RCM EQUITY FUNDS INC
N-30D, 1996-08-29
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<PAGE>

                       RCM GLOBAL TECHNOLOGY FUND
               MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE

   The Fund had an interesting six months. The Fund returned 13.35%, compared 
to 10.10% for the S&P 500 Stock Index and 3.36% for the Lipper Science & 
Technology Index. In January, RCM Capital Management, predecessor to the 
Fund's current investment manager, RCM Capital Management, L.L.C. ("RCM"), 
had expected a period of consolidation in the technology sector before the 
market enters another period of outstanding performance. But the volatile 
environment of the first half was truly a challenging time. The U.S. economy 
at first seemed to slow, but then re-accelerated; then European economies 
began to slow. The intense shortage of semiconductors turned into a glut, and 
the inventory correction for some of the specialty companies, which RCM 
thought would be short-lived, was extended by the weaknesses noted above. A 
huge number of IPO's distracted investors from existing companies; the number 
of negative surprises increased throughout the period. Weaknesses were 
exaggerated by the strength of the dollar and the lack of a summer slowdown 
last year. The IPO mania caused a buyers' stampede into increasingly higher 
risk, lower quality or more fragile companies. This "party" ended with an 
indiscriminate disgorgement of these stocks in early July, after the close of 
the six-month period. The momentum buyers narrowed their focus on an 
increasingly smaller list of companies without regard to what their 
businesses were or how durable their advantages or how high their valuations 
- - investors had not seen so many triple digit multiples since the "growth 
stock" phenomena of the early 1970's! This culminated in some well-publicized 
booms and busts in such stocks as Presstek and Iomega. Eventually, this bust 
spread to most of the high-multiple companies, again in early July. 
"Challenging" is an understatement of what the Fund experienced!

   From the attached graph, you can see that the Fund met these challenges 
and navigated through a difficult six-month period relatively unscathed. 
After the difficult period, RCM indeed feels better about the environment 
than it did as the Fund commenced operations six months ago. The excesses are 
largely gone and buyers are more wary. The most difficult earnings 
comparisons are happening in the second and third calendar quarters of 1996, 
which should be followed by a period of gradual improvement. The inventory 
liquidation cycles should be ending soon. RCM believes that the product 
cycles it has been anticipating are now within sight - new wireless 
infrastructure, new client-server software, and a continued period of 
innovation and infrastructure construction associated with the emerging 
communications paradigm broadly known as the Internet. More importantly, RCM 
feels that the market will return to a more rational environment, where RCM's 
research and valuation skills will enhance shareholder value.

   Specifically, RCM has continued to diversify the Fund's portfolio across 
many segments and to focus on high quality companies that are leaders of 
their industries or are participating in high growth


<PAGE>

industries. The Fund continues to own several stocks that have compelling 
valuations where RCM believes the reality is better than the perception.

   RCM continues to believe that the communications and networking areas will 
benefit the Fund. One of the Fund's holdings, Stratacom, was acquired by 
another, Cisco Systems, a consolidation that RCM supports because the 
upgrading of telecommunications infrastructure is a global phenomenon that 
should continue for many years.

   The Fund continues to have large investments in the business and technical 
software sectors. These areas continue to rank at the top of priority lists 
of corporate spending, and the barriers to entry are formidable. These 
companies supply the databases, the operating systems, the training systems 
and the utilities to run these environments. RCM believes these companies 
will prosper in most environments and will appreciate in value.

   The systems integration and processing sector is well-represented in the 
Fund.  These companies are characterized by consistent growth, a high 
percentage of recurring revenue and, therefore, a predictable earnings 
stream. This sector performed well in the first six months of this year 
because of the increasing uncertainty about the outlook for the economy and 
interest rates.

   RCM underestimated the severity of the inventory correction for our 
specialty semiconductor holdings, and has responded by concentrating the 
Fund's holdings in those companies in which RCM believes the cycle is ending 
and in which there are strong new product cycles unfolding. RCM sees many of 
these companies benefiting from the spread of semiconductors into consumer, 
industrial, and communications products, so RCM has diversified the Fund's 
holdings across these three industries.

   The Fund continues to have modest investments in the computer hardware 
industry, with concentrations in companies that have more than a strong 
industry position. The companies RCM selected tend to have gone through major 
restructuring, have improving margins and are selling at low price to 
earnings ratios. Just as the U.S. demand has lagged the economic recovery for 
these companies, RCM believes that world-wide demand is lagging its recovery, 
especially in Japan and parts of Europe, which may be turning the corner. 
Thus, the disappointments of the first half could turn into recoveries.

   RCM has also continued to add to the Fund's positions in some of the 
wireless and consumer software areas. These stocks have not performed well in 
the first half, but RCM believes that their prospects will improve.

                                       Page 2

<PAGE>

   The Fund has good representation from the commercial aerospace sector. The 
industry is at the start of a long commercial aircraft cycle and leading 
companies should do quite well.

   Finally, RCM has shifted the Fund's holdings in the healthcare industry, 
focusing on those companies with strong product cycles in the next year. The 
defensive characteristics of this group proved less than expected because the 
rising interest rates in the first half depressed some of the multiples, so 
RCM sought companies that could help offset this effect. RCM increased the 
Fund's exposure to biotechnology after that group's recent correction.

   RCM believes it has positioned the Fund to do well in the popular 
scenarios, which are equally likely. If the world economies begin or continue 
their recoveries, and interest rates gradually increase, the Fund has 
companies with strong growth and elasticities that can compensate for lower 
multiples. If recoveries stall and the economies weaken, the Fund owns 
companies that have strong new product cycles and good returns that will 
distinguish their performance and help their stocks. It is this "win-win" 
potential that should once again draw investors to technology. Furthermore, 
RCM continues to believe that technology will be a major driving force of the 
global economy for the next ten years.

                                       Page 3
<PAGE>

RCM GLOBAL TECHNOLOGY FUND
PERFORMANCE SUMMARY
______________________________________________________________________________

$30,000

$29,000
                                                                       $28,450
$28,000
                                                                       $27,587
$27,000

$26,000
                                                                       $25,783
$25,000

$24,000
       -----------------------------------------------------------------------
    12/27/95    1/31/96    2/29/96    3/31/96    4/30/96    5/31/96    6/30/96

___ Fund   --- Upper Science & Technology Fund Index   ==== S&P 500 Stock Index


PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.

The chart above shows the performance of the RCM Global Technology Fund since 
the Fund's inception versus the Standard & Poor's 500 Stock Index+ and the 
Lipper Science & Technology Fund Index++.  The chart represents a cumulative 
return+* of 13.80%, without a redemption fee, for the Fund.  The Fund's 
cumulative return+* with a redemption fee** would have been 12.09%.  The 
chart assumes a hypothetical $25,000++ initial investment in the Fund and 
reflects all Fund expenses.

JUNE 30, 1996 TOTAL RETURNS+
- ----------------------------------------------
Without Redemption Fee   With Redemption Fee**
- ----------------------------------------------
             LIFE OF                LIFE OF
 YTD          FUND*         YTD      FUND*
- ----------------------------------------------
13.35%        13.80%       11.65%    12.09%
- ----------------------------------------------

The data above represents past performance of the Fund, and may not be 
indicative of future results.  The investment return and principal value of 
an investment in the Fund will fluctuate, so that shares, when redeemed, may 
be worth more or less than their original cost.

- --------------
+    The Standard & Poor's 500 Index is a capitalization-weighted index of 
     500 stocks designed to measure performance of the broad domestic economy 
     through changes in the aggregate market value of 500 stocks representing 
     all major industries.
++   The Lipper Science & Technology Fund Index is an equally weighted index 
     of the 10 largest science and technology mutual funds.
+    Returns assume reinvestment of all dividends and capital gains 
     distributions at net asset value.
*    The Fund commenced operations on December 27, 1995.
**   Performance reflects the effects of the 1.5% redemption fee charged on 
     redemptions of shares made within 12 months of purchase.
++   The Fund's minimum initial investment.


                                     Page 4

<PAGE>



                           RCM EQUITY FUNDS, INC.
                        STOCKHOLDER MEETING RESULTS


A Special Meeting of Stockholders of the RCM Equity Funds, Inc. (the 
"Company") was held on Tuesday, May 28, 1996. The number of shares issued, 
outstanding and eligible to vote as of April 18, 1996 (the "Record Date") was 
239,094. Present were 157,436 shares in person or represented by proxy or 
65.85% of the shares outstanding on the Record Date. The matters voted upon 
by stockholders and the resulting votes for each matter are presented below:

1.   The new Investment Management Agreement between the Company, on behalf 
     of the Fund and RCM Capital Management, L.L.C. was approved. For: 
     157,435, Against: 0, Abstain: 0.

2.   Each person nominated as a director was selected as set forth below:

                                             For        Withhold
                                        ------------- ------------
          DeWitt F. Bowman                 157,401         34
          Frank P. Greene                  157,401         34
          Pamela A. Farr                   157,401         34
          Thomas S. Foley                  136,351       21,075
          George G.C. Parker               157,401         34


3.   The selection by the Board of Directors of Coopers & Lybrand L.L.P. as 
     independent public accountants for the fiscal year ending December 31, 
     1996 was approved. For: 157,436, Against: 0, Abstain: 0.


                                       Page 5



<PAGE>

                              RCM GLOBAL TECHNOLOGY FUND
                      INVESTMENTS IN SECURITIES AND NET ASSETS
                                    JUNE 30, 1996
                                     (UNAUDITED)

<TABLE>
<CAPTION>

                                                                % of
Shares    Country          Equity Investments                 Net Assets    Market Value
- ------    ------   -----------------------------              ----------    ------------
<S>       <C>      <C>                                        <C>           <C>
AEROSPACE AND DEFENSE                                             6.0%

2,000      SWDN    Celsius AB *                                              $   26,284
2,390       US     Rohr Industries Inc. *                                        49,891
1,140       US     Sundstrand Corp.                                              41,753
  230       US     United Technologies Corp.                                     26,450
1,000       US     Wyman-Gordon Co. *                                            17,838
                                                                             ----------
                                                                                162,216
                                                                             ----------
BIOTECH AND BIOPHARMACEUTICAL
                                                               3.5%
1,160       US     Centocor Inc. *                                               34,655
7,800       US     CIMA Labs Inc. *                                              58,500
                                                                             ----------
                                                                                 93,155
                                                                             ----------
BUSINESS EQUIPMENT
                                                               1.3%
  330      JPN     Canon Inc. (ADR)                                              34,402

BUSINESS SOFTWARE
                                                              14.2%
1,180      IRE     CBT Group PLC (Sponsored ADR) *                               54,575
  620       US     Computer Associates International Inc.                        44,175
  400       US     FileNet Corp. *                                               14,600
2,550       US     Information Resources Inc. *                                  31,237
2,320       US     Informix Corp. *                                              52,241
  420       US     Microsoft Corp. *                                             50,452
  525       US     Netscape Communications Corp. *                               32,681
1,440       US     Oracle Systems Corp. *                                        56,790
  620       US     Sterling Software Inc. *                                      47,740
                                                                             ----------
                                                                                384,491
                                                                             ----------
COMPONENTS
                                                              10.9%
1,140       US     Altera Corp. *                                                43,320
1,500       US     Analog Devices Inc. *                                         38,365
2,100      TWN     ASE Test Limited *                                            24,413
2,100       US     CP Clare Corp. *                                              54,075
  910       US     Intel Corp.                                                   66,828
  900       US     Molex Inc. Class A                                            26,437
1,120       FR     SGS Thomson Microelectronics N.V. *                           40,180
                                                                             ----------
                                                                                293,618
                                                                             ----------
</TABLE>

   The accompanying notes are an integral part of the financial statements.


                                       Page 6

<PAGE>

                              RCM GLOBAL TECHNOLOGY FUND
                       INVESTMENTS IN SECURITIES AND NET ASSETS
                                    JUNE 30, 1996
                                     (UNAUDITED)

<TABLE>
<CAPTION>

                                                                % of
Shares    Country          Equity Investments                 Net Assets    Market Value
- ------    ------   -----------------------------              ----------    ------------
<S>       <C>      <C>                                        <C>           <C>
COMPUTERS                                                         1.7%

1,000       US     Digital Equipment Corp. *                                 $   45,000

CONSUMER SOFTWARE                                                 2.2%

2,210       US     Electronics Arts Inc. *                                       59,117

DATA PROCESSING AND SERVICES                                     13.6%

  970       US     Ceridian Corp. *                                              48,985
  590       US     Computer Sciences Corp. *                                     44,102
1,200       US     Computrac Inc. *                                               3,150
2,000      SWDN    Enator AB *                                                   46,072
  610       US     First Data Corp. *                                            48,571
1,250       US     Gemstar International Group Ltd. *                            37,500
2,220       US     PMT Services Inc. *                                           63,548
  960       US     Sierra On-Line Inc. *                                         42,120
  500      SWDN    WM-Data AB Series B                                           31,722
                                                                             ----------
                                                                                365,770
                                                                             ----------
ELECTRICAL EQUIPMENT                                              2.3%

  650       US     Cooper Industries Inc.                                        26,975
2,000      JPN     Yamatake-Honeywell                                            36,392
                                                                             ----------
                                                                                 63,367
                                                                             ----------
HEALTH CARE SERVICES                                              3.4%

2,390       US     Curative Technologies Inc. *                                  62,737
  700       US     Total Renal Care Holdings Inc. *                              29,575
                                                                             ----------
                                                                                 92,312
                                                                             ----------
INDUSTRIAL EQUIPMENT                                              1.6%

5,000       JPN    Mitsubishi Heavy Industries Ltd.                              43,570

LOCAL ACCESS TELEPHONE                                            1.1%

  780       US     MFS Communications Inc. *                                     29,347
</TABLE>

   The accompanying notes are an integral part of the financial statements.

                                       Page 7

<PAGE>

                              RCM GLOBAL TECHNOLOGY FUND
                       INVESTMENTS IN SECURITIES AND NET ASSETS
                                    JUNE 30, 1996
                                     (UNAUDITED)

<TABLE>
<CAPTION>

                                                                % of
Shares    Country          Equity Investments                 Net Assets    Market Value
- ------    ------   -----------------------------              ----------    ------------
<S>       <C>      <C>                                        <C>           <C>
LOCAL AREA COMMUNICATIONS                                         6.7%

  600       US     3Com Corp. *                                              $   27,225
  200       US     Cabletron Systems Inc. *                                      13,725
  770       US     Cisco Systems Inc. *                                          43,601
1,590       US     StrataCom Inc. *                                              95,063
                                                                             ----------
                                                                                179,614
                                                                             ----------
MEDICAL PRODUCTS AND TECHNOLOGY                                   1.3%

1,250       US     Sofamor/Danek Group Inc. *                                    34,688

PERIPHERAL EQUIPMENT                                              1.1%

  900       US     Radisys Corp. *                                               30,600

PHYSICIAN MANAGEMENT                                              1.6%

1,980       US     American Oncology Resources Inc. *                            43,065

SPECIALTY COST CONTAINMENT                                        2.5%

1,680       US     Medaphis Corp. *                                              66,780

TECHNICAL SOFTWARE                                                1.4%

1,940       US     Wonderware Corp. *                                            36,618

WIDE AREA COMMUNICATIONS                                          9.6%

  340       US     Glenayre Technologies Inc. *                                  17,000
1,430       US     NETCOM On-line Communications Services Inc. *                 38,610
1,400       US     Network Equipment Technologies Inc. *                         29,750
  620       US     Newbridge Networks Corp. *                                    40,610
2,030      FIN     Nokia Corp. (Sponsored ADR A)                                 75,110
  500       US     QUALCOMM Inc. *                                               26,563
  900       US     Uniphase Corp. *                                              31,950
                                                                             ----------
                                                                                259,593
                                                                             ----------
WIRELESS COMMUNICATIONS                                           3.2%

1,490       US     Airtouch Communications Inc. *                                42,092
1,400       US     American Mobile Satellite Corp. *                             21,700
</TABLE>

   The accompanying notes are an integral part of the financial statements.

                                       Page 8

<PAGE>

                      RCM GLOBAL TECHNOLOGY FUND
                INVESTMENTS IN SECURITIES AND NET ASSETS
                            JUNE 30, 1996
                             (UNAUDITED)

<TABLE>
<CAPTION>

                                                                % of
Shares    Country          Equity Investments                 Net Assets    Market Value
- ------    ------   -----------------------------              ----------    ------------
<S>       <C>      <C>                                        <C>           <C>
WIRELESS COMMUNICATIONS (CONTINUED)

  910       US     Comsat Corp.                                              $   23,660
                                                                             ----------
                                                                                 87,452
                                                                             ----------
TOTAL EQUITY INVESTMENTS (COST $2,240,679)                       89.2%        2,404,775
                                                                             ----------


SHORT-TERM INVESTMENTS

100,000    US   Seven Seas Series U.S. Government Money Market Fund             100,000
100,000    US   Seven Seas Series Money Market Fund                             100,000
                                                                             ----------

TOTAL SHORT-TERM INVESTMENTS (COST $200,000)                      7.4%          200,000
                                                                             ----------

TOTAL INVESTMENTS (COST $2,440,679) **                                        2,604,775

            OTHER ASSETS LESS LIABILITIES                         3.4%           90,698
                                                                             ----------

            NET ASSETS                                          100.0%       $2,695,473
                                                                             ==========
</TABLE>
____________________

*  Non-income producing security.
** For Federal income tax purposes, cost is $2,440,679 and unrealized 
   appreciation (depreciation) of equity securities is as follows:

            Unrealized appreciation              $    272,553
            Unrealized depreciation                  (108,457)
                                                 ------------
            Net unrealized appreciation          $    164,096
                                                 ============

==============================================================================

The Fund's investments in securities at June 30,1996 categorized by country:

                                        % of
            Country                   Net Assets
            -------                   ----------
            Finland                       2.8%
            France                        1.5%
            Ireland                       2.0%
            Japan                         4.2%
            Sweden                        3.9%
            Taiwan                        0.9%
            United States                84.7%
                                     ------------
                                        100.0%
                                     ============



   The accompanying notes are an integral part of the financial statements.

                                       Page 9
<PAGE>

                         RCM GLOBAL TECHNOLOGY FUND
                    STATEMENT OF ASSETS AND LIABILITIES
                              JUNE 30, 1996
                               (UNAUDITED)

<TABLE>
<CAPTION>

ASSETS:
<S>                                                                  <C>
   Investments in securities, at value (cost $2,440,679) (Note 1)    $ 2,604,775
   Cash                                                                  119,968
   Deferred organizational costs (Note 5)                                 67,315
   Receivable from investment manager (Note 6)                            41,953
   Receivable for investments sold                                        27,425
   Prepaid assets                                                         11,003
   Dividends receivable                                                    1,602
                                                                     -----------
      Total Assets                                                     2,874,041
                                                                     -----------

LIABILITIES:
   Payable for investments purchased                                     104,464
   Payable for deferred organizational costs                              26,099
   Payable for printing expenses                                          10,718
   Payable for transfer agent fees                                         8,935
   Payable for legal fees                                                  8,502
   Payable for insurance expenses                                          5,359
   Payable for Directors' fees and expenses                                5,000
   Payable for audit fees                                                  4,710
   Payable for custodian fees                                              1,679
   Payable for registration and filing fees                                  587
   Payable for miscellaneous expenses                                      2,515
                                                                     -----------
      Total Liabilities                                                  178,568
                                                                     -----------
NET ASSETS                                                           $ 2,695,473
                                                                     ===========

NET ASSET VALUE PER SHARE
   ($2,695,473 divided by 236,806 shares outstanding)                $     11.38

NET ASSETS CONSIST OF:
   Paid in capital                                                   $ 2,426,731
   Accumulated net investment loss                                       (11,114)
   Accumulated net realized gain on investments and foreign
    currency transactions                                                115,760
   Net unrealized appreciation on investments                            164,096
                                                                     -----------
NET ASSETS                                                           $ 2,695,473
                                                                     ===========
</TABLE>

    The accompanying notes are an integral part of the financial statements.

                                   Page 10

<PAGE>


                           RCM GLOBAL TECHNOLOGY FUND
                            STATEMENT OF OPERATIONS
                     FOR THE SIX MONTHS ENDED JUNE 30, 1996
                                  (UNAUDITED)

<TABLE>
<CAPTION>

INVESTMENT INCOME:
<S>                                                                  <C>
   Income:
      Dividends (net of foreign withholding tax of $76)              $     5,314

   Expenses:
      Legal fees                                                          22,377
      Registration and filing fees                                        16,253
      Printing expenses                                                   11,189
      Transfer agent fees                                                 13,593
      Directors' fees and expenses                                        10,000
      Amortization of organizational costs (Note 5)                        7,644
      Audit fees                                                           7,210
      Custodian fees                                                       6,345
      Investment management fees (Note 6)                                  9,531
      Insurance expenses                                                   5,383
      Miscellaneous expenses                                               2,485
                                                                     -----------
         Total expenses before reimbursements                            112,010
      Expenses reimbursed by investment manager (Note 6)                 (95,731)
                                                                     -----------
         Total net expenses                                               16,279
                                                                     -----------

            Net investment loss                                          (10,965)
                                                                     -----------

NET REALIZED AND UNREALIZED GAIN:
   Net realized gain from investments                                    114,680
   Net realized gain from foreign currency transactions                    1,080
                                                                     -----------
         Net realized gain                                               115,760
                                                                     -----------

   Net unrealized appreciation on investments                            160,243
                                                                     -----------

            Net realized and unrealized gain during the period           276,003
                                                                     -----------

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS                 $   265,038
                                                                     ===========
</TABLE>

     The accompanying notes are an integral part of the financial statements.

                                    Page 11

<PAGE>

                           RCM GLOBAL TECHNOLOGY FUND
                       STATEMENTS OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>

                                                                               December 27, 1995
                                                            Six months ended     (commencement
                                                              June 30, 1996    of operations) to
                                                               (Unaudited)     December 31, 1995
                                                            ----------------- -------------------
<S>                                                         <C>               <C>
OPERATIONS:
   Net investment loss                                         $  (10,965)          $    (149)
   Net realized gain on investments and foreign
     currency transactions                                        115,760                 -
   Net unrealized appreciation on investments                     160,243               3,853
                                                              -----------           ---------
   Net increase in net assets resulting from
     operations                                                   265,038               3,704

NET INCREASE FROM CAPITAL SHARES TRANSACTIONS
     (NOTE 3)                                                   1,476,731             850,000
                                                              -----------           ---------

NET INCREASE IN NET ASSETS                                      1,741,769             853,704

NET ASSETS:
      Beginning of period                                         953,704             100,000
                                                              -----------           ---------
      End of period                                           $ 2,695,473           $ 953,704
                                                              ===========           =========
</TABLE>

     The accompanying notes are an integral part of the financial statements.

                                    Page 12

<PAGE>

                           RCM GLOBAL TECHNOLOGY FUND
                              FINANCIAL HIGHLIGHTS


Selected data for each share of capital stock outstanding are as follows:

<TABLE>
<CAPTION>
                                                                                  December 27, 1995
                                                            Six months ended        (commencement
                                                              June 30, 1996       of operations) to
                                                               (Unaudited)++      December 31, 1995
                                                            -----------------    -------------------
<S>                                                         <C>                  <C>
PER SHARE OPERATING PERFORMANCE:
   Net asset value, beginning of period                        $   10.04            $   10.00
                                                               ---------            ---------
   Net investment loss                                             (0.05)+                -
   Net realized and unrealized gain
     on investments                                                 1.39                 0.04
                                                               ---------            ---------
   Net increase in net asset value
     resulting from investment operations                           1.34                 0.04
                                                               ---------            ---------

NET ASSET VALUE, END OF PERIOD                                 $   11.38            $   10.04
                                                               =========            =========

TOTAL RETURN *                                                     13.35%                0.40%
                                                               =========            =========

RATIOS AND SUPPLEMENTAL DATA:
Average commission rate paid per share                         $ 0.05630            $ 0.05013
                                                               =========            =========

Net assets, end of period (in 000's)                           $   2,695            $     954
                                                               =========            =========

Ratio of expenses to average net assets                             1.70%**+             0.00%+

Ratio of net investment loss to average
   net assets                                                      (1.15%)**+           (0.02%)+
                                                               =========            =========

Portfolio turnover                                                 85.78%++              0.00%+
                                                               =========            =========
</TABLE>

_____________________
++   On June 14, 1996, RCM Capital Management, L.L.C. became the investment 
     manager (see Note 6).
+    Includes reimbursement by the Fund's investment manager of certain 
     ordinary operating expenses equal to $0.40 per share. Without such 
     reimbursement, the ratio of expenses to average net assets would 
     have been 11.73%** and the ratio of net investment loss to average 
     net assets would have been (11.17%)** (see Note 6).
*    Total return measures the change in value of an investment over the 
     period indicated.
**   Annualized.
+    Not annualized. Fund was in operations for five days, ratios are not 
     meaningful.
++   Not annualized.


     The accompanying notes are an integral part of the financial statements.

                                    Page 13

<PAGE>

                          RCM GLOBAL TECHNOLOGY FUND
                         NOTES TO FINANCIAL STATEMENTS
                                JUNE 30, 1996
                                 (UNAUDITED)

1. SIGNIFICANT ACCOUNTING POLICIES

   RCM Global Technology Fund (the "Fund") is a non-diversified, no-load 
   series of RCM Equity Funds, Inc. (the "Company"). The Company is organized 
   as a Maryland corporation and is registered under the Investment Company 
   Act of 1940, as amended, as an open-end management investment company.

   The following is a summary of significant accounting policies consistently 
   followed by the Fund in the preparation of its financial statements. The 
   policies are in conformity with generally accepted accounting principles 
   which require management to make estimates and assumptions that affect the 
   reported amount of assets and liabilities.

   a. SECURITIES VALUATIONS:

   Investment securities are stated at fair market value. Equity securities 
   traded on stock exchanges are valued at the last sale price on the 
   exchange or in the principal over-the-counter market in which such 
   securities are traded as of the close of business on the day the 
   securities are being valued. If there has been no sale on such day, then 
   the security will be valued at the closing bid price on such day. If no 
   bid price is quoted on such day, then the security will be valued by such 
   method as the Board of Directors of the Company in good faith deems 
   appropriate to reflect its fair market value. Readily marketable 
   securities traded only in the over-the-counter market that are not listed 
   on the National Association of Securities Dealers, Inc. Automated 
   Quotation System or similar foreign reporting service will be valued at 
   the mean bid price, or such other comparable sources as the Board of 
   Directors of the Company deems appropriate to reflect their fair market 
   value. Other portfolio securities held by the Fund will be valued at 
   current market value, if current market quotations are readily available 
   for such securities. To the extent that market quotations are not readily 
   available, such securities will be valued by whatever means the Board of 
   Directors of the Company in good faith deems appropriate to reflect their 
   fair market value.

   Short-term investments with a maturity of 60 days or less are valued at 
   amortized cost, which approximates market value.

   b. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME:

   Security transactions are recorded as of the date of purchase or sale. 
   Realized gains and losses on security transactions are determined on an 
   identified cost basis for both financial statement and federal income tax 
   purposes. Interest income, foreign taxes and expenses are accrued daily.

   c. FOREIGN CURRENCY TRANSLATIONS:

   The records of the Fund are maintained in U.S. dollars. Foreign 
   currencies, investments and other assets and liabilities are translated 
   into U.S. dollars at current exchange rates. Purchases and sales of 
   foreign securities and income and withholding taxes are translated on the 
   respective dates of such transactions. Net realized currency gains and 
   losses include foreign currency gains and losses between trade date and 
   settlement date, sales, forward foreign currency contracts and foreign 
   currency transactions. The Fund does not isolate that portion of foreign 
   currency exchange fluctuation

                                    Page 14

<PAGE>

                         RCM GLOBAL TECHNOLOGY FUND
                        NOTES TO FINANCIAL STATEMENTS
                                JUNE 30, 1996
                                 (UNAUDITED)

   1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

   on investments from unrealized appreciation and depreciation which arises 
   from changes in market prices. Such fluctuations are included with the net 
   unrealized appreciation or depreciation on investments.

   d. FEDERAL INCOME TAXES:

   It is the policy of the Fund to comply with the requirements for 
   qualification as a "regulated investment company" under the Internal 
   Revenue Code of 1986, as amended (the "Code"). It is also the intention of 
   the Fund to make distributions sufficient to avoid imposition of any 
   excise tax under Section 4982 of the Code. Therefore, no provision has 
   been made for Federal or excise taxes on income and capital gains.

   e. DISTRIBUTIONS:

   Distributions to shareholders are recorded by the Fund on the ex-dividend 
   date. Income and capital gain distributions are determined in accordance 
   with Federal income tax regulations which may differ from generally 
   accepted accounting principles. These differences are primarily due to 
   differing treatments of income and gains on various investment securities 
   held by the Fund and timing differences.

2. INVESTMENT IN FOREIGN SECURITY AND CURRENCY

   Investing in foreign equity securities and currency transactions involves 
   significant risks, some of which are not typically associated with 
   investments of domestic origin. The Fund's investments in foreign and 
   emerging markets will subject the Fund to the risk of foreign currency 
   exchange rate fluctuations, perceived credit risk and adverse economic and 
   political developments.

3. CAPITAL SHARES

   At June 30, 1996, there were 1,000,000,000 shares of the Company's capital 
   stock authorized, at $0.0001 par value. Of this amount, 50,000,000 were 
   classified as shares of the Fund and 950,000,000 remain unclassified. 
   There were 84,980 shares sold for a total of $850,000 from December 27, 
   1995 (commencement of operations) to December 31, 1995 and transactions in 
   capital shares for the six months ended June 30, 1996 were as follows:

                         CAPITAL SHARE TRANSACTIONS

                                           Six months ended June 30, 1996
                                        ------------------------------------
                                           Shares                 Amount
                                        ------------           -------------
Shares sold                               144,114               $ 1,503,357
Shares repurchased                         (2,288)                  (26,626)
                                        ------------           -------------
Net increase                              141,826               $ 1,476,731
                                        ============           =============

                                      Page 15


<PAGE>

                             RCM GLOBAL TECHNOLOGY FUND
                            NOTES TO FINANCIAL STATEMENTS
                                    JUNE 30, 1996
                                     (UNAUDITED)

3. CAPITAL SHARES (CONTINUED)

   At June 30, 1996, two affiliated shareholders individually held greater 
   than 5%, and in aggregate held approximately 54%, of the outstanding 
   shares of the Fund.

4. PURCHASES AND SALES OF SECURITIES

   Purchases and sales proceeds of investment securities by the Fund, 
   excluding short-term securities, aggregated $2,874,897 and $1,469,337, 
   respectively, for the six months ended June 30, 1996.

5. DEFERRED ORGANIZATIONAL COSTS

   Costs incurred by the Fund in connection with its organization aggregated 
   $75,000. These costs are being amortized on a straight-line basis over a 
   five-year period beginning at the commencement of the Fund's operations. 
   In the event that any of the initial shares of the Fund are redeemed 
   during the amortization period, the redemption proceeds will be reduced by 
   any unamortized organizational expense allocable to the shares redeemed.

6. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES

   On June 14, 1996, all of the outstanding general and limited partnership 
   interests in the Fund's investment manager, RCM Capital Management, a 
   California Limited Partnership ("Old RCM"), were acquired by RCM Capital 
   Management, L.L.C., ("RCM"), a wholly owned subsidiary of Dresdner Bank 
   AG, an international banking organization headquartered in Frankfurt, 
   Germany. Because the transaction may have constituted an "assignment" of 
   the Fund's management agreement with Old RCM under the Investment Company 
   Act of 1940, and thus a termination of such management agreement, the Fund 
   sought and obtained approval of a new management agreement from the 
   Company's Board of Directors and from the Fund's stockholders at a special 
   meeting held on May 28, 1996. The terms of the new management agreement 
   are substantially the same as those of the previous management agreement.

   RCM manages the Fund's investments and provides various administrative 
   services, subject to the authority of the Board of Directors. The Fund 
   pays investment management fees monthly to RCM at an annualized rate of 
   1.00% of the Fund's average daily net assets. For the six months ended 
   June 30, 1996, the Fund recorded investment management fees of $9,531.

   RCM has voluntarily agreed, until at least December 31, 1996, to pay the 
   Fund on a quarterly basis the amount, if any, by which the ordinary 
   operating expenses of the Company attributable to the Fund for the quarter 
   (except interest, taxes, and extraordinary expenses) exceed the annualized 
   rate of 1.75% of the value of the average daily net assets of the Fund. In 
   subsequent years, the Fund will reimburse RCM for any such payments to the 
   extent that the Fund's operating expenses are otherwise below this expense 
   cap. RCM reimbursed Fund operating expenses totaling $95,731 for the six 
   months ended June 30, 1996.

   The RCM Capital Management Profit Sharing Plan, participation in which is 
   limited to employees of RCM, owned 88,532 shares of the Fund on June 30, 
   1996.

                                    Page 16




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