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TETON Westwood SmallCap Equity Fund

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Portfolio Manager: Nicholas F. Galluccio Ticker Symbol: WESCX

Objective

The TETON Westwood SmallCap Equity Fund seeks to provide long-term capital appreciation by investing primarily in smaller capitalization equity securities.

Principal Investment Strategies:
Under normal market conditions, the SmallCap Fund invests at least 80% of its net assets in a portfolio of common stocks of smaller companies. These smaller companies have a market capitalization (defined as shares outstanding times current market price) of between $100 million and $2.5 billion at the time of the SmallCap Fund's initial investment.

In selecting securities for the Fund, the Sub-Adviser considers companies which offer:

  • an increasing return on equity
  • a low debt/equity ratio
  • recent earnings surprises that may mark the beginning of a trend towards improved returns and profitability particularly when these trends have not been fully reflected in consensus earnings estimates
  • current market valuation that is significantly below proprietary valuation estimates

Frequently small capitalization companies exhibit one or more of the following traits:

  • new products or technologies
  • new distribution methods
  • rapid changes in industry conditions due to regulatory or other developments
  • changes in management or similar characteristics that may result in expected growth in earnings

The Fund may invest in relatively new or unseasoned companies, which are in their early stages of development, or small companies in new and emerging industries.

Because smaller growth companies are less actively followed by stock analysts and less information is available on which to base stock price evaluations, the market may overlook favorable trends in particular smaller growth companies, and then adjust its valuation more quickly once investor interest is gained. Smaller growth companies may also be more subject to a valuation catalyst (such as increased investor attention, takeover efforts or a change in management) than larger companies.

The Fund may appeal to you if:

  • you are a long-term investor
  • you seek long-term growth of capital
  • you seek investments in small capitalization stocks as part of your overall investment strategy

You may not want to invest in the Fund if:

  • you are seeking a high level of current income
  • you are conservative in your investment approach you seek stability of principal more than growth of capital.


Securities of smaller companies present greater risks than securities of larger, more established companies. The stocks of smaller companies may trade less frequently and experience more abrupt price movements than stocks of larger companies, therefore, investing in this sector involves special challenges.

The fund typically invests in 50-70 companies. By concentrating in a small number of investments, the Fund's risks are increased because each investment has a greater effect in the Fund's performance than a Fund which is more broadly diversified.

The Fund's share price will fluctuate with changes in the market value of the Fund's portfolio securities. Stocks are subject to market, economic and business risks that cause their prices to fluctuate. When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund.

Investors should consider the investment objectives, risks, sales charges and expense of the fund carefully before investing. The prospectus contains more complete information about this and other matters. The prospectus should be read carefully before investing.

You can obtain a free prospectus by calling at 1-800-GABELLI (1-800-422-3554), or contacting your financial representative or by visiting http://www.gabelli.com.

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