<PAGE>
<TABLE>
<C> <S>
Dresdner RCM
Global Funds
JUNE 30, 1999 Semi-Annual Report
</TABLE>
[LOGO]
<PAGE>
August 20, 1999
Dear Shareholders:
We are pleased to present the Dresdner RCM Global Funds' (the "Funds" or
"Fund") Semi-annual Shareholder Report for the six months ended June 30, 1999.
On the following pages, you will find discussions from the individual Fund
managers providing a range of valuable information from a review of market
conditions to portfolio managers' current strategy and outlook.
The first half of 1999 represented an exciting period for the Dresdner
RCM Global Funds, managed by Dresdner RCM Global Investors LLC ("Dresdner RCM"),
with two major events having taken center stage. First, to take advantage of the
long-term prospects for European economic growth, due in part to the
introduction of the euro, shareholders approved the expansion of the Emerging
Germany Fund's investment mandate to include all of Europe. The Fund, now named
the Dresdner RCM Europe Fund, pursues long-term capital growth through
pan-European investments. Shareholders also approved the conversion of this fund
from a closed-end to an open-end structure. Second, the Dresdner RCM Tax Managed
Growth Fund, which was launched to maximize the after-tax returns to its
shareholders, completed its inaugural six-month period of operation. The Fund
offers investors access to the same portfolio management team that has provided
tax-managed solutions to institutional investors of Dresdner RCM for more than
20 years.
This year, so far, has seen a return to relative calm in financial
markets around the world as the Asian economic crisis of 1997-1998 faded from
view. The US economy was stronger than expected, and the stock market performed
very well, with the Dow Jones Industrial Average leaping over the 10,000 and
11,000 barriers. Japan's markets were surprisingly robust, particularly for
smaller cap stocks. In contrast, Europe was disappointing as its new currency,
the euro, weakened significantly after being launched on January 1, 1999.
Emerging markets in Asia, Latin America and Eastern Europe, though very
volatile, recaptured most of the losses experienced in 1998.
Amidst the activity in the markets, Dresdner RCM continues to focus on a
bottom-up analysis of company fundamentals combined with a careful assessment of
projected earnings growth. In identifying possible investments, Dresdner RCM
draws on the expertise of nearly 180 investment professionals. Dresdner RCM also
uncovers and confirms market place demand for key products and services, as well
as anticipates new industry and market trends through Grassroots(SM) Research.
Dresdner RCM believes that Grassroots(SM) Research is a valuable adjunct to its
traditional research efforts; it provides a "second look" at companies and
checks assumptions concerning market demands for particular products and
services. A seasoned team of economists supplements these reports with
macroeconomic assessments of regional and global trends. As a result of this
exhaustive discipline, a number of the Dresdner RCM Global Funds achieved
impressive performance results during the first half of 1999. We are extremely
proud of this overall level of performance, particularly during a period when
investor preference leaned toward value-oriented stocks.
We would like to take this opportunity to once again assure Shareholders
that Dresdner RCM has committed considerable effort and resources to avoid
difficulties related to Y2K through technological upgrades as well as ensuring
that critical vendor systems are also Y2K compliant. In addition, Dresdner RCM
reviews and takes into consideration in its investment decision making process,
the Y2K preparedness of the companies in which it invests. However, Dresdner RCM
recognizes that Y2K problems could adversely affect some companies, therefore
investment returns may be temporarily impacted.
Thank you for your continued confidence in the Dresdner RCM Global
Funds. We believe that our strong commitment to value and performance, built on
a rigorous company-by-company selection approach, has served our Shareholders
well and will continue to do so. If you have any questions about the material in
this report, or would like more information on a specific Fund, please call us
at 1-800-726-7240 or visit our website at www.dresdnerrcmglobalfunds.com.
Sincerely,
<TABLE>
<S> <C>
[SIGNATURE] [SIGNATURE]
DeWitt F. Bowman Theodore J. Coburn
Chairman Chairman
Dresdner RCM Global Funds, Inc. Dresdner RCM Investment Funds Inc.
Dresdner RCM Capital Funds, Inc.
</TABLE>
<PAGE>
Dresdner RCM Large Cap Growth Fund
Management's Performance Review
Despite the shift in investor preference from growth to value in the
second quarter, the Fund's emphasis on technology and telecommunications was a
major reason that it outperformed the broad market as well as its benchmark
growth index during the first half of 1999. For the six months ended June 30,
1999, the Dresdner RCM Large Cap Growth Fund posted a total return of 14.81% and
14.68% for Class I and Class N shares, respectively. In comparison, the Fund's
benchmark, the S&P 500 Index returned 12.38%.
MARKET REVIEW
As 1999 began, the U.S. economy and the stock market had weathered the
Asian economic crisis and the prospect of global deflation. Such a scenario of
scarce growth turned out to be ideal for the type of stocks in which the Fund
invests -- growth stocks that can continue to post strong earnings regardless of
the economic environment. As a result, the first quarter of 1999 was extremely
strong for the Fund as new highs were generated on the broad market. True, the
increasing narrowness of the advance was a major concern, as growth outperformed
value and large cap stocks outperformed small to the point where the divergence
in returns widened to historic levels.
However, the market changed dramatically in the second quarter as
evidence of a better global economic environment began to emerge. After a small
correction, the recovery of U.S. stocks propelled consumer confidence and
spending upward as unemployment hit an all-time low of 4.2%. Oil and some other
industrial commodities appreciated significantly from depressed prices, while
cyclical, value and smaller cap stocks began to outperform. Long-term interest
rates, which had been as low as 4.7% last fall, climbed above 6% as the Federal
Reserve Board changed its bias from neutral to tightening. While the stock
market initially reacted negatively to the prospect of the Fed raising
short-term interest rates, growth stocks bounced back in late June as the Fed
removed its tightening bias and only raised short-term rates by 25 basis points.
By June 30, 1999, the Dow was near 11,000, while the S&P 500 Index and the
NASDAQ Composite reached all-time highs.
FACTORS AFFECTING PERFORMANCE
Since the Fund's bias is toward large cap growth, its style was favored
in the first quarter, outperforming the Standard & Poor's 500 Index by about 8
percentage points. Although growth was not generally favored during the second
quarter, the Fund's consistent overweight in technology and telecommunications
stocks throughout the first half of the year continued to be a major advantage.
The portfolio achieved particularly strong performance from America Online,
Nokia, and Qualcomm.
Dresdner RCM Global Investors LLC ("Dresdner RCM"), the Fund's
investment manager, continues to believe that the increased productivity gained
from the substitution of technology for labor is a secular phenomenon and should
continue to drive earnings. The Internet has been an explosive sector over the
past year and a half, and Dresdner RCM was able to opportunistically add and cut
back on industry leader America Online at advantageous times as the stock rose
over 300% during the past 12 months. The Fund also has a large commitment to the
telecommunications sector, with such holdings as Nokia and Qualcomm. Nokia
products have significant technological advantages compared to the competition,
which is why it has continued to gain market share. Qualcomm has positioned
itself to become the global technological leader in wireless communications for
years to come. The transformation of the telecommunications environment from an
analog to a digital world and the heightening race to provide capacity and
content creates confidence in the growth characteristic of the global telecom
providers and systems suppliers.
On the negative side, the market's general concern about the valuation
of growth stocks, as well as increasing concerns that Congress will expand
Medicare to include prescription drugs, has caused pharmaceutical stocks to
significantly underperform during the period. The Fund's weighting in this
sector has been reduced to roughly the market weighting, however the recent
price declines have pushed the stocks to levels where they represent a very
attractive trade off between risk and return.
As the pharmaceutical sector was reduced, energy was added to the
portfolio including Chevron, Enron, and Schlumberger. These stocks performed
very well as the price of oil rose from about $11 per barrel to $20 in an
improving global economic environment. Other cyclical areas that were added
include aerospace and defense with holdings such as General Dynamics, Raytheon,
and
Page 2
<PAGE>
Dresdner RCM Large Cap Growth Fund
Management's Performance Review
United Technologies. These companies should also benefit from an improved
economic climate in Asia, as well as the need to rebuild the U.S. military
arsenal after the conflict in Kosovo.
OUTLOOK
While it's hard to imagine that stocks can continue to appreciate at the
levels seen over the last few years, the economic environment is quite positive
and should provide a solid background for equity prices. Inflation is still
under control and corporate profits are proving to be stronger than expected
earlier in the year.
With the 30-year bond at 6%, the economy is likely to cool even if the
Fed doesn't raise short-term rates further. In addition, consumer spending is
very dependent on stock market profits, since the savings rate in the U.S. has
become negative. If the stock market stalls in the second half, it is likely to
slow down consumer spending and, in turn, the economy. While the Asian economies
have improved somewhat, Europe is very sluggish and parts of Latin America and
Eastern Europe are showing negative growth. All of these factors put constraints
on the U.S. economy, which Dresdner RCM believes is likely to slow down in the
second half of 1999. A return to modest economic growth is an advantage for
growth stocks -- and the Fund.
Page 3
<PAGE>
Dresdner RCM Large Cap Growth Fund
Total Return Index Comparison(b)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
Class I Shares S&P 500 Stock Index (a)
<S> <C> <C>
12/31/96 $10,000 $10,000
1/31/97 $10,640 $10,625
2/28/97 $10,570 $10,708
3/31/97 $9,920 $10,268
4/30/97 $10,490 $10,881
5/31/97 $11,300 $11,544
6/30/97 $11,880 $12,061
7/31/97 $13,020 $13,021
8/31/97 $12,210 $12,292
9/30/97 $13,230 $12,965
10/31/97 $12,930 $12,532
11/30/97 $13,140 $13,113
12/31/97 $13,199 $13,338
1/31/98 $13,599 $13,486
2/28/98 $14,647 $14,458
3/31/98 $15,337 $15,199
4/30/98 $15,737 $15,352
5/31/98 $15,263 $15,088
6/30/98 $16,190 $15,701
7/31/98 $16,232 $15,533
8/31/98 $13,515 $13,287
9/30/98 $14,716 $14,139
10/31/98 $15,737 $15,288
11/30/98 $16,864 $16,215
12/31/98 $19,020 $17,148
1/31/99 $20,470 $17,865
2/28/99 $19,728 $17,310
3/31/99 $21,460 $18,002
4/30/99 $21,118 $18,699
5/31/99 $20,305 $18,257
6/30/99 $21,837 $19,271
$10,000 Investment (12/31/96-6/30/99)(c)(e)(f)
</TABLE>
PERFORMANCE(B)
JUNE 30, 1999
<TABLE>
<CAPTION>
CUMULATIVE
SINCE SINCE
YTD(G) 1 YEAR INCEPTION INCEPTION
<S> <C> <C> <C> <C>
Class I
Average Annual Total Return(c) 14.81% 34.88% 36.67% 118.37%
Class N
Average Annual Total
Return(d)(e)(f) 14.68% 34.73% 36.61% 118.13%
</TABLE>
The data above represents past performance of the Fund and may not be
indicative of future performance. The investment return and principal value of
an investment in the Fund will fluctuate, so that shares, when redeemed, may be
worth more or less than their original cost.
- --------------------------------
(a) The Standard & Poor's 500 Stock Index is a capitalization-weighted index
of 500 stocks that attempts to measure performance of the broad domestic
economy through changes in the aggregate market value of 500 stocks
representing major industries.
(b) Returns assume reinvestment of all dividends and capital gains
distributions at net asset value.
(c) Class I shares commenced operations on December 31, 1996.
(d) Class N shares commenced operations on March 2, 1999.
(e) For periods prior to March 2, 1999, figures reflect Class I performance.
From the inception date March 2, 1999, figures reflect actual Class N
performance, including the effect of Rule 12b-1 fees.
(f) The value of a $10,000 investment for Class N is $21,813 for the period
from 12/31/96 - 6/30/99. The performance of the Class N shares are lower due
to the effects of 12b-1 fees.
(g) Unannualized.
Page 4
<PAGE>
Dresdner RCM Large Cap Growth Fund
Portfolio of Investments
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY EQUITY INVESTMENTS NET ASSETS (NOTE 1)
- -----------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
CONSUMER NON-DURABLES SECTOR 16.4%
BEVERAGE/TOBACCO 4.3%
1,600 US Anheuser-Busch Companies Inc. $ 113,500
2,500 US Coca Cola Co. 156,250
3,500 US Coca Cola Enterprises Inc. 104,125
3,700 US Philip Morris Co. Inc. 148,694
--------------
522,569
--------------
HOUSEHOLD/RELATED NON-DURABLES 2.5%
1,600 US Colgate Palmolive Co. 158,000
1,400 US Gillette Co. 57,400
900 US Procter & Gamble Co. 80,325
--------------
295,725
--------------
LEISURE TIME PRODUCTS/SERVICES 1.4%
4,000 US McDonalds Corp. 165,250
RETAIL TRADE 8.2%
1,600 US Circuit City Stores Inc. 148,800
1,600 US Costco Cos. Inc. * 128,100
1,600 US Dayton Hudson Corp. 104,000
2,000 US Home Depot Inc. 128,875
1,200 US Lowe's Companies Inc. 68,025
2,500 US Nike Inc. Class B 158,281
1,350 US The Gap Inc. 68,006
3,700 US Wal-Mart Stores Inc. 178,525
--------------
982,612
--------------
CYCLICAL/CAPITAL GOODS SECTOR 11.7%
AEROSPACE/DEFENSE 2.8%
1,400 US General Dynamics Corp. 95,900
1,400 US Raytheon Co. Class B 98,525
2,000 US United Technologies Corp. 143,375
--------------
337,800
--------------
ELECTRICAL EQUIPMENT 3.6%
3,800 US General Electric Co. 429,400
INDUSTRIAL EQUIPMENT 4.8%
6,100 BH Tyco International Ltd. 577,975
RAW/BASIC MATERIALS 0.5%
900 US Alcoa Inc. 55,688
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 5
<PAGE>
Dresdner RCM Large Cap Growth Fund
Portfolio of Investments
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY EQUITY INVESTMENTS NET ASSETS (NOTE 1)
- -----------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
ENERGY SECTOR 5.1%
ENERGY 5.1%
1,500 US Burlington Resources Inc. $ 64,875
1,400 US Chevron Corp. 133,263
2,600 US Conoco Inc. Class A 72,475
3,000 US Enron Corp. 245,250
1,600 US Schlumberger Ltd. 101,900
--------------
617,763
--------------
HEALTH CARE SECTOR 14.4%
DRUGS AND HOSPITAL SUPPLIES 13.9%
3,500 US Alza Corp. * 178,062
2,100 US American Home Products Corp. 120,750
5,000 US Amgen Inc. * 304,375
1,900 US Eli Lilly & Co. 136,088
2,200 US Forest Laboratories Inc. * 101,750
1,200 US Johnson & Johnson 117,600
2,400 US Merck & Co. Inc. 177,600
1,600 US Pfizer Inc. 175,600
1,400 US Sepracor Inc. * 113,750
3,500 US Warner Lambert Co. 242,812
--------------
1,668,387
--------------
HEALTH CARE SERVICES 0.5%
1,000 US Cardinal Health Inc. 64,125
INTEREST-SENSITIVE SECTOR 7.1%
BANKING 3.6%
3,400 US Bank of New York Inc. 124,737
3,900 US Citigroup Inc. 185,250
4,500 US Firstar Corp. 126,000
--------------
435,987
--------------
GENERAL FINANCE 1.5%
5,000 US AMRESCO Inc. * 32,188
2,500 US Federal Home Loan Mortgage Corp. 145,000
--------------
177,188
--------------
INSURANCE 2.0%
2,100 US American International Group Inc. 245,831
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 6
<PAGE>
Dresdner RCM Large Cap Growth Fund
Portfolio of Investments
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY EQUITY INVESTMENTS NET ASSETS (NOTE 1)
- -----------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
TECHNOLOGY SECTOR 26.0%
COMPUTERS/OFFICE EQUIPMENT 5.9%
4,400 US E M C Corp. * $ 242,000
1,400 US Hewlett-Packard Co. 140,700
2,200 US International Business Machines 284,350
600 US Sun Microsystems Inc. * 41,325
--------------
708,375
--------------
ELECTRONICS/NEW TECHNOLOGY 14.9%
7,400 US Cisco Systems Inc. * 477,300
2,200 US Intel Corp. 130,900
4,300 US Lucent Technologies Inc. 289,981
2,000 US Motorola Inc. 189,500
4,000 FI Nokia Corp. (ADR) 366,250
800 US QUALCOMM Inc. * 114,800
1,200 FR STMicroelectronics N.V. NY Registry 83,250
400 US Uniphase Corp. * 66,400
1,200 US Xilinx Inc. (rights) * 68,700
--------------
1,787,081
--------------
TECHNOLOGY SERVICES 5.2%
1,400 US America Online Inc. 154,700
5,200 US Microsoft Corp. * 468,975
--------------
623,675
--------------
TELEMEDIA/SERVICES SECTOR 16.0%
BUSINESS SERVICES 1.6%
3,500 US Waste Management Inc. 188,125
COMMUNICATION SERVICES 11.2%
2,300 US Frontier Corp. 135,700
900 US Global TeleSystems Group Inc. * 72,900
1,800 US GTE Corp. 136,350
6,600 US MCI WorldCom Inc. * 568,013
4,000 US Nextel Communications Inc. * 200,750
2,200 US SBC Communications Inc. 127,600
500 UK Vodafone AirTouch PLC (ADR) 98,500
--------------
1,339,813
--------------
MEDIA 3.2%
3,500 US Clear Channel Communications * 241,281
2,000 US Time Warner Inc. 147,000
--------------
388,281
--------------
TOTAL EQUITY INVESTMENTS (COST $9,861,928) 96.7% 11,611,650
--------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 7
<PAGE>
Dresdner RCM Large Cap Growth Fund
Portfolio of Investments
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY EQUITY INVESTMENTS NET ASSETS (NOTE 1)
- -----------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
SHORT-TERM INVESTMENTS
MONEY MARKET FUNDS 2.7%
184,774 US SSgA Money Market Fund $ 184,774
137,531 US SSgA U.S. Government Money Market Fund 137,531
--------------
TOTAL SHORT-TERM INVESTMENTS (COST $322,305) 2.7% 322,305
--------------
TOTAL INVESTMENTS (COST $10,184,233) ** 99.4% 11,933,955
OTHER ASSETS LESS LIABILITIES 0.6% 77,903
--------------
NET ASSETS 100.0% $ 12,011,858
--------------
--------------
</TABLE>
- --------------------------------
* Non-income producing security.
ADR American Depository Receipt
Tax Information:
** For Federal income tax purposes, cost is $10,246,816 and gross aggregate
unrealized appreciation (depreciation) for all securities is as follows:
<TABLE>
<S> <C>
Unrealized Appreciation $ 1,944,570
Unrealized Depreciation (257,431)
-------------
Net unrealized
appreciation $ 1,687,139
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-------------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fund's investments in securities at June 30, 1999, categorized by country:
<TABLE>
<CAPTION>
% OF NET ASSETS
------------------------------------------
COUNTRY SHORT-TERM
COUNTRY CODE EQUITIES AND OTHER TOTAL
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Bermuda BH 4.8% 4.8%
Finland FI 3.1% 3.1%
France FR 0.7% 0.7%
United Kingdom UK 0.8% 0.8%
United States US 87.3% 3.3% 90.6%
--- --- ----------
Total 96.7% 3.3% 100.0%
--- --- ----------
--- --- ----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 8
<PAGE>
Dresdner RCM Biotechnology Fund
Management's Performance Review
The Fund's focus on biotechnology companies helped the Dresdner RCM
Biotechnology Fund improve its relative performance in the second quarter. For
the six months ending June 30, 1999, the Fund achieved a total return of 8.65%
compared to the Fund's benchmarks, the NASDAQ/Biotechnology Index which returned
15.99%, and the AMEX Biotechnology Index which returned 15.78%.
MARKET REVIEW
As market uncertainty over global economies eased, higher-risk
investments such as small cap development-stage biotechnology companies began to
show stronger performance. Investors began to recognize that biotechnology
stocks were significantly undervalued compared to the major pharmaceutical and
medical device companies. In addition, a number of companies -- including many
in the portfolio -- have increasingly begun to see the fruits of their research
& development efforts. The Congressional debate over Medicare's role in covering
prescription drugs cast a cloud over the pharmaceutical sector, though the
impact on biotechnology companies and specialty pharmaceutical companies was
less pronounced. In addition to possible changes in federal government laws and
regulations, a ruling by the Financial Accounting Standard Board to eliminate
the pooling-of-interest accounting method has spurred biotechnology companies to
find partners before the rule takes effect in 2001.
FACTORS AFFECTING PERFORMANCE
Dresdner RCM Global Investors LLC ("Dresdner RCM"), the investment
manager of the Fund, combines rigorous fundamental research with a disciplined
methodology to uncover quality companies that generate strong earnings and solid
growth prospects. The Fund's portfolio managers have advanced degrees in
medicine and the biological sciences as well as extensive financial training,
which helps them to analyze new products and services from the biotechnology and
health care sectors.
This training and experience allowed them to evaluate the merits of a
number of new therapies. For example, Enzon has used its technology to reduce
the number of required injections of Interferon A in treating hepatitis, while
minimizing its debilitating side effects. QLT Phototherapeutics has developed a
new treatment that helps opthamologists successfully treat macular degeneration,
in which retinal degradation leads to blindness. Medimmune's Synegis has proven
to be the leading antibody against respiratory viruses in neonates. All three
companies performed very well during the period.
Mergers and acquisitions impacted a number of stocks in the portfolio.
In March, Alza's shares sold off sharply when there were indications that
Ditropan XL, a drug that treats incontinence, was not being accepted in the
marketplace. Dresdner RCM took the opportunity to buy additional shares because
of their conviction that the drug was indeed attracting favorable reviews from
the urological community. This conviction was based on valuable input from
Dresdner RCM's Grassroots-SM- Research. Shareholders were rewarded by this
action in late June, when Alza announced that it was being acquired by Abbott
Laboratories. Although the stock prices of large cap pharmaceuticals have been
under pressure in recent months, these companies still possess formidable stock
valuations, which they are able to use as currency to acquire other companies.
Other forms of corporate restructuring proved positive for the Fund's
performance. The Fund's investment in Genentech, which was two-thirds owned by
Roche Holdings, the Swiss pharmaceutical company, was driven by the view that
the stock was selling at a significant discount to the option price by Roche to
buy the rest of Genentech. The Fund enjoyed a strong return on its investment in
Genentech as Roche exercised its option. In addition, two of Genentech's
products, Rituxin and Herceptin, have proven to be successful antibodies aimed
at attacking cancer cells with minimal side effects. Stryker Corp., which
develops, manufactures and markets specialty surgical and medical products
including orthopedic implants, made a major acquisition during 1998 that diluted
its earnings per share. However, the Fund purchased shares in Stryker at that
time with the belief that the company's management could resume generating a 20%
growth rate beginning in 2000. The majority of investors came to the same
conclusion, and the stock has performed very well. Bausch & Lomb reinvented
itself from a company that had made some ill-advised acquisitions to one that is
now more focused on its core optical business. For example, investors frowned
upon its acquisition of Ray-Ban, a sun glass maker, as well as other divisions
unrelated to its Bausch & Lomb franchise. A new management team has
Page 9
<PAGE>
Dresdner RCM Biotechnology Fund
Management's Performance Review
refocused the firm on its core business -- optical products such as contact
lenses, optical-related pharmaceutical products and lasers for refractive
surgery. The stock has responded favorably to this new emphasis.
Aside from all of these positives, the Fund's high concentration in
small cap companies was a disadvantage compared to the Index, which tends to
focus on larger-cap biotech stocks. The larger cap stocks generally performed
better than small caps in the first six months of the year.
OUTLOOK
The increased consolidation activity in biotechnology is driven by
several major factors. First, the capital markets have not been very active for
many of these biotechnology companies, particularly those that are in a
developmental stage and in need of funding. One way for biotech companies to
obtain the needed financing is to get acquired by large pharmaceutical
manufacturers, which have strong earnings and still-rich valuations. In turn,
the large drug companies seek to acquire superior technology that the biotech
companies have to offer.
Second, the Financial Accounting Standards Board's elimination of the
pooling method of accounting for mergers effective in 2001 will create an
incentive for biotech companies to finalize any planned partnerships via pooling
before the new rule goes into effect. Under the pooling method, there is no
earnings dilution for the acquirer. The alternative method, purchase accounting,
requires the acquirer to write off intangible assets such as good will over a
period of years, which damages consolidated earnings. In a market that is
extremely sensitive to earnings performance, avoiding such dilution could create
an urgency to complete transactions.
Finally, biotechnology as an industry is increasingly emerging from the
development phase to a point where its companies are producing products and
earnings. Technological advances as well as the increased life expectancies of
the world's population will support increasing demand for biotechnology products
for many years to come. As investors view the Medicare debate's adverse impact
on large pharmaceutical companies, biotechnology becomes the logical recipient
for those health care investment dollars.
Page 10
<PAGE>
Dresdner RCM Biotechnology Fund
Total Return Index Comparison(d)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CLASS N NASDAQ BIOTECH AMEX BIOTECH
SHARES INDEX (B) RUSSELL 2000 INDEX (C) INDEX (A)
<S> <C> <C> <C> <C>
12/97 $10,000 $10,175 $10,071 $10,042
1/98 $10,260 $10,140 $9,912 $9,734
2/98 $10,490 $10,572 $10,644 $9,936
3/98 $10,590 $11,363 $11,083 $10,791
4/98 $10,470 $11,107 $11,144 $10,830
5/98 $10,350 $10,719 $10,543 $9,971
6/98 $10,040 $10,649 $10,565 $9,079
7/98 $10,110 $10,971 $9,710 $8,531
8/98 $7,930 $8,560 $7,824 $6,462
9/98 $9,110 $10,692 $8,437 $8,618
10/98 $9,880 $11,585 $8,781 $10,146
11/98 $10,560 $11,987 $9,241 $10,116
12/98 $11,776 $14,681 $9,813 $11,446
1/99 $12,383 $16,183 $9,943 $12,147
2/99 $11,776 $15,235 $9,138 $10,931
3/99 $11,518 $16,728 $9,281 $11,558
4/99 $11,261 $15,261 $10,112 $11,817
5/99 $11,436 $16,436 $10,260 $12,434
6/99 $12,795 $17,029 $10,724 $13,252
$10,000 Investment (12/30/97-6/30/99)(e)
</TABLE>
PERFORMANCE(D)
JUNE 30, 1999
<TABLE>
<CAPTION>
CUMULATIVE
SINCE SINCE
YTD(F) 1 YEAR INCEPTION INCEPTION
<S> <C> <C> <C> <C>
Class N
Average Annual Total Return(e) 8.65% 27.56% 17.82% 27.95%
</TABLE>
The data above represents past performance of the Fund and may not be
indicative of future performance. The investment return and principal value of
an investment in the Fund will fluctuate, so that shares, when redeemed, may be
worth more or less than their original cost.
- --------------------------------
(a) The American Stock Exchange Biotechnology Index is an equal-dollar
weighted index that attempts to measure the performance of a cross section
of companies in the biotechnology industry that are primarily involved in
the use of biological processes to develop products or provide services.
This Index was developed with a base level of 200 stocks as of October 18,
1991.
(b) The NASDAQ Biotechnology Index is a capitalization-weighted index that
attempts to measure the performance of all NASDAQ stocks in the
biotechnology sector. This Index was developed with a base value of 200
stocks as of November 1, 1993.
(c) The Russell 2000 Index is composed of the 2,000 smallest securities in the
Russell 3000 Index, which is composed of the 3,000 largest U.S. companies
based on market capitalization and represents approximately 98% of the
investable U.S. equity market.
(d) Returns assume reinvestment of all dividends and capital gains
distributions at net asset value.
(e) Class N shares began operations on December 30, 1997.
(f) Unannualized.
Page 11
<PAGE>
Dresdner RCM Biotechnology Fund
Portfolio of Investments
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY EQUITY INVESTMENTS NET ASSETS (NOTE 1)
- -----------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
HEALTH CARE SECTOR 92.8%
DRUGS AND HOSPITAL SUPPLIES 82.3%
2,800 US Algos Pharmaceutical Corp. * $ 61,775
2,800 US Alkermes Inc. * 64,750
5,400 US Alza Corp. * 274,725
4,500 US American Home Products Corp. 258,750
2,600 US Amgen Inc. * 158,275
2,300 US Aviron * 66,125
3,100 US Biogen Inc. * 199,369
2,100 US Bristol Myers Squibb Co. 145,793
7,600 US Coulter Pharmaceutical Inc. * 171,475
2,900 US Eli Lilly & Co. 207,712
9,800 US Enzon Inc. * 202,737
5,400 US Forest Laboratories Inc. * 249,750
2,600 UK Glaxo Wellcome PLC (ADR) 146,867
6,100 US MedImmune Inc. * 413,275
7,000 US PathoGensis Corp. * 98,875
4,600 CA QLT PhotoTherapeutics Inc. * 253,000
8 CH Roche Holdings AG 82,234
4,900 US SangStat Medical Corp. * 84,525
2,400 US Sepracor Inc. * 195,000
5,000 US SUGEN Inc. * 147,500
3,600 IS Teva Pharmaceutical Industries Ltd. 176,400
3,000 US Transkaryotic Therapies Inc. * 99,000
3,400 US Warner Lambert Co. 235,875
2,900 US Watson Pharmaceuticals Inc. * 91,133
--------------
4,084,920
--------------
HEALTH CARE SERVICES 10.5%
10,200 US Inhale Therapeutic Systems * 242,888
5,000 US Mylan Laboratories Inc. 132,500
2,600 US Pharmacia & Upjohn Inc. 147,355
--------------
522,743
--------------
TOTAL EQUITY INVESTMENTS (COST $4,279,822) 92.8% 4,607,663
--------------
SHORT-TERM INVESTMENTS
MONEY MARKET FUNDS 2.9%
72,054 US SSgA Money Market Fund 72,054
72,054 US SSgA U.S. Government Money Market Fund 72,054
--------------
TOTAL SHORT-TERM INVESTMENTS (COST $144,108) 2.9% 144,108
--------------
--------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 12
<PAGE>
Dresdner RCM Biotechnology Fund
Portfolio of Investments
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
NET ASSETS (NOTE 1)
<S> <C> <C>
- ----------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (COST $4,423,930) ** 95.7% $ 4,751,771
OTHER ASSETS LESS LIABILITIES 4.3% 213,095
-------------
NET ASSETS 100.0% $ 4,964,866
-------------
-------------
</TABLE>
- --------------------------------
* Non-income producing security
ADR American Depository Receipt
Tax Information:
** At June 30, 1999, the aggregate cost of investments for book and Federal
income tax was the same. Gross aggregate unrealized appreciation
(depreciation) for all securities is as follows:
<TABLE>
<S> <C>
Unrealized appreciation $ 430,671
Unrealized depreciation (102,830)
---------
Net unrealized appreciation $ 327,841
---------
---------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fund's investments in securities at June 30, 1999, categorized by country:
<TABLE>
<CAPTION>
% OF NET ASSETS
--------------------------------------------
COUNTRY SHORT-TERM
COUNTRY CODE EQUITIES AND OTHER TOTAL
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Canada CA 5.1% 5.1%
Israel IS 3.5% 3.5%
Switzerland CH 1.7% 1.7%
United Kingdom UK 3.0% 3.0%
United States US 79.5% 7.2% 86.7%
--- -- ----------
Total 92.8% 7.2% 100.0%
--- -- ----------
--- -- ----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 13
<PAGE>
Dresdner RCM Tax Managed Growth Fund
Management's Performance Review
After tripling the performance of the market in the first quarter, but
giving back some excess returns when value outperformed growth in the second
quarter, the Dresdner RCM Tax Managed Growth Fund still handily exceeded its
benchmark in the first half of 1999. For the six months ended June 30, 1999, the
Dresdner RCM Tax Managed Growth Fund posted a total return of 21.30% and 21.20%
for I Class and N Class, respectively. In comparison, the S&P 500 Index returned
12.38%.
MARKET REVIEW
The first quarter of 1999 was a continuation of 1998: large cap growth
stocks were the clear market leaders. Although cyclicals and value stocks were
starting to perform better during the first few weeks of the year, the Brazilian
currency devaluation refocused investors on certainty and high quality. However,
by April, it was clear that the U.S. economy was performing much stronger than
expected, Asian economies appeared to be recovering and there was a hint of
inflation, starting with the rapid rise in energy prices. As a result, basic
industry and commodity companies that had been very depressed began to rebound.
Small and midcap stocks also benefited from this shift in investor preference
away from large cap growth.
At the same time, two major growth sectors -- certain areas of
technology and health care -- had clouds on the horizon. In technology,
investors became concerned that corporations will stop buying equipment and
software until after the Y2K issue is resolved. In health care, Congressional
debate began over whether Medicare will be expanded to cover prescription drugs,
causing concerns that the government will exert price controls and thereby
negatively impact the profitability of the pharmaceutical industry.
FACTORS AFFECTING PERFORMANCE
With a focus on long-term performance, Dresdner RCM, the investment
manager of the Fund, invests in companies that have tremendous growth potential
well into the next century. In Dresdner RCM's opinion, the most attractive
sectors are technology, telecommunications and health care. As of June 30, 1999,
the Fund's top holdings included Nokia, Microsoft, Tyco International, General
Electric, MCI WorldCom, Cisco Systems, Amgen, Eli Lilly and Charles Schwab.
To be sure, some of these companies experienced significant volatility
in the second quarter of 1999 as interest rates were rising and investors were
shifting away from growth to value. For example, Charles Schwab, the San
Francisco-based brokerage firm that is widely recognized as the industry pioneer
in Internet-based trading and research, was in the center of the difficult
environment for Internet and financial services companies. However,
Dresdner RCM continues to have confidence that Schwab's management is customer
focused and that the company is able to differentiate itself in terms of service
and reliability from its online competitors. In spite of the volatile second
quarter, Schwab was still a strong contributor to performance during the period.
In addition to a shift from growth to value during the second quarter,
investors also began to favor smaller cap stocks. That was an advantage for the
Fund as it invests in stocks across all market capitalization ranges. The Fund
thus tends to hold a heavier weighting in smaller cap companies than the S&P 500
Index. As of June 30, 1999, about 8% of the portfolio had a market cap under $3
billion, versus about 1.3% for the S&P 500 Index. About 71.5% of the portfolio's
market capitalization was over $20 billion, compared to 77% for the S&P 500
Index.
Offsetting these positive factors were pharmaceutical holdings such as
Eli Lilly and Pfizer, which performed poorly during the second quarter due to
the Medicare issue. In addition, consumer non-durables such as Coca-Cola and
Gillette underperformed as weak currencies in emerging markets damaged profits.
Because income tax ramifications of any trade are a major consideration
for this Fund, Dresdner RCM routinely performs a "Break Even" analysis to
determine whether a stock with large gains should be sold if it means incurring
a heavy tax burden. In addition, stocks that may not be working well in the
short-run may be held in the portfolio if Dresdner RCM continues to have
confidence in the investment over the long term. As a result of this buy and
hold strategy, the portfolio tends to be relatively concentrated, with
investments in 30 to 40 companies.
Tax considerations of investments often help to determine the timing of
a transaction. For example, in the first half of the year, Dresdner RCM utilized
unrealized losses by reducing the pharmaceutical weight to offset
Page 14
<PAGE>
Dresdner RCM Tax Managed Growth Fund
Management's Performance Review
gains realized from the sale of Priceline.com. Although Dresdner RCM's analysts
firmly believed in Priceline.com and its business model, the stock price had
reached a level beyond which it could be justified for the portfolio, and it was
sold. The fact that the gains could be used to offset losses in other parts of
the portfolio was an added bonus.
Another tax-oriented transaction during the six month period ended June
30, 1999, was Dresdner RCM's swap of Disney for Time Warner. Because the
cost-basis of Disney was relatively high, there was little tax consequence of
selling Disney to buy Time Warner, a company that Dresdner RCM believes has
greater long-term growth prospects. At the same time, Dresdner RCM wanted to
continue the Fund's media and cable programming exposure and believed that
Disney was struggling to perform in certain business segments. Had Disney's cost
basis been too low, the "Break Even" analysis would have determined that the tax
consequences outweighed the decision to sell Disney in order to buy Time Warner.
OUTLOOK
Over the next six months, Dresdner RCM is likely to increase the Fund's
weighting in technology, despite the concerns over Y2K. Although there will
likely be volatility as 1999 draws to a close, the uncertainty creates
opportunity for a long-term investor. Dresdner RCM is also likely to add more
exposure to the energy sector, where the Fund has been underweighted. Although
the pharmaceutical industry is likely to be a volatile area until after the 2000
election, there are no plans to further reduce the weighting of this sector in
the portfolio. In terms of demographics, new products, consolidation and
profitability, the industry remains attractive when properly viewed from a long
term perspective.
Page 15
<PAGE>
Dresdner RCM Tax Managed Growth Fund
Total Return Index Comparison(b)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
Class I Shares S&P 500 Stock Index (a)
<S> <C> <C>
12/31/98 10,000 10,000
1/31/99 10,790 10,418
2/28/99 10,510 10,094
3/31/99 11,610 10,498
4/30/99 11,500 10,904
5/31/99 11,130 10,647
6/30/99 12,130 11,238
$10.000 Investment (12/31/98-6/30/99) (c)(e)(f)
</TABLE>
PERFORMANCE(B)
JUNE 30, 1999
<TABLE>
<CAPTION>
CUMULATIVE
SINCE
YTD(G) INCEPTION
<S> <C> <C>
Class I
Average Annual Total Return(c) 21.30% 21.30%
Class N
Average Annual Total Return(d)(e)(f) 21.20% 21.20%
</TABLE>
The data above represents past performance of the Fund and may not be
indicative of future performance. The investment return and principal value of
an investment in the Fund will fluctuate, so that shares, when redeemed, may be
worth more or less than their original cost.
- --------------------------------
(a) The Standard & Poor's 500 Stock Index is a capitalization-weighted index
of 500 stocks that attempts to measure performance of the board domestic
economy through changes in the aggregate market value of 500 stocks
representing major industries.
(b) Returns assume reinvestment of all dividends and capital gains
distributions at net asset value.
(c) Class I shares commenced operations on December 31, 1998.
(d) Class N shares commenced operations on February 12, 1999.
(e) For periods prior to February 12, 1999, figures reflect Class I
performance. From the inception date February 12, 1999, figures reflect
actual Class N performance, including the effect of Rule 12b-1 fees.
(f) The value of a $10,000 investment for Class N is $12,120 for the period
from 12/31/98 - 6/30/99. The performance of the Class N shares are lower due
to the effects of 12b-1 fees.
(g) Unannualized.
Page 16
<PAGE>
Dresdner RCM Tax Managed Growth Fund
Portfolio of Investments
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY EQUITY INVESTMENTS NET ASSETS (NOTE 1)
- -----------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
CONSUMER NON-DURABLES SECTOR 22.2%
BEVERAGE/TOBACCO 1.7%
375 US Coca Cola Co. $ 23,438
HOUSEHOLD/RELATED NON-DURABLES 7.1%
900 US Estee Lauder Co. Inc. 45,112
500 US Gillette Co. 20,500
700 US Scotts Co. Class A * 33,338
--------------
98,950
--------------
LEISURE TIME PRODUCTS/SERVICES 4.6%
400 US Harley Davidson Inc. 21,750
1,000 US McDonalds Corp. 41,312
--------------
63,062
--------------
RETAIL TRADE 8.8%
800 US Bed Bath & Beyond Inc. * 30,800
300 US Costco Cos. Inc. * 24,019
450 US Nike Inc. (Class B) 28,491
1,300 US Walgreen Co. 38,187
--------------
121,497
--------------
CYCLICAL/CAPITAL GOODS SECTOR 8.9%
ELECTRICAL EQUIPMENT 4.1%
500 US General Electric Co. 56,500
INDUSTRIAL EQUIPMENT 4.8%
700 BH Tyco International Ltd. 66,325
ENERGY SECTOR 2.2%
ENERGY 2.2%
850 US Weatherford International Inc. 31,131
HEALTH CARE SECTOR 17.9%
DRUGS AND HOSPITAL SUPPLIES 14.9%
400 US Algos Pharmaceutical Corp. * 8,825
800 US Amgen Inc. * 48,700
700 US Eli Lilly & Co. 50,138
400 US Johnson & Johnson 39,200
200 US Pfizer Inc. 21,950
550 US Warner Lambert Co. 38,156
--------------
206,969
--------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 17
<PAGE>
Dresdner RCM Tax Managed Growth Fund
Portfolio of Investments
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY EQUITY INVESTMENTS NET ASSETS (NOTE 1)
- -----------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
HEALTH CARE SERVICES 3.0%
700 US CareInsite Inc. * $ 33,075
350 US Inhale Therapeutic Systems * 8,334
--------------
41,409
--------------
INTEREST-SENSITIVE SECTOR 9.7%
BANKING 3.1%
500 US State Street Corp. 42,688
GENERAL FINANCE 4.7%
600 US Charles Schwab Corp. 65,925
INSURANCE 1.9%
225 US American International Group Inc. 26,339
TECHNOLOGY SECTOR 22.4%
COMPUTERS/OFFICE EQUIPMENT 3.9%
350 US Hewlett-Packard Co. 35,175
150 US International Business Machines 19,387
--------------
54,562
--------------
ELECTRONICS/NEW TECHNOLOGY 12.1%
1,000 US Cisco Systems Inc. * 64,500
500 US Intel Corp. 29,750
800 FI Nokia Corp. (ADR) 73,250
--------------
167,500
--------------
TECHNOLOGY SERVICES 6.4%
150 US America Online Inc. 16,575
800 US Microsoft Corp. * 72,150
--------------
88,725
--------------
TELEMEDIA/SERVICES SECTOR 14.3%
BUSINESS SERVICES 3.5%
1,400 US Pittway Corp. Class A 47,863
COMMUNICATION SERVICES 9.2%
200 US Global TeleSystems Group Inc. * 16,200
700 US MCI WorldCom Inc. * 60,244
200 UK Vodafone AirTouch PLC (ADR) 39,400
250 US WinStar Communications Inc. * 12,187
--------------
128,031
--------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 18
<PAGE>
Dresdner RCM Tax Managed Growth Fund
Portfolio of Investments
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY EQUITY INVESTMENTS NET ASSETS (NOTE 1)
- -----------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
MEDIA 1.6%
300 US Time Warner Inc. $ 22,050
--------------
TOTAL EQUITY INVESTMENTS (COST $1,142,287) 97.6% 1,352,964
--------------
SHORT-TERM INVESTMENTS
MONEY MARKET FUNDS 1.2%
8,096 US SSgA Money Market Fund 8,096
8,096 US SSgA U.S. Government Money Market Fund 8,096
--------------
TOTAL SHORT-TERM INVESTMENTS (COST $16,192) 1.2% 16,192
--------------
TOTAL INVESTMENTS (COST $1,158,479) ** 98.8% 1,369,156
OTHER ASSETS LESS LIABILITIES 1.2% 16,704
--------------
NET ASSETS 100.0% $ 1,385,860
--------------
--------------
</TABLE>
- --------------------------------
* Non-income producing security
ADR American Depository Receipt
Tax Information:
** At June 30, 1999, the aggregate cost of investments for book and Federal
income tax was the same. Gross aggregate unrealized appreciation
(depreciation) for all securities is as follows:
<TABLE>
<S> <C>
Unrealized appreciation $ 233,396
Unrealized depreciation (22,719)
-------------
Net unrealized
appreciation $ 210,677
-------------
-------------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fund's investments in securities at June 30, 1999 categorized by country:
<TABLE>
<CAPTION>
% OF NET ASSETS
------------------------------------------
COUNTRY SHORT-TERM
COUNTRY CODE EQUITIES AND OTHER TOTAL
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
Bermuda BH 4.8% 4.8%
Finland FI 5.3% 5.3%
United Kingdom UK 2.8% 2.8%
United States US 84.7% 2.4% 87.1%
--- --- ----------
Total 97.6% 2.4% 100.0%
--- --- ----------
--- --- ----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 19
<PAGE>
Dresdner RCM Global Small Cap
Management's Performance Review
Continuing strength in Japanese small cap stocks and the Fund's
significantly increased weighting in Japan explained much of Global Small Cap
Fund's outperformance during the first half of 1999. For the six months ended
June 30, 1999, the Dresdner RCM Global Small Cap Fund achieved a total return of
14.47% and 14.31% for the Class I and Class N shares, respectively. In
comparison, the MSCI World Small Cap Index returned 11.06% while the Salomon
Smith Barney Extended Market Index returned 6.93%.
MARKET REVIEW
Japan's small cap sector, particularly in technology, was among the best
markets in the world during the first half of 1999 as investors expected
Internet usage in Japan to mirror the growth already registered in America. Less
dramatically, the U.S. small cap market began to improve, particularly in the
second quarter, as investors became more comfortable taking more risk on the
assumption that the U.S. economy was on a stable course. However, European
markets within the European Monetary Union lagged in the face of rising bond
yields and a depreciating euro currency. Although the climate in emerging
markets such as Latin America and Asia excluding Japan was significantly better
compared to 1998, the Fund's holdings in those markets were relatively small.
Overall, global small cap stocks out performed large caps by 3.2% (for the six
months ended June 30, 1999), the first such outperformance in a number of years.
FACTORS AFFECTING PERFORMANCE
At the beginning of the year, Japan's weighting in the Fund was under
2%, compared to 16% for the benchmark, while the U.S. component was nearly 50%
compared to 39% for the benchmark. By June 30, 1999, the weighting was nearly
15% in Japan and 41% in the U.S., which represents a major shift in the Fund's
assets and indicates Dresdner RCM Global Investors LLC's
("Dresdner RCM"), the investment manager of the Fund, conviction that the
Japanese market's revival was likely not a short-term phenomenon. Dresdner RCM's
ability to make such an aggressive move accounted for much of the Fund's
outperformance during the first half of 1999.
During the second quarter, the U.S. component of the Fund generated a
22.3% return, significantly higher than the Russell 2000 Index, which was up
15.6%. The Fund's strong performance was driven by overweight positions in
technology and telecommunications. For example, Cypress Semiconductor, one of
the Fund's largest U.S. holdings in the portfolio, benefited from the upturn in
the semiconductor cycle. Like many such "capacity plays," Cypress
Semiconductor's profitability is directly impacted by an increase in sales,
since most of the company's costs are fixed. In telecommunications, Winstar
Communications has benefited from explosive growth in the market for broad-band
connectivity to the Internet. Outside of technology, NCO Group, which provides
accounts receivable management for corporations, benefited from the outsourcing
trend in which companies provide clients with a non-core service.
Outside of the U.S., the Fund continues to find excellent opportunities
throughout Asia, Europe and other parts of the world. In Japan, the Fund
continued to focus on the semiconductor industry and allied fields. For
instance, Taiyo Ink Manufacturing, which produces the insulating ink that lines
the boards on which the semi-conductors are mounted, performed very well during
the period as the demand for semiconductors soared globally. In Israel, the Fund
invested in an initial public offering from Backweb, a company that is adding
depth and power to the e-mail process by, for example, allowing users to
prioritize messages. In Canada, Research in Motion, which makes a hand-held
wireless device that allows the user to send and receive e-mail while in remote
locations, continued to perform well. In Denmark, Vestas Wind Systems, a
windmill maker, is generating impressive orders from customers around the world
seeking power generation that does not cause environmental damage.
Over the past several months, Dresdner RCM sold a half-dozen of the
Fund's holdings in the Netherlands, as investors seem disinterested in
small-caps in that market. In general, Europe's slow growth environment will
likely continue to present challenges in the small cap arena.
In Latin America, the Fund owns one stock, Group Continental, a Mexican
Coca-Cola bottler that continues to trade at about five times cash flow. This is
a market where most of the cash flows are institutional, and those buyers are
looking for large cap stocks. The Fund's light weighting in Latin America
reflects that bias, as well as Dresdner RCM's perception that small cap
companies in Latin America tend to be of lower quality and represent an
unacceptable level of risk.
Page 20
<PAGE>
Dresdner RCM Global Small Cap
Management's Performance Review
In general, Dresdner RCM's strategy for the Fund is to invest in
high-quality small cap growth stocks using bottom-up analysis. Although the
investment may occasionally be an IPO, it is not a focus of the Fund.
Regardless, Dresdner RCM uses the same discipline, insisting that the company
have sustained earnings growth, unique market niches and strong management with
appropriate incentives.
Dresdner RCM's global research effort, their access to top corporate
executives, as well as Grassroots-SM- Research, are particularly valuable in
markets that are less covered by Wall Street.
OUTLOOK
The small cap sector in Japan is by far the most vibrant part of that
nation's economy, with much higher returns on equity, low head count, better
management incentives and sharper focus. They represent the best solution for
the Japanese economy to emerge from its decade-long malaise. As Japan's economy
improves, the rest of Asia stands to benefit, which is a plus for small cap
investing throughout the Pacific Rim.
Based on investment fundamentals, the outlook for small cap stocks
around the world is promising. Generally, the price/earnings ratio gap between
the large cap and small cap sectors is still very wide. Dresdner RCM believes
that based on relative valuation, the small cap asset class has only just
started to see the signs of recovery.
Page 21
<PAGE>
Dresdner RCM Global Small Cap Fund
Total Return Index Comparison(c)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
Class I Shares Salomon EMI (a) MSCI World Small Cap (b)
<S> <C> <C> <C>
12/31/96 $10,000 $10,000 $10,000
1/31/97 $10,290 $10,021 $10,061
2/28/97 $10,010 $10,005 $10,043
3/31/97 $9,410 $9,665 $9,608
4/30/97 $9,320 $9,620 $9,402
5/31/97 $10,730 $10,370 $10,309
6/30/97 $11,750 $10,689 $10,627
7/31/97 $12,280 $10,978 $10,768
8/31/97 $12,320 $10,846 $10,491
9/30/97 $13,260 $11,313 $10,757
10/31/97 $12,440 $10,838 $10,193
11/30/97 $12,410 $10,645 $9,723
12/31/97 $12,548 $10,647 $9,431
1/31/98 $12,446 $10,711 $9,613
2/28/98 $13,827 $11,501 $10,449
3/31/98 $15,071 $11,980 $10,739
4/30/98 $15,705 $12,039 $10,810
5/31/98 $15,388 $11,799 $10,536
6/30/98 $15,784 $11,645 $10,270
7/31/98 $15,524 $11,152 $9,784
8/31/98 $12,197 $9,366 $8,160
9/30/98 $12,096 $9,589 $8,143
10/31/98 $12,707 $10,162 $8,717
11/30/98 $14,144 $10,599 $9,183
12/31/98 $14,968 $11,084 $9,376
1/31/99 $15,101 $11,023 $9,383
2/28/99 $14,049 $10,528 $8,960
3/31/99 $14,375 $10,756 $9,284
4/30/99 $15,065 $11,461 $9,990
5/31/99 $15,065 $11,393 $9,869
6/30/99 $17,134 $11,854 $10,413
$10,000 Investment (12/31/96-6/30/99)((d)(f)(g))
</TABLE>
PERFORMANCE(C)
JUNE 30, 1999
<TABLE>
<CAPTION>
CUMULATIVE
SINCE SINCE
YTD(H) 1 YEAR INCEPTION INCEPTION
<S> <C> <C> <C> <C>
Class I
Average Annual Total Return(d) 14.47% 8.55% 24.04% 71.34%
Class N
Average Annual Total
Return(e)(f)(g) 14.31% 8.40% 23.97% 71.10%
</TABLE>
The data above represents past performance of the Fund and may not be
indicative of future performance. The investment return and principal value of
an investment in the Fund will fluctuate, so that shares, when redeemed, may be
worth more or less than their original cost.
- --------------------------------
(a) The Salomon Brothers Extended Market Index ("EMI") is a component of the
Salomon Brothers Broad Market Index ("BMI") which includes listed shares of
5,409 companies with a total available market capitalization of at least the
local equivalent of US$100 million on the last business day of May each
year. The BMI consists of two components: the Primary Market Index ("PMI")
is the large capitalization stock component and the EMI is the small
capitalization stock component. The PMI universe is defined as those stocks
falling within the top 80% of the cumulative available capital level in each
country. The EMI includes the bottom 20% of the cumulative available capital
level in each country.
(b) The Morgan Stanley Capital International ("MSCI") World Global Small Cap
Index is a market capitalization weighted index composed of companies
representative of the market structure of 22 developed market countries in
North America, Europe, and the Asia/Pacific region. The Index is created by
selecting companies within the market capitalization range of US$200 -- $800
million. The Index aims to represent 40% of the Small Cap universe within
each country by capturing 40% of each industry. The Index is calculated
without dividends, with net or with gross dividends reinvested, in both U.S.
Dollars and local currencies.
(c) Returns assume reinvestment of all dividends and capital gains
distributions at net asset value.
(d) Class I shares commenced operations on December 31, 1996.
(e) Class N shares commenced operations on March 10, 1999.
(f) For periods prior to March 10, 1999, figures reflect Class I performance.
From the inception date March 10, 1999, figures reflect actual Class N
performance, including the effect of Rule 12b-1 fees.
(g) The value of a $10,000 investment for Class N is $17,110 for the period
from 12/31/96 - 6/30/99. The performance of the Class N shares are lower due
to the effects of 12b-1 fees.
(h) Unannualized.
Page 22
<PAGE>
Dresdner RCM Global Small Cap Fund
Portfolio of Investments
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY EQUITY INVESTMENTS NET ASSETS (NOTE 1)
- -------------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
CONSUMER DURABLES SECTOR 1.8%
AUTOMOTIVE RELATED 1.1%
2,100 US Dura Automotive Systems Inc. * $ 69,825
CONSUMER DURABLES 0.7%
250 DE Schneider Rundfunkwerke AG * 48,728
CONSUMER NON-DURABLES SECTOR 19.2%
BEVERAGE/TOBACCO 1.7%
2,200 ES Baron de Ley S.A. * 76,005
20,000 MX Grupo Continental S.A. 31,288
--------------
107,293
--------------
FOOD/FOOD PROCESSING 2.6%
3,140 JP Hokuto Corp. 168,628
HOUSEHOLD/RELATED NON-DURABLES 2.2%
3,900 FI Huhtamaki Oyj Series I 141,975
LEISURE TIME PRODUCTS/SERVICES 3.1%
1,400 US Dave & Buster's Inc. * 40,600
22,500 UK First Choice Holidays PLC 67,564
6,900 ES NH Hoteles S.A. 88,378
--------------
196,542
--------------
RETAIL TRADE 9.6%
2,300 US CSK Auto Corp. * 62,100
900 CH Distefora Holding AG * 92,629
80,000 HK Giordano International Ltd. 56,196
3,200 JP Homac Corp. 80,637
185 CH Selecta Group - Registered Shares 73,781
3,400 ES Superdiplo S.A. * 75,386
5,700 US Trans World Entertainment Corp. * 64,125
2,000 JP Yamada Denki 109,554
--------------
614,408
--------------
CYCLICAL/CAPITAL GOODS SECTOR 11.4%
BUILDING/CONSTRUCTION 0.5%
28,200 SG Allgreen Properties Ltd. * 30,478
CHEMICAL/TEXTILES 2.9%
2,000 JP Taiyo Ink Manufacturing Co. Ltd. 186,721
ELECTRICAL EQUIPMENT 1.0%
1,050 DK Bang & Olufsen Holding A/S Series B 66,726
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 23
<PAGE>
Dresdner RCM Global Small Cap Fund
Portfolio of Investments
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY EQUITY INVESTMENTS NET ASSETS (NOTE 1)
- -------------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
INDUSTRIAL EQUIPMENT 4.3%
8,500 IT Industria Macchine Automatiche $ 56,715
14,000 IT Interpump Group SpA 60,350
2,200 NO Tomra Systems ASA 82,721
900 DK Vesta Wind Systems A/S * 79,466
--------------
279,252
--------------
RAW/BASIC MATERIALS 1.3%
6,400 US Metals USA Inc. * 81,600
TRANSPORTATION SERVICES 1.4%
1,650 DE Sixt AG Non-Voting Pfd. 88,483
HEALTH CARE SECTOR 7.0%
DRUGS AND HOSPITAL SUPPLIES 4.7%
3,700 US Anesta Corp. * 75,619
2,200 FR Genset S.A. (Sponsored ADR) * 34,375
3,000 DK H Lundbeck A/S 80,930
1,500 SE Nobel Biocare AB 22,054
3,400 UK Shire Pharmaceuticals Group PLC (ADR) * 88,400
--------------
301,378
--------------
HEALTH CARE SERVICES 2.3%
500 CH Gretag Imaging Holdings 48,324
2,400 US Pharmaceutical Product Development Inc. * 65,700
2,300 US Veterinary Centers of America Inc. * 31,194
--------------
145,218
--------------
INTEREST-SENSITIVE SECTOR 2.8%
GENERAL FINANCE 2.8%
2,500 JP Mycal Card Inc. 113,603
10,100 US UniCapital Corp. * 63,756
--------------
177,359
--------------
TECHNOLOGY SECTOR 37.4%
COMPUTERS/OFFICE EQUIPMENT 1.3%
4,000 SE Maldata AB Series B 52,225
6,300 UK Skillsgroup PLC 29,444
--------------
81,669
--------------
ELECTRONICS/NEW TECHNOLOGY 10.4%
900 DE Aixtron AG 74,159
3,500 US Artesyn Technologies Inc. * 77,656
2,600 US Atmel Corp. * 68,087
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 24
<PAGE>
Dresdner RCM Global Small Cap Fund
Portfolio of Investments
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY EQUITY INVESTMENTS NET ASSETS (NOTE 1)
- -------------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
ELECTRONICS/NEW TECHNOLOGY (CONTINUED)
3,100 US Brooks Automation Inc. * $ 83,894
11,900 US Cypress Semiconductor Corp. * 196,350
450 US Emulex Corp. * 50,034
2,100 UK Filtronic PLC 24,711
1,300 US Microchip Technology Inc. * 61,588
2,000 FI Perlos OYJ * 29,288
--------------
665,767
--------------
TECHNOLOGY SERVICES 25.7%
2,000 JP ARGOTECHNOS 21 Corp. 64,278
2,800 US Aspect Development Inc. * 51,800
10,200 UK Autonomy Corporation PLC * 58,650
8,000 IS BackWeb Technologies Ltd. * 219,000
3,100 US BindView Development Corp. * 73,625
2,800 US Exchange Applications Inc. * 114,100
2,800 US High Speed Access Corp. * 71,750
1,600 US Informatica Corp. * 57,000
1,300 IN Infosys Technologies Ltd. (ADR) 75,400
31 FR Jet Multimedia (Warrants 12/31/99) * 96
6,000 NO Merkantildata ASA 57,925
1,000 JP Nippon System Development 59,487
2,400 CA Open Text Corp. * 72,000
1,600 US Pacific Internet Ltd. * 75,800
1,900 US Pegasus Systems Inc. * 71,131
2,500 UK Psion PLC 32,314
11,900 US Renaissance Worldwide Inc. * 94,828
3,100 US SoftNet Systems Inc. * 86,413
1,000 JP Trend Micro Inc. 168,545
10,700 CA VERSUS Technologies Inc. * 109,888
3,200 US VISTA Information Solutions Inc. * 37,000
--------------
1,651,030
--------------
TELEMEDIA/SERVICES SECTOR 19.5%
BUSINESS SERVICES 5.1%
200 FR Altran Technologies S.A. 52,801
7,500 SE Mandator AB 49,843
2,200 US Metzler Group Inc. * 60,775
2,700 US NCO Group Inc. * 102,600
3,750 US Tetra Tech Inc. * 61,875
--------------
327,894
--------------
COMMUNICATION SERVICES 6.9%
1,000 IS Gilat Satellite Networks Ltd. * 52,500
1,400 US Global TeleSystems Group Inc. * 113,400
4,000 US Intermedia Communications of Florida Inc. * 120,000
1,200 US Network Access Solutions Corp. * 15,975
3,500 CA Research in Motion Ltd. * 69,879
1,400 US WinStar Communications Inc. * 68,250
--------------
440,004
--------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 25
<PAGE>
Dresdner RCM Global Small Cap Fund
Portfolio of Investments
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY EQUITY INVESTMENTS NET ASSETS (NOTE 1)
- -------------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
MEDIA 7.5%
4,100 US Education Management Corp. * $ 85,075
55 DE EM.TV & Merchandising AG 77,423
1,080 DE Kinowelt Medien AG * 48,784
2,800 US SFX Entertainment Inc. Class A 179,200
4,600 ES Telefonica Publicidad e Informacion S.A. * 91,794
--------------
482,276
--------------
TOTAL EQUITY INVESTMENTS (COST $4,999,747) 99.1% 6,353,254
--------------
SHORT-TERM INVESTMENTS
MONEY MARKET FUNDS 0.0%
8 US SSgA Money Market Fund 8
8 US SSgA U.S. Government Money Market Fund 8
--------------
TOTAL SHORT-TERM INVESTMENTS (COST $16) 0.0% 16
--------------
TOTAL INVESTMENTS (COST $4,999,763) ** 99.1% 6,353,270
OTHER ASSETS LESS LIABILITIES 0.9% 56,037
--------------
NET ASSETS 100.0% $ 6,409,307
--------------
--------------
</TABLE>
- --------------------------------
* Non-income producing security.
ADR American Depository Receipt
Tax Information:
** For Federal income tax purposes, cost is $5,006,491 and gross aggregate
unrealized appreciation (depreciation) for all securities is as follows:
<TABLE>
<S> <C>
Unrealized appreciation $ 1,513,562
Unrealized depreciation (166,783)
-----------
Net unrealized
appreciation $ 1,346,779
-----------
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 26
<PAGE>
Dresdner RCM Global Small Cap Fund
Portfolio of Investments
June 30, 1999 (Unaudited)
The Fund's investments in securities at June 30,1999 categorized by country:
<TABLE>
<CAPTION>
% OF NET ASSETS
------------------------------------------
COUNTRY SHORT-TERM AND
COUNTRY CODE EQUITIES OTHER TOTAL
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Canada CA 3.9% 3.9%
Denmark DK 3.5% 3.5%
Finland FI 2.7% 2.7%
France FR 1.4% 1.4%
Germany DE 5.3% 5.3%
Hong Kong HK 0.9% 0.9%
India IN 1.2% 1.2%
Israel IS 4.2% 4.2%
Italy IT 1.8% 1.8%
Japan JP 14.8% 14.8%
Mexico MX 0.5% 0.5%
Norway NO 2.2% 2.2%
Singapore SG 0.5% 0.5%
Spain ES 5.2% 5.2%
Sweden SE 1.9% 1.9%
Switzerland CH 3.3% 3.3%
United Kingdom UK 4.7% 4.7%
United States US 41.1% 0.9% 42.0%
--- -- ----------
Total 99.1% 0.9% 100.0%
--- -- ----------
--- -- ----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 27
<PAGE>
Dresdner RCM Global Technology Fund
Management's Performance Review
Despite rising interest rates, a shift in investor preference from
growth to value and extremely high valuations coming into the year, technology
continued to be among the top performing sectors during the first half of 1999.
For the six months ended June 30, 1999, the Dresdner RCM Global Technology Fund
achieved a total return of 31.53% and 31.44% for the Class I and Class N shares,
respectively. For the period, the Fund outperformed its benchmark, the Lipper
Science and Technology Fund Index, which returned 27.34% while the S&P 500 Index
rose 12.38%.
MARKET REVIEW
The performance of the technology sector was remarkable during the first
half of 1999 even as market conditions for the sector became less favorable.
First, the number of initial and secondary offerings was unprecedented, yet the
market was able to absorb them and still climb higher. Second, interest rates
rose steadily during the period, typically a negative for non-dividend paying,
long-duration technology stocks. Third, investor preference shifted away from
growth and toward cyclical and value stocks in the second quarter-with
technology a notable exception. Fourth, other volatile asset classes, such as
emerging markets, increasingly attracted investors during the period. Despite
all of these obstacles, the broadly defined technology sector was remarkably
resilient during the first half of the year, sustaining only minor, periodic
corrections.
Although the Internet sector was extremely volatile, particularly in the
second quarter, other areas such as telecommunications equipment, semiconductors
and storage management performed very well. One of the most difficult areas was
the personal computer sector, as expectations of a better than normal spring
season proved unfounded. In general, the recovery of Asian markets created a
positive climate for U.S. technology companies, which tend to have a high
exposure to the region.
FACTORS AFFECTING PERFORMANCE
The technology sector's dramatic appreciation, following the Federal
Reserve Board's decisive moves to lower interest rates last fall, was
unprecedented in such a short period of time. Nevertheless, the Fund still
outperformed its benchmark during the first half of 1999, even though Dresdner
RCM, the investment manager of the Fund, expected a more meaningful correction
than actually occurred.
The Internet sector was an extreme example of dramatic upside
performance and volatility. Fortunately, Dresdner RCM was particularly
successful in navigating its ups and downs. After soaring in December, the
Internet sector's momentum began to fade in mid-January and its respective
stocks corrected significantly. Dresdner RCM took advantage of that pause based
on anticipation that first quarter-end Internet traffic figures would be strong.
This turned out to be the case. However, by mid-April, when first-quarter
results were reported, a number of companies, particularly Amazon.com, did not
come through with positive revenue or earnings surprises. As a result, Dresdner
RCM reduced the Fund's Internet position, which was timely, and then added to it
once again as the period was coming to a close. By June 30, 1999, the outlook
for long-duration assets such as Internet stocks improved when the Fed raised
short-term interest rates just 25 basis points and shifted from a tightening to
a neutral bias.
Within the Internet sector, Yahoo! Japan was among the most successful
stocks during the period under review, rising over 900% in dollar terms. At the
time of the purchase, Yahoo! Japan's market capitalization was less than $2
billion while Yahoo! in the U.S. had a market cap of $40 billion. While it is
true that the Internet has not yet penetrated Japanese society to the extent
that it has in the U.S., Japan's population is roughly half that of the U.S.,
and the Fund's managers believe that Yahoo! Japan has significant appreciation
potential as it serves that market. Another successful Japanese Internet
performer was Softbank, which also capitalized on the profound impact that the
Internet is likely to have on Japan, where the consumer has traditionally been
poorly served. In addition, Softbank also owns meaningful stakes in many high
profile U.S. Internet companies.
With the recovery of global markets, telecommunications companies
performed extremely well during the first half of 1999. For example, QUALCOMM, a
global leader in wireless communication technology, has risen 127% since it was
purchased in March. Uniphase, a company whose laser technology plays an
important role in the
Page 28
<PAGE>
Dresdner RCM Global Technology Fund
Management's Performance Review
telecommunications industry's ability to increase the capacity of traffic
carried over fiber-optic networks, announced a merger with JDS Fitel, another
telecommunications infrastructure supplier in the portfolio, which rose 139%
during the first half of the year. Within computer memory storage management,
companies such as EMC, Network Appliance and VERITAS Software performed well,
beneficiaries of the explosion in data traffic and the reduction in disk drive
prices. As of June 30, 1999, the portfolio had no exposure to the personal
computer industry, which was a positive since it was one of the worst performing
areas in technology. However, the Fund's exposure to semiconductor stocks was
also light, and that was a negative for the portfolio because many semiconductor
companies performed well as suppliers to the telecommunications industry.
OUTLOOK
Technology continues to be an area of extremely high valuations -- as
well as exhilarating opportunity and growth. Internet companies with profitable
models which show increasing economies of scale are likely to continue showing
superior performance, whereas many of the other Internet companies that do not
have a profitable business model may fall by the wayside. Dresdner RCM
anticipates that the Fund will continue to be underweighted in PCs and
overweighted in telecommunications equipment manufacturers and component
suppliers that are building infrastructure. Other areas of opportunity include
the cyclical semiconductor industry, currently in the first year of a recovery,
and information technology consulting. With the year 2000 just months away, the
concern over Y2K seems to have diminished in the investment community. Although
there still could be a slowdown in the technology sector due to Y2K, the market
seems to have discounted most of these concerns. Overall, Dresdner RCM believes
that technology continues to present enormous opportunity throughout the rest of
1999 and beyond.
Page 29
<PAGE>
Dresdner RCM Global Technology Fund
Total Return Index Comparison(c)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
Class I Lipper Science & S&P 500
Shares Technology Fund Index (b) Stock Index (a)
<S> <C> <C> <C>
12/27/95 $10,000 $10,000 $10,000
12/31/95 $10,040 $9,952 $10,023
1/31/96 $10,370 $9,897 $10,364
2/29/96 $10,660 $10,314 $10,460
3/31/96 $10,620 $9,857 $10,561
4/30/96 $11,580 $10,840 $10,717
5/31/96 $11,930 $11,098 $10,993
6/30/96 $11,380 $10,332 $11,035
7/31/96 $10,270 $9,565 $10,547
8/31/96 $10,770 $10,055 $10,770
9/30/96 $11,870 $10,987 $11,376
10/31/96 $11,700 $10,822 $11,690
11/30/96 $12,770 $11,837 $12,573
12/31/96 $12,692 $11,626 $12,324
1/31/97 $13,689 $12,542 $13,095
2/28/97 $12,359 $11,408 $13,197
3/31/97 $11,564 $10,549 $12,654
4/30/97 $11,715 $11,007 $13,410
5/31/97 $13,447 $12,317 $14,226
6/30/97 $13,860 $12,432 $14,864
7/31/97 $15,694 $14,157 $16,047
8/31/97 $15,764 $14,245 $15,148
9/30/97 $17,094 $14,849 $15,978
10/31/97 $15,986 $13,279 $15,445
11/30/97 $15,754 $13,166 $16,160
12/31/97 $16,129 $12,537 $16,438
1/31/98 $15,976 $12,759 $16,620
2/28/98 $17,837 $14,277 $17,819
3/31/98 $18,838 $14,394 $18,731
4/30/98 $20,452 $15,012 $18,920
5/31/98 $19,227 $13,911 $18,595
6/30/98 $21,065 $14,727 $19,350
7/31/98 $20,441 $14,588 $19,143
8/31/98 $17,095 $11,850 $16,375
9/30/98 $17,790 $13,248 $17,425
10/31/98 $19,463 $14,259 $18,841
11/30/98 $22,055 $15,858 $19,983
12/31/98 $25,891 $18,423 $21,134
1/31/99 $29,859 $22,018 $20,809
2/28/99 $26,956 $21,333 $18,637
3/31/99 $30,210 $22,186 $20,536
4/30/99 $31,807 $23,045 $20,792
5/31/99 $30,634 $22,501 $20,763
6/30/99 $34,166 $23,750 $23,461
</TABLE>
PERFORMANCE(C)
JUNE 30, 1999
<TABLE>
<CAPTION>
CUMULATIVE
SINCE SINCE
YTD(H) 1 YEAR 3 YEAR INCEPTION INCEPTION
<S> <C> <C> <C> <C> <C>
Class I
Average Annual Total Return(d) 31.53% 62.10% 44.26% 41.90% 241.66%
Class N
Average Annual Total
Return(e)(f)(g) 31.44% 61.99% 44.23% 41.88% 241.43%
</TABLE>
The data above represents past performance of the Fund and may not be
indicative of future performance. The investment return and principal value of
an investment in the Fund will fluctuate, so that shares, when redeemed, may be
worth more or less than their original cost.
- --------------------------------
(a) The Standard & Poor's 500 Stock Index is a capitalization-weighted index
of 500 stocks that attempts to measure performance of the broad domestic
economy through changes in the aggregate market value of 500 stocks
representing major industries.
(b) The Lipper Science & Technology Fund Index is an equally weighted index of
the 10 largest U.S. science and technology mutual funds.
(c) Returns assume reinvestment of all dividends and capital gains
distributions at net asset value.
(d) Class I shares commenced operations on December 27, 1995.
(e) Class N shares commenced operations on January 20, 1999.
(f) For periods prior to January 20, 1999, figures reflect Class I
performance. From the inception date January 20, 1999, figures reflect
actual Class N performance, including the effect of Rule 12b-1 fees.
(g) The value of a $10,000 investment for Class N is $34,143 for the period
from 12/27/95 - 6/30/99. The performance of the Class N shares are lower due
to the effects of 12b-1 fees.
(h) Unannualized.
Page 30
<PAGE>
Dresdner RCM Global Technology Fund
Portfolio of Investments
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY EQUITY INVESTMENTS NET ASSETS (NOTE 1)
- -----------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
CONSUMER DURABLES SECTOR 0.3%
CONSUMER DURABLES 0.3%
1,400 JP Sony Corp. $ 150,947
CYCLICAL/CAPITAL GOODS SECTOR 6.3%
ELECTRICAL EQUIPMENT 3.5%
7,000 JP Hirose Electric Co. Ltd. 726,394
10,600 US Oak Industries Inc. * 463,088
92,000 JP The Furukawa Electric Co. Ltd. 421,857
--------------
1,611,339
--------------
INDUSTRIAL EQUIPMENT 2.8%
13,900 BH Tyco International Ltd. 1,317,025
TECHNOLOGY SECTOR 76.7%
COMPUTERS/OFFICE EQUIPMENT 7.4%
18,400 US E M C Corp. * 1,012,000
15,100 US Electronics for Imaging Inc. * 775,763
4,000 US International Business Machines 517,740
16,500 US Network Appliance Inc. * 921,937
3,400 US Sun Microsystems Inc. * 234,175
--------------
3,461,615
--------------
ELECTRONICS/NEW TECHNOLOGY 29.2%
800 JP Advantest Corp. 87,908
10,200 US Analog Devices Inc. * 511,912
3,600 US Applied Materials Inc. * 265,950
10,000 NL ASM Lithography Holding N.V. * 593,750
14,974 US Cisco Systems Inc. * 965,823
50,000 JP Fujitsu Ltd. 1,005,898
10,800 CA JDS Fitel Inc. * 901,187
10,840 US Motorola Inc. 1,027,090
9,290 FI Nokia Corp. (ADR) 850,616
4,000 US PMC-Sierra Inc. * 236,250
17,080 US QUALCOMM Inc. * 2,450,980
5,900 US Sanmina Corp. * 447,662
14,400 FR STMicroelectronics N.V. NY Registry 999,000
8,960 US Uniphase Corp. * 1,487,360
8,400 US Vitesse Semiconductor Corp. * 566,475
19,980 US Xilinx Inc. (rights) * 1,143,855
--------------
13,541,716
--------------
TECHNOLOGY SERVICES 40.1%
5,700 US Amazon.com Inc. * 713,212
7,280 US America Online Inc. 804,440
20,000 JP ARGOTECHNOS 21 Corp. 642,783
5,208 US At Home Corp. Series A * 280,907
4,400 FR Atos SA * 449,222
13,300 US BMC Software Inc. * 718,200
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 31
<PAGE>
Dresdner RCM Global Technology Fund
Portfolio of Investments
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY EQUITY INVESTMENTS NET ASSETS (NOTE 1)
- -----------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
TECHNOLOGY SERVICES (CONTINUED)
43,000 US Cambridge Technology Partners Inc. * $ 755,187
100 UK CMG PLC 2,636
11,100 US Concord EFS, Inc. * 469,669
6,400 US eBay Inc. * 966,400
19,900 US Exodus Communications Inc. * 2,386,756
3,600 HK Gemstar International Group Ltd. * 234,900
19,200 US I2 Technologies Inc. * 825,600
9,200 US Intuit * 829,150
26,000 UK Logica PLC 273,485
7,000 US Microsoft Corp. * 631,313
9,400 US Network Solutions Inc. * 743,775
6,000 US Siebel Systems Inc. * 398,250
3,300 JP Softbank Corp. 668,255
9,200 US Sterling Commerce Inc. * 335,800
3,800 FR Transiciel SA 403,640
32,800 US UsWeb Corp. * 727,750
14,400 US Verio Inc. * 1,000,800
13,000 US VERITAS Software Co. * 1,234,187
4 JP Yahoo Inc. * 1,497,073
3,512 US Yahoo Inc. * 604,942
--------------
18,598,332
--------------
TELEMEDIA/SERVICES SECTOR 9.4%
COMMUNICATION SERVICES 9.4%
4,200 NL Equant N.V. NY Registry * 395,325
13,500 US Frontier Corp. 796,500
5,800 DE Mannesmann AG 865,506
4,310 US MCI WorldCom Inc. * 370,929
19,600 US Nextel Communications Inc. * 983,675
18,800 US WinStar Communications Inc. * 916,500
--------------
4,328,435
--------------
TOTAL EQUITY INVESTMENTS (COST $29,850,398) 92.7% 43,009,409
--------------
OPTIONS 0.7%
NO. OF
CONTRACTS
310 US Call Option on Newbridge Networks Corp.,
Strike @ $20, Exp. 1/00 329,375
--------------
TOTAL OPTIONS (COST $445,680) 329,375
--------------
TOTAL EQUITY INVESTMENTS AND OPTIONS (COST $30,296,078) 93.4% 43,338,784
--------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 32
<PAGE>
Dresdner RCM Global Technology Fund
Portfolio of Investments
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
FACE
AMOUNT/ % OF MARKET VALUE
SHARES COUNTRY EQUITY INVESTMENTS NET ASSETS (NOTE 1)
- -----------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
SHORT-TERM INVESTMENTS
U.S. GOVERNMENT SECURITIES 8.5%
4,000,000 US U.S. Treasury Bill 4.600% maturing 09/23/99 $ 3,957,113
MONEY MARKET FUNDS 3.9%
906,260 US SSgA Money Market Fund 906,260
906,260 US SSgA U.S. Government Money Market Fund 906,260
--------------
1,812,520
--------------
TOTAL SHORT-TERM INVESTMENTS (COST $5,769,633) 12.4% 5,769,633
--------------
TOTAL INVESTMENTS (COST $36,065,711) ** 105.8% 49,108,417
OTHER ASSETS LESS LIABILITIES (5.8)% (2,698,969)
--------------
NET ASSETS 100.0% $ 46,409,448
--------------
--------------
</TABLE>
- --------------------------------
* Non-income producing security
ADR American Depository Receipt
Tax Information:
** For Federal income tax purposes, cost is $36,450,300 and gross aggregate
unrealized appreciation (depreciation) for all securities is as follows:
<TABLE>
<S> <C>
Unrealized appreciation $ 13,474,058
Unrealized depreciation (815,941)
-------------
Net unrealized
appreciation $ 12,658,117
-------------
-------------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fund's investments in securities at June 30, 1999 categorized by country:
<TABLE>
<CAPTION>
% OF NET ASSETS
------------------------------------------
COUNTRY SHORT-TERM
COUNTRY CODE EQUITIES AND OTHER TOTAL
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Bermuda BH 2.8% 2.8%
Canada CA 2.0% 2.0%
Finland FI 1.8% 1.8%
France FR 4.0% 4.0%
Germany DE 1.9% 1.9%
Hong Kong HK 0.5% 0.5%
Japan JP 11.2% 11.2%
Netherlands NL 2.1% 2.1%
United Kingdom UK 0.6% 0.6%
United States US 65.8% 7.3% 73.1%
--- --- ----------
Total 92.7% 7.3% 100.0%
--- --- ----------
--- --- ----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 33
<PAGE>
Dresdner RCM Global Health Care Fund
Management's Performance Review
Investor preference for value in the second quarter as well as
Congressional debate over Medicare's role in covering prescription drugs cast a
cloud over the health care sector. The Fund's emphasis on specialty
pharmaceutical companies somewhat protected the portfolio against this
environment. For the six months ended June 30, 1999, the Dresdner RCM Health
Care Fund returned -2.76%, significantly outperforming its benchmark, the
Russell Midcap Health Care Index, which returned -13.40%.
MARKET REVIEW
Unlike many other sectors of the economy, the federal government's
actual or projected role has a major impact on the health care industry's
profitability and stock price performance. For example, in recent years, reduced
Medicare reimbursement has made the hospital and health maintenance organization
industries a difficult area for investors. In contrast, one of the major reasons
why the U.S. pharmaceutical industry has had such vibrancy in terms of earnings
and stock price performance -- and why the Fund has shifted significantly to
this sector -- is its free-market system. Unlike most other countries in the
world where the government is the largest purchaser of pharmaceuticals, the U.S.
government has never stepped in as a direct purchaser.
However, for the past several months, the Clinton Administration and
Congress have been discussing the possibility of adding a prescription drug
benefit to the Medicare program, which currently covers most other medical costs
for senior citizens. The possibility that Medicare will be expanded to include
prescription drugs has adversely affected pharmaceutical stocks, and Dresdner
RCM Global Investors LLC ("Dresdner RCM"), the investment manager of the Fund,
believes that it will continue to do so until the issue is resolved. The impact
is greatest on the large, diversified drug companies rather than the niche
players in one or two product categories.
To a lesser extent, another factor affecting the group was the general
migration from growth to value stocks that took place during the second quarter.
As economies rebounded throughout the world, the classic defensive nature of
growth-orientated pharmaceutical companies wasn't as attractive on a relative
basis.
FACTORS AFFECTING PERFORMANCE
Dresdner RCM combines rigorous fundamental research of health care
securities with a disciplined methodology to uncover quality companies that
generate strong earnings and solid growth prospects. Its portfolio managers, who
have advanced degrees in medicine and the biological sciences as well as
extensive financial training, have a unique ability to analyze new products and
services from the health care sector.
For the past six months, Dresdner RCM invested the Fund primarily in
larger capitalization stocks, since that is where they perceived the most value.
In addition, they were able to find more opportunities in the products sector
verses the services sector.
The Fund's emphasis on niche players within the pharmaceutical industry
accounted for much of its outperformance versus its benchmark. For specialty
pharmaceutical companies such as Alza, the critical factor in the stock's
performance was not Medicare but how its important drugs were being received in
the medical community. In March, Alza's shares sold off sharply when there were
indications that Ditropan XL, a drug that treats incontinence, was not being
accepted in the marketplace. Dresdner RCM took that opportunity to buy
additional shares because of a conviction that the drug was attracting favorable
reviews from the urological community. This conviction was based on valuable
input from Dresdner RCM's Grassroots-SM- Research. Shareholders were rewarded in
late June, when Alza announced that it was being acquired by Abbott
Laboratories.
The Fund was overweighted in specialty pharmaceutical companies and
underweighted in companies that were most exposed to the Medicare issue. During
the past six months, particularly in the second quarter, the Fund was
underweighted in Merck and Pfizer, which dominate the Index. That decision was a
major positive contributor to performance. Merck was, and continues to face,
some very significant patent expirations next year, particularly in the
cardio-vascular area that made them one of the premier drug companies of the
1980s and early 1990s. Pfizer was generally thought of as being the best
pharmaceutical company with standout drugs such as Viagra. However, Dresdner RCM
believes that Pfizer's sustainable revenue stream did not justify the
price/earnings multiple that the
Page 34
<PAGE>
Dresdner RCM Global Health Care Fund
Management's Performance Review
market was willing to place on the company. When Viagra first came out, some
Wall Street analysts estimated that it could generate $6 billion a year in
revenue. Partly because the side effects were underestimated, the high-end
estimate is now about $700 million.
In contrast, Dresdner RCM believes that Cardinal Health, a
pharmaceutical distributor, is less likely to be hurt from Medicare legislation
since the company benefits from higher volumes and revenues that would result
from expanded coverage. The company has participated very aggressively in the
recent trend towards consolidation of the drug distribution sector. As that
consolidation came mostly to a close, the company began diversifying into
service-related businesses such as dispensing systems, specialty manufacturing
and specialty packaging that they could offer to the manufacturers that they buy
products from and the hospitals, drugs stores and other customers to whom they
sell products. Many of these businesses are growing faster and offer better
margins than their core distribution business, making it a very attractive
return on capital story and growth story at the same time.
OUTLOOK
The current discussions about changes in Medicare are reminiscent of
five years ago, when the Clinton Administration was proposing sweeping changes
in the nation's health care system. Those changes ultimately did not occur.
However, Dresdner RCM believes that this time, there will be some changes in the
Medicare system, partly because of the political imperatives of an upcoming
national election and an outgoing president who is concerned about his legacy.
In addition, when Medicare was first enacted over 30 years ago, outpatient
pharmaceutical costs were a minor portion of the total health dollar. Because
the drug companies, through their superior research and development efforts,
have done an excellent job in creating demand for their products, outpatient
drug therapies are becoming an increasing focus -- and an increasing percentage
of the cost -- of elderly treatment. As Dresdner RCM has done over the past
several quarters, they will continue to focus on specialty pharmaceutical
companies that are less vulnerable to Congressional action. In addition, as
patent expirations occur in 1999 and 2000, Dresdner RCM will also focus on
selected generic drug companies that have the necessary manufacturing expertise
to mimic the synthesis of these compounds.
Page 35
<PAGE>
Dresdner RCM Global Health Care Fund
Total Return Index Comparison(c)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CLASS N RUSSELL MIDCAP S&P 500
SHARES HEALTH CARE INDEX (B) STOCK INDEX (A)
<S> <C> <C> <C>
12/31/96 $10,000 $10,000 $10,000
1/31/97 $10,700 $10,353 $10,625
2/28/97 $10,650 $10,552 $10,708
3/31/97 $9,910 $9,637 $10,268
4/30/97 $10,050 $9,786 $10,881
5/31/97 $11,140 $10,712 $11,544
6/30/97 $11,660 $11,201 $12,061
7/31/97 $11,990 $11,904 $13,021
8/31/97 $11,790 $11,739 $12,292
9/30/97 $13,110 $12,373 $12,965
10/31/97 $12,910 $11,644 $12,532
11/30/97 $13,110 $11,886 $13,113
12/31/97 $13,000 $11,920 $13,338
1/31/98 $13,189 $11,938 $13,486
2/28/98 $14,060 $13,012 $14,458
3/31/98 $14,584 $13,725 $15,199
4/30/98 $14,897 $14,478 $15,352
5/31/98 $14,261 $14,231 $15,088
6/30/98 $14,295 $14,779 $15,701
7/31/98 $14,216 $14,392 $15,533
8/31/98 $12,241 $11,813 $13,287
9/30/98 $13,659 $13,577 $14,139
10/31/98 $14,004 $14,298 $15,288
11/30/98 $15,109 $15,021 $16,215
12/31/98 $16,324 $16,394 $17,148
1/31/99 $16,482 $15,584 $17,865
2/28/99 $16,056 $14,842 $17,310
3/31/99 $15,813 $14,728 $18,002
4/30/99 $15,059 $13,653 $18,699
5/31/99 $14,937 $13,882 $18,257
6/30/99 $15,874 $14,197 $19,271
$10,000 Investment (12/31/96-6/30/99)(d)
</TABLE>
PERFORMANCE(C)
JUNE 30, 1999
<TABLE>
<CAPTION>
CUMULATIVE
SINCE SINCE
YTD(E) 1 YEAR INCEPTION INCEPTION
<S> <C> <C> <C> <C>
Class N
Average Annual Total Return(d) -2.76% 11.05% 20.30% 58.74%
</TABLE>
The data above represents past performance of the Fund and may not be
indicative of future performance. The investment return and principal value of
an investment in the Fund will fluctuate, so that shares, when redeemed, may be
worth more or less than their original cost.
- --------------------------------
(a) The Standard & Poor's 500 Stock Index is a capitalization-weighted index
of 500 stocks that attempts to measure performance of the broad domestic
economy through changes in the aggregate market value of 500 stocks
representing major industries.
(b) The Russell Midcap Health Care Index is composed of all medium and
medium/small health care companies in the Russell 1000 Index. The Russell
1000 Index measures the performance of the 1,000 largest companies in the
Russell 3000 Index, which represents approximately 90% of the total market
capitalization of the Russell 3000 Index.
(c) Returns assume reinvestment of all dividends and capital gains
distributions at net asset value.
(d) Class N shares commenced operations on December 31, 1996.
(e) Unannualized.
Page 36
<PAGE>
Dresdner RCM Global Health Care Fund
Portfolio of Investments
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY EQUITY INVESTMENTS NET ASSETS (NOTE 1)
- -------------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
HEALTH CARE SECTOR 95.4%
DRUGS AND HOSPITAL SUPPLIES 77.9%
2,200 US Algos Pharmaceutical Corp. * $ 48,538
3,100 US Alkermes Inc. * 71,688
6,000 US Alza Corp. * 305,250
6,500 US American Home Products Corp. 373,750
1,500 US Amgen Inc. * 91,312
1,900 US Bausch & Lomb Inc. 145,350
2,000 US Biogen Inc. * 128,625
2,600 US Boston Scientific Corp. * 114,238
5,500 US Bristol Myers Squibb Co. 387,406
6,300 US Coulter Pharmaceutical Inc. * 142,144
4,600 US Eli Lilly & Co. 329,475
6,600 US Forest Laboratories Inc. * 305,250
1,900 UK Glaxo Wellcome PLC (ADR) 107,326
1,650 US Johnson & Johnson 161,700
2,200 US MedImmune Inc. * 149,050
2,768 US Merck & Co. Inc. 204,832
5,300 US Omnicare Inc. 66,912
6,100 US Province Healthcare Co. * 118,950
2,600 CA QLT PhotoTherapeutics Inc. * 143,000
5 CH Roche Holdings AG 51,396
5,500 US SangStat Medical Corp. * 94,875
800 US Sepracor Inc. * 65,000
3,000 IS Teva Pharmaceutical Industries Ltd. 147,000
5,300 US Warner Lambert Co. 367,687
2,500 US Watson Pharmaceuticals Inc. * 87,656
--------------
4,208,410
--------------
HEALTH CARE SERVICES 17.5%
7,000 US American Dental Partners * 77,875
2,680 US Cardinal Health Inc. 171,855
3,500 US CareInsite Inc. * 165,375
4,000 US Health Management Associates Inc. * 45,000
4,200 US Inhale Therapeutic Systems * 100,013
6,000 US Mylan Laboratories Inc. 159,000
4,000 US Pharmacia & Upjohn Inc. 227,250
--------------
946,368
--------------
TOTAL EQUITY INVESTMENTS (COST $4,960,338) 95.4 % 5,154,778
--------------
TOTAL INVESTMENTS (COST $4,960,338) ** 95.4 % 5,154,778
OTHER ASSETS LESS LIABILITIES 4.6 % 245,828
--------------
NET ASSETS 100.0 % $ 5,400,606
--------------
--------------
</TABLE>
- --------------------------------
* Non-income producing security
ADR American Depository Receipt
The accompanying notes are an integral part of the financial statements.
Page 37
<PAGE>
Dresdner RCM Global Health Care Fund
Portfolio of Investments
June 30, 1999 (Unaudited)
Tax Information:
** For Federal income tax purposes, cost is $4,963,512 and gross aggregate
unrealized appreciation (depreciation) for all securities is as follows:
<TABLE>
<S> <C>
Unrealized appreciation $ 406,941
Unrealized depreciation (215,675)
-------------
Net unrealized
appreciation $ 191,266
-------------
-------------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fund's investments in securities at June 30, 1999, categorized by country:
<TABLE>
<CAPTION>
% OF NET ASSETS
------------------------------------------
COUNTRY SHORT-TERM
COUNTRY CODE EQUITIES AND OTHER TOTAL
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Canada CA 2.6% 2.6%
Israel IS 2.7% 2.7%
Switzerland CH 1.0% 1.0%
United Kingdom UK 2.0% 2.0%
United States US 87.1% 4.6% 91.7%
------ -- ----------
Total 95.4% 4.6% 100.0%
------ -- ----------
------ -- ----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 38
<PAGE>
Dresdner RCM International Growth Equity Fund
Management's Performance Review
A rebounding Japan and surging emerging market countries, along with a
weak Europe and sliding euro currency, characterized the international markets
in the first half of 1999. For the six months ended June 30, 1999, the Dresdner
RCM International Growth Equity Fund achieved a total return of 4.81% and 4.74%
for Class I and Class N shares, respectively. For the period, the portfolio
outperformed its primary benchmark, the Morgan Stanley Capital International
Europe, Australia, Far East Index (EAFE), which returned 4.11% while its
secondary benchmark, the MSCI All Country World Free Ex-U.S. Index (ACWI), which
includes emerging markets, returned 7.15%.
MARKET REVIEW
After a turbulent 1998, decisive action by central banks around the
world restored confidence in many international markets. In Japan, economic
growth was still sluggish, but the corporate sector has begun to take
restructuring seriously. Following a surge in smaller stocks last fall, the
large cap Japanese markets have staged a rebound after a decade-long bear
market. As a result, Japan's market rose by 20.3% in dollar terms for the first
half of 1999.
In Europe, growth has been negligible, particularly in Germany and
Italy, which account for about half of Euroland's economy. Partly because
Europe's growth was overshadowed by the U.S., the euro devalued from $1.18 to
$1.02 during the period. In addition, the war in Kosovo created investor
skittishness and there was an outflow of liquidity by international investors to
buy Asia equities. On the positive side, the euro's launch on January 1, 1999
has spurred consolidations, as mergers & acquisitions rose nearly 50% in the
first half of 1999 compared to the same period in 1998. European economic
activity, particularly consumer spending, appeared to be improving and has begun
to support higher earnings growth. As a result, there was a style shift in
markets from growth into cyclical stocks during the second quarter. Still,
European markets fell 3.2% in dollar terms during the period.
Meanwhile, emerging markets made up all of the ground lost in 1998.
After central banks throughout the world took a cue from the Federal Reserve
Board and slashed interest rates last fall, this massive expansion in the
monetary base boosted equities and stabilized currencies, particularly in small
illiquid markets. As the global economy began to improve, oil prices rose
sharply, which in turn benefited energy-rich regions such as Latin America.
FACTORS AFFECTING PERFORMANCE
The Fund's performance was hampered slightly in the first quarter by an
underweight in Japan, although the Fund's effective stock selection was a plus,
primarily in the technology sector with such holdings as Softbank, Yahoo! Japan,
NTT Mobile Communications Network and Fujitsu. Dresdner RCM Global Investors LLC
("Dresdner RCM"), the Fund's investment manager, began to increase Japan's
weighting towards the end of the first quarter, which helped the Fund's relative
performance.
In Japan, corporate restructuring and an improved profit environment
ignited the equity markets. The Fund's strongest Japan-based performer was
Softbank, the holding company for several U.S. Internet stocks including Yahoo!,
Ebay, E*Trade and Ziff-Davis, the publishing concern. Softbank has been very
astute at funding Internet ventures throughout the world. Within Japan, Softbank
is capitalizing on the profound impact that the Internet is likely to have on
Japan, where the consumer has traditionally been poorly served. Yahoo! Japan was
also among the most successful stocks during the period. Japan's population is
roughly half of the U.S., and the Fund's managers believe that Yahoo! Japan,
with just a fraction of the market capitalization of Yahoo! in the U.S., has
significant appreciation potential as it serves that market. The portfolio's
position in Japan steadily increased as the restructuring in that country
increasingly became apparent during the middle of the first quarter. However,
the Fund remained underweight in emerging markets, which was a slight negative
to total return.
In Europe, the depreciating European currency accounted for about half
of the Fund's underperformance compared to the ACWI. Dresdner RCM does not
typically hedge currency unless there is a very strong conviction about a
currency -- and the euro's precipitous decline was not expected. In addition,
the advent of "Euroland" created an exodus by European fund managers out of
certain traditional European equity assets, particularly in Germany and the
Netherlands, and into other European markets.
Page 39
<PAGE>
Dresdner RCM International Growth Equity Fund
Management's Performance Review
However, a plus for the portfolio was an underweight in interest-sensitive
stocks in Europe, in particular-insurance companies, which performed poorly due
to rising bond yields.
Although the portfolio increased its allocation to cyclical stocks, it
continued to emphasize technology, telecommunications and media, three
industries that are well positioned to benefit from high earnings growth
throughout the world. For instance, Fujitsu is a computer component parts
manufacturer that acted very early in Japan's restructuring process and is
continually winning new orders. The Fund's emphasis on European
telecommunication stocks-Vodafone Airtouch in the U.K., Telefonica in Spain, and
KPN in the Netherlands-also contributed positively to the portfolio. In Italy,
Telecom Italia of was the least expensive telecommunication stock within the
European continent. It was ultimately the subject of a takeover bid from
Olivetti. This type of bold move reflects the cultural changes that have taken
place in Corporate Europe over the past few years.
Although country and currency risk are critical variables, the portfolio
is driven by bottom-up research where the aim is to generate above-average
returns through superior stock selection throughout the world. Indeed, in June,
the portfolio's investments in Softbank, Yahoo! Japan, NTT Mobile Communications
Network and Fujitsu, led to particularly strong outperformance in the month of
June 1999.
OUTLOOK
Dresdner RCM is very optimistic about international markets. In Japan,
the nation's monetary and fiscal policies support the current bull market.
Although the Bank of Japan is only targeting a 0.5% to 1% growth in Gross
National Product for 1999, investors are focusing not so much on economic
revival but corporate restructuring and improving returns on equity. In Europe,
the trend toward consolidation, particularly in the banking sector, is likely to
increase in the second half of 1999, driving economic growth. In addition, as
interest rates level off, the euro is likely to stabilize, improving
dollar-denominated returns for investors. Although emerging markets are likely
to remain volatile, the underlying economic environments are much more positive
than could have been predicted a year ago.
On a valuation basis, international markets appear to offer much more
opportunity than the U.S., with companies typically trading at lower multiples
for higher growth than their U.S. counterparts. Regardless of location, the Fund
will continue to emphasize high quality, attractively priced securities that
offer strong earnings growth.
Page 40
<PAGE>
Dresdner RCM International Growth Equity Fund
Total Return Index Comparison(c)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PERFORMANCE FROM COMMENCEMENT OF OPERATIONS
$10,000 INVESTMENT (12/28/94 - 6/30/99) (D)(F)(G)
CLASS I SHARES MSCI-EAFE (A) MSCI-ACWI (B)
<S> <C> <C> <C>
12/28/1994 10,000 10,000 10,000
9,555 9,617 9,629
9,577 9,592 9,576
3/31/95 10,054 10,193 10,117
10,492 10,579 10,512
10,564 10,455 10,466
6/30/95 10,847 10,275 10,321
11,570 10,917 10,907
11,420 10,503 10,529
9/30/95 11,665 10,711 10,709
11,489 10,426 10,423
11,522 10,719 10,668
12/31/95 11,799 11,153 11,089
12,126 11,201 11,241
12,271 11,241 11,241
3/31/1996 12,648 11,483 11,450
13,096 11,820 11,797
13,263 11,604 11,620
6/30/1996 13,353 11,673 11,680
12,822 11,334 11,292
13,108 11,362 11,358
9/30/1996 13,404 11,666 11,640
13,302 11,549 11,524
13,864 12,011 11,969
12/31/1996 14,078 11,860 11,830
14,355 11,447 11,612
14,477 11,637 11,825
3/31/1997 14,410 11,683 11,800
14,654 11,747 11,899
15,606 12,514 12,634
6/30/1997 16,502 13,207 13,332
17,509 13,424 13,601
16,292 12,424 12,530
9/30/1997 17,620 13,122 13,208
16,458 12,117 12,084
16,414 11,996 11,933
12/31/1997 16,603 12,104 12,070
17,063 12,661 12,431
17,924 13,476 13,261
3/31/1998 18,602 13,894 13,719
18,954 14,006 13,818
19,063 13,942 13,568
6/30/1998 19,123 14,050 13,517
19,754 14,197 13,645
17,063 12,440 11,721
9/30/1998 16,033 12,062 11,474
16,869 13,323 12,675
17,730 14,009 13,356
12/31/1998 18,895 14,565 13,816
1/31/1999 19,223 14,526 13,801
2/28/1999 18,429 14,183 13,492
3/31/1999 18,832 14,779 14,144
4/30/1999 19,160 15,380 14,851
5/31/1999 18,290 14,591 14,153
6/30/1999 19,804 15,163 14,804
PERFORMANCE FROM FIRST PUBLIC OFFERING
$10,000 Investment (5/22/95 - 6/30/99) (d)(f)(g)
Class I Shares MSCI-EAFE (a) MSCI-ACWI (b)
5/22/95 10,000 10,000 10,000
10,117 9,992 10,111
10,233 9,984 10,222
6/30/95 10,508 9,811 10,081
11,208 10,424 10,654
11,063 10,029 10,284
9/30/95 11,300 10,228 10,460
11,130 9,956 10,180
11,161 10,236 10,420
12/31/95 11,430 10,650 10,831
11,747 10,696 10,980
11,887 10,735 10,980
3/31/1996 12,254 10,965 11,184
12,686 11,287 11,523
12,848 11,081 11,350
6/30/1996 12,935 11,147 11,408
12,421 10,823 11,029
12,698 10,849 11,094
9/30/1996 12,985 11,140 11,369
12,886 11,029 11,256
13,430 11,470 11,690
12/31/1996 13,638 11,325 11,554
13,906 10,931 11,342
14,024 11,113 11,549
3/31/1997 13,959 11,156 11,525
14,195 11,217 11,622
15,117 11,950 12,340
6/30/1997 15,986 12,612 13,021
16,961 12,819 13,284
15,782 11,864 12,239
9/30/1997 17,069 12,530 12,901
15,943 11,571 11,803
15,900 11,455 11,656
12/31/1997 16,083 11,558 11,790
16,529 12,090 12,142
17,363 12,868 12,952
3/31/1998 18,020 13,267 13,400
18,361 13,375 13,497
18,466 13,313 13,252
6/30/1998 18,525 13,417 13,202
19,136 13,556 13,327
16,529 11,879 11,448
9/30/1998 15,532 11,518 11,207
16,342 12,722 12,380
17,175 13,377 13,045
12/31/1998 18,304 13,908 13,495
1/31/1999 18,622 13,871 13,480
2/28/1999 17,852 13,543 13,178
3/31/1999 18,243 14,112 13,815
4/30/1999 18,561 14,687 14,580
5/31/1999 17,718 13,933 13,790
6/30/1999 19,184 14,479 14,459
</TABLE>
PERFORMANCE(C)
JUNE 30, 1999
<TABLE>
<CAPTION>
LIFE OF FUND LIFE OF FUND
ANNUALIZED SINCE CUMULATIVE SINCE
YTD(H) 1 YEAR 3 YEAR 12/28/1994(D) 5/22/1995(D) 12/28/1994(D) 5/22/1995(D)
<S> <C> <C> <C> <C> <C> <C> <C>
Class I
Average Annual Total
Return(d) 4.81% 3.56% 14.04% 16.37% 17.19% 98.04% 91.84%
Class N
Average Annual Total
Return(e)(f)(g) 4.74% 3.49% 14.01% 16.35% 17.17% 97.91% 91.72%
</TABLE>
The data above represents past performance of the Fund and may not be
indicative of future performance. The investment return and principal value of
an investment in the Fund will fluctuate, so that shares, when redeemed, may be
worth more or less than their original cost.
- --------------------------------
(a) The MSCI-EAFE Index is an arithmetic, market value-weighted average of the
performance of over 900 securities listed on the stock exchanges of
countries in Europe, Australia, and the Far East. The Index is calculated on
a total return basis, which includes reinvestment of gross dividends before
deduction of withholding taxes.
(b) The MSCI-ACWI Index is a market capitalization-weighted index composed of
companies representative of the market structure of 47 developed and
emerging market countries excluding the United States. Stock selection
excludes securities which are not purchasable by foreigners. The Index is
calculated on a total return basis, which includes reinvestment of gross
dividends before deduction of withholding taxes.
(c) Returns assume reinvestment of all dividends and capital gains distributions
at net asset value.
(d) The Class I shares were registered for offer and sale under the Securities
Act of 1933 on May 22, 1995. In accordance with SEC regulations, performance
information is provided for the period beginning on May 22, 1995
("Registration"). For the convenience of our long-term shareholders,
performance information is also provided for the period beginning on
December 28, 1994 ("Commencement of Operations").
(e) Class N shares commenced operations on March 10, 1999.
(f) For periods prior to March 10, 1999, figures reflect Class I performance.
From the inception date March 10, 1999, figures reflect actual Class N
performance, including the effect of Rule 12b-1 fees.
(g) The growth of $10,000 for the Class N is $98,955 and $95,859 for the Fund
from December 28, 1994 to June 30, 1999 and from May 22,1995 to June 30,
1999, respectively. The performance of the Class N shares are lower due to
the effects of 12b-1 fees.
(h) Unannualized.
Page 41
<PAGE>
Dresdner RCM International Growth Equity Fund
Portfolio of Investments
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY EQUITY INVESTMENTS NET ASSETS (NOTE 1)
- -----------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
CONSUMER DURABLES SECTOR 2.3%
AUTOMOTIVE RELATED 0.8%
562 DE Porsche AG $ 1,321,431
CONSUMER DURABLES 1.5%
5,900 JP Funai Electric Co. Ltd. 1,169,898
12,500 JP Sony Corp. 1,347,738
--------------
2,517,636
--------------
CONSUMER NON-DURABLES SECTOR 9.1%
BEVERAGE/TOBACCO 1.7%
28,600 NL Heineken N.V. 1,464,397
128,000 UK Imperial Tobacco Group PLC 1,403,285
--------------
2,867,682
--------------
FOOD/FOOD PROCESSING 0.9%
5,700 FR Groupe Danone 1,469,563
20 JP Hokuto Corp. 1,074
--------------
1,470,637
--------------
HOUSEHOLD/RELATED NON-DURABLES 1.2%
47 NL Benckiser N.V. 2,509
67,000 JP Kao Corp. 1,882,082
--------------
1,884,591
--------------
LEISURE TIME PRODUCTS/SERVICES 0.8%
158,000 UK Airtours PLC 1,260,220
RETAIL TRADE 4.5%
11,500 FR Carrefour Supermarche S.A. 1,689,997
72,168 NL Koninklijke Ahold N.V. 2,485,790
35,700 CA Loblaw Cos. Ltd. 900,913
120 FR Promodes S.A. 78,769
5,300 JP Ryohin Keikaku Co. Ltd. 1,333,362
21,600 CA Weston George Ltd. 948,618
--------------
7,437,449
--------------
CYCLICAL/CAPITAL GOODS SECTOR 16.4%
BUILDING/CONSTRUCTION 1.8%
79,934 IE CRH PLC 1,417,860
150,000 JP Sekisui House Ltd. 1,618,559
--------------
3,036,419
--------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 42
<PAGE>
Dresdner RCM International Growth Equity Fund
Portfolio of Investments
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY EQUITY INVESTMENTS NET ASSETS (NOTE 1)
- -----------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
CHEMICALS/TEXTILES 2.6%
84,100 UK BOC Group PLC $ 1,646,480
77,000 JP Shin Etsu Chemical Co. Ltd. 2,576,503
--------------
4,222,983
--------------
ELECTRICAL EQUIPMENT 1.4%
16,464 NL Koninklijke (Royal) Philips Electronics N.V. 1,624,028
106,000 JP Toshiba Corp. 755,791
--------------
2,379,819
--------------
INDUSTRIAL EQUIPMENT 2.7%
50,100 FR Alstom 1,575,835
185,800 UK Hanson PLC 1,669,396
30,300 NO Tomra Systems ASA 1,139,296
--------------
4,384,527
--------------
RAW/BASIC MATERIALS 7.3%
54,070 BR Aracruz Celulose S.A. (ADR) 1,189,540
208,136 AU Broken Hill Proprietary Co. Ltd. 2,410,970
1,934 CH Holderbank Financiere Glarus AG 2,282,846
567,000 IE Jefferson Smurfit Group PLC 1,340,643
61,000 KR Pohang Iron & Steel Co. Ltd. (ADR) 2,051,125
30,500 DE Preussag AG 1,638,743
37,500 FI UPM-Kymmene Oyj 1,075,102
--------------
11,988,969
--------------
TRANSPORTATION SERVICES 0.6%
1,154,000 HK Cosco Pacific Ltd. 959,360
ENERGY SECTOR 5.0%
ENERGY 5.0%
96,400 UK BP Amoco PLC 1,726,212
10,220 FR Elf Aquitaine S.A. 1,499,785
415,000 UK Shell Transport & Trading Co. 3,113,823
14,760 FR Total Fina S.A. (B Shares) 1,904,220
--------------
8,244,040
--------------
HEALTH CARE SECTOR 3.9%
DRUGS AND HOSPITAL SUPPLIES 3.9%
94,801 UK Glaxo Wellcome PLC 2,634,536
140 CH Roche Holdings AG 1,439,093
57,720 FR Synthelabo * 2,449,455
--------------
6,523,084
--------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 43
<PAGE>
Dresdner RCM International Growth Equity Fund
Portfolio of Investments
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY EQUITY INVESTMENTS NET ASSETS (NOTE 1)
- -----------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
HEALTH CARE SERVICES 0.1%
900 JP Nichii Gakkan Co. $ 98,153
INTEREST-SENSITIVE SECTOR 20.4%
BANKING 11.6%
33,300 UK Abbey National PLC 625,428
138,000 ES Banco Santander Central Hispano S.A. * 1,437,387
68,031 IE Bank of Ireland 1,147,951
113,904 UK Bank of Scotland 1,523,455
17,200 FR Banque Nationale de Paris 1,433,221
51,088 UK Barclays PLC 1,485,779
13,050 DE Bayerische Hypo- und Vereinsbank AG 847,861
28,400 DE Deutsche Bank AG 1,732,393
23,000 KR Housing & Commercial Bank, Korea (GDR) 725,293
46,303 UK HSBC Holdings PLC 1,688,930
28,000 KR Kookmin Bank 568,485
104,370 UK Lloyds TSB Group PLC 1,417,326
175,100 SE Nordbanken Holding AB 1,023,610
36,000 KR Shinhan Bank 404,332
33,700 CA Toronto Dominion Bank 1,519,866
4,930 CH Union Bank of Switzerland AG 1,471,462
--------------
19,052,779
--------------
GENERAL FINANCE 3.4%
10,400 JP Aeon Credit Service Ltd. 988,135
12,800 JP Aiful Corp. 1,567,267
80,000 JP Credit Saison Co. Ltd. 1,672,228
65,000 JP Kokusai Securities Co. Ltd. 805,544
11,400 JP Mycal Card Inc. 518,027
--------------
5,551,201
--------------
INSURANCE 3.8%
117,300 IT Alleanza Assicurazioni SpA 1,348,796
125,000 UK Allied Zurich AG PLC 1,571,374
12,500 FR Axa S.A. 1,524,994
1,791 UK CGU PLC 25,789
123,000 UK Prudential Corp. PLC 1,812,824
--------------
6,283,777
--------------
UTILITIES 1.6%
32,174 FR Vivendi * 2,606,301
TECHNOLOGY SECTOR 22.0%
COMPUTERS/OFFICE EQUIPMENT 1.0%
58,000 JP Canon Inc. 1,667,601
700 JP Canon Sales Co. Inc. 10,994
--------------
1,678,595
--------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 44
<PAGE>
Dresdner RCM International Growth Equity Fund
Portfolio of Investments
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY EQUITY INVESTMENTS NET ASSETS (NOTE 1)
- -----------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
ELECTRONICS/NEW TECHNOLOGY 14.0%
35,000 JP Alps Electric Co. Ltd. $ 819,796
86,400 SE Ericsson (LM) Telefonaktiebolaget 2,769,314
218,000 JP Fujitsu Ltd. 4,385,714
16,000 JP Matsushita Communications Industrial Co. 1,143,460
80,000 JP Matsushita Electric Industries 1,553,255
27,000 SG Murata Manufacturing Co. Ltd. 1,775,668
58,100 FI Nokia Oyj 5,092,938
51,200 FR STMicroelectronics N.V. NY Registry 3,552,000
57,000 TW Taiwan Semiconductor Manufacturing Co. (ADR) 1,938,000
--------------
23,030,145
--------------
TECHNOLOGY SERVICES 7.0%
16,200 FR Cap Gemini S.A. 2,546,088
15,100 JP Nippon System Development 898,244
26,700 UK Psion PLC 345,115
23,500 JP Softbank Corp. 4,758,784
8 JP Yahoo Inc. * 2,994,147
--------------
11,542,378
--------------
TELEMEDIA/SERVICES SECTOR 18.2%
BUSINESS SERVICES 1.6%
25,000 JP Secom Co. Ltd. 2,602,528
COMMUNICATION SERVICES 13.2%
153,839 UK British Telecom PLC 2,575,312
14,000 NL Equant N.V. NY Registry * 1,317,750
28,000 IS Gilat Satellite Networks Ltd. * 1,470,000
28,000 US Global TeleSystems Group Inc. * 2,268,000
19,400 NL KPN N.V. 910,304
27,900 DE Mannesmann AG 4,163,380
130 JP NTT Mobile Communications Network, Inc. * 1,744,272
28,000 PH Philippine Long Distance Telephone Co. (ADR) 843,500
27,423 ES Telefonica S.A. 1,324,380
25,000 MX Telefonos De Mexico (ADR) 2,020,313
157,100 UK Vodafone Airtouch PLC 3,090,506
--------------
21,727,717
--------------
MEDIA 3.4%
8,170 FR Canal Plus 2,292,577
180,200 IT Mediaset SpA 1,601,900
369,700 UK TeleWest Communications PLC * 1,656,490
--------------
5,550,967
--------------
TOTAL EQUITY INVESTMENTS (COST $136,759,857) 97.3% 160,223,388
--------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 45
<PAGE>
Dresdner RCM International Growth Equity Fund
Portfolio of Investments
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY EQUITY INVESTMENTS NET ASSETS (NOTE 1)
- -----------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
SHORT-TERM INVESTMENTS
MONEY MARKET FUNDS 1.0%
748,995 US SSgA Money Market Fund $ 748,995
883,862 US SSgA U.S. Government Money Market Fund 883,862
--------------
TOTAL SHORT-TERM INVESTMENTS (COST $1,632,857) 1.0% 1,632,857
--------------
TOTAL INVESTMENTS (COST $138,392,714) ** 98.3% 161,856,245
OTHER ASSETS LESS LIABILITIES 1.7% 2,845,289
--------------
NET ASSETS 100.0% $164,701,534
--------------
--------------
</TABLE>
- --------------------------------
* Non-income producing security
ADR American Depository Receipt
GDR Global Depository Receipt
Tax Information:
** For Federal income tax purposes, cost is $138,846,391 and gross aggregate
unrealized appreciation (depreciation) for all securities is as follows:
<TABLE>
<S> <C>
Unrealized appreciation $ 27,091,522
Unrealized depreciation (4,081,668)
------------
Net unrealized
appreciation $ 23,009,854
------------
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 46
<PAGE>
Dresdner RCM International Growth Equity Fund
Portfolio of Investments
June 30, 1999 (Unaudited)
The Fund's investments in securities at June 30, 1999 categorized by country:
<TABLE>
<CAPTION>
% OF NET ASSETS
-------------------------------------------
COUNTRY SHORT-TERM
COUNTRY CODE EQUITIES AND OTHER TOTAL
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Australia AU 1.5% 1.5%
Brazil BR 0.7% 0.7%
Canada CA 2.0% 2.0%
Finland FI 3.7% 3.7%
France FR 14.9% 14.9%
Germany DE 5.9% 5.9%
Hong Kong HK 0.6% 0.6%
Ireland IE 2.4% 2.4%
Israel IS 0.9% 0.9%
Italy IT 1.8% 1.8%
Japan JP 23.6% 23.6%
Korea KR 2.3% 2.3%
Mexico MX 1.2% 1.2%
Netherlands NL 4.7% 4.7%
Norway NO 0.7% 0.7%
Philippines PH 0.5% 0.5%
Singapore SG 1.1% 1.1%
Spain ES 1.7% 1.7%
Sweden SE 2.3% 2.3%
Switzerland CH 3.2% 3.2%
Taiwan TW 1.2% 1.2%
United Kingdom UK 19.0% 19.0%
United States US 1.4% 2.7% 4.1%
--- --- ----------
Total 97.3% 2.7% 100.0%
--- --- ----------
--- --- ----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 47
<PAGE>
Dresdner RCM Emerging Markets Fund
Management's Performance Review
During the first half of 1999, emerging markets were volatile and
unpredictable, but unlike 1998, in a positive direction. For the six months
ended June 30, 1999, the Dresdner RCM Emerging Markets Fund returned 27.23% and
27.12% for the Class I and Class N shares, respectively. In comparison, the MSCI
Emerging Markets Free Index (EMF), the Fund's benchmark, returned 39.87%.
MARKET REVIEW
During the first half of 1999, emerging markets made up most of the
ground lost in 1998. After the Asian currency crisis and the Russian debt
default last summer, central banks throughout the world took a cue from the
Federal Reserve Board and slashed interest rates. This massive expansion in the
monetary base boosted equities and stabilized currencies, particularly in small
illiquid markets. Many emerging market mutual funds and other investment pools
were holding significant amounts of cash in late 1998, which was put to work
during 1999, further fueling the markets. As the global economy began to
improve, oil prices rose sharply, which in turn benefited energy-rich regions
such as Latin America. Although global growth is still only projected to
increase 2.4% in 1999 from 1998 (a revision from 1.5%) other fundamentals such
as lower interest rates, low inflation and increasing corporate earnings are
improving the environment for emerging markets.
In addition, many countries have made substantive reforms. For example,
in South Korea, government policy often supported too many companies in a given
industry, moving them into markets that were unprofitable in their zeal to
compete with Japan. The government has recently changed tactics, declaring its
intention to focus on profitable businesses, consolidating industries so that
there might be one or two very strong companies competing in a global market
instead of several. Other countries have simply focused on the right industries,
such as Taiwan, which supplies the booming U.S. technology sector.
Emerging market sectors showing the greatest strength included
technology, telecommunications and economic cyclicals, all benefiting from the
recovering economies and positive investor sentiment.
FACTORS AFFECTING PERFORMANCE
Although the Dresdner RCM Emerging Markets Fund performed extremely well
on an absolute basis, it trailed its benchmark by a significant margin for the
first six months of the year. The primary reason was the Fund's emphasis on
high-quality companies, which tend to underperform in a bull market, and the
Fund's underweight in Brazil after the country's currency devaluation in
January. Fortunately, the Fund's relative performance improved in the second
quarter of 1999, with the Fund nearly matching the Index return in the month of
June.
Throughout the period, Dresdner RCM Global Investors LLC ("Dresdner
RCM"), the investment manager of the Fund, continued to employ rigorous
fundamental research to uncover companies throughout the world with superior
earnings growth selling at reasonable valuations. For example, the Fund's
investment in Samsung Electronics was a play on the global semiconductor
business cycle, and the fact that the consolidation of the semiconductor
industry within South Korea has shut down capacity and therefore improved
pricing rationality. As another example of South Korea's foresight, the banking
industry consulted with Mexican bankers who had been involved in Mexico's
financial crisis in the mid-1990s. Using this knowledge, a plan was put in place
to recapitalize the banks very quickly. As a result, South Korea is one of the
few emerging market countries that is seeing significant growth in loan volume.
A top performer for the Fund was Housing and Commercial Bank, a South Korean
mortgage lender, which took advantage of that nation's rapid GNP growth.
In South Africa, the Fund was well-positioned for the improving outlook
for commodities, with investments such as Impala Platinum Holdings and Anglo
American, a British firm operating in South Africa, two of the few platinum
producers in the world. In addition, there is increasing demand for rhodium, a
by-product of platinum production, which is also produced by these two South
African companies. In Taiwan, the Fund enjoyed strong performance with Asustek
Computers and Siliconware Precision Industries, two low-cost manufacturers of
computer components. In Mexico, the Fund's investment in Grupo Televisa, the
largest Spanish language content provider in the world, performed better due to
new management and improved profitability.
Page 48
<PAGE>
Dresdner RCM Emerging Markets Fund
Management's Performance Review
In Brazil, the Fund's position in Aracruz Celulose, the largest global
pulp and paper manufacturer, did well after the company benefited from the
Brazilian currency devaluation in January. However, after the devaluation,
during the first quarter of 1999, the Fund was underweighted in Brazil based on
the expectation that the stock market would fall sharply. Thus, performance was
hindered when it did not occur.
Although telecommunications continued to be a major theme in the
portfolio, a high point being SK Telecom in South Korea, disappointments
included Portugal Telecom as the Portuguese market generally underperformed, and
India's Matahari Telephone, which continues to report disappointing earnings.
The Fund's underweight in Indonesia, due to the Dresdner RCM's concern about the
country's continuing political instability, was also a detriment to relative
performance. Dresdner RCM also avoided certain banks in Thailand and the
Philippines with rising non-performing loans. Nevertheless, the stocks of those
banks soared during the period. Dresdner RCM believes the run-up in these stocks
is based on investor sentiment, rather than fundamental improvement.
Dresdner RCM's fundamental investment philosophy is to focus on high
quality companies with strong franchises, sustained earnings growth and
excellent management. However, when there is a tremendous upswing in emerging
markets, the lower-quality companies tend to outperform. On the other hand, when
emerging markets do poorly, this focus on high-quality tends to insulate the
portfolio. For example, in 1998, the MSCI EMF Index was down about 25% whereas
the Fund was only down 8%.
OUTLOOK
Dresdner RCM has a very positive view about emerging markets and
believes that the sector could outperform its MSCI-EMF Index counterpart over
the next several quarters based on earnings growth forecasts and current
valuations. Dresdner RCM will likely continue to overweight the Fund in Asia,
underweight in Latin America and maintain a neutral weighting in Eastern Europe.
Dresdner RCM's emphasis on high quality will likely continue to be the most
prudent strategy from a risk/return standpoint, particularly as a broader and
perhaps more conservative type of institutional investor returns to emerging
markets. Although the Fed's tightening bias in May chilled emerging markets, it
would probably take much more than a 25-basis point increase to crimp investor
enthusiasm, particularly in countries where interest rates are very low by
historical standards.
Page 49
<PAGE>
Dresdner RCM Emerging Markets Fund
Total Return Index Comparison(c)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CLASS I MSCI EMERGING IFC EMERGING
SHARES FREE INDEX (A) MARKETS INDEX (B)
<S> <C> <C> <C>
12/97 $9,990 $10,024 $10,015
1/98 $9,720 $9,238 $9,358
2/98 $10,530 $10,203 $10,314
3/98 $10,950 $10,645 $10,718
4/98 $11,120.00 $10,529 $10,747
5/98 $9,920 $9,087 $9,406
6/98 $9,170 $8,134 $8,444
7/98 $9,590 $8,391 $8,779
8/98 $7,660 $5,965 $6,311
9/98 $7,810 $6,344 $6,615
10/98 $8,660 $7,012 $7,375
11/98 $8,910 $7,595 $7,812
12/98 $9,151 $7,485 $7,930
1/98 $8,879 $7,364 $7,630
2/98 $8,839 $7,436 $7,765
3/98 $9,696 $8,416 $8,661
4/98 $10,715 $9,457 $9,843
5/98 $10,493 $9,402 $9,667
6/98 $11,644 $10,469 $10,719
$10,000 Investment (12/31/97-6/30/99)(d)(f)(g)
</TABLE>
PERFORMANCE(C)
JUNE 30, 1999
<TABLE>
<CAPTION>
CUMULATIVE
SINCE SINCE
YTD(H) 1 YEAR INCEPTION INCEPTION
<S> <C> <C> <C> <C>
Class I
Average Annual Total Return(d) 27.23% 26.98% 10.69% 16.44%
Class N
Average Annual Total
Return(e)(f)(g) 27.12% 26.87% 10.62% 16.34%
</TABLE>
The data above represents past performance of the Fund and may not be
indicative of future performance. The investment return and principal value of
an investment in the Fund will fluctuate, so that shares, when redeemed, may be
worth more or less than their original cost.
- --------------------------------
(a) The MSCI Emerging Markets Free Index is a market capitalization-weighted
index composed of 981 companies in 26 emerging market countries. The average
market capitalization size of the listed companies is US$800 million.
(b) The IFC Index of Investable Emerging Markets represents the IFC Investable
regional total return composite. The term investable indicates that the
stocks and the weights in the IFCI index represent the amount that the
foreign institutional investors might buy by the virtue of the foreign
institutional restrictions (either at the national level or by the
individual company's corporate statute) plus factoring in minimum market
capitalization and liquidity screens.
(c) Returns assume reinvestment of all dividends and capital gains distributions
at net asset value.
(d) Class I shares began operations on December 30, 1997.
(e) Class N shares commenced operations on March 10, 1999.
(f) For periods prior to March 10, 1999, figures reflect Class I performance.
From the inception date March 10, 1999, figures reflect actual Class N
performance, including the effect of Rule 12b-1 fees.
(g) The value of a $10,000 investment for Class N is $11,634 for the period from
12/31/97 - 6/30/99. The performance of the Class N shares are lower due to
the effects of 12b-1 fees.
(h) Unannualized.
Page 50
<PAGE>
Dresdner RCM Emerging Markets Fund
Portfolio of Investments
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY EQUITY INVESTMENTS NET ASSETS (NOTE 1)
- -----------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
CONSUMER DURABLES SECTOR 2.5%
CONSUMER DURABLES 2.5%
1,650 IN Hindustan Lever Ltd. $ 90,530
CONSUMER NON-DURABLES SECTOR 16.2%
BEVERAGE/TOBACCO 7.1%
960 GB Al-Ahram Beverage Co. S.A.E. (GDR) * 27,288
900 MX Coca Cola FEMSA S.A. de C.V. (ADR) * 17,437
945 MX Fomento Economico Mexicano, S.A. de C.V. (ADR) 37,682
17,000 MX Grupo Continental S.A. 26,594
12,500 MX Grupo Modelo S.A. de C.V. Series C 35,589
3,600 IN ITC Ltd. 90,729
8,250 PH San Miguel Corp. Class B 17,996
--------------
253,315
--------------
GENERAL RETAIL 7.2%
20,000 MX Cifra S.A. de C.V. Series V * 39,797
2,300 BR Companhia Brasileria de Distribuicao Grupo Pao
Acucar (ADR) 42,981
22,000 MX Controladora Comercial Mexicana S.A. de C.V. 22,913
56,000 HK Giordano International Ltd. 39,336
11,000 BM Jardine Matheson Holdings, Ltd. (ADR) 53,625
6,800 MX Organizacion Soriana S.A. B shares 31,884
15,400 TH Siam Makro Public Co. Ltd. 27,981
--------------
258,517
--------------
LEISURE TIME PRODUCTS/SERVICES 1.9%
32,700 MY Berjaya Sports Toto 68,190
CYCLICALS/CAPITAL GOODS SECTOR 20.3%
BUILDING/CONSTRUCTION 7.0%
4,200 SG Allgreen Properties Ltd. * 4,539
152,000 PH Ayala Land, Inc. 47,937
3,500 MX Cemex S.A. De CV Class B (ADR) 33,687
2,500 AR Perez Companc S.A. (ADR) 30,938
675 KR Pohang Iron & Steel Co. Ltd. 79,892
1,800 TH Siam Cement Co. Ltd. 54,671
--------------
251,664
--------------
CHEMICALS/TEXTILES 2.1%
900 KR L.G. Chemicals Ltd. 24,492
1,750 KR S.K. Corp. 50,346
--------------
74,838
--------------
ELECTRICAL EQUIPMENT 0.7%
1,700 PO Elektrim S.A. 23,397
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 51
<PAGE>
Dresdner RCM Emerging Markets Fund
Portfolio of Investments
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY EQUITY INVESTMENTS NET ASSETS (NOTE 1)
- -----------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
HOUSEHOLD/RELATED NON-DURABLES 1.0%
1,950 GR Maillis $ 36,719
INDUSTRIAL EQUIPMENT 0.9%
28,000 MY Sime Darby 33,043
RAW/BASIC MATERIALS 7.5%
8,400 MX Alfa S.A. de C.V. Class A 34,807
310 GB Anglo American PLC. * 14,487
2,300 BR Aracruz Celulose S.A. (ADR) 50,600
2,100 PE Compania De Minas Buenaventura S.A. (Sponsored
ADR) 32,156
1,400 BR Gerdau S.A. (ADR) 22,575
3,660 SA Impala Platinum Holdings Ltd. 92,069
10,000 ID PT Semen Gresik (Persero) 21,786
--------------
268,480
--------------
TRANSPORTATION SERVICES 1.1%
48,000 HK Cosco Pacific Ltd. 39,594
ENERGY SECTOR 4.5%
ENERGY 4.5%
2,800 IN Castrol India Ltd. 26,814
1,200 KR Korea Electric Power Corp. (ADR) 24,600
1,450 HU MOL Magyar Olaj-Es Gazipari Rt 34,949
475,000 BR Petroleo Brasiliers S.A. (Petrobras) 73,675
--------------
160,038
--------------
INTEREST SENSITIVE SECTOR 23.7%
BANKING 16.1%
1,293 GR Alpha Credit Bank 83,348
8,800 BR Banco Bradesco S.A. (ADR) 42,350
10,000 PH Bank of The Phillipine Islands 35,742
800 KR Housing & Commercial Bank * 25,227
4,500 KR Kookmin Bank 91,361
18,200 MY Malayan Banking Berhad 49,166
1,102 GR National Bank of Greece S.A. 72,086
5,390 PH Phillipine Commericial International Bank 36,830
20,000 TH Thai Farmers Bank Co. Ltd. * 61,830
1,650 BR Unibanco (Sponsored GDR) 39,703
2,500 TR Yapi Ve Kredi Bankasi (GDR) 37,825
--------------
575,468
--------------
GENERAL FINANCE 2.6%
42,500 MY Commerce Asset Holdings Berhad 94,668
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 52
<PAGE>
Dresdner RCM Emerging Markets Fund
Portfolio of Investments
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY EQUITY INVESTMENTS NET ASSETS (NOTE 1)
- -----------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
INSURANCE 2.7%
38,000 HK AXA China Region Ltd. $ 30,365
6,500 SA Fedsure Holdings Ltd. 67,860
--------------
98,225
--------------
UTILITIES 2.3%
81,000 CI Beijing Datang Power Generation Co. Ltd. 26,099
125,705 BR Electropaulo Metropolitana (Receipts) Pfd. * 5,566
1,200 KR Korea Electric Power Corp. 49,866
--------------
81,531
--------------
TECHNOLOGY SECTOR 11.3%
COMPUTERS/OFFICE EQUIPMENT 2.4%
4,200 TW Asustek Computer Inc. (GDR) 60,585
5,537 SA Dimension Data Holdings Ltd. * 24,499
--------------
85,084
--------------
ELECTRONICS/NEW TECHNOLOGY 7.0%
1,600 TW ASE Test Ltd. * 34,400
413 KR Samsung Electronics Co. 45,314
5,958 TW Siliconware Precision Industries (GDR)* 80,582
2,600 TW Taiwan Semiconductor Manufacturing (ADR)* 88,400
--------------
248,696
--------------
TECHNOLOGY SERVICES 1.9%
700 IN Infosys Technologies Ltd. (ADR) 40,600
600 SG Pacific Internet Ltd. * 28,425
--------------
69,025
--------------
TELEMEDIA/SERVICES SECTOR 17.8%
COMMUNICATIONS SERVICES 13.7%
1,900 CL Cia. de Telecomunicaciones de Chile S.A. (ADR) 47,025
6,000 MX Grupo Carso Global Telecom * 37,913
3,000 GR Hellenic Telecommunications Organization S.A.
(ADR) 33,187
10,000 HU Matav Rt. 54,076
25 KR SK Telecom Co. Ltd. 34,147
5 KR SK Telecom Co. Ltd., Rights * 2,562
650 BR Tele Centro Sul Participacoes S.A. (ADR) 36,075
1,080 AR Telecom Argentina S.A. (ADR) 28,890
1,130 BR Telecommunicacoes Brasileiras S.A. Pfd. (ADR) 101,912
1,400 MX Telefonos de Mexico (ADR) 113,138
--------------
488,925
--------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 53
<PAGE>
Dresdner RCM Emerging Markets Fund
Portfolio of Investments
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY EQUITY INVESTMENTS NET ASSETS (NOTE 1)
- -----------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
MEDIA 4.1%
3,000 PO Agora S.A. (GDR) * $ 36,000
6,800 TH BEC World Public Co. Ltd. Foreign Shares 42,414
1,550 MX Grupo Televisa S.A. (ADR) * 69,459
--------------
147,873
--------------
TOTAL EQUITY INVESTMENTS (COST $2,757,329) 96.3% 3,447,820
--------------
TOTAL INVESTMENTS (COST $2,757,329) ** 96.3% 3,447,820
OTHER ASSETS LESS LIABILITIES 3.7% 133,296
--------------
NET ASSETS 100.0% $ 3,581,116
--------------
--------------
</TABLE>
- --------------------------------
* Non-income producing security.
ADR American Depository Receipt
GDR Global Depository Receipt
Pfd. Preferred Stock
Tax information:
** For Federal income tax purposes, cost is $3,044,997 and the gross aggregate
unrealized appreciation (depreciation) for all securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation $ 454,420
Unrealized depreciation (51,597)
-------------
Net unrealized
appreciation $ 402,823
-------------
-------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 54
<PAGE>
Dresdner RCM Emerging Markets Fund
Portfolio of Investments
June 30, 1999 (Unaudited)
The Fund's investments in securities at June 30, 1999, categorized by country:
<TABLE>
<CAPTION>
% OF NET ASSETS
------------------------------------------
COUNTRY SHORT-TERM
COUNTRY CODE EQUITIES AND OTHER TOTAL
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
Argentina AR 1.7% 1.7%
Bermuda BM 1.5% 1.5%
Brazil BR 11.6% 11.6%
China CI 0.7% 0.7%
Chile CL 1.3% 1.3%
Great Britain GB 1.2% 1.2%
Greece GR 6.3% 6.3%
Hong Kong HK 3.1% 3.1%
Hungary HU 2.5% 2.5%
India IN 6.9% 6.9%
Indonesia ID 0.6% 0.6%
Korea KR 11.9% 11.9%
Malaysia MY 6.8% 6.8%
Mexico MX 14.0% 14.0%
Peru PE 0.9% 0.9%
Phillippines PH 3.9% 3.9%
Poland PO 1.7% 1.7%
Singapore SG 0.9% 0.9%
South Africa SA 5.1% 5.1%
Taiwan TW 7.4% 7.4%
Thailand TH 5.2% 5.2%
Turkey TR 1.1% 1.1%
United States US -- 3.7% 3.7%
--- --- ----------
Total 96.3% 3.7% 100.0%
--- --- ----------
--- --- ----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 55
<PAGE>
Dresdner RCM Europe Fund
Management's Performance Review
The Dresdner RCM Europe Fund performed in line with its benchmark during
the first half of 1999 despite major shifts in portfolio holdings caused by
shareholder-approved changes in the investment mandate from a pure German fund
to a pan-European portfolio and the conversion from a closed-end to an open
fund. For the six months ended June 30, 1999, the Dresdner RCM Europe Fund
returned -3.44% while the MSCI Europe Index returned -2.27%.
MARKET REVIEW
On January 1, 1999, eleven European nations abandoned local currencies
in favor of the euro, Europe's new single currency. But instead of rivaling the
U.S. dollar in terms of strength and stability as proponents had predicted, the
euro steadily weakened during the first half of 1999. The euro's performance
reflected the growing gap in economic growth between the U.S. and Europe,
concerns over the war in Kosovo, and an outflow of liquidity as investors sold
European equities to fund purchases in Asia. Europe's sluggish growth was
particularly evident in Germany and Italy, which account for about half of the
Euroland economy.
On the positive side, the euro has been a significant catalyst for
mergers & acquisition activity in Europe, as companies increasingly strive to
gain scale on a pan-European basis in the face of global competition. This
development, along with the surge in initial public offerings, reinforces the
new European equity culture, as more and more individuals invest in stocks and
mutual funds to save for retirement. Until recently, the pension needs of
European citizens was a role reserved for government. However, given the budget
constraints imposed under the Maastricht Treaty, individuals will have to
provide more of their own retirement funding.
FACTORS AFFECTING PERFORMANCE
The Dresdner RCM Europe Fund was originally launched in 1990 as a
closed-end fund to focus on emerging Germany after the demise of the Berlin
Wall. In subsequent years, the advent of the European Monetary Union expanded
investor focus beyond single countries. In February 1999, shareholders voted to
broaden the Fund's mandate from Germany to all of Europe, reflecting the new
Euroland environment. To meet the mandate, Dresdner RCM, the investment manager
of the Fund, had to sell German equities and purchase equities of other
countries. Unfortunately, the German market had weakened considerably during
this time period, causing the Fund to realize fewer profits than would
ordinarily have been the case.
Also affecting the Fund's performance was the shareholder-approved
conversion to an open-end fund on May 3, 1999. This conversion led to expected
redemptions which, in turn, required sales of securities in generally weak
markets. Despite this handicap, the Dresdner RCM Europe Fund outperformed its
benchmark in the second quarter, with the Fund achieving a total return of 3.64%
while the MSCI Europe Index posted a return of -0.24%.
In connection with the open-ending of the Fund, shareholders approved a
1% redemption fee that will be in effect until November 1, 1999. The redemption
fee applies to shares that are held for less than one year.
A major positive factor affecting performance was the Fund's overweight
in telecommunications and technology, with 32% and 17% of the portfolio invested
there, respectively, compared to 18% and 6% in the benchmark. This reflects
Dresdner RCM's view that these two industries are likely to experience superior
earnings growth for many years to come. Major contributors to performance
included United PanEuropean Communications (UPC), a Dutch cable T.V. service and
Internet provider that has been a leader in creating a pan-European network;
Nokia, a technological and market leader in wireless communications with strong
potential to benefit from increasing penetration in the wireless markets; and
STMicroelectronics, a French semiconductor company that invested in research and
development in the downturn of the semiconductor cycle a few years ago, who is
now a key benficiary of the upturn in the semiconductor industry.
Early in the second quarter, there was a shift in investor preference
from growth to cyclical stocks. The Fund benefited from its holdings in BP Amoco
and Shell Transport & Trading, which rose due to the sharp recovery in oil
prices and improved OPEC compliance on production targets. The energy sector
also experienced some consolidation during the period. Although the environment
for financial services was generally negative due to weak bond markets in the
U.S. and Europe, Italy-based Banca Popolare di Brescia performed very well
during the period. Innovative and profitable, the bank stands to benefit from
Page 56
<PAGE>
Dresdner RCM Europe Fund
Management's Performance Review
the inevitable consolidation in the European banking industry. The bank is at
the forefront of new product development and alternative distribution for
financial services.
Another positive aspect affecting performance was the Fund's
underweighted position in the European pharmaceutical industry, which had
extended valuations and disappointing growth prospects. The outlook for the
improvement in global economic growth made pharmaceuticals, consumer
nondurables-another underweighted area-and other stable growth areas look less
attractive, which proved advantageous for the portfolio.
OUTLOOK
Dresdner RCM expects a gradual stabilization and improvement in European
economic growth during the second half of 1999. Europe's environment of low
inflation, low interest rates, increasing M&A activity and a pickup in demand
due to Asia's recovery is very positive for corporate profits. Another trend
that is positive for the Fund is the general bias toward large-cap stocks driven
by new investment benchmarks in Europe. Even governmental action, which has
generally lagged behind Corporate Europe in terms of focusing on shareholder
value, is moving in the right direction. A proposal in Germany that would reduce
the corporate tax rate from 45% to 25% is clearly positive for German equities.
The changing European business environment, the improving economies in Asia and
the booming U.S. economy all bode well for companies doing business in Europe
and suggests an improved outlook for the Dresdner RCM Europe Fund.
Page 57
<PAGE>
Dresdner RCM Europe Fund
Total Return Index Comparison(c)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
Class N Shares MSCI-Europe(a) DAX 100(b)
<S> <C> <C> <C>
4/5/90 10,000 10,000 10,000
4/1/90 9,150 9,738 9,346
5/1/90 9,117 10,535 9,432
6/1/90 9,400 10,909 9,862
7/1/90 9,708 11,372 10,643
8/1/90 8,617 10,249 9,117
9/1/90 7,358 9,046 7,545
10/1/90 8,250 9,814 8,450
11/1/90 8,283 9,917 8,575
12/1/90 8,000 9,778 8,318
1/1/91 7,898 10,111 8,425
2/1/91 8,289 11,000 8,858
3/1/91 7,319 10,266 7,848
4/1/91 7,600 10,163 8,194
5/1/91 7,847 10,466 8,514
6/1/91 7,311 9,591 7,813
7/1/91 7,591 10,260 8,075
8/1/91 7,694 10,451 8,216
9/1/91 7,770 10,769 8,390
10/1/91 7,481 10,547 8,239
11/1/91 7,387 10,303 8,293
12/1/91 7,739 11,113 8,872
1/1/92 7,835 11,114 8,965
2/1/92 8,071 11,162 9,123
3/1/92 7,879 10,776 8,953
4/1/92 7,853 11,375 8,974
5/1/92 8,263 12,026 9,534
6/1/92 8,202 11,806 9,712
7/1/92 7,792 11,390 9,259
8/1/92 7,818 11,358 9,266
9/1/92 7,346 11,175 8,761
10/1/92 6,883 10,399 8,171
11/1/92 6,735 10,398 8,146
12/1/92 6,602 10,642 7,980
1/1/93 6,806 10,664 8,163
2/1/93 7,134 10,790 8,580
3/1/93 7,293 11,349 8,829
4/1/93 7,249 11,603 8,691
5/1/93 7,320 11,732 8,720
6/1/93 6,992 11,564 8,369
7/1/93 7,329 11,607 8,746
8/1/93 8,002 12,629 9,740
9/1/93 8,091 12,594 9,824
10/1/93 8,490 13,123 10,290
11/1/93 8,259 12,843 10,096
12/1/93 8,792 13,812 10,880
1/1/94 8,559 14,519 10,598
2/1/94 8,541 14,009 10,397
3/1/94 8,775 13,617 10,768
4/1/94 9,142 14,185 11,477
5/1/94 8,730 13,586 10,922
6/1/94 8,541 13,448 10,871
7/1/94 8,792 14,156 11,458
8/1/94 9,026 14,609 11,854
9/1/94 8,299 14,035 11,103
10/1/94 8,550 14,651 11,682
11/1/94 8,182 14,095 11,082
12/1/94 8,364 14,179 11,508
1/1/95 8,064 14,073 11,191
2/1/95 8,500 14,397 12,166
3/1/95 8,073 15,070 11,812
4/1/95 8,300 15,559 12,295
5/1/95 8,527 15,882 12,628
6/1/95 8,664 16,038 12,958
7/1/95 9,009 16,880 13,702
8/1/95 8,500 16,233 12,947
9/1/95 8,482 16,730 13,049
10/1/95 8,436 16,656 12,974
11/1/95 8,273 16,781 12,902
12/1/95 8,364 17,318 13,188
1/1/96 8,682 17,438 13,838
2/1/96 8,836 17,762 13,942
3/1/96 8,682 17,981 13,913
4/1/96 8,355 18,117 13,414
5/1/96 8,618 18,264 13,784
6/1/96 8,964 18,470 14,119
7/1/96 8,846 18,245 14,090
8/1/96 9,073 18,792 14,367
9/1/96 9,136 19,195 14,513
10/1/96 9,164 19,646 14,611
11/1/96 9,591 20,648 15,204
12/1/96 9,709 21,054 15,299
1/1/97 9,600 21,118 15,334
2/1/97 9,883 21,403 15,951
3/1/97 10,493 22,100 16,918
4/1/97 10,210 21,997 16,409
5/1/97 10,584 22,942 17,202
6/1/97 11,149 24,096 17,926
7/1/97 12,278 25,231 19,555
8/1/97 11,285 23,796 17,670
9/1/97 12,214 26,109 19,204
10/1/97 11,522 24,832 17,692
11/1/97 11,786 25,219 18,150
12/1/97 12,182 26,147 19,048
1/1/98 12,724 27,243 19,476
2/1/98 13,430 29,379 20,801
3/1/98 14,746 31,479 22,112
4/1/98 15,558 32,096 22,846
5/1/98 16,250 32,754 24,902
6/1/98 17,268 33,121 25,822
7/1/98 18,775 33,784 26,116
8/1/98 15,346 29,540 21,849
9/1/98 14,608 28,368 21,326
10/1/98 15,676 30,645 22,438
11/1/98 16,386 32,285 23,431
12/1/98 16,738 33,706 23,515
1/1/99 17,253 33,497 23,442
2/1/99 16,088 32,656 21,825
3/1/99 15,611 33,022 21,288
4/1/99 15,973 34,012 22,781
5/1/99 15,463 32,386 21,302
6/1/99 16,138 32,940 22,233
$10,000 Investment (4/05/90-6/30/99)(d)
</TABLE>
PERFORMANCE(C)
JUNE 30, 1999
<TABLE>
<CAPTION>
CUMULATIVE
SINCE SINCE
YTD(E) 1 YEAR 3 YEAR 5 YEAR INCEPTION INCEPTION
<S> <C> <C> <C> <C> <C> <C>
Class N
Average Annual Total
Return(d) -3.44% -6.52% 21.66% 13.58% 5.36% 61.38%
</TABLE>
The data above represents past performance of the Fund and may not be
indicative of future performance. The investment return and principal value of
an investment in the Fund will fluctuate, so that shares, when redeemed, may be
worth more or less than their original cost.
- --------------------------------
(a) The MSCI-Europe Index is a market capitalization-weighted index composed of
companies representative of the market structure of 15 developed countries.
The Index is calculated on a total return basis, which includes reinvestment
of gross dividends before deduction of withholding taxes. The graph for the
MSCI-Europe Index represents growth of $10,000 from March 31, 1990 compared
to the Fund's inception date of April 5, 1990.
(b) The DAX 100 Index is a total rate of return index of the 100 most highly
capitalized stocks traded on the Frankfurt Stock Exchange. The Index was
developed with a base value of 500 as of December 31, 1987. The underlying
stock prices are from XETRA.
(c) Returns assume reinvestment of all dividends and capital gains distributions
at net asset value.
(d) Class N shares commenced operations on April 5, 1990.
(e) Unannualized.
Page 58
<PAGE>
Dresdner RCM Europe Fund
Portfolio of Investments
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY EQUITY INVESTMENTS NET ASSETS (NOTE 1)
- -----------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
CONSUMER DURABLES SECTOR 3.5%
AUTOMOTIVE RELATED 2.6%
550 DE Porsche AG $ 1,293,216
CONSUMER DURABLES 0.9%
2,329 DE Schneider Rundfunkwerke AG * 453,946
CONSUMER NON-DURABLES SECTOR 6.6%
HOUSEHOLD/RELATED NON-DURABLES 0.0%
112 NL Benckiser N.V. 5,977
LEISURE TIME PRODUCTS/SERVICES 2.4%
150,000 UK Airtours PLC 1,196,412
RETAIL TRADE 4.2%
8,000 FR Carrefour Supermarche S.A. 1,175,650
50,000 UK Dixons Group PLC 937,899
500 NL Koninklijke Ahold N.V. 17,222
--------------
2,130,771
--------------
CYCLICAL/CAPITAL GOODS SECTOR 14.6%
BUILDING/CONSTRUCTION 1.4%
40,300 IE CRH PLC 714,836
ELECTRICAL EQUIPMENT 1.8%
9,016 NL Koninklijke (Royal) Philips Electronics N.V. 889,349
INDUSTRIAL EQUIPMENT 5.4%
154,000 UK Hanson PLC 1,383,676
36,000 NO Tomra Systems ASA 1,353,619
--------------
2,737,295
--------------
RAW/BASIC MATERIALS 3.4%
293,000 IE Jefferson Smurfit Group PLC 692,784
35,000 FI UPM-Kymmene Oyj 1,003,428
--------------
1,696,212
--------------
TRANSPORTATION SERVICES 2.6%
25,000 DE Sixt AG Non-Voting Pfd. 1,340,654
ENERGY SECTOR 7.6%
ENERGY 7.6%
77,706 UK BP Amoco PLC 1,391,463
230,000 UK Shell Transport & Trading Co. 1,725,733
5,500 FR Total Fina S.A. (B Shares) 709,567
--------------
3,826,763
--------------
HEALTH CARE SECTOR 2.6%
DRUGS AND HOSPITAL SUPPLIES 2.6%
31,200 FR Synthelabo * 1,324,030
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 59
<PAGE>
Dresdner RCM Europe Fund
Portfolio of Investments
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY EQUITY INVESTMENTS NET ASSETS (NOTE 1)
- -----------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
INTEREST-SENSITIVE SECTOR 15.6%
BANKING 12.0%
32,500 IT Banca Popolare di Brescia $ 1,392,604
633 UK Bank of Scotland 8,466
8,000 FR Banque Nationale de Paris 666,615
50,000 UK Barclays PLC 1,454,137
12,600 DE Bayerische Hypo- und Vereinsbank AG 818,624
300 CH Julius Bar Holding Ltd. 854,888
3,000 CH Union Bank of Switzerland AG 895,413
--------------
6,090,747
--------------
INSURANCE 3.6%
56,400 UK Allied Zurich AG PLC 709,004
2,782 UK CGU PLC 40,059
72,700 UK Prudential Corp. PLC 1,071,482
--------------
1,820,545
--------------
TECHNOLOGY SECTOR 16.7%
COMPUTERS/OFFICE EQUIPMENT 2.4%
45,000 DE Maxdata AG * 1,206,589
ELECTRONICS/NEW TECHNOLOGY 13.3%
6,000 DE Aixtron AG 494,392
50,000 SE Ericsson (LM) Telefonaktiebolaget 1,646,875
33,500 FI Nokia Corp. (ADR) 3,067,344
22,000 FR STMicroelectronics N.V. NY Registry 1,526,250
--------------
6,734,861
--------------
TECHNOLOGY SERVICES 1.0%
40,000 UK Psion PLC 517,026
TELEMEDIA/SERVICES SECTOR 31.7%
BUSINESS SERVICES 1.1%
2,000 FR Altran Technologies S.A. 528,011
COMMUNICATION SERVICES 24.0%
100,000 UK British Telecom PLC 1,674,031
20,000 CZ Ceske Radiokomunikace A.S. (GDR) (144A) * 690,000
15,000 NL Equant N.V. NY Registry * 1,411,875
20,000 US Global TeleSystems Group Inc. * 1,620,000
15,000 DE Mannesmann AG 2,238,377
22,200 ES Telefonica S.A. 1,072,137
20,200 NL United Pan-Europe Communications * 1,095,747
119,000 UK Vodafone Airtouch PLC 2,340,995
--------------
12,143,162
--------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 60
<PAGE>
Dresdner RCM Europe Fund
Portfolio of Investments
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY EQUITY INVESTMENTS NET ASSETS (NOTE 1)
- -----------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
MEDIA 6.6%
5,000 FR Canal Plus $ 1,403,046
600 DE EM.TV & Merchandising AG 844,612
125,000 IT Mediaset SpA 1,111,196
--------------
3,358,854
--------------
TOTAL EQUITY INVESTMENTS (COST $44,007,629) 98.9% 50,009,256
--------------
SHORT-TERM INVESTMENTS
<CAPTION>
FACE
AMOUNT
- ---------
<C> <C> <S> <C> <C>
TIME DEPOSIT 0.6%
276,000 US Time Deposit 3.750% maturing 07/01/99 276,000
--------------
TOTAL SHORT-TERM INVESTMENTS (COST $276,000) 0.6% 276,000
--------------
TOTAL INVESTMENTS (COST $44,283,629) ** 99.5% 50,285,256
OTHER ASSETS LESS LIABILITIES 0.5% 274,516
--------------
NET ASSETS 100.0% $ 50,559,772
--------------
--------------
</TABLE>
- --------------------------------
* Non-income producing security
ADR American Depository Receipt
GDR Global Depository Receipt
Pfd. Preferred Stock
144A Security is purchased pursuant to Rule 144A of the Securities Act of 1933
and may be resold only to qualified institutional buyers.
Tax Information:
** For Federal income tax purposes, cost is $47,232,981 and gross aggregate
unrealized appreciation (depreciation) for all securities is as follows:
<TABLE>
<S> <C>
Unrealized appreciation $ 7,438,984
Unrealized depreciation (4,396,709)
-----------
Net unrealized
appreciation $ 3,052,275
-----------
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 61
<PAGE>
Dresdner RCM Europe Fund
Portfolio of Investments
June 30, 1999 (Unaudited)
The Fund's investments in securities at June 30, 1999, categorized by country:
<TABLE>
<CAPTION>
% OF NET ASSETS
------------------------------------------
COUNTRY SHORT-TERM
COUNTRY CODE EQUITIES AND OTHER TOTAL
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Czech Republic CZ 1.4% 1.4%
Finland FI 8.0% 8.0%
France FR 14.5% 14.5%
Germany DE 17.2% 17.2%
Ireland IE 2.8% 2.8%
Italy IT 4.9% 4.9%
Netherlands NL 6.8% 6.8%
Norway NO 2.7% 2.7%
Spain ES 2.1% 2.1%
Sweden SE 3.3% 3.3%
Switzerland CH 3.5% 3.5%
United Kingdom UK 28.6% 28.6%
United States US 3.2% 1.0% 4.2%
--- --- ----------
Total 99.0% 1.0% 100.0%
--- --- ----------
--- --- ----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 62
<PAGE>
Dresdner RCM Global Equity Fund
Management's Performance Review
A rebounding Japan, a sliding euro currency and continuing strength in
the United States economy characterized the global markets in the first half of
1999. For the six months ended June 30, 1999, the Dresdner RCM Global Equity
Fund returned 10.0%. For the period, the portfolio outperformed its primary
benchmark, the MSCI World Index, which rose 8.69%. Reflecting the continuing
strength of the U.S. stock market, the Standard & Poor's 500 Index returned
12.38% during the first half of 1999, while the MSCI-EAFE Index, which includes
Europe, Australia and the Far East, rose 4.11%.
MARKET REVIEW
The Asian economic crisis of 1997-1978 dissipated as decisive action by
the Federal Reserve Board and central banks around the world restored confidence
in the global markets. In Japan, economic growth remained sluggish, but the
corporate sector has begun to focus on shareholder value rather than preserving
the status quo. Following a surge in Japan's over-the-counter market last fall,
the large cap Japanese markets, particularly technology stocks, staged a rebound
after a prolonged bear market.
In Europe, the euro steadily weakened during the first half of 1999,
reflecting the growing gap in economic growth compared to the U.S. In addition,
the war in Kosovo and an outflow of liquidity as investors sold European
equities to fund purchases in Asia adversely affected the markets. On the plus
side, the euro has been a catalyst for cross-border mergers & acquisition
activity in Europe, particularly in the banking and telecommunication sectors,
which in turn has led to an improved corporate profit picture.
In the U.S., the stock market advanced despite rising interest rates,
with technology leading the way. Economic growth was stronger than expected, and
corporate profits improved in a low inflationary environment. The recovery of
the markets in Japan and the rest of Asia also created a positive climate for
U.S. companies, many of which have a high exposure to the region. During the
second quarter, investor preference shifted away from growth toward cyclical
stocks, although growth made a strong comeback in June.
FACTORS AFFECTING PERFORMANCE
Although country and currency risk are critical variables, the
management of the portfolio is driven by bottom-up research, with the objective
of generating above-average returns through superior stock selection. Indeed,
stock selection in Japan, as well as a hefty weighting in technology throughout
the world, accounted for the majority of outperformance during the first half of
1999.
The Fund's strongest Japan performer was Softbank, the holding company
for several U.S. Internet stocks including Yahoo!, Ebay, E*Trade and Ziff-Davis,
the publishing concern. Softbank has been very astute at funding Internet
ventures throughout the world. Within Japan, Softbank is capitalizing on the
profound impact that the Internet is likely to have in Japan, where the consumer
has traditionally been poorly served.
In the U.S., the Fund's investment in QUALCOMM was very timely, as the
company announced that it would be the dominant player in the new cellular
technology standard throughout the world. In addition, Uniphase, a company whose
laser technology plays an important role in the telecommunications industry's
ability to increase the capacity of traffic carried over fiber-optic networks,
was a strong performer during the period.
In Europe, the precipitous depreciation of the euro was a drag on
performance. In addition, the advent of Euroland created an exodus by European
fund managers out of certain traditional European assets, particularly in
Germany and the Netherlands, and into other European markets. However, a plus
for the portfolio was an underweight in interest-sensitive stocks, which
performed poorly in the bear market for bonds, and pharmaceutical companies,
many of which have exposure to the U.S. market where Congress is considering
expanding Medicare to include prescription drugs.
OUTLOOK
Dresdner RCM has a very positive outlook about global markets, supported
by generally improving economies and an increasing emphasis on shareholder
value. In Europe, the trend toward consolidation is likely to increase in the
second half of 1999, driving economic growth and stabilizing the euro. In Japan,
the nation's monetary and fiscal policies support the current bull market.
Although the
Page 63
<PAGE>
Dresdner RCM Global Equity Fund
Management's Performance Review
Bank of Japan is only targeting a 0.5% to 1% growth in Gross National Product
for 1999, investors are focusing not so much on economic revival but on
corporate restructuring and improving returns on equity. In the U.S., the pace
of economic expansion and consumer spending remains robust, driven by the
"wealth effect" created by the continuing bull market. Corporate profits are
growing much faster than expected, with positive earnings surprises concentrated
in the technology, basic materials and retail sectors.
On a valuation basis, Dresdner RCM believes that international markets
are recovering from a period of lackluster growth. They appear to offer much
more opportunity than the U.S., with companies typically trading at lower
multiples for higher growth than their U.S. counterparts. Dresdner RCM will
continue to employ rigorous fundamental research to uncover companies throughout
the world with superior earnings growth selling at reasonable valuations.
Page 64
<PAGE>
Dresdner RCM Global Equity Fund
Total Return Index Comparison(c)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
Class I Shares S&P 500 Stock Index(a) MSCI-ACWI Free(b)
<S> <C> <C> <C>
12/31/98 $10,000 $10,000 $10,000
1/31/99 $10,300 $10,418 $10,204
2/28/99 $9,940 $10,094 $9,948
3/31/99 $10,430 $10,498 $10,396
4/30/99 $10,520 $10,904 $10,845
5/31/99 $10,160 $10,647 $10,462
6/30/99 $11,000 $11,238 $10,983
$10,000 Investment (12/31/98-6/30/99)(d)
</TABLE>
PERFORMANCE(C)
JUNE 30, 1999
<TABLE>
<CAPTION>
CUMULATIVE
SINCE
YTD(E) INCEPTION
<S> <C> <C>
Class I
Average Annual Total Return(d) 10.00% 10.00%
</TABLE>
The data above represents past performance of the Fund and may not be
indicative of future performance. The investment return and principal value of
an investment in the Fund will fluctuate, so that shares, when redeemed, may be
worth more or less than their original cost.
- --------------------------------
(a) The Standard & Poor's 500 Stock Index is a capitalization-weighted index of
500 stocks that attempts to measure performance of the board domestic
economy through changes in the aggregate market value of 500 stocks
representing major industries.
(b) The Morgan Stanley Capital International ("MSCI") Global Equity All Country
World Free Index ("ACWI Free") is a market capitalization-weighted index
composed of companies representative of the market structure of 47 developed
and emerging market countries in the Americas, Europe/Middle East, and
Asia/Pacific regions. The Index is calculated without dividends or with
gross dividends reinvested, in both U.S. Dollars and local currencies. The
MSCI ACWI Free Index excludes closed markets and those shares in otherwise
free markets which are not purchasable by foreigners.
(c) Returns assume reinvestment of all dividends and capital gains distributions
at net asset value.
(d) Class I shares commenced operations on December 31, 1998.
(e) Unannualized.
Page 65
<PAGE>
Dresdner RCM Global Equity Fund
Portfolio of Investments
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY EQUITY INVESTMENTS NET ASSETS (NOTE 1)
- -----------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
CONSUMER DURABLES SECTOR 0.4%
AUTOMOTIVE RELATED 0.4%
2 DE Porsche AG $ 4,703
CONSUMER NON-DURABLES SECTOR 9.4%
BEVERAGE/TOBACCO 1.5%
70 US Anheuser-Busch Companies Inc. 4,966
120 US Coca Cola Co. 7,500
420 UK Imperial Tobacco Group PLC 4,604
--------------
17,070
--------------
HOUSEHOLD/RELATED NON-DURABLES 1.8%
155 US Colgate Palmolive Co. 15,306
105 US Gillette Co. 4,305
--------------
19,611
--------------
LEISURE TIME PRODUCTS/SERVICES 1.3%
700 UK Airtours PLC 5,584
100 US McDonalds Corp. 4,131
90 US Tricon Global Restaurants Inc. * 4,871
--------------
14,586
--------------
RETAIL TRADE 4.8%
62 FR Carrefour Supermarche S.A. 9,112
80 US Circuit City Stores Inc. 7,440
115 US Costco Cos. Inc. * 9,207
270 NL Koninklijke Ahold N.V. 9,300
190 US Kroger Co. * 5,308
100 US Nike Inc. (Class B) 6,331
120 US Wal-Mart Stores Inc. 5,790
--------------
52,488
--------------
CYCLICAL/CAPITAL GOODS SECTOR 15.5%
AEROSPACE/DEFENSE 1.6%
150 US General Dynamics Corp. 10,275
110 US Raytheon Co. (Class B) 7,741
--------------
18,016
--------------
BUILDING/CONSTRUCTION 2.4%
333 IE CRH PLC 5,907
170 US Martin Marietta Materials Inc. 10,030
1,000 JP Sekisui House Ltd. 10,790
--------------
26,727
--------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 66
<PAGE>
Dresdner RCM Global Equity Fund
Portfolio of Investments
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY EQUITY INVESTMENTS NET ASSETS (NOTE 1)
- -----------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
CHEMICAL/TEXTILES 1.1%
590 UK BOC Group PLC $ 11,551
ELECTRICAL EQUIPMENT 1.5%
150 US General Electric Co. 16,950
INDUSTRIAL EQUIPMENT 2.2%
250 BH Tyco International Ltd. 23,687
RAW/BASIC MATERIALS 6.1%
360 BR Aracruz Celulose S.A. (ADR) 7,920
1,429 AU Broken Hill Proprietary Co. Ltd. 16,553
8 CH Holderbank Financiere Glarus AG 9,443
4,700 IE Jefferson Smurfit Group PLC 11,113
400 KR Pohang Iron & Steel Co. Ltd. (ADR) 13,450
150 DE Preussag AG 8,059
--------------
66,538
--------------
TRANSPORTATION SERVICES 0.6%
8,000 HK Cosco Pacific Ltd. 6,651
ENERGY SECTOR 5.5%
ENERGY 5.5%
321 UK BP Amoco PLC 5,748
150 US Enron Corp. 12,263
330 US Schlumberger Ltd. 21,017
1,670 UK Shell Transport & Trading Co. 12,530
70 FR Total Fina S.A. (B Shares) 9,031
--------------
60,589
--------------
HEALTH CARE SECTOR 8.0%
DRUGS AND HOSPITAL SUPPLIES 7.2%
210 US Alza Corp. * 10,684
250 US Amgen Inc. * 15,219
170 US Bausch & Lomb Inc. 13,005
60 US Eli Lilly & Co. 4,298
283 UK Glaxo Wellcome PLC 7,865
50 US PE Biosystems Group 5,737
35 US Pfizer Inc. 3,841
234 FR Synthelabo * 9,930
125 US Warner Lambert Co. 8,672
--------------
79,251
--------------
HEALTH CARE SERVICES 0.8%
130 US Cardinal Health Inc. 8,336
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 67
<PAGE>
Dresdner RCM Global Equity Fund
Portfolio of Investments
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY EQUITY INVESTMENTS NET ASSETS (NOTE 1)
- -----------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
INTEREST-SENSITIVE SECTOR 16.5%
BANKING 8.5%
300 US Bank of New York Inc. $ 11,006
403 UK Bank of Scotland 5,390
80 FR Banque Nationale de Paris 6,666
80 DE Bayerische Hypo- und Vereinsbank AG 5,198
125 US Citigroup Inc. 5,938
140 DE Deutsche Bank AG 8,540
250 KR Housing & Commercial Bank, Korea (GDR) 7,737
400 UK HSBC Holdings PLC 14,590
740 UK Lloyds TSB Group PLC 10,049
850 FI Merita PLC 4,830
150 CA Toronto Dominion Bank 6,765
23 CH Union Bank of Switzerland AG 6,865
--------------
93,574
--------------
GENERAL FINANCE 4.1%
100 JP Aeon Credit Service Ltd. 9,501
100 JP Aiful Corp. 12,244
70 US Charles Schwab Corp. 7,691
500 JP Credit Saison Co. Ltd. 10,452
100 JP Mycal Card Inc. 4,544
--------------
44,432
--------------
INSURANCE 3.9%
850 IT Alleanza Assicurazioni SpA 9,774
400 UK Allied Zurich AG PLC 5,028
90 US American International Group Inc. 10,536
45 FR Axa S.A. 5,490
7 UK CGU PLC 101
830 UK Prudential Corp. PLC 12,233
--------------
43,162
--------------
TECHNOLOGY SECTOR 24.5%
COMPUTERS/OFFICE EQUIPMENT 5.0%
670 JP Canon Inc. (ADR) 19,514
190 US E M C Corp. * 10,450
250 JP Fujitsu Ltd. (ADR) 25,147
--------------
55,111
--------------
ELECTRONICS/NEW TECHNOLOGY 13.4%
480 US Cisco Systems Inc. * 30,960
300 SE Ericsson (LM) Telefonaktiebolaget 9,616
30 JP Matsushita Electric Industrial Co. Ltd. (ADR) 5,949
280 FI Nokia Oyj 24,544
140 US QUALCOMM Inc. * 20,090
280 FR STMicroelectronics N.V. NY Registry 19,425
400 TW Taiwan Semiconductor Manufacturing Co. (ADR) 13,600
140 US Uniphase Corp. * 23,240
--------------
147,424
--------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 68
<PAGE>
Dresdner RCM Global Equity Fund
Portfolio of Investments
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY EQUITY INVESTMENTS NET ASSETS (NOTE 1)
- -----------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
TECHNOLOGY SERVICES 6.1%
85 US America Online Inc. $ 9,393
300 US Microsoft Corp. * 27,056
100 JP Softbank Corp. 20,250
60 US Yahoo Inc. * 10,335
--------------
67,034
--------------
TELEMEDIA/SERVICES SECTOR 18.6%
BUSINESS SERVICES 1.0%
200 US Waste Management Inc. 10,750
COMMUNICATION SERVICES 14.4%
101 US AT&T Corp. 5,609
230 US Bell Atlantic Corp. 15,036
930 UK British Telecom PLC 15,569
70 NL Equant N.V. NY Registry * 6,589
100 IS Gilat Satellite Networks Ltd. * 5,250
90 US Global TeleSystems Group Inc. * 7,290
152 DE Mannesmann AG 22,682
370 US MCI WorldCom Inc. * 31,843
240 US SBC Communications Inc. 13,920
102 ES Telefonica S.A. 4,926
160 MX Telefonos De Mexico (ADR) 12,930
855 UK Vodafone Airtouch PLC 16,820
--------------
158,464
--------------
MEDIA 3.2%
30 FR Canal Plus 8,418
150 US Clear Channel Communications * 10,341
550 IT Mediaset SpA 4,889
1,400 UK TeleWest Communications PLC * 6,273
80 US Time Warner Inc. 5,880
--------------
35,801
--------------
TOTAL EQUITY INVESTMENTS (COST $954,096) 98.4% 1,082,506
--------------
SHORT-TERM INVESTMENTS
MONEY MARKET FUNDS 0.8%
12 US SSgA Money Market Fund 12
8,478 US SSgA U.S. Government Money Market Fund 8,478
--------------
TOTAL SHORT-TERM INVESTMENTS (COST $8,490) 0.8% 8,490
--------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 69
<PAGE>
Dresdner RCM Global Equity Fund
Portfolio of Investments
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
NET ASSETS (NOTE 1)
- -----------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
TOTAL INVESTMENTS (COST $962,586) ** 99.2% $ 1,090,996
OTHER ASSETS LESS LIABILITIES 0.8% 9,049
--------------
NET ASSETS 100.0% $ 1,100,045
--------------
--------------
</TABLE>
- --------------------------------
* Non-income producing security
ADR American Depository Receipt
Tax Information:
** At June 30, 1999, the aggregate cost of investments for book and Federal
income tax was the same. Gross aggregate unrealized appreciation
(depreciation) for all securities is as follows:
<TABLE>
<S> <C>
Unrealized appreciation $ 151,185
Unrealized depreciation (22,775)
---------
Net unrealized
appreciation $ 128,410
---------
---------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fund's investments in securities at June 30, 1999, categorized by country:
<TABLE>
<CAPTION>
% OF NET ASSETS
------------------------------------------
COUNTRY SHORT-TERM
COUNTRY CODE EQUITIES AND OTHER TOTAL
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Australia AU 1.5% 1.5%
Bermuda BH 2.2% 2.2%
Brazil BR 0.7% 0.7%
Canada CA 0.6% 0.6%
Finland FI 2.7% 2.7%
France FR 6.2% 6.2%
Germany DE 4.5% 4.5%
Hong Kong HK 0.6% 0.6%
Ireland IE 1.5% 1.5%
Israel IS 0.5% 0.5%
Italy IT 1.3% 1.3%
Japan JP 10.8% 10.8%
Korea KR 1.9% 1.9%
Mexico MX 1.2% 1.2%
Netherlands NL 1.4% 1.4%
Spain ES 0.4% 0.4%
Sweden SE 0.9% 0.9%
Switzerland CH 1.5% 1.5%
Taiwan TW 1.2% 1.2%
United Kingdom UK 12.2% 12.2%
United States US 44.6% 1.6% 46.2%
--- --- ----------
Total 98.4% 1.6% 100.0%
--- --- ----------
--- --- ----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 70
<PAGE>
Dresdner RCM Strategic Income Fund
Management's Performance Review
A rising interest rate environment exerted downward pressure on bond
prices during the first half of 1999, although Strategic Income Fund investors
continued to receive attractive returns due in part to the portfolio's emerging
market and high-yield holdings. For the six months ending June 30, 1999, the
Dresdner RCM Strategic Income Fund returned 0.60% while the Lehman Brothers U.S.
Universal Index, the Fund's unmanaged benchmark, returned -0.66%.
MARKET REVIEW
At the beginning of 1999, the global economic turmoil was still fresh in
the minds of fixed-income investors. As a result, incremental yields on lower
quality bonds were very high and relatively attractive compared to U.S. Treasury
securities. However, by the end of the first quarter, investors were more
convinced that the global economy was strengthening while the U.S. economy was
outperforming expectations. Treasury bonds sold off sharply and other categories
of bonds outperformed.
As the end of the six-month period approached, there were concerns that
the U.S. economy might be overheating. The bond market continued to sell off in
the second quarter in reaction to the apparent stabilization of foreign
economies and concerns about inflation. Led by rising energy prices, the
Consumer Price Index rose 0.7% in April, the largest monthly increase in over
nine years. When the Federal Reserve shifted to a tightening bias in mid-May,
there were renewed concerns about a withdrawal of liquidity, which is typically
negative for non-government bonds, and corporate bonds began to underperform.
In addition, the supply of corporate bonds surged, placing further
pressure on bond prices, as issuers sought to accelerate their financing
activity ahead of Y2K concerns. On June 30, 1999, the Fed raised short-term
interest rates 25 basis points and shifted from a tightening to a neutral bias.
Over the six month period, the yield on 10-year Treasury notes rose 113 basis
points, while the 30-year bond rose 87 basis points. Further downside in the
Treasury market was limited by strong foreign demand, prompted by the strength
in the U.S. dollar relative to the euro and the yen.
FACTORS AFFECTING PERFORMANCE
The Dresdner RCM Strategic Income Fund seeks attractive current income
by investing primarily in a portfolio of debt securities of issuers in both U.S.
and foreign markets, including emerging markets. Dresdner RCM Global Investors
LLC ("Dresdner RCM"), the investment manager of the Fund, seeks to diversify its
portfolio by allocating its assets across 1) investment grade U.S. and foreign
government debt securities; 2) investment grade U.S. and foreign corporate debt
securities; 3) emerging market debt securities; and 4) U.S. and foreign debt
securities rated below investment grade. The Fund's allocation of investments
among these categories is based on an evaluation of expected performance and
risk of each type of investment. Dresdner RCM employs a top-down sector
analysis, and sector specialists create a diversified portfolio of bonds within
their sector that they believe will provide the best risk/return trade-off.
Dresdner RCM is also able to capitalize on its Grassroots-SM- Research
capabilities and its equity research team.
During the period under review, the largest component of the Fund was
invested in the U.S. high-yield market, which has become an increasingly
important part of the overall fixed income market. Since 1992, the U.S.
high-yield market has tripled in size to about $600 billion. The amount of new
issues has jumped from a low of $1.4 billion in 1990 to $150 billion in 1998,
and defaults have been relatively rare. To minimize the possibility of default,
Dresdner RCM undertakes a rigorous credit review process of each security and
emphasizes the higher quality range of the high-yield market.
Another large component of the Fund was emerging market debt, which
performed well, coming off crisis valuations in late 1998 and the extremely wide
yield spreads at the beginning of the year. Although the sector continued to be
very volatile, moving from one relatively minor crisis to another during the
first half of 1999, the total return for the sector was very positive.
Meanwhile, the bonds continued to produce attractive income for shareholders.
Dresdner RCM was successful in identifying out of favor credits, such as
Russian bonds after the country's default on its government debt last fall.
Dresdner RCM believed there was a genuine improvement in the Russian
Page 71
<PAGE>
Dresdner RCM Strategic Income Fund
Management's Performance Review
economic condition and that the threat of default was diminishing. They also saw
value in Brazilian bonds after their devaluation in January, and continued to
hold Bulgarian bonds after the start of the Kosovo conflict this spring. As
Kosovo moved toward a resolution, the Bulgarian bonds appreciated in value, as
did the Russian and Brazilian bonds months after their respective crises faded.
Another category for the portfolio was U.S. mortgages, which
outperformed Treasury bonds in a rising rate environment because of the
reduction in prepayment risk. Rated AAA, mortgages offered an additional 140
basis points in yield over Treasury bonds. They contributed to the Fund's high
yield given its average credit rating of Baa2.
The Fund holds a small amount of non-dollar denominated investments,
principally in Greece, which is trying to enter the European Monetary Union.
While this investment has turned out well, the Fund will infrequently take
significant currency risk because adverse currency movements can have a very
large impact on Income.
OUTLOOK
Dresdner RCM anticipates another Fed increase in short-term interest
rates, perhaps as early as August but no later than October, particularly if the
U.S. economy continues to show signs of extraordinary strength. It is Dresdner
RCM's view that the market has not fully anticipated additional rate increases.
As a result, the portfolio's duration is slightly shorter than its benchmark,
which reduces the Fund's price sensitivity to rising interest rates. With the
30-year U.S. Treasury bond yield at or above 6%, and inflation still not a
factor, bond market values are much more compelling as fall approaches than they
were at the beginning of 1999.
Page 72
<PAGE>
Dresdner RCM Strategic Income Fund
Total Return Index Comparison(b)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LEHMAN BROTHERS
CLASS I SHARES U.S. UNIVERSAL INDEX (A)
<S> <C> <C>
12/98 10,000 10,000
1/99 10,040 10,067
2/99 9,840 9,908
3/99 10,020 9,987
4/99 10,336 10,046
5/99 10,057 9,945
6/99 10,060 9,934
$10,000 Investment (12/31/98 - 6/30/99)(c)
</TABLE>
PERFORMANCE(B)
JUNE 30, 1999
<TABLE>
<CAPTION>
CUMULATIVE
SINCE
YTD(D) INCEPTION
<S> <C> <C>
Class I
Average Annual Total Return(c) 0.60% 0.60%
</TABLE>
The data above represents past performance of the Fund and may not be
indicative of future performance. The investment return and principal value of
an investment in the Fund will fluctuate, so that shares, when redeemed, may be
worth more or less than their original cost.
- --------------------------------
(a) The Lehman Brothers U.S. Universal Index, like the Lehman Brothers
Aggregate Index, is modular and combines the core Lehman Aggregate Index
with the following cap-weighted sub-sectors: High Yield, Emerging Market,
Rule 144a, and Eurobond Dollar. The Index is broadly diversified by sector,
but is still concentrated in AAA-rated and government quality issues.
(b) Returns assume reinvestment of all dividends and capital gains
distributions at net asset value.
(c) Class I shares commenced operations on December 31, 1998.
(d) Unannualized.
Page 73
<PAGE>
Dresdner RCM Strategic Income Fund
Portfolio of Investments
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
FACE AMOUNT CURRENCY DEBT INVESTMENTS NET ASSETS (NOTE 1)
- ------------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
BRAZIL 7.6%
$ 346,631 USD Federal Republic of Brazil C Bond
5.000% with 3% Interest Capitalization
maturing 4/15/14 $ 223,577
BULGARIA 3.0%
150,000 USD National Republic of Bulgaria
2.500% maturing 7/28/99 89,250
CANADA 3.4%
50,000 CAD Clearnet Communications Inc.
10.125% maturing 5/1/09, Step Coupon 28,375
25,000 USD Gulf Canada Resources Ltd.
8.375% maturing 11/15/05 24,875
50,000 USD Imax Corp.
7.875% maturing 12/1/05 47,125
--------------
100,375
--------------
GREECE 4.5%
43,000,000 GRD Hellenic Republic
6.000% maturing 2/19/06 134,088
NETHERLANDS 1.1%
40,000 USD PT Indah Kiat International Finance Corp.
11.875% maturing 6/15/02, Series B 32,800
RUSSIA 7.5%
390,000 USD Russian Federation
12.750% maturing 6/24/28, Series 144A 221,325
SOUTH KOREA 3.0%
90,000 KRW Korea Development Bank
7.375% maturing 9/17/04 88,169
UNITED STATES 54.6%
75,000 EUR Adelphia Communications Corp.
7.750% maturing 1/15/09, Series B 70,312
25,000 EUR AES Corp.
9.500% maturing 6/1/09 25,750
75,000 USD Alaska Steel Corp.
7.875% maturing 2/15/09 72,750
75,000 USD American Standard Inc.
7.375% maturing 2/1/08 70,687
50,000 USD Applied Power Inc.
8.750% maturing 4/1/09 48,500
50,000 USD Budget Group Inc.
9.125% maturing 4/1/06 47,000
50,000 USD Calpine Corp.
7.750% maturing 4/15/09 47,875
50,000 USD Chattem Inc.
8.875% maturing 4/1/08, Series B 49,500
25,000 USD Crown Castle International Corp.
10.625% maturing 11/5/07, Step Coupon 17,375
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 74
<PAGE>
Dresdner RCM Strategic Income Fund
Portfolio of Investments
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
FACE AMOUNT CURRENCY DEBT INVESTMENTS NET ASSETS (NOTE 1)
- ------------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
UNITED STATES (CONTINUED)
$ 60,000 USD CSX Corp.
6.250% maturing 10/15/08 $ 56,337
50,000 USD Echostar DBS Corp.
9.375% maturing 2/1/09, Series 144A 51,125
392,389 USD Federal National Mortgage Association
6.000% maturing 1/1/29 368,704
225,000 USD Federal National Mortgage Association
7.000% maturing 12/1/99 223,102
100,000 USD Fox/Liberty Networks LLC
9.750% maturing 8/15/07, Step Coupon 79,500
25,000 USD Integrat Electric SV
9.375% maturing 2/1/09, Series B 24,625
50,000 USD Liberty Media Group
7.875% maturing 7/15/09 49,863
25,000 USD Manadalay Resort Group
9.250% maturing 12/1/05 25,438
50,000 USD Nextel Communications Inc.
9.950% maturing 2/15/08, Step Coupon 34,625
75,000 USD Owens Illinois Inc.
7.350% maturing 5/15/08 71,345
25,000 USD Quest Diagnostic Inc.
9.875% maturing 7/1/09, Series 144A 25,188
30,000 USD Rohm & Haas Co.
7.850% maturing 7/15/29, Series 144A 29,978
25,000 USD Scotts Co.
8.625% maturing 1/15/09, Series 144A 24,814
50,000 USD Sinclairbroadcast Group Inc.
8.750% maturing 12/15/07 49,125
50,000 USD TV Guide Inc.
8.125% maturing 3/1/09, Series 144A 47,500
--------------
1,611,018
--------------
TOTAL DEBT INVESTMENTS (COST $2,586,333) 84.7 % 2,500,602
--------------
SHORT-TERM INVESTMENTS
COMMERCIAL PAPER 4.9 %
145,000 USD General Electric Capital Corp.
4.810% maturing 8/26/99 143,915
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 75
<PAGE>
Dresdner RCM Strategic Income Fund
Portfolio of Investments
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES CURRENCY DEBT INVESTMENTS NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
- ----------------------------------------------------------------------------------------------
MONEY MARKET FUNDS 7.8%
112,037 USD SSgA Money Market Fund $ 112,037
118,472 USD SSgA U.S. Government Money Market Fund 118,472
-------------
230,509
-------------
TOTAL SHORT-TERM INVESTMENTS (COST $374,424) 12.7% 374,424
-------------
TOTAL INVESTMENTS (COST $2,960,757) ** 97.4 % 2,875,026
OTHER ASSETS LESS LIABILITIES 2.6 % 75,262
-------------
NET ASSETS 100.0 % $ 2,950,288
-------------
-------------
</TABLE>
- --------------------------------
144A Security is purchased pursuant to Rule 144A of the Securities Act of 1933
and may be resold only to qualified institutional buyers.
Tax Information:
** At June 30, 1999, the aggregate cost of investments for book and Federal
income tax was the same. Gross aggregate unrealized appreciation
(depreciation) for all securities is as follows:
<TABLE>
<S> <C>
Unrealized appreciation $ 6,144
Unrealized depreciation (91,875 )
-----------
Net unrealized depreciation $ (85,731)
-----------
-----------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fund's investments in securities at June 30, 1999, categorized by country:
<TABLE>
<CAPTION>
% OF NET ASSETS
---------------------------------------
COUNTRY SHORT-TERM
COUNTRY CODE DEBT AND OTHER TOTAL
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Brazil BR 7.6% 7.6%
Bulgaria BG 3.0% 3.0%
Canada CA 3.4% 3.4%
Greece GR 4.5% 4.5%
Netherlands NL 1.1% 1.1%
Russia RU 7.5% 7.5%
South Korea SK 3.0% 3.0%
United States US 54.6% 15.3% 69.9%
--- --- ----------
Total 84.7% 15.3% 100.0%
--- --- ----------
--- --- ----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 76
<PAGE>
(THIS PAGE INTENTIONALLY LEFT BLANK)
Page 77
<PAGE>
Dresdner RCM Global Funds
Statements of Assets and Liabilities
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
LARGE CAP TAX MANAGED
GROWTH BIOTECHNOLOGY GROWTH
FUND FUND FUND
------------ -------------- -------------
ASSETS:
<S> <C> <C> <C>
Investments at cost $ 9,861,928 $ 4,279,822 $ 1,142,287
------------ -------------- -------------
------------ -------------- -------------
Foreign currency at cost $ -- $ -- $ --
------------ -------------- -------------
------------ -------------- -------------
Short-term investments at cost $ 322,305 $ 144,108 $ 16,192
------------ -------------- -------------
------------ -------------- -------------
Investments at value (Note1) $ 11,611,650 $ 4,607,663 $ 1,352,964
Foreign currency at value (Note 1) -- -- --
Cash -- -- --
Short-term investments at value (Note 1) 322,305 144,108 16,192
Receivables:
Investments sold 57,407 1,151,929 --
Fund shares sold 206,096 22,694 372
Forward foreign currency contracts (Note 1) -- -- --
Dividends and dividend reclaims 7,286 803 394
Interest -- -- 46
Investment Manager (Note 2) 20,314 3,462 41,417
Prepaid expenses 5,923 866 11,132
Organization costs (Note 6) -- 1,908 --
Cash collateral for securities on loan (Note 1) -- -- --
------------ -------------- -------------
Total Assets 12,230,981 5,933,433 1,422,517
------------ -------------- -------------
LIABILITIES:
Payables:
Bank overdraft -- -- --
Options -- -- --
Investments purchased 179,189 925,891 --
Fund shares repurchased -- 17,694 --
Collateral for securities on loan (Note 1) -- -- --
Accrued Expenses:
Management fees (Note 2) -- -- --
Distribution fees (Note 3) 5 942 35
Directors fees (Note 8) 11,315 11,405 4,822
Other 28,614 12,635 31,800
------------ -------------- -------------
Total Liabilities 219,123 968,567 36,657
------------ -------------- -------------
NET ASSETS $ 12,011,858 $ 4,964,866 $ 1,385,860
------------ -------------- -------------
------------ -------------- -------------
NET ASSETS CONSIST OF:
Paid-in capital (Note 4) $ 8,049,269 $ 4,083,389 $ 1,150,000
Accumulated net investment income (loss) (16,456) (24,312) (4,088)
Accumulated net realized gain (loss) on investments and foreign
currency transactions 2,229,323 577,963 29,271
Net unrealized appreciation (depreciation) on foreign currency
translations -- (15) --
Net unrealized appreciation (depreciation) on options written -- -- --
Net unrealized appreciation (depreciation) on investments 1,749,722 327,841 210,677
------------ -------------- -------------
NET ASSETS $ 12,011,858 $ 4,964,866 $ 1,385,860
------------ -------------- -------------
------------ -------------- -------------
CLASS I NET ASSETS $ 11,983,115 $ -- $ 1,213,316
------------ -------------- -------------
------------ -------------- -------------
CLASS I SHARES OUTSTANDING 646,882 -- 100,000
------------ -------------- -------------
------------ -------------- -------------
CLASS I NET ASSET VALUE PER SHARE, OFFERING AND REDEMPTION PRICE PER
SHARE (NOTES 1 AND 4) $ 18.52 $ -- $ 12.13
------------ -------------- -------------
------------ -------------- -------------
CLASS N NET ASSETS $ 28,743 $ 4,964,866 $ 172,544
------------ -------------- -------------
------------ -------------- -------------
CLASS N SHARES OUTSTANDING 1,553 399,279 14,231
------------ -------------- -------------
------------ -------------- -------------
CLASS N NET ASSET VALUE PER SHARE, OFFERING AND REDEMPTION PRICE PER
SHARE (NOTES 1 AND 4) $ 18.51 $ 12.43 $ 12.12
------------ -------------- -------------
------------ -------------- -------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 78
<PAGE>
Dresdner RCM Global Funds
Statements of Assets and Liabilities
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
GLOBAL GLOBAL GLOBAL INTERNATIONAL EMERGING GLOBAL STRATEGIC
SMALL CAP TECHNOLOGY HEALTH CARE GROWTH EQUITY MARKETS EUROPE EQUITY INCOME
FUND FUND FUND FUND FUND FUND FUND FUND
- ----------- ------------ ----------- -------------- ----------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 4,999,747 $ 30,296,078 $4,960,338 $136,759,857 $ 2,757,329 $ 44,007,629 $ 954,096 $ 2,586,333
- ----------- ------------ ----------- -------------- ----------- ------------ ----------- -----------
- ----------- ------------ ----------- -------------- ----------- ------------ ----------- -----------
$ 76,203 $ 253,883 $ 1,247 $ 1,190,571 $ 28,235 $ 350,142 $ 1,362 $ --
- ----------- ------------ ----------- -------------- ----------- ------------ ----------- -----------
- ----------- ------------ ----------- -------------- ----------- ------------ ----------- -----------
$ 16 $ 5,769,633 $ -- $ 1,632,857 $ 244,557 $ 276,000 $ 8,490 $ 374,424
- ----------- ------------ ----------- -------------- ----------- ------------ ----------- -----------
- ----------- ------------ ----------- -------------- ----------- ------------ ----------- -----------
$ 6,353,254 $ 43,338,784 $5,154,778 $160,223,388 $ 3,447,820 $ 50,009,256 $ 1,082,506 $ 2,500,602
76,081 253,855 1,233 1,189,091 27,407 348,241 1,360 --
-- -- 41,588 -- 79 510 5,400 --
16 5,769,633 -- 1,632,857 244,557 276,000 8,490 374,424
59,473 -- 481,523 1,970,751 187,993 152,815 3,452 596,547
51,400 1,043,345 -- 900,000 12,500 -- 290 --
-- -- -- -- -- 59,454 -- 4,809
2,212 8,697 3,784 262,055 10,264 215,114 1,353 --
2,123 5,130 -- 30,474 3,509 42,532 56 36,184
8,079 -- 3,950 -- 48,266 -- 27,014 15,212
-- 20,963 951 -- 27,551 55,315 4,131 5,636
17,976 23,192 -- -- 14,071 -- -- --
-- -- -- -- -- 885,832 -- --
- ----------- ------------ ----------- -------------- ----------- ------------ ----------- -----------
6,570,614 50,463,599 5,687,807 166,208,616 4,024,017 52,045,069 1,134,052 3,533,414
- ----------- ------------ ----------- -------------- ----------- ------------ ----------- -----------
8,573 -- -- -- -- -- -- --
-- 1,135,639 -- -- -- -- -- --
121,754 2,044,759 265,365 1,337,690 400,048 14,513 2,611 550,926
-- 725,382 -- -- -- 388,007 -- --
-- -- -- -- -- 885,832 -- --
-- 85,049 -- 95,715 -- 3,782 -- --
28 1,551 1,043 92 21 31,530 -- --
11,314 11,284 11,602 53,317 11,038 113,527 4,812 4,812
19,638 50,487 9,191 20,268 31,794 48,106 26,584 27,388
- ----------- ------------ ----------- -------------- ----------- ------------ ----------- -----------
161,307 4,054,151 287,201 1,507,082 442,901 1,485,297 34,007 583,126
- ----------- ------------ ----------- -------------- ----------- ------------ ----------- -----------
$ 6,409,307 $ 46,409,448 $5,400,606 $164,701,534 $ 3,581,116 $ 50,559,772 $ 1,100,045 $ 2,950,288
- ----------- ------------ ----------- -------------- ----------- ------------ ----------- -----------
- ----------- ------------ ----------- -------------- ----------- ------------ ----------- -----------
$ 4,750,057 $ 31,486,815 $4,180,447 $137,181,822 $ 3,099,770 $ 17,087,121 $ 1,000,000 $ 3,000,000
(25,471) (120,976) (20,820) 1,078,359 7,362 (3,182,773) (947) 11,813
331,474 2,001,134 1,046,579 2,993,753 (209,174) 30,662,961 (27,377) 19,510
(260) (231) (40) (15,931) (7,333) (9,164) (41) 4,696
-- -- -- -- -- -- -- --
1,353,507 13,042,706 194,440 23,463,531 690,491 6,001,627 128,410 (85,731)
- ----------- ------------ ----------- -------------- ----------- ------------ ----------- -----------
$ 6,409,307 $ 46,409,448 $5,400,606 $164,701,534 $ 3,581,116 $ 50,559,772 $ 1,100,045 $ 2,950,288
- ----------- ------------ ----------- -------------- ----------- ------------ ----------- -----------
- ----------- ------------ ----------- -------------- ----------- ------------ ----------- -----------
$ 6,259,561 $ 37,986,908 $ -- $164,255,209 $ 3,528,621 $ -- $ 1,100,045 $ 2,950,288
- ----------- ------------ ----------- -------------- ----------- ------------ ----------- -----------
- ----------- ------------ ----------- -------------- ----------- ------------ ----------- -----------
443,948 1,345,126 -- 10,462,015 305,409 -- 100,000 300,000
- ----------- ------------ ----------- -------------- ----------- ------------ ----------- -----------
- ----------- ------------ ----------- -------------- ----------- ------------ ----------- -----------
$ 14.10 $ 28.24 $ -- $ 15.70 $ 11.55 $ -- $ 11.00 $ 9.83
- ----------- ------------ ----------- -------------- ----------- ------------ ----------- -----------
- ----------- ------------ ----------- -------------- ----------- ------------ ----------- -----------
$ 149,746 $ 8,422,540 $5,400,606 $ 446,325 $ 52,495 $ 50,559,772 $ -- $ --
- ----------- ------------ ----------- -------------- ----------- ------------ ----------- -----------
- ----------- ------------ ----------- -------------- ----------- ------------ ----------- -----------
10,630 298,398 413,904 28,450 4,551 3,992,985 -- --
- ----------- ------------ ----------- -------------- ----------- ------------ ----------- -----------
- ----------- ------------ ----------- -------------- ----------- ------------ ----------- -----------
$ 14.09 $ 28.23 $ 13.05 $ 15.69 $ 11.53 $ 12.66 $ -- $ --
- ----------- ------------ ----------- -------------- ----------- ------------ ----------- -----------
- ----------- ------------ ----------- -------------- ----------- ------------ ----------- -----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 79
<PAGE>
Dresdner RCM Global Funds
Statements of Operations
For the Six Months Ended June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
LARGE CAP TAX MANAGED
GROWTH BIOTECHNOLOGY GROWTH
FUND FUND FUND
----------- -------------- -------------
INVESTMENT INCOME: (NOTE 1)
<S> <C> <C> <C>
Income:
Dividends $ 33,558 $ 7,586 $ 2,714
Interest 5,325 1,273 839
Foreign tax withheld (10) (308) --
----------- -------------- -------------
Total investment income 38,873 8,551 3,553
----------- -------------- -------------
Expenses:
Investment management fees (Note 2) 40,757 21,934 4,549
Administration fees 15,445 15,445 15,456
Transfer agent expense, Class I 6,967 -- 7,563
Transfer agent expense, Class N 5,565 7,458 5,439
Registration and filing, Class I 10,722 -- 9,745
Registration and filing, Class N 8,169 9,133 9,670
Printing expense 3,883 3,573 3,978
Accounting expense 15,497 7,438 4,548
Audit fees 11,144 8,679 12,192
Directors' fees and expenses (Note 8) 5,610 5,572 6,053
Legal fees 4,500 4,077 4,639
Custodian fees 5,206 2,747 3,874
Distribution fees (Note 3) 19 5,478 151
Amortization of organization costs (Note 6) 992 992 --
Miscellaneous expenses -- 430 921
----------- -------------- -------------
Total expenses before waivers and reimbursements 134,476 92,956 88,778
Less: Expenses waived and reimbursed by Investment Manager (Note 2) (79,147) (60,093) (81,046)
----------- -------------- -------------
Total net expenses 55,329 32,863 7,732
----------- -------------- -------------
Net investment income (loss) (16,456) (24,312) (4,179)
----------- -------------- -------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on investments 1,832,147 517,565 29,271
Net realized gain (loss) on foreign currency transactions -- (21,964) --
Net realized gain (loss) on options written -- -- --
----------- -------------- -------------
Net realized gain (loss) 1,832,147 495,601 29,271
----------- -------------- -------------
Net change in unrealized appreciation (depreciation) on foreign currency
translations -- (15) --
Net change in unrealized appreciation (depreciation) on investments (321,822) (80,863) 210,677
----------- -------------- -------------
Net unrealized appreciation (depreciation) (321,822) (80,878) 210,677
----------- -------------- -------------
Net realized and unrealized gain (loss) on investments 1,510,325 414,723 239,948
----------- -------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 1,493,869 $ 390,411 $ 235,769
----------- -------------- -------------
----------- -------------- -------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 80
<PAGE>
Dresdner RCM Global Funds
Statements of Operations
For the Six Months Ended June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
INTERNATIONAL
GLOBAL GLOBAL GLOBAL GROWTH EMERGING GLOBAL STRATEGIC
SMALL CAP TECHNOLOGY HEALTH CARE EQUITY MARKETS EUROPE EQUITY INCOME
FUND FUND FUND FUND FUND FUND FUND FUND
- ----------- ----------- ----------- ------------ --------- ----------- --------- -----------
<C> <C> <C> <C> <C> <C> <C> <C> <S>
$ 16,372 $ 42,528 $ 18,528 $1,149,509 $ 30,960 $ 838,864 $ 5,614 $ --
2,722 75,639 911 74,622 3,097 65,320 301 96,989
(2,468) (1,015) (584) (127,907) (2,945) (114,398) (457) --
- ----------- ----------- ----------- ------------ --------- ----------- --------- -----------
16,626 117,152 18,855 1,096,224 31,112 789,786 5,458 96,989
- ----------- ----------- ----------- ------------ --------- ----------- --------- -----------
27,116 158,932 26,510 511,362 14,884 680,495 3,822 11,133
15,845 15,445 15,845 15,446 16,321 5,348 15,445 15,445
5,983 7,551 -- 7,454 3,504 -- -- --
4,352 8,756 8,431 6,093 6,598 52,752 -- --
6,165 6,323 -- 6,322 6,792 -- 983 854
3,793 5,499 12,954 3,799 4,523 4,133 -- --
3,883 3,883 3,883 3,616 3,147 111,570 4,005 4,004
9,918 15,703 9,297 17,663 21,059 8,691 5,783 4,340
11,144 7,181 8,679 20,916 9,101 22,614 12,123 11,896
5,611 5,642 5,354 18,493 5,436 66,217 6,043 6,043
3,676 4,078 3,676 5,325 3,035 -- 4,683 4,683
8,871 7,075 3,367 79,275 26,748 59,318 8,306 4,106
67 3,893 6,627 393 21 31,530 -- --
992 7,439 992 -- 1,984 -- -- --
-- -- 642 481 4,077 20,173 502 502
- ----------- ----------- ----------- ------------ --------- ----------- --------- -----------
107,416 257,400 106,257 696,638 127,230 1,062,841 61,695 63,006
(66,675) (19,272) (66,582) (16,540) (104,765) (45,484) (55,325) (44,442)
- ----------- ----------- ----------- ------------ --------- ----------- --------- -----------
40,741 238,128 39,675 680,098 22,465 1,017,357 6,370 18,564
- ----------- ----------- ----------- ------------ --------- ----------- --------- -----------
(24,115) (120,976) (20,820) 416,126 8,647 (227,571) (912) 78,425
- ----------- ----------- ----------- ------------ --------- ----------- --------- -----------
216,112 1,719,969 689,506 12,797,308 289,416 35,849,027 (26,691) 3,512
(36,638) 17,771 (62,448) (2,777,836) (47,613) (5,151,131) (686) 15,998
-- (767,552) -- -- -- -- -- --
- ----------- ----------- ----------- ------------ --------- ----------- --------- -----------
179,474 970,188 627,058 10,019,472 241,803 30,697,896 (27,377) 19,510
- ----------- ----------- ----------- ------------ --------- ----------- --------- -----------
582 (227) (40) 987,152 (7,260) (39,677) (41) 4,696
629,803 7,718,193 (759,204) (3,459,297) 520,494 (39,138,337) 128,410 (85,731)
- ----------- ----------- ----------- ------------ --------- ----------- --------- -----------
630,385 7,717,966 (759,244) (2,472,145) 513,234 (39,178,014) 128,369 (81,035)
- ----------- ----------- ----------- ------------ --------- ----------- --------- -----------
809,859 8,688,154 (132,186) 7,547,327 755,037 (8,480,118) 100,992 (61,525)
- ----------- ----------- ----------- ------------ --------- ----------- --------- -----------
$ 785,744 $8,567,178 $(153,006) $7,963,453 $ 763,684 $(8,707,689) $ 100,080 $ 16,900
- ----------- ----------- ----------- ------------ --------- ----------- --------- -----------
- ----------- ----------- ----------- ------------ --------- ----------- --------- -----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 81
<PAGE>
<TABLE>
<CAPTION>
Dresdner RCM Global Funds
Statements of Changes in Net Assets
LARGE CAP GROWTH FUND BIOTECHNOLOGY FUND TAX MANAGED GROWTH FUND
----------------------- ------------------------ ------------------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED
JUN. 30, DEC. 31, JUN. 30, DEC. 31, JUN. 30, DEC. 31,
1999 1998 1999 1998 1999 1998
---------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $ (16,456) $ (6,364) $ (24,312) $ (29,696) $ (4,179) $ 91
Net realized gain (loss) on
investments, foreign currency
transactions and options written 1,832,147 1,043,967 495,601 219,333 29,271 --
Net change in unrealized appreciation
(depreciation) on investments, foreign
currency translations and options
written (321,822) 1,180,703 (80,878) 408,704 210,677 --
---------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net assets
resulting from operations 1,493,869 2,218,306 390,411 598,341 235,769 91
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Class I shares:
Net investment income (Note 1) -- (4,049) -- -- -- --
Net realized gain on investments
(Note 1) -- (757,103) -- -- -- --
---------- ----------- ----------- ----------- ----------- -----------
Total distributions, Class I -- (761,152) -- -- -- --
---------- ----------- ----------- ----------- ----------- -----------
Class N shares:
Net investment income (Note 1) -- -- -- -- -- --
Net realized gain on investments
(Note 1) -- -- -- (108,529) -- --
---------- ----------- ----------- ----------- ----------- -----------
Total distributions, Class N -- -- -- (108,529) -- --
---------- ----------- ----------- ----------- ----------- -----------
Total distributions to shareholders -- (761,152) -- (108,529) -- --
NET INCREASE (DECREASE) FROM CAPITAL
SHARE TRANSACTIONS * 2,582,787 1,452,814 663,483 420,924 150,000 1,000,000
---------- ----------- ----------- ----------- ----------- -----------
TOTAL INCREASE (DECREASE) IN NET ASSETS 4,076,656 2,909,968 1,053,894 910,736 385,769 1,000,091
NET ASSETS:
Begining of period 7,935,202 5,025,234 3,910,972 3,000,236 1,000,091 --
---------- ----------- ----------- ----------- ----------- -----------
End of period $12,011,858 $7,935,202 $4,964,866 $3,910,972 $1,385,860 $1,000,091
---------- ----------- ----------- ----------- ----------- -----------
---------- ----------- ----------- ----------- ----------- -----------
End of period net assets include net
investment income (loss) of: $ (16,456) $ -- $ (24,312) $ -- $ (4,088) $ 91
---------- ----------- ----------- ----------- ----------- -----------
---------- ----------- ----------- ----------- ----------- -----------
</TABLE>
- -----------------------------------------
* For detail on capital share transactions by class, see Statement of Changes
in Net Assets (Capital Stock Activity) on pages 86-88.
The accompanying notes are an integral part of the financial statements.
Page 82
<PAGE>
<TABLE>
<CAPTION>
INTERNATIONAL GROWTH
GLOBAL SMALL CAP FUND GLOBAL TECHNOLOGY FUND GLOBAL HEALTH CARE FUND EQUITY FUND EMERGING MARKETS FUND
- ------------------------ ---------------------- ------------------------ ------------------------ ------------------------
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
SIX MONTHS SIX MONTHS SIX MONTHS SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED
JUN. 30, DEC. 31, JUN. 30, DEC. 31, JUN. 30, DEC. 31, JUN. 30, DEC. 31, JUN. 30, DEC. 31,
1999 1998 1999 1998 1999 1998 1999 1998 1999 1998
- ----------- ----------- ---------- ---------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ (24,115) $ (53,943) $ (120,976) $ (102,817) $ (20,820) $ (35,252) $ 416,126 $ 434,891 $ 8,647 $ 35,002
179,474 556,990 970,188 1,689,193 627,058 854,178 10,019,472 (4,599,002) 241,803 (462,955)
630,385 297,558 7,717,966 4,071,745 (759,244) 366,002 (2,472,145) 18,441,434 513,234 173,885
- ----------- ----------- ---------- ---------- ----------- ----------- ----------- ----------- ----------- -----------
785,744 800,605 8,567,178 5,658,121 (153,006) 1,184,928 7,963,453 14,277,323 763,684 (254,068)
-- -- -- -- -- -- -- (1,801,634) -- (24,028)
-- (361,941) -- (463,770) -- -- -- (2,741,618) -- --
- ----------- ----------- ---------- ---------- ----------- ----------- ----------- ----------- ----------- -----------
-- (361,941) -- (463,770) -- -- -- (4,543,252) -- (24,028)
- ----------- ----------- ---------- ---------- ----------- ----------- ----------- ----------- ----------- -----------
-- -- -- -- -- -- -- -- -- --
-- -- -- -- -- (473,111) -- -- -- --
- ----------- ----------- ---------- ---------- ----------- ----------- ----------- ----------- ----------- -----------
-- -- -- -- -- (473,111) -- -- -- --
- ----------- ----------- ---------- ---------- ----------- ----------- ----------- ----------- ----------- -----------
-- (361,941) -- (463,770) -- (473,111) -- (4,543,252) -- (24,028)
144,369 584,948 19,284,103 6,413,482 66,607 104,252 34,762,830 13,798,251 83,265 16,509
- ----------- ----------- ---------- ---------- ----------- ----------- ----------- ----------- ----------- -----------
930,113 1,023,612 27,851,281 11,607,833 (86,399) 816,069 42,726,283 23,532,322 846,949 (261,587)
5,479,194 4,455,582 18,558,167 6,950,334 5,487,005 4,670,936 121,975,251 98,442,929 2,734,167 2,995,754
- ----------- ----------- ---------- ---------- ----------- ----------- ----------- ----------- ----------- -----------
$6,409,307 $5,479,194 $46,409,448 $18,558,167 $5,400,606 $5,487,005 $164,701,534 $121,975,251 $3,581,116 $2,734,167
- ----------- ----------- ---------- ---------- ----------- ----------- ----------- ----------- ----------- -----------
- ----------- ----------- ---------- ---------- ----------- ----------- ----------- ----------- ----------- -----------
$ (25,471) $ (1,356) $ (120,976) $ -- $ (20,820) $ -- $ 1,078,359 $ 662,233 $ 7,362 $ (1,285)
- ----------- ----------- ---------- ---------- ----------- ----------- ----------- ----------- ----------- -----------
- ----------- ----------- ---------- ---------- ----------- ----------- ----------- ----------- ----------- -----------
</TABLE>
Page 83
<PAGE>
<TABLE>
<CAPTION>
Dresdner RCM Global Funds
Statements of Changes in Net Assets
EUROPE FUND GLOBAL EQUITY FUND STRATEGIC INCOME FUND
------------------------ ------------------------ ------------------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED
JUN. 30, DEC. 31, JUN. 30, DEC. 31, JUN. 30, DEC. 31,
1999 1998 1999 1998 1999 1998
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $ (227,571) $ (666,051) $ (912) $ (35) $ 78,425 $ 289
Net realized gain (loss) on
investments, foreign currency
transactions and options written 30,697,896 50,944,544 (27,377) -- 19,510 --
Net change in unrealized
appreciation (depreciation) on
investments, foreign currency
translations (39,178,014) 13,394,579 128,369 -- (81,035) --
----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net
assets resulting from operations (8,707,689) 63,673,072 100,080 (35) 16,900 289
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Class I shares:
Net investment income (Note 1) -- -- -- -- (66,901) --
Net realized gain on investments
(Note 1) -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Total distributions, Class I -- -- -- -- (66,901) --
----------- ----------- ----------- ----------- ----------- -----------
Class N shares:
Net investment income (Note 1) (336,200) (2,381,417) -- -- -- --
Net realized gain on investments
(Note 1) (6,808,050) (46,367,585) -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Total distributions, Class N (7,144,250) (48,749,002) -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Total distributions to shareholders (7,144,250) (48,749,002) -- (66,901) --
NET INCREASE (DECREASE) FROM CAPITAL
SHARE TRANSACTIONS * (125,277,135) -- 1,000,000 -- 3,000,000
Redemption fees 350,780 -- -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
TOTAL INCREASE (DECREASE) IN NET
ASSETS (140,778,294) 14,924,070 100,080 999,965 (50,001) 3,000,289
NET ASSETS:
Begining of period 191,338,066 176,413,996 999,965 -- 3,000,289 --
----------- ----------- ----------- ----------- ----------- -----------
End of period $50,559,772 $191,338,066 $1,100,045 $ 999,965 $2,950,288 $3,000,289
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
End of period net assets include net
investment income (loss) of: $(3,182,773) $(2,619,002) $ (947) $ (35) $ 11,813 $ 289
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
</TABLE>
- -----------------------------------------
* For detail on capital share transactions by class, see Statement of Changes
in Net Assets (Capital Stock Activity) on page 89.
The accompanying notes are an integral part of the financial statements.
Page 84
<PAGE>
(THIS PAGE INTENTIONALLY LEFT BLANK)
Page 85
<PAGE>
<TABLE>
<CAPTION>
Dresdner RCM Global Funds
Statements of Changes in Net Assets
Capital Stock Activity
TAX MANAGED
LARGE CAP GROWTH FUND BIOTECHNOLOGY FUND GROWTH FUND
----------------------------- ----------------------------- -------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED ENDED
JUN. 30, 1999 DEC. 31, 1998 JUN. 30, 1999 DEC. 31, 1998 JUN. 30, 1999
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
FUND SHARE TRANSACTIONS
DOLLAR ACTIVITY
Class I shares:
Sold $ 5,906,920 $ 6,444,000 $ -- $ -- $ --
Issued to shareholders in reinvestment of
distributions -- 9,143 -- -- --
Repurchased (3,351,133) (5,000,329) -- -- --
------------- ------------- ------------- ------------- -------------
Net increase (decrease), Class I $ 2,555,787 $ 1,452,814 $ -- $ -- $ --
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
Class N shares:
Sold $ 27,000 $ -- $ 850,974 $ 480,443 $ 150,000
Issued to shareholders in reinvestment of
distributions -- -- -- 10,343 --
Repurchased -- -- (187,491) (69,862) --
------------- ------------- ------------- ------------- -------------
Net increase (decrease), Class N $ 27,000 $ -- $ 663,483 $ 420,924 $ 150,000
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
SHARE AMOUNTS
Class I shares:
Sold 348,843 403,182 -- -- --
Issued to shareholders in reinvestment of
distributions -- 578 -- -- --
Repurchased (193,575) (313,306) -- -- --
------------- ------------- ------------- ------------- -------------
Net increase (decrease), Class I 155,268 90,454 -- -- --
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
Class N shares:
Sold 1,553 -- 74,025 47,923 14,231
Issued to shareholders in reinvestment of
distributions -- -- -- 948 --
Repurchased -- -- (16,703) (6,914) --
------------- ------------- ------------- ------------- -------------
Net increase (decrease), Class N 1,553 -- 57,322 41,957 14,231
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
PURCHASES AND SALES OF INVESTMENT SECURITIES:
(EXCLUDING SHORT-TERM SECURITIES)
Purchase of securities $ 12,761,599 $ 5,615,060 $ 6,682,316 $ 6,545,066 $ 1,440,115
Proceeds from sales of securities 9,056,492 6,264,205 6,336,398 3,325,610 323,498
<CAPTION>
Dresdner RCM Global Funds
Statements of Changes in Net Assets
Capital Stock Activity
YEAR ENDED
DEC. 31, 1998
-------------
<S> <C>
FUND SHARE TRANSACTIONS
DOLLAR ACTIVITY
Class I shares:
Sold $ 1,000,000
Issued to shareholders in reinvestment of
distributions --
Repurchased --
-------------
Net increase (decrease), Class I $ 1,000,000
-------------
-------------
Class N shares:
Sold $ --
Issued to shareholders in reinvestment of
distributions --
Repurchased --
-------------
Net increase (decrease), Class N $ --
-------------
-------------
SHARE AMOUNTS
Class I shares:
Sold 100,000
Issued to shareholders in reinvestment of
distributions --
Repurchased --
-------------
Net increase (decrease), Class I 100,000
-------------
-------------
Class N shares:
Sold --
Issued to shareholders in reinvestment of
distributions --
Repurchased --
-------------
Net increase (decrease), Class N --
-------------
-------------
PURCHASES AND SALES OF INVESTMENT SECURITIES:
(EXCLUDING SHORT-TERM SECURITIES)
Purchase of securities $ --
Proceeds from sales of securities --
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 86
<PAGE>
<TABLE>
<CAPTION>
Dresdner RCM Global Funds
Statements of Changes in Net Assets
Capital Stock Activity
GLOBAL SMALL CAP FUND GLOBAL TECHNOLOGY FUND GLOBAL HEALTH CARE FUND
- ------------------------------- -------------------------------- --------------------------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED
JUN. 30, 1999 DEC. 31, 1998 JUN. 30, 1999 DEC. 31, 1998 JUN. 30, 1999 DEC. 31, 1998
- ------------- ------------- ------------- -------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
210,094
$ $ 770,457 $ 16,018,676 $ 8,185,377 $ -- $ --
-- 32,246 -- 440,325 -- --
(197,240) (217,755) (4,454,735) (2,212,220) -- --
- ------------- ------------- ------------- -------------- ------------- --------------
$ 12,854 $ 584,948 $ 11,563,941 $ 6,413,482 $ -- $ --
- ------------- ------------- ------------- -------------- ------------- --------------
- ------------- ------------- ------------- -------------- ------------- --------------
$ 131,515 $ -- $ 8,377,735 $ -- $ 141,584 $ 121,310
-- -- -- -- -- 9,106
-- -- (657,573) -- (74,977) (26,164)
- ------------- ------------- ------------- -------------- ------------- --------------
$ 131,515 $ -- $ 7,720,162 $ -- $ 66,607 $ 104,252
- ------------- ------------- ------------- -------------- ------------- --------------
- ------------- ------------- ------------- -------------- ------------- --------------
16,839 58,016 657,689 473,535 -- --
-- 2,716 -- 20,799 -- --
(15,976) (19,341) (179,866) (134,649) -- --
- ------------- ------------- ------------- -------------- ------------- --------------
863 41,391 477,823 359,685 -- --
- ------------- ------------- ------------- -------------- ------------- --------------
- ------------- ------------- ------------- -------------- ------------- --------------
10,630 -- 323,437 -- 10,627 9,538
-- -- -- -- -- 707
-- -- (25,039) -- (5,729) (2,076)
- ------------- ------------- ------------- -------------- ------------- --------------
10,630 -- 298,398 -- 4,898 8,169
- ------------- ------------- ------------- -------------- ------------- --------------
- ------------- ------------- ------------- -------------- ------------- --------------
$ 6,864,636 $ 9,264,526 $ 45,660,776 $ 26,910,068 $ 6,728,540 $7,670,187
6,297,176 9,230,899 26,789,259 23,828,076 6,932,591 7,857,133
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 87
<PAGE>
<TABLE>
<CAPTION>
Dresdner RCM Global Funds
Statements of Changes in Net Assets
Capital Stock Activity
INTERNATIONAL GROWTH EQUITY
FUND EMERGING MARKETS FUND
----------------------------- -----------------------------
(UNAUDITED) (UNAUDITED)
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
JUN. 30, 1999 DEC. 31, 1998 JUN. 30, 1999 DEC. 31, 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
FUND SHARE TRANSACTIONS
DOLLAR ACTIVITY
Class I shares:
Sold $ 72,735,537 $ 21,109,570 $ 36,549 $ 19,991
Issued to shareholders in reinvestment of
distributions -- 4,361,747 -- 31
Repurchased (38,396,707) (11,673,066) -- (3,513)
------------- ------------- ------------- -------------
Net increase (decrease), Class I $ 34,338,830 $ 13,798,251 $ 36,549 $ 16,509
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Class N shares:
Sold $ 824,000 $ -- $ 46,716 $ --
Issued to shareholders in reinvestment of
distributions -- -- -- --
Repurchased (400,000) -- -- --
------------- ------------- ------------- -------------
Net increase (decrease), Class N $ 424,000 $ -- $ 46,716 $ --
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
SHARE AMOUNTS
Class I shares:
Sold 4,882,990 1,461,592 3,755 2,068
Issued to shareholders in reinvestment of
distributions -- 307,165 -- 3
Repurchased (2,564,302) (809,365) -- (417)
------------- ------------- ------------- -------------
Net increase (decrease), Class I 2,318,688 959,392 3,755 1,654
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Class N shares:
Sold 55,765 -- 4,551 --
Issued to shareholders in reinvestment of
distributions -- -- -- --
Repurchased (27,315) -- -- --
------------- ------------- ------------- -------------
Net increase (decrease), Class N 28,450 -- 4,551 --
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
PURCHASES AND SALES OF INVESTMENT SECURITIES:
(EXCLUDING SHORT-TERM SECURITIES)
Purchase of securities $ 134,375,260 $ 113,486,711 $ 3,651,620 $ 5,923,745
Proceeds from sales of securities 102,817,573 95,448,542 3,404,507 5,291,486
Purchase of long-term U.S. government
obligations -- -- -- 1,168,170
Proceeds from sales of long-term U.S. government
obligations -- -- -- 1,184,955
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 88
<PAGE>
<TABLE>
<CAPTION>
Dresdner RCM Global Funds
Statements of Changes in Net Assets
Capital Stock Activity
EUROPE FUND GLOBAL EQUITY FUND STRATEGIC INCOME FUND
- ------------------------------ ------------------------------- -------------------------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED
JUN. 30, 1999 DEC. 31, 1998 JUN. 30, 1999 DEC. 31, 1998 JUN. 30, 1999 DEC. 31, 1998
- ------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
$ -- $ -- $ -- $ 1,000,000 $ -- $ 3,000,000
-- -- -- -- -- --
-- -- -- -- -- --
- ------------- ------------- ------------- ------------- ------------- -------------
$ -- $ -- $ -- $ 1,000,000 $ -- $ 3,000,000
- ------------- ------------- ------------- ------------- ------------- -------------
- ------------- ------------- ------------- ------------- ------------- -------------
$ 246,893 $ -- $ -- $ -- $ -- $ --
-- -- -- -- -- --
(125,524,028) -- -- -- -- --
- ------------- ------------- ------------- ------------- ------------- -------------
$(125,277,135) $ -- $ -- $ -- $ -- $ --
- ------------- ------------- ------------- ------------- ------------- -------------
- ------------- ------------- ------------- ------------- ------------- -------------
-- -- -- 100,000 -- 300,000
-- -- -- -- -- --
-- -- -- -- -- --
- ------------- ------------- ------------- ------------- ------------- -------------
-- -- -- 100,000 -- 300,000
- ------------- ------------- ------------- ------------- ------------- -------------
- ------------- ------------- ------------- ------------- ------------- -------------
15,225 -- -- -- -- --
-- -- -- -- -- --
(10,030,574) -- -- -- -- --
- ------------- ------------- ------------- ------------- ------------- -------------
(10,015,349) -- -- -- -- --
- ------------- ------------- ------------- ------------- ------------- -------------
- ------------- ------------- ------------- ------------- ------------- -------------
$ 168,753,146 $ 237,505,798 $ 1,299,174 $ -- $ 3,228,406 $ --
326,123,046 260,360,854 808,632 -- 1,215,104 --
-- -- -- -- 4,811,710 --
-- -- -- -- 4,163,563 --
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 89
<PAGE>
<TABLE>
<CAPTION>
Dresdner RCM Global Funds
Financial Highlights
For a share outstanding throughout each fiscal year or period ended
LARGE CAP GROWTH FUND
-------------------------------------------------------------------
CLASS I CLASS N
--------------------------------------------- -----------------
(UNAUDITED) YEAR ENDED DECEMBER 31, (UNAUDITED)
SIX MONTHS ENDED ------------------------- PERIOD ENDED
JUNE 30, 1999 1998 1997 1996(3) JUNE 30, 1999(10)
---------------- ------ ------ ------- -----------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE: (1)
Net asset value, beginning of period $ 16.14 $12.53 $10.00 $ 10.00 $ 16.60
-------- ------ ------ ------- --------
Income from investment operations:
Net investment income (loss) (0.03) (0.02) 0.01 -- (0.04)
Net realized and unrealized gain on
investments 2.41 5.51 3.17 -- 1.95
-------- ------ ------ ------- --------
Total from investment operations 2.38 5.49 3.18 -- 1.91
Less distributions:
From net investment income -- (0.01) (0.01) -- --
From net realized gain on
investments -- (1.87) (0.64) -- --
-------- ------ ------ ------- --------
Total distributions -- (1.88) (0.65) -- --
-------- ------ ------ ------- --------
NET ASSET VALUE, END OF PERIOD $ 18.52 $16.14 $12.53 $ 10.00 $ 18.51
-------- ------ ------ ------- --------
-------- ------ ------ ------- --------
TOTAL RETURN (8) 14.81% 44.11% 31.99% 0.00% 11.51%
-------- ------ ------ ------- --------
-------- ------ ------ ------- --------
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $11,983 $7,935 $5,025 $ 4,000 $ 29
-------- ------ ------ ------- --------
-------- ------ ------ ------- --------
Ratio of expenses to average net assets:
With waiver and reimbursement (17) 0.95% 0.95% 0.95% 0.00%(9) 1.20%
-------- ------ ------ ------- --------
-------- ------ ------ ------- --------
Without waiver and reimbursement
(17) 2.07% 3.04% 2.63% -- 179.66%
-------- ------ ------ ------- --------
-------- ------ ------ ------- --------
Ratio of net investment income to
average net assets:
With waiver and reimbursement (17) ( 0.28)% (0.11)% 0.10% 0.00%(9) (0.54)%
-------- ------ ------ ------- --------
-------- ------ ------ ------- --------
Without waiver and reimbursement
(17) (1.41)% (2.20)% (1.58)% -- (178.98)%
-------- ------ ------ ------- --------
-------- ------ ------ ------- --------
Portfolio turnover 79.00% 99.58% 119.87% 0.00% 79.00%
-------- ------ ------ ------- --------
-------- ------ ------ ------- --------
</TABLE>
- -----------------------------------------
For Footnote References, see "Notes to Finanacial Highlights."
<TABLE>
<CAPTION>
BIOTECHNOLOGY FUND
------------------------------------
CLASS N
------------------------------------
YEAR ENDED
(UNAUDITED) DECEMBER 31,
SIX MONTHS ENDED ----------------
JUNE 30, 1999 1998 1997(4)
---------------- ------ -------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE: (1)
Net asset value, beginning of period $ 11.44 $10.00 $ 10.00
-------- ------ -------
Income from investment operations:
Net investment loss (0.06) (0.10) --
Net realized and unrealized gain on
investments 1.05 1.86 --
-------- ------ -------
Total from investment operations 0.99 1.76 --
Less distributions:
From net investment income -- -- --
From net realized gain on
investments -- (0.32) --
-------- ------ -------
Total distributions -- (0.32) --
-------- ------ -------
NET ASSET VALUE, END OF PERIOD $ 12.43 $11.44 $ 10.00
-------- ------ -------
-------- ------ -------
TOTAL RETURN (8) 8.65% 17.76% 0.00%
-------- ------ -------
-------- ------ -------
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 4,965 $3,911 $ 3,000
-------- ------ -------
-------- ------ -------
Ratio of expenses to average net assets:
With waiver and reimbursement (17) 1.50% 1.50% 0.01%(9)
-------- ------ -------
-------- ------ -------
Without waiver and reimbursement (17) 4.24% 4.87% --
-------- ------ -------
-------- ------ -------
Ratio of net investment income to
average net assets:
With waiver and reimbursement (17) (1.11)% (0.95)% 0.01%(9)
-------- ------ -------
-------- ------ -------
Without waiver and reimbursement (17) (3.85)% (4.32)% --
-------- ------ -------
-------- ------ -------
Portfolio turnover 145.13% 127.21% 0.00%
-------- ------ -------
-------- ------ -------
</TABLE>
- -----------------------------------------
For Footnote References, see "Notes to Financial Highlights".
The accompanying notes are an integral part of the financial statements.
Page 90
<PAGE>
<TABLE>
<CAPTION>
Dresdner RCM Global Funds
Financial Highlights
For a share outstanding throughout each
fiscal year or period ended:
TAX MANAGED GROWTH FUND
----------------------------------------------------
CLASS I CLASS N
-------------------------------- -----------------
(UNAUDITED) YEAR ENDED (UNAUDITED)
SIX MONTHS ENDED DECEMBER 31, PERIOD ENDED JUNE
JUNE 30, 1999 1998(5) 30, 1999(11)
---------------- ------------- -----------------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE: (1)
Net asset value, beginning of period $10.00 $ 10.00 $10.34
------- ------------- -------
Income from investment operations:
Net investment loss (0.01) -- (0.24)
Net realized and unrealized gain on
investments 2.14 -- 2.02
------- ------------- -------
Total from investment operations 2.13 -- 1.78
Less distributions:
From net investment income -- -- --
From net realized gain on
investments -- -- --
------- ------------- -------
Total distributions -- -- --
------- ------------- -------
NET ASSET VALUE, END OF PERIOD $12.13 $ 10.00 $12.12
------- ------------- -------
------- ------------- -------
TOTAL RETURN (8) 21.30% 0.00% 17.22%
------- ------------- -------
------- ------------- -------
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $1,213 $ 1,000 $ 173
------- ------------- -------
------- ------------- -------
Ratio of expenses to average net assets:
With waiver and reimbursement (17) 1.25% 0.00%(9) 1.50%
------- ------------- -------
------- ------------- -------
Without waiver and reimbursement
(17) 12.51% -- 33.84%
------- ------------- -------
------- ------------- -------
Ratio of net investment income to
average net assets:
With waiver and reimbursement (17) (0.14)% 0.00%(9) (5.67)%
------- ------------- -------
------- ------------- -------
Without waiver and reimbursement
(17) (11.39)% -- (38.01)%
------- ------------- -------
------- ------------- -------
Portfolio turnover 26.00% 0.00% 26.00%
------- ------------- -------
------- ------------- -------
</TABLE>
- -----------------------------------------
For Footnote References, see "Notes to Financial Highlights".
<TABLE>
<CAPTION>
GLOBAL SMALL CAP FUND
------------------------------------------------------------------
CLASS I CLASS N
---------------------------------------------- -----------------
(UNAUDITED) YEAR ENDED DECEMBER 31, (UNAUDITED)
SIX MONTHS ENDED --------------------------- PERIOD ENDED
JUNE 30, 1999 1998 1997 1996(3) JUNE 30, 1999(12)
---------------- ------- ------- ------- -----------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE: (1)
Net asset value, beginning of period $12.37 $11.09 $10.00 $10.00 $11.63
------- ------- ------- ------- -------
Income from investment operations:
Net investment loss ( 0.05) (0.13) (0.13) -- (0.04)
Net realized and unrealized gain on
investments 1.78 2.23 2.64 -- 2.50
------- ------- ------- ------- -------
Total from investment operations 1.73 2.10 2.51 -- 2.46
Less distributions:
From net investment income -- -- -- -- --
From net realized gain on
investments -- (0.82) (1.42) -- --
------- ------- ------- ------- -------
Total distributions -- (0.82) (1.42) -- --
------- ------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD $14.10 $12.37 $11.09 $10.00 $14.09
------- ------- ------- ------- -------
------- ------- ------- ------- -------
TOTAL RETURN (8) 14.47% 19.29% 25.48% 0.00% 21.15%
------- ------- ------- ------- -------
------- ------- ------- ------- -------
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $6,260 $5,479 $4,456 $4,000 $ 150
------- ------- ------- ------- -------
------- ------- ------- ------- -------
Ratio of expenses to average net assets:
With waiver and reimbursement (17) 1.50% 1.75% 1.75% 0.00%(9) 1.75%
------- ------- ------- ------- -------
------- ------- ------- ------- -------
Without waiver and reimbursement
(17) 3.66% 3.86% 3.09% -- 33.83%
------- ------- ------- ------- -------
------- ------- ------- ------- -------
Ratio of net investment income to
average net assets:
With waiver and reimbursement (17) (0.89)% (1.03)% (1.14)% 0.00%(9) (1.14)%
------- ------- ------- ------- -------
------- ------- ------- ------- -------
Without waiver and reimbursement
(17) (3.05)% (3.14)% (2.49)% -- (33.21)%
------- ------- ------- ------- -------
------- ------- ------- ------- -------
Portfolio turnover 116.04% 184.38% 153.49% 0.00% 116.04%
------- ------- ------- ------- -------
------- ------- ------- ------- -------
</TABLE>
- -----------------------------------------
For Footnote References, see "Notes to Financial Highlights".
The accompanying notes are an integral part of the financial statements.
Page 91
<PAGE>
<TABLE>
<CAPTION>
Dresdner RCM Global Funds
Financial Highlights
For a share outstanding throughout each fiscal year or period ended:
GLOBAL TECHNOLOGY FUND
---------------------------------------------------------------------------
CLASS N
-------------
CLASS I (UNAUDITED)
--------------------------------------------------------- SIX MONTHS
(UNAUDITED) YEAR ENDED DECEMBER 31, ENDED
SIX MONTHS ENDED ------------------------------------- JUNE 30,
JUNE 30, 1999 1998 1997 1996 1995(2) 1999(13)
---------------- ------- ------- ------- ------- -------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE: (1)
Net asset value, beginning of period $ 21.40 $ 13.69 $ 12.60 $ 10.04 $ 10.00 $24.01
-------- ------- ------- ------- ------- -------------
Income from investment operations:
Net investment loss (0.09) (0.16) (0.16) (0.15) -- (0.11)
Net realized and unrealized gain on
investments 6.93 8.44 3.46 2.80 0.04 4.33
-------- ------- ------- ------- ------- -------------
Total from investment operations 6.84 8.28 3.30 2.65 0.04 4.22
Less distributions:
From net investment income -- -- -- -- -- --
From net realized gain on
investments -- (0.57) (2.21) (0.09) -- --
-------- ------- ------- ------- ------- -------------
Total distributions -- (0.57) (2.21) (0.09) -- --
-------- ------- ------- ------- ------- -------------
NET ASSET VALUE, END OF PERIOD $ 28.24 $ 21.40 $ 13.69 $ 12.60 $ 10.04 $28.23
-------- ------- ------- ------- ------- -------------
-------- ------- ------- ------- ------- -------------
TOTAL RETURN (8) 31.53% 60.53% 27.08% 26.41% 0.40% 17.58%
-------- ------- ------- ------- ------- -------------
-------- ------- ------- ------- ------- -------------
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $37,987 $18,558 $ 6,950 $ 5,117 $ 954 $8,423
-------- ------- ------- ------- ------- -------------
-------- ------- ------- ------- ------- -------------
Ratio of expenses to average net assets:
With waiver and reimbursement (17) 1.50% 1.75% 1.75% 1.73% 0.00%(9) 1.75%
-------- ------- ------- ------- ------- -------------
-------- ------- ------- ------- ------- -------------
Without waiver and reimbursement (17) 1.53% 2.49% 2.45% 7.75% -- 2.49%
-------- ------- ------- ------- ------- -------------
-------- ------- ------- ------- ------- -------------
Ratio of net investment income to
average net assets:
With waiver and reimbursement (17) (0.76)% (0.99)% (1.15)% (1.34)% (0.02)%(9) (0.99)%
-------- ------- ------- ------- ------- -------------
-------- ------- ------- ------- ------- -------------
Without waiver and reimbursement (17) (0.79)% (1.73)% (1.86)% (7.36)% -- (1.73)%
-------- ------- ------- ------- ------- -------------
-------- ------- ------- ------- ------- -------------
Portfolio turnover 97.00% 265.99% 189.41% 155.58% 0.00% 97.00%
-------- ------- ------- ------- ------- -------------
-------- ------- ------- ------- ------- -------------
</TABLE>
- -----------------------------------------
For Footnote References, see "Notes to Financial Highlights".
<TABLE>
<CAPTION>
CLASS N
GLOBAL HEALTH CARE FUND
----------------------------------------------
----------------------------------------------
(UNAUDITED) YEAR ENDED DECEMBER 31,
SIX MONTHS ENDED --------------------------
JUNE 30, 1999 1998 1997 1996(3)
---------------- ------- ------- -------
PER SHARE OPERATING PERFORMANCE: (1)
<S> <C> <C> <C> <C>
Net asset value, beginning of period $13.42 $ 11.65 $ 10.00 $ 10.00
------- ------- ------- -------
Income from investment operations:
Net investment loss (0.05) (0.09 (0.06) --
Net realized and unrealized gain
(loss) on investments (0.32) 3.02 3.03 --
------- ------- ------- -------
Total from investment operations (0.37) 2.93 2.97 --
Less distributions:
From net investment income -- -- -- --
From net realized gain on
investments -- (1.16) (1.32) --
------- ------- ------- -------
Total distributions -- (1.16) (1.32) --
------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD $13.05 $ 13.42 $ 11.65 $ 10.00
------- ------- ------- -------
------- ------- ------- -------
TOTAL RETURN (8) (2.76)% 25.57% 30.00% 0.00%
------- ------- ------- -------
------- ------- ------- -------
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $5,401 $ 5,487 $ 4,671 $ 4,000
------- ------- ------- -------
------- ------- ------- -------
Ratio of expenses to average net assets:
With waiver and reimbursement (17) 1.50% 1.50% 1.50% 0.00%(9)
------- ------- ------- -------
------- ------- ------- -------
Without waiver and reimbursement (17) 4.01% 3.65% 2.93% --
------- ------- ------- -------
------- ------- ------- -------
Ratio of net investment income to
average net assets:
With waiver and reimbursement (17) (0.79)% (0.69)% (0.55)% 0.00%(9)
------- ------- ------- -------
------- ------- ------- -------
Without waiver and reimbursement (17) (3.30)% (2.84)% (1.98)% --
------- ------- ------- -------
------- ------- ------- -------
Portfolio turnover 127.68% 153.92% 157.65% 0.00%
------- ------- ------- -------
------- ------- ------- -------
</TABLE>
- -----------------------------------------
For Footnote References, see "Notes to Financial Highlights".
The accompanying notes are an integral part of the financial statements.
Page 92
<PAGE>
<TABLE>
<CAPTION>
Dresdner RCM Global Funds
Financial Highlights
For a share outstanding throughout each fiscal year or period ended
INTERNATIONAL GROWTH EQUITY FUND
---------------------------------------------------------------------------------------
CLASS I CLASS N
------------------------------------------------------------------ -----------------
(UNAUDITED) YEAR ENDED DECEMBER 31, (UNAUDITED)
SIX MONTHS ENDED ----------------------------------------------- PERIOD ENDED
JUNE 30, 1999 1998 1997 1996(6) 1995 1994(7) JUNE 30, 1999(14)
---------------- -------- ------- ---------- ------- ------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE: (1)
Net asset value, beginning of period $ 14.98 $ 13.70 $ 12.72 $ 11.56 $ 10.00 $ 10.00 $14.78
---------------- -------- ------- ---------- ------- ------- -------
Income from investment operations:
Net investment income 0.05 0.06 0.06 0.04 0.12 -- 0.04
Net realized and unrealized gain on
investments 0.67 1.80 2.22 2.16 1.68 -- 0.87
---------------- -------- ------- ---------- ------- ------- -------
Total from investment operations 0.72 1.86 2.28 2.20 1.80 -- 0.91
Less distributions:
From net investment income -- (0.23) (0.14) (0.16) (0.11) -- --
From net realized gain on
investments -- (0.35) (1.16) (0.88) (0.13) -- --
---------------- -------- ------- ---------- ------- ------- -------
Total distributions -- (0.58) (1.30) (1.04) (0.24) -- --
---------------- -------- ------- ---------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD $ 15.70 $ 14.98 $ 13.70 $ 12.72 $ 11.56 $ 10.00 $15.69
---------------- -------- ------- ---------- ------- ------- -------
---------------- -------- ------- ---------- ------- ------- -------
TOTAL RETURN (8) 4.81% 13.81% 17.93% 19.31% 17.98% 0.01% 6.16%
---------------- -------- ------- ---------- ------- ------- -------
---------------- -------- ------- ---------- ------- ------- -------
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $164,255 $121,975 $98,443 $ 52,605 $34,347 $25,004 $ 446
---------------- -------- ------- ---------- ------- ------- -------
---------------- -------- ------- ---------- ------- ------- -------
Ratio of expenses to average net assets:
With waiver and reimbursement (17) 1.00% 1.00% 1.00% 0.99% 0.75% 0.00%(9) 1.25%
---------------- -------- ------- ---------- ------- ------- -------
---------------- -------- ------- ---------- ------- ------- -------
Without waiver and reimbursement (17) 1.00% 1.06% 1.06% 1.25% 1.11% -- 7.51%
---------------- -------- ------- ---------- ------- ------- -------
---------------- -------- ------- ---------- ------- ------- -------
Ratio of net investment income to
average net assets:
With waiver and reimbursement (17) 0.60% 0.37% 0.41% 0.32% 1.19% 0.01%(9) 0.85%
---------------- -------- ------- ---------- ------- ------- -------
---------------- -------- ------- ---------- ------- ------- -------
Without waiver and reimbursement (17) 0.60% 0.31% 0.35% 0.06% 0.83% -- (5.41)%
---------------- -------- ------- ---------- ------- ------- -------
---------------- -------- ------- ---------- ------- ------- -------
Portfolio turnover 76.00% 84.49% 122.43% 119.09% 87.40% 0.00% 76.00%
---------------- -------- ------- ---------- ------- ------- -------
---------------- -------- ------- ---------- ------- ------- -------
</TABLE>
- -----------------------------------------
For Footnote References, see "Notes to Financial Highlights".
<TABLE>
<CAPTION>
EMERGING MARKETS FUND
----------------------------------------------------------
CLASS I
------------------------------------ CLASS N
YEAR ENDED -----------------
(UNAUDITED) DECEMBER 31, (UNAUDITED)
SIX MONTHS ENDED ----------------- PERIOD ENDED
JUNE 30, 1999 1998 1997(4) JUNE 30, 1999(12)
---------------- ------- -------- -----------------
PER SHARE OPERATING PERFORMANCE: (1)
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.06 $ 9.99 $10.00 $ 9.22
-------- ------- -------- --------
Income from investment operations:
Net investment income 0.03 0.12 -- --
Net realized and unrealized gain
(loss) on investments 2.46 (0.97) (0.01) 2.31
-------- ------- -------- --------
Total from investment operations 2.49 (0.85) (0.01) 2.31
Less distributions:
From net investment income -- (0.08) -- --
From net realized gain on
investments -- -- -- --
-------- ------- -------- --------
Total distributions -- (0.08) -- --
-------- ------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 11.55 $ 9.06 $ 9.99 $ 11.53
-------- ------- -------- --------
-------- ------- -------- --------
TOTAL RETURN (8) 27.23% (8.50)% 0.00% 25.05%
-------- ------- -------- --------
-------- ------- -------- --------
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 3,529 $ 2,734 $2,996 $ 52
-------- ------- -------- --------
-------- ------- -------- --------
Ratio of expenses to average net assets:
With waiver and reimbursement (17) 1.50% 1.50% 0.01% 1.75%(9)
-------- ------- -------- --------
-------- ------- -------- --------
Without waiver and reimbursement (17) 7.82% 8.29% -- 144.07%
-------- ------- -------- --------
-------- ------- -------- --------
Ratio of net investment income to
average net assets:
With waiver and reimbursement (17) 0.59% 1.23% 0.00% (0.19)%(9)
-------- ------- -------- --------
-------- ------- -------- --------
Without waiver and reimbursement (17) (5.72)% (5.56)% -- (142.52)%
-------- ------- -------- --------
-------- ------- -------- --------
Portfolio turnover 121.75% 279.25% 0.00% 121.75%
-------- ------- -------- --------
-------- ------- -------- --------
</TABLE>
- -----------------------------------------
For Footnote References, see "Notes to Financial Highlights".
The accompanying notes are an integral part of the financial statements.
Page 93
<PAGE>
<TABLE>
<CAPTION>
Dresdner RCM Global Funds
Financial Highlights
For a share outstanding throughout each fiscal year or period ended
EUROPE FUND
----------------------------------------------------------------------
CLASS N
----------------------------------------------------------------------
(UNAUDITED) YEAR ENDED DECEMBER 31,
SIX MONTHS ENDED ---------------------------------------------------
JUNE 30, 1999(1) 1998(1) 1997(1) 1996(1) 1995 1994
---------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 13.66 $ 12.59 $ 10.66 $ 9.20 $ 9.20 $ 9.80
-------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income (loss) (0.17) (0.05) 0.01 0.03 0.07 0.03
Net realized and unrealized gain
(loss) on investments (0.32) 4.60 2.70 1.45 (0.07) (0.51)
-------- -------- -------- -------- -------- --------
Total from investment operations (0.49) 4.55 2.71 1.48 0.00 (0.48)
Less distributions:
From net investment income (0.03) (0.17) (0.06) (0.02) 0.00 0.00
From net realized gain on
investments (0.48) (3.31) (0.72) 0.00 0.00 (0.12)
-------- -------- -------- -------- -------- --------
Total distributions (0.51) (3.48) (0.78) (0.02)(15) 0.00 (0.12)(15)
-------- -------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 12.66 $ 13.66 $ 12.59 $ 10.66 $ 9.20 $ 9.20
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
TOTAL RETURN NET ASSET VALUE (8) (3.44)% 37.23% 25.70% 15.87% 1.33% (4.98)%
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
PER SHARE MARKET VALUE, END OF PERIOD
(16) $ -- $ 12.69 $ 11.25 $ 8.13 $ 7.25 $ 7.38
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
TOTAL RETURN MARKET VALUE (18) --% 43.50% 48.04% 12.34% (1.69)% (20.07)%
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $50,560 $191,338 $176,414 $149,299 $128,932 $128,937
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
Ratio of expenses to average net assets:
With waiver and reimbursement (17) 2.17% 1.97% 1.30% 1.42% 1.51% 1.40%
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
Without waiver and reimbursement (17) 2.25% -- -- -- -- --
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
Ratio of net investment income to
average net assets:
With waiver and reimbursement (17) (0.40)% (0.31)% 0.06% 0.33% 0.76% 0.34%
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
Without waiver and reimbursement (17) (0.47)% -- -- -- -- --
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
Portfolio turnover 161.00% 114.00% 85.00% 51.00% 40.00% 91.00%
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
</TABLE>
- -----------------------------------------
For Footnote References, see "Notes to Financial Highlights".
<TABLE>
<CAPTION>
GLOBAL EQUITY FUND
---------------------------------
CLASS I
---------------------------------
(UNAUDITED) PERIOD ENDED
SIX MONTHS ENDED DECEMBER 31,
JUNE 30, 1999 1998(5)
---------------- ------------
PER SHARE OPERATING PERFORMANCE: (1)
<S> <C> <C>
Net asset value, beginning of period $ 10.00 $10.00
------- ------------
Income from investment operations:
Net investment loss ( 0.01) --
Net realized and unrealized gain on
investments 1.01 --
------- ------------
Total from investment operations 1.00 --
Less distributions:
From net investment income -- --
From net realized gain on
investments -- --
------- ------------
Total distributions -- --
------- ------------
NET ASSET VALUE, END OF PERIOD $ 11.00 $10.00
------- ------------
------- ------------
TOTAL RETURN (8) 10.00% 0.00%
------- ------------
------- ------------
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 1,100 $1,000
------- ------------
------- ------------
Ratio of expenses to average net assets:
With waiver and reimbursement (17) 1.25% 0.00%(9)
------- ------------
------- ------------
Without waiver and reimbursement (17) 12.11% --
------- ------------
------- ------------
Ratio of net investment income to
average net assets:
With waiver and reimbursement (17) (0.18)% 0.00%(9)
------- ------------
------- ------------
Without waiver and reimbursement (17) (11.03)% --
------- ------------
------- ------------
Portfolio turnover 80.00% 0.00%
------- ------------
------- ------------
</TABLE>
- -----------------------------------------
For Footnote References, see "Notes to Financial Highlights".
The accompanying notes are an integral part of the financial statements.
Page 94
<PAGE>
<TABLE>
<CAPTION>
Dresdner RCM Global Funds
Financial Highlights
For a share outstanding throughout each period ended
STRATEGIC INCOME FUND
----------------------------
CLASS I
----------------------------
PERIOD
(UNAUDITED) ENDED
SIX MONTHS DECEMBER
ENDED 31,
JUNE 30, 1999 1998(5)
--------------- -----------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE: (1)
Net asset value, beginning of period $ 10.00 $ 10.00
------- -----------
Income from investment operations:
Net investment income 0.26 --
Net realized and unrealized loss on investments (0.21) --
------- -----------
Total from investment operations 0.05 --
Less distributions:
From net investment income (0.22) --
From net realized gain on investments -- --
------- -----------
Total distributions (0.22) --
------- -----------
NET ASSET VALUE, END OF PERIOD $ 9.83 $ 10.00
------- -----------
------- -----------
TOTAL RETURN (8) 0.60% 0.00%
------- -----------
------- -----------
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 2,950 $ 3,000
------- -----------
------- -----------
Ratio of expenses to average net assets:
With waiver and reimbursement (17) 1.25% 0.00%(9)
------- -----------
------- -----------
Without waiver and reimbursement (17) 4.24% --
------- -----------
------- -----------
Ratio of net investment income to average net assets:
With waiver and reimbursement (17) 5.28% 0.00 %(9)
------- -----------
------- -----------
Without waiver and reimbursement (17) 2.29% --
------- -----------
------- -----------
Portfolio turnover 203.00% 0.00%
------- -----------
------- -----------
</TABLE>
- ------------------------------------
For Footnote References, see "Notes to Financial Highlights".
The accompanying notes are an integral part of the financial statements.
Page 95
<PAGE>
Dresdner RCM Global Funds
Notes to Financial Highlights
June 30, 1999 (Unaudited)
The following notes are being used as reference items in the Financial
Highlights of the Funds.
(1) Calculated using the average share method.
(2) Commencement of operation was December 27, 1995.
(3) Commencement of operation was December 31, 1996.
(4) Commencement of operation was December 30, 1997.
(5) Commencement of operation was December 31, 1998.
(6) 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.
(7) Commencement of operation was December 28, 1994.
(8) Total return measures the change in value of an investment over the period
indicated.
(9) Not annualized. Fund was in operations for less than five days.
(10) Commencement of operation was March 2, 1999.
(11) Commencement of operations was February 12, 1999.
(12) Commencement of operation was March 10, 1999.
(13) Commencement of operation was January 20, 1999.
(14) Commencement of operation was March 10, 1999.
(15) The ex-dividend date was after the end of the fiscal year.
(16) Closing price -- New York Stock Exchange.
(17) Annualized for periods of less than one year.
(18) The total market value return calculation includes reinvestment of
dividends in the year declared.
The accompanying notes are an integral part of the financial statements.
Page 96
<PAGE>
(THIS PAGE INTENTIONALLY LEFT BLANK)
Page 97
<PAGE>
DRESDNER RCM GLOBAL FUNDS
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES
Dresdner RCM Global Funds, Inc. ("Global Company"), previously Dresdner
RCM Equity Funds Inc., Dresdner RCM Capital Funds, Inc. ("Capital Company") and
Dresdner RCM Investment Funds Inc. ("Investment Company") are organized as
Maryland corporations and are registered as open-end management investment
companies under the Investment Company Act of 1940, as amended. These three
corporations are each referred to as a "Company" and collectively as the
"Companies."
The Global Company consists of nine no-load series:
Non-Diversified Funds
- -------------------
Dresdner RCM Global Technology Fund ("Global Technology Fund")
Dresdner RCM Global Health Care Fund ("Global Health Care Fund")
Dresdner RCM Biotechnology Fund ("Biotechnology Fund")
Diversified Funds
- --------------
Dresdner RCM Global Small Cap Fund ("Global Small Cap Fund")
Dresdner RCM Large Cap Growth Fund ("Large Cap Growth Fund")
Dresdner RCM Emerging Markets Fund ("Emerging Markets Fund")
Dresdner RCM Tax Managed Growth Fund ("Tax Managed Growth Fund")
Dresdner RCM Global Equity Fund ("Global Equity Fund")
Dresdner RCM Strategic Income Fund ("Strategic Income Fund")
The Dresdner RCM International Growth Equity Fund ("International
Fund"), formerly Dresdner RCM International Growth Equity Fund A, is a
non-diversified, no-load series of the Capital Company (financial information of
the other series of the Capital Company are reported in the Dresdner RCM Capital
Funds semi-annual report). The Dresdner RCM Europe Fund ("Europe Fund"),
formerly The Emerging Germany Fund Inc., is a non-diversified, no load series of
the Investment Company. These eleven series are collectively referred to as the
"Funds."
The Tax Managed Growth Fund, Global Equity Fund and Strategic Income
Fund commenced operations on December 31, 1998. Beginning December 31, 1998, the
Global Company and International Fund began offering Non-Institutional Class
("Class N") and Institutional Class ("Class I") shares for each of the Funds
listed above except for the Global Health Care Fund and Biotechnology Fund,
which remain as single class funds, and are designated as Class N. As of
December 31, 1998, outstanding shares of the Global Technology Fund, Global
Small Cap Fund, Large Cap Growth Fund, Emerging Markets Fund and International
Fund have been re-designated as each such Fund's Class I shares.
The following is a summary of significant accounting policies
consistently followed by the Funds in the preparation of their financial
statements. The policies are in conformity with generally accepted accounting
principles which require management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results may differ from these estimates.
Page 98
<PAGE>
DRESDNER RCM GLOBAL FUNDS
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
A. PORTFOLIO VALUATIONS:
Investment securities are stated at fair market value. Equity securities
traded on stock exchanges are valued at the last sale price on the exchange or
in the principal over-the-counter market in which such securities are traded as
of the close of business on the day the securities are being valued. If there
has been no sale on such day, then the security will be valued at the closing
bid price on such day. If no bid price is quoted on such day, then the security
will be valued by such method as the Board of Directors of the appropriate
Company or a duly constituted committee of the Board of Directors of the
Companies shall determine in good faith to reflect its fair market value.
Readily marketable securities traded only in the over-the-counter market that
are not listed on NASDAQ or similar foreign reporting service will be valued at
the mean bid price, or using such other comparable sources as the Board of
Directors of the appropriate Company in good faith deems appropriate to reflect
their fair market value. Other portfolio securities held by the Funds will be
valued at current market value, if current market quotations are readily
available for such securities. To the extent that market quotations are not
readily available, such securities will be valued by whatever means the Board of
Directors of the appropriate Company or a duly constituted committee of the
Board of Directors of the appropriate Company in good faith deems appropriate to
reflect their fair market value. Short-term investments with a maturity of 60
days or less are valued at amortized cost, which approximates market value.
B. SECURITY TRANSACTIONS, RELATED INVESTMENT INCOME AND EXPENSES:
Security transactions are recorded as of the date of purchase or sale.
Dividends are recorded on the ex-dividend date. Interest income is recorded on
the accrual basis and includes amortization of discounts and premiums. Realized
gains and losses on security transactions are determined on the identified cost
basis for both financial statement and federal income tax purposes. Each Fund
bears expenses incurred specifically on its behalf as well as a portion of any
general expenses of the appropriate company. Each Fund's income, expenses (other
than the class specific distribution fees) and realized and unrealized gains and
losses are allocated based upon the relative net assets of each class.
C. FOREIGN CURRENCY TRANSLATIONS AND FOREIGN INVESTMENTS:
The records of the Funds are maintained in U.S. dollars. Foreign
currencies, foreign investments and other assets and liabilities denominated in
currencies other than U.S. dollars are translated into U.S. dollars based upon
foreign exchange rates prevailing at the end of the period. Purchases and sales
of foreign securities and income and withholding taxes are translated on the
respective dates of such transactions. Net realized currency gains and losses
include foreign currency gains and losses between trade date and settlement date
and foreign currency translations. The Funds do not isolate that portion of
foreign currency exchange fluctuation on investments from unrealized
appreciation and depreciation which arises from changes in market prices. Such
fluctuations are included with the net unrealized appreciation or depreciation
on investments.
D. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS:
A forward foreign currency exchange contract ("forward contract") is an
agreement between two parties to buy and sell a currency at a set price on a
future date. A Fund may enter into a forward contract in order to hedge foreign
currency risk associated with its portfolio securities or for other risk
management or investment purposes. The market value of the forward contract
fluctuates with changes in currency exchange rates. The forward contract is
Page 99
<PAGE>
DRESDNER RCM GLOBAL FUNDS
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
marked-to-market daily and the change in market value is recorded by the Fund as
an unrealized appreciation or depreciation on foreign currency translations on
the Fund's Statement of Assets and Liabilities. When the forward contract is
closed, the Fund records a realized gain or loss on foreign currency
translations in the Fund's Statement of Operations equal to the difference
between the value at the time the forward contract was opened and the value at
the time it was closed. A Fund could be exposed to risk of loss if the
counterparty is unable to meet the terms of the forward contract or if the value
of the currency changes unfavorably.
E. OPTION ACCOUNTING PRINCIPLES:
A Fund may purchase or write 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. When a Fund writes a
call or put option, an amount equal to the premium received is included in the
Fund's Statement of Assets and Liabilities as an asset and an equivalent
liability. The amount of the liability is subsequently marked-to-market to
reflect the current market value of the option. An option listed on a traded
exchange is valued at its last sale price. If there has been no sale on such
day, then the option will be valued at the closing bid price on such day. If an
option expires on its stipulated expiration date or if the Fund enters into a
closing purchase transaction, a gain or loss is realized without regard to any
unrealized gain or loss on the underlying security, and the liability related to
such option is extinguished. If a written call option is exercised, a gain or
loss is realized from the sale of the underlying security and the proceeds of
the sale are increased by the premium originally received. If a written put
option is exercised, the cost of the underlying security purchased is decreased
by the premium originally received.
The premium paid by a Fund for the purchase of a call or put option is
included in the Fund's Statement of Assets and Liabilities as an investment and
subsequently marked-to-market to reflect the current market value of the option.
If an option which the Fund has purchased expires on the stipulated expiration
date, the Fund realizes a loss in the amount of the cost of the option. If the
Fund enters into a closing sale transaction, the Fund realizes a gain or loss,
depending on whether proceeds from the closing sale transaction are greater or
less than the cost of the option. If the Fund exercises a call option, the cost
of the securities acquired by exercising the call is increased by the premium
paid to buy the call. If the Fund exercises a put option, it realizes a gain or
loss from the sale of the underlying security, and the proceeds from such sale
are decreased by the premium originally paid.
F. FEDERAL INCOME TAXES:
It is the policy of each Fund to comply with the requirements for
qualification as a "regulated investment company" under the Internal Revenue
Code of 1986, as amended (the "Code"). It is also the intention of each Fund to
make distributions sufficient to avoid imposition of any excise tax under
Section 4982 of the Code. Therefore, no provision has been made for Federal
income or excise taxes on income and capital gains. As of December 31, 1998, the
Emerging Markets Fund had capital loss carryovers of $377,387 and $372 which
will expire on December 31, 2006 and 2005, respectively. The International Fund
also had a capital loss carryover of $6,919,702 which will expire on December
31, 2006.
G. DISTRIBUTIONS:
Dividends and capital gains (if any) are declared and distributed to
shareholders annually. Distributions are recorded by the Funds on the
ex-dividend date. Income and capital gain distributions are determined in
accordance with
Page 100
<PAGE>
DRESDNER RCM GLOBAL FUNDS
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Federal income tax regulations, which may differ from generally accepted
accounting principles. These differences are primarily due to differing
treatments for losses as a result of wash sales, foreign currency transactions
and/or investments in passive foreign investment companies.
H. SECURITIES LENDING:
The Europe Fund may lend portfolio securities while it continues to earn
dividends on such securities loaned. At June 30, 1999, securities with a market
value of $839,992 were on loan to brokers. The loans were collateralized by cash
of $885,832, received by the Fund. For international securities, cash collateral
is received by the Europe Fund against loaned securities in an amount at least
equal to 105% of the market value of the loaned securities at the inception of
each loan. This collateral must be maintained at not less than 104.5% of the
market value of the loaned securities during the period of the loan. For the six
months ended June 30, 1999, net securities lending income was $5,658 and is
included in interest income. As with other extensions of credit, the Fund may
bear the risk of delay in the recovery of the loaned securities or in the
foreclosure on collateral.
I. REDEMPTION FEES:
The Europe Fund and Tax Managed Growth Fund charge a 1.00% redemption
fee to shareholders who redeem shares held for less than twelve consecutive
months. For the Europe Fund this redemption fee will remain in effect through
November 1, 1999. The redemption fee for the Tax Managed Growth Fund will remain
in effect indefinitely. For the period ended June 30, 1999, the redemption fees
for the Europe Fund amounted to $350,780, which is included in the Statement of
Changes in Net Assets.
J. EUROPE FUND CONVERSION:
The Europe Fund was incorporated in the State of Maryland on February 2,
1990 as a non-diversified, closed-end management investment company and
registered under the Investment Company Act of 1940. On January 26, 1999, the
stockholders of the Europe Fund approved the conversion of the Fund from a
closed-end investment company to an open-end investment company. Upon conversion
of the Europe Fund on May 3, 1999, two classes of shares were offered: Class N
and Class I. Existing shareholders of the Fund received Class N shares of the
converted open-end fund, equal in number to their previous closed-end fund
shares.
2. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Dresdner RCM Global Investors LLC ("Dresdner RCM") serves as the Funds'
investment manager, subject to the authority of the Boards of Directors. The
Funds pay the management fees shown below to Dresdner RCM monthly. The fees are
annual percentages based on average daily net assets.
Dresdner RCM has voluntarily agreed, until at least December 31, 1999,
to pay each Fund (except the Europe Fund) the amount, if any, by which ordinary
operating expenses of the Fund for each quarter (except interest, taxes, and
extraordinary expenses) exceed its annualized total expense ratio noted below as
a percentage of its average daily net assets. In subsequent years, each Fund
will reimburse Dresdner RCM for any such payments during a five-year period to
the extent that operating expenses are otherwise below the expense cap.
Page 101
<PAGE>
DRESDNER RCM GLOBAL FUNDS
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999 (Unaudited)
2. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES (CONTINUED)
Upon conversion of the Europe Fund on May 3, 1999, Dresdner RCM
voluntarily agreed, until at least April 30, 2002, to pay the Europe Fund on a
quarterly basis the amount, if any, by which the ordinary operating expenses of
the Europe Fund (except taxes, interest, and extraordinary expenses) exceed an
annual expense ratio of 1.35% (Class I) and 1.60% (Class N). In subsequent
years, the Europe Fund will reimburse Dresdner RCM, for any such payments during
a five year period, to the extent that the Europe Fund's operating expenses are
otherwise below the expense cap. Prior to conversion, the Europe Fund paid
Dresdner RCM investment management and administrative fees monthly, at an annual
rate of 1.00% of the average weekly net assets up to $100 million and at an
annual rate of 0.80% of such assets in excess of $100 million.
For the period ended June 30, 1999, Dresdner RCM reimbursed the Funds'
for the following operating expenses.
<TABLE>
<CAPTION>
ANNUAL MANAGEMENT FEE PERCENTAGES
---------------------------------------------------------- EXPENSES
FIRST $500 NEXT $500 ABOVE $1 --------------------------------
FUND FLAT RATE MILLION MILLION BILLION EXPENSE CAPS REIMBURSEMENT
- ------------------------ ------------- ------------- ------------- ------------- ------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Large Cap Growth Fund--I -- 0.70% 0.65% 0.60% 0.95% $ 65,344
Large Cap Growth Fund--N -- 0.70% 0.65% 0.60% 1.20% 13,803
Biotechnology Fund--N -- 1.00% 0.95% 0.90% 1.50% 60,093
Tax Managed Growth
Fund--I -- 0.75% 0.70% 0.65% 1.25% 61,459
Tax Managed Growth
Fund--N -- 0.75% 0.70% 0.65% 1.50% 19,587
Global Small Cap Fund--I -- 1.00% 0.95% 0.90% 1.50% 58,128
Global Small Cap Fund--N -- 1.00% 0.95% 0.90% 1.75% 8,547
Global Technology
Fund--I 1.00% -- -- -- 1.50% 7,804
Global Technology
Fund--N 1.00% -- -- -- 1.75% 11,468
Global Health Care
Fund--N -- 1.00% 0.95% 0.90% 1.50% 66,582
International Fund--I 0.75% -- -- -- 1.00% 6,685
International Fund--N 0.75% -- -- -- 1.25% 9,855
Emerging Markets Fund--I 1.00% -- -- -- 1.50% 93,191
Emerging Markets Fund--N 1.00% -- -- -- 1.50% 11,574
Europe Fund--I 1.00% * -- -- -- 1.35% --
Europe Fund--N 1.00% * -- -- -- 1.60% 45,484
Global Equity Fund--I -- 0.75% 0.70% 0.65% 1.25% 55,325
Global Equity Fund--N -- 0.75% 0.70% 0.65% 1.50% --
Strategic Income Fund--I -- 0.75% 0.70% 0.65% 1.25% 44,442
Strategic Income Fund--N -- 0.75% 0.70% 0.65% 1.50% --
</TABLE>
* The Europe Fund pays management fees at 1.00% annually for assets under $100
million and 0.80% for assets above $100 million.
Page 102
<PAGE>
DRESDNER RCM GLOBAL FUNDS
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999 (Unaudited)
2. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES (CONTINUED)
On June 30, 1999, the Dresdner RCM Profit Sharing Plan, participation in
which is limited to employees of Dresdner RCM, owned 213,174 shares and 354,530
shares of the total 1,643,524 and 10,490,465 outstanding shares of the Global
Technology Fund and the International Fund, respectively. Also on June 30, 1999,
certain Dresdner RCM employees individually owned 996,414 shares of the Global
Technology Fund. As of June 30, 1999, clients of Dresdner Bank AG/Investment
Management/Institutional Asset Management Division owned the following shares of
the Funds:
<TABLE>
<CAPTION>
FUND SHARES OWNED OUTSTANDING SHARES
- ---------------------------------------- --------------- -------------------
<S> <C> <C>
Biotechnology Fund 300,000 399,279
Tax Managed Growth Fund 100,000 114,231
Global Small Cap Fund 400,000 443,948
Global Health Care Fund 400,000 413,904
Emerging Markets Fund 300,000 309,900
Global Equity Fund 100,000 100,000
Strategic Income Fund 300,000 300,000
</TABLE>
At June 30, 1999, the following Funds had shareholders which each held
more than 5% of the Fund's Net Assets:
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE OF
FUND SHAREHOLDERS AGGREGATE OWNERSHIP
- ---------------------------------------------- ------------------- -------------------
<S> <C> <C>
Large Cap Growth Fund 2 88%
Global Technology Fund 5 72%
International Fund 5 62%
</TABLE>
3. DISTRIBUTOR
Funds Distributor, Inc. (the "Distributor") acts as distributor of
shares of the Funds. During fiscal 1998, the Global Company had a distribution
plan (the "Old Plan") pursuant to Rule 12b-1 under the 1940 Act with respect to
the Global Small Cap Fund, Global Health Care Fund, Large Cap Growth Fund, and
Biotechnology Fund. Under the Old Plan, which was a "reimbursement plan," the
Global Small Cap Fund, Global Health Care Fund, and Biotechnology Fund each paid
the Distributor an annual fee of up to 0.25% of each respective Fund's average
daily net assets and the Large Cap Growth Fund paid the Distributor an annual
fee of up to 0.15% of its average daily net assets, as reimbursement for certain
expenses actually incurred by the Distributor in connection with distribution of
shares of the Funds.
Beginning December 31, 1998 (effective for fiscal year 1999), both the
Global Company and the Capital Company adopted new distribution and service
plans (the "New Plans") pursuant to Rule 12b-1 under the 1940 Act. The terms of
the New Plans are substantially the same as the Old Plan. Under the New Plans,
each Fund pays the Distributor an annual fee of up to 0.25% of the average daily
net assets of its Class N shares as reimbursement for certain expenses incurred
by the Distributor in providing distribution and shareholder support services to
such shares. 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 Class N shares. Class I shares are not subject to
12b-1 fees.
Page 103
<PAGE>
DRESDNER RCM GLOBAL FUNDS
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999 (Unaudited)
3. DISTRIBUTOR (CONTINUED)
Effective May 3, 1999, the Investment Funds adopted a distribution plan
pursuant to Rule 12b-1 under the 1940 Act, whereby the Fund pays the Distributor
on a monthly basis for all costs incurred by the Distributor in distributing
Class N shares at an annual fee of up to 0.25% of the Fund's Class N shares'
average daily net assets.
4. CAPITAL SHARES
At June 30, 1999, the Global Company and Capital Company each has
1,000,000,000 authorized shares of common stock at $0.0001 par value, and the
Investment Company has 1,000,000,000 authorized shares of $0.001 par value
common stock, designated as follows:
<TABLE>
<CAPTION>
CLASS I CLASS N
----------- -----------
<S> <C> <C>
Large Cap Growth Fund 50,000,000 25,000,000
Biotechnology Fund -- 50,000,000
Tax Managed Growth Fund 25,000,000 25,000,000
Global Small Cap Fund 50,000,000 25,000,000
Global Technology Fund 50,000,000 25,000,000
Global Health Care Fund -- 50,000,000
International Fund 100,000,000 50,000,000
Emerging Markets Fund 50,000,000 25,000,000
Europe Fund 100,000,000 100,000,000
Global Equity Fund 25,000,000 25,000,000
Strategic Income Fund 25,000,000 25,000,000
</TABLE>
5. INVESTMENT IN FOREIGN SECURITY AND CURRENCY
Investing in foreign equity securities and currency transactions
involves significant risks, some of which are not typically associated with
investments of domestic origin. The Funds' investments in foreign and/or
emerging markets will subject the Funds to the risk of foreign currency exchange
rate fluctuations, credit risk and adverse economic and political developments.
6. DEFERRED ORGANIZATION COSTS
Costs incurred by the Funds in connection with their organization are
being amortized on a straight-line basis over a five-year period beginning at
the commencement of each Fund's operations. The Tax Managed Growth Fund, Global
Equity Fund, Strategic Income Fund, International Fund, and Europe Fund did not
have any organization costs.
Page 104
<PAGE>
DRESDNER RCM GLOBAL FUNDS
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999 (Unaudited)
7. WRITTEN OPTIONS
Transactions in written put and call options for the six months ended
June 30, 1999 for the Global Technology Fund were as follows:
<TABLE>
<CAPTION>
AMOUNT OF NUMBER OF
PREMIUMS CONTRACTS
----------- -----------
<S> <C> <C>
Options outstanding at December 31, 1998 $ -- --
Options sold 3,398,087 600
Options cancelled in closing purchase transactions (3,398,087) (600)
Options expired prior to exercise -- --
Options exercised -- --
----------- -----------
Options outstanding at June 30, 1999 $ -- --
----------- -----------
----------- -----------
</TABLE>
No written options were outstanding at June 30, 1999.
8. DIRECTORS' FEES
Each Director who is not an interested person of the Global Company (as
defined in the Investment Company Act of 1940) receives from the Global Company
an annual retainer of $1,000 (the retainer is evenly prorated among each series
of the Global Company), plus $500 for each Board meeting attended for each
series, and $250 for each committee meeting attended for each series.
Each Director who is not an interested person of the Capital Company (as
defined in the Investment Company Act of 1940) receives from the Capital Company
an annual retainer of $9,000 (the retainer is evenly prorated among each series
of the Capital Company), plus $1,500 for each Board meeting attended for each
series, and $500 for each committee meeting attended for each series.
Each Director who is not an interested person of the Investment Company
(as defined in the Investment Company Act of 1940) receives from the Investment
Company an annual retainer of $9,000, plus $1,500 for each Board meeting
attended for the series. The Europe Fund also pays each member of the strategic
planning and communications subcommittees $1,500 for each meeting attended.
Each Director of the Capital Company and the Global Company who is not
an interested person of the Global Company and the Capital Company 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/her deferred fees deemed invested either in 90-day U.S.
Treasury bills, or shares of the common stock of the Capital Company, the Global
Company, or a combination of these options. 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.
Page 105
<PAGE>
DRESDNER RCM GLOBAL FUNDS
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999 (Unaudited)
9. LINE OF CREDIT
The Europe Fund has an uncommitted Line of Credit arrangement ("LOC")
with State Street Bank and Trust Company, primarily to cover redemption
payments. The Fund's borrowings cannot exceed 33 1/3% of the Europe Fund's net
assets and cannot exceed the $60 million limit on the LOC. The Fund is subject
to the payment of interest on the unpaid balance of any borrowings based on the
prevailing market rates as defined in the LOC. The average daily loan balance
was $399,756, at a weighted average interest rate of 5.49%. The maximum loan
outstanding during the period ended June 30, 1999 was $11,148,000. At June 30,
1999, there were no such borrowings outstanding.
10. PENDING LITIGATION
On April 8, 1998, The Emerging Germany Fund (now the Dresdner RCM Europe
Fund) filed a lawsuit in the United States District Court for the Southern
District of New York against Phillip Goldstein, Ronald Olin and three affiliated
entities captioned THE EMERGING GERMANY FUND INC. V. GOLDSTEIN. The Fund alleged
violations by the defendants of the proxy solicitation and beneficial ownership
disclosure provisions of the federal securities laws in connection with the
Fund's annual meeting scheduled for April 1998. With respect to that meeting,
Opportunity Partners, L.P. filed an action in the same court against the Fund
and its directors on April 24, 1998, captioned OPPORTUNITY PARTNERS L.P. V. THE
EMERGING GERMANY FUND INC. alleging violations of the proxy antifraud rule of
the federal securities laws and breach of fiduciary duty. In addition, The
Emerging Germany Fund Inc., as nominal defendant, and each member of the Fund's
Board of Directors were named as defendants in a derivative and purported class
action suit captioned STEINER V. FUGELSANG filed on May 28, 1998, in the same
court. The class action allegations assert that the defendants violated the
federal securities laws and Maryland corporate law and the derivative claims
assert breach of fiduciary duty regarding the annual meeting. All issues in the
actions have been resolved except as to entitlement to the legal fees by the
Goldstein and Steiner litigants, which issues are the subject of settlement
discussions in part and further litigation in part. The Europe Fund believes
that a substantial portion of such legal fees that may be payable will be
reimbursed under a contract of insurance which insures the Europe Fund and its
Directors.
Page 106
<PAGE>
INVESTMENT MANAGER
Dresdner RCM Global Investors LLC
Four Embarcadero Center
San Francisco, California 94111
TRANSFER AND REDEMPTION AGENT
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
DISTRIBUTOR
Funds Distributor, Inc.
60 State Street, Suite 1300
Boston, Massachusetts 02109
CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
(Dresdner RCM Emerging Markets Fund Only)
Brown Brothers Harriman & Company
40 Water Street
Boston, Massachusetts 02109
LEGAL COUNSEL
Paul, Hastings, Janofsky & Walker LLP
555 South Flower Street
Los Angeles, California 90071
(Dresdner RCM Europe Fund Only)
Shaw Pittman
2300 N Street, N.W.
Washington, DC 20037
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
160 Federal Street
Boston, Massachusetts 02110
Shareholders may obtain monthly portfolio holdings by calling 1-800-726-7240.
Additional information is available on our website at
www.dresdnerrcmglobalfunds.com.
Page 107
<PAGE>
This report is not authorized for distribution to prospective investors
unless preceded or accompanied by a Dresdner RCM Global Funds prospectus, which
contains complete information about the Funds, including expenses. Investors
should read the prospectus carefully before they invest or send money, as it
explains certain risks associated with investing in these Funds, including
investments in international and emerging markets. These risks include social,
economic and political instability, market illiquidity, and currency volatility.
There are also special risks associated with investing in stocks of small
companies, which tend to be more volatile and less liquid than stocks of large
companies. There are additional risks associated with investing in Funds that
lack industry diversification. Portfolio holdings are subject to change and
should not be considered recommendation to purchase.
DISTRIBUTOR: DRESDNER RCM DISTRIBUTORS, A DIVISION OF FUNDS DISTRIBUTOR INC.
