The Safe Harbor of Hybrid Growth: How Gabelli Funds Navigates Turbulent Markets with Utilities and Gold

In a market increasingly defined by tariff-driven volatility and sector polarization, investors are seeking strategies that blend growth potential with defensive stability. Gabelli Funds has positioned itself at the forefront of this demand through its hybrid growth-and-value approach, combining exposure to utilities and gold equities while leveraging strategic partnerships and geographic diversification. This strategy offers a compelling “wait-and-see” alternative for investors wary of overexposure to sectors buffeted by trade wars, regulatory shifts, and macroeconomic uncertainty.

Utilities: The Anchor in a Stormy Sea

Gabelli's utilities portfolio is a masterclass in defensive investing. The sector, as highlighted in recent filings, benefits from three key tailwinds: rising electric demand from data centers, EV adoption, and manufacturing onshoring; regulatory tailwinds favoring infrastructure investment; and rate base growth insulated from tariff impacts. Regulated utilities, such as those in Texas and the Midwest, are particularly attractive due to their guaranteed returns via rate hikes tied to capital investments.

The data underscores this resilience:

Even as tech stocks and industrials face valuation pressures, utilities are trading at a reasonable 17x-18x P/E, offering a 3.4% dividend yield. Notably, acquisitions like Iberdrola's purchase of Avangrid (which Gabelli has long tracked) signal consolidation trends that could further stabilize returns.

Gold Equities: The Hedge Against Chaos

While utilities provide steady income, gold equities act as the portfolio's shock absorber. Gabelli's Gold Fund (GOLDX) focuses on high-quality miners with low-cost, long-life mines—companies like Newmont Corp (NEM) and Agnico Eagle (AEM)—which benefit from rising gold prices driven by inflation and geopolitical tensions.

The fund's YTD return of 61.38% as of June 2025 (vs. the S&P 500's 15%) highlights its success in this arena. Gold's allure lies in its inverse correlation with both equities and bonds, making it a diversifier in portfolios skewed toward growth stocks.

The chart reveals how gold equities have outperformed physical gold, a reflection of Gabelli's active stock selection.

Strategic Partnerships and Geographic Expansion: Building a Fortress

Gabelli's hybrid strategy extends beyond sector allocation. Recent moves, such as the acquisition of Keeley-Teton Advisors and its Zurich expansion, underscore a focus on small-cap equities and European renewables, areas underserved by broader indices. These partnerships enhance research depth in regions like the EU, where green energy mandates are creating opportunities for utilities and infrastructure firms.

The data shows a deliberate tilt toward North America and Europe, where regulatory clarity and demand for grid modernization are strongest.

The Case for a “Wait-and-See” Stance

In a market polarized between sectors (e.g., regulated utilities vs. non-regulated power producers), Gabelli's hybrid approach offers a middle path. Utilities provide ballast against economic slowdowns, while gold equities capitalize on inflation and uncertainty. The fund's 5.2% dividend yield and $175M cash reserves further fortify its resilience.

Investors should note risks: equity issuances could dilute returns, and gold's performance hinges on geopolitical dynamics. Yet for those seeking to avoid the extremes of growth or value traps, Gabelli's strategy offers a pragmatic compromise.

Final Take: A Portfolio for All Seasons

Gabelli Funds' hybrid model isn't just a defensive play—it's a calculated bet on structural shifts in energy demand and monetary policy. Utilities and gold equities, combined with global diversification and active management, create a portfolio that thrives in volatility. For investors willing to wait out the storm, this strategy could be the lighthouse guiding them through choppy waters.

The low correlation between these assets highlights their role as portfolio stabilizers—a critical feature in today's polarized markets.

Investors seeking stability without sacrificing growth would be wise to consider Gabelli's hybrid approach. In a world where “wait-and-see” is the safest mantra, this strategy offers both shelter and opportunity.