In the third quarter of 2025, the Gabelli International Small Cap Fund (GLOIX) showcased robust performance, largely driven by its strategic investments in gold. The fund's managers, Caesar M. P. Bryan, Gustavo Pifano, and Ashish Sinha, navigated a complex global market, emphasizing a balanced approach across various sectors. The fund strategically initiated a position in Nitto Boseki Co., a move aimed at enhancing exposure to the specialty materials sector, known for its attractive end-market flexibility. Concurrently, the fund exited its holding in Iveco Group, a decision made after evaluating the likelihood of a higher acquisition offer. This commentary provides an overview of the fund's asset allocation, key contributors to its performance, and significant portfolio adjustments during the quarter.
Detailed Report on Fund Performance and Strategic Allocations
The Gabelli International Small Cap Fund, with total net assets of $6.5 million and a Net Asset Value (NAV) of $15.54 for Class I shares, recorded a turnover of 7% since its inception on May 11, 1998. The fund's gross/net expense ratio stood at 4.10%/0.92%.
A standout factor in the fund's third-quarter performance was its substantial gold holdings. These investments emerged as the most significant contributors to the fund's overall gains. The fund's managers continue to meticulously monitor its portfolio, making judicious adjustments based on market dynamics and strategic objectives.
During the quarter, the fund made a notable addition by initiating a position in Nitto Boseki Co., representing 1.0% of the portfolio. This investment was a calculated move to enhance the fund's exposure to companies specializing in unique materials with promising opportunities in various markets. On the other hand, the fund decided to liquidate its position in Iveco Group. This decision was based on the assessment that the company was unlikely to attract a more favorable acquisition bid, thus prompting a reallocation of capital.
The management team, comprising Caesar M. P. Bryan, Gustavo Pifano, and Ashish Sinha, maintains a vigilant stance on market conditions, particularly regarding U.S.-China trade relations and the stability of sovereign debt in developed markets. These factors are continuously evaluated to mitigate potential risks and capitalize on emerging opportunities. The fund's philosophy centers on identifying high-quality, domestically focused small-cap enterprises that demonstrate strong pricing power and operational leverage, positioning the portfolio to thrive in evolving economic landscapes.
The Gabelli International Small Cap Fund's Q3 2025 commentary reflects a proactive and strategic investment approach. The significant contribution of gold holdings underscores the fund's ability to capitalize on market trends, while the thoughtful adjustments to its portfolio, such as the addition of Nitto Boseki and the exit from Iveco Group, highlight a commitment to optimizing returns. As an investor, it's inspiring to see fund managers adeptly balancing growth opportunities with risk management, especially in an unpredictable global economy. This quarter's performance and strategic shifts provide valuable insights into the careful deliberation and expertise that guide the fund, reinforcing the importance of diversification and timely decision-making in achieving robust investment outcomes.