RCM EQUITY FUNDS INC, 485BPOS, 1998-05-01

RCM EQUITY FUNDS INC
485BPOS, 1998-05-01

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<PAGE>

As filed with the Securities and Exchange Commission on April 30, 1998
1933 Act File No. 33-97572
1940 Act File No. 811-9100

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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549
- --------------------------------------------------------------------------------

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Post-Effective Amendment No. 7

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 8

- --------------------------------------------------------------------------------
DRESDNER RCM EQUITY FUNDS, INC.
Four Embarcadero Center
San Francisco, California 94111
(415) 954-5400
- --------------------------------------------------------------------------------

Richard W. Ingram, President, Treasurer and Chief Financial Officer

DRESDNER RCM EQUITY FUNDS, INC.
Four Embarcadero Center
San Francisco, California 94111
(800) 726-7240

(Name and Address of Agent for Service)

Copies to:

Timothy B. Parker, Deputy General Counsel Michael Glazer
Dresdner RCM Global Investors LLC Paul, Hastings, Janofsky & Walker LLP
Four Embarcadero Center 555 South Flower Street
San Francisco, California 94111 Los Angeles, California 90071

Shares of Capital Stock Offered: Par Value $.0001 per share.

It is proposed that this filing will become effective:

[x ] Immediately upon filing pursuant to paragraph (b)
[ ] On _________________ pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] On _________________ pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] On _________________ pursuant to paragraph (a)(2) of rule 485

<PAGE>

DRESDNER RCM EQUITY FUNDS, INC.

CROSS REFERENCE SHEET
BETWEEN ITEMS OF PART A AND B OF FORM N-1A AND THE
PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION

ITEM NUMBER OF PART A OF FORM N-1A CAPTIONS IN PROSPECTUS

1. Cover Page Cover Page

2. Synopsis Table of Contents; Overview; Summary
of Fees and Expenses

3. Condensed Financial Information Financial Highlights

4. General Description of Registrant Dresdner RCM Global Funds;
Investment Policies; Investment and
Risk Considerations; General
Information

5. Management of the Fund Organization and Management

5A. Management's Description of Fund *
Performance

6. Capital Stock and Other Securities Dividends, Distributions and Taxes;
General Information

7. Purchase of Securities Being Offered Organization and Management; How to
Purchase Shares

8. Redemption or Repurchase Redemption of Shares

9. Pending Legal Proceedings *

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*Not applicable

C-1

<PAGE>

DRESDNER RCM EQUITY FUNDS, INC.

CROSS REFERENCE SHEET
BETWEEN ITEMS OF PART A AND B OF FORM N-1A AND THE
PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION
(CONTINUED)

ITEM NUMBER OF PART B OF FORM N-1A CAPTIONS IN PROSPECTUS AND STATEMENT
OF ADDITIONAL INFORMATION

10. Cover Page Cover Page

11. Table of Contents Table of Contents

12. General Information and History *

13. Investment Objectives and Investment Objective and Policies;
Policies Investment and Risk Considerations;
Investment Restrictions

14. Management of the Fund Directors and Officers

15. Control Persons and Principal Directors and Officers; Description
Holders of Securities of Capital Shares

16. Investment Advisory and Other The Investment Manager; The
Services Distributor; Additional Information

17. Brokerage Allocation
Execution of Portfolio Transactions

18. Capital Stock and Other Description of Capital Shares
Securities

19. Purchase, Redemption and Pricing How to Purchase Shares
of Securities Being Offered

20. Tax Status Dividends, Distributions and Tax
Status

21. Underwriters The Distributor

22. Calculation of Performance Data Investment Results

23. Financial Statements Additional Information

C-2

<PAGE>
[LOGO]

Dresdner RCM Capital Funds, Inc.

Dresdner RCM Equity Funds, Inc.

Four Embarcadero Center
San Francisco, California 94111
(800) 726-7240

DRESDNER RCM LARGE CAP GROWTH FUND
DRESDNER RCM GLOBAL SMALL CAP FUND
DRESDNER RCM GLOBAL TECHNOLOGY FUND
DRESDNER RCM GLOBAL HEALTH CARE FUND
DRESDNER RCM BIOTECHNOLOGY FUND
DRESDNER RCM INTERNATIONAL GROWTH EQUITY FUND A
DRESDNER RCM EMERGING MARKETS FUND

The mutual funds offered pursuant to this Prospectus (each a "Fund" and,
collectively, the "Funds") have as their investment objective long-term
appreciation of capital primarily through investment in equity and
equity-related securities of domestic or foreign growth companies. As a result,
the Funds' investments are chosen primarily with regard to their potential for
capital appreciation. Current income is considered only as part of total
investment return and is not emphasized.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.

This Prospectus sets forth concisely the information about the Funds
that prospective investors should know before investing. Investors should read
this document and retain it for future use. A Statement of Additional
Information ("SAI") for the Funds dated May 1, 1998 has been filed with the
Securities and Exchange Commission ("SEC") and is incorporated by reference
into this Prospectus. The SAI may be obtained, without charge, by writing or
calling the Company at the address or telephone number set forth above.

Shares of the Funds are not deposits, obligations of, or endorsed or
guaranteed in any way by, Dresdner Bank AG or any other depository institution.
Shares of the Funds are not insured by the Federal Deposit Insurance
Corporation, or any other agency, and are subject to investment risks,
including possible loss of the principal amount invested.

The date of this Prospectus is May 1, 1998

<PAGE>
TABLE OF CONTENTS

<TABLE>
<S> <C>
OVERVIEW_______________________________________ 3
SUMMARY OF FEES AND EXPENSES___________________ 4
FINANCIAL HIGHLIGHTS___________________________ 5
DRESDNER RCM GLOBAL FUNDS______________________ 9
INVESTMENT POLICIES____________________________ 17
INVESTMENT AND RISK CONSIDERATIONS_____________ 25
ORGANIZATION AND MANAGEMENT____________________ 30
HOW TO PURCHASE SHARES_________________________ 35
STOCKHOLDER SERVICES___________________________ 37
REDEMPTION OF SHARES___________________________ 39
DIVIDENDS, DISTRIBUTIONS AND TAXES_____________ 41
GENERAL INFORMATION____________________________ 43
</TABLE>

No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus in connection
with the offer contained in this Prospectus and, if given or made, such
information or representations must not be relied upon as having been
authorized by Dresdner RCM Capital Funds, Inc. or Dresdner RCM Equity Funds,
Inc. This Prospectus is not an offer to sell or a solicitation of an offer to
buy any of the securities offered hereby in any jurisdiction or to any person
to whom it is unlawful to make such offer or solicitation.

2
<PAGE>
OVERVIEW

This Prospectus relates to the Dresdner RCM International Growth Equity
Fund A which is offered by Dresdner RCM Capital Funds, Inc. (the "Capital
Company") and to the Dresdner RCM Large Cap Growth Fund, Dresdner RCM Global
Small Cap Fund, Dresdner RCM Global Technology Fund, Dresdner RCM Global Health
Care Fund, Dresdner RCM Biotechnology Fund and Dresdner RCM Emerging Markets
Fund, which are offered by Dresdner RCM Equity Funds, Inc. (the "Equity
Company" and with the Capital Company, the "Companies"), respectively. Each
Fund's investment objective is long-term appreciation of capital.

DRESDNER RCM LARGE CAP GROWTH FUND invests primarily in domestic and
foreign companies with large market capitalizations.
DRESDNER RCM GLOBAL SMALL CAP FUND invests primarily in small-sized
domestic and foreign companies.

DRESDNER RCM GLOBAL TECHNOLOGY FUND invests primarily in domestic and
foreign companies whose revenues are primarily generated by technology products
and services.

DRESDNER RCM GLOBAL HEALTH CARE FUND invests primarily in domestic and
foreign companies in the health care and related industries.
DRESDNER RCM BIOTECHNOLOGY FUND invests primarily in domestic and foreign
companies in the biotechnology industry.

DRESDNER RCM INTERNATIONAL GROWTH EQUITY FUND A invests primarily in
foreign companies.

DRESDNER RCM EMERGING MARKETS FUND invests primarily in emerging market
companies.

The Funds' investments are chosen primarily with regard to their
potential for capital appreciation. Current income is considered only as part
of total return and is not emphasized. There is no assurance that any Fund will
achieve its investment objective. If you seek an aggressive approach to capital
growth, and can accept the above-average level of price fluctuations that the
Funds may experience, one or more of the Funds may be an appropriate part of
your overall investment strategy. Consider your investment goals, your time
horizon for achieving them, and your tolerance for risk.

Each Fund is managed by Dresdner RCM Global Investors LLC ("Dresdner
RCM" or the "Investment Manager"). Dresdner RCM is an investment adviser
registered with the Securities and Exchange Commission with principal offices in
San Francisco, California. Dresdner RCM, together with its predecessors, have
over 25 years of experience in investing in equity and equity-related
securities. Dresdner RCM, together with its affiliates, currently provides
investment management services to institutional and individual clients and
registered investment companies with aggregate assets in excess of $60 billion.

[LOGO]
<PAGE>
SUMMARY OF FEES AND EXPENSES

The following information is designed to help you understand various
costs and expenses of each Fund that an investor may bear directly or
indirectly. Information about the Biotechnology Fund and the Emerging Markets
Fund is based on their expected expenses for their first full year of
operation. Information about the other Funds is based on their expenses for the
past year. Actual expenses and returns may be greater or less than those shown
below.

SHAREHOLDER TRANSACTION EXPENSES
(applicable to each Fund)

<TABLE>
<S> <C>
Sales load imposed on purchases None
Sales load imposed on reinvested
dividends None
Deferred sales charges on redemptions None
Redemption fee None
Exchange fee None
</TABLE>

ANNUAL OPERATING EXPENSES
(expressed as a percentage of average net assets)

<TABLE>
<CAPTION>
TOTAL FUND
MANAGEMENT RULE 12b-1 OTHER OPERATING
FEE FEE EXPENSES(1) EXPENSES(1)
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------
Large Cap Fund 0.70% 0.15% 0.10% 0.95%
Global Small Cap Fund 1.00% 0.25% 0.50% 1.75%
Technology Fund 1.00% - 0.75% 1.75%
Health Care Fund 1.00% 0.25% 0.25% 1.50%
Biotechnology Fund 1.00% 0.25% 0.25% 1.50%
International Fund 0.75% - 0.25% 1.00%
Emerging Markets Fund 1.00% - 0.50% 1.50%
</TABLE>

EXAMPLE
Assume you invest $1,000 in each Fund, the Funds return 5% annually and each
Fund's expense ratio remains as listed above. The example below shows the
operating expenses that you would indirectly bear as an investor in the Funds.

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
Large Cap Fund $10 $30 $53 $117
Global Small Cap Fund 18 55 95 206
Technology Fund 18 55 95 206
Health Care Fund 15 47 82 179
Biotechnology Fund 15 47 82 179
International Fund 10 32 55 122
Emerging Markets Fund 15 47 82 179

This example should not be considered a representation of past or future returns or expenses,
which may be more or less than those shown.
</TABLE>

- --------------------------------------------------------------------------------

(1) The Investment Manager has voluntarily agreed, until at least December 31,
1998, to pay each Fund on a quarterly basis the amount, if any, by which
ordinary operating expenses of the respective Company attributable to such
Fund for the quarter (except interest, taxes and extraordinary expenses)
exceed such Fund's annualized rate noted above as a percentage of the
average daily net assets of such Fund. Without such reimbursement, the
ratio of other expenses and total Fund operating expenses would have been
0.31% and 1.06% for the International Fund, 1.45% and 2.45% for the
Technology Fund, 1.84% and 3.09% for the Global Small Cap Fund, 1.68% and
2.93% for the Health Care Fund, and 1.78% and 2.63% for the Large Cap Fund.
In subsequent years, each Fund will reimburse the Investment Manager for
any such payments to the extent that each Fund's operating expenses are
otherwise below its expense cap. Other expenses and total Fund operating
expenses for the first year of operation of the Biotechnology Fund and
Emerging Markets Fund, without expense reduction, are estimated to be 4.14%
and 5.39%, respectively, for the Biotechnology Fund and 4.32% and 5.32%,
respectively, for the Emerging Markets Fund.

<PAGE>

FINANCIAL HIGHLIGHTS

The information relating to the Biotechnology Fund and the Emerging
Markets Fund for the three-month period ended March 31, 1998 has been prepared
by the Equity Company and is not audited. The following information relating to
each of the other Funds has been audited by Coopers & Lybrand L.L.P.,
independent accountants, as stated in their opinion appearing in such Fund's
1997 Annual Report to Shareholders (which has been incorporated by reference in
the SAI). This information should be read in conjunction with the financial
statements and related notes, which are included in such Annual Report to
Shareholders.

Copies of the Funds' 1997 Annual Reports to Shareholders are available,
upon request, by either calling Dresdner RCM Global Funds at (800) 726-7240 or
mailing a request to Four Embarcadero Center, San Francisco, California 94111.

[LOGO]
<PAGE>
DRESDNER RCM EQUITY FUNDS, INC.
FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
------------------------------------------------------------------
TECHNOLOGY
LARGE CAP FUND GLOBAL SMALL CAP FUND FUND
------------------------- ------------------------- ----------
For a share outstanding throughout each
fiscal year or period ended December 31 1997 1996(1) 1997 1996(1) 1997
---------- ------------- ---------- ------------- ----------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE: (5)
Net asset value, beginning of period $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 12.60
---------- ------------- ---------- ------------- ----------
Net investment income (loss) 0.01 - (0.13 ) - (0.16 )
Net realized and unrealized gain
(loss) on investments 3.17 - 2.64 - 3.46
---------- ------------- ---------- ------------- ----------
Net increase (decrease) in net asset
value resulting from investment
operations 3.18 - 2.51 - 3.30
---------- ------------- ---------- ------------- ----------
Distributions:
Net investment income (0.01 ) - - - -
Net realized gain on investments (0.64 ) - (1.42 ) - (2.21 )
---------- ------------- ---------- ------------- ----------
Total distributions (0.65 ) - (1.42 ) - (2.21 )
---------- ------------- ---------- ------------- ----------
NET ASSET VALUE, END OF PERIOD $ 12.53 $ 10.00 $ 11.09 $ 10.00 $ 13.69
---------- ------------- ---------- ------------- ----------
---------- ------------- ---------- ------------- ----------
TOTAL RETURN (6) 31.99% 0.00% 25.48% 0.00% 27.08%
---------- ------------- ---------- ------------- ----------
---------- ------------- ---------- ------------- ----------
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 5,025 $ 4,000 $ 4,456 $ 4,000 $ 6,950
---------- ------------- ---------- ------------- ----------
---------- ------------- ---------- ------------- ----------
Ratio of expenses to average net
assets:
With reimbursement 0.95% 0.00%(8) 1.75% 0.00%(8) 1.75%
---------- ------------- ---------- ------------- ----------
---------- ------------- ---------- ------------- ----------
Without reimbursement 2.63% - 3.09% - 2.45%
---------- ------------- ---------- ------------- ----------
---------- ------------- ---------- ------------- ----------
Ratio of net investment income to
average
net assets:
With reimbursement 0.10% 0.00%(8) (1.14%) 0.00%(8) (1.15%)
---------- ------------- ---------- ------------- ----------
---------- ------------- ---------- ------------- ----------
Without reimbursement (1.58%) - (2.49%) - (1.86%)
---------- ------------- ---------- ------------- ----------
---------- ------------- ---------- ------------- ----------
Portfolio turnover 119.87% 0.00% 153.49% 0.00% 189.41%
---------- ------------- ---------- ------------- ----------
---------- ------------- ---------- ------------- ----------
Average commission rate paid per share
(7) $ 0.0469 $ 0.0326 $ 0.0202 $ 0.0465 $ 0.0678
---------- ------------- ---------- ------------- ----------
---------- ------------- ---------- ------------- ----------
</TABLE>

- --------------------------------------------------------------------------------

(1) Period from December 31, 1996 (commencement of operation) to December 31,
1996.
(2) Period from December 27, 1995 (commencement of operation) to December 31,
1995.
(3) For the three-month period ended March 31, 1998.
(4) Period from December 30, 1997 (commencement of operation) to December 31,
1997.
(5) Calculated using the average share method.
(6) Total return measures the change in value of an investment over the period
indicated.
(7) 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.
(8) Not annualized. Fund was in operation for less than five days.

<PAGE>

<TABLE>
<CAPTION>
DRESDNER RCM
---------------------------------------------------------------------------------
TECHNOLOGY FUND HEALTH CARE FUND BIOTECHNOLOGY FUND
------------------------- ------------------------- -------------------------
(UNAUDITED)
1996 1995(2) 1997 1996(1) 1998(3) 1997(4)
---------- ------------- ---------- ------------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE: (5)
Net asset value, beginning of period $ 10.04 $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00
---------- ------------- ---------- ------------- ---------- -------------
Net investment income (loss) (0.15 ) - (0.06 ) - (0.01 ) -
Net realized and unrealized gain
(loss) on investments 2.80 0.04 3.03 - 0.60 -
---------- ------------- ---------- ------------- ---------- -------------
Net increase (decrease) in net asset
value resulting from investment
operations 2.65 0.04 2.97 - 0.59 -
---------- ------------- ---------- ------------- ---------- -------------
Distributions:
Net investment income - - - - - -
Net realized gain on investments (0.09 ) - (1.32 ) - - -
---------- ------------- ---------- ------------- ---------- -------------
Total distributions (0.09 ) - (1.32 ) - - -
---------- ------------- ---------- ------------- ---------- -------------
NET ASSET VALUE, END OF PERIOD $ 12.60 $ 10.04 $ 11.65 $ 10.00 $ 10.59 $ 10.00
---------- ------------- ---------- ------------- ---------- -------------
---------- ------------- ---------- ------------- ---------- -------------
TOTAL RETURN (6) 26.41% 0.40% 30.00% 0.00% 5.90% 0.00%
---------- ------------- ---------- ------------- ---------- -------------
---------- ------------- ---------- ------------- ---------- -------------
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 5,117 $ 954 $ 4,671 $ 4,000 $ 3,190 $ 3,000
---------- ------------- ---------- ------------- ---------- -------------
---------- ------------- ---------- ------------- ---------- -------------
Ratio of expenses to average net
assets:
With reimbursement 1.73% 0.00%(8) 1.50% 0.00%(8) 1.50% 0.01%(8)
---------- ------------- ---------- ------------- ---------- -------------
---------- ------------- ---------- ------------- ---------- -------------
Without reimbursement 7.75% - 2.93% - 5.39% -
---------- ------------- ---------- ------------- ---------- -------------
---------- ------------- ---------- ------------- ---------- -------------
Ratio of net investment income to
average
net assets:
With reimbursement (1.34%) (0.02%)(8) (0.55%) 0.00%(8) (0.58%) 0.01%(8)
---------- ------------- ---------- ------------- ---------- -------------
---------- ------------- ---------- ------------- ---------- -------------
Without reimbursement (7.36%) - (1.98%) - (4.47%) -
---------- ------------- ---------- ------------- ---------- -------------
---------- ------------- ---------- ------------- ---------- -------------
Portfolio turnover 155.58% 0.00% 157.65% 0.00% 22.69% 0.00%
---------- ------------- ---------- ------------- ---------- -------------
---------- ------------- ---------- ------------- ---------- -------------
Average commission rate paid per share
(7) $ 0.0599 $ - $ 0.0528 $ 0.0324 $ 0.0416 $ -
---------- ------------- ---------- ------------- ---------- -------------
---------- ------------- ---------- ------------- ---------- -------------

EMERGING MARKETS FUND
-------------------------
(UNAUDITED)
1998(3) 1997(4)
---------- -------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE: (5)
Net asset value, beginning of period $ 9.99 $ 10.00
---------- -------------
Net investment income (loss) 0.00 -
Net realized and unrealized gain
(loss) on investments 0.97 (0.01)
---------- -------------
Net increase (decrease) in net asset
value resulting from investment
operations 0.97 (0.01)
---------- -------------
Distributions:
Net investment income - -
Net realized gain on investments - -
---------- -------------
Total distributions - -
---------- -------------
NET ASSET VALUE, END OF PERIOD $ 10.96 $ 9.99
---------- -------------
---------- -------------
TOTAL RETURN (6) 9.71% 0.00%
---------- -------------
---------- -------------
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 3,289 $ 2,996
---------- -------------
---------- -------------
Ratio of expenses to average net
assets:
With reimbursement 1.50% 0.01%(8)
---------- -------------
---------- -------------
Without reimbursement 5.32% -
---------- -------------
---------- -------------
Ratio of net investment income to
average
net assets:
With reimbursement 0.19% 0.00%(8)
---------- -------------
---------- -------------
Without reimbursement (3.63%) -
---------- -------------
---------- -------------
Portfolio turnover 32.85% 0.00%
---------- -------------
---------- -------------
Average commission rate paid per share
(7) $ 0.0042 $ 0.0079
---------- -------------
---------- -------------
</TABLE>

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[LOGO]
<PAGE>
DRESDNER RCM CAPITAL FUNDS, INC.
FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
DRESDNER RCM INTERNATIONAL GROWTH EQUITY FUND A
For a share outstanding throughout each ------------------------------------------------------
fiscal year ended December 31 1997(1) 1996(1)(2) 1995 1994(3)
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 12.72 $ 11.56 $ 10.00 $ 10.00
------------ ------------ ------------ ------------
Net investment income 0.06 0.04 0.12 0.00
Net realized and unrealized gain
(loss) on investments 2.22 2.16 1.68 (0.00 )
------------ ------------ ------------ ------------
Net increase in net asset value
resulting from investment
operations 2.28 2.20 1.80 0.00
------------ ------------ ------------ ------------
Distributions:
Net investment income (0.14 ) (0.16 ) (0.11 ) (0.00 )
Net realized gain on investments (1.16 ) (0.88 ) (0.13 ) (0.00 )
------------ ------------ ------------ ------------
Total distributions (1.30 ) (1.04 ) (0.24 ) (0.00 )
------------ ------------ ------------ ------------
NET ASSET VALUE, END OF PERIOD $ 13.70 $ 12.72 $ 11.56 $ 10.00
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
TOTAL RETURN (4) 17.93% 19.31% 17.98% 0.01%
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in millions) $ 98 $ 53 $ 34 $ 25
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Ratio of expenses to average net
assets:
With reimbursement 1.00% 0.99% 0.75% 0.00%(6)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Without reimbursement 1.06% 1.25% 1.11% -
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Ratio of net investment income to
average net assets:
With reimbursement 0.41% 0.32% 1.19% 0.01%(6)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Without reimbursement 0.35% 0.06% 0.83% -
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Portfolio turnover 122.43% 119.09% 87.40% 0.00%(6)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Average commission rate paid per share
(5) $ 0.0235 $ 0.0179 $ - $ -
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>

- --------------------------------------------------------------------------------

(1) Calculated using the average share method.
(2) Stock split 10:1 at the close of business on June 17, 1996. All prior
period per share amounts were restated to reflect the stock split.
(3) Commencement of operation was December 28, 1994.
(4) Total return measures the change in value of an investment over the period
indicated.
(5) 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.
(6) Not annualized. Fund was in operation for four days.

<PAGE>
DRESDNER RCM GLOBAL FUNDS

The following section describes the goals and strategies for the
Dresdner RCM Global Funds offered pursuant to this Prospectus. An investment in
any one of the Funds is subject to a variety of risks including risks
associated with equity securities and foreign companies. For a
detailed description of the risks associated with an investment in any one of
the Funds, refer to the section entitled INVESTMENT AND RISK CONSIDERATIONS
beginning on page 25. Please read this section carefully before investing.

[LOGO]
<PAGE>
DRESDNER RCM LARGE CAP GROWTH FUND

GOAL AND STRATEGY

Dresdner RCM Large Cap Growth Fund (the "Large Cap Fund") seeks
appreciation of capital by investing primarily in equity and equity-related
securities of domestic companies with large market capitalizations. Companies
with "large market capitalizations" are defined as companies whose common
stock, and securities convertible into common stock, have a total market
capitalization of at least $1 billion at the time of purchase. Under normal
market conditions, the Fund invests at least 65% of its total assets in these
companies.

The Fund may invest up to 20% of its total assets in equity and
equity-related securities of foreign issuers. Under normal market conditions,
the Fund will not invest more than 10% of its total assets in securities of
issuers that are organized or headquartered in any one foreign country. The
Fund may invest up to 10% of its total assets in securities of companies
organized or headquartered in emerging market countries, all of which may be
invested in securities of issuers organized or headquartered in any one emerging
market country.

10
<PAGE>
DRESDNER RCM GLOBAL SMALL CAP FUND

GOAL AND STRATEGY

Dresdner CM Global Small Cap Fund (the "Global Small Cap Fund") seeks
appreciation of capital by investing primarily in equity and equity-related
securities of small-sized domestic and foreign companies. "Small-sized
companies" are defined as companies whose common stock, or securities
convertible into common stock, have a total market capitalization of up to $1
billion at the time of purchase. Under normal market conditions, the Fund
invests at least 65% of its total assets in these companies.

Under normal market conditions, as a fundamental policy which cannot be
changed without stockholder approval, the Fund invests in equity and
equity-related securities of companies organized or headquartered in at least
three different countries (one of which may be the United States). The Fund may
invest up to 100% of its total assets in equity and equity-related securities
of foreign issuers. While there is no limitation on the countries in which the
Fund may invest, the Fund currently expects that the majority of its foreign
investments will be in securities of companies organized or headquartered in
Japan and the countries of Western Europe. Under normal market conditions, the
Fund will not invest more than 25% of its total assets in securities of issuers
that are organized or headquartered in any one foreign country, other than
France, Germany, Japan and the United Kingdom. Up to 30% of the Fund's total
assets may be invested in securities of companies organized or headquartered in
emerging market countries; however, the Fund will not invest more than 10% of
its total assets in securities of issuers organized or headquartered in any one
emerging market country.

There are currently no limitations on the types of businesses in which
the Fund may invest, although no more than 25% of the Fund's total assets may
be invested in the securities of companies primarily engaged in any one industry
(other than securities of the U.S. Government, its agencies and
instrumentalities). Although there is no minimum market capitalization for the
companies in which the Fund invests, the Investment Manager currently does not
intend to invest more than 15% of the Fund's total assets in securities of
companies with market capitalizations below $100 million at the time of
purchase. The Fund is not required to sell portfolio securities solely because
a company's market capitalization has exceeded $1 billion, and is not prevented
from purchasing or required to sell other portfolio securities as a result of
such change. The average market capitalization of the Fund's portfolio at
market value is expected to be approximately $500 million and will not exceed $1
billion.

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DRESDNER RCM GLOBAL TECHNOLOGY FUND

GOAL AND STRATEGY

Dresdner RCM Global Technology Fund (the "Technology Fund") seeks
appreciation of capital by investing primarily in equity and equity-related
securities of domestic and foreign companies whose revenues are primarily
generated by technology products and services. These products and services
include computers and computer peripherals, software, electronic components and
systems, communications equipment and services, media and information services,
pharmaceuticals, hospital supply and medical devices, biotechnology products,
environmental services, chemical products and synthetic materials, and defense
and aerospace products and services. The Fund may also invest in companies
that, in the Investment Manager's view, should significantly benefit from the
commercialization of technological advances even if they are not directly
involved in them. Under normal market conditions, the Fund invests at least 65%
of its total assets in these companies.

Although there is no limitation of the market capitalizations of the
companies in which the Fund invests, the Investment Manager currently intends
to invest primarily in equity and equity-related securities of companies with
market capitalizations in excess of $500 million at the time of purchase, and
does not intend to invest more than 15% of the Fund's total assets in
securities of companies with market capitalizations below $100 million at the
time of purchase.

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DRESDNER RCM GLOBAL HEALTH CARE FUND

GOAL AND STRATEGY

Dresdner RCM Global Health Care Fund (the "Health Care Fund") seeks
appreciation of capital by investing primarily in equity and equity-related
securities of domestic and foreign health care companies. "Health care
companies" are defined as companies which principally are engaged in the health
care business including, but not limited to, pharmaceutical, biochemical and
biotechnology and medical companies. These companies are typically involved in
research and development or ownership and/or operation of health care
facilities, franchises or practices, and the design, production or selling of
medical, dental and optical products. A company will be deemed to be
principally engaged in the health care business if at least 50% of its earnings
or revenues is derived from health care activities, or at least 50% of its
assets are devoted to such activities, based upon the company's financial
statements as of the end of its most recent fiscal year. Under normal market
conditions, the Fund invests at least 65% of its total assets in these
companies.

Under normal market conditions, as a fundamental policy which cannot be
changed without stockholder approval, the Fund invests in equity and
equity-related securities of companies organized or headquartered in at least
three different countries (one of which may be the United States). The Fund may
invest up to 100% of its total assets in equity and equity-related securities
of foreign issuers. While there is no limitation on the countries in which the
Fund may invest, the Fund currently expects that the majority of its foreign
investments will be in securities of companies organized or headquartered in
Japan and the countries of Western Europe. Up to 15% of the Fund's total assets
may be invested in securities of companies organized or headquartered in
emerging market countries; however, the Fund will not invest more than 10% of
its total assets in securities of issuers organized or headquartered in any one
emerging market country.

Although there is no limitation on the market capitalizations of the
companies in which the Fund may invest, the Investment Manager currently
intends to invest primarily in equity and equity-related securities of
companies with market capitalizations of at least $1 billion at the time of
purchase, and does not intend to invest more than 15% of the Fund's total
assets in securities of companies with market capitalizations below $100
million at the time of purchase.

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DRESDNER RCM BIOTECHNOLOGY FUND

GOAL AND STRATEGY

Dresdner RCM Biotechnology Fund (the "Biotechnology Fund") seeks
appreciation of capital by investing primarily in equity and equity-related
securities of domestic and foreign companies in the biotechnology industry. The
Fund seeks investment opportunities in companies engaged in the research,
development, provision and/or manufacture of biotechnological products,
services and processes. Such companies generally employ genetic engineering to
develop new drugs and apply new and innovative processes to discover and develop
diagnostic and therapeutic products and services. The biotechnology industry
includes pharmaceutical, biochemical, medical/surgical, human health care,
agricultural and industrial oriented companies. However, because of the rapid
developments in the biotechnology industry, it can be expected that over time
companies with new and different products and focuses will be included in the
industry. Under normal market conditions, the Fund invests at least 65% of its
total assets in these companies.

While there is no limitation on the countries in which the Fund may
invest, the Fund currently expects that the majority of its investments will be
in securities of companies organized or headquartered in the United States.
However, the Fund may invest up to 100% of its total assets in equity and
equity-related securities of foreign issuers. Under normal market conditions
the Fund will not invest more than 25% of its total assets in securities of
issuers organized or headquartered in any one foreign country. Up to 15% of the
Fund's total assets may be invested in securities of companies organized or
headquartered in emerging market countries; however, the Fund will not invest
more than 10% of its total assets in securities of issuers organized or
headquartered in any one emerging market country.

Although there is no limitation on the market capitalizations of the
companies in which the Fund may invest, it is likely that a significant portion
of the companies in which the Fund invests will have market capitalizations
below $1 billion. The Investment Manager currently does not intend to invest
more than 15% of the Fund's total assets in securities of companies with market
capitalizations below $100 million at the time of purchase.

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DRESDNER RCM INTERNATIONAL GROWTH
EQUITY FUND A

GOAL AND STRATEGY

Dresdner RCM International Growth Equity Fund A (the "International
Fund") seeks appreciation of capital by investing primarily in equity and
equity-related securities of foreign companies. These foreign companies include:
(i) companies that are organized or headquartered, or whose operations
principally are conducted outside, the United States; (ii) companies whose
securities are principally traded outside the United States, regardless of
where the company is organized or headquartered or where its operations
principally are conducted; (iii) companies that have issued depositary
receipts; and (iv) other investment companies investing primarily in such
equity and equity-related foreign securities. Under normal market conditions,
the Fund invests at least 65% of its total assets in these companies.

The Fund invests in securities of issuers located in at least ten
different countries, with no more than 25% of its total assets invested in
securities of issuers that are organized or headquartered in any one foreign
country other than Japan, the United Kingdom and Germany. Investments in
securities of issuers organized or headquartered in Japan, the United Kingdom
and Germany may in each country aggregate up to 65% of the Fund's total assets.
The Fund may also invest up to 10% of its total assets in U.S. issuers. The
Fund expects to invest a substantial portion of its assets in securities of
companies that are organized or headquartered in developed foreign countries.
Up to 30% of the Fund's total assets may be invested in securities of companies
organized or headquartered in emerging market countries; however, the Fund will
not invest more than 10% of its total assets in securities (excluding foreign
currencies) of issuers organized or headquartered in any one emerging market
country.

Although there is no limitation on the market capitalizations of the
companies in which the Fund may invest, the Investment Manager currently
intends to invest primarily in equity and equity-related securities of issuers
with market capitalizations in excess of $1 billion at the time of purchase,
and does not intend to invest more than 10% of the Fund's total assets in
securities of issuers with market capitalizations below $100 million at the
time of purchase.

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DRESDNER RCM EMERGING MARKETS FUND

GOAL AND STRATEGY

Dresdner RCM Emerging Markets Fund (the "Emerging Markets Fund") seeks
appreciation of capital by investing primarily in equity and equity-related
securities of emerging market companies. "Emerging markets companies" are
defined as companies organized or headquartered in any country that is
generally considered to be an emerging or developing country by the World Bank,
the International Finance Corporation, the United Nations or its authorities,
or other recognized financial institutions. Under normal market conditions, the
Fund invests at least 80% of its total assets in these companies.

As of the date of this Prospectus, emerging market countries are deemed
to include, for purposes of this Prospectus, all foreign countries other than
Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany,
Ireland, Italy, Japan, Luxembourg, The Netherlands, New
Zealand, Norway, Singapore, Spain, Sweden, Switzerland, and the United Kingdom.

The Fund will not invest more than 15% of its total assets in securities
of issuers that are organized or headquartered in any one emerging market
country. In addition, the Fund may invest up to 15% of its total assets in
securities of issuers that are organized or headquartered in developed
countries, but that have or will have substantial assets in developing
countries or derive or expect to derive a substantial portion of their total
revenues from goods and services produced in, or sales made in, developing
countries.

Although there is no limit on the market capitalizations of the
companies in which the Fund may invest, the Investment Manager currently
intends to invest primarily in equity and equity-related securities of
companies with market capitalizations in excess of $100 million at the time of
purchase.

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INVESTMENT POLICIES

HOW DO THE FUNDS SELECT PORTFOLIO SECURITIES?

The Investment Manager seeks to identify companies that are expected to
have higher-than-average rates of growth and strong potential for capital
appreciation relative to downside exposure. While each Fund emphasizes
investments in growth companies, each Fund also may invest in other companies
that are not traditionally considered to be growth companies, such as emerging
growth companies and cyclical and semi-cyclical companies in developing
economies, if the Investment Manager believes that such companies have
above-average growth potential.
In determining whether securities of particular issuers are believed to
have the potential for capital appreciation, the Investment Manager evaluates
the fundamental value of each enterprise, as well as its prospects for growth.
In most cases, these companies will have one or more of the following
characteristics: superior management; strong balance sheets; differentiated or
superior products or services; substantial capacity for growth in revenue,
through either an expanding market or through expanding market share; strong
commitment to research and development; and a steady stream of new products or
services. Because current income is not the focus of any Fund's investment
objective, no Fund will restrict its investments in equity and equity-related
securities to those issuers with a record of dividend payments.
In evaluating particular foreign investment opportunities, the
Investment Manager may consider, in addition to the factors described above,
the anticipated economic growth rate, the political outlook, the anticipated
inflation rate, the currency outlook, and the interest rate environment for the
country and the region in which a particular company is located, as well as
other factors it deems relevant.

WHAT ARE EQUITY AND EQUITY-RELATED SECURITIES?

Equity and equity-related securities include common stock, preferred
stock, convertible preferred stock, convertible debt obligations, warrants or
other rights to acquire stock, and options on stock and stock indices. In
addition, equity and equity-related securities may include securities sold in
the form of depositary receipts and securities issued by other investment
companies. The International Fund and Large Cap Fund currently intend to invest
primarily in common stock. The other Funds currently intend to invest primarily
in common stock and depositary receipts.

WHAT KINDS OF FOREIGN SECURITIES WILL THE FUNDS INVEST IN?

The types of foreign equity and equity-related securities that the Funds
may invest in include: (i) securities of companies that are organized or
headquartered, or whose operations principally are conducted, outside the United
States; (ii) securities that are principally traded outside the United States,
regardless of where the issuer of such securities is organized or

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headquartered or where its operations principally are conducted; (iii)
depositary receipts; and (iv) securities of other investment companies
investing primarily in such equity and equity-related foreign securities.
Each Fund expects that its investments in foreign securities will be
comprised primarily of securities that are traded on recognized foreign
securities exchanges. However, each Fund also may invest in securities that are
traded only over-the-counter, either in the United States or in foreign
markets, when the Investment Manager believes that such securities meet the
Fund's investment criteria. Subject to each Fund's restrictions on investment
in foreign securities, the Funds also may invest in securities that are not
publicly traded either in the United States or in foreign markets.

DO THE FUNDS BUY AND SELL FOREIGN CURRENCIES?

Each Fund presently expects to purchase or sell foreign currencies
primarily to settle foreign securities transactions. However, each Fund may
also engage in currency management transactions to hedge currency exposure
related to securities it owns or that it anticipates purchasing. (See DO THE
FUNDS HEDGE THEIR INVESTMENTS?) In addition, a Fund may hold foreign currency
received in connection with investments in foreign securities when, in the
judgment of the Investment Manager, it would be beneficial to convert such
currency into U.S. dollars at a later date, based on anticipated changes in the
relevant exchange rates.

For purposes of the percentage limitations on each Fund's investments in
foreign securities, the term securities does not include foreign currencies.
This means that a Fund's exposure to foreign currencies or multinational
currency units such as the European Currency Unit (a "basket" comprised of
specified amounts of currencies of certain of the members of the European Union)
may be greater than its percentage limitation on investments in foreign
securities denominated in foreign currencies and multinational currency units.
Each Fund will incur costs in connection with conversions between various
currencies and gains in a particular securities market may be affected, either
positively or negatively, by changes in exchange rates.

Each Fund is also authorized to employ currency management techniques to
enhance its total return, although there is no current intention to do so. A
Fund may not employ more than 30% of the value of its total assets, calculated
at the time of purchase, in currency management techniques for the purpose of
enhancing return.

DO THE FUNDS HEDGE THEIR INVESTMENTS?

For hedging purposes, each Fund may purchase options on stock indices
and on securities that are authorized for purchase by the Fund. If a Fund
purchases a "put" option on a security, the Fund acquires the right to sell the
underlying security at a specified price at any time during the term of the
option (for "American-style" options) or on the option expiration date (for
"European-style" options). If a Fund purchases a "call" option on a security,
it acquires the right to purchase the underlying security at a specified price
at any time during the term of the option (or on the option expiration date).
An option on a stock index gives a Fund the right to receive a cash

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payment equal to the difference between the closing price of the index and the
exercise price of the option. A Fund may "close out" an option prior to its
exercise or expiration by selling an option of the same series as the option
previously purchased.

Each Fund may employ certain currency management techniques to hedge
against currency exchange rate fluctuations. The International Fund may hedge
up to 100% of its total assets. These techniques include forward currency
exchange contracts, currency options, futures contracts (and related options),
and currency swaps. A forward currency exchange contract is an obligation to
purchase or sell a specific currency at a future date at a price set at the
time of the contract. Currency options are rights to purchase or sell a
specific currency at a future date at a specified price. Futures contracts are
agreements to take or make delivery of an amount of cash equal to the
difference between the value of the currency at the close of the last trading
day of the contract and the contract price. Currency swaps involve the exchange
of rights to make or receive payments in specified currencies.

Each Fund may cross-hedge currencies, which involves writing or
purchasing options or entering into foreign exchange contracts on one currency
to hedge against changes in exchange rates for a different currency, if, in the
judgment of the Investment Manager, there is a pattern of correlation between
the two currencies.

WHAT OTHER INVESTMENT PRACTICES SHOULD I KNOW ABOUT?

DEPOSITARY RECEIPTS

Each Fund may invest in securities of foreign companies in the form of
American Depositary Receipts ("ADRs"), European Depositary Receipts ("EDRs"),
Global Depositary Receipts ("GDRs"), or other similar depositary instruments
representing securities of foreign companies. ADRs are receipts for ordinary
shares of foreign companies that typically are issued by U.S. banks and entitle
the holder to all dividends and all capital gains associated with the underlying
ordinary shares. These securities may not be denominated in the same currency
as the underlying securities that they represent. EDRs and GDRs are receipts
issued by a non-U.S. financial institution evidencing a similar arrangement.
When it is possible to invest either in an ADR, EDR, or GDR, or to invest
directly in the underlying security, the Investment Manager will evaluate which
investment opportunity is preferable, based on price differences, relative
trading volumes, anticipated liquidity, differences in currency risk, and other
factors.
Although investment in ADRs does not involve the currency exchange risk
that is present when investing in the underlying securities, depositary
receipts may have risks that are similar to those of foreign equity securities.
Therefore, for purposes of each Fund's investment policies and restrictions,
depositary receipts are treated as foreign equity securities, based on the
country in which the underlying issuer is organized or headquartered. (See WHAT
KINDS OF FOREIGN SECURITIES WILL THE FUNDS INVEST IN?)

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OTHER INVESTMENT COMPANIES

The laws of some foreign countries may make it difficult or impossible
for a Fund to invest directly in issuers organized or headquartered in those
countries, or may place limitations on such investments. The only practical
means of investing in such issuers may be through investment in other
investment companies that in turn are authorized to invest in the securities of
such issuers. In such cases and in other appropriate circumstances, and subject
to the restrictions referred to above regarding investments in companies
organized or headquartered in foreign countries (see WHAT KINDS OF FOREIGN
SECURITIES WILL THE FUNDS INVEST IN?), each Fund may invest up to 10% of the
value of its total assets in other investment companies. However, no Fund may
acquire more than 3% of the voting securities of any other investment company.

To the extent that a Fund invests in other investment companies, it will
bear its proportionate share of any management or administration fees and other
expenses paid by investment companies in which it invests. At the same time,
the Fund would continue to pay its own management fees and other expenses.

SHORT SELLING

Each Fund, except the International Fund, may make short sales of
securities that it owns or has the right to acquire at no added cost through
conversion or exchange of other securities it owns (referred to as short sales
"against the box") and may also make short sales of securities which it does
not own or have the right to acquire. In order to deliver a security that is
sold short to the buyer, the Fund must arrange through a broker to borrow the
security, and becomes obligated to replace the security borrowed at its market
price at the time of replacement, whatever that price may be. When a Fund makes
a short sale, the proceeds of the sale are retained by the broker until the
Fund replaces the borrowed security.

The value of securities of any issuer in which a Fund maintains a short
position that is not "against the box" may not exceed the lesser of 5% of the
value of the Fund's net assets or 5% of the securities of such class of the
issuer. A Fund's ability to enter into short sales transactions is limited by
the requirements of the Investment Company Act of 1940 (the "1940 Act").

Although the International Fund may not make short sales of securities,
it may maintain short positions in connection with its use of options, futures
contracts, options on futures contracts, forward foreign currency exchange
transactions, and currency options.

WHEN ISSUED, FIRM COMMITMENT AND DELAYED SETTLEMENT TRANSACTIONS

Each Fund may purchase securities on a delayed delivery or "when issued"
basis and may enter into firm commitment agreements (transactions in which the
payment obligation and interest rate are fixed at the time of the transaction
but the settlement is delayed). Delivery and payment for these securities
typically occur 15 to 45 days after the commitment to purchase, but delivery
and payment can be scheduled for shorter or longer periods, based upon the
agreement of the buyer and the seller. No interest accrues to the purchaser
during the period before delivery. The Funds generally do not intend to enter
into these

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transactions for the purpose of leverage, but may sell the right to receive
delivery of the securities before the settlement date. The value of the
securities at settlement may be more or less than the agreed upon price.
A Fund will segregate cash, U.S. Government securities or other liquid
debt or equity securities in an amount sufficient to meet its payment
obligations with respect to any such transactions. To the extent that assets are
segregated for this purpose, a Fund's liquidity and the ability of the
Investment Manager to manage its portfolio may be adversely affected.

DEBT SECURITIES

Under normal market conditions, the International Fund may invest up to
20%, and each other Fund except the Emerging Markets Fund may invest up to 10%,
of its total assets in short-term debt obligations (with maturities of less than
one year) issued or guaranteed by the U.S. Government or foreign governments
(including their respective agencies, instrumentalities, authorities and
political subdivisions), debt obligations issued or guaranteed by international
or supranational governmental entities, and debt obligations of corporate
issuers. Such debt obligations will be rated, at the time of purchase,
investment grade by Standard & Poor's, a division of The McGraw-Hill Companies,
Inc. ("Standard & Poor's"), Moody's Investors Service ("Moody's"), or another
recognized rating organization, or if unrated will be determined by the
Investment Manager to be of comparable investment quality. Investment grade
means the issuer of the security is believed to have adequate capacity to pay
interest and repay principal, although certain of such securities in the lower
grades have speculative characteristics, and changes in economic conditions or
other circumstances may be more likely to lead to a weakened capacity to pay
interest and principal than would be the case with higher-rated securities. The
Investment Manager does not currently intend to purchase U.S. or foreign debt
securities on behalf of the International Fund except on an occasional basis
when the Investment Manager believes that unusually attractive investments are
available.

The Emerging Markets Fund may invest up to 5% of its total assets in
debt securities issued or guaranteed by an emerging market company or
government (including such government's agencies, instrumentalities,
authorities and political subdivisions), or denominated in the currencies of
emerging market countries that the Investment Manager believes present
attractive investment opportunities for capital growth. There is no limit on
the average maturity of the debt securities in the Emerging Markets Fund's
portfolio. Such debt obligations may be unrated or rated, at the time of
purchase, below investment grade by Standard & Poor's, Moody's, or another
recognized international rating organization. Bonds rated below investment
grade are often referred to as "junk bonds," and involve greater risk of
default or price declines than investment grade securities.

During times when the Investment Manager believes a temporary defensive
posture is warranted, including times involving international, political or
economic uncertainty, each Fund may hold all or a substantial portion of its
assets in investment grade debt securities issued or guaranteed by the U.S.
Government or foreign governments (including their respective agencies,

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instrumentalities, authorities and political subdivisions), debt obligations
issued or guaranteed by international or supranational government entities, and
debt obligations of corporate issuers. When a Fund is so invested, it may not
be achieving its investment objective.

BORROWING MONEY

From time to time, it may be advantageous for a Fund to borrow money
rather than sell portfolio securities to raise the cash to meet redemption
requests. In order to meet such redemption requests, each Fund may borrow from
banks or enter into reverse repurchase agreements. Each Fund may also borrow up
to 5% of the value of its total assets for temporary or emergency purposes
other than to meet redemptions. However, the Funds will not borrow money for
leveraging purposes. A Fund may continue to purchase securities while borrowings
are outstanding, but will not do so when the Fund's borrowings (including
reverse repurchase agreements) exceed 5% of the value of its total assets. The
1940 Act permits a Fund to borrow only from banks and only to the extent that
the value of its total assets, less its liabilities other than borrowings, is
equal to at least 300% of all borrowings (including the proposed borrowing),
and requires the Fund to take prompt action to reduce its borrowings if this
limit is exceeded. For the purpose of the 300% borrowing limitation, reverse
repurchase transactions are considered to be borrowings.

A reverse repurchase agreement involves a transaction by which a
borrower (such as a Fund) sells a security to a purchaser (a member bank of the
Federal Reserve System or a broker-dealer deemed creditworthy pursuant to
standards adopted by the Board of Directors of the Capital Company or the
Equity Company, as applicable (each, a "Board of Directors" or collectively, the
"Boards of Directors"), and simultaneously agrees to repurchase the security at
an agreed-upon price on an agreed-upon date within a number of days (usually
not more than seven) from the date of purchase.

LENDING PORTFOLIO SECURITIES

Each Fund is authorized to make loans of portfolio securities, for the
purpose of realizing additional income, to broker-dealers or other
institutional investors deemed creditworthy pursuant to standards adopted by
its Board of Directors. The borrower must maintain with the Fund's custodian
collateral consisting of cash, U.S. Government securities or other liquid debt
or equity securities equal to at least 100% of the value of the borrowed
securities, plus any accrued interest. The Fund will receive any interest paid
on the loaned securities, and a fee and/or a portion of the interest earned on
the collateral, less any fees and administrative expenses associated with the
loan.

ILLIQUID SECURITIES

Each Fund may invest up to 15% (10% for the International Fund) of the
value of its net assets in illiquid securities. Securities may be considered
illiquid if a Fund cannot reasonably expect to receive approximately the amount
at which the Fund values such securities within seven days. The Investment
Manager has the authority to determine whether certain securities held by a

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Fund are liquid or illiquid pursuant to standards adopted by the Boards of
Directors.

The Funds' investments in illiquid securities may include securities
that are not registered for resale under the Securities Act of 1933 (the
"Securities Act"), and therefore are subject to restrictions on resale. When a
Fund purchases unregistered securities, it may, in appropriate circumstances,
obtain the right to register such securities at the expense of the issuer. In
such cases there may be a lapse of time between the Fund's decision to sell any
such security and the registration of the security permitting sale. During any
such period, the price of the security will be subject to market fluctuations.
The fact that there are contractual or legal restrictions on resale of
certain securities to the general public or to certain institutions may not be
indicative of the liquidity of such investments. If such securities are subject
to purchase by institutional buyers in accordance with Rule 144A under the
Securities Act, the Investment Manager may determine in particular cases,
pursuant to standards adopted by the Boards of Directors, that such securities
are not illiquid securities notwithstanding the legal or contractual
restrictions on their resale. Investing in Rule 144A securities could have the
effect of increasing a Fund's illiquidity to the extent that qualified
institutional buyers become, for a time, uninterested in purchasing such
securities.

CAN THE FUNDS' OBJECTIVES AND POLICIES BE CHANGED?

Each Fund's investment objective is a fundamental policy that may not be
changed without stockholder approval. However, except as otherwise indicated in
this Prospectus or the SAI, each Fund's other investment policies and
restrictions are not fundamental and may be changed without stockholder
approval. If there is a change in a Fund's investment objective or policies,
stockholders should consider whether the Fund remains an appropriate investment
in light of their then current financial position and needs.
The various percentage limitations referred to in this Prospectus apply
immediately after a purchase or initial investment. Except as specifically
indicated to the contrary, a Fund is not required to sell any security in its
portfolio as a result of change in any applicable percentage resulting from
market fluctuations.

WHAT ARE THE FUNDS' PORTFOLIO TURNOVER RATES?

Each Fund may invest in securities on either a long-term or short-term
basis. The Investment Manager anticipates that the annual portfolio turnover
rate for the Biotechnology Fund and the Emerging Markets Fund should not exceed
150% and 125%, respectively, during their first full year of operation. See
FINANCIAL HIGHLIGHTS for the portfolio turnover rates of the other Funds.

A Fund's portfolio turnover rate is not a limiting factor when the
Investment Manager deems portfolio changes appropriate. Securities in a Fund's
portfolio will be sold whenever the Investment Manager believes it is
appropriate to do so, regardless of the length of time that securities have
been held, and securities may be purchased or sold for short-term profits
whenever the Investment Manager believes it is appropriate

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or desirable to do so. Turnover will be influenced by sound investment
practices, each Fund's investment objective and the need for funds for the
redemption of a Fund's shares.
Because the Investment Manager will purchase and sell securities for
each Fund's portfolio without regard to the length of the holding period for
such securities, it is possible that a Fund's portfolio will have a higher
turnover rate than might be expected for investment companies that invest
substantially all of their assets for long-term capital appreciation or
generation of current income. A high portfolio turnover rate would increase
aggregate brokerage commission expenses and other transaction costs, which must
be borne directly by a Fund and ultimately by the Fund's stockholders.

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INVESTMENT AND RISK CONSIDERATIONS

Investment in the Funds is subject to a variety of risks, including the
following. See the SAI for further information about these and other risks.

EQUITY INVESTMENTS

Although equity securities have a history of long-term growth in value,
their prices fluctuate based on changes in the issuer's financial condition and
prospects and on overall market and economic conditions. The value of each
Fund's net assets can be expected to fluctuate.

SPECIFIC INDUSTRIES

Because the Technology Fund, Health Care Fund and Biotechnology Fund
each focus its investments in a single industry, each will be more susceptible
than other diversified investment companies to market and other conditions
affecting the industry in which that Fund invests. Such conditions include
competitive pressures affecting the financial condition of companies in which
these Funds invest, rapid product obsolescence, dependence on extensive research
and development, aggressive pricing and greater sensitivity to changes in
governmental regulation and policies. As a result of each such Fund's
concentration on a single sector, its net assets may be more volatile in price
than the net asset value of an investment company with a more broadly
diversified portfolio.

SMALL-SIZED COMPANIES

Investments in small-sized concerns may involve greater risks than
investments in larger companies. The securities of small-sized companies, as a
class, have shown market behavior which has had periods of more favorable
results, and periods of less favorable results, than securities of larger
companies as a class. In addition, small-sized companies in which a Fund may
invest may be unseasoned; that is, these companies may have limited or
unprofitable operating histories, limited financial resources and inexperienced
management. Small-sized companies often face competition from larger or more
established firms that have greater resources. Small-sized companies may not
have as great an ability to raise additional capital, may have a less
diversified product line (making them susceptible to market pressure), and may
have a smaller public market for their shares than larger companies. Securities
of small and unseasoned companies are often less liquid than securities of
larger companies and are frequently traded in the over-the-counter market or on
regional exchanges where low trading volumes may result in erratic or abrupt
price movements. To dispose of these securities, a Fund may have to sell them
over an extended period of time or below the original purchase price.
Investment by a Fund in these small or unseasoned companies may be regarded as
speculative. As a result of these factors, to the extent a Fund invests in
small-sized companies, its net assets may be more volatile in price than would
otherwise be the case.

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FOREIGN SECURITIES

Investing in foreign securities involves significant risks, some of
which are not typically associated with investing in securities of U.S.
issuers. For example, the value of investments in such securities may fluctuate
based on changes in the value of one or more foreign currencies relative to the
U.S. dollar. In addition, information about foreign issuers may be less readily
available than information about domestic issuers. Foreign issuers generally
are not subject to accounting, auditing and financial reporting standards, or to
other regulatory practices and requirements, comparable to those applicable to
U.S. issuers. Furthermore, with respect to certain foreign countries, the
possibility exists of political instability, expropriation or nationalization of
assets, revaluation of currencies, confiscatory taxation, and limitations on
foreign investment and use or removal of funds or other assets of a Fund
(including the withholding of dividends and limitations on the repatriation of
currencies). A Fund may also experience difficulties or delays in obtaining or
enforcing judgments.
Most foreign securities markets have substantially less volume than U.S.
securities markets, and the securities of many foreign issuers may be less
liquid and more volatile than securities of comparable U.S. issuers. In
addition, there is generally less government regulation of securities markets,
securities exchanges, securities dealers, and listed and unlisted companies in
foreign countries than in the United States. Foreign markets also have
different clearance and settlement procedures, and in certain markets there
have been times when settlements have been unable to keep pace with the volume
of securities transactions, making it difficult to conduct and complete such
transactions. In addition, the costs associated with transactions in securities
traded on foreign markets or of foreign issuers, and the expense of maintaining
custody of such securities with foreign custodians, generally are higher than
the costs associated with transactions in U.S. securities on U.S. markets.

Because certain of the Funds may invest more than 25% of their total
assets in the securities of companies organized or headquartered in France,
Germany, Japan or the United Kingdom, such Funds may be subject to increased
risks due to political, economic, social or regulatory events that may occur in
these countries. Such political, economic, social or regulatory developments
may adversely effect the securities and currency markets of these countries.

EMERGING MARKETS

There are special additional risks associated with investments in
emerging markets. The securities markets of emerging market countries are
substantially smaller, less developed, less liquid, and more volatile than the
securities markets of the United States and developed foreign markets.
Disclosure and regulatory standards in many respects are less stringent than in
the United States and developed foreign markets. There also may be a lower
level of monitoring and regulation of securities markets in emerging market
countries and the activities of investors in such markets, and enforcement of
existing regulations has been extremely limited.
Economies in emerging market countries generally are heavily dependent
upon international

26
<PAGE>
trade, and may be affected adversely by the economic conditions of the
countries with which they trade, as well as by trade barriers, exchange
controls, managed adjustments in relative currency values, and other
protectionist measures imposed or negotiated by the countries with which they
trade. In many cases, governments of emerging market countries continue to
exercise a significant degree of control over the economies of such countries.
In addition, certain of such countries have in the past failed to recognize
private property rights and have at times nationalized or expropriated the
assets of private companies. There is a heightened possibility of confiscatory
taxation, imposition of withholding taxes on interest payments, or other similar
developments that could affect investments in those countries. Unanticipated
political or social developments may also affect the value of a Fund's
investments in those countries.

OPTIONS, CURRENCY HEDGING AND CURRENCY MANAGEMENT

There are a number of risks associated with transactions in options on
securities. Options may be more volatile than the underlying instruments.
Differences between the options and securities markets could result in an
imperfect correlation between these markets, causing a given transaction not to
achieve its objective. In addition, a liquid secondary market for particular
options may be absent for a variety of reasons. When trading options on foreign
exchanges, many of the protections afforded to participants in the United
States will not be available. Although the purchaser of an option cannot lose
more than the amount of the premium plus transaction costs, this entire amount
could be lost.
A Fund's currency management techniques involve risks different from
those that arise in connection with investments in U.S. dollar-denominated
securities. To the extent that a Fund is invested in foreign securities while
also maintaining currency positions, it may be exposed to greater combined risk
than would otherwise be the case. Transactions in currency futures contracts
and options on currency futures contracts involve risks similar to those of
options on securities; in addition, the potential loss incurred by a Fund in
such transactions is unlimited. To the extent that such techniques are used to
enhance return, they are considered speculative.
The use of hedging and currency management techniques is a highly
specialized activity, and there can be no assurance as to the success of any
such operations which a Fund may implement. Gains and losses in such
transactions depend upon the Investment Manager's ability to predict correctly
the direction of stock prices, interest rates, currency exchange rates, and
other economic factors. Although such operations could reduce the risk of loss
due to a decline in the value of the hedged security or currency, they could
also limit the potential gain from an increase in the value of the security or
currency.

SHORT SELLING

Short sales by a Fund that are not made "against the box" create
opportunities to increase a Fund's return but, at the same time, involve
special risk considerations and may be considered a speculative technique. The
net asset value per

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share of a Fund engaging in short sales will tend to be more volatile than
would otherwise be the case. Short sales that are not "against the box" also
theoretically involve unlimited loss potential, as the market price of
securities sold short may continuously increase, although a Fund may mitigate
such losses by replacing the securities sold short before the market price has
increased significantly. Under adverse market conditions, a Fund might have
difficulty in purchasing securities to meet its short sale delivery
obligations, might have to purchase such securities at higher prices than would
otherwise be the case, and might have to sell portfolio securities to raise the
capital necessary to meet its short sale obligations at a time when fundamental
investment considerations would not favor such sales.

WHAT OTHER RISK FACTORS SHOULD I BE AWARE OF?

CONVERTIBLE SECURITIES AND WARRANTS

The value of a convertible security is a function of both its yield in
comparison with the yields of similar non-convertible securities and the value
of the underlying stock. A convertible security held by a Fund may be subject to
redemption at the option of the issuer at a fixed price, in which event the
Fund will be required to permit the issuer to redeem the security, convert it
into the underlying common stock, or sell it to a third party. Investment in
warrants also involves certain risks, including the possible lack of a liquid
market for resale, potential price fluctuations as a result of speculation or
other factors, and the failure of the price of the underlying security to reach
or have reasonable prospects of reaching the exercise price, in which event the
warrant may expire without being exercised, resulting in a loss of a Fund's
entire investment in the warrant.

CREDIT OF COUNTERPARTIES

A number of transactions in which the Funds may engage are subject to
the risks of default by the other party to the transaction. When a Fund engages
in repurchase, reverse repurchase, when-issued, forward commitment, delayed
settlement and securities lending transactions, it relies on the other party to
consummate the transaction. Failure of the other party to do so may result in a
Fund's incurring a loss or missing an opportunity to obtain a price believed to
be advantageous.

BORROWING

Borrowing also involves special risk considerations. Interest costs of
borrowings may fluctuate with changing market rates of interest and may
partially offset or exceed the return earned on the borrowed funds (or on the
assets that were retained rather than sold to meet the needs for which funds
were borrowed). Under adverse market conditions, a Fund might have to sell
portfolio securities to meet interest or principal payments at a time when
fundamental investment considerations would not favor such sales. To the extent
a Fund enters into reverse repurchase agreements, the Fund is subject to risks
that are similar to those of borrowing.

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<PAGE>
NON-DIVERSIFICATION

The Technology Fund, Health Care Fund, Biotechnology Fund and
International Fund are non-diversified within the meaning of the 1940 Act. As
non-diversified funds, each may invest a greater percentage of its assets in
the securities of any single issuer than diversified funds, and may be more
susceptible to risks associated with a single economic, political or regulatory
occurrence than diversified funds. However, in order to meet the requirements
of the Internal Revenue Code of 1986, as amended (the "Code"), for qualification
as a regulated investment company, a Fund must diversify its holdings so that,
at the end of each quarter of its taxable year, (i) at least 50% of the market
value of its assets is represented by cash, U.S. Government securities, the
securities of other regulated investment companies and other securities, with
such other securities of any one issuer limited for purposes of this
calculation to an amount not greater than 5% of the value of the Fund's total
assets and representing not more than 10% of the issuer's outstanding voting
securities, and (ii) not more than 25% of the value of the Fund's total assets
may be invested in the securities of any one issuer (other than the U.S.
Government or other regulated investment companies).

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ORGANIZATION AND MANAGEMENT

WHO MANAGES THE FUNDS?

The Large Cap Fund, Global Small Cap Fund, Technology Fund, Health Care
Fund, Biotechnology Fund and Emerging Markets Fund are series of the Equity
Company. The International Fund is a series of the Capital Company. The Equity
Company and the Capital Company were incorporated in Maryland as open-end
management investment companies in September 1995 and March 1979, respectively.

Each Company's Board of Directors has overall responsibility for the
operation of the series of the Company. Pursuant to such responsibility, the
Board of Directors of each Company has approved contracts for various financial
organizations to provide, among other things, day-to-day management services
required by its respective series.

Each Company has retained, as its Funds' investment manager, Dresdner
RCM Global Investors LLC, a Delaware limited liability company, with principal
offices at Four Embarcadero Center, San Francisco, California 94111. The
Investment Manager manages each Fund's investments, provides various
administrative services, and supervises each Fund's daily business affairs,
subject to the authority of the applicable Company's Board of Directors.

The Investment Manager is actively engaged in providing investment
supervisory services to institutional and individual clients, and is registered
under the Investment Advisers Act of 1940. The Investment Manager was
established in April 1996 and is the successor to RCM Capital Management, a
California Limited Partnership, which, with its predecessors, has been in
operation since 1970. The Investment Manager is a wholly owned subsidiary of
Dresdner Bank AG ("Dresdner"), an international banking organization with
principal executive offices located in Frankfurt, Germany. Shares of the Funds
are not deposits, obligations of, or endorsed or guaranteed in any way by,
Dresdner Bank AG, or any other depository institution. Shares of the Funds are
not insured by the Federal Deposit Insurance Corporation, or any other agency,
and are subject to investment risks, including possible loss of principal
amount invested.

Pursuant to an agreement among RCM Limited L.P. ("RCM Limited"), the
Investment Manager and Dresdner, RCM Limited manages, operates and makes all
decisions regarding the day-to-day business and affairs of the Investment
Manager, subject to the oversight of Dresdner RCM's Board of Managers. RCM
Limited is a California limited partnership consisting of 45 limited partners
and one general partner, RCM General Corporation, a California corporation.
Twenty-four of the limited partners of RCM Limited are also the shareholders of
RCM General.

EQUITY PHILOSOPHY

The Investment Manager's equity philosophy is to invest in growth
stocks--stocks of companies that are expected to have superior and predictable
growth. Through fundamental research and a series of valuation screens, the
Investment Manager seeks to purchase securities of those companies whose
expected growth in

30
<PAGE>
earnings and dividends will provide a risk-adjusted return in excess of the
market.

GRASSROOTS RESEARCH

In addition to traditional research activities, the Investment Manager
utilizes research produced by Grassroots Research, an operating group within
the Investment Manager. Grassroots Research prepares research reports based on
field interviews with customers, distributors, and competitors of the companies
that the Investment Manager follows. The Investment Manager believes that
Grassroots Research can be a valuable adjunct to its traditional research
efforts by providing a "second look" at companies in which a Fund is
considering investing and by checking marketplace assumptions concerning market
demand for particular products and services.

LARGE CAP FUND

John D. Leland, Jr. and Carson V. Levit are primarily responsible for
the day-to-day management of the Large Cap Fund. Mr. Leland is a Principal of
the Investment Manager, with which he has been associated since 1972. He has
managed equity portfolios on behalf of the Investment Manager since 1972. Mr.
Levit is a Senior Vice President of the Investment Manager, with which he has
been associated since 1993. He has participated in the management of equity
portfolios on behalf of the Investment Manager since 1994.

GLOBAL SMALL CAP FUND

David S. Plants and Michael F. Malouf are primarily responsible for the
day-to-day management of the Global Small Cap Fund. Mr. Plants is a Senior Vice
President of the Investment Manager, with which he has been associated since
1993. Mr. Malouf is a Senior Vice President of the Investment Manager, with
which he has been associated since 1991. They have participated in the
management of portfolios on behalf of the Investment Manager since 1993 and
1992, respectively.

TECHNOLOGY FUND

Walter C. Price and Huachen Chen are primarily responsible for the
day-to-day management of the Technology Fund. Messrs. Price and Chen are both
Principals of the Investment Manager, with which they have been associated
since 1974 and 1985, respectively. They have managed equity portfolios on
behalf of the Investment Manager since 1985.

HEALTH CARE FUND AND BIOTECHNOLOGY FUND

Jeffrey J. Wiggins and Selena A. Chaisson, M.D. are primarily
responsible for the day-to-day management of the Health Care Fund and the
Biotechnology Fund. Mr. Wiggins is a Principal of the Investment Manager, with
which he has been associated since 1992. He has participated in the management
of portfolios on behalf of the Investment Manager since 1992. Dr. Chaisson is a
Senior Vice President of the Investment Manager, with which she has been
associated since 1994.

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She has participated in the management of portfolios on behalf of the
Investment Manager since 1996. In 1994 she was employed by Regeneron
Pharmaceuticals where she served as Manager of Corporate Finance. From 1993-1994
she was employed by The Mendel Group where she served as a Consultant.

INTERNATIONAL FUND AND EMERGING MARKETS FUND

William S. Stack is primarily responsible for the day-to-day management
of the International Fund and together with Ana Wiechers-Marshall is primarily
responsible for the day-to-day management of the Emerging Markets Fund. Mr.
Stack is a Principal of the Investment Manager, with which he has been
associated since 1994, and is a member of its Board of Managers. From 1985-1994
he was employed by Lexington Management Corporation where he served as Managing
Director and Chief Investment Officer. Mr. Stack has more than 24 years of
experience managing both domestic and international equities. Ms.
Wiechers-Marshall is a Senior Vice President of the Investment Manager, with
which she has been associated since 1995. She has participated in the
management of portfolios on behalf of the Investment Manager since 1997. From
1993-1995 she was employed by The Bank of America where she served as Latin
America Regional Manager.

WHAT ARE THE FUNDS' MANAGEMENT FEES?

Each Fund pays the Investment Manager a fee pursuant to an investment
management agreement. The Technology Fund and the Emerging Markets Fund each
pay a monthly fee to the Investment Manager based on its average daily net
assets, at the annual rate of 1.00%. The International Fund pays a monthly fee
to the Investment Manager based on its average daily net assets, at the annual
rate of 0.75%.

The Health Care Fund, Global Small Cap Fund and Biotechnology Fund each
pay a monthly fee to the Investment Manager based on its average daily net
assets, at the following annual rate:

<TABLE>
<CAPTION>
AVERAGE DAILY NET ASSETS FEE
<S> <C>
- -----------------------------------------------
The first $500 million 1.00%
Above $500 million and below $1 billion 0.95%
Above $1 billion 0.90%
</TABLE>

The Large Cap Fund also pays a monthly fee to the Investment Manager
based on its average daily net assets, at the following annual rate:

<TABLE>
<CAPTION>
AVERAGE DAILY NET ASSETS FEE
<S> <C>
- -----------------------------------------------
The first $500 million 0.70%
Above $500 million and below $1 billion 0.65%
Above $1 billion 0.60%
</TABLE>

WHAT OTHER EXPENSES DO THE FUNDS PAY?

Each Fund is responsible for the payment of its expenses, including:
brokerage and commission expenses; taxes; interest charges on borrowings (if
any); custodial charges and expenses; investment management fees due to the
Investment Manager; fees paid pursuant to a Rule 12b-1 plan, if applicable; and
all other operating expenses (e.g., legal and audit fees, securities
registration expenses, and compensation of directors who are not affiliated
with the Investment Manager).

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<PAGE>

To limit the expenses of each Fund, the Investment Manager has agreed to
pay each Fund on a quarterly basis the amount, if any, by which the ordinary
operating expenses of the respective Company attributable to the Fund for the
quarter (except interest, taxes and extraordinary expenses) exceed the
following expense ratios on an annual basis through December 31, 1998:
Technology Fund and Global Small Cap Fund - 1.75%; Health Care Fund,
Biotechnology Fund and Emerging Markets Fund - 1.50%; International Fund -
1.00%; and Large Cap Fund - 0.95%. Each Fund will reimburse the Investment
Manager for fees deferred or other expenses paid by the Investment Manager
pursuant to this agreement in later years in which operating expenses are
otherwise less than such expense limitation. Accordingly, until all such
amounts are reimbursed, a Fund's expenses will be higher, and its total return
will be lower, than would otherwise have been the case. No interest, carrying or
finance charge will be paid by a Fund with respect to any amounts representing
fees deferred or other expenses paid by the Investment Manager. In addition, a
Fund will not be required to repay any unreimbursed amounts to the Investment
Manager upon termination of its investment management agreement.

HOW DO THE FUNDS DECIDE WHICH BROKERS TO USE?

The Investment Manager, subject to the overall supervision of the Boards
of Directors, makes each Fund's investment decisions and selects the broker or
dealer to be used in each specific transaction using its judgment to choose the
broker or dealer most capable of providing the services necessary to obtain the
best execution of that transaction. In seeking the best execution of each
transaction, the Investment Manager evaluates a wide range of criteria. Subject
to the requirement of seeking best execution, the Investment Manager may, in
circumstances in which two or more brokers are in a position to offer
comparable execution, give preference to a broker that has provided investment
information to the Investment Manager. In so doing, the Investment Manager may
effect securities transactions which cause a Fund to pay an amount of
commission in excess of the amount of commission another broker would have
charged. Subject to the requirement of seeking the best available execution,
the Investment Manager may also place orders with brokerage firms that have
sold shares of a Fund.

A Fund may in some instances invest in foreign and/or U.S. securities
that are not listed on a national securities exchange but are traded in the
over-the-counter market. A Fund may also purchase listed securities through the
third market (over-the-counter trades of exchange-listed securities) or fourth
market (direct trades of securities between institutional investors without the
intermediation of a broker-dealer). When transactions are executed in the
over-the-counter market or the third or fourth market, the Investment Manager
seeks to deal with the counterparty that the Investment Manager believes can
provide the best execution, whether or not that counterparty is the primary
market maker for that security.
When appropriate and to the extent consistent with applicable laws and
regulations, a Fund may execute brokerage transactions through Dresdner
Kleinwort Benson North America LLC, a

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wholly owned subsidiary of Dresdner, or other broker-dealer subsidiaries or
affiliates of Dresdner.

WHO IS THE FUNDS' DISTRIBUTOR?

Funds Distributor, Inc. (the "Distributor"), whose principal place of
business is 60 State Street, Suite 1300, Boston, Massachusetts 02109, acts as
distributor of shares of each Fund. The Distributor is engaged in the business
of providing mutual fund distribution services to registered investment
companies, and is an indirect wholly owned subsidiary of Boston Institutional
Group, Inc., which is not affiliated with the Investment Manager or Dresdner.

The Equity Company has adopted distribution plans pursuant to Rule 12b-1
under the 1940 Act on behalf of the Large Cap Fund, Global Small Cap Fund,
Global Health Care Fund and Biotechnology Fund. Under the distribution plans,
each Fund pays the Distributor an annual fee of up to 0.25% of its average
daily net assets (0.15% for the Large Cap Fund) as reimbursement for certain
expenses actually incurred by the Distributor in connection with distribution of
shares of the Fund. These expenses include advertising and marketing expenses,
payments to broker-dealers and others who have entered into agreements with the
Distributor, the expenses of preparing, printing and distributing the prospectus
to persons who are not already stockholders, and indirect and overhead costs
associated with the sale of shares of the Fund. If in any month the Distributor
is due more from a Fund for such services than is immediately payable because of
the expense limitation under the plans, the unpaid amount is carried forward
from month to month while the plan is in effect until such time as it may be
paid.

WHO ARE THE FUNDS' CUSTODIANS AND TRANSFER AGENT?

State Street Bank and Trust Company acts as the custodian, transfer
agent, redemption agent and dividend paying agent for the International Fund,
Technology Fund, Health Care Fund, Global Small Cap Fund, Biotechnology Fund
and Large Cap Fund and as transfer agent, redemption agent and dividend paying
agent for the Emerging Markets Fund. State Street's principal business address
is 1776 Heritage Drive, North Quincy, Massachusetts 02171.

Brown Brothers Harriman & Co. acts as the Emerging Markets Fund's
custodian. Brown Brothers' principal business address is 40 Water Street,
Boston, Massachusetts 02109.

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<PAGE>
HOW TO PURCHASE SHARES

WHAT IS THE OFFERING PRICE FOR FUND SHARES?

Shares of the Funds are offered on a continuous basis at the offering
price next determined after receipt of an order in proper form. The offering
price is the net asset value per share. The minimum initial investment is
$5,000, and the minimum subsequent investment is $250 (other than investments
through a Fund's automatic dividend reinvestment plan). However, for investors
purchasing shares through a broker-dealer or other intermediary having a service
agreement with the Investment Manager and maintaining an omnibus account with
any of the Funds, the minimum initial investment may differ.

HOW CAN I PURCHASE FUND SHARES BY MAIL?

Investors or their duly authorized agents may purchase shares of any of
the Funds by sending a signed, completed subscription form to National
Financial Data Services ("NFDS"), an affiliate of State Street Bank and Trust
Company, at P.O. Box 419927, Kansas City, Missouri 64141-6927, and paying for
the shares as described below. Shares may also be purchased through certain
brokers which have entered into selling group agreements with the Distributor.
Brokers may charge a fee for their services at the time of purchase or
redemption. Subscription forms can be obtained from the Companies.

Orders for shares received by NFDS, or any other authorized agent of the
Companies, prior to the close of regular trading on the New York Stock Exchange
on each day the Exchange is open for trading will be priced at the net asset
value (see HOW ARE SHARES PRICED?) computed as of the close of regular trading
on the Exchange on that day. Each Company reserves the right to reject any
subscription at its sole discretion. Orders received after the close of regular
trading on the New York Stock Exchange, or on any day on which the Exchange is
not open for trading, will be priced at the close of regular trading on the
Exchange on the next succeeding day on which the Exchange is open for trading.

Upon receipt of an order in proper form, NFDS will open a stockholder
account in accordance with the investor's registration instructions. A
confirmation statement reflecting the current transaction will be forwarded to
the investor.

WHERE SHOULD I SEND MY SUBSCRIPTION PAYMENT?

Payment for shares purchased should be made by check or money order.
Checks should be bank or certified checks. Each Company may, at its option,
accept a check that is not a bank or certified check; however, third-party
checks will not be accepted. Payments should be sent to:

FUND NAME
P.O. Box 419927
Kansas City, MO 64141-6927

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HOW CAN I PURCHASE FUND SHARES BY WIRE?

Investors may also make initial or subsequent investments by electronic
transfer of funds or wire transfer of federal funds. Before transferring or
wiring funds, an investor must first call (800) 726-7240 for instructions. On
the telephone, the following information will be requested: name of authorized
person; stockholder account number (if such account number is in existence);
name of Fund; amount being transferred or wired; and transferring or wiring
bank name.
Investors may be charged a fee if they effect transactions through a
broker or agent. Your broker or agent is responsible for forwarding payment
promptly to NFDS. Each Company reserves the right to cancel any purchase order
for which payment has not been received by the third business day following the
order.
Share certificates will be issued only for full shares and only upon the
specific request of the stockholder. Confirmation statements showing
transactions in the stockholder's account and a summary of the status of the
account serve as evidence of ownership of shares of a Fund.

CAN I PAY FOR SHARES WITH INVESTMENT SECURITIES?

In its discretion, each Company may accept securities of equal value
instead of cash in payment of all or part of the subscription price for Fund
shares. Any such securities: (i) will be valued at the close of regular trading
on the New York Stock Exchange on the day of acceptance of the subscription in
accordance with the method of valuing a Fund's portfolio described under HOW
ARE SHARES PRICED? below; (ii) will have a tax basis to the Fund equal to such
value; (iii) must not be restricted securities; and (iv) must be permitted to
be purchased in accordance with the Fund's investment objective and policies
and must be securities that a Fund would be willing to purchase at that time.
Prospective stockholders considering this method of payment should contact the
appropriate Company in advance to discuss the securities in question and the
documentation necessary to complete the transaction.

HOW ARE SHARES PRICED?

The net asset value of each Fund on which its offering and redemption
prices are based is the sum of the market value of the securities and other
assets owned by the Fund less its liabilities (including expenses payable and
accrued), computed pursuant to standards adopted by the Boards of Directors.
The net asset value of each share of a Fund is the quotient obtained by dividing
the net assets of such Fund by the total number of shares of the Fund
outstanding. The net asset value of a Fund's shares will be calculated as of the
close of regular trading on the New York Stock Exchange, normally 4:00 p.m.
Eastern Time, on each day that the New York Stock Exchange is open for trading.

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<PAGE>
STOCKHOLDER SERVICES

WHAT SERVICES ARE PROVIDED TO STOCKHOLDERS?

AUTOMATIC REINVESTMENT

Each income dividend and capital gain distribution, if any, declared by
a Fund will be reinvested in full and fractional shares based on the net asset
value as determined on the payment date, unless the stockholder or his or her
duly authorized agent has elected to receive all such payments, or only the
dividend or distribution portions thereof, in cash. Changes in the manner in
which dividend and distribution payments are made may be requested by the
stockholder or his or her duly authorized agent at any time through written
notice to the appropriate Company and will be effective as to any subsequent
payment if such notice is received prior to the record date used for
determining the stockholders entitled to such payment. Any dividend and
distribution election will remain in effect until such Company is notified by
the stockholder in writing to the contrary.

EXCHANGE PRIVILEGE

You may exchange shares of a Fund into shares of any other Fund offered
through this Prospectus, without a sales charge or other fee, by contacting
NFDS. Exchange purchases are subject to the minimum investment requirements of
the series purchased. An exchange will be treated as a redemption and purchase
for tax purposes.

Shares will be exchanged at net asset value per share net determined
after receipt by NFDS of: (i) a written request for exchange, signed by each
registered owner or his or her duly authorized agent exactly as the shares are
registered, which clearly identifies the exact names in which the account is
registered, the account number and the number of shares or the dollar amount to
be exchanged; and (ii) stock certificates for any shares to be exchanged which
are held by the stockholder. Exchanges will not become effective until all
documents in the form required have been received by NFDS. A stockholder in
doubt as to what documents are required should contact NFDS.

TELEPHONE PURCHASES AND REDEMPTIONS

Commencing July 1, 1998, stockholders may purchase or redeem shares by
calling (800) 726-7240. If a stockholder calls before 1:00 p.m. (Pacific Time),
the purchase or redemption will be at the net asset value determined that day;
if a stockholder calls after 1:00 p.m. (Pacific Time), the purchase or
redemption will be at the net asset value determined on the next business day.

Stockholders should realize that by utilizing the telephone privilege
they may be giving up a measure of security that they may have if they were to
purchase or redeem their shares in writing. Each Company will employ procedures
designed to provide reasonable assurance that instructions communicated by
telephone are genuine and, if they do not do so, may be liable for any losses
due to unauthorized or fraudulent instructions. Each Company reserves the right
to refuse a telephone purchase or redemption request if it believes, that

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the person making the request is not authorized by the investor to make the
request. Neither Company, nor their agents, will be liable for any loss,
liability or cost which results from acting upon instructions of a person
reasonably believed to be a stockholder with respect to the telephone privilege.

ACCOUNT STATEMENTS

Stockholder accounts are opened in accordance with your registration
instructions. Transactions in the account, such as additional investments and
dividend reinvestments, will be reflected on regular confirmation statements.

REPORTS TO STOCKHOLDERS

Each Fund's fiscal year ends on December 31. Each Fund will issue to its
stockholders semi-annual and annual reports. In addition, stockholders will
receive quarterly statements of the status of their accounts reflecting all
transactions having taken place within that quarter. In order to reduce
duplicate mailings and printing costs, the Companies will provide one annual
and semi-annual report and annual prospectus per household. The federal income
tax status of stockholders' dividends and distributions will also be reported
to stockholders after the end of each fiscal year.

STOCKHOLDER INQUIRIES

Stockholder inquiries should be addressed to the appropriate Company at
the address or telephone number on the front page of this Prospectus.

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REDEMPTION OF SHARES

HOW DO I REDEEM MY SHARES?

Subject to the limitations described below, each Company will redeem the
shares of its respective series tendered to it, at a redemption price equal to
the net asset value per share as next computed following the receipt of all
necessary redemption documents. Because the net asset value of a Fund's shares
will fluctuate as a result of changes in the market value of securities owned,
the amount a stockholder receives upon redemption may be more or less than the
amount paid for those shares.

Redemption payments will be made wholly in cash unless the appropriate
Board of Directors believes that unusual conditions exist which would make such
payment detrimental to the best interests of a Fund. Under such circumstances,
payment of the redemption price could be made in whole or in part in portfolio
securities.

Stockholders may be charged a fee if they effect transactions through a
broker or agent.

WHEN WILL I RECEIVE MY REDEMPTION PAYMENT?

PAYMENT FOR SHARES

Payment for shares redeemed will be made within seven days after receipt
of: (i) a written request for redemption, signed by each registered owner or
his or her duly authorized agent exactly as the shares are registered, which
clearly identifies the exact names in which the account is registered, the
account number and the number of shares or the dollar amount to be redeemed;
(ii) stock certificates for any shares to be redeemed which are held by the
stockholder; and (iii) the additional documents required for redemptions by
corporations, executors, administrators, trustees and guardians. Redemptions
will not become effective until all documents in the form required have been
received by the appropriate Company. A stockholder in doubt as to what
documents are required should contact the appropriate Company.

If either Company is requested to redeem shares for which it has not yet
received payment,the mailing of a redemption check will be delayed until such
time as payment has been collected, which may take up to 15 days. Delays in the
receipt of redemption proceeds may be avoided if shares are purchased through
the use of wire-transferred funds or other methods which do not entail a
clearing delay.

Upon execution of the redemption order, a confirmation statement will be
forwarded to the stockholder indicating the number of shares sold and the
proceeds thereof. Proceeds of all redemptions will be paid by check or federal
funds wire no later than seven days after execution of the redemption order,
except as provided below.

SUSPENSION OF REDEMPTIONS

The right of redemption may not be suspended or the date of payment upon
redemption postponed for more than seven days after shares are tendered for
redemption, except for any period during which the New York Stock Exchange is
closed (other than a customary weekend or holiday closing) or during which the
SEC determines that trading thereon is restricted,

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or for any period during which an emergency (as determined by the SEC) exists
as a result of which disposal by a Fund of securities it owns is not reasonably
practicable, or as a result of which it is not reasonably practical for a Fund
fairly to determine the value of its net assets, or for such other periods as
the SEC may by order permit for the protection of stockholders.

WHAT ELSE SHOULD I KNOW ABOUT REDEMPTIONS?

REINSTATEMENT PRIVILEGE

You may reinvest proceeds from a redemption of shares of a Fund, or
proceeds of a dividend or capital gain distribution paid to you with respect to
shares of a Fund, in the same Fund or any of the other Funds offered in this
Prospectus. Send a written request and a check to the Dresdner RCM Global Funds
within 90 days after the date of the redemption, dividend or distribution.
Reinvestment will be at the next calculated net asset value after receipt. The
taxability of a gain realized on a redemption will not be affected by exercise
of the reinstatement privilege, but a loss may be nullified if you reinvest in
the same series within 30 days.

INVOLUNTARY REDEMPTION

In order to reduce a Fund's expenses, it may redeem all of the shares of
any investor whose account has a net asset value of less than $5,000 due to
redemptions (other than a stockholder who is a participant in a qualified
retirement plan or whose initial investment is below $5,000). The Fund will
give such stockholders 60 days' prior written notice in which to purchase
sufficient additional shares to avoid such redemption.

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DIVIDENDS, DISTRIBUTIONS AND TAXES

WHAT DIVIDENDS AND OTHER DISTRIBUTIONS DO THE FUNDS PAY?

Each Fund intends to pay to its stockholders all of each fiscal year's
net investment income and net realized capital gains, if any, on its investment
portfolio and net gains, if any, from foreign currency transactions. The amount
and time of any such dividend or other distribution depends upon the
realization by a Fund of income and capital gains from investments. Normally,
dividend and other distribution payments are declared and paid by each Fund in
December.

A stockholder who purchases a Fund's shares shortly before the record
date for a dividend or other distribution thereon will pay full price for the
shares (known as buying a distribution) and then will receive some portion of
his or her purchase price back as a taxable distribution even though, because
the amount of the dividend or other distribution reduces the shares' net asset
value, it actually represents a return of invested capital.

WHAT TAXES WILL I PAY ON THE FUNDS DIVIDENDS AND OTHER DISTRIBUTIONS?

Dividends from a Fund's investment company taxable income (whether paid
in cash or reinvested in additional shares) generally will be taxable to
stockholders as ordinary income. Distributions of a Fund's net capital gain (the
excess of net long-term capital gain over net short-term capital loss), when
designated as such, will be taxable to stockholders as long-term capital gain,
regardless of how long they have held their Fund shares and whether paid in
cash or reinvested additional shares. Stockholders who are not subject to tax
on their income generally will not be required to pay tax on dividends or
distributions. Dividends and other distributions generally are taxable to
stockholders at the time they are received. However, dividends declared in
October, November and December by a Fund and made payable to stockholders of
record in such a month are treated as paid and are thereby taxable as of
December 31, provided that the Fund pays the dividend no later than January 31
of the following year.

Federal law requires a Fund to withhold 31% of the amount of dividends,
capital gain distributions and/or redemption proceeds payable to individual and
certain other non-corporate stockholders if the stockholder has not properly
furnished a certified correct taxpayer identification number and (except with
respect to redemption proceeds) has not certified that backup withholding does
not apply. Amounts withheld are applied to the stockholder's federal tax
liability, and a refund may be obtained from the Internal Revenue Service if
withholding results in an overpayment of taxes. Under the Code, distributions
of investment company taxable income and net capital gain by a Fund to a
stockholder who, as to the United States, is a non-resident alien individual,
non-resident alien fiduciary of a trust or estate, foreign corporation, or
foreign partnership may also be subject to U.S. withholding tax, although
distributions of net capital gain to such a stockholder generally will not be
subject to withholding.

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WILL THE FUNDS ALSO PAY TAXES?

Each Fund intends to qualify for treatment as a "regulated investment
company" under Subchapter M of the Code. By doing so, it will not be subject to
federal income tax with respect to investment company taxable income and net
capital gain distributed to its stockholders.

Each Fund may be required to pay income, withholding and other taxes
imposed by foreign countries, generally at rates from 10% to 40%, which would
reduce the Fund's investment income. Tax conventions between certain countries
and the United States may reduce or eliminate such taxes. If it is eligible to
do so, a Fund may elect to "pass through" to its stockholders the amount of
foreign income taxes paid by the Fund, if such election is deemed to be in the
best interests of stockholders. If this election is made, stockholders will be
required to include in their gross income their pro rata share of foreign taxes
paid by the Fund, and will be able to treat such taxes as either an itemized
deduction or a foreign credit against U.S. income taxes (but not both) on their
tax returns. If a Fund does not make that election, stockholders will not be
able to deduct their pro rata share of such taxes in computing their taxable
income and will not be able to take their share of such taxes as a credit
against their U.S. income taxes.

WHEN WILL I RECEIVE TAX INFORMATION?

Each stockholder of a Fund will receive, after the end of each year,
full information on dividends, capital gain distributions and other reportable
amounts with respect to shares of the Fund for tax purposes, including
information such as the portion taxable as capital gains and the amount of
dividends, if any, eligible for the federal dividends-received deduction for
corporate taxpayers.

The foregoing is a general, abbreviated summary of the present U.S.
federal income tax law applicable to dividends and distributions by the Funds;
see the SAI for further information. Investors should consult their own tax
advisers for more detailed information and for information regarding any
foreign, state, and local tax laws and regulations applicable to dividends and
distributions received.

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GENERAL INFORMATION

WHAT OTHER INFORMATION SHOULD I KNOW ABOUT THE FUNDS?

The authorized capital stock of the Capital Company is 1,000,000,000
shares of capital stock (par value $.0001 per share), of which 100,000,000
shares have been designated as shares of the International Fund. The authorized
capital stock of the Equity Company is 1,000,000,000 shares of capital stock
(par value $.0001 per share), of which 50,000,000 shares have been designated
as shares of each of the Technology Fund, Global Small Cap Fund, Health Care
Fund, Large Cap Fund, Biotechnology Fund, and Emerging Markets Fund. The Board
of Directors of each Company may, in the future, authorize the issuance of
other classes of shares of such Funds, or of other series of capital stock
representing shares of additional investment portfolios or funds.

All shares of each Company have equal voting rights and will be voted in
the aggregate, and not by series, except where voting by series is required by
law or where the matter involved affects only one series. There are no
conversion or preemptive rights in connection with any shares. All shares of
the Funds when duly issued will be fully paid and non-assessable. The rights of
the holders of shares of each Fund may not be modified except by vote of the
majority of the outstanding shares of such Fund. Certificates are not issued
unless requested and are never issued for fractional shares. Fractional shares
are liquidated when an account is closed.

As of March 31, 1998, there were: 7,849,683 shares of the International
Fund outstanding of which 38.6% were beneficially owned by The Pension Plan for
Salaried Employees of Travelers Insurance Company and its Affiliates; 530,156
shares of the Technology Fund outstanding of which 35.2% were beneficially
owned by RCM Capital Management Profit Sharing Plan; 400,865 shares of the
Health Care Fund outstanding, 402,646 shares of the Global Small Cap Fund
outstanding, 401,965 shares of the Large Cap Fund outstanding, 301,379 shares of
the Biotechnology Fund outstanding, and 300,011 shares of the Emerging Markets
Fund outstanding of which 99.8%, 99.3%, 99.5%, 99.5%, and 100%, respectively,
were beneficially owned by clients of Dresdner Bank AG/Investment
Management/Institutional Asset Management Division.

Shares of each Company have non-cumulative voting rights, which means
that the holders of more than 50% of all series of a Company's shares voting
for the election of the directors can elect 100% of the directors of the
Company if they wish to do so. In such event, the holders of the remaining less
than 50% of the shares of the Company voting for the election of directors will
not be able to elect any person to the Board of Directors of the Company.

Neither Company is required to hold a meeting of stockholders in any
year in which the 1940 Act does not require a stockholder vote on a particular
matter, such as election of directors. A Company will hold a meeting of its
stockholders for the purpose of voting on the question of removal of one or
more directors if requested in writing by the holders of at least 10% of the
Company's outstanding voting securities, and will assist in

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communicating with its stockholders as required by Section 16(c) of the 1940
Act.

Because the Capital Company and the Equity Company are registered
separately under the 1940 Act but are using a combined Prospectus and SAI there
is a possibility that the series of either Company may be liable for any
misstatements, inaccuracies or incomplete disclosures in such documents
concerning the other Company.

This Prospectus does not contain all of the information set forth in the
Capital Company's and the Equity Company's respective registration statements
and related forms as filed with the SEC, certain portions of which are omitted
in accordance with rules and regulations of the SEC. The registration
statements and related forms may be inspected at the Public Reference Room of
the SEC at Room 1024, 450 5th Street, N.W., Judiciary Plaza, Washington, D.C.
20549, and copies thereof may be obtained from the SEC at prescribed rates.
They are also available on the SEC's Internet Web Site at http://www.sec.gov.

44
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NOTES
<PAGE>

DRESDNER RCM CAPITAL FUNDS, INC.

DRESDNER RCM EQUITY FUNDS, INC.

DRESDNER RCM LARGE CAP GROWTH FUND

DRESDNER RCM GLOBAL SMALL CAP FUND

DRESDNER RCM GLOBAL TECHNOLOGY FUND

DRESDNER RCM GLOBAL HEALTH CARE FUND

DRESDNER RCM BIOTECHNOLOGY FUND

DRESDNER RCM INTERNATIONAL GROWTH EQUITY FUND A

DRESDNER RCM EMERGING MARKETS FUND

FOUR EMBARCADERO CENTER

SAN FRANCISCO, CALIFORNIA 94111

(800) 726-7240

STATEMENT OF ADDITIONAL INFORMATION

May 1, 1998

Dresdner RCM International Growth Equity Fund A (the "International Fund") is a
series of Dresdner RCM Capital Funds, Inc. (the "Capital Company"), an open-end
management investment company. Dresdner RCM Large Cap Growth Fund (the "Large
Cap Fund"), Dresdner RCM Global Small Cap Fund (the "Global Small Cap Fund"),
Dresdner RCM Global Technology Fund (the "Technology Fund"), Dresdner RCM Global
Health Care Fund (the "Health Care Fund"), Dresdner RCM Biotechnology Fund (the
"Biotechnology Fund"), and Dresdner RCM Emerging Markets Fund (the "Emerging
Markets Fund") are series (each a "Fund" and, with the International Fund, the
"Funds") of Dresdner RCM Equity Funds, Inc. (the " Equity Company" and, with the
Capital Company, the "Companies"), an open-end management investment company.
The Funds' investment manager is Dresdner RCM Global Investors LLC (the
"Investment Manager").

This Statement of Additional Information is not a prospectus, but contains
information in addition to and more detailed than that set forth in the Funds'
Prospectus dated May 1, 1998 and should be read in conjunction with such
Prospectus. The Prospectus may be obtained without charge by writing or calling
either Company at the address and phone number above.

TABLE OF CONTENTS

PAGE

Investment Objectives and Policies . . . . . . . . . . . . . . . . . 2
Investment and Risk Considerations . . . . . . . . . . . . . . . . . 11
Investment Restrictions. . . . . . . . . . . . . . . . . . . . . . . 18
Execution of Portfolio Transactions. . . . . . . . . . . . . . . . . 20
Directors and Officers . . . . . . . . . . . . . . . . . . . . . . . 22
The Investment Manager . . . . . . . . . . . . . . . . . . . . . . . 24
The Distributor. . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Net Asset Value. . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Purchase and Redemption of Shares. . . . . . . . . . . . . . . . . . 29
Dividends, Distributions and Tax Status. . . . . . . . . . . . . . 29
Investment Results . . . . . . . . . . . . . . . . . . . . . . . . . 32
Description of Capital Shares. . . . . . . . . . . . . . . . . . . . 34
Additional Information . . . . . . . . . . . . . . . . . . . . . . . 37

<PAGE>

------------------------------

INVESTMENT OBJECTIVES AND POLICIES

------------------------------

INVESTMENT CRITERIA

In evaluating particular investment opportunities, the Investment Manager may
consider such other factors, in addition to those described in the Prospectus,
as the anticipated economic growth rate, the political outlook, the anticipated
inflation rate, the currency outlook, and the interest rate environment for the
country and the region in which a particular issuer is located. When the
Investment Manager believes it would be appropriate and useful, the Investment
Manager's personnel may visit the issuer's headquarters and plant sites to
assess an issuer's operations and to meet and evaluate its key executives. The
Investment Manager also will consider whether other risks may be associated with
particular securities.

INVESTMENT IN FOREIGN SECURITIES

The securities markets of many countries have at times in the past moved
relatively independently of one another due to different economic, financial,
political, and social factors. In seeking to achieve each Fund's investment
objective, the Investment Manager allocates the Fund's assets among securities
of countries and in currency denominations where opportunities for meeting the
Fund's investment objective are expected to be the most attractive, subject to
the percentage limitations set forth in the Prospectus. In addition, from time
to time a Fund may strategically adjust its investments among issuers based in
various countries and among the various equity markets of the world in order to
take advantage of diverse global opportunities, based on the Investment
Manager's evaluation of prevailing trends and developments, as well as on the
Investment Manager's assessment of the potential for capital appreciation (as
compared to the risks) of particular companies, industries, countries, and
regions.

INVESTMENT IN DEVELOPED FOREIGN COUNTRIES. The Emerging Markets Fund may, and
each other Fund will, invest in securities of companies that are organized or
headquartered in developed foreign countries. A Fund may not be invested in all
developed foreign countries at one time, and may not invest in particular
developed foreign countries at any time, depending on the Investment Manager's
view of the investment opportunities available.

Although these countries have developed economies, even developed countries may
be subject to periods of economic or political instability. For example, efforts
by the member countries of the European Union to eliminate internal barriers to
the free movement of goods, persons, services and capital have encountered
opposition arising from the conflicting economic, political and cultural
interests and traditions of the member countries and their citizens. The
reunification of the former German Democratic Republic (East Germany) with the
Federal Republic of Germany (West Germany) and other political and social events
in Europe have caused considerable economic and social dislocations. Such events
can materially affect securities markets and have also disrupted the
relationship of such currencies with each other and with the U.S. dollar.
Similarly, events in the Japanese economy and social developments may affect
Japanese securities and currency markets, as well as the relationship of the
Japanese Yen to the U.S. dollar. Future political, economic and social
developments can be expected to produce continuing effects on securities and
currency markets in these and other developed foreign countries.

INVESTMENT IN EMERGING MARKETS. Each Fund may, and the Emerging Markets Fund
will, invest in securities of companies organized or headquartered in developing
countries with emerging markets. As a general matter, countries that are not
considered to be developed foreign countries by the Investment Manager will be
deemed to be emerging market countries. (See INVESTMENT IN DEVELOPED FOREIGN
COUNTRIES.) As their economies grow and their markets grow and mature, some
countries that currently may be characterized by the Investment Manager as
emerging market countries may be deemed by the Investment Manager to be
developed foreign countries. In the

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<PAGE>

event that the Investment Manager deems a particular country to be a developed
foreign country, any investment in securities issued by that country's
government or by an issuer located in that country would not be subject to a
Fund's overall limitations on investments in emerging market countries.

Securities of issuers organized or headquartered in emerging market countries
may, at times, offer excellent opportunities for capital appreciation. However,
prospective investors should be aware that the markets of emerging market
countries historically have been more volatile than the markets of the United
States and developed foreign countries, and thus the risks of investing in
securities of issuers organized or headquartered in emerging market countries
may be far greater than the risks of investing in developed foreign markets. See
INVESTMENT AND RISK CONSIDERATIONS -- EMERGING MARKET SECURITIES for a more
detailed discussion of the risk factors associated with investments in emerging
market securities. In addition, movements of emerging market currencies
historically have had little correlation with movements of developed foreign
market currencies. Prospective investors should consider these risk factors
carefully before investing in a Fund. Some emerging market countries have
currencies whose value is closely linked to the U.S. dollar. Emerging market
countries also may issue debt denominated in U.S. dollars and other currencies.

It is unlikely that a Fund will be invested in equity securities in all emerging
market countries at any time. Moreover, investing in some emerging markets
currently may not be desirable or feasible, due to lack of adequate custody
arrangements for Fund assets, overly burdensome repatriation or similar
restrictions, the lack of organized and liquid securities markets, unacceptable
political risks, poor values of investments in those markets relative to
investments in other emerging markets, in developed foreign markets, or in the
United States, or for other reasons.

CURRENCY MANAGEMENT

Securities purchased by the Funds may be denominated in U.S. dollars, foreign
currencies, or multinational currency units such as the European Currency Unit,
and the Funds will incur costs in connection with conversions between various
currencies. Movements in the various securities markets may be offset by changes
in foreign currency exchange rates. Exchange rates frequently move independently
of securities markets in a particular country. As a result, gains in a
particular securities market may be affected, either positively or negatively,
by changes in exchange rates, and a Fund's net currency positions may expose it
to risks independent of its securities positions.

From time to time, the Funds may employ currency management techniques to
enhance their total returns, although there is no current intention to do so.
A Fund may not employ more than 30% of the value of its total assets in
currency management techniques for the purpose of enhancing returns. To the
extent that such techniques are used to enhance return, they are considered
speculative.

A Fund's ability and decision to purchase or sell portfolio securities may be
affected by the laws or regulations in particular countries relating to
convertibility and repatriation of assets. Because the shares of the Funds are
redeemable in U.S. dollars each day the Funds determine their net asset value,
the Funds must have the ability at all times to obtain U.S. dollars to the
extent necessary to meet redemptions. Under present conditions, the Investment
Manager does not believe that these considerations will have any significant
adverse effect on its portfolio strategies, although there can be no assurances
in this regard.

GENERAL CURRENCY CONSIDERATIONS. Currency exchange rates may fluctuate
significantly over short periods of time causing, along with other factors, each
Fund's net asset value to fluctuate as well. Currency exchange rates generally
are determined by the forces of supply and demand in the foreign exchange
markets and the relative merits of investments in different countries, actual or
anticipated changes in interest rates and other complex factors, as seen from an
international perspective. Currency exchange rates also can be affected
unpredictably by intervention, or failure to do so, by U.S. or foreign
governments or central banks or by currency controls or political developments
in the United States or abroad. The markets in forward foreign currency exchange
contracts, currency swaps and other privately negotiated currency instruments
offer less protection against defaults by the other party to such instruments
than is available for currency instruments traded on an exchange. To the extent
that a substantial

3
<PAGE>

portion of a Fund's total assets, adjusted to reflect the Fund's net position
after giving effect to currency transactions, is denominated or quoted in the
currencies of foreign countries, the Fund will be more susceptible to the risk
of adverse economic and political developments within those countries.

FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS. Each Fund may purchase or sell
forward foreign currency exchange contracts ("forward contracts") for hedging
purposes or to seek to increase total return when the Investment Manager
anticipates that a foreign currency will appreciate or depreciate in value, but
securities denominated or quoted in that currency do not present attractive
investment opportunities and are not held in the Fund's portfolio. When
purchased or sold to increase total return, forward contracts are considered
speculative. In addition, a Fund may enter into forward contracts in order to
protect against anticipated changes in future foreign currency exchange rates.
Each Fund may engage in cross-hedging by using forward contracts in a currency
different from that in which the hedged security is denominated or quoted if the
Investment Manager determines that there is a pattern of correlation between the
two currencies. Each Fund may also engage in proxy hedging, by using forward
contracts in a series of foreign currencies for similar purposes.

Each Fund may enter into forward contracts to purchase foreign currencies to
protect against an anticipated rise in the U.S. dollar price of securities it
intends to purchase. Each Fund may enter into forward contracts to sell foreign
currencies to protect against the decline in value of its foreign currency
denominated or quoted portfolio securities, or a decline in the value of
anticipated dividends from such securities, due to a decline in the value of
foreign currencies against the U.S. dollar. Forward contracts to sell foreign
currency could limit any potential gain which might be realized by a Fund if the
value of the hedged currency increased.

If a Fund enters into a forward contract to sell foreign currency to increase
total return or to buy foreign currency for any purpose, the Fund will segregate
cash, U.S. Government securities, or other liquid debt or equity securities with
the Fund's custodian in an amount equal to the value of the Fund's total assets
committed to the consummation of the forward contract. If the value of the
segregated securities declines, additional assets will be segregated so that the
value of the segregated assets will equal the amount of the Fund's commitment
with respect to the contract.

A forward contract is subject to the risk that the counterparty to such contract
will default on its obligations. Since a forward contract is not guaranteed by
an exchange or clearinghouse, a default on the contract would deprive a Fund of
unrealized profits, transaction costs or the benefits of a currency hedge or
force the Fund to cover its purchase or sale commitments, if any, at the current
market price. The Funds will enter into such transactions only with the primary
dealers or others deemed creditworthy by the Investment Manager.

OPTIONS ON FOREIGN CURRENCIES. Each Fund may purchase and sell (write) put and
call options on foreign currencies for the purpose of protecting against
declines in the U.S. dollar value of foreign portfolio securities and
anticipated dividends on such securities and against increases in the U.S.
dollar cost of foreign securities to be acquired. Each Fund may also use options
on currency to cross-hedge, which involves writing or purchasing options on one
currency to hedge against changes in exchange rates for a different currency, if
the Investment Manager believes there is a pattern of correlation between the
two currencies. Options on foreign currencies to be written or purchased by the
Funds will be traded on U.S. and foreign exchanges.

The writer of a put or call option receives a premium and gives the purchaser
the right to sell (or buy) the currency underlying the option at the exercise
price. The writer has the obligation upon exercise of the option to purchase (or
deliver) the currency during the option period. A writer of an option who wishes
to terminate the obligation may effect a "closing transaction" by buying an
option of the same series as the option previously written. A writer may not
effect a closing purchase transaction after being notified of the exercise of an
option. The writing of an option on foreign currency will constitute only a
partial hedge, up to the amount of the premium received; a Fund could be
required to purchase or sell additional foreign currencies at disadvantageous
exchange rates, thereby incurring losses. The purchase of an option on foreign
currency may constitute an effective hedge against exchange rate fluctuations;
however, in the event of exchange rate movements adverse to a Fund's position,
the Fund may forfeit the entire amount of the premium plus related transaction
costs.

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<PAGE>

Each Fund may purchase call or put options on currency to seek to increase total
return when the Investment Manager anticipates that the currency will appreciate
or depreciate in value, but the securities quoted or denominated in that
currency do not present attractive investment opportunities and are not held in
the Fund's portfolio.

When a Fund writes a put or call option on a foreign currency, an amount of
cash, U.S. Government securities, or other liquid debt or equity securities
equal to the market value of its obligations under the option will be segregated
by the Fund's custodian to collateralize the position.

CURRENCY SWAPS. Each Fund may enter into currency swaps for both hedging and to
seek to increase total return. Currency swaps involve the exchange of rights to
make or receive payments in specified currencies. Since currency swaps are
individually negotiated, the Funds expect to achieve an acceptable degree of
correlation between their portfolio investments and their currency swap
positions entered into for hedging purposes. Currency swaps may involve the
delivery of the entire principal value of one designated currency in exchange
for the other designated currency, or the delivery of the net amount of a
party's obligations over its entitlements. Therefore, the entire principal value
of a currency swap may be subject to the risk that the other party to the swap
will default on its contractual delivery obligations. Each Fund will maintain in
a segregated account with the Fund's custodian cash, U.S. Government securities,
or other liquid debt or equity securities equal to the amount of the Fund's
obligations, or the net amount (if any) of the excess of the Fund's obligations
over its entitlements, with respect to swap transactions. To the extent that
such amount of a swap is segregated, the Companies and the Investment Manager
believe that swaps do not constitute senior securities under the Investment
Company Act of 1940 (the "1940 Act") and, accordingly, will not treat them as
being subject to a Fund's borrowing restriction.

The use of currency swaps is a highly specialized activity which involves
investment techniques and risks different from those associated with ordinary
portfolio securities transactions. If the Investment Manager is incorrect in its
forecasts of market values and currency exchange rates, the investment
performance of a Fund entering into a currency swap would be less favorable than
it would have been if this investment technique were not used.

OPTIONS TRANSACTIONS

Each Fund may purchase listed put and call options on stocks and stock indices
as a hedge against changes in market conditions that may result in changes in
the value of the Fund's portfolio securities. The aggregate premiums on put
options and call options purchased by a Fund may not in each case exceed 5% of
the value of the net assets of the Fund as of the date of purchase. In
addition, a Fund will not purchase options if more than 25% of the value of its
net assets would be hedged.

A put gives the holder the right, in return for the premium paid, to require the
writer of the put to purchase from the holder a security at a specified price. A
call gives the holder the right, in return for the premium paid, to require the
writer of the call to sell a security to the holder at a specified price. Put
and call options on various stocks and stock indices are traded on U.S. and
foreign exchanges. A put option is covered if the writer segregates cash, U.S.
Government securities or other liquid debt or equity securities equal to the
exercise price. A call option is covered if the writer owns the security
underlying the call or has an absolute and immediate right to acquire the
security without additional cash consideration upon conversion or exchange of
other securities held by it.

PUT OPTIONS. If a Fund purchases a put option, the Fund acquires the right to
sell the underlying security at a specified price at any time during the term of
the option (for "American-style" options) or on the option expiration date (for
"European-style" options). Purchasing put options may be used as a portfolio
investment strategy when the Investment Manager perceives significant short-term
risk but substantial long-term appreciation for the underlying security. The put
option acts as an "insurance policy", as it protects against significant
downward price movement while it allows full participation in any upward
movement. If a Fund is holding a stock which the Investment Manager feels has
strong fundamentals, but for some reason may be weak in the near term, the Fund
may purchase a put option on such security, thereby giving itself the right to
sell such security at a certain strike price throughout the term of the option.
Consequently, the Fund will exercise the put only if the price of such

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security falls below the strike price of the put. The difference between the
put's strike price and the market price of the underlying security on the date
the Fund exercises the put, less transaction costs, will be the amount by which
the Fund will be able to hedge against a decline in the underlying security. If
during the period of the option the market price for the underlying security
remains at or above the put's strike price, the put will expire worthless,
representing a loss of the price the Fund paid for the put, plus transaction
costs. If the price of the underlying security increases, the profit the Fund
realizes on the sale of the security will be reduced by the premium paid for the
put option less any amount for which the put may be sold.

CALL OPTIONS. If a Fund purchases a call option, it acquires the right to
purchase the underlying security at a specified price at any time during the
term of the option. The purchase of a call option is a type of "insurance
policy" to hedge against losses that could incur if a Fund intends to purchase
the underlying security and the security thereafter increases in price. The Fund
will exercise a call option only if the price of the underlying security is
above the strike price at the time of exercise. If during the option period the
market price for the underlying security remains at or below the strike price of
the call option, the option will expire worthless, representing a loss of the
price paid for the option, plus transaction costs. If the price of the
underlying security thereafter falls, the price the Fund pays for the security
will in effect be increased by the premium paid for the call option less any
amount for which such option may be sold.

STOCK INDEX OPTIONS. Each Fund may purchase put and call options with respect to
stock indices such as the S&P Composite 500 Stock Price Index and other stock
indices. Such options may be purchased as a hedge against changes resulting
from market conditions in the values of securities which are held in a Fund's
portfolio or which it intends to purchase or sell, or when they are economically
appropriate for the reduction of risks inherent in the ongoing management of the
Fund.

The distinctive characteristics of options on stock indices create certain risks
that are not present with stock options generally. Because the value of an index
option depends upon movements in the level of the index rather than the price of
a particular stock, whether a Fund will realize a gain or loss on the purchase
or sale of an index option depends upon movements in the level of stock prices
in the stock market generally rather than movements in the price of a particular
stock. Accordingly, successful use by a Fund of options on a stock index will be
subject to the Investment Manager's ability to predict correctly movements in
the direction of the stock market generally. This requires different skills and
techniques than predicting changes in the prices of individual stocks.

Index prices may be distorted if trading of certain stocks included in an index
is interrupted. Trading of index options also may be interrupted in certain
circumstances, such as if trading were halted in a substantial number of stocks
included in the index. If this were to occur, a Fund would not be able to close
out options which it had purchased, and if restrictions on exercise were
imposed, the Fund might be unable to exercise an option it holds, which could
result in substantial losses to the Fund. It is the policy of the Funds to
purchase put or call options only with respect to an index which the Investment
Manager believes includes a sufficient number of stocks to minimize the
likelihood of a trading halt in the index.

DEALER OPTIONS. Each Fund may engage in transactions involving dealer options as
well as exchange-traded options. Options not traded on an exchange generally
lack the liquidity of an exchange-traded option, and may be subject to a Fund's
restriction on investment in illiquid securities. In addition, dealer options
may involve the risk that the securities dealers participating in such
transactions will fail to meet their obligations under the terms of the options.

SHORT SALES

Each Fund, except the International Fund, may engage in short sales
transactions. Although the International Fund may not make short sales of
securities, it may maintain short positions in connection with its use of
options, futures contracts, options on futures contracts, forward foreign
currency exchange transactions, and currency options. A short sale that is not
made "against the box" is a transaction in which a Fund sells a security it does
not own in anticipation of a decline in market price. When a Fund makes a short
sale, the proceeds it receives are retained by

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the broker until the Fund replaces the borrowed security. In order to deliver
the security to the buyer, the Fund must arrange through a broker to borrow the
security and, in so doing, the Fund becomes obligated to replace the security
borrowed at its market price at the time of replacement, whatever that price may
be.

Short sales by a Fund that are not made "against the box" create opportunities
to increase the Fund's return but, at the same time, involve special risk
considerations and may be considered a speculative technique. Since a Fund in
effect profits from a decline in the price of the securities sold short without
the need to invest the full purchase price of the securities on the date of the
short sale, the Fund's net asset value per share will tend to increase more when
the securities it has sold short decrease in value, and to decrease more when
the securities it has sold short increase in value, than would otherwise be the
case if it had not engaged in such short sales. Short sales theoretically
involve unlimited loss potential, as the market price of securities sold short
may continuously increase, although a Fund may mitigate such losses by replacing
the securities sold short before the market price has increased significantly.
Under adverse market conditions, a Fund might have difficulty purchasing
securities to meet its short sale delivery obligations, and might have to sell
portfolio securities to raise the capital necessary to meet its short sale
obligations at a time when fundamental investment considerations would not favor
such sales.

If a Fund makes a short sale "against the box," the Fund would not immediately
deliver the securities sold and would not receive the proceeds from the sale.
The seller is said to have a short position in the securities sold until it
delivers the securities sold, at which time it receives the proceeds of the
sale. A Fund's decision to make a short sale "against the box" may be a
technique to hedge against market risks when the Investment Manager believes
that the price of a security may decline, causing a decline in the value of a
security owned by the Fund or a security convertible into or exchangeable for
such security. In such case, any future losses in the Fund's long position would
be reduced by a gain in the short position.

In the view of the Securities and Exchange Commission ("SEC"), a short sale
involves the creation of a "senior security" as such term is defined in the 1940
Act, unless the sale is "against the box" and the securities sold are placed in
a segregated account (not with the broker), or unless the Fund's obligation to
deliver the securities sold short is "covered" by segregating (not with the
broker) cash, U.S. Government securities or other liquid debt or equity
securities in an amount equal to the difference between the market value of the
securities sold short at the time of the short sale and any cash or securities
required to be deposited as collateral with a broker in connection with the sale
(not including the proceeds from the short sale), which difference is adjusted
daily for changes in the value of the securities sold short. The total value of
the cash and securities deposited with the broker and otherwise segregated may
not at any time be less than the market value of the securities sold short at
the time of the short sale.

To avoid limitations under the 1940 Act on borrowing by investment companies,
short sales by each Fund will be "against the box", or the Fund's obligation to
deliver the securities sold short will be "covered" by segregating cash, U.S.
Government securities or other liquid debt or equity securities in an amount
equal to the market value of its delivery obligation. A Fund will not make short
sales of securities or maintain a short position if doing so could create
liabilities or require collateral deposits and segregation of assets aggregating
more than 25% of the value of the Fund's total assets.

FUTURES TRANSACTIONS

Each Fund may purchase and sell currency futures contracts and futures options,
in accordance with the strategies more specifically described below, to hedge
against currency exchange rate fluctuations or to enhance returns. The
International Fund may also purchase and sell stock index futures contracts and
futures options as a hedge against changes in market conditions that may result
in changes in the value of the Fund's portfolio securities.

FUTURES CHARACTERISTICS. A futures contract is an agreement between two parties
(buyer and seller) to take or make delivery of an amount of cash equal to the
difference between the value of the currency or index at the close of the last
trading day of the contract and the price at which the currency or index
contract was originally written. In the case of futures contracts traded on U.S.
exchanges, the exchange itself or an affiliated clearing corporation assumes the
opposite side of each transaction (i.e., as buyer or seller). A futures contract
may be satisfied or closed out by

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<PAGE>

payment of the change in the cash value of the currency or index. No physical
delivery of the underlying currency or stocks in the index is made.

Unlike when a Fund purchases or sells a security, no price is paid or received
by a Fund upon the purchase or sale of a futures contract. Initially, the Fund
will be required to deposit with the Fund's custodian or such other parties as
may be authorized by the SEC (in the name of the futures commission merchant
(the "FCM")) an amount of cash or U.S. Treasury bills which is referred to as an
"initial margin" payment. The nature of initial margin in futures transactions
is different from that of margin in security transactions in that a futures
contract margin does not involve the borrowing of funds by a Fund to finance the
transactions. Rather, the initial margin is in the nature of a performance bond
or good faith deposit on the contract which is returned to the Fund upon
termination of the futures contract, assuming all contractual obligations have
been satisfied. Futures contracts customarily are purchased and sold with
initial margins that may range upwards from less than 5% of the value of the
futures contract being traded. Subsequent payments, called "variation margin",
to and from the FCM, will be made on a daily basis as the price of the
underlying currency or stock index varies, making the long and short positions
in the futures contract more or less valuable. This process is known as "marking
to the market." For example, when a Fund has purchased a currency futures
contract and the price of the underlying currency has risen, the Fund's position
will have increased in value and the Fund will receive from the FCM a variation
margin payment equal to that increased value. Conversely, when a Fund has
purchased a currency futures contract and the price of the underlying currency
has declined, the position would be less valuable and the Fund would be required
to make a variation margin payment to the FCM. At any time prior to expiration
of a futures contract, a Fund may elect to close the position by taking an
identical opposite position which will operate to terminate the Fund's position
in the futures contract. A final determination of variation margin is then made,
additional cash is required to be paid by or released to the Fund, and the Fund
realizes a loss or a gain.

CHARACTERISTICS OF FUTURES OPTIONS. Each Fund may also purchase call options and
put options on currency or stock index futures contracts ("futures options"). A
futures option gives the holder the right, in return for the premium paid, to
assume a long position (in the case of a call) or short position (in the case of
a put) in a futures contract at a specified exercise price prior to the
expiration of the option. Upon exercise of a call option, the holder acquires a
long position in the futures contract and the writer is assigned the opposite
short position. In the case of a put option, the opposite is true. A futures
option may be closed out (before exercise or expiration) by an offsetting
purchase or sale of a futures option of the same series.

PURCHASE OF FUTURES. Each Fund may purchase a currency futures contract when it
anticipates the subsequent purchase of particular securities and has the
necessary cash, but expects the currency exchange rates then available in the
applicable market to be less favorable than rates that are currently available,
or to attempt to enhance return when it anticipates that future currency
exchange rates will be more favorable than current rates. Similarly, when the
Investment Manager anticipates a significant stock market or stock market sector
advance, the International Fund may purchase a stock index futures contract
which affords a hedge against not participating in such advance at a time when
the Fund is not fully invested in equity securities. Such purchase of a futures
contract would serve as a temporary substitute for the purchase of individual
stocks which may later be purchased (with attendant costs) in an orderly
fashion. As such purchase of individual stocks are made, an approximately
equivalent amount of stock index futures would be terminated by offsetting
sales.

SALE OF FUTURES. Each Fund may sell a currency futures contract to hedge against
an anticipated decline in foreign currency rates that would adversely affect the
dollar value of a Fund's portfolio securities denominated in such currency, or
may sell a currency futures contract in one currency to hedge against
fluctuations in the value of securities denominated in a different currency if
there is an established historical pattern or correlation between the two
currencies. Similarly, the International Fund may sell stock index futures
contracts in anticipation of or during a general stock market or market sector
decline that may adversely affect the market values of the Fund's portfolio of
equity securities. To the extent that the Fund's portfolio of equity securities
changes in value in correlation with a given stock index, the sale of futures
contracts on that index would reduce the risk to the portfolio of a market
decline and, by doing so, would provide an alternative to the liquidation of
securities positions in the portfolio with resultant transaction costs.

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<PAGE>

PURCHASE OF PUT OPTIONS ON FUTURES. The purchase of a put option on a currency
futures or stock index futures contracts is analogous to the purchase of a put
on individual stocks, where an absolute level of protection from price
fluctuation is sought below which no additional economic loss would be incurred
by a Fund. Put options may be purchased to hedge a portfolio of stocks or a
position in the futures contract upon which the put option is based against a
possible decline in market value. The purchase of a put option on a currency
futures contract can be used to hedge against unfavorable movements in currency
exchange rates, or to attempt to enhance returns in contemplation of movements
in such rates.

PURCHASE OF CALL OPTIONS ON FUTURES. The purchase of a call option on a currency
futures or stock index futures contract represents a means of obtaining
temporary exposure to favorable currency exchange rate movements or temporary
exposure to market appreciation with risk limited to the premium paid for the
call option. It is analogous to the purchase of a call option on an individual
stock, which can be used as a substitute for a position in the stock itself.
Depending on the pricing of the option compared to either the futures contract
upon which it is based, or to the price of the underlying currency or stock
index itself, the call option may be less risky, because losses are limited to
the premium paid for the call option, when compared to the ownership of the
underlying currency or stock index futures contract. Like the purchase of a
currency futures or stock index futures contract, a Fund would purchase a call
option on a currency or stock index futures contract to hedge against an
unfavorable movement in exchange rates.

LIMITATIONS ON PURCHASE AND SALE OF FUTURES AND FUTURES OPTIONS. A Fund may
not purchase or sell futures contracts or purchase futures options if,
immediately thereafter, more than 30% of the value of its net assets would be
hedged. In addition, except for the Emerging Markets Fund, a Fund may not
purchase or sell futures or purchase futures options if, immediately
thereafter, the sum of the amount of margin deposits on the Fund's existing
futures positions and premiums paid for futures options would exceed 5% of
the market value of the Fund's total assets. In Fund transactions involving
futures contracts, to the extent required by applicable SEC guidelines, an
amount of cash, U.S. Government securities, or other liquid debt or equity
securities equal to the market value of the futures contracts will be
segregated with the Fund's Custodian, or in other segregated accounts as
regulations may allow, to collateralize the position and thereby to insure
that the use of such futures is unleveraged.

The International Fund will not engage in transactions in stock index futures
contracts and futures options for speculation, but only as a hedge against
changes in the value of securities held in the Fund's portfolio, or securities
which the Investment Manager intends to purchase for the portfolio, resulting
from actual or anticipated changes in general market conditions. Such
transactions will only be effected when, in the view of the Investment Manager,
they are economically appropriate to the reduction of risks inherent in the
ongoing management of the Fund's portfolio.

REGULATORY MATTERS. The Companies have filed claims of exemption from
registration of the Funds as commodity pools with the Commodity Futures Trading
Commission (the "CFTC"). Each Fund intends to conduct its futures trading
activity in a manner consistent with that exemption. The Investment Manager is
registered with the CFTC as both a commodity pool operator and as a commodity
trading advisor.

DEBT SECURITIES

Each Fund may purchase debt obligations. The timing of purchase and sale
transactions in debt obligations may result in capital appreciation or
depreciation because the value of debt obligations varies inversely with
prevailing interest rates.

The debt obligations in which each Fund will invest (other than the Emerging
Markets Fund) will be rated, at the time of purchase, BBB or higher by Standard
& Poor's, a division of The McGraw-Hill Companies, Inc. ("Standard & Poor's"),
or Baa or higher by Moody's Investors Service, Inc. ("Moody's") or equivalent
ratings by other rating organizations, or, if unrated, will be determined by the
Investment Manager to be of comparable investment quality. If the rating of an
investment grade security held by a Fund is downgraded, the Investment Manager
will determine whether it is in the best interests of the Fund to continue to
hold the security in its investment portfolio. The

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<PAGE>

Emerging Markets Fund may also invest in debt obligations unrated or rated, at
the time of purchase, below investment grade by Standard & Poor's, Moody's or
another recognized international rating organization.

U.S. Government obligations include obligations issued or guaranteed as to
principal and interest by the U.S. Government and its agencies and
instrumentalities, by the right of the issuer to borrow from the U.S. Treasury,
by the discretionary authority of the U.S. Government to purchase certain
obligations of the agency or instrumentality, or only by the credit of the
agency or instrumentality.

PREFERRED STOCKS

Each Fund may purchase preferred stock. Preferred stock, unlike common stock,
offers a stated dividend rate payable from a corporation's earnings. Such
preferred stock dividends may be cumulative or non-cumulative, participating, or
auction rate. If interest rates rise, the fixed dividend on preferred stocks
may be less attractive, causing the price of preferred stocks to decline.
Preferred stock may have mandatory sinking fund provisions, as well as
call/redemption provisions prior to maturity, a negative feature when interest
rates decline. Dividends on some preferred stock may be "cumulative," requiring
all or a portion of prior unpaid dividends to be paid prior to payment of
dividends on the issuer's common stock. Preferred stock also generally has a
preference over common stock on the distribution of a corporation's assets in
the event of liquidation of the corporation, and may be "participating," which
means that it may be entitled to a dividend exceeding the stated dividend in
certain cases. The rights of the holders of preferred stock on the distribution
of a corporation's assets in the event of a liquidation are generally
subordinate to the rights associated with a corporation's debt securities.

INVESTMENT IN ILLIQUID SECURITIES

Each Fund may purchase illiquid securities. The Investment Manager takes into
account a number of factors in reaching liquidity decisions, including, but not
limited to: the listing of the security on an exchange or national market
system; the frequency of trading in the security; the number of dealers who
publish quotes for the security; the number of dealers who serve as market
makers for the security; the apparent number of other potential purchasers; and
the nature of the security and how trading is effected (e.g., the time needed to
sell the security, how offers are solicited, and the mechanics of transfer).

CASH-EQUIVALENT INVESTMENTS

Other than as described under INVESTMENT RESTRICTIONS below, the Funds are not
restricted with regard to the types of cash-equivalent investments they may
make. When the Investment Manager believes that such investments are an
appropriate part of a Fund's overall investment strategy, the Fund may hold or
invest, for investment purposes, a portion of its assets in any of the
following, denominated in U.S. dollars, foreign currencies, or multinational
currency units: cash; short-term U.S. or foreign government securities;
commercial paper rated at least A-2 by Standard & Poor's or P-2 by Moody's;
certificates of deposit or other deposits of banks deemed creditworthy by the
Investment Manager pursuant to standards adopted by the Capital Company's and
the Equity Company's Boards of Directors (herein after collectively referred to
as the "Board of Directors"); time deposits; bankers' acceptances; and
repurchase agreements related to any of the foregoing. In addition, for
temporary defensive purposes under abnormal market or economic conditions, a
Fund may invest up to 100% of its assets in such cash-equivalent investments.

A certificate of deposit is a short-term obligation of a commercial bank. A
bankers' acceptance is a time draft drawn on a commercial bank by a borrower,
usually in connection with international commercial transactions. A repurchase
agreement involves a transaction by which an investor (such as a Fund) purchases
a security and simultaneously obtains the commitment of the seller (a member
bank of the Federal Reserve System or a securities dealer deemed creditworthy by
the Investment Manager pursuant to standards adopted by the Board of Directors)
to repurchase the security at an agreed-upon price on an agreed-upon date within
a number of days (usually not more than seven) from the date of purchase.

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PORTFOLIO TURNOVER

Each Fund may invest in securities on either a long-term or short-term basis. A
Fund may invest with the expectation of short-term capital appreciation if the
Investment Manager believes that such action will benefit the Fund's
stockholders. A Fund also may sell securities that have been held on a
short-term basis if the Investment Manager believes that circumstances make the
sale of such securities advisable. This may result in a taxable stockholder
paying higher income taxes on Fund distributions than would be the case for
shareholders of investment companies emphasizing the realization of long-term
capital gains. Because the Investment Manager will purchase and sell securities
for each Fund's portfolio without regard to the length of the holding period for
such securities, it is possible that a Fund's portfolio will have a higher
turnover rate than might be expected for investment companies that invest
substantially all of their funds for long-term capital appreciation or
generation of current income. Securities in a Fund's portfolio will be sold
whenever the Investment Manager believes it is appropriate to do so, regardless
of the length of time that securities have been held, and securities may be
purchased or sold for short-term profits whenever the Investment Manager
believes it is appropriate or desirable to do so. Turnover will be influenced by
sound investment practices, a Fund's investment objective, and the need for
funds for the redemption of a Fund's shares.

For example, a 150% portfolio turnover rate would occur if the value of
purchases or sales of portfolio securities (whichever is less) by a Fund for a
year (excluding purchases of U.S. Treasury issues and securities with a maturity
of one year or less) were equal to 150% of the average monthly value of the
securities held by the Fund during such year. As a result of the manner in which
turnover is measured, a high turnover rate could also occur during the first
year of a Fund's operations, and during periods when a Fund's assets are growing
or shrinking.

INVESTMENT RESTRICTIONS

In making purchases within the foregoing policies, each Fund and the Investment
Manager will be subject to all of the restrictions referred to under INVESTMENT
RESTRICTIONS below. If a percentage restriction on a Fund's investment or
utilization of assets set forth above or under INVESTMENT RESTRICTIONS is
adhered to at the time the investment is made, a later change in percentage
resulting from changing value or a similar type of event will not be considered
a violation of the Fund's investment policies or restrictions. A Fund may
exchange securities, exercise conversion or subscription rights, warrants or
other rights to purchase common stock or other equity securities and may hold,
except to the extent limited by the 1940 Act, any such securities so acquired
without regard to the Fund's investment policies and restrictions.

Because certain of the Funds may invest more than 25% of their total assets in
the securities of companies organized or headquartered in France, Germany, Japan
or the United Kingdom, such Funds may be subject to increased risks due to
political, economic, social or regulatory events that may occur in these
countries. Such political, economic, social or regulatory developments may
adversely effect the securities and currency markets of these countries.

------------------------------

INVESTMENT AND RISK CONSIDERATIONS

------------------------------

INVESTMENTS IN FOREIGN SECURITIES GENERALLY

Investments in foreign equity securities may offer investment opportunities and
potential benefits not available from investments solely in securities of U.S.
issuers. Such benefits may include the opportunity to invest in foreign issuers
that appear, in the opinion of the Investment Manager, to offer better
opportunity for long-term capital appreciation than investments in securities of
U.S. issuers, the opportunity to invest in foreign countries with economic
policies or business cycles different from those of the United States and the
opportunity to reduce

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<PAGE>

fluctuations in portfolio value by taking advantage of foreign stock markets
that do not necessarily move in a manner parallel to U.S. stock markets.

At the same time, however, investing in foreign equity securities involves
significant risks, some of which are not typically associated with investing in
securities of U.S. issuers. For example, the value of investments in such
securities may fluctuate based on changes in the value of one or more foreign
currencies relative to the U.S. dollar, and a change in the exchange rate of one
or more foreign currencies could reduce the value of certain portfolio
securities. Currency exchange rates may fluctuate significantly over short
periods of time, and are generally determined by the forces of supply and demand
and other factors beyond a Funds' control. Changes in currency exchange rates
may, in some circumstances, have a greater effect on the market value of a
security than changes in the market price of the security. To the extent that a
substantial portion of a Fund's total assets is denominated or quoted in the
currency of a foreign country, the Fund will be more susceptible to the risk of
adverse economic and political developments within that country. As discussed
above, each Fund may employ certain investment techniques to hedge its foreign
currency exposure; however, such techniques also entail certain risks.

In addition, information about foreign issuers may be less readily available
than information about domestic issuers. Foreign issuers generally are not
subject to accounting, auditing, and financial reporting standards or to other
regulatory practices and requirements comparable to those applicable to U.S.
issuers. Furthermore, with respect to certain foreign countries, the possibility
exists of expropriation, nationalization, revaluation of currencies,
confiscatory taxation, and limitations on foreign investment and the use or
removal of funds or other assets of a Fund, including the withholding of tax on
dividends and other distributions and limitations on the repatriation of
currencies. In addition, a Fund may experience difficulties or delays in
obtaining or enforcing judgments. Foreign securities may be subject to foreign
government taxes that could reduce the yield and total return on such
securities.

Foreign equity securities may be traded on an exchange in the issuer's country,
an exchange in another country, or over-the-counter in one or more countries.
Most foreign securities markets, including over-the-counter markets, have
substantially less volume than U.S. securities markets, and the securities of
many foreign issuers may be less liquid and more volatile than securities of
comparable U.S. issuers. In addition, there is generally less government
regulation of securities markets, securities exchanges, securities dealers, and
listed and unlisted companies in foreign countries than in the United States.

Foreign markets also have different clearance and settlement procedures, and in
certain markets there have been times when settlements have been unable to keep
pace with the volume of securities transactions, making it difficult to conduct
and complete such transactions. Inability to dispose of a portfolio security
caused by settlement problems could result either in losses to a Fund due to
subsequent declines in the value of the portfolio security or, if a Fund has
entered into a contract to sell that security, could result in possible
liability of the Fund to the purchaser. Delays in settlement could adversely
affect a Fund's ability to implement its investment strategies and to achieve
its investment objective.

In addition, the costs associated with transactions in securities traded on
foreign markets or of foreign issuers, and the expense of maintaining custody of
such securities with foreign custodians, generally are higher than the costs
associated with transactions in U.S. securities on U.S. markets. Investments in
foreign securities may result in higher expenses due to the cost of converting
foreign currency to U.S. dollars, the payment of fixed brokerage commissions on
foreign exchanges, the expense of maintaining securities with foreign custodians
and the imposition of transfer taxes or transaction charges associated with
foreign exchanges.

Investment in debt obligations of supranational organizations involves
additional risks. Such organizations' debt obligations generally are not
guaranteed by their member governments, and payment depends on their financial
solvency and/or the willingness and ability of their member governments to
support their obligations. Continued support of a supranational organization by
its government members is subject to a variety of political, economic and other
factors, as well as the financial performance of the organization.

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DEPOSITARY RECEIPTS

In many respects, the risks associated with investing in depositary receipts are
similar to the risks associated with investing in foreign equity securities
directly. In addition, to the extent that a Fund acquires depositary receipts
through banks that do not have a contractual relationship with the foreign
issuer of the security underlying the depositary receipts to issue and service
depositary receipts, there may be an increased possibility that the Fund would
not become aware of and be able to respond to corporate actions, such as stock
splits or rights offerings, involving the foreign issuer in a timely manner.

The information available for American Depositary Receipts ("ADRs") sponsored by
the issuers of the underlying securities is subject to the accounting, auditing,
and financial reporting standards of the domestic market or exchange on which
they are traded, which standards generally are more uniform and more exacting
than those to which many non-domestic issuers may be subject. However, some ADRs
are sponsored by persons other than the issuers of the underlying securities.
Issuers of the stock on which such ADRs are based are not obligated to disclose
material information in the United States. The information that is available
concerning the issuers of the securities underlying European Depositary Receipts
("EDRs") and Global Depositary Receipts ("GDRs") may be less than the
information that is available about domestic issuers, and EDRs and GDRs may be
traded in markets or on exchanges that have lesser standards than those
applicable to the markets for ADRs.

A depositary receipt will be treated as an illiquid security for purposes of a
Fund's restriction on the purchases of such securities unless the depositary
receipt is convertible into cash by the Fund within seven days.

EMERGING MARKET SECURITIES

There are special risks associated with investments in securities of companies
organized or headquartered in developing countries with emerging markets that
are in addition to the usual risks of investing in securities of issuers located
in developed foreign markets around the world, and investors in the Funds are
strongly advised to consider those risks carefully. The securities markets of
emerging market countries are substantially smaller, less developed, less
liquid, and more volatile than the securities markets of the United States and
developed foreign markets. As a result, the prices of emerging market securities
may increase or decrease much more rapidly and much more dramatically than the
prices of securities of issuers located in developed foreign markets. Disclosure
and regulatory standards in many respects are less stringent than in the United
States and developed foreign markets. There also may be a lower level of
monitoring and regulation of securities markets in emerging market countries and
the activities of investors in such markets, and enforcement of existing
regulations has been extremely limited.

Many emerging market countries have experienced substantial, and in some periods
extremely high, rates of inflation for many years. Inflation and rapid
fluctuations in inflation rates have had and may continue to have very negative
effects on the economies and securities markets of certain emerging market
countries. Economies in emerging markets generally are heavily dependent upon
international trade and, accordingly, have been and may continue to be affected
adversely by trade barriers, exchange controls, managed adjustments in relative
currency values, and other protectionist measures imposed or negotiated by the
countries with which they trade. These economies also have been and may continue
to be adversely affected by economic conditions in the countries in which they
trade. In addition, custodial services and other costs related to investment in
foreign markets may be more expensive in emerging markets than in many developed
foreign markets, which could reduce the Funds' investment returns from such
securities.

In many cases, governments of emerging market countries continue to exercise a
significant degree of control over the economies of such countries, and
government actions relative to the economy, as well as economic developments
generally, also may have a major effect on an issuer's prospects. In addition,
certain of such governments have in the past failed to recognize private
property rights and have at times naturalized or expropriated the assets of
private companies. There is also a heightened possibility of confiscatory
taxation, imposition of withholding taxes on dividend and interest payments, or
other similar developments that could affect investments in those countries. As
a result, there can be no assurance that adverse political changes will not
cause a

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<PAGE>

Fund to suffer a loss with respect to any of its holdings. In addition,
political and economic structures in many of such countries may be undergoing
significant evolution and rapid development, and such countries may lack the
social, political and economic stability characteristics of more developed
countries. Unanticipated political or social developments may affect the value
of the Funds' investments in those countries and the availability of additional
investments in those countries.

INVESTMENTS IN SMALLER COMPANIES

Investment in the securities of companies with market capitalizations below $1
billion involves greater risk and the possibility of greater portfolio price
volatility than investing in larger capitalization companies. The securities of
small-sized concerns, as a class, have shown market behavior which has had
periods of more favorable results, and periods of less favorable results,
relative to securities of larger companies as a class. For example, smaller
capitalization companies may have less certain growth prospects, and may be more
sensitive to changing economic conditions, than large, more established
companies. Moreover, smaller capitalization companies often face competition
from larger or more established companies that have greater resources. In
addition, the smaller capitalization companies in which a Fund may invest may
have limited or unprofitable operating histories, limited financial resources,
and inexperienced management. Furthermore, securities of such companies are
often less liquid than securities of larger companies, and may be subject to
erratic or abrupt price movements. To dispose of these securities, a Fund may
have to sell them over an extended period of time below the original purchase
price. Investments in smaller capitalization companies may be regarded as
speculative.

No Fund, except the Emerging Markets Fund, will invest more than 5% of the
value of its total assets in securities issued by companies (including
predecessors) that have operated for less than three years. The securities of
such companies may have limited liquidity, which can result in their prices
being lower than might otherwise be the case. In addition, investments in
such companies are more speculative and entail greater risk than do
investments in companies with established operating records.

CONVERTIBLE SECURITIES

Each Fund may invest in convertible securities. Investment in convertible
securities involves certain risks. The value of a convertible security is a
function of its "investment value" (determined by its yield in comparison with
the yields of other securities of comparable maturity and quality that do not
have a conversion privilege) and its "conversion value" (the security's worth,
at market value, if converted into the underlying stock). If the conversion
value is low relative to the investment value, the price of the convertible
security will be governed principally by its yield, and thus may not decline in
price to the same extent as the underlying stock; to the extent the market price
of the underlying common stock approaches or exceeds the conversion price, the
price of the convertible security will be influenced increasingly by its
conversion value. A convertible security held by a Fund may be subject to
redemption at the option of the issuer at a price established in the instrument
governing the convertible security, in which event the Fund will be required to
permit the issuer to redeem the security, convert it into the underlying common
stock, or sell it to a third party.

OTHER DEBT OBLIGATIONS

Although securities rated BBB by Standard & Poor's or Baa by Moody's are
considered to be of "investment grade," and are considered to have adequate
capacity to pay interest and repay principal, adverse economic conditions or
changing circumstances are more likely to lead to a weakened capacity to pay
interest and principal than higher-rated securities. Credit ratings evaluate the
safety of principal and interest payments of securities, not their market value.
The rating of an issuer is also heavily weighted by past developments and does
not necessarily reflect probable future conditions. There is frequently a lag
between the time a rating is assigned and the time it is updated.

JUNK BOND CONSIDERATIONS

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<PAGE>

The Emerging Markets Fund may invest up to 5% of its total assets in debt
securities rated below "Baa" by Moody's, below "BBB" by Standard & Poor's, or
below investment grade by other recognized rating agencies, or if unrated,
securities determined by the Investment Manager to be of comparable quality, if
the Investment Manager believes that the financial condition of the issuer or
the protection afforded to the particular securities is stronger than would
otherwise be indicated by such low ratings or the lack thereof. Securities
rated below "Baa" or "BBB" or equivalent ratings, commonly referred to as "junk
bonds," are subject to greater risk of loss of income and principal than higher-
rated bonds and are considered to be predominantly speculative with respect to
the issuer's capacity to pay interest and repay principal, which may in any case
decline during sustained periods of deteriorating economic conditions or rising
interest rates. Junk bonds are generally considered to be subject to greater
market risk in times of deteriorating economic conditions, and to wider market
and yield fluctuations, than higher-rated securities. Junk bonds may also be
more susceptible to real or perceived adverse economic and competitive industry
conditions than investment grade securities. The market for such securities may
be thinner and less active than that for higher-rated securities, which can
adversely affect the prices at which these securities can be sold. To the
extent that there is no established secondary market for lower-rated securities,
the Emerging Markets Fund may experience difficulty in valuing such securities
and, in turn, its assets. In addition, adverse publicity and investor
perceptions about junk bonds, whether or not based on fundamental analysis, may
tend to decrease the market value and liquidity of such securities.

The Investment Manager will try to reduce the risk inherent in the Emerging
Market Fund's investment in such securities through credit analysis,
diversification and attention to current developments and trends in interest
rates and economic conditions. However, there can be no assurance that losses
will not occur. Since the risk of default is higher for lower-rated bonds, the
Investment Manager's research and credit analysis are a correspondingly more
important aspect of its program for managing the Emerging Market Fund's
investments in such debt securities. The Investment Manager will attempt to
identify those issuers of high-yielding securities whose financial conditions
are adequate to meet future obligations, or have improved or are expected to
improve in the future.

Credit ratings evaluate the safety of principal and interest payments of
securities, not their market value. The rating of an issuer is also heavily
weighted by past developments and does not necessarily reflect probable future
conditions. There is frequently a lag between the time a rating is assigned and
the time it is updated. As credit rating agencies may fail to timely change
credit ratings of securities to reflect subsequent events, the Investment
Manager will also monitor issuers of such securities to determine if such
issuers will have sufficient cash flow and profits to meet required principal
and interest payments and to assure their liquidity.

OPTIONS

There are several risks associated with transactions in options on securities
and indices. Options may be more volatile than the underlying instruments, and
therefore, on a percentage basis, an investment in options may be subject to
greater fluctuation than an investment in the underlying instruments themselves.
There are also significant differences between the securities and options
markets that could result in an imperfect correlation between these markets,
causing a given transaction not to achieve its objective. In addition, a liquid
secondary market for particular options may be absent for reasons which include
the following: there may be insufficient trading interest in certain options;
restrictions may be imposed by an exchange on opening transactions or closing
transactions or both; trading halts, suspensions or other restrictions may be
imposed with respect to particular classes or series of options or underlying
instruments; unusual or unforeseen circumstances may interrupt normal operations
on an exchange; the facilities of an exchange or clearing corporation may not at
all times be adequate to handle current trading volume; or one or more exchanges
could, for economic or other reasons, decide, or be compelled at some future
date, to discontinue the trading of options (or a particular class or series of
options), in which event the secondary market on that exchange (or in that class
or series of options) would cease to exist, although outstanding options that
had been issued by a clearing corporation as a result of trades on that exchange
would continue to be exercisable in accordance with their terms.

A decision as to whether, when and how to use options involves the exercise of
skill and judgment, and even a well-conceived transaction may be unsuccessful to
some degree because of market behavior or unexpected events.

15
<PAGE>

In addition, when trading options on foreign exchanges, many of the protections
afforded to participants in U.S. option exchanges will not be available. For
example, there may be no daily price fluctuation limits in such exchanges or
markets, and adverse market movements could therefore continue to an unlimited
extent over a period of time. Although the purchaser of an option cannot lose
more than the amount of the premium plus related transaction costs, this entire
amount could be lost.

Potential losses to the writer of an option are not limited to the loss of the
option premium received by the writer, and thus may be greater than the losses
incurred in connection with the purchasing of an option.

FUTURES TRANSACTIONS

There are several risks in connection with the use of futures contracts in the
Funds. One risk arises because the correlation between movements in the price of
a futures contract and movements in the price of the security or currency which
is the subject of the hedge is not always perfect. The price of the futures
contract acquired by a Fund may move more than, or less than, the price of the
security or currency being hedged. If the price of the future moves less than
the price of the security or currency which is the subject of the hedge, the
hedge will not be fully effective but, if the price of the security or currency
being hedged has moved in an unfavorable direction, the Fund would be in a
better position than if it had not hedged at all. If the price of the security
or currency being hedged has moved in a favorable direction, this advantage will
be partially offset by movement in the value of the future. If the price of the
futures contract moves more than the price of the security or currency, the Fund
will experience either a loss or a gain on the futures contract which will not
be completely offset by movements in the price of the security or currency which
is the subject of the hedge.

To compensate for the imperfect correlation of movements in the price of a
security or currency being hedged and movements in the price of the futures, a
Fund may buy or sell futures contracts in a greater dollar amount than the
dollar amount of the security or currency being hedged, if the historical
volatility of the price of such security or currency has been greater than the
historical volatility of the security or currency. Conversely, a Fund may buy or
sell fewer futures contracts if the historical volatility of the price of the
security or currency being hedged is less than the historical volatility of the
security or currency.

Because of the low margins required, futures trading involves a high degree of
leverage. As a result, a relatively small investment in a futures contract by a
Fund may result in immediate and substantial loss, or gain, to the Fund. A
purchase or sale of a futures contract may result in losses in excess of the
initial margin for the futures contract. However, the Fund would have sustained
comparable losses if, instead of the futures contract, it had invested in the
underlying financial instrument and sold the instrument after the decline.

When futures are purchased by a Fund to hedge against a possible unfavorable
movement in a currency exchange rate before the Fund is able to invest its cash
(or cash equivalents) in stock in an orderly fashion, it is possible that the
currency exchange rate may move in a favorable manner instead. If the Fund then
decides not to invest in stock at that time because of concern as to possible
further market decline or for other reasons, the Fund will realize a loss on the
futures contract that is not offset by a reduction in the price of securities
purchased.

In addition to the possibility that there may be an imperfect correlation, or no
correlation at all, between movements in the futures and the security or
currency which is the subject of a hedge, the price of futures contracts may not
correlate perfectly with movements in the stock index or currency due to certain
market distortions. First, all participants in the futures market are subject to
margin deposit and maintenance requirements. Rather than meeting additional
margin deposit requirements, investors may close futures contracts through
offsetting transactions. This practice could distort the normal relationship
between the index or currency and futures markets. Second, from the point of
view of speculators, the deposit requirements in the futures market may be less
onerous than margin requirements in the security or currency market. Therefore,
increased participation by speculators in the futures market also may cause
temporary price distortions. Due to the possibility of price distortion in the
futures market and because of the imperfect correlation between movements in the
stock index or currency and movements in the

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<PAGE>

price of stock index or currency futures, a correct forecast of general market
or currency trends by the Investment Manager still may not result in a
successful hedging transaction over a short time frame.

Futures exchanges may limit the amount of fluctuation permitted in certain
futures contract prices during a single trading day. Once the daily limit has
been reached, no more trades may be made on that day at a price beyond the
limit. The daily limit governs only price movements during a particular trading
day and therefore does not limit potential losses, because the limit may prevent
the liquidation of unfavorable positions.

Compared to the use of a futures contract, the purchase of an option on a
futures contract involves less potential risk to a Fund because the maximum
amount at risk is the premium paid for the option (plus transaction costs).
However, there may be circumstances when the use of an option on a futures
contract would result in loss to a Fund when the use of a futures contract would
not, such as when there is no movement in the level of an index. In addition,
daily changes in the value of the option due to changes in the value of the
underlying futures contract are reflected in the net asset value of the Fund.

A Fund will only enter into futures contracts or purchase futures options that
are standardized and traded on a U.S. or foreign exchange or board of trade, or
similar entity, or quoted on an automated quotation system. However, there is no
assurance that a liquid secondary market on an exchange or board of trade will
exist for any particular futures contract or futures option or at any particular
time. In such event, it may not be possible to close a futures position, and, in
the event of adverse price movements, the Fund would continue to be required to
make daily cash payments of variation margin. In the event futures contracts
have been used to hedge a portfolio security or currency, an increase in the
price of the security or currency, if any, may partially or completely offset
losses on the futures contract. However, as described above, there is no
guarantee that the price of the security or currency will, in fact, correlate
with the movements in the futures contract and thus provide an offset to losses
on a futures contract.

Successful use of futures by the Funds for hedging purposes or to enhance
returns is subject to the Investment Manager's ability to predict correctly
movements in the direction of the security and currency markets. For example, if
a Fund hedged against the possibility of a decline in the market adversely
affecting stocks held in its portfolio and stock prices increased instead, the
Fund would lose part or all of the benefit of the increased value of its stocks
which it hedged because it would have offsetting losses in its futures
positions. In addition, in such situations, if a Fund had insufficient cash, it
might have to sell securities to meet daily variation margin requirements. Such
sales of securities might be, but would not necessarily be, at increased prices
which would reflect the rising market. Similarly, if a Fund purchased currency
futures contracts with the intention of profiting from a favorable change in
currency exchange rates, and the change was unfavorable, the Fund would incur a
loss, and might have to sell securities to meet daily variation margin
requirements at a time when it might be disadvantageous to do so. The Investment
Manager and its predecessor have been actively engaged in the provision of
investment supervisory services for institutional and individual accounts since
1970, but the skills required for the successful use of futures and options on
futures are different from those needed to select portfolio securities, and the
Investment Manager has limited prior experience in the use of futures or options
techniques in the management of assets under its supervision.

OTHER RISK CONSIDERATIONS

Investment in illiquid securities involves potential delays on resale as well as
uncertainty in valuation. Limitations on resale may have an adverse effect on
the marketability of portfolio securities, and a Fund might not be able to
dispose of such securities promptly or at reasonable prices.

A number of transactions in which the Funds may engage are subject to the risks
of default by the other party to the transaction. If the seller of securities
pursuant to a repurchase agreement entered into by a Fund defaults and the value
of the collateral securing the repurchase agreement declines, the Fund may incur
a loss. If bankruptcy proceedings are commenced with respect to the seller,
realization of the collateral by the Fund may be delayed or limited. Similarly,
when a Fund engages in when-issued, reverse repurchase, forward commitment and
related settlement transactions, it relies on the other party to consummate the
trade; failure of the other party to do so may

17
<PAGE>

result in the Fund incurring a loss or missing an opportunity to obtain a price
the Investment Manager believed to be advantageous. The risks in lending
portfolio securities, as with other extensions of secured credit, consist of a
possible delay in receiving additional collateral or in recovery of the
securities or possible loss of rights in the collateral should the borrower fail
financially.

------------------------------

INVESTMENT RESTRICTIONS

------------------------------

FUNDAMENTAL POLICIES

Each Fund has adopted certain investment restrictions that are fundamental
policies and that may not be changed without approval by the vote of a majority
of the Fund's outstanding voting securities, as defined in the 1940 Act. The
"vote of a majority of the outstanding voting securities" of the Fund, as
defined in Section 2(a)(42) of the 1940 Act, means the vote of (i) 67% or more
of the voting securities of the Fund present at any meeting, if the holders of
more than 50% of the outstanding voting securities of the Fund are present or
represented by proxy, or (ii) more than 50% of the outstanding voting securities
of the Fund, whichever is less. These restrictions provide that a Fund may not:

1. Invest more than 25% of the value of its total assets in the securities of
companies primarily engaged in any one industry (other than the United
States of America, its agencies and instrumentalities) (this restriction
does not apply to the Technology Fund, Health Care Fund or Biotechnology
Fund).

2. Acquire more than 10% of the outstanding voting securities of any one
issuer;

3. Invest in companies for the purpose of exercising control or management;

4. Borrow money, except from banks to meet redemption requests or for
temporary or emergency purposes; provided that borrowings for temporary or
emergency purposes other than to meet redemption requests shall not exceed
5% of the value of its total assets; and provided further that total
borrowings shall be made only to the extent that the value of the Fund's
total assets, less its liabilities other than borrowings, is equal to at
least 300% of all borrowings (including the proposed borrowing). For
purposes of the foregoing limitations, reverse repurchase agreements and
other borrowing transactions covered by segregated assets are considered to
be borrowings. A Fund will not mortgage, pledge, hypothecate, or in any
other manner transfer as security for an indebtedness any of its assets.
This investment restriction shall not prohibit a Fund from engaging in
futures contracts, options on futures, forward foreign currency exchange
transactions, and currency options;

5. Purchase securities on margin, but it may obtain such short-term credit
from banks as may be necessary for the clearance of purchases and sales of
securities;

6. Make loans of its funds or assets to any other person, which shall not be
considered as including: (i) the purchase of a portion of an issue of
publicly distributed debt securities, (ii) the purchase of bank obligations
such as certificates of deposit, bankers' acceptances and other short-term
debt obligations, (iii) entering into repurchase agreements with respect to
commercial paper, certificates of deposit and obligations issued or
guaranteed by the U.S. Government, its agencies or instrumentalities, and
(iv) the loan of portfolio securities to brokers, dealers and other
financial institutions where such loan is callable by the Fund at any time
on reasonable notice and is fully secured by collateral in the form of cash
or cash equivalents. A Fund will not enter into repurchase agreements with
maturities in excess of seven days if

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<PAGE>
immediately after and as a result of such transaction the value of the
Fund's holdings of such repurchase agreements exceeds 10% of the value of
the Fund's total assets;

7. Act as an underwriter of securities issued by other persons, except insofar
as it may be deemed an underwriter under the Securities Act of 1933 in
selling portfolio securities, or invest more than 15% of the value of its
net assets in securities that are illiquid;

8. Purchase the securities of any other investment company or investment
trust, except by purchase in the open market where, to the best information
of the Company, no commission or profit to a sponsor or dealer (other than
the customary broker's commission) results from such purchase and such
purchase does not result in such securities exceeding 10% of the value of
the Fund's total assets, or except when such purchase is part of a merger,
consolidation, acquisition of assets, or other reorganization approved by
the Fund's stockholders;

9. Purchase portfolio securities from or sell portfolio securities to the
officers, directors, or other "interested persons" (as defined in the 1940
Act) of the Company, other than unaffiliated broker-dealers;

10. Purchase commodities or commodity contracts, except that the Fund may
purchase securities of an issuer which invests or deals in commodities or
commodity contracts, and except that the Fund may enter into futures and
options contracts in accordance with the applicable rules of the CFTC. The
Funds have no current intention of entering into commodities contracts
except for currency futures and futures options;

11. Purchase or sell futures or purchase related options if, immediately
thereafter, the sum of the amount of "margin" deposits on the Fund's
existing futures positions and premiums paid for related options entered
into for the purpose of seeking to increase total return would exceed 5% of
the market value of the Fund's net assets (this restriction applies to
the International Fund only);

12. Issue senior securities, except that the Fund may borrow money as permitted
by restriction 4 above. This restriction shall not prohibit the Fund from
engaging in short sales, options, futures and foreign currency
transactions; and

13. Purchase or sell real estate; provided that the Fund may invest in readily
marketable securities secured by real estate or interests therein or issued
by companies which invest in real estate or interests therein.

OPERATING POLICIES

Each Fund has adopted certain investment restrictions that are not fundamental
policies and may be changed by the Board of Directors without approval of the
Fund's outstanding voting securities. These restrictions provide that a Fund may
not:

1. Invest in interests in oil, gas, or other mineral exploration or
development programs (this restriction does not apply to the Emerging
Markets Fund);

2. Invest more than 5% of the value of its total assets in the securities of
any issuer which has a record of less than three years of continuous
operation (including the operation of any predecessor) (this restriction
does not apply to the Emerging Markets Fund);

3. Participate on a joint or a joint-and-several basis in any trading account
in securities (the aggregation of orders for the sale or purchase of
marketable portfolio securities with other accounts under the management of
the Investment Manager to save brokerage costs, or to average prices among
them, is not deemed to result in a securities trading account); and

4. Purchase or sell futures or purchase related options if, immediately
thereafter, the sum of the amount of "margin" deposits on the Fund's
existing futures positions and premiums paid for related options entered

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<PAGE>

into for the purpose of seeking to increase total return would exceed 5% of
the value of the Fund's net assets (this restriction does not apply to the
International Fund and Emerging Markets Fund).

The Funds are also subject to other restrictions under the 1940 Act; however,
the registration of the Companies under the 1940 Act does not involve any
supervision by any federal or other agency of the Companies management or
investment practices or policies, other than incident to occasional or periodic
compliance examinations conducted by the SEC staff.

------------------------------

EXECUTION OF PORTFOLIO TRANSACTIONS

------------------------------

The Investment Manager, subject to the overall supervision of the Board of
Directors, makes each Fund's investment decisions and selects the broker or
dealer to be used in each specific transaction using its best judgment to choose
the broker or dealer most capable of providing the services necessary to obtain
the best execution of that transaction. In seeking the best execution of a
transaction, the Investment Manager evaluates a wide range of criteria,
including any or all of the following: the broker's commission rate, promptness,
reliability and quality of executions, trading expertise, positioning and
distribution capabilities, back-office efficiency, ability to handle difficult
trades, knowledge of other buyers and sellers, confidentiality, capital strength
and financial stability, prior performance in serving the Investment Manager and
its clients, and other factors affecting the overall benefit to be received in
the transaction. When circumstances relating to a proposed transaction indicate
to the Investment Manager that a particular broker is in a position to obtain
the best execution, the order is placed with that broker. This may or may not be
a broker that has provided investment information and research services to the
Investment Manager. Such investment information may include, among other things:
a wide variety of written reports or other data on individual companies and
industries; data and reports on general market or economic conditions;
information concerning pertinent federal and state legislative and regulatory
developments and other developments that could affect the value of actual or
potential investments; information about companies in which the Investment
Manager has invested or may consider investing; attendance at meetings with
corporate management personnel, industry experts, economists, government
personnel, and other financial analysts; comparative issuer performance and
evaluation and technical measurement services; subscription to publications that
provide investment-related information; accounting and tax law interpretations;
availability of economic advice; quotation equipment and services; execution
measurement services; market-related and survey data concerning the products and
services of an issuer and its competitors or concerning a particular industry
that are used in reports prepared by the Investment Manager to enhance its
ability to analyze an issuer's financial condition and prospects; and other
services provided by recognized experts on investment matters of particular
interest to the Investment Manager. In addition, the foregoing services may
include the use of, or be delivered by, computer systems whose hardware and/or
software components may be provided to the Investment Manager as part of the
services. In any case in which information and other services can be used for
both research and non-research purposes, the Investment Manager makes an
appropriate allocation of those uses and pays directly for that portion of the
services to be used for non-research purposes.

Subject to the requirement of seeking the best execution, the Investment Manager
may, in circumstances in which two or more brokers are in a position to offer
comparable execution, give preference to a broker or dealer that has provided
investment information to the Investment Manager. In so doing, the Investment
Manager may effect securities transactions which cause a Fund to pay an amount
of commission in excess of the amount of commission another broker would have
charged. In electing such broker or dealer, the Investment Manager will make a
good faith determination that the amount of commission is reasonable in relation
to the value of the brokerage services and research and investment information
received, viewed in terms of either the specific transaction or the Investment
Manager's overall responsibility to the accounts for which the Investment
Manager exercises investment discretion. The Investment Manager continually
evaluates all commissions paid in order to ensure that the

20
<PAGE>

commissions represent reasonable compensation for the brokerage and research
services provided by such brokers. Such investment information as is received
from brokers or dealers may be used by the Investment Manager in servicing all
of its clients (including the Funds), and it is recognized that a Fund may be
charged commission paid to a broker or dealer who supplied research services not
utilized by the Fund. However, the Investment Manager expects that each Fund
will benefit overall by such practice because it is receiving the benefit of
research services and the execution of such transactions not otherwise available
to it without the allocation of transactions based on the recognition of such
research services.

Subject to the requirement of seeking the best execution, the Investment Manager
may also place orders with brokerage firms that have sold shares of the Funds.
The Investment Manager has made and will make no commitments to place orders
with any particular broker or group of brokers. It is anticipated that a
substantial portion of all brokerage commissions will be paid to brokers who
supply investment information to the Investment Manager.

The Funds may in some instances invest in foreign and/or U.S. securities that
are not listed on a national securities exchange but are traded in the over-the-
counter market. The Funds may also purchase listed securities through the third
market or fourth market. When transactions are executed in the over-the-counter
market or the third or fourth market, the Investment Manager will seek to deal
with the counterparty that the Investment Manager believes can provide the best
execution, whether or not that counterparty is the primary market maker for that
security.

For the fiscal year ended December 31, 1997, the Large Cap Fund, Global Small
Cap Fund, Health Care Fund and Emerging Markets Fund paid in brokerage
commissions $8,344, $19,389, $12,833 and $3,913, respectively, of which 77%,
98%, 95% and 100%, respectively, was paid to firms which provided research
information. The Biotechnology Fund paid no brokerage commissions for the
fiscal year ended December 31, 1997.

For the fiscal years ended December 31, 1997 and 1996, the Technology Fund paid
in brokerage commissions $12,641 and $11,875, respectively, of which 89% and
83%, respectively, was paid to firms which provided research information.

For the fiscal years ended December 31, 1997, 1996 and 1995, the International
Fund paid in brokerage commissions $518,944, $333,597 and $207,486,
respectively, all of which was paid to firms which provided research
information.

As noted below, the Investment Manager is a wholly owned subsidiary of Dresdner
Bank AG ("Dresdner"). Dresdner Kleinwort Benson North America LLC ("Dresdner
Kleinwort Benson") and other Dresdner subsidiaries may be broker-dealers
(collectively, the "Dresdner Affiliates"). The Investment Manager believes that
it is in the best interests of the Funds to have the ability to execute
brokerage transactions, when appropriate, through the Dresdner Affiliates.
Accordingly, the Investment Manager intends to execute brokerage transactions on
behalf of the Funds through the Dresdner Affiliates, when appropriate and to the
extent consistent with applicable laws and regulations, including federal
banking laws.

In all such cases, the Dresdner Affiliates will act as agent for the Funds, and
the Investment Manager will not enter into any transaction on behalf of the
Funds in which a Dresdner Affiliate is acting as principal for its own account.
In connection with such agency transactions, the Dresdner Affiliates will
receive compensation in the form of a brokerage commissions separate from the
Investment Manager's management fee. It is the Investment Manager's policy that
such commissions be reasonable and fair when compared to the commissions
received by other brokers in connection with comparable transactions involving
similar securities and that the commissions paid to a Dresdner Affiliate be no
higher than the commissions paid to that broker by any other similar customer of
that broker who receives brokerage and research services that are similar in
scope and quality to those received by the Funds.

The Investment Manager performs investment management and advisory services for
various clients, including other registered investment companies, and pension,
profit-sharing and other employee benefit plans, as well as individuals. In many
cases, portfolio transactions for a Fund may be executed in an aggregated
transaction as part of

21
<PAGE>

concurrent authorizations to purchase or sell the same security for numerous
accounts served by the Investment Manager, some of which accounts may have
investment objectives similar to those of the Fund. The objective of aggregated
transactions is to obtain favorable execution and/or lower brokerage
commissions, although there is no certainty that such objective will be
achieved. Although executing portfolio transactions in an aggregated transaction
potentially could be either advantageous or disadvantageous to any one or more
particular accounts, aggregated transactions in which a Fund participates will
be effected only when the Investment Manager believes that to do so will be in
the best interest of the Fund, and the Investment Manager is not obligated to
aggregate orders into larger transactions. These orders generally will be
averaged as to price. When such aggregated transactions occur, the objective
will be to allocate the executions in a manner which is deemed fair and
equitable to each of the accounts involved over time. In making such allocation
decisions, the Investment Manager will use its business judgment and will
consider, among other things, any or all of the following: each client's
investment objectives, guidelines, and restrictions, the size of each client's
order, the amount of investment funds available in each client's account, the
amount already committed by each client to that or similar investments, and the
structure of each client's portfolio.

----------------------------

DIRECTORS AND OFFICERS

----------------------------

The names and addresses of the Directors and officers of the Companies and their
principal occupations and certain other affiliations during the past five years
are given below. Unless otherwise specified, the address of each of the
following persons is Four Embarcadero Center, San Francisco, California 94111.

DEWITT F. BOWMAN, (67), Chairman and Director. Mr. Bowman is a Principal of
Pension Investment Consulting, with which he has been associated since February
1994. From February 1989 to January 1994, he was Chief Investment Officer for
California Public Employees Retirement System, a public pension fund. He serves
as a director of RREEF America REIT, Inc. and the Wilshire Target Funds, and as
a trustee of Brandes Investment Trust and Pacific Gas and Electric Nuclear
Decommissioning Trust.

PAMELA A. FARR, (52), Director. Ms. Farr is a partner in Best & Co. LLC, a
manufacturer and retailer of children's clothing and accessories. From 1991 to
1994, she was President of Banyan Homes, Inc., a real estate development and
construction firm; and for eight years she was a management consultant for
McKinsey & Company, where she served a variety of Fortune 500 companies in all
aspects of strategic management and organizational structure.

FRANK P. GREENE, (61), Director. Mr. Greene is a partner and portfolio manager
of Wood Island Associates, Inc., a registered investment adviser, with which he
has been associated since August 1991. From November 1987 to August 1991, he was
a Senior Vice President and Portfolio Manager of Siebel Capital Management,
Inc., a registered investment adviser.

GEORGE G.C. PARKER, (59), Director. Mr. Parker is Associate Dean for Academic
Affairs, and Director of the MBA Program and Dean Witter Professor of Finance at
the Graduate School of Business at Stanford University, with which he has been
associated since 1973. Mr. Parker has served on the Board of Directors of: the
California Casualty Group of Insurance Companies since 1977; BB&K Holdings,
Inc., a holding company for financial services companies, since 1980; H. Warshow
& Sons, Inc., a manufacturer of specialty textiles, since 1982; Zurich
Reinsurance Centre, Inc., a large reinsurance underwriter, since 1994; and
Continental Airlines, since 1996. Mr. Parker served on the Board of Directors of
the University National Bank & Trust Company from 1986 to 1995.

KENNETH E. SCOTT, (69), Director. Mr. Scott is the Ralph M. Parsons Professor of
Law and Business at Stanford Law School, with which he has been associated since
1967. He is also a director of certain registered investment

22
<PAGE>

companies managed by Benham Capital Management. Mr. Scott does not serve as a
Director of the Equity Company.

RICHARD W. INGRAM, (42), President, Treasurer and Chief Financial Officer. Mr.
Ingram is Executive Vice President and Director of Client Services and Treasury
Administration of Funds Distributor, Inc., ("FDI"), the ultimate parent of which
is Boston Institutional Group, Inc. From March 1994 to November 1995, Mr. Ingram
was Vice President and Division Manager of First Data Investor Services Group.
From 1989 to 1994, Mr. Ingram was Vice President, Assistant Treasurer and Tax
Director - Mutual Funds of The Boston Company. He is also an officer of certain
investment companies distributed or administered by FDI. His address is 60 State
Street, Suite 1300, Boston, Massachusetts 02109.

GARY S. MACDONALD, (33), Vice President and Assistant Treasurer. Mr. MacDonald
is a Vice President of FDI, with which he has been associated since November
1996. From September 1992 to November 1996, he was a Vice President of BayBanks
Investment Management/BayBanks Financial Services; and from April 1989 to
September 1992, he was an analyst at Wellington Management Company. He is also
Vice President and Assistant Treasurer of RCS. His address is 60 State Street,
Suite 1300, Boston Massachusetts 02109.

DOUGLAS C. CONROY, (29), Vice President and Assistant Treasurer. Mr. Conroy is a
Assistant Vice President and Assistant Department Manager of Treasury Services
and Administration of FDI since April 1997. Prior to April 1997, Mr. Conroy was
Supervisor of Treasury Services and Administration of FDI. From April 1993 to
January 1995, Mr. Conroy was a Senior Fund Accountant for Investors Bank & Trust
Company. From December 1991 to March 1993, Mr. Conroy was a Fund Accountant at
The Boston Company, Inc. He is also an officer of certain investment companies
distributed or administered by FDI. His address is 60 State Street, Suite 1300,
Boston, Massachusetts 02109.

KAREN JACOPPO-WOOD, (31), Assistant Secretary. Ms. Jacoppo-Wood is a Vice
President and Counsel of FDI, with which she has been associated since January
1996. From June 1994 to January 1996, she was a Manager of SEC Registration for
Scudder, Stevens & Clark, Inc. From 1988 to May 1994, she was a Senior Paralegal
at The Boston Company Advisors, Inc. She is also an officer of certain
investment companies distributed or administered by FDI. Her address is 60
State Street, Suite 1300, Boston, Massachusetts 02109.

MARY A. NELSON, (34), Assistant Treasurer. Ms. Nelson is Vice President of
Treasury Administration and Operations for FDI, with which she has been
associated since 1994. From 1989 to 1994, she was an Assistant Vice President
and Client Manager for The Boston Company. She is also an officer of certain
investment companies distributed or administered by FDI. Her address is 60 State
Street, Suite 1300, Boston, Massachusetts 02109.

Regular meetings of each Company's Board of Directors are held on a quarterly
basis. Each Company's Audit Committee, whose present members are George G.C.
Parker and Kenneth E. Scott for the Capital Company and DeWitt F. Bowman and
Frank P. Greene for the Equity Company, meets with its independent
accountants to exchange views and information and to assist the full Board in
fulfilling its responsibilities relating to corporate accounting and
reporting practices. Each Director of the Capital Company receives a fee of
$9,000 per year plus $1,500 per series for each Board meeting attended and
$500 for each Audit Committee meeting attended and each Director of the
Equity Company receive a fee of $1,000 per year plus $500 for each Board
meeting attended and $250 for each Audit Committee meeting attended. Each
Director is reimbursed for travel and other expenses incurred in connection
with attending Board meetings.

The following table sets forth the aggregate compensation paid by the Companies
for the fiscal year ended December 31, 1997, to the Directors and the aggregate
compensation paid to the Directors for service on the Board of Directors and
that of all other funds in the "Company complex" (as defined in Schedule 14A
under the Securities Exchange Act of 1934):

23
<PAGE>

Total
Compensation
Pension or from the
Retirement Companies and
Aggregate Aggregate Benefits Accrued Estimate Company
Compensation Compensation as Part of Annual Complex
from the Equity from the Capital the Companies Benefits Upon Paid to Director
Name Company Company Expenses Retirement (1)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
DeWitt F. Bowman $26,000 $49,500 None N/A $75,500

Pamela A. Farr $15,750 $38,250 None N/A $54,000

Thomas S. Foley (2) $14,750 $35,250 None N/A $50,000

Frank P. Greene $16,000 $31,500 None N/A $47,500

George G.C. Parker $11,750 $23,250 None N/A $35,000

Kenneth E. Scott $0 $38,250 None N/A $38,250

</TABLE>

- ---------------------

(1) During the fiscal year ended December 31, 1997, there were nine funds in
the complex.

(2) Mr. Foley served on each Company's Board of Directors from May 1996 through
November 1997.

Each Director of the Capital Company or the Equity Company who is not an
"interested person" as that term is defined in the 1940 Act, of the Investment
Manager may elect to defer receipt of all or a portion of his or her fees for
service as a Director in accordance with the terms of a Deferred Compensation
Plan for Non-Interested Directors ("Directors' Plan"). Under the Directors'
Plan, an eligible Director may elect to have his or her deferred fees deemed
invested either in 90-day U.S. Treasury bills or, if authorized by an order of
the Securities and Exchange Commission ("Order", for which an application is
pending) or otherwise, shares of the Common Stock of the Company of which he or
she is a Director, or a combination of these options, and the amount of deferred
fees payable to such director under the Directors' Plan will be determined by
reference to the return on such deemed investments. Generally, the deferred
fees (reflecting any earnings, gains or losses thereon) become payable upon the
Director's retirement or disability. The obligation to make these payments to
the Directors of a Company pursuant to the Directors' Plan is a general
obligation of such Company. Each Fund may, to the extent permitted by the 1940
Act and the Order, invest in 90-day U.S. Treasury bills or the Common Stock of
the Capital Company and/or the Equity Company, to match its share of the
deferred compensation obligation under the Directors' Plan.

As of December 31, 1997, no Director or officer of either Company was a
beneficial owner of any shares of the outstanding Common Stock of any series of
the Companies.

------------------------------

THE INVESTMENT MANAGER

------------------------------

The Board of Directors of each Company has overall responsibility for the
operation of the such Company's Funds. Pursuant to such responsibility, the
Board of Directors has approved various contracts for designated financial
organizations to provide, among other things, day to day management services
required by the Funds. The

24
<PAGE>

Companies, on behalf of their respective Funds, have retained as the Funds'
Investment Manager Dresdner RCM Global Investors LLC, a Delaware limited
liability company with principal offices at Four Embarcadero Center, San
Francisco, California 94111. The Investment Manager is actively engaged in
providing investment supervisory services to institutional and individual
clients, and is registered under the Investment Advisers Act of 1940. The
Investment Manager was established in April 1996, as the successor to the
business and operations of RCM Capital Management, a California Limited
Partnership, which, with its predecessors, has been in operation since 1970.

The Investment Manager is a wholly owned subsidiary of Dresdner, an
international banking organization with principal executive offices located at
Gallunsanlage 7, 60041 Frankfurt, Germany. With total consolidated assets as of
December 31, 1996, of DM 561 billion ($388 billion), and approximately 1,600
offices and 45,000 employees in over 60 countries around the world, Dresdner is
one of Germany's largest banks. Dresdner provides a full range of banking
services, including traditional lending activities, mortgages, securities,
project finance and leasing, to private customers and financial and
institutional clients. In the United States, Dresdner maintains branches in New
York and Chicago and an agency in Los Angeles. As of the date of this
Prospectus, the nine members of the Board of Managers of the Investment Manager
are William L. Price (Chairman), Gerhard Eberstadt, George N. Fugelsang, Joachim
Midler, Michael J. Apatoff, Luke D. Knecht, Jeffrey S. Rudsten, William S.
Stack, and Kenneth B. Weeman, Jr.

Banking laws and regulations, including the Glass-Steagall Act as presently
interpreted by the Board of Governors of the Federal Reserve System, prohibit
certain banking entities, such as Dresdner, from sponsoring, organizing,
controlling or distributing the shares of a registered investment company
continuously engaged in the issuance of its shares, and prohibit banks generally
from underwriting securities. However, banks and their affiliates generally can
act as adviser to an investment company and can purchase shares of an investment
company as agent for and upon the order of customers. The Investment Manager
believes that it may perform the services contemplated by the investment
management agreement without violating these banking laws or regulations.
However, future changes in legal requirements relating to the permissible
activities of banks and their affiliates, as well as future interpretations of
current requirements, could prevent the Investment Manager from continuing to
perform investment management services for the Companies.

Pursuant to an agreement among RCM Limited L.P. ("RCM Limited"), the Investment
Manager, and Dresdner, RCM Limited manages, operates and makes all decisions
regarding the day-to-day business and affairs of the Investment Manager, subject
to the oversight of the Board of Managers. RCM Limited is a California limited
partnership consisting of 45 limited partners and one general partner, RCM
General Corporation, a California corporation. Twenty-four of the limited
partners of RCM Limited are also principals of the Investment Manager, and the
shareholders of RCM General. As of the date of this Prospectus, the following
persons are limited partners of RCM Limited and shareholders of RCM General:
William L. Price, Michael J. Apatoff, Eamonn F. Dolan, John D. Leland, Jr.,
Jeffrey S. Rudsten, William S. Stack, Kenneth B. Weeman, Jr., Anthony Ain, Donna
L. Avedisian, John L. Bernard, Huachen Chen, Jacqueline M. Cormier, G. Nicholas
Farwell, Joanne L. Howard, Stephen Kim, John A. Kriewall, Allan C. Martin,
Andrew H. Massie, Jr., Melody L. McDonald, Lee N. Price, Walter C. Price, Jr.,
Gary B. Sokol, Andrew C. Whitelaw, and Jeffrey J. Wiggins.

The Investment Manager provides the Funds with investment supervisory services
pursuant to Investment Management Agreements, Powers of Attorney and Service
Agreements (the "Management Agreements") dated as of June 14, 1996 for the
Technology Fund and International Fund, December 27, 1996 for the Global Small
Cap Fund, Health Care Fund and Large Cap Fund, and December 30, 1997 for the
Biotechnology Fund and Emerging Markets Fund. The Investment Manager manages
the Funds' investments, provides various administrative services, and supervises
the Funds' daily business affairs, subject to the authority of the Boards of
Directors. The Investment Manager is also the investment manager for Dresdner
RCM Growth Equity Fund and Dresdner RCM Small Cap Fund, each a series of
Dresdner RCM Capital Funds, Inc.; RCM Strategic Global Government Fund, Inc. and
The Emerging Germany Fund Inc., closed-end management investment companies; and
is sub-adviser to Bergstrom Capital Corporation, a closed-end management
investment company.

25
<PAGE>

The Management Agreements with respect to the International Fund, Technology
Fund, Global Small Cap Fund, Health Care Fund and Large Cap Fund were approved
by the stockholders of the Funds on May 28, 1996, December 30, 1996 (for Global
Small Cap Fund, Health Care Fund and Large Cap Fund), respectively, all of which
were most recently approved by the unanimous vote of the Board of Directors of
each Company on March 19, 1998. The Management Agreements with respect to the
Biotechnology and Emerging Markets Fund were approved by the initial
stockholders of each Fund as of December 30, 1997, and by the unanimous vote of
the Equity Company's Board of Directors on December 11, 1997, and will continue
in effect until December 30, 1999. A Fund's Management Agreement may be renewed
from year-to-year after its initial term, provided that any such renewals have
been specifically approved at least annually by (i) the vote of a majority of
the Fund's Board of Directors, including a majority of the Directors who are not
parties to the Management Agreement or interested persons of any such person,
cast in person at a meeting called for the purpose of voting on such approval,
or (ii) the vote of a majority (as defined in the 1940 Act) of the outstanding
voting securities of the Fund and the vote of a majority of the Directors who
are not parties to the contract or interested persons of any such party.

Each Fund has, under its respective Management Agreement, assumed the obligation
for payment of all of its ordinary operating expenses, including: (a) brokerage
and commission expenses, (b) federal, state, or local taxes incurred by, or
levied on, the Fund, (c) interest charges on borrowings, (d) charges and
expenses of the Fund's custodian, (e) investment advisory fees (including fees
payable to the Investment Manager under the Management Agreement), (f) fees
pursuant to the Fund's Rule 12b-1 plan, (g) legal and audit fees, (h) SEC and
"Blue Sky" registration expenses, and (i) compensation, if any, paid to officers
and employees of the Company who are not employees of the Investment Manager
(see DIRECTORS AND OFFICERS). The Investment Manager is responsible for all of
its own expenses in providing services to the Funds. Expenses attributable to a
Fund are charged against the assets of the Fund.

The Investment Manager has voluntarily agreed to limit each Fund's expenses as
described in the Prospectus. In subsequent years, each Fund has agreed to
reimburse the Investment Manager for any such payments to the extent that the
Fund's operating expenses are otherwise below this expense cap. This obligation
will not be recorded on the books of a Fund to the extent that the total
operating expenses of the Fund are at or above the expense cap. However, if the
total operating expenses of a Fund fall below the expense cap, the reimbursement
to the Investment Manager will be accrued by the Fund as a liability. No
amounts were paid in fiscal 1997 under this reimbursement policy.

Each Fund's Management Agreement provides that the Investment Manager will not
be liable for any error of judgment or for any loss suffered by the Fund in
connection with the matters to which the Management Agreement relates, except
for liability resulting from willful misfeasance, bad faith or gross negligence
in the performance of its duties or by reason of the Investment Manager's
reckless disregard of its duties and obligations under the Management Agreement.
Each Company has agreed to indemnify the Investment Manager against liabilities,
costs and expenses that the Investment Manager may incur in connection with any
action, suit, investigation or other proceeding arising out of or otherwise
based on any action actually or allegedly taken or omitted to be taken by the
Investment Manager in connection with the performance of its duties or
obligations under the Management Agreement or otherwise as investment manager of
the various series of the Company. The Investment Manager is not entitled to
indemnification with respect to any liability to a Fund or its stockholders by
reason of willful misfeasance, bad faith or gross negligence in the performance
of its duties, or of its reckless disregard of its duties and obligations under
the Management Agreement.

Each Management Agreement is terminable without penalty on 60 days' written
notice by a vote of the majority of the outstanding voting securities of the
Fund which is the subject of the Management Agreement, by a vote of the majority
the Board of Directors, or by the Investment Manager on 60 days' written notice
and will automatically terminate in the event of its assignment (as defined in
the 1940 Act).

26
<PAGE>

----------------------------
THE DISTRIBUTOR

----------------------------

Funds Distributor, Inc., 60 State Street, Suite 1300, Boston, Massachusetts
02109, (the "Distributor") serves as Distributor to each Fund. The Distributor
has provided mutual fund distribution services since 1976, and is a subsidiary
of Boston Institutional Group, Inc., which provides distribution and other
related services with respect to investment products.

DISTRIBUTION AGREEMENT

Pursuant to Distribution Agreements with the Capital Company and the Equity
Company, the Distributor has agreed to use its best efforts to effect sales of
shares of the Funds, but is not obligated to sell any specified number of
shares. Each Distribution Agreement contains provisions with respect to renewal
and termination similar to those in each Fund's Management Agreement discussed
above. Pursuant to the Distribution Agreements, the Companies have agreed to
indemnify the Distributor to the extent permitted by applicable law against
certain liabilities under the Securities Act of 1933 arising in connection with
the Distributor's activities on behalf of the Companies.

Each Company also has an Agreement with the Investment Manager and the
Distributor pursuant to which the Distributor has agreed to provide: regulatory,
compliance and related technical services to the Companies; services with regard
to advertising, marketing and promotional activities; and officers to the
Companies. The Investment Manager is required to reimburse the Companies for any
fees and expenses of the Distributor pursuant to the Agreements.

DISTRIBUTION PLAN

Under a plan of distribution for the Equity Company with respect to the Large
Cap Fund, Health Care Fund, Global Small Cap Fund and Biotechnology Fund (the
"Distribution Plan") adopted pursuant to Rule 12b-1 under the 1940 Act, the
Distributor incurs the expense of distributing shares of these Funds. The
Distribution Plan provides for reimbursement to the Distributor for the services
it provides, and the costs and expenses it incurs, related to marketing shares
of each such Fund. The Distributor is reimbursed for: (a) expenses incurred in
connection with advertising and marketing shares of the Fund, including but not
limited to any advertising by radio, television, newspapers, magazines,
brochures, sales literature, telemarketing or direct mail solicitations; (b)
periodic payments of fees or commissions for distribution assistance made to one
or more securities brokers, dealers or other industry professionals such as
investment advisers, accountants, estate planning firms and the Distributor
itself in respect of the average daily value of shares owned by clients of such
service organizations, and (c) expenses incurred in preparing, printing and
distributing the Fund's prospectus and statement of additional information.

The Distribution Plan continues in effect from year to year with respect to each
such Fund, provided that each such continuance is approved at least annually by
a vote of the Board of Directors of the Equity Company, including a majority
vote of the Directors who are not "interested persons" of such Company within
the meaning of the 1940 Act and have no direct or indirect financial interest in
the Plan or in any agreement related to the Plan, cast in person at a meeting
called for the purpose of voting on such continuance. The Distribution Plan may
be terminated with respect to a Fund at any time, without penalty, by the vote
of a majority of the outstanding shares of the Fund. The Distribution Plan may
not be amended to increase materially the amounts to be paid by a Fund for the
services described therein without approval by the shareholders of the Fund, and
all material amendments are required to be approved by the Board of Directors of
the Equity Company in the manner described above. The Distribution Plan will
automatically terminate in the event of its assignment.

27
<PAGE>

The Distributor may pay broker-dealers and others, out of the fees it receives
under the Distribution Plans, quarterly trail commissions of up to the following
respective percentages, on an annual basis, of the average daily net assets
attributable to shares of the Funds held in the accounts of their customers:
0.15% for the Large Cap Fund and 0.25% for the Global Small Cap Fund, Health
Care Fund and Biotechnology Fund. During fiscal year ended December 31, 1997,
no fees were paid to the Distributor pursuant to the Distribution Plans.

Pursuant to the Distribution Plans, the Board of Directors of the Equity Company
will review at least quarterly a written report of the distribution expenses
incurred on behalf of shares of the Funds by the Distributor. The report will
include an itemization of the distribution expenses and the purposes of such
expenditures. In addition, as long as the Plans remain in effect, the selection
and nomination of Directors of the Equity Company who are not "interested
persons" of the Company within the meaning of the 1940 Act will be committed to
the Directors who are not interested persons of the Company.

------------------------------

NET ASSET VALUE

------------------------------

For purposes of the computation of the net asset value of each share of each
Fund, 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 regular trading on the day the
securities are being valued, unless the Board of Directors determines that such
price does not reflect the fair value of the security. In cases where
securities are traded on more than one exchange, the securities are valued on
the exchange determined by the Investment Manager to be the primary market for
the securities. If there has been no sale on such day, 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 a duly constituted
committee of the Board of Directors shall determine in good faith to reflect its
fair value. Readily marketable securities traded only in the over-the-counter
market that are not listed on the Nasdaq Stock Market or a similar foreign
reporting service will be valued at the mean bid price, or such other comparable
sources as the Board of Directors deems appropriate to reflect their fair 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 deems appropriate to reflect their fair value.

Futures contracts and related options are valued at their last sale or
settlement price as of the close of the exchange on which they are traded or, if
no sales are reported, at the mean between the last reported bid and asked
prices. All other assets of the Funds will be valued in such manner as a duly
constituted committee of the Board of Directors in good faith deems appropriate
to reflect their fair value.

Trading in securities on foreign exchanges and over-the-counter markets is
normally completed at times other than the close of regular trading on the New
York Stock Exchange. In addition, foreign securities and commodities trading may
not take place on all business days in New York, and may occur in various
foreign markets on days which are not business days in New York and on which net
asset value is not calculated. The calculation of net asset value may not take
place contemporaneously with the determination of the prices of portfolio
securities used in such calculation. Events affecting the values of portfolio
securities that occur between the time their prices are determined and the close
of the New York Stock Exchange will not be reflected in the calculation of net
asset value unless the appropriate Board of Directors determines that a
particular event would materially affect net asset value, in which case an
adjustment will be made.

Assets or liabilities initially expressed in terms of foreign currencies are
translated prior to the next determination of net asset value into U.S. dollars
at the spot exchange rates at 12:00 p.m. Eastern time or at such other rates as
the Investment Manager may determine to be appropriate in computing net asset
value.

28
<PAGE>

Debt obligations with maturities of 60 days or less are valued at amortized
cost. The Companies may use a pricing service approved by the Board of Directors
to value other debt obligations. Prices provided by such a service represent
evaluations of the mean between current bid and asked market prices, may be
determined without exclusive reliance on quoted prices, and may reflect
appropriate factors such as institution-size trading in similar groups of
securities, yield, quality, coupon rate, maturity, type of issue, individual
rating characteristics, indications of value from dealers, and other market
data. Such services may use electronic data processing techniques and/or a
matrix system to determine valuations. The procedures of such services are
reviewed periodically by the officers of the Investment Manager under the
general supervision of the Board of Directors. Short-term investments are
amortized to maturity based on their cost, adjusted for foreign exchange
translation, provided such valuations equal fair market value.

------------------------------

PURCHASE AND REDEMPTION OF SHARES

------------------------------

The price paid for purchase and redemption of shares of the Funds is based on
the net asset value per share, which is normally calculated once daily at the
close of regular trading (currently 4:00 P.M. New York time) on the New York
Stock Exchange on each day that the New York Stock Exchange is open. The New
York Stock Exchange is currently closed on weekends and on the following
holidays: New Year's Day, Washington's Birthday, Martin Luther King Jr. Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and
Christmas Day. The offering price is effective for orders received by National
Financial Data Services ("NFDS") prior to the time of determination of net asset
value. Dealers are responsible for promptly transmitting purchase orders to
NFDS. Each Company reserves the right in its sole discretion to suspend the
continued offering of one or more of its Funds' shares and to reject purchase
orders in whole or in part when such rejection is in the best interests of each
such Company and its respective series.

REDEMPTION OF SHARES

Payments will be made wholly in cash unless the Board of Directors believes that
economic conditions exist which would make such a practice detrimental to the
best interests of a Fund. Under such circumstances, payment of the redemption
price could be made either in cash or in portfolio securities taken at their
value used in determining the redemption price (and, to the extent practicable,
representing a pro rata portion of each of the portfolio securities held by the
Fund), or partly in cash and partly in portfolio securities. Payment for shares
redeemed also may be made wholly or partly in the form of a pro rata portion of
each of the portfolio securities held by a Fund at the request of the redeeming
stockholder, if the Company of which it is a series believes that honoring such
request is in the best interests of such series. If payment for shares redeemed
were to be made wholly or partly in portfolio securities, brokerage costs would
be incurred by the stockholder in converting the securities to cash.

------------------------------

DIVIDENDS, DISTRIBUTIONS AND TAX STATUS

------------------------------

Each income dividend and capital gain distribution, if any, declared by a Fund
will be paid in full and fractional shares based on the net asset value as
determined on the payment date for such distribution, unless the stockholder or
his or her duly authorized agent has elected to receive all such payments or the
dividend or other distribution portion thereof in cash. Changes in the manner in
which dividend and other distribution payments are paid may be requested by the
stockholder or his or her duly authorized agent at any time through written
notice to the appropriate

29
<PAGE>

Company and will be effective as to any subsequent payment if such notice is
received by such Company prior to the record date used for determining the
stockholders entitled to such payment. Any distribution election will remain in
effect until such Company is notified by the stockholder in writing to the
contrary.

REGULATED INVESTMENT COMPANY. Each Fund has qualified and intends to continue to
qualify for treatment as a "regulated investment company" under Subchapter M of
the Code. Each Fund is treated as a separate corporation for tax purposes and
thus the provisions of the Code generally applicable to regulated investment
companies are applied separately to the Funds. In addition, net capital gains
(the excess of net long-term capital gain over net short-term capital loss), net
investment income, and operating expenses are determined separately for the
Funds. By complying with the applicable provisions of the Code, a Fund will not
be subject to federal income tax with respect to net investment income and net
realized capital gains distributed to its stockholders.

To qualify as a regulated investment company under Subchapter M, generally a
Fund must: (i) derive at least 90% of its gross income each taxable year from
dividends, interest, payments with respect to securities loans, and gains from
the sale or other disposition of stock, securities or foreign currencies and
certain other income (including gains from certain options, futures and forward
contracts), ("Income Requirement"); and (ii) diversify its holdings so that, at
the end of each fiscal quarter, (a) at least 50% of the value of the Fund's
total assets is represented by cash, cash items, U.S. Government securities,
securities of other regulated investment companies and other securities,
limited, in respect of any one issuer, to an amount not greater than 5% of the
Fund's total assets and 10% of the outstanding voting securities of such issuer,
and (b) not more than 25% of the value of its total assets is invested in the
securities of any one issuer (other than U.S. Government securities or the
securities of other regulated investment companies), or in two or more issuers
which the Fund controls and which are engaged in the same or similar trades or
businesses.

In any taxable year in which a Fund so qualifies and distributes at least 90% of
the sum of its investment company taxable income (consisting of net investment
income, the excess of net short-term capital gains over net long-term capital
losses and net gains from certain foreign currency transactions) and its net
tax-exempt interest income (if any) ("Distribution Requirement"), it will be
taxed only on that portion, if any, of such investment company taxable income
and any net capital gain that it retains. The Funds expect to so distribute all
of such income and gains on an annual basis and thus will generally avoid any
such taxation.

Even if a Fund qualifies as a "regulated investment company," it may be subject
to a federal excise tax unless it meets certain additional distribution
requirements. Under the Code, a nondeductible excise tax of 4% ("Excise Tax") is
imposed on the excess of a regulated investment company's "required
distribution" for a calendar year ending within the regulated investment
company's taxable year over the "distributed amount" for that calendar year. The
term "required distribution" means the sum of (i) 98% of ordinary income
(generally net investment income and net gains from certain foreign currency
transactions) for the calendar year, (ii) 98% of capital gain net income
(generally both long-term and short-term capital gain) for the one-year period
ending on October 31 (as though that period were the regulated investment
company's taxable year), and (iii) the sum of any untaxed, undistributed net
investment income and net capital gains of the regulated investment company for
prior periods. The term "distributed amount" generally means the sum of
(i) amounts actually distributed by a Fund from its current year's ordinary
income and capital gain net income and (ii) any amount on which a Fund pays
income tax for the year. The Funds intend to meet these distribution
requirements to avoid Excise Tax liability.

Stockholders who are subject to federal or state income or franchise taxes will
be required to pay taxes on dividend and capital gain distributions they receive
from a Fund whether paid in additional shares of the Fund or in cash. To the
extent that dividends received by a Fund would qualify for the 70% dividends-
received deduction available to corporations, the Fund must designate in a
written notice to stockholders, within 60 days after the close of the Fund's
taxable year, the amount of the Fund's dividends that would be eligible for this
treatment. In order to qualify for the dividends-received deduction with respect
to a dividend paid on Fund shares, a corporate stockholder must hold the Fund
shares for at least 45 days during the 90 day period that begins 45 days before
the shares become ex-dividend with respect to the dividend. Stockholders, such
as qualified employee benefit plans, who are exempt from federal and state
taxation generally would not have to pay income tax on dividend or capital gain
distributions.

30
<PAGE>

Prospective tax-exempt investors should consult their own tax advisers with
respect to the tax consequences of an investment in the Funds under federal,
state, and local tax laws.

WITHHOLDING. Dividends paid by a Fund to a stockholder who, as to the U.S., is a
nonresident alien individual, nonresident alien fiduciary of a trust or estate,
foreign corporation, or foreign partnership (a "foreign stockholder") generally
will be subject to U.S. withholding tax (at a rate of 30% or a lower treaty
rate, if applicable). Withholding will not apply, however, if a dividend paid by
a Fund to a foreign stockholder is "effectively connected" with the conduct of a
U.S. trade or business, in which case the reporting and withholding requirements
applicable to U.S. citizens or domestic corporations will apply. Distributions
of net capital gain to foreign stockholders who are neither U.S. resident aliens
nor engaged in a U.S. trade or business generally are not subject to withholding
or U.S. federal income tax.

FOREIGN CURRENCY, OPTIONS, FUTURES AND FORWARD CONTRACTS. Gains from the sale
or other disposition of foreign currencies (except certain gains therefrom that
may be excluded by future regulations), and gains from options, futures, and
forward contracts derived by a Fund with respect to its business of investing in
securities of foreign currencies, will qualify as permissible income under the
Income Requirement.

SECTION 1256 CONTRACTS. Many of the options, futures contracts and forward
contracts entered into by the Funds are "Section 1256 contracts." Any gains or
losses realized on Section 1256 contracts are generally considered 60% long-term
and 40% short-term capital gains or losses, although certain foreign currency
gains and losses from such contracts may be treated as ordinary income in
character. Section 1256 contracts held by a Fund at the end of each taxable year
(and, for purposes of the Excise Tax, on October 31 or such other dates as
prescribed under the Code), other than Section 1256 contracts that are part of a
"mixed straddle" with respect to which a Fund has made an election not to have
the following rules apply, must be "marked-to-market" (that is, treated as sold
for their fair market value) for federal income tax purposes, with the result
that unrealized gains or losses are treated as though they were realized. As of
the date of this Statement of Additional Information, it is not entirely clear
whether the 60% portion of gains on Section 1256 contracts that is treated as
long-term capital gain will qualify for the reduced maximum tax rates on net
capital gain enacted by the Taxpayer Relief Act of 1997 -- 20% (10% for
taxpayers in the 15% marginal tax bracket) for gain recognized on capital assets
held for more than 18 months -- instead of the 28% rate in effect before that
legislation, which now applies to gain recognized on capital assets held for
more than one year but not more than 18 months, although proposed technical
corrections legislation would do so.

STRADDLE RULES. Generally, the hedging transactions and other transactions in
options, futures and forward contracts undertaken by the Funds may result in
"straddles" for U.S. federal income tax purposes. The straddle rules may affect
the amount, character and timing of recognition of gains or losses realized by a
Fund. In addition, losses realized by a Fund on positions that are part of a
straddle position may be deferred under the straddle rules, rather than being
taken into account for the taxable year in which these losses are realized.
Because limited regulations implementing the straddle rules have been
promulgated, the tax consequences of hedging transactions and options, futures
and forward contracts to the Funds are not entirely clear.

Hedging transactions may increase the amount of short-term capital gain realized
by a Fund, which is taxed as ordinary income when distributed to stockholders. A
Fund may make one or more elections available under the Code which are
applicable to straddle positions. If a Fund makes any of the elections, the
amount, character and timing of the recognition of gains or losses from the
affected straddle positions will be determined under rules that vary according
to elections made. The rules applicable under certain elections operate to
accelerate the recognition of gains or losses from the affected straddle
positions. Because the application of the straddle rules may affect the
character of gains or losses, defer losses and/or accelerate the recognition of
gains or losses from the affected straddle positions, the amount which must be
distributed to stockholders, and which will be taxed to stockholders as ordinary
income or long-term capital gain, may be increased or decreased substantially as
compared to a fund that did not engage in such hedging transactions.

SECTION 988 GAINS AND LOSSES. Under the Code, gains or losses attributable to
fluctuations in exchange rates which occur between the time a Fund accrues
interest or other receivables, or accrues expenses or other liabilities,

31
<PAGE>

denominated in a foreign currency and the time the Fund actually collects such
receivables or pays such liabilities, generally are treated as ordinary income
or loss. Similarly, on the disposition of debt securities denominated in foreign
currency and on the disposition of certain future contracts, forward contracts
and options, gains or losses attributable to fluctuation in the value of foreign
currency between the date of acquisition of the debt security, contract or
option and the date of disposition thereof are also treated as ordinary gain or
loss. These gains or losses, referred to under the Code as "Section 988" gains
or losses, may increase or decrease the amount of a Fund's investment company
taxable income to be distributed to stockholders as ordinary income.

FOREIGN TAXES. A Fund may be required to pay withholding and other taxes imposed
by foreign countries which would reduce the Fund's investment income, generally
at rates from 10% to 40%. Tax conventions between certain countries and the
United States may reduce or eliminate such taxes. If more than 50% of the value
of a Fund's total assets at the close of its taxable year consists of securities
of foreign corporations, the Fund will be eligible to elect to "pass-through" to
the Fund's stockholders the amount of foreign income and similar taxes paid by
the Fund. If this election is made, stockholders generally subject to tax will
be required to include in gross income (in addition to taxable dividends
actually received) their pro rata shares of the foreign income taxes paid by the
Fund, and may be entitled either to deduct (as an itemized deduction) their pro
rata shares of foreign taxes in computing their taxable income or to use such
amount (subject to limitations) as a foreign tax credit against their U.S.
federal income tax liability. No deduction for foreign taxes may be claimed by a
stockholder who does not itemize deductions. Each stockholder will be notified
within 60 days after the close of a Fund's taxable year whether the foreign
taxes paid by the Fund will be "passed-through" for that year.

The foregoing is a general abbreviated summary of present U.S. federal income
tax laws applicable to the Funds, their stockholders and dividend and capital
gain distributions by the Funds. Stockholders are urged to consult their own tax
advisers for more detailed information and for information regarding any
foreign, state, and local tax laws and regulations applicable to dividends and
other distributions received from the Funds.

------------------------------

INVESTMENT RESULTS

------------------------------

Average annual total return ("T") of a Fund is calculated as follows: an initial
hypothetical investment of $1,000 ("P") is divided by the net asset value of
shares of the Fund as of the first day of the period in order to determine the
initial number of shares purchased. Subsequent dividend and capital gain
distributions by a Fund are paid at net asset value on the payment date
determined by the Board of Directors. The sum of the initial shares purchased
and shares acquired through distributions is multiplied by the net asset value
per share of the Fund as of the end of the period ("n") to determine ending
redeemable value ("ERV"). The ending value divided by the initial investment
converted to a percentage equals total return. The formula thus used, as
required by the SEC, is:
n
P(1+T) = ERV

The resulting percentage indicates the positive or negative investment results
that an investor would have experienced from reinvested dividend and capital
gain distributions and changes in share price during the period.

This formula reflects the following assumptions: (i) all share sales at net
asset value, without a sales load reduction from the $1,000 initial investment;
(ii) reinvestment of dividends and distributions at net asset value on the
reinvestment date determined by the Board of Directors; and (iii) complete
redemption at the end of any period illustrated. Total return may be calculated
for one year, five years, ten years, and for other periods, and will typically
be updated on a quarterly basis. The average annual compound rate of return over
various periods may also be computed by utilizing ending values as determined
above.

32
<PAGE>

Average annual total returns of the Large Cap Fund, Global Small Cap Fund and
Health Care Fund for the one year period ended December 31, 1997 were 31.99%,
25.48% and 30.00%, respectively. Average annual total returns of the Technology
Fund for the one year period ended December 31, 1997, and since inception, were
27.08% and 26.84%, respectively. Average annual total returns for the
International Fund for the one year period ended December 31, 1997, the Fund's
first public offering, and since inception, were 17.93%, 19.99% and 18.36%,
respectively.

In addition, in order to more completely represent a Fund's performance or more
accurately compare such performance to other measures of investment return, a
Fund also may include in advertisements and stockholder reports other total
return performance data based on time-weighted, monthly-linked total returns
computed on the percentage change of the month end net asset value of the Fund
after allowing for the effect of any cash additions and withdrawals recorded
during the month. Returns may be quoted for the same or different periods as
those for which average total return is quoted. A Fund's investment results will
vary from time to time depending upon market conditions, the composition of the
Fund's portfolio, and operating expenses, so that any investment results
reported should not be considered representative of what an investment in the
Fund may earn in any future period. These factors and possible differences in
calculation methods should be considered when comparing a Fund's investment
results with those published for other investment companies, other investment
vehicles and unmanaged indices. Results also should be considered relative to
the risks associated with a Fund's investment objective and policies.

The Large Cap Fund may from time to time compare its investment results with the
following:

1. The S&P 500 Composite Index.

2. Data and mutual fund rankings published or prepared by Lipper Analytical
Services, Inc. and Morningstar, which rank mutual funds by overall
performance, investment objectives, and assets.

The Global Small Cap Fund and Health Care Fund may from time to time compare its
investment results with the following:

1. The S&P 500 Index.

2. The Russell Midcap Index.

3. Data and mutual fund rankings published by Lipper Analytical Services, Inc.
and Morningstar, which rank mutual funds by overall performance, investment
objectives, and assets.

The Technology Fund may from time to time compare its investment results with
the following:

1. The S&P 500 Index.

2. The Russell Midcap Index.

3. The Lipper Science & Technology Fund Index.

4. The Hambrecht & Quist Technology Index.

5. Data and mutual fund rankings published or prepared by Lipper Analytical
Services, Inc. and Morningstar, which rank mutual funds by overall
performance, investment objectives and assets.

The Biotechnology Fund may from time to time compare its investment results with
the following:

1. The American Stock Exchange Biotechnology Index.

2. The Russell 2000 Index.

33
<PAGE>

3. Data and mutual fund rankings published or prepared by Lipper Analytical
Services, Inc. and Morningstar, which rank mutual funds by overall
performance, investment objectives, and assets.

The International Fund may from time to time compare its investment results with
the following:

1. The MSCI EAFE Market Capitalization-Weighted Index.

2. The MSCI All Country World Free Ex-U.S. Index.

3. The S&P 500 Index.

4. Data and mutual fund rankings published or prepared by Lipper Analytical
Services, Inc. and Morningstar, which rank mutual funds by overall
performance, investment objectives, and assets.

The Emerging Markets Fund may from time to time compare its investment results
with the following:

1. The IFC Index of Investable Emerging Markets.

2. The MSCI Emerging Markets Free Index.

3. The S&P 500 Index.

4. Data and mutual fund rankings published or prepared by Lipper Analytical
Services, Inc. and Morningstar, which rank mutual funds by overall
performance, investment objectives, and assets.

------------------------------

DESCRIPTION OF CAPITAL SHARES

------------------------------

Stockholders are entitled to one vote for each full share held and fractional
votes for fractional shares held. Unless otherwise provided by law or Articles
of Incorporation or Bylaws, each Company generally may take or authorize any
action upon the favorable vote of the holders of more than 50% of the
outstanding shares of the Company.

As of the March 31, 1998, there were 401,964.975 shares of the Large Cap Fund
outstanding, 402,645.995 shares of the Global Small Cap Fund outstanding,
530,156.449 shares of the Technology Fund outstanding, 400,865.415 shares of the
Health Care Fund outstanding, 301,379.147 shares of the Biotechnology Fund
outstanding, 789,683.248 shares of the International Fund outstanding and
300,011.000 shares of the Emerging Markets Fund outstanding. On that date the
following were known to the Companies to own of record more than 5% of the
Funds' capital stock:

34
<PAGE>

Name and Address of
BENEFICIAL OWNER SHARES HELD % SHARES OUTSTANDING
- ---------------- ----------- --------------------
LARGE CAP FUND

Clients of 400,000 99.5%
Dresdner Bank AG/Investment
Management
Institutional Asset Management
Division
Jurgen-Ponto-Platz
60301 Frankfurt
Germany

GLOBAL SMALL CAP FUND

Clients of 400,000 99.3%
Dresdner Bank AG/Investment
Management
Institutional Asset Management
Division
Jurgen-Ponto-Platz
60301 Frankfurt
Germany

TECHNOLOGY FUND

RCM Capital Management 186,619 35.2%
Profit Sharing Plan
Four Embarcadero Center
San Francisco, CA 94111

Walter C. Price 105,326 19.9%
c/o Dresdner RCM Global Investors
Four Embarcadero Center
San Francisco, CA 94111

Chen Family Trust 27,184 5.1%
c/o Dresdner RCM Global Investors
Four Embarcadero Center
San Francisco, CA 94111

HEALTH CARE FUND

Clients of 400,000 99.8%
Dresdner Bank AG/Investment
Management
Institutional Asset Management
Division
Jurgen-Ponto-Platz
60301 Frankfurt
Germany

35
<PAGE>

BIOTECHNOLOGY FUND

Clients of 400,000 99.5%
Dresdner Bank AG/Investment
Management
Institutional Asset Management
Division
Jurgen-Ponto-Platz
60301 Frankfurt
Germany

INTERNATIONAL FUND

The Pension Plan for Salaried 3,029,700 38.6%
Employees of Travelers Insurance
Company and Its Affiliates
388 Greenwich Street
New York, NY 10013

JM Family Enterprises, Inc. 1,495,495 19.1%
100 NW 12th Avenue
Deerfield Beach, FL 33442

General Mills Inc. 802,237 10.2%
c/o State Street Bank and Trust Company
P.O. Box 1992
Boston, MA 02105-1992

The Lurie Company 532,480 6.8%
555 California Street, Suite 1500
San Francisco, CA 94104

EMERGING MARKETS FUND

Clients of 300,000 100%
Dresdner Bank AG/Investment
Management
Institutional Asset Management
Division
Jurgen-Ponto-Platz
60301 Frankfurt
Germany

36
<PAGE>

------------------------------

ADDITIONAL INFORMATION

-----------------------------

COUNSEL

Certain legal matters in connection with the capital shares offered by the
Prospectus have been passed upon for the Fund by Paul, Hastings, Janofsky &
Walker LLP, 555 South Flower Street, Los Angeles, California 90071. The validity
of the capital stock offered by the International Fund has been passed upon by
Morrison & Foerster, 425 Market Street, San Francisco, California 94105 and by
Venable, Baetjer and Howard, LLP, 1800 Mercantile Bank & Trust Building, 2
Hopkins Plaza, Baltimore, Maryland 21201 for each of the other Funds. Paul,
Hastings, Janofsky & Walker LLP has acted and will continue to act as counsel to
the Investment Manager in various matters.

INDEPENDENT ACCOUNTANTS

Coopers & Lybrand L.L.P., One Post Office Square, Boston, Massachusetts 02109,
have been appointed as independent auditors for each Company.

LICENSE AGREEMENT

Under License Agreements dated as of December 11, 1997, the Investment Manager
has granted each Company the right to use the "Dresdner RCM" name and has
reserved the right to withdraw its consent to the use of such name by the
Company at any time, or to grant the use of such name to any other company. In
addition, each Company has granted the Investment Manager, under certain
conditions, the right to use any other name it might assume in the future, with
respect to any other investment company sponsored by the Investment Manager.

YEAR 2000

The services provided by the Funds' Investment Manager, Distributor, Custodians
and other service providers depend on the proper functioning of their computer
systems. Certain of these systems will require updating or replacement prior to
the year 2000 to avoid errors when storing dates and making date-related
calculations. The Funds understand that these firms (and their important
vendors and business partners) are taking steps reasonably designed to prepare
their computer systems for the 21st century. However, there can be no assurance
that these steps will be sufficient to avoid any adverse impact on any one of
the Funds.

FINANCIAL STATEMENTS

Incorporated by reference herein are the financial statements of the Funds
contained in the Funds' Annual Reports to Shareholders for the year ended
December 31, 1997, including the Report of Independent Accountants, dated
February 20, 1998, the Statement of Investments in Securities and Net Assets,
the Statement of Assets and Liabilities, the Statement of Operations, the
Statement of Changes in Net Assets, and the related Notes to Financial
Statements. Information pertaining to the Biotechnology Fund and Emerging
Markets Fund cover the period from December 30, 1997 (commencement of
operations) through December 31, 1997. Copies of the Funds' Annual and
Semi-Annual Reports to Shareholders will be available, upon request, by
calling (800) 726-7240, or by writing to Four Embarcadero Center, San
Francisco, California 94111.

REGISTRATION STATEMENT

The Funds' Prospectus and this Statement of Additional Information do not
contain all of the information set forth in each Company's registration
statement and related forms as filed with the SEC, certain portions of which are

37
<PAGE>

omitted in accordance with rules and regulations of the SEC. Each registration
statement and related forms may be inspected at the Public Reference Room of the
SEC at Room 1024, 450 5th Street, N.W., Judiciary Plaza, Washington, D.C. 20549,
and copies thereof may be obtained from the SEC at prescribed rates. It is also
available on the SEC's Internet Web site at http://www.sec.gov.

Statements contained in the Prospectus or this Statement of Additional
Information as to the contents of any contract or other document referred to
herein or in the Prospectus are not necessarily complete, and, in each instance,
reference is made to the copy of such contract or other document filed as an
exhibit to each Company's registration statement, each such statement being
qualified in all respects by such reference.

38
<PAGE>

PART C

OTHER INFORMATION

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS.

(a) FINANCIAL STATEMENTS

Statement of Assets and Liabilities, Statement of Investments in Securities
and Net Assets, Statement of Operations and Statement of Changes in Net
Assets for Dresdner RCM Equity Funds, Inc., on behalf of Dresdner RCM
Global Technology Fund, Dresdner RCM Global Small Cap Fund, Dresdner RCM
Global Health Care Fund, Dresdner RCM Large Cap Growth Fund, Dresdner RCM
Biotechnology Fund and Dresdner RCM Emerging Markets Fund for the fiscal
year ended December 31, 1997, which were previously filed with the Annual
Report to Shareholders on March 2, 1998, are incorporated herein by
reference.

(b) EXHIBITS

1. (a) Articles of Incorporation of Registrant are incorporated herein
by reference to Exhibit 1 of Pre-Effective Amendment No.1.

(b) Articles Supplementary to Articles of Incorporation of Registrant
with respect to RCM Global Health Care Fund, RCM Global Small Cap
Fund and RCM Large Cap Growth Fund, (currently known as Dresdner
RCM Global Health Care Fund, Dresdner RCM Global Small Cap Fund
and Dresdner RCM Large Cap Growth Fund, respectively), are
incorporated herein by reference to Exhibit 1(b) of
Post-Effective Amendment No. 2.

(c) Articles Supplementary to Articles of Incorporation of Registrant
with respect to Dresdner RCM Emerging Markets Fund is
incorporated herein by reference to Exhibit 1(c) of
Post-Effective Amendment No. 5.

(d) Articles Supplementary to Articles of Incorporation of Registrant
with respect to Dresdner RCM Biotechnology Fund is incorporated
hereby by reference to Exhibit 1(d) of Post-Effective Amendment
No. 6.

(e) Articles of Amendment to Articles of Incorporation of Registrant
with respect to Dresdner RCM Global Technology Fund, Dresdner RCM
Global Health Care Fund, Dresdner RCM Global Small Cap Fund and
Dresdner RCM Large Cap Growth Fund, is incorporated herein by
reference to Exhibit 1(e) of Post-Effective Amendment No. 6.

2. (a) Bylaws of Registrant are incorporated herein by reference to
Exhibit 2 of Pre-Effective Amendment No. 2.

C-3
<PAGE>

(b) Form of Amendments to Bylaws of Registrant are incorporated
herein by reference to Exhibit 2(b) of Post-Effective Amendment
No. 3.

3. None

4. (a) Proof of specimen of certificate for capital stock ($0.0001 par
value) of Registrant, on behalf of RCM Global Technology Fund
(currently known as Dresdner RCM Global Technology Fund), and
excerpts from Articles of Incorporation and Bylaws, are
incorporated herein by reference to Exhibit 4 of Pre-Effective
Amendment No. 2.

(b) Proof of specimen of certificate for capital stock ($0.0001 par
value) of Registrant, on behalf of RCM Global Health Care Fund
(currently known as Dresdner RCM Global Health Care Fund), is
incorporated herein by reference to Exhibit 4(b) of
Post-Effective Amendment No. 1.

(c) Proof of specimen of certificate for capital stock ($0.0001 par
value) of Registrant, on behalf of RCM Global Small Cap Fund
(currently known as Dresdner RCM Global Small Cap Fund), is
incorporated herein by reference to Exhibit 4(c) of
Post-Effective Amendment No. 1.

(d) Proof of specimen of certificate for capital stock ($0.0001 par
value) of Registrant, on behalf of RCM Large Cap Growth Fund
(currently known as Dresdner RCM Large Cap Growth Fund), is
incorporated herein by reference to Exhibit 4(d) of
Post-Effective Amendment No. 1.

(e) Proof of specimen of certificate for capital stock ($0.0001 par
value) of Registrant, on behalf of Dresdner RCM Emerging Markets
Fund, is incorporated herein by reference to Exhibit 4(e) of
Post-Effective Amendment No. 2.

(f) Proof of specimen of certificate for capital stock ($0.0001 par
value) of Registrant, on behalf of Dresdner RCM Biotechnology
Fund, is incorporated herein by reference to Exhibit 4(f) of
Post-Effective Amendment No. 5.

5. (a) Investment Management Agreement, Power of Attorney and Service
Agreement between Registrant, on behalf of RCM Global Technology
Fund (currently known as Dresdner RCM Global Technology Fund),
and RCM Capital Management, L.L.C., (currently known as Dresdner
RCM Global Investors LLC), dated as of June 14, 1996, is
incorporated herein by reference to Exhibit 5(a) of
Post-Effective Amendment No. 1.

(b) Investment Management Agreement, Power of Attorney and Service
Agreement between Registrant, on behalf of RCM Global Health Care
Fund (currently known as Dresdner RCM Global Health Care Fund)
and

C-4
<PAGE>
RCM Capital Management, L.L.C., (currently known as Dresdner
RCM Global Investors LLC) dated as of December 27, 1996 and
Appendix A (Schedule of Fees) dated as of December 30, 1997, are
incorporated herein by reference to Exhibit 5(b) of
Post-Effective Amendment No. 6.

(c) Investment Management Agreement, Power of Attorney and Service
Agreement between Registrant, on behalf of RCM Global Small Cap
Growth Fund (currently known as Dresdner RCM Global Small Cap
Growth Fund), and RCM Capital Management, L.L.C., (currently
known as Dresdner RCM Global Investors LLC) dated as of
December 27, 1996 and Appendix A (Schedule of Fees) dated as of
December 30, 1997, are incorporated herein by reference to
Exhibit 5(c) of Post-Effective Amendment No. 6.

(d) Investment Management Agreement, Power of Attorney and Service
Agreement between Registrant, on behalf of RCM Large Cap Growth
Fund, (currently known as Dresdner RCM Large Cap Growth Fund) and
RCM Capital Management, L.L.C., (currently known as Dresdner RCM
Global Investors LLC) dated as of December 27, 1996 and Appendix
A (Schedule of Fees) dated as of December 30, 1997, are
incorporated herein by reference to Exhibit 5(d) of
Post-Effective Amendment No. 6.

(e) Investment Management Agreement, Power of Attorney and Service
Agreement and Appendix A (Schedule of Fees) between Registrant,
on behalf of Dresdner RCM Emerging Markets Fund, and RCM Capital
Management, L.L.C. (currently known as Dresdner RCM Global
Investors LLC) dated as of December 30, 1997, are incorporated
herein by reference to Exhibit 5(e) of Post-Effective Amendment
No. 6.

(f) Investment Management Agreement, Power of Attorney and Service
Agreement and Appendix A (Schedule of Fees) between Registrant,
on behalf of Dresdner RCM Biotechnology Fund, and Dresdner RCM
Global Investors LLC dated as of December 30, 1997, are
incorporated herein by reference to Exhibit 5(f) of
Post-Effective Amendment No. 6.

6. (a) Distribution Agreement between Registrant and Funds Distributor
Inc., ("FDI") dated June 13, 1996 is incorporated herein by
reference to Exhibit 6(b) of Post-Effective Amendment No. 1.

(b) Service Agreement among RCM Capital Management, a California
Limited Partnership, (currently known as Dresdner RCM Global
Investors LLC), RCM Equity Funds, Inc., RCM Capital Funds, Inc.
(currently known as Dresdner RCM Equity Funds, Inc. and Dresdner
RCM Capital Funds, Inc., respectively) and FDI, dated June 13,
1996, is incorporated herein by reference to Exhibit 6(a) of
Post-Effective Amendment No. 1.

C-5
<PAGE>

(c) Fee Letter Agreement between Registrant, RCM Capital Management,
a California Limited Partnership, (currently known as Dresdner
RCM Global Investors LLC), RCM Equity Funds, Inc., RCM Capital
Funds, Inc. (currently known as Dresdner RCM Equity Funds, Inc.
and Dresdner RCM Capital Funds, Inc., respectively) and FDI,
dated June 13, 1996 is incorporated herein by reference to
Exhibit 6(c) of Post-Effective Amendment No. 1.

(d) Form of Selling Agreement is incorporated herein by reference to
Exhibit 6(d) of Post-Effective Amendment No. 1.

7. None

8. (a) Custodian Contract and remuneration schedule between Registrant,
on behalf of RCM Global Technology Fund (currently known as
Dresdner RCM Global Technology Fund) and State Street Bank and
Trust Company is incorporated herein by reference to Exhibit 8(a)
of Post-Effective Amendment No. 5.

(b) Form of Amendment to Custodian Contract between Registrant, on
behalf of RCM Global Health Care Fund (currently known as
Dresdner RCM Global Health Care Fund), and State Street Bank and
Trust Company is incorporated herein by reference to Exhibit 8(b)
of Post-Effective Amendment No. 1.

(c) Form of Amendment to Custodian Contract between Registrant, on
behalf of RCM Global Small Cap Fund (currently known as Dresdner
RCM Global Small Cap Fund), and State Street Bank and Trust
Company is incorporated herein by reference to Exhibit 8(c) of
Post-Effective Amendment No. 1.

(d) Form of Amendment to Custodian Contract between Registrant, on
behalf of RCM Large Cap Growth Fund (currently known as Dresdner
RCM Large Cap Growth Fund), and State Street Bank and Trust
Company is incorporated herein by reference to Exhibit 8(d) of
Post-Effective Amendment No. 1.

(e) Custodian Agreement between Registrant, on behalf of Dresdner RCM
Emerging Markets Fund, and Brown Brothers Harriman & Co. is
incorporated herein by reference to Exhibit 8(e) of
Post-Effective Amendment No. 6.

(f) Amendment to Custodian Agreement between Registrant on behalf of
Dresdner RCM Emerging Markets Fund and Brown Brothers
Harriman & Co. is incorporated herein by reference to
Exhibit 8(f) of Post-Effective Amendment No. 6.

C-6
<PAGE>

(g) Form of Amendment to Custodian Contract between Registrant, on
behalf of Dresdner RCM Biotechnology Fund, and State Street Bank
and Trust Company is incorporated herein by reference to Exhibit
8(g) of Post-Effective Amendment No. 5.

9. (a) License Agreement between Dresdner RCM Global Investors LLC and
Registrant relating to the use by Registrant of the mark
"Dresdner RCM", is incorporated herein by reference to Exhibit
9(a) of Post-Effective Amendment No. 6.

10. (a) Opinion and consent of Baetjer, Venable and Howard, LLP as to the
legality of securities being registered are incorporated herein
by reference to Exhibit 10(a) of Pre-Effective Amendment No. 2
and Post-Effective Amendment No. 6.

(b) Letter of Paul, Hastings, Janofsky & Walker LLP is filed herein
as Exhibit 10(b).

11. Consent of Coopers & Lybrand is filed herein as Exhibit 11.

12. None

13. (a) Investment letter of initial investors in the Technology Fund
is incorporated herein by reference to Exhibit 13 of
Pre-Effective Amendment No. 1.

(b) Investment letter of initial investors in the Large Cap Fund,
Global Small Cap Fund and Health Care Fund is filed herein as
Exhibit 13(b).

(c) Subscription Agreement for Initial Stockholder of the Dresdner
RCM Biotechnology Fund is filed herein as Exhibit 13(c).

(d) Subscription Agreement for Initial Stockholder of the Dresdner
RCM Emerging Markets Fund is filed herein as Exhibit 13(d).

14. None

15. (a) Amended and Restated Rule 12b-1 Plan of Registrant, on behalf of
Dresdner RCM Global Health Care Fund, Dresdner RCM Global Small
Cap Fund and Dresdner RCM Large Cap Growth Fund is incorporated
herein as Exhibit 15(a) of Post-Effective Amendment No. 6.

(b) Rule 12b-1 Plan of Registrant, on behalf of Dresdner RCM
Biotechnology Fund is incorporated herein by reference to Exhibit
15(b) of Post-Effective Amendment No. 6.

16. None.

17. Financial Data Schedules are filed herein as Exhibit 17.

18. None

19. Power of Attorney for DeWitt F. Bowman, Pamela A. Farr, Frank P.
Greene and George G.C. Parker, is incorporated herein by reference to
Exhibit 19 of Post-Effective Amendment No. 1.

C-7
<PAGE>

ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.

Dresdner RCM Growth Equity Fund, Dresdner RCM Small Cap Fund and
Dresdner RCM International Growth Equity Fund A are each series of Dresdner RCM
Capital Funds, Inc., an open-end management investment company ("Capital
Funds"), for which Dresdner RCM Global Investors LLC, acts as investment
manager. RCM Strategic Global Government Fund, Inc. is a closed-end management
investment company ("RCS"), for which Dresdner RCM Global Investors LLC acts as
investment manager. Certain officers and/or directors of Capital Funds and RCS
are also officers and/or directors of Registrant. Accordingly, Capital Funds and
RCS may be deemed to be under common control with Registrant.

Funds Distributor, Inc. ("FDI") acts as distributor of shares of the
funds of Registrant. Certain officers or employees of FDI also serve as officers
of Registrant, Capital Funds and RCS. Accordingly, FDI may be deemed to be under
common control with Registrant.

ITEM 26. NUMBER OF HOLDERS OF SECURITIES.

As of March 31, 1998

TITLE OF CLASS NUMBER OF RECORD-HOLDERS

Dresdner RCM Global Technology Fund 55
Capital Stock
($0.0001 par value)

Dresdner RCM Global Health Care Fund 5
Capital Stock
($0.0001 par value)

Dresdner RCM Large Cap Growth Fund 5
Capital Stock
($0.0001 par value)

Dresdner RCM Global Small Cap Fund 6
Capital Stock
($0.0001 par value)

Dresdner RCM Emerging Markets Fund 1
Capital Stock
($0.0001 par value)

Dresdner RCM Biotechnology Fund 5
Capital Stock
($0.0001 par value)

C-8
<PAGE>
ITEM 27. INDEMNIFICATION.

Section 2-418 of the General Corporation Law of Maryland empowers a
corporation to indemnify directors and officers of the corporation under various
circumstances as provided in such statute. A director or officer who has been
successful on the merits or otherwise, in the defense of any proceeding, must be
indemnified against reasonable expenses incurred by such person in connection
with the proceeding. Reasonable expenses may be paid or reimbursed by the
corporation in advance of the final disposition of the proceeding, after a
determination that the facts then known to those making the determination would
not preclude indemnification under the statute, and following receipt by the
corporation of a written affirmation by the person that his or her standard of
conduct necessary for indemnification has been met and upon delivery of a
written undertaking by or on behalf of the person to repay the amount advanced
if it is ultimately determined that the standard of conduct has not been met.

Article VI of the Bylaws of Registrant contains indemnification
provisions conforming to the above statute and to the provisions of Section 17
of the Investment Company Act of 1940, as amended.

The Registrant and the directors and officers of Registrant obtained
coverage under an Errors and Omissions insurance policy. The terms and
conditions of policy coverage conform generally to the standard coverage
available throughout the investment company industry. The coverage also applies
to Registrant's investment manager and its members and employees.

Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of Registrant pursuant to the provisions of Maryland law and
Registrant's Articles of Incorporation and Bylaws, or otherwise, Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in said Act, and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by Registrant of expenses incurred or
paid by a director, officer or controlling person of Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, Registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER

Registrant's investment manager, Dresdner RCM Global Investors LLC, is
a Delaware limited liability company, whose two members are Dresdner Bank AG
("Dresdner") and Dresdner Kleinwort Benson North America, Inc. ("Dresdner
Kleinwort Benson"). Dresdner is an international banking organization whose
principal executive offices are located at Gallunsanlage 7, 60041 Frankfurt am
Main, Frankfurt, Germany. Dresdner Kleinwort Benson is a wholly owned

C-9
<PAGE>

subsidiary of Dresdner whose principal executive offices are located at 75 Wall
Street, New York, New York 10005.

The name and principal business address of the companies that the officers and
members of the Board of Managers of Dresdner RCM have had, during the past two
years, a director or officer position which is set forth below:

Name of the Officer Business Affiliations Address
or Member of the
Board of Managers
<S> <C> <C>
Michael J. Apatoff President and Member of the Four Embarcadero Center
Board of Managers, Dresdner San Francisco, CA 94111
RCM (February 1991 - present)

Director, Kleinwort Benson 75 Wall Street
Investment Management Americas New York, NY 10005
Inc. ("KBIMA") (December 1997
- present)

Director, Dresdner RCM Global 10 Fenchurch Street
Investors (UK) Limited London, UK EC3M3LB
("Dresdner RCM (UK)") January
1998 - present)

Vice President and Director, Four Embarcadero Center
RCM Capital Funds, Inc. San Francisco, CA 94111
("Capital Funds")
(November 1993 - June 1996)

President and Director, RCM Four Embarcadero Center
Equity Funds, Inc. ("Equity San Francisco, CA 94111
Funds")
(September 1995 - June 1996);

Vice President, RCM Strategic Four Embarcadero Center
Global Government Fund, Inc. San Francisco, CA 94111
( "RCS")
(February 1994 - June 1996)

Gerhard Eberstadt Dresdner Bank AG Jurgen-Ponto-Platz 1
(May 1998 - present) D-60301
Frankfurt am Main
Germany

Chairman, Dresdner Kleinwort 75 Wall Street
Benson North America, Inc. New York, NY 10005
(September 1996 - present)

Director, KBIMA (December 1997 75 Wall Street
- present) New York, NY 10005

George N. Fugelsang President, Chief Executive 75 Wall Street
Officer, Chairman, Dresdner New York, NY 10005
Kleinwort Benson North America
LLC (February 1994 - present)

Director, Dresdner Kleinwort 75 Wall Street
Benson North America Services New York, NY 10005
LLC (September 1996 -
present); Director, KBIMA
(December 1997 - present)

<PAGE>

Director, KBIMA (December 1997 75 Wall Street
- present) New York, NY 10005

Susan C. Gause Dresdner RCM (July 1994 - Four Embarcadero Center
present) San Francisco, CA
94111

Treasurer and Chief Financial Four Embarcadero Center
Officer, Capital Funds San Francisco, CA
(September 1994 - June 1996) 94111

Treasurer and Chief Financial Four Embarcadero Center
Officer, Equity Funds San Francisco, CA
(September 1995 - June 1996) 94111

Treasurer and Chief Financial Four Embarcadero Center
Officer, RCS (October 1994 - San Francisco, CA
June 1996) 94111

Luke D. Knecht Member of the Board of Four Embarcadero Center
Managers, Dresdner RCM San Francisco, CA
(February 1997 - present) 94111

Executive Director, Russell 206 S. Wacker Drive
Reynolds (September 1995 - Chicago, IL
January 1997)

Joachim Madler Director, Dresdner Bank AG Mainzer Lanstrasse 15-17
(September 1997 - present) 60301 Frankfurt
Germany

Director, KBIMA (December 1997 75 Wall Street
- present) New York, NY 10005

Director, Dresdner (South East Singapore
Asia) (October 1997 - present)

<PAGE>

Managing Director, Dresdner Farberstrasse 6,
Bank (Schweiz) AG (November Zurich, Switzerland
1997 - present)

Chairman, DFV Deutsche Fonds Mainzer Lanstrasse 11-13
und Vorsorgeberatungs (July 60301 Frankfurt
1996 - June 1997) Germany

Deutscher Investment-Trust Mainzer Lanstrasse 11-13
(June 1996 - June 1997) 60301 Frankfurt
Germany

Managing Director, GKS Windmuhlweg 12
Gesellschaft fur Kontenservice 95030 Hof
GmbH (June 1994 - June 1997) Germany

William L. Price Chairman and Member of the Four Embarcadero Center
Board of Managers, Dresdner San Francisco, CA
RCM (December 1997 - present) 94111

Director, KBIMA (December 75 Wall Street
1997 - present New York, NY 10005

Director, Dresdner RCM (UK) 10 Fenchurch Street
(January 1998 - present London, UK EC3M3LB

President and Chairman, Four Embarcadero Center
Capital Funds (May 1979 - June San Francisco, CA
1996) 94111

Chairman, Equity Funds Four Embarcadero Center
(September 1995 - June 1996) San Francisco, CA
94111

Jeffrey S. Rudsten Member of the Board of Four Embarcadero Center
Managers, Dresdner RCM (June San Francisco, CA
1978 - present) 94111

Director, KBIMA (December 75 Wall Street
1997 - present) New York, NY 10005

Vice President and Director, Four Embarcadero Center
RCS (February 1994 - June San Francisco, CA
1996) 94111

William S. Stack Member of the Board of Four Embarcadero Center
Managers, Dresdner RCM (August San Francisco, CA
1994 - present) 94111

<PAGE>

Director, KBIMA (December 75 Wall Street
1997- present) New York, NY 10005

Director, Dresdner RCM (UK) 10 Fenchurch Street
(January 1998 - present) London, UK EC3M3LB

Vice President, Capital Funds Four Embarcadero Center
(December 1994 - June 1996) San Francisco, CA
94111

Vice President and Director, Four Embarcadero Center
Equity Funds (September 1995 - San Francisco, CA
June 1996) 94111

Kenneth B. Weeman, Chief Operating Officer and Four Embarcadero Center
Jr. Member of the Board of San Francisco, CA
Managers, Dresdner RCM 94111
(October 1979 - present)

Director, KBIMA (December 75 Wall Street
1997 - present) New York, NY 10005

Director, Dresdner RCM (UK) 10 Fenchurch Street
(January 1998 - present) London, UK EC3M3LB

Vice President and Director, Four Embarcadero Center
Capital Funds (November 1993 San Francisco, CA
- June 1996) 94111

Vice President and Director, Four Embarcadero Center
Equity Funds (September 1995 - San Francisco, CA
June 1996) 94111
</TABLE>

ITEM 29. PRINCIPAL UNDERWRITERS.

(a) Funds Distributor, Inc. ("FDI"), whose principal offices are
located at 60 State Street, Suite 1300, Boston Massachusetts
02109, is the principal underwriter of Registrant. FDI is an
indirect, wholly owned subsidiary of Boston Institutional Group,
Inc., a holding company, all of whose outstanding shares are
owned by key employees. FDI is a broker-dealer registered under
the Securities Exchange Act of 1934, as amended, and is a member
of the National Association of Securities Dealers, Inc. FDI also
serves as principal underwriter of the following investment
companies:

American Century California Tax-Free and Municipal Funds
Amercian Century Capital Portfolios, Inc.
American Century Government Income Trust
American Century International Bond Funds
American Century Investment Trust
American Century Municipal Trust
American Century Mutual Funds, Inc.
Amercian Century Premium Reserves, Inc.
American Century Quantitative Equity Funds
American Century Strategic Asset Allocations, Inc.
American Century Target Maturities Trust
American Century Variable Portfolios, Inc.
American Century World Mutual Funds, Inc.
BJB Investment Funds
The Brinson Funds
Dresdner RCM Capital Funds, Inc.
Founders Funds, Inc.
Harris Insight Funds Trust
HT Insight Funds, Inc. d/b/a Harris Insight Funds
J.P. Morgan Institutional Funds
J.P. Morgan Funds
JPM Series Trust
JPM Series Trust II
LaSalle Partners Funds, Inc.
Monetta Fund, Inc.
Monetta Trust
The Montgomery Funds
The Montgomery Funds II
The Munder Framlington Funds Trust
The Munder Funds, Inc.
The Munder Funds Trust

C-10
<PAGE>

Orbitex Group of Funds
St. Clair Funds, Inc.
The Skyline Funds
Waterhouse Investors Family of Funds Inc.
WEBS Index Fund, Inc.

FDI does not act as a depositor or investment adviser of any
investment company.

(b) The following is a list of the executive officers, directors and
partners of FDI:

NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES
BUSINESS ADDRESS WITH FUNDS DISTRIBUTOR, WITH REGISTRANT
INC.

Marie E. Connolly Director, President and None
Chief Executive Officer

George A. Rio Executive Vice President None

Richard W. Ingram Executive Vice President President, Treasurer and
Chief Financial Officer

Donald R. Roberson Executive Vice President None

William S. Nichols Executive Vice President None

Margaret W. Chambers Senior Vice President, None
General Counsel, Chief
Compliance Officer,
Secretary and Clerk

Michael S. Petrucelli Senior Vice President None

Joseph F. Tower III Director, Senior Vice None
President, Treasurer and
Chief Financial Officer

Paula R. David Senior Vice President None

Allen B. Closser Senior Vice President None

Bernard A. Whalen Senior Vice President None

William J. Nutt Chairman and Director None

C-11
<PAGE>

ITEM 30. LOCATION OF ACCOUNTS AND RECORDS.

Accounts, books and other records required by Rules 31a-1 and 31a-2
under the Investment Company Act of 1940, as amended, are maintained and held in
the offices of Registrant's investment manager, Dresdner RCM Global Investors
LLC, Four Embarcadero Center, San Francisco, California 94111; and/or
Registrant's distributor, Funds Distributor, Inc., 60 State Street, Suite 1300,
Boston, Massachusetts 02109.

Records covering portfolio transactions are also maintained and
kept by Brown Brothers Harriman & Co., 40 Water Street, Boston, Massachusetts
02109, for the Dresdner RCM Emerging Markets Fund and by State Street Bank
and Trust Company, U.S. Mutual Funds Services Division, P.O. Box 1713,
Boston, Massachusetts 02105, for each of the other Funds controlled by the
Registrant.

ITEM 31. MANAGEMENT SERVICES.

None

ITEM 32. UNDERTAKINGS.

(a) Not applicable

(b) Not applicable.

(c) Registrant undertakes to furnish each person to whom a prospectus is
delivered with a copy of Registrant's latest annual report to shareholders, upon
request and without charge.

C-12
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, Dresdner RCM Equity Funds, Inc. has duly caused
this Post-Effective Amendment No. 7 to the Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this
Post-Effective Amendment No. 7 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Boston,
Commonwealth of Massachusetts, on April 30, 1998.

DRESDNER RCM EQUITY FUNDS, INC.

By: /s/ Richard W. Ingram, President
----------------------------------

Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 7 to the Registration Statement has been signed
below by the following persons in the capacities and on the date indicated.

SIGNATURE TITLE DATE

(1) Principal Executive Officer President April 30, 1998

/s/ Richard W. Ingram*
------------------------
Richard W. Ingram

(2) Chief Financial and Accounting Officer Treasurer April 30, 1998

/s/ Richard W. Ingram*
------------------------
Richard W. Ingram

<PAGE>

SIGNATURE TITLE DATE

(4) Directors

/s/ DeWitt F. Bowman* April 30, 1998
------------------------
DeWitt F. Bowman

/s/ Pamela A. Farr*
------------------------ April 30, 1998
Pamela A. Farr

/s/ Frank P. Greene *
------------------------ April 30, 1998
Frank P. Greene

/s/ George G.C. Parker *
------------------------ April 30, 1998
George G.C. Parker

By: /s/ Richard W. Ingram* April 30, 1998
------------------------
Richard W. Ingram
as Attorney-in-Fact

- ---------------------
* By Richard W. Ingram, pursuant to Power of Attorney dated June 14, 1996,
and incorporated herein by reference to Exhibit 5(a) of Post-Effective
Amendment No. !.
<PAGE>

EXHIBIT INDEX

NUMBER DESCRIPTION

10(b) Letter of Paul, Hastings, Janofsky & Walker LLP

11 Consent of Coopers & Lybrand L.L.P.

13(b) Investment Letter--Large Cap, Global Small Cap and
Health Care Fund

13(c) Subscription Agreement--Biotechnology Fund

13(d) Subscription Agreement--Emerging Markets Fund

17 Financial Data Schedules

<PAGE>

Exhibit 10(b)

Paul, Hastings, Janofsky & Walker LLP
555 South Flower Street
Los Angeles, California 90071
(213)683-6000

April 30, 1998

Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549

Re: Dresdner RCM Equity Funds, Inc.
Post-Effective Amendment No. 7
to Form N-1A Registration Statement
File Nos. 33-97572 and 811-9100

Ladies and Gentlemen:

As counsel to Dresdner RCM Equity Funds, Inc. (the "Company"), we
have reviewed the Prospectus and Statement of Additional Information of the
Company included in Post-Effective Amendment No. 7 (the "Amendment") to the
Company's Registration Statement on Form N-1A under the Securities Act of
1933 (the "1933 Act") and the Investment Company Act of 1940. This will
confirm, pursuant to Rule 485(b)(4) under the 1933 Act, that the Amendment
does not contain disclosures that would render it ineligible to become
effective pursuant to Rule 485(b) under the 1933 Act.

Very truly yours,

/s/Michael Glazer
for PAUL, HASTINGS,
JANOFSKY & WALKER LLP

<PAGE>
Exhibit 11

CONSENT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors of Dresdner RCM Equity Funds, Inc.
Re: Dresdner RCM Large Cap Growth Fund
Dresdner RCM Global Small Cap Fund
Dresdner RCM Global Technology Fund
Dresdner RCM Global Health Care Fund
Dresdner RCM Biotechnology Fund
Dresdner RCM Emerging Markets Fund

We hereby consent to the incorporation by reference of our reports dated
February 20, 1998 on our audit of the financial statements and financial
highlights of the Dresdner RCM Large Cap Growth Fund, Dresdner RCM Global
Small Cap Fund, Dresdner RCM Global Technology Fund, Dresdner RCM Global
Health Care Fund, Dresdner RCM Biotechnology Fund and Dresdner RCM Emerging
Markets Fund, as of December 31, 1997 in the Statement of Additional
Information with respect to the Post-Effective Amendment to the Registration
Statement on Form N-1A under the Securities Act of 1933, as amended, of the
Dresdner RCM Equity Funds, Inc. We further consent to the reference to our
Firm under the captions "Financial Highlights" and "Independent Accountants"
in the Prospectus and Statement of Additional Information.

/s/ Coopers & Lybrand L.L.P.

COOPERS & LYBRAND L.L.P.

Boston, Massachusetts
April 30, 1998

<PAGE>

Exhibit 13(b)

RCM Equity Funds, Inc. and
RCM Capital Management, L.L.C.
Four Embarcadero Center, Suite 3000
San Francisco, California 94111

Re: Investment in Capital Stock
RCM Large Cap Fund;
RCM Global Small Cap Fund; and
RCM Global Health Care Fund (the "Funds")

Gentlemen:

You have informed us that the Funds are equity investment portfolios offered by
RCM Equity Funds, Inc., and open-end management investment company registered as
such under the Investment Company Act of 1940, as amended. You have further
informed us that RCM Capital Management, L.L.C. ("RCM") is, pursuant to written
contract, acting as investment manager to the Funds. The Funds are offering
their shares for sale to * (the "Accounts"); the
undersigned is a fiduciary of the Account with full discretionary authority to
invest assets of the Accounts in the Funds.

Please be advised that the undersigned is independent of and unrelated to RCM,
and on the basis of the current Prospectus of the Funds, dated December __,
1996, and the detailed written disclosure of the investment advisory and other
fees referred to therein, receipt of which is hereby acknowledged, the
undersigned hereby approves the purchase and sale of shares of the Funds for the
Accounts in connection with the following purchase and sale program:

Price per/ No. Aggregate
Share Shares Subscription
---------- -------- ------------
<S> <C> <C> <C>
RCM Large Cap Fund $10.00 400,000 $4 million

RCM Global Small Cap Fund $10.00 400,000 $4 million

RCM Global Health Care Fund $10.00 400,000 $4 million

</TABLE>

* clients of Dresdner Bank AG, Investment Management/Institutional Asset
Management Division

RCM or its successor, will notify you of any changes in any of the rates of fees
charged to or paid by the Fund to RCM.

Very truly yours,

/s/Brock /s/Kranz

Please indicate below the preferred option for receipt of dividends and
distributions from the Funds (check only one):

[ ] All dividends and distributions to be reinvested in shares from the Funds.

[ ] Income dividends to be paid in cash to the Account; capital gains
distributions to be reinvested in shares from the Funds.

[x] All dividends and distributions to be paid in cash to the Accounts.

In the absence of specific instructions, dividends and distributions will be
reinvested in shares from the respective Funds.

<PAGE>
Exhibit 13(c)

SUBSCRIPTION AGREEMENT

FOR

INITIAL STOCKHOLDER

This agreement (the "Subscription Agreement"), dated as of December 30,
1997, is between Dresdner RCM Equity Funds, Inc. (the "Company") and Dresdner
Bank AG (the "Stockholder").

WHEREAS, the Company is an open-end management investment company
registered under the Investment Company Act of 1940, as amended, and the rules
and regulations promulgated thereunder;

WHEREAS, the Articles of Incorporation of the Company, as amended,
authorizes 50,000,000 shares of capital stock in a series designated as the
"Dresdner RCM Biotechnology Fund" (the "Fund");

WHEREAS, the Stockholder desires to purchase from the Fund for the benefit
of certain of its clients 300,000 shares of capital stock of the Fund (the
"Shares"), at a price of $10.00 per Share;

NOW, THEREFORE, the parties to this Agreement hereby agree as follows:

1. The Fund hereby agrees to issue and sell to the Stockholder, and the
Stockholder has agreed to purchase, the Shares for the benefit of certain of its
clients, at a price of $10.00 per Share.

2. The Stockholder represents and warrants that (a) it is acquiring the
Shares for the benefit of certain of its clients for investment purposes only
and that the Shares are not being acquired with a view to or in connection with
any resale, distribution, subdivision, or fractionalization of any or all of the
Shares or any interest therein, (b) it has received a copy of the Fund's
prospectus and (c) it has the requisite authority and discretion to purchase the
Shares for the benefit of its clients.

3. The Stockholder hereby agrees that it will not direct the sale,
assignment, transfer, pledge, hypothecation, or exchange of all or any part of
the Shares except upon repurchase or redemption by the Fund, unless and until
(i) the Stockholder reasonably believes that such sale, assignment, transfer,
pledge, hypothecation or exchange will not violate the provisions of the
Securities Act of 1933, as amended or the rules or regulations thereunder (the
"1933 Act"), and the Fund receives adequate notice of the Stockholder's
intentions and does not object to such sale, assignment, transfer, pledge,
hypothecation or exchange, or (ii) the Stockholder receives an opinion of
counsel that such sale, assignment, transfer, pledge, hypothecation or exchange
will not violate the provisions of the 1933 Act.

4. The Stockholder represents and warrants that its representative named
below has all necessary power and authority to execute this Subscription
Agreement on behalf of the Stockholder.

IN WITNESS WHEREOF, the parties hereto have executed this Subscription
Agreement as of the date indicated above.

DRESDNER RCM EQUITY FUNDS, INC.
on behalf of the Dresdner RCM Biotechnology Fund

By:
----------------------------

DRESDNER BANK AG

By: /s/Dr. Lange /s/Brocks

<PAGE>
Exhibit 13(d)

SUBSCRIPTION AGREEMENT

FOR

INITIAL STOCKHOLDER

This agreement (the "Subscription Agreement"), dated as of December
30,1997, is between Dresdner RCM Equity Funds, Inc. (the "Company") and Dresdner
Bank AG (the "Stockholder").

WHEREAS, the Company is an open-end management investment company
registered under the Investment Company Act of 1940, as amended, and the rules
and regulations promulgated thereunder;

WHEREAS, the Articles of Incorporation of the Company, as amended,
authorizes 50,000,000 shares of capital stock in a series designated as the
"Dresdner RCM Emerging Markets Fund" (the "Fund");

WHEREAS, the Stockholder desires to purchase from the Fund for the benefit
of certain of its clients 300,000 shares of capital stock of the Fund (the
"Shares"), at a price of $10.00 per Share;

NOW, THEREFORE, the parties to this Agreement hereby agree as follows:

1. The Fund hereby agrees to issue and sell to the Stockholder, and the
Stockholder has agreed to purchase, the Shares for the benefit of certain of its
clients, at a price of $10.00 per Share.

4. The Stockholder represents and warrants that its representative named
below has all necessary power and authority to execute this Subscription
Agreement on behalf of the Stockholder.

IN WITNESS WHEREOF, the parties hereto have executed this Subscription
Agreement as of the date indicated above.

DRESDNER RCM EQUITY FUNDS, INC.

on behalf of the Dresdner RCM Emerging Markets Fund

By:
------------------------------

DRESDNER BANK AG

By: /s/Dr. Lange /s/Brocks

<PAGE>
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