information of the
shareholders of The Gabelli Equity Income Fund. It is not authorized
for distribution to prospective investors unless preceded or
accompanied by an effective prospectus.
GAB444Q408SR
FIRST QUARTER REPORT
DECEMBER 31, 2008