Mario Gabelli's Gabelli Asset Fund 4th-Quarter Commentary

INVESTMENT SCORECARD

Sony (+14%, 2.9% of net assets as of December 31, 2021), was among the largest contributors to returns for the fourth quarter as the company continues to benefit from its focus on attractive end markets including games, music and sensors. With inflation a focus certain holdings with pricing power or the ability to act as inflation conduits performed well. This included waste collection company Republic Services (+17%, 1.7%), distributor Genuine Parts (+16%, 1.6%) and distilled spirits makers Diageo (+14%, 1.9%) and Brown Forman (+10%, 2.2%). Several industrial companies including Ametek (+19%, 3.2%) and ITT (+19%, 0.9%) rose with hopes for a strong economic growth in 2022. Finally, Edgewell Personal Care (+26%, 0.8%) has finally seen the demand for razors stabilize and its operational improvements come to fruition.

Media stocks were challenged for a variety of reasons in Q4. ViacomCBS (-20%, 0.6%), Grupo Televisa (-15%, 0.3%) and The Walt Disney Company (-8%, 1.0%) were pressured by varying degrees by the increasing level of investment required to compete in the new streaming world. U.S. cable operator Comcast Corp. (-10%, 1.9%) declined after disclosing broadband subscriber growth would decelerate more than expected. Paypal Holdings (-28%, 0.3%) was caught in a downdraft for payments providers as new technologies threaten existing competitive moats. Finally, Swedish Match (-9%, 2.3%) suffered from headlines early in the quarter suggesting its smokeless tobacco products would be subject to a new nicotine tax in the U.S., a proposal subsequently deleted.

COMPARATIVE RESULTS

Average Annual Returns through December 31, 2021 (a)

Total returns and average annual returns reflect changes in share price, reinvestment of distributions, and are net of expenses.

Performance returns for periods of less than one year are not annualized.

LET’S TALK STOCKS

Deere & Co. (2.6% of net assets as of December 31, 2021) (DE, Financial) (DE – $342.89 – NYSE), headquartered in Moline, Illinois, is a leading global manufacturer of machinery for agricultural, construction, and forestry usage. Its dominant position in North American agricultural equipment markets optimally positions the company for what is expected to be an increase in demand for agricultural equipment both in the near term given cycle dynamics as well as for the long term, as global population and income growth drive crop demand in the coming decades. Its premium product portfolio and strong balance sheet position it well to thrive as its end markets recover. Moreover, DE is a leader in “Precision Ag” technologies that improve farmer productivity through cloud and AI-based improvements on centuries-old farming techniques.

Newmont Corp. (1.3%) (NEM, Financial) (NEM – $62.02 – NYSE) is the largest gold mining company in the world by volume, producingapproximately 6.5 million ounces in 2021. Newmont aims to maintain production through internal expansion projects as some mines deplete. This capital-light model will allow the company to pay increasingly larger dividends if the price of gold stays at current levels or appreciates.

Swedish Match AB (2.3%) (OSTO:SWMA, Financial) (SWMA – $7.97/SEK72.02 – Stockholm Stock Exchange) produces tobacco products that include snus and snuff, chewing tobacco, cigars, and lights. 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. The company has a rapidly growing tobacco-free nicotine pouch product called ZYN that is growing rapidly in the U.S. as well as around the world. In September, the company announced plans to separate its cigar business via a spin-off to shareholders, with the transaction expected to be completed during the second half of 2022. After the spin-off, we believe Swedish Match could be an attractive takeover candidate for a global tobacco company that wants to increase its presence in the smokeless segment.

When discussing specific stocks in the portfolios of the Funds, 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 a Fund’s entire portfolio. For the holdings discussed, the percentage of the Fund’s net assets and their share prices stated in U.S. dollar equivalent terms are presented as of December 31, 2021.

a Other classes of shares are available, with different characteristics. For additional information please contact your financial advisor or call 800-GABELLI.

b Returns would have been lower had Gabelli Funds, LLC (the “Adviser”) not reimbursed certain expenses of the Fund for periods prior to December 31, 1988. The Class AAA Share NAVs are used to calculate performance for the period prior to the issuance of Class I Shares on January 11, 2008. The actual performance of the Class I Shares would have been higher due to lower expenses related to this class of shares. The Fund imposes a 2% redemption fee on shares sold or exchanged within seven days of purchase.

c The S&P 500 Index is a market capitalization weighted index of 500 large capitalization stocks commonly used to represent the U.S. equity market. Dividends are considered reinvested. You cannot invest directly in an index. S&P 500 Index since inception performance is as of February 28, 1986.

In the current prospectuses dated April 30, 2021, the expense ratio for Class I Shares is 1.11%. Class I Shares do not have a sales charge.

Returns represent past performance and do not guarantee future results. 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.