<PAGE>
| Dresdner RCM Biotechnology Fund
| Investment in Securities and Net Assets
| March 31, 1998
| Unaudited
<TABLE>
<CAPTION>
% OF
SHARES COUNTRY EQUITY INVESTMENTS NET ASSETS MARKET VALUE
- ------- ------- ----------------------------------------------------------- ---------- ------------
<S> <C> <C> <C> <C>
DRUGS AND HOSPITAL SERVICES 90.3%
1,800 US Agouron Pharmaceuticals Inc. * $ 68,175
3,500 US Algos Pharmaceutical Corp. 105,875
6,000 US Alkermes Inc. * 149,250
5,000 US Alteon Inc. * 25,312
700 US American Home Products Corp. 66,762
2,500 US Amgen Inc. 152,187
7,500 US Anesta Corp. * 139,687
6,000 US Biosite Diagnostics Inc. * 97,875
700 US Boston Scientific Corp. * 47,250
1,100 US Centocor Inc. * 49,087
4,000 US Cerus Corp. * 66,000
5,000 US Chiron Corp. * 104,689
3,500 US DePuy Inc. 106,094
3,000 US Genentech Inc. * 211,312
3,400 US Gilead Sciences Inc. * 122,400
1,200 US Glaxo Wellcome PLC (Sponsored ADR) 64,950
1,500 US Hyseq Inc. * 18,750
4,500 US Icos Corp. * 68,625
5,500 US Inhale Therapeutic Systems * 149,188
900 US Johnson & Johnson 65,981
5,000 US Ligand Pharmaceuticals Inc. Class B * 79,687
1,400 US Minimed Inc. * 61,950
10,000 US Molecular Biosystems Inc. * 92,500
6,000 US NaPro BioTherapeutics Inc. * 14,813
4,000 US Novoste Corp. * 103,750
9,000 US Penederm Inc. * 116,437
3,500 US Perclose Inc. * 99,094
1,800 US Progenics Pharmaceuticals Inc. * 33,413
4,100 US SangStat Medical Corp. * 130,688
6,000 US Shire Pharmaceuticals Group PLC (Sponsored ADR) * 128,625
900 US Sofamor/Danek Group Inc. * 76,725
2,000 US Vertex Pharmaceuticals Inc. * 63,875
-----------
2,881,006
-----------
TOTAL EQUITY INVESTMENTS (COST $2,703,675) 90.3% 2,881,006
-----------
SHORT-TERM INVESTMENTS
MONEY MARKET FUNDS
136,200 US SSgA Money Market Fund 136,200
136,167 US SSgA U.S. Government Money Market Fund 136,167
-----------
TOTAL SHORT-TERM INVESTMENTS (COST $272,367) 8.5% 272,367
-----------
TOTAL INVESTMENTS (COST $2,976,042) ** 98.8% 3,153,373
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
1
<PAGE>
| Dresdner RCM Biotechnology Fund
| Investment in Securities and Net Assets
| March 31, 1998
| Unaudited
<TABLE>
<CAPTION>
% OF
SHARES COUNTRY EQUITY INVESTMENTS NET ASSETS MARKET VALUE
- ------- ------- ----------------------------------------------------------- ---------- ------------
<S> <C> <C> <C> <C>
OTHER ASSETS LESS LIABILITIES 1.2% $ 36,824
-----------
NET ASSETS 100.0% $ 3,190,197
-----------
-----------
</TABLE>
- -----------------------------------
* Non-income producing security.
** At March 31, 1998, the aggregate cost of investments for book and federal
income tax purposes was approximately the same.
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
| Dresdner RCM Emerging Markets Fund
| Investment in Securities and Net Assets
| March 31, 1998
| Unaudited
<TABLE>
<CAPTION>
% OF
SHARES COUNTRY EQUITY INVESTMENTS NET ASSETS MARKET VALUE
- ------- ------- ----------------------------------------------------------- ---------- ------------
<S> <C> <C> <C> <C>
CONSUMER NONDURABLES SECTOR 17.1%
BEVERAGE/TOBACCO 9.3%
3,000 MX Coca-Cola Femsa S.A. (ADR) $ 61,313
3,000 CH Compia Cervecerias Unidas S.A. (ADR) 90,750
11,300 MX Fomento Economico Mexicano-B 82,117
2,400 SA South African Breweries Inc. 71,157
-----------
305,337
-----------
FOOD/FOOD PROCESSING 3.1%
27,000 MX Grupo Industrial Bimbo Ser A 71,636
25,000 MY United Plantations Berhad 31,731
-----------
103,367
-----------
HOUSEHOLD/RELATED NONDURABLES 2.7%
17,000 MX Kimberly-Clark de Mexico-A 87,814
RETAIL TRADE 2.0%
69,000 SA Metro Cash & Carry Limited 65,727
CYCLICALS/CAPITAL GOODS SECTOR 9.3%
BUILDING/CONSTRUCTION 5.0%
190,000 HK China Resources Beijing Land 101,764
6,900 MX Consorcio ARA S.A. * 32,240
600 HU Zalakeramia Rt. 29,535
-----------
163,539
-----------
ELECTRICAL EQUIPMENT 2.3%
6,000 PO Elektrim S.A. 74,718
INDUSTRIAL EQUIPMENT 0.9%
1,300 HU Mezogazdasagi Gepgyarto RT * 29,863
RAW/BASIC MATERIALS 1.1%
1,500 BR Companhia Vale do Rio Doce Pfd. 36,014
HEALTH CARE SECTOR 7.5%
DRUGS & HOSPITAL SUPPLIES 7.5%
300 HU Gedeon Richter Ltd. 144A GDS * 31,463
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
| Dresdner RCM Emerging Markets Fund
| Investment in Securities and Net Assets
| March 31, 1998
| Unaudited
<TABLE>
<CAPTION>
% OF
SHARES COUNTRY EQUITY INVESTMENTS NET ASSETS MARKET VALUE
- ------- ------- ----------------------------------------------------------- ---------- ------------
<S> <C> <C> <C> <C>
DRUGS & HOSPITAL SUPPLIES (CONTINUED)
11,500 KR Medison Co. Ltd. $ 98,808
3,300 CR Pliva d.d. (GDR) 61,875
1,300 IS Teva Pharmaceutical (Sponsored ADR) 55,575
-----------
247,721
-----------
INTEREST SENSITIVE SECTOR 31.8%
BANKING 13.6%
857,143 TR Arbank T.A.S. 62,596
11,000 MX Grupo Financiero Banamex-B (Banacci) 28,023
3,500 PT Banco Comercial Portugues - Rt. 10,855
3,500 PT Banco Comercial Portugues 113,004
2,400 BR Banco de Galicia y Buenos Aires S.A. (Sponsored ADR) 58,800
750 PO Bank Przemyslowo-Handlowy S.A. 59,731
1,700 BR Unibanco (Sponsored GDR) 61,625
1,800 CR Zagrebacka Banka d.d. (Sponsored GDR) 53,775
-----------
448,409
-----------
GENERAL FINANCE 6.0%
1,850 PT BPI-SGPS S.A. Registered Shares 71,159
94,000 MX Grupo Financiero Bancomer-B 55,398
4,600 IN Industrial Credit & Investment (Sponsored GDR) 70,150
-----------
196,707
-----------
INSURANCE 7.6%
3,600 SA Liberty Life Association of Africa Ltd. 121,453
4,000 PT Mundial Confianca * 129,359
-----------
250,812
-----------
UTILITIES 4.5%
1,600 PT Electricidade de Portugal S.A. (Sponsored ADR)* 74,800
195,000 BR Light-Servicos de Electricidade S.A. 74,601
-----------
149,401
-----------
TECHNOLOGY SECTOR 17.7%
COMPUTERS/OFFICE EQUIPMENT 3.3%
130,000 HK Founder Hong Kong Ltd. 109,056
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
| Dresdner RCM Emerging Markets Fund
| Investment in Securities and Net Assets
| March 31, 1998
| Unaudited
<TABLE>
<CAPTION>
% OF
SHARES COUNTRY EQUITY INVESTMENTS NET ASSETS MARKET VALUE
- ------- ------- ----------------------------------------------------------- ---------- ------------
<S> <C> <C> <C> <C>
ELECTRONICS/NEW TECHNOLOGY 14.4%
2,400 TW ASE Test Ltd. * $ 120,600
16,000 MY Malaysian Pacific Industries 47,033
1,900 KR Samsung Electronics Co. 100,144
4,800 TW Siliconware Precision Industrie Co. (Sponsored GDR)* 88,800
4,500 TW Taiwan Semiconductor Manufacturing Co. Ltd. (Sponsored ADR)* 116,438
-----------
473,015
-----------
TELEMEDIA/SERVICES SECTOR 14.4%
COMMUNICATIONS SERVICES 14.4%
1,150 PT Portugal Telecom S.A. 59,815
850 BR Telebras (Sponsored ADR) 110,341
470,000 BR Telecomunicacoes do Rio Janeiro S.A. Pfd. 66,219
210 PT Telecel-Comunicacaoes Pessoais S.A. * 32,599
440,000 BR Telecomunicacoes de Sao Paulo Pfd. 142,790
1,100 MX Telefonos de Mexico S.A. (ADR L) 62,013
-----------
473,777
------------
TOTAL EQUITY INVESTMENTS (COST $2,842,163) ** 97.8% 3,215,277
OTHER ASSETS LESS LIABILITIES 2.2% 73,306
------------
NET ASSETS 100.0% $ 3,288,583
------------
------------
</TABLE>
- -----------------------------------
* Non-income producing security.
** At March 31, 1998, the aggregate cost of investments for book and federal
income tax purposes was approximately the same.
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
| Dresdner RCM Emerging Markets Fund
| Investment in Securities and Net Assets
| March 31, 1998
| Unaudited
The Fund's investments in securities at March 31, 1998 categorized by country:
<TABLE>
<CAPTION>
% OF NET ASSETS
------------------------------------
COUNTRY SHORT TERM
COUNTRY CODE EQUITIES AND OTHER TOTAL
- ----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Brazil BR 16.8% 0.0% 16.8%
Chile CH 2.8% 0.0% 2.8%
Croatia CR 3.5% 0.0% 3.5%
Hong Kong HK 6.4% 0.0% 6.4%
Hungary HU 2.8% 0.0% 2.8%
India IN 2.1% 0.0% 2.1%
Israel IS 1.7% 0.0% 1.7%
Korea KR 6.0% 0.0% 6.0%
Malaysia MY 2.4% 0.0% 2.4%
Mexico MX 14.6% 0.0% 14.6%
Poland PO 4.1% 0.0% 4.1%
Portugal PT 14.9% 0.0% 14.9%
South Africa SA 7.9% 0.0% 7.9%
Turkey TR 1.9% 0.0% 1.9%
Taiwan TW 9.9% 0.0% 9.9%
United States US 0.0% 2.2% 2.2%
-------- ---------- ------
Total 97.8% 2.2% 100.0%
-------- ---------- ------
-------- ---------- ------
</TABLE>
6
<PAGE>
| Dresdner RCM Equity Funds, Inc.
| Statements of Assets and Liabilities
| March 31, 1998
| Unaudited
<TABLE>
<CAPTION>
Dresdner RCM Dresdner RCM
Biotechnology Emerging Markets
Fund Fund
------------- ----------------
<S> <C> <C>
ASSETS:
Investments at cost $ 2,703,675 $ 2,842,163
------------- --------------
------------- --------------
Short-term investments at cost $ 272,367 $ -
------------- -------------
------------- -------------
Investments at value (Note 1) 2,881,006 3,215,277
Foreign currency at value (Note 1) - 326
Cash 307,603 193,137
Short-term investments at value 272,367 -
Receivables:
Investments sold 32,461 -
Investment Manager (Note 6) 29,851 28,606
Fund shares sold 5,000 -
Dividends and dividend reclaims 1,552 3,952
Interest 600 8,615
Organizational costs (Note 5) 9,507 19,014
------------- ------------
Total Assets 3,539,947 3,468,927
------------- ------------
LIABILITIES:
Payables:
Investments purchased 304,656 121,255
Organizational costs (Note 5) 10,000 20,000
Management fees (Note 6) 7,847 7,648
Registration and filing fees 7,344 5,000
Accounting fees 3,750 5,000
Directors' fees and expenses (Note 8) 3,208 3,208
12b-1 fees (Note 7) 1,921 -
Miscellaneous expenses 11,024 18,233
------------- -------------
Total Liabilities 349,750 180,344
------------- -------------
NET ASSETS $ 3,190,197 $ 3,288,583
------------- ------------
------------- ------------
NET ASSETS CONSIST OF:
Paid-in capital (Note 3) $ 3,014,088 $ 3,000,105
Accumulated net investment income (loss) (4,220) 1,486
Accumulated net realized gain (loss) on investments
and foreign currency transactions 2,998 (86,656)
Net unrealized appreciation on foreign currency transactions - 534
Net unrealized appreciation on investments 177,331 373,114
------------- -------------
NET ASSETS $ 3,190,197 $ 3,288,583
------------- ------------
------------- ------------
SHARES OUTSTANDING 301,379 300,011
------------- ------------
------------- ------------
NET ASSET VALUE PER SHARE $ 10.59 $ 10.96
------------- ------------
------------- ------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
| Dresdner RCM Equity Funds, Inc.
| Statements of Operations
| For the period ended March 31, 1998
| Unaudited
<TABLE>
<CAPTION>
Dresdner RCM Dresdner RCM
Biotechnology Emerging Markets
Fund Fund
------------- ----------------
<S> <C> <C>
INVESTMENT INCOME:
Income:
Dividends $ 3,365 $ 5,785
Interest 3,877 8,282
Foreign tax withheld (167) (1,428)
------------- -------------
Total income 7,075 12,639
------------- -------------
Expenses:
Registration & filing fees 8,565 5,000
Investment management fees (Note 6) 7,682 7,483
Transfer agent expense 4,800 4,800
Audit fees 4,314 4,313
Directors' fees and expenses (Note 8) 3,208 3,208
12b-1 fees (Note 7) 1,921 -
Amortization of organizational costs (Note 5) 493 986
Miscellaneous expenses 3,604 6,011
------------- -------------
Total expenses before reimbursements 41,382 39,846
Expenses reimbursed by investment manager (Note 6) (29,851) (28,606)
------------- -------------
Total net expenses 11,531 11,240
------------- -------------
Net investment income (loss) (4,456) 1,399
------------- -------------
NET REALIZED AND UNREALIZED GAIN (Loss):
Net realized gain (loss) on investments 2,998 (79,355)
Net realized loss on foreign currency transactions - (6,929)
------------- -------------
Net realized gain (loss) 2,998 (86,284)
------------- -------------
Net change in unrealized appreciation on foreign
currency transactions - 585
Net change in unrealized appreciation on investments 177,331 377,024
------------- -------------
Net unrealized appreciation 177,331 377,609
------------- -------------
Net realized and unrealized gain during the period 180,329 291,325
------------- -------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 175,873 $ 292,724
------------- -------------
------------- -------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
| Dresdner RCM Equity Funds, Inc.
| Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Dresdner RCM
-------------------------------------------------------------------------
Biotechnology Fund Emerging Markets Fund
----------------------------------- ----------------------------------
(Unaudited) (Unaudited)
Three Months Dec. 31, 1996* Three Months Dec. 31, 1996*
Ended to Ended to
March 31, 1998 Dec. 31, 1996 March 31, 1998 Dec. 31, 1996
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $ (4,456) $ 236 $ 1,399 $ 87
Net realized gain (loss) on investments
and foreign currency transactions 2,998 - (86,284) (372)
Net change in unrealized appreciation
(depreciation) on investments and
foreign currency transactions 177,331 - 377,609 (3,961)
-------------- -------------- -------------- --------------
Net increase (decrease) in net assets
resulting from operations 175,873 236 292,724 (4,246)
NET INCREASE FROM CAPITAL SHARE
TRANSACTIONS (Note 3) 14,088 3,000,000 105 3,000,000
-------------- -------------- -------------- --------------
TOTAL INCREASE IN NET ASSETS 189,961 3,000,236 292,829 2,995,754
NET ASSETS:
Beginning of period 3,000,236 - 2,995,754 -
-------------- -------------- -------------- --------------
End of period $ 3,190,197 $ 3,000,236 $ 3,288,583 $ 2,995,754
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
End of period net assets include accumulated
net investment income (loss) of: $ (4,220) $ 236 $ 1,486 $ 87
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
</TABLE>
- -------------------
* Commencement of investment operations.
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
| Dresdner RCM Equity Funds, Inc.
| Financial Highlights
<TABLE>
<CAPTION>
Dresdner RCM
------------------------------------------------------
Biotechnology Fund Emerging Markets Fund
------------------------ -------------------------
(Unaudited) (Unaudited)
1998(1) 1997(2) 1998(1) 1997(2)
----------- --------- ------------ ---------
<S> <C> <C> <C> <C>
For a share outstanding throughout each period
PER SHARE OPERATING PERFORMANCE: (3)
Net asset value, beginning of period $ 10.00 $ 10.00 $ 9.99 $ 10.00
------------ ---------- ----------- ----------
Net investment income (loss) (0.01) - 0.00 -
Net realized and unrealized gain (loss)
on investments 0.60 - 0.97 (0.01)
------------ ---------- ----------- ----------
Net increase (decrease) in net asset
value resulting from investment operations 0.59 - 0.97 (0.01)
------------ ---------- ----------- ----------
NET ASSET VALUE, END OF PERIOD $ 10.59 $ 10.00 $ 10.96 $ 9.99
------------ ---------- ----------- ----------
------------ ---------- ----------- ----------
TOTAL RETURN (4) 5.90% 0.00% 9.71% 0.00%
------------ ---------- ----------- ----------
------------ ---------- ----------- ----------
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 3,190 $ 3,000 $ 3,289 $ 2,996
------------ ---------- ----------- ----------
------------ ---------- ----------- ----------
Ratio of expenses to average net assets:
With reimbursement 1.50% 0.01%(5) 1.50% 0.01%(5)
------------ ---------- ----------- ----------
------------ ---------- ----------- ----------
Without reimbursement (Note 6) 5.39% 0.00% 5.32% 0.00%
------------ ---------- ----------- ----------
------------ ---------- ----------- ----------
Ratio of net investment income to average
net assets:
With reimbursement (0.58%) 0.01%(5) 0.19% 0.00%(5)
------------ ---------- ----------- ----------
------------ ---------- ----------- ----------
Without reimbursement (Note 6) (4.47%) 0.00% (3.63%) 0.00%
------------ ---------- ----------- ----------
------------ ---------- ----------- ----------
Portfolio turnover rate 22.69% 0.00% 32.58% 0.00%
------------ ---------- ----------- ----------
------------ ---------- ----------- ----------
Average commission per share (6) $ 0.0416 - $ 0.0042 $ 0.0079
------------ ---------- ----------- ----------
------------ ---------- ----------- ----------
</TABLE>
- -------------------
(1) For the three-month period ended March 31, 1998.
(2) Period from December 30, 1997 (commencement of operation) to December 31,
1997.
(3) Calculated using the average share method.
(4) Total return measures the change in value of an investment over the period
indicated.
(5) Not annualized. Fund was in operations for two days.
(6) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for security
trades on which commissions are charged. This amount may vary from period
to period and fund to fund depending on the mix of trades executed in
various markets where trading practices and commission rate structures may
differ.
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
| Dresdner RCM Equity Funds, Inc.
| Notes to Financial Statements
| March 31, 1998
| Unaudited
1. SIGNIFICANT ACCOUNTING POLICIES
Dresdner RCM Equity Funds, Inc. (formerly known as the RCM Equity Funds,
Inc.) (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. Dresdner RCM Biotechnology Fund
("Biotechnology Fund") is a non-diversified, no-load series of the Company
and Dresdner RCM Emerging Markets Fund ("Emerging Markets Fund") is a
diversified, no-load series of the Company. The Biotechnology Fund and the
Emerging Markets Fund are collectively referred to as the "Funds." The
Funds commenced operations on December 30, 1997.
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their 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. Actual results may
differ from these estimates.
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
exchangeor in the principal over-the-counter market in which such
securities aretraded 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 bevalued at the closing bid price on such day. If no bid
price is quoted onsuch day, then the security will be valued by such
method as a duly constituted committee of the Board of Directors of the
Company shall determine in good faith to reflect its fair market value.
Readily marketable securities traded only in the over-the-counter market
that are not listed on NASDAQ or similar foreign reporting service will be
valued at the mean bid price, or using such other comparable sources as
the Board of Directors of the Company in good faith deems appropriate to
reflect their fair market value. Other portfolio securities held by the
Funds 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 a duly constituted committee of 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 the
identified cost basis for both financial statement and federal income tax
purposes. Interest income, foreign taxes and expenses are accrued daily.
Dividends are recorded on the ex-dividend date.
c. Foreign Currency Transactions:
The records of the Funds 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 and foreign currency transactions. The Funds do not
isolate that portion of foreign currency exchange fluctuation 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.
<PAGE>
| Dresdner RCM Equity Funds, Inc.
| Notes to Financial Statements
| March 31, 1998
| Unaudited
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
d. Federal Income Taxes:
It is the policy of the Funds 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 Funds 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 Funds 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 for losses as a result of wash sales, foreign
currency transactions and/or passive foreign investment companies.
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 Funds' investments in foreign and/or
emerging markets will subject the Funds to the risk of foreign currency
exchange rate fluctuations, perceived credit risk and adverse economic and
political developments.
3. CAPITAL SHARES
At March 31, 1998, there were 1,000,000,000 shares of the Company's common
stock authorized, at $0.0001 par value. Of this amount, 50,000,000 were
classified as shares of each of the Funds and for each of the other series
of the Company. The remaining 700,000,000 authorized shares of the
Company are unclassified.
There were 300,000 shares sold for a total of $3,000,000 on December 30,
1997 (commencement of operations) for each of the Biotechnology Fund and
Emerging Markets Fund.
Transactions in capital shares for the three-month period ended March 31,
1998 were as follows:
CAPITAL SHARE TRANSACTIONS
<TABLE>
<CAPTION>
Biotechnology Fund Emerging Markets Fund
------------------- ---------------------
Shares Amount Shares Amount
------------------- ---------------------
<S> <C> <C> <C> <C>
Shares sold 1,379 $14,088 11 $105
Shares repurchased - - - -
------------------- ---------------------
Net increase 1,379 $14,088 11 $105
------------------- ---------------------
------------------- ---------------------
</TABLE>
4. PURCHASES AND SALES OF SECURITIES
For the three-month period ended March 31, 1998, purchases and sales of
investment securities, other than U.S. government obligations and
short-term securities, aggregated $3,069,460 and $368,783, respectively,
for the Biotechnology Fund and $1,710,420 and $839,897, respectively, for
<PAGE>
| Dresdner RCM Equity Funds, Inc.
| Notes to Financial Statements
| March 31, 1998
| Unaudited
4. PURCHASES AND SALES OF SECURITIES (CONTINUED)
the Emerging Markets Fund. During the same period, short-term
sales/maturities of U.S. government obligations aggregated $2,730,000 for
the Biotechnology Fund. There were no purchases of U.S. government
obligations by the Funds. At March 31, 1998, the aggregate cost of
investments was the same for book and federal income tax purposes.
5. DEFERRED ORGANIZATIONAL COSTS
Costs incurred by the Funds in connection with its organization aggregated
$10,000 for the Biotechnology Fund and $20,000 for the Emerging Markets
Fund. These costs are being amortized on a straight-line basis over a
five-year period beginning at the commencement of each Fund's operations.
6. TRANSACTIONS WITH RELATED PARTIES
Dresdner RCM Global Investors LLC (formerly known as RCM Capital
Management, L.L.C.) ("Dresdner RCM") manages the Funds' investments and
provides various administrative services, subject to the authority of the
Board of Directors. The Biotechnology Fund pays investment management
fees monthly at an annualized rate of 1.00% for the first $500 million,
0.95% on the next $500 million and 0.90% thereafter based on the average
daily netassets of the Biotechnology Fund. The Emerging Markets Fund pays
investment management fees monthly at an annualized rate of 1.00% of the
value of the Emerging Markets Fund's average daily net assets. For the
three-month period ended March 31, 1998, investment management fees
recorded were $7,682 for the Biotechnology Fund and $7,483 for the
Emerging Markets Fund.
Dresdner RCM has voluntarily agreed, until at least December 31, 1998, to
pay the Funds on a quarterly basis the amount, if any, by which the
ordinary operating expenses of the Company attributable to the Funds for
the quarter (except interest, taxes, and extraordinary expenses) exceed
the annualized rate of 1.50% of each Fund's average daily net assets. In
subsequent years, each Fund will reimburse Dresdner RCM for any such
payments to the extent that the Fund's operating expenses is otherwise
below this expense cap. For the three-month period ended March 31, 1998,
Dresdner RCM reimbursed operating expenses totaling $29,851 for the
Biotechnology Fund and $28,606 for the Emerging Markets Fund.
On March 31, 1998, clients of Dresdner Bank AB/Investment
Management/Institutional Asset Management Division owned 300,000 of the
total 301,379 outstanding shares of the Biotechnology Fund and 300,000 of
the total 300,011 outstanding shares of the Emerging Markets Fund.
7. DISTRIBUTOR
Funds Distributor, Inc. (the "Distributor") acts as distributor of shares
of the Funds. The Company has adopted a distribution plan pursuant to
Rule 12b-1 under the 1940 Act with respect to the Biotechnology Fund and
certain other series of the Company. Under the distribution plan, which
is a "reimbursement plan," the Biotechnology Fund pays the Distributor an
annual fee of up to 0.25% of its average daily net assets, as
reimbursement for certain expenses actually incurred by the Distributor in
connection with distribution of its shares. For the three-month period
ended March 31, 1998, the Biotechnology Fund incurred $1,921 in 12b-1
fees.
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| Dresdner RCM Equity Funds, Inc.
| Notes to Financial Statements
| March 31, 1998
| Unaudited
8. DIRECTORS' FEES
Each Director who is not an interested person of the Company receives from
the Company an annual retainer of $1,000 (the retainer is evenly prorated
among each series of the Company), plus $500 for each meeting of the Board
attended and $250 for each committee meeting attended.
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INVESTMENT MANAGER
Dresdner RCM Global Investors LLC
Four Embarcadero Center
San Francisco, California 94111
TRANSFER AND REDEMPTION AGENT
State Street Bank and Trust Company
1776 Heritage Drive
North Quincy, Massachusetts 02171
DISTRIBUTOR
Funds Distributor, Inc.
60 State Street, Suite 1300
Boston, Massachusetts 02109
CUSTODIAN
Dresdner RCM Biotechnology Fund:
State Street Bank and Trust Company
1776 Heritage Drive
North Quincy, Massachusetts 02171
Dresdner RCM Emerging Markets Fund:
Brown Brothers Harriman & Company
40 Water Street
Boston, Massachusetts 02109
LEGAL COUNSEL
Paul, Hastings, Janofsky & Walker LLP
555 South Flower Street
Los Angeles, California 90071
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
One Post Office Square
Boston, Massachusetts 02109
