<PAGE>
<TABLE>
<C> <S>
Dresdner RCM
Capital Funds
JUNE 30, 1999 Semi-Annual Report
</TABLE>
[LOGO]
<PAGE>
August 20, 1999
Dear Shareholders:
We are pleased to present the Dresdner RCM Capital 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.
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
concerning 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 Global Investors LLC
("Dresdner RCM"), the investment manager to the Funds, 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
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.
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 Capital
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.
Sincerely,
[SIGNATURE]
DeWitt F. Bowman
Chairman
Dresdner RCM Capital Funds, Inc.
<PAGE>
Dresdner RCM Growth Equity Fund
Management's Performance Review
Despite the shift in investor preference from growth to value in the
second quarter, superior stock selection and industry allocations was a major
reason that the Dresdner RCM Growth Equity Fund outperformed the broad market as
well as its benchmark during the first half of 1999. For the six months ended
June 30, 1999, the Dresdner RCM Growth Equity Fund returned of 16.54% while the
Fund's benchmark, the Russell Midcap Index, returned 10.33%.
MARKET REVIEW
The first quarter of 1999 witnessed large cap stocks outperforming mid
and small caps, and growth stocks outperforming value stocks. Investors shifted
focus in April as the strength of the underlying economy led to the
outperformance of the more economically sensitive sectors of the equity market.
The April rally coincided with a two-month market preference for cyclical
industries and value stocks. This trend reversed in June with the market's
digestion of the Federal Reserve's modest interest rate hike and subsequent
return to a neutral bias. Investors were heartened and optimistic that this Fed
action and benign interest rate environment would be accommodative of continuing
robust economic growth. These dynamics led to an improvement in the relative
strength of the mid cap sector relative to large caps during the quarter.
Indeed, the Russell Midcap Index outperformed the S&P 500 Index 3.8% during the
second quarter.
Dominating the strong mid cap performance during the period was the
technology sector. Infrastructure spending and continued strong semiconductor
orders drove mid caps to strong absolute and relative performance, compared to
other asset classes. One outperforming sector in the Index was utilities,
dominated by telecommunication services. The fast pace of technology is creating
demand for increased bandwidth and services access, wireline and wireless. This
trend remained strong through the period, and drove utilities higher and
generated consolidation activity in the sector.
FACTORS AFFECTING PERFORMANCE
The Growth Equity Fund substantially outperformed the Russell Midcap
Index during the six month period ended June 30, 1999. Dresdner RCM Global
Investors LLC ("Dresdner RCM"), the investment manager of the Fund, instituted
an overweight position in the telecommunication equipment and electronics
industries, relative to the Index. This strategy was the prominent factor for
the Fund's outperformance. Heavy capital investments by the network providers
during the first six months of 1999 led to significant performance for the
Fund's holdings in Qualcomm, Exodus Communications, and JDS Uniphase. Meanwhile,
companies such as STMicroelectronics and Xilinx benefited from continuing
strength in the semiconductor industry.
In addition, the Fund's holdings in Nextel Communications, Western
Wireless, Global Telesystems Corporation, and Winstar Communications were all
beneficiaries of strong unit growth of wireless telephones.
Dresdner RCM's stock selection process led to the overweighting of
securities in a broad range of industries. In particular, its bottom-up stock
selection resulted in the investment in several companies that became takeover
targets during the first half of 1999. This flow of events also contributed
substantially to the Fund's strong performance. The holdings, encompassing a
broad range of industries included ALZA Corporation, Ascend Corporation,
Genentech, Honeywell, and Frontier Corporation.
Although the Fund outperformed its benchmark, it was negatively affected
by exposure to Nordstrom Incorporated, Forest Laboratories, and Omnicare, Inc.
as company-specific shortfalls impacted performance.
OUTLOOK
Dresdner RCM remains committed to their intensive bottom-up,
research-driven decision making process that has historically produced superior
returns for shareholders. Specifically, Dresdner RCM remains committed to their
investments in the core growth sectors with large overweight positions in the
technology, telecommunications, and consumer discretionary sectors. Dresdner RCM
continues to focus on the Internet as an investment theme, generally with
related investments in telecommunication equipment and services as Dresdner
RCM's valuation disciplines have resulted in reductions in the more traditional
destination site and Internet portal companies. Additionally, Dresdner RCM
continues to build Fund weightings in the energy sector based on the improving
supply and demand characteristics for the oil and natural gas markets, while the
health care exposure has been reduced based on Dresdner RCM's unenthusiastic
outlook for the group. Finally, Dresdner RCM believes the current interest rate
environment creates a favorable backdrop for growth stock investing in the
second half of the year, and is positioning the Fund appropriately to take
advantage of this favorable environment.
Page 2
<PAGE>
Dresdner RCM Growth Equity Fund
Total Return Index Comparison(b)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
FUND RUSSELL MIDCAP INDEX (A)
<S> <C> <C>
12/79 $10,719 $11,158
1/80 $11,210 $11,777
2/80 $10,792 $11,516
3/80 $9,599 $9,996
4/80 $10,028 $10,641
5/80 $10,856 $11,467
6/80 $11,315 $12,024
7/80 $12,980 $13,034
8/80 $13,656 $13,375
9/80 $14,396 $13,821
10/80 $14,878 $13,966
11/80 $15,935 $15,074
12/80 $15,665 $14,784
1/81 $15,304 $14,439
2/81 $15,725 $14,694
3/81 $17,588 $15,843
4/81 $18,134 $15,918
5/81 $19,279 $16,306
6/81 $18,560 $16,008
7/81 $18,247 $15,809
8/81 $17,371 $14,908
9/81 $16,587 $13,951
10/81 $18,157 $14,914
11/81 $18,503 $15,518
12/81 $18,211 $15,139
1/82 $17,929 $14,583
2/82 $17,527 $13,964
3/82 $17,476 $13,825
4/82 $18,682 $14,486
5/82 $18,511 $13,970
6/82 $18,441 $13,595
7/82 $18,512 $13,274
8/82 $20,047 $14,871
9/82 $20,666 $15,293
10/82 $23,233 $17,338
11/82 $25,235 $18,395
12/82 $25,710 $18,660
1/83 $27,172 $19,319
2/83 $28,967 $19,987
3/83 $30,108 $20,691
4/83 $32,700 $21,984
5/83 $34,645 $22,903
6/83 $36,064 $23,737
7/83 $34,391 $22,991
8/83 $33,610 $22,846
9/83 $34,935 $23,486
10/83 $33,413 $22,575
11/83 $34,930 $23,541
12/83 $34,348 $23,105
1/84 $32,764 $22,449
2/84 $31,089 $21,235
3/84 $31,709 $21,587
4/84 $31,839 $21,350
5/84 $30,674 $20,146
6/84 $32,051 $20,774
7/84 $31,196 $20,166
8/84 $34,191 $22,684
9/84 $33,648 $22,791
10/84 $33,611 $22,880
11/84 $32,993 $22,784
12/84 $33,496 $23,435
1/85 $37,254 $25,659
2/85 $38,042 $26,119
3/85 $37,399 $25,970
4/85 $36,747 $25,894
5/85 $39,165 $27,365
6/85 $39,965 $28,030
7/85 $40,928 $27,994
8/85 $40,385 $27,876
9/85 $38,429 $26,510
10/85 $40,118 $27,883
11/85 $42,578 $29,810
12/85 $44,235 $30,937
1/86 $45,046 $31,633
2/86 $48,307 $34,205
3/86 $49,783 $36,003
4/86 $50,541 $35,845
5/86 $52,554 $37,701
6/86 $51,571 $38,216
7/86 $47,374 $35,687
8/86 $49,140 $38,219
9/86 $45,601 $35,511
10/86 $48,335 $37,364
11/86 $48,946 $37,640
12/86 $48,361 $36,569
1/87 $54,951 $41,072
2/87 $59,189 $43,530
3/87 $60,968 $43,942
4/87 $60,390 $42,842
5/87 $62,092 $42,989
6/87 $64,592 $44,737
7/87 $67,740 $46,653
8/87 $70,486 $48,302
9/87 $68,483 $47,379
10/87 $49,455 $35,710
11/87 $47,006 $33,727
12/87 $53,665 $36,652
1/88 $53,930 $38,355
2/88 $58,780 $41,072
3/88 $60,415 $41,126
4/88 $61,386 $41,380
5/88 $60,234 $41,283
6/88 $64,720 $44,110
7/88 $63,335 $43,225
8/88 $61,789 $42,264
9/88 $64,192 $43,702
10/88 $63,486 $43,889
11/88 $62,127 $42,836
12/88 $64,859 $43,910
1/89 $68,192 $46,537
2/89 $67,612 $46,427
3/89 $68,994 $47,190
4/89 $73,125 $49,465
5/89 $77,254 $51,695
6/89 $74,440 $51,503
7/89 $79,915 $55,093
8/89 $83,387 $56,935
9/89 $83,428 $56,413
10/89 $79,787 $53,752
11/89 $80,873 $54,489
12/89 $82,292 $55,446
1/90 $75,120 $50,999
2/90 $77,825 $52,033
3/90 $80,029 $53,300
4/90 $78,163 $51,011
5/90 $86,194 $55,632
6/90 $87,034 $55,271
7/90 $84,425 $53,628
8/90 $75,868 $47,860
9/90 $71,033 $44,312
10/90 $69,568 $42,913
11/90 $75,112 $47,046
12/90 $78,902 $49,072
1/91 $85,003 $52,398
2/91 $92,631 $56,764
3/91 $97,028 $59,119
4/91 $96,459 $59,474
5/91 $101,948 $62,298
6/91 $96,909 $59,427
7/91 $102,335 $62,340
8/91 $105,602 $64,204
9/91 $105,329 $63,830
10/91 $108,557 $65,138
11/91 $104,724 $62,445
12/91 $116,960 $69,442
1/92 $119,326 $70,748
2/92 $120,948 $72,373
3/92 $115,847 $70,524
4/92 $113,545 $71,075
5/92 $114,312 $71,534
6/92 $108,991 $70,374
7/92 $112,618 $73,316
8/92 $110,272 $71,628
9/92 $113,146 $73,113
10/92 $117,301 $74,902
11/92 $122,190 $78,677
12/92 $125,186 $80,789
1/93 $125,594 $82,405
2/93 $121,886 $82,496
3/93 $124,822 $85,179
4/93 $121,150 $82,922
5/93 $126,171 $85,555
6/93 $126,630 $86,522
7/93 $125,543 $86,939
8/93 $131,747 $90,806
9/93 $134,398 $91,153
10/93 $135,795 $91,229
11/93 $131,931 $89,113
12/93 $138,604 $92,341
1/94 $143,687 $94,889
2/94 $142,568 $93,598
3/94 $134,622 $89,611
4/94 $135,889 $90,226
5/94 $134,603 $90,349
6/94 $130,975 $87,673
7/94 $132,730 $90,682
8/94 $141,423 $94,981
9/94 $140,120 $92,660
10/94 $142,420 $93,369
11/94 $137,052 $89,250
12/94 $139,650 $90,409
1/95 $140,145 $92,266
2/95 $146,023 $97,042
3/95 $151,805 $99,819
4/95 $152,385 $101,324
5/95 $155,053 $104,654
6/95 $162,810 $108,171
7/95 $174,821 $113,423
8/95 $177,454 $115,160
9/95 $183,158 $117,762
10/95 $179,789 $115,128
11/95 $185,416 $120,853
12/95 $187,880 $121,558
1/96 $190,835 $124,137
2/96 $200,326 $127,052
3/96 $203,882 $128,890
4/96 $212,394 $132,542
5/96 $215,917 $134,544
6/96 $206,821 $132,526
7/96 $188,917 $124,324
8/96 $198,795 $130,243
9/96 $211,760 $136,676
10/96 $211,966 $137,772
11/96 $222,461 $146,165
12/96 $223,710 $144,673
1/97 $229,653 $150,085
2/97 $218,817 $149,858
3/97 $204,835 $143,388
4/97 $209,029 $147,059
5/97 $236,993 $157,788
6/97 $243,285 $162,951
7/97 $260,762 $176,549
8/97 $257,966 $174,642
9/97 $275,443 $184,614
10/97 $259,015 $177,433
11/97 $257,966 $181,656
12/97 $262,848 $186,669
1/98 $259,895 $183,160
2/98 $287,741 $197,483
3/98 $303,773 $206,843
4/98 $309,680 $207,360
5/98 $291,960 $200,953
6/98 $302,508 $203,746
7/98 $285,210 $194,028
8/98 $224,033 $162,983
9/98 $233,315 $173,528
10/98 $256,520 $185,363
11/98 $273,396 $194,149
12/98 $302,435 $205,546
1/99 $309,133 $205,196
2/99 $293,161 $198,363
3/99 $314,801 $204,572
4/99 $331,803 $219,690
5/99 $328,711 $219,053
6/99 $352,451 $226,785
</TABLE>
PERFORMANCE(B)
JUNE 30, 1999
<TABLE>
<CAPTION>
CUMULATIVE
SINCE SINCE
YTD(D) 1 YEAR 5 YEAR 10 YEAR INCEPTION INCEPTION
<S> <C> <C> <C> <C> <C> <C>
Average Annual
Total Return(c) 16.54% 16.51% 21.89% 16.82% 19.86% 3,424.51%
</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 Russell Midcap Index is composed of the smallest 800 companies in the
Russell 1000 Index. The Russell 1000 Index is made up of the 1,000 largest
companies in the Russell 3000 Index, which is composed of the 3,000 largest
U.S. companies by market capitalization and represents approximately 98% of
the investable U.S. equity market.
(b) Returns assume reinvestment of all dividends and capital gains distributions
at net asset value.
(c) The Fund began operations on November 6, 1979.
(d) Unannualized.
Page 3
<PAGE>
Dresdner RCM 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 0.4%
CONSUMER DURABLES 0.4%
143,500 US Furniture Brands International Inc. * $ 4,000,062
CONSUMER NON-DURABLES SECTOR 17.5%
BEVERAGE/TOBACCO 1.6%
659,500 US Pepsi Bottling Group Inc. 15,209,719
HOUSEHOLD/RELATED NON-DURABLES 1.5%
80,000 US Avon Products Inc. 4,440,000
261,500 US Dial Corp. 9,724,531
--------------
14,164,531
--------------
LEISURE TIME PRODUCTS/SERVICES 5.1%
26,800 US Harley Davidson Inc. 1,457,250
428,600 US Hasbro Inc. 11,974,012
280,000 US Host Marriott Corp. 3,325,000
298,500 US Marriott International Inc. Class A 11,156,438
96,800 US Papa John's International Inc. * 4,325,750
298,500 US Speedway Motorsports Inc. * 11,734,781
86,100 US Tricon Global Restaurants Inc. * 4,660,163
--------------
48,633,394
--------------
RETAIL TRADE 9.3%
236,000 US Abercrombie & Fitch Co. Class A * 11,328,000
165,000 US Bed Bath & Beyond Inc. * 6,352,500
223,700 US Circuit City Stores Inc. 20,804,100
171,400 US Costco Cos. Inc. * 13,722,712
506,000 US Family Dollar Stores Inc. 12,144,000
95,000 US Hannaford Bros. Co. 5,082,500
264,100 US Nordstrom Inc. 8,847,350
467,100 US Office Depot Inc. * 10,305,394
--------------
88,586,556
--------------
CYCLICAL/CAPITAL GOODS SECTOR 10.1%
AEROSPACE/DEFENSE 2.2%
77,500 US General Dynamics Corp. 5,308,750
317,500 US L-3 Communications Holdings Inc. * 15,339,219
--------------
20,647,969
--------------
BUILDING/CONSTRUCTION 2.0%
316,500 US Martin Marietta Materials Inc. 18,673,500
CHEMICALS/TEXTILES 3.1%
342,500 US Praxair Inc. 16,761,094
300,000 US Rohm & Haas Co. 12,862,500
--------------
29,623,594
--------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 4
<PAGE>
Dresdner RCM Growth Equity Fund
Portfolio of Investments (cont.)
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY EQUITY INVESTMENTS NET ASSETS (NOTE 1)
- ------------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
ELECTRICAL EQUIPMENT 2.2%
76,500 US Honeywell Inc. $ 8,864,437
191,000 US Rockwell International Corp. 11,603,250
--------------
20,467,687
--------------
INDUSTRIAL EQUIPMENT 0.2%
152,000 US MSC Industrial Direct Inc. 1,558,000
RAW/BASIC MATERIALS 0.4%
179,000 US AK Steel Holding Corp. 4,027,500
ENERGY SECTOR 6.3%
ENERGY 6.3%
493,500 US Burlington Resources Inc. 21,343,875
378,500 FR Coflexip S.A. (ADR) 16,464,750
598,000 US Weatherford International Inc. 21,901,750
--------------
59,710,375
--------------
HEALTH CARE SECTOR 10.3%
DRUGS AND HOSPITAL SUPPLIES 7.6%
510,692 US Alza Corp. * 25,981,455
173,800 US Bausch & Lomb Inc. 13,295,700
185,000 US Becton, Dickinson & Co. 5,550,000
111,600 US Boston Scientific Corp. * 4,903,425
230,500 US Forest Laboratories Inc. * 10,660,625
29,000 US Sepracor Inc. * 2,356,250
158,500 US Stryker Corp. 9,529,813
--------------
72,277,268
--------------
HEALTH CARE SERVICES 2.7%
298,973 US Cardinal Health Inc. 19,171,643
51,400 US HCR Manor Care Inc. * 1,243,238
211,000 US Health Management Associates Inc. * 2,373,750
171,900 US Omnicare Inc. 2,170,238
--------------
24,958,869
--------------
INTEREST-SENSITIVE SECTOR 7.2%
BANKING 3.8%
60,700 US CCB Financial Corp. 3,209,513
64,400 US City National Corp. 2,410,975
436,900 US Firstar Corp. 12,233,200
193,000 US National Commerce Bancorp 4,221,875
220,800 US Zions Bancorp 14,020,800
--------------
36,096,363
--------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 5
<PAGE>
Dresdner RCM Growth Equity Fund
Portfolio of Investments (cont.)
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY EQUITY INVESTMENTS NET ASSETS (NOTE 1)
- ------------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
GENERAL FINANCE 2.9%
344,800 US Charter One Financial Inc. $ 9,589,750
142,000 US CIT Group Inc. Class A 4,100,250
159,000 US Countrywide Credit Industries Inc. 6,797,250
385,100 US Federated Investors Inc. Class B 6,907,731
--------------
27,394,981
--------------
INSURANCE 0.5%
101,000 US Nationwide Financial Services Inc. Class A 4,570,250
TECHNOLOGY SECTOR 27.1%
COMPUTERS/OFFICE EQUIPMENT 2.9%
258 US Clarent Corp. 3,870
353,100 US Electronics for Imaging Inc. * 18,140,512
157,100 US Network Appliance Inc. * 8,777,963
37,400 US Seagate Technology * 958,375
--------------
27,880,720
--------------
ELECTRONICS/NEW TECHNOLOGY 12.8%
187,100 US ADC Telecommunications Inc. * 8,524,744
145,500 US Altera Corp. * 5,356,319
327,000 US Jabil Circuit Inc. * 14,755,875
90,440 US KLA Tencor Corp. * 5,867,295
105,300 US Maxim Integrated Products Inc. * 7,002,450
120,200 US QUALCOMM Inc. 17,248,700
180,800 US Sanmina Corp. * 13,718,200
224,000 NL STMicroelectronics N.V. NY Registry 15,540,000
96,800 US Uniphase Corp. * 16,068,800
64,500 US Vitesse Semiconductor Corp. * 4,399,706
230,000 US Xilinx Inc. 13,167,500
--------------
121,649,589
--------------
TECHNOLOGY SERVICES 11.4%
12,100 US Amazon.com Inc. * 1,514,013
148 US Ask Jeeves, Inc. 2,072
307,300 US BMC Software Inc. * 16,594,200
128,900 US Citrix Systems Inc. * 7,282,850
196,500 US Concord EFS, Inc. * 8,314,406
16,500 US DoubleClick Inc. * 1,513,875
14,790 US eBay Inc. * 2,233,290
163,500 US Exodus Communications Inc. * 19,609,781
263,100 US I2 Technologies Inc. * 11,313,300
73,800 US Intuit * 6,651,225
51,200 US Network Solutions Inc. * 4,051,200
317,200 US Sterling Commerce Inc. * 11,577,800
326,600 US USWeb Corp. * 7,246,437
102,500 US VERITAS Software Co. * 9,731,094
--------------
107,635,543
--------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 6
<PAGE>
Dresdner RCM Growth Equity Fund
Portfolio of Investments (cont.)
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY EQUITY INVESTMENTS NET ASSETS (NOTE 1)
- ------------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
TELEMEDIA/SERVICES SECTOR 17.8%
BUSINESS SERVICES 2.4%
233,300 US Fiserv Inc. * $ 7,305,206
383,200 US Sybron International Corp. Wisconsin * 10,561,950
91,000 US Waste Management Inc. 4,891,250
--------------
22,758,406
--------------
COMMUNICATION SERVICES 12.7%
698,500 US Cincinnati Bell Inc. 17,418,844
291,500 US Frontier Corp. 17,198,500
174,000 US Global TeleSystems Group Inc. * 14,094,000
195,000 US ICG Communications Inc. * 4,168,125
382,500 US Intermedia Communications of Florida Inc. * 11,475,000
170,000 US McLeodUSA Inc. * 9,350,000
330,000 US Nextel Communications Inc. * 16,561,875
504,000 US VoiceStream Wireless Corp. * 14,332,500
123,500 US Western Wireless Corp. Class A 3,334,500
264,700 US WinStar Communications Inc. * 12,904,125
--------------
120,837,469
--------------
MEDIA 2.7%
175,000 US Acxiom Corp. * 4,364,063
187,500 US SFX Entertainment Inc. Class A 12,000,000
201,000 US Young & Rubicam Inc. 9,132,937
--------------
25,497,000
--------------
TOTAL EQUITY INVESTMENTS (COST $768,174,246) 96.7% 916,859,345
--------------
SHORT-TERM INVESTMENTS
MONEY MARKET FUNDS 2.3%
11,028,653 US SSgA Money Market Fund 11,028,653
11,028,653 US SSgA U.S. Government Money Market Fund 11,028,653
--------------
TOTAL SHORT-TERM INVESTMENTS (COST $22,057,306) 2.3% 22,057,306
--------------
TOTAL INVESTMENTS (COST $790,231,552)** 99.0% 938,916,651
OTHER ASSETS LESS LIABILITIES 1.0% 9,211,535
--------------
NET ASSETS 100.0% $948,128,186
--------------
--------------
</TABLE>
- --------------------------------
* Non-income producing security
ADR American Depository Receipt
The accompanying notes are an integral part of the financial statements.
Page 7
<PAGE>
Dresdner RCM Growth Equity Fund
Portfolio of Investments (cont.)
June 30, 1999 (Unaudited)
Tax Information:
** For Federal income tax purposes, cost is $818,159,634 and gross aggregate
unrealized appreciation (depreciation) for all securities is as follows:
<TABLE>
<S> <C>
Unrealized appreciation $ 163,752,975
Unrealized depreciation (42,995,958)
-------------
Net unrealized
appreciation $ 120,757,017
-------------
-------------
</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>
France FR 1.7% 1.7%
Netherlands NL 1.6% 1.6%
United States US 93.4% 3.3% 96.7%
--- --- ----------
Total 96.7% 3.3% 100.0%
--- --- ----------
--- --- ----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 8
<PAGE>
Dresdner RCM Small Cap Fund
Management's Performance Review
Despite the strong absolute returns of small cap companies during the
first half of 1999, they continued to lag their large cap counterparts, though
not as substantially as in years past. For the six months ended June 30, 1999,
the Dresdner RCM Small Cap Fund returned -4.27%, underperforming its Russell
2000 benchmark, which returned 9.28%.
MARKET REVIEW
The first six months of 1999 proved to be extremely volatile for U.S.
small cap companies, allowing only a very narrow universe of small cap companies
to outperform their relative benchmark. From the first trading day in 1999
through April 23, 1999, companies in the Russell 2000 Index with negative
earnings appreciated an average of 24.2%. Conversely, companies in the Index
with positive earnings had an average return of -1.1% for the same period.(1)
While the broad small cap asset class was out of favor among investors,
a narrow universe of small cap stocks underwent periods of dramatic price
advances and declines, largely driven by speculative momentum. The market
capitalization of many Internet stocks passed through the small cap sector,
sometimes within hours or days, on the way to becoming mid and large cap issues.
Issues with ".com" in their names were fuels for speculative fires; even without
historical or foreseeable earnings, these stocks often rose precipitously. In
fact, in December 1998, the Russell 2000 growth benchmark contained a 4%
Internet sector-related weighting. By the end of the first quarter 1999,
Internet related stocks comprised approximately 10% of the overall market
capitalization in the Russell 2000 growth index. Similarly, 14 of the 20 best
performing stocks in the Russell 2000 Index were Internet or Internet-related
companies.(2) In short, the broad small cap universe languished while just a
handful of stocks drove the performance of the benchmark index.
FACTORS AFFECTING PERFORMANCE
On an absolute basis, the Dresdner RCM Small Cap Fund performed very
well in the second quarter of 1999, however the overall performance for the
first half of the year was hurt by its non-participation in the narrow rally as
described above. There are two principal motivations for this non-participation.
First, Dresdner RCM Global Investors LLC ("Dresdner RCM"), the investment
manager of the Fund, is committed to buying the stock of quality companies with
solid earnings, reasonable valuations, and excellent management. Despite being
extremely frustrated by the market's preference towards more speculative
companies, Dresdner RCM continues to implement its growth-at-a-reasonable price
philosophy, which has been consistent since the firm's inception in 1970.
Second, the market capitalization of many of the Internet stocks in the Russell
2000 Index exceeded the Fund's definition of a small cap stock. Upon the
rebalancing of the Russell 2000 on June 30th, many of the companies with market
caps incompatible with the Fund were removed.
Putting speculation and momentum-driven investments aside, the Internet
does hold tremendous investment potential. Although the Fund's participation in
this industry is somewhat minor, Dresdner RCM initiated and added to positions
in Internet infrastructure and connectivity companies, instead of making pure
Internet stock plays. These are the companies expending capital today for rich
returns in the future. For example, the Dresdner RCM Small Cap Fund owns such
companies as Pegasus Systems. Leveraging the popularity of on-line airline and
hotel reservations, Pegasus Systems routes Internet traffic from the most
popular travel Web sites to reservation systems like SABRE.
Dresdner RCM continues to be bullish on business services stocks. The
business services industry allows client companies to outsource important, but
tangential, business services. This industry provides value by allowing client
companies to focus on their core competencies. The Fund owns stock in many
business service companies, such as Choicepoint, which specialized in performing
background checks, and G&K Services, which is a leading supplier of uniforms.
Another sector the Fund favors is electronics/ new technologies
including holdings in Artysen Technologies, Cypress Semiconductors, and Hadco
Corporation. These companies are all providing the products and services that
allow technology to advance.
- --------------------------
(1) Morgan Stanley Dean Witter "U.S. Investment Research" report, April 30,
1999.
(2) Ibid
Page 9
<PAGE>
Dresdner RCM Small Cap Fund
Management's Performance Review
OUTLOOK
Moving forward, the outlook for small caps appears to be improving.
Dresdner RCM is encouraged by the signs of a rebound in performance with early
indications about the second quarter 1999 earnings reports for companies in the
Fund coming in above or at Dresdner RCM's own earnings growth projections. The
character of the market has reverted back to more traditional merits of
valuations, rewarding companies with strong earnings growth and reasonable
multiples. In Dresdner RCM's view the market is starting to rationalize the
extremes in valuation and performance between a very narrow set of early-stage
investments (often with little or no positive cash flow attributes) and the rest
of the small cap market.
With favorable macro-economic trends, including a benign interest rate
environment and robust GDP growth absent rising inflation, the small cap market
seems ready once again to provide attractive returns for investors. Dresdner RCM
is positive on the earnings prospects for many of the Fund's technology holdings
and is maintaining overweight positions in various technology sectors. Dresdner
RCM is beginning to focus on areas of technology, which may benefit beyond 1999
from the significant capital investment currently diverted to remedy Y2K systems
issues. By continuing to seek out firms with tangible assets, and realistic and
consistent top-line growth of greater than 20%, the Dresdner RCM believes that
the Small Cap Fund is well positioned for the future.
Page 10
<PAGE>
Dresdner RCM Small Cap Fund
Total Return Index Comparison(b)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
Fund Russell 2000 Index (a)
<S> <C> <C>
12/31/1991 $10,000 $10,000
1/1/1992 $10,000 $10,000
1/31/1992 $10,786 $10,811
2/28/1992 $11,118 $11,127
3/31/1992 $10,850 $10,751
4/30/1992 $10,613 $10,373
5/31/1992 $10,703 $10,511
6/30/1992 $10,165 $10,017
7/31/1992 $10,530 $10,366
8/31/1992 $10,336 $10,072
9/30/1992 $10,603 $10,304
10/31/1992 $11,002 $10,630
11/30/1992 $11,807 $11,444
12/31/1992 $12,214 $11,842
1/31/1993 $12,212 $12,242
2/28/1993 $11,792 $11,960
3/31/1993 $12,082 $12,348
4/30/1993 $11,636 $12,008
5/31/1993 $12,102 $12,539
6/30/1993 $12,134 $12,617
7/31/1993 $12,126 $12,791
8/31/1993 $12,580 $13,344
9/30/1993 $13,037 $13,720
10/31/1993 $13,186 $14,074
11/30/1993 $12,728 $13,615
12/31/1993 $13,337 $14,080
1/31/1994 $13,592 $14,522
2/28/1994 $13,431 $14,469
3/31/1994 $12,712 $13,707
4/30/1994 $12,637 $13,788
5/31/1994 $12,411 $13,633
6/30/1994 $11,990 $13,173
7/31/1994 $12,173 $13,390
8/31/1994 $13,095 $14,136
9/30/1994 $13,073 $14,088
10/31/1994 $13,240 $14,031
11/30/1994 $12,765 $13,464
12/31/1994 $13,049 $13,824
1/31/1995 $12,958 $13,649
2/28/1995 $13,392 $14,217
3/31/1995 $13,900 $14,461
4/30/1995 $14,064 $14,782
5/31/1995 $14,030 $15,037
6/30/1995 $14,728 $15,817
7/31/1995 $15,706 $16,728
8/31/1995 $16,245 $17,074
9/30/1995 $16,900 $17,380
10/31/1995 $16,330 $16,602
11/30/1995 $16,882 $17,300
12/31/1995 $17,496 $17,756
1/31/1996 $17,973 $17,737
2/28/1996 $18,914 $18,290
3/31/1996 $19,374 $18,662
4/30/1996 $20,684 $19,660
5/31/1996 $21,660 $20,435
6/30/1996 $20,993 $19,596
7/31/1996 $18,958 $17,884
8/31/1996 $20,592 $18,923
9/30/1996 $22,457 $19,662
10/31/1996 $22,226 $19,359
11/30/1996 $22,488 $20,157
12/31/1996 $23,514 $20,685
1/31/1997 $23,754 $21,098
2/28/1997 $22,335 $20,587
3/31/1997 $20,877 $19,615
4/30/1997 $20,357 $19,670
5/31/1997 $23,953 $21,858
6/30/1997 $25,312 $22,795
7/31/1997 $26,750 $23,856
8/31/1997 $27,350 $24,403
9/30/1997 $29,867 $26,189
10/31/1997 $28,508 $25,039
11/30/1997 $28,329 $24,877
12/31/1997 $28,098 $25,312
1/31/1998 $27,929 $24,912
2/28/1998 $30,435 $26,753
3/31/1998 $31,520 $27,855
4/30/1998 $31,496 $28,009
5/31/1998 $29,688 $26,499
6/30/1998 $30,700 $26,555
7/31/1998 $28,339 $24,404
8/31/1998 $20,989 $19,664
9/30/1998 $22,531 $21,204
10/31/1998 $24,290 $22,069
11/30/1998 $26,483 $23,226
12/31/1998 $28,411 $24,663
1/31/1999 $27,925 $24,991
2/28/1999 $24,283 $22,967
3/31/1999 $24,010 $23,325
4/30/1999 $24,738 $25,415
5/31/1999 $25,861 $25,786
6/30/1999 $27,197 $26,952
</TABLE>
PERFORMANCE(B)
JUNE 30, 1999
<TABLE>
<CAPTION>
CUMULATIVE
SINCE SINCE
YTD(D) 1 YEAR 5 YEAR 10 YEAR INCEPTION INCEPTION
<S> <C> <C> <C> <C> <C> <C>
Average Annual
Total Return(c) -4.27% -11.41% 9.01% 17.80% 14.27% 171.97%
</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 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 by
market capitalization and represents approximately 98% of the investable
U.S. equity market.
(b) Returns assume reinvestment of all dividends and capital gains distributions
at net asset value.
(c) The Fund began operations on January 3, 1992.
(d) Unannualized.
Page 11
<PAGE>
Dresdner RCM 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 4.0%
AUTOMOTIVE RELATED 3.4%
235,000 US Dura Automotive Systems Inc. * $ 7,813,750
403,000 US Keystone Automotive Industries Inc. * 7,002,125
--------------
14,815,875
--------------
CONSUMER DURABLES 0.6%
100,000 US Furniture Brands International Inc. * 2,787,500
CONSUMER NON-DURABLES SECTOR 12.5%
FOOD/FOOD PROCESSING 0.4%
335,057 US Omega Protein Corp. * 1,759,049
HOUSEHOLD/RELATED NON-DURABLES 3.8%
532,925 US French Fragrances Inc. * 3,897,014
167,900 US Ocular Sciences Inc. * 2,917,263
202,700 US Scotts Co. * 9,653,587
--------------
16,467,864
--------------
LEISURE TIME PRODUCTS/SERVICES 2.4%
260,000 US Dave & Buster's Inc. * 7,540,000
62,000 US Papa John's International Inc. * 2,770,625
--------------
10,310,625
--------------
RETAIL TRADE 5.9%
446,200 US CSK Auto Corp. * 12,047,400
83,100 US Electronics Boutique Holdings Corp. * 1,184,175
142,300 US Pantry Inc. * 2,294,588
178,800 US Petsmart Inc. * 1,832,700
136,000 US Regis Corp. 2,609,500
172,000 US Select Comfort Corp. * 1,537,250
346,700 US Trans World Entertainment Corp. * 3,900,375
--------------
25,405,988
--------------
CYCLICAL/CAPITAL GOODS SECTOR 9.7%
BUILDING/CONSTRUCTION 3.3%
250,000 US Comfort Systems USA Inc. * 4,500,000
347,300 US Integrated Electrical Services * 5,600,212
200,800 US NCI Building Systems Inc. * 4,292,100
--------------
14,392,312
--------------
INDUSTRIAL EQUIPMENT 1.5%
356,668 US Tokheim Corp. * 4,079,390
110,000 US US Liquids Inc. * 2,296,250
--------------
6,375,640
--------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 12
<PAGE>
Dresdner RCM Small Cap Fund
Portfolio of Investments (cont.)
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY EQUITY INVESTMENTS NET ASSETS (NOTE 1)
- -----------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
RAW/BASIC MATERIALS 1.4%
300,000 US Metals USA Inc. * $ 3,825,000
165,500 US Oregon Steel Mills Inc. 2,203,219
--------------
6,028,219
--------------
TRANSPORTATION SERVICES 3.5%
175,000 US Covenant Transport Inc. (Class A) * 2,756,250
150,000 US Knight Transportation Inc. * 3,206,250
210,000 US Mark VII Inc. * 3,491,250
258,400 US Swift Transportation Co. Inc. * 5,684,800
--------------
15,138,550
--------------
HEALTH CARE SECTOR 9.0%
DRUGS AND HOSPITAL SUPPLIES 1.7%
167,600 US Bone Care International Inc. * 1,655,050
270,000 US CIMA Labs Inc. * 1,248,750
592,000 US Heska Corp. * 1,369,000
60,500 US Inhale Therapeutic Systems * 1,440,656
386,296 US Sicor Inc. * 1,641,758
--------------
7,355,214
--------------
HEALTH CARE SERVICES 7.3%
335,000 US American Retirement Corp. * 4,187,500
200,000 US Centennial Healthcare Corp. * 1,056,250
186,000 US IMPATH Inc. * 5,022,000
155,000 US Kendle International Inc. * 2,480,000
219,400 US Pharmaceutical Product Development Inc. * 6,006,075
74,700 US Province Healthcare Co. * 1,456,650
289,700 US Renal Care Group Inc. * 7,495,987
29,300 US Sunrise Assisted Living Inc. * 1,021,838
225,000 US Veterinary Centers of America Inc. * 3,051,563
--------------
31,777,863
--------------
INTEREST-SENSITIVE SECTOR 3.4%
GENERAL FINANCE 3.4%
207,400 US Affiliated Managers Group Inc. * 6,260,888
163,500 US Federated Investors Inc. (Class B) 2,932,781
907,500 US UniCapital Corp. * 5,728,594
--------------
14,922,263
--------------
TECHNOLOGY SECTOR 32.2%
COMPUTERS/OFFICE EQUIPMENT 8.4%
424,200 US Black Box Corp. * 21,263,025
449,000 US Micros Systems Inc. * 15,266,000
--------------
36,529,025
--------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 13
<PAGE>
Dresdner RCM Small Cap Fund
Portfolio of Investments (cont.)
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 16.5%
195,000 US Actel Corp. * $ 2,876,250
935,500 US Artesyn Technologies Inc. * 20,756,406
150,000 US Burr-Brown Corp. * 5,493,750
1,343,900 US Cypress Semiconductor Corp. * 22,174,350
38,400 US Emulex Corp. * 4,269,600
400,000 US Hadco Corp. * 15,900,000
--------------
71,470,356
--------------
TECHNOLOGY SERVICES 7.3%
129,600 US Aspect Development Inc. * 2,397,600
113,300 US BindView Development Corp. * 2,690,875
219,400 US High Speed Access Corp. * 5,622,125
26,000 US MapQuest.com Inc. * 424,125
117,300 US Pegasus Systems Inc. * 4,391,419
711,800 US Renaissance Worldwide Inc. * 5,672,156
188,000 US SoftNet Systems Inc. * 5,240,500
465,700 US Technology Solutions Co. * 5,035,381
--------------
31,474,181
--------------
TELEMEDIA/SERVICES SECTOR 26.2%
BUSINESS SERVICES 18.6%
75,900 US Choicepoint Inc. * 5,094,787
58,000 US Consolidated Graphics Inc. * 2,900,000
313,865 US FYI Inc. * 9,847,514
85,000 US G & K Services Inc. Class A 4,451,875
270,000 US INSpire Insurance Solutions Inc. * 3,915,000
180,000 US Iron Mountain Inc. * 5,152,500
169,600 US Lason Holdings Inc. * 8,416,400
414,000 US Modis Professional Services Inc. * 5,692,500
104,000 US NCO Group Inc. * 3,952,000
690,000 US Personnel Group of America Inc. * 6,900,000
834,300 US Romac International Inc. * 7,404,412
277,900 US School Specialty Inc. * 4,463,769
94,000 US The Metzler Group Inc. * 2,596,750
138,965 US Vestcom International Inc. * 486,378
252,000 US Wackenhut Corrections Corp. * 4,992,750
327,000 US Wilmar Industries Inc. * 4,251,000
--------------
80,517,635
--------------
COMMUNICATION SERVICES 3.1%
310,000 US ICG Communications Inc. * 6,626,250
92,000 US Intermedia Communications of Florida Inc. * 2,760,000
120,800 US Sykes Enterprises Inc. * 4,031,700
--------------
13,417,950
--------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 14
<PAGE>
Dresdner RCM Small Cap Fund
Portfolio of Investments (cont.)
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY EQUITY INVESTMENTS NET ASSETS (NOTE 1)
- -----------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
MEDIA 4.5%
110,000 US Bright Horizons Family Solutions * $ 2,076,250
123,500 US Education Management Corp. * 2,562,625
88,350 US Scholastic Corp. * 4,472,719
145,000 US SFX Entertainment Inc. Class A 9,280,000
35,000 US Sportsline USA Inc. * 1,255,625
--------------
19,647,219
--------------
TOTAL EQUITY INVESTMENTS (COST $410,961,983) 97.0% 420,593,328
--------------
SHORT-TERM INVESTMENTS
MONEY MARKET FUNDS 2.3%
7,634,564 US SSgA Money Market Fund 7,634,564
2,202,837 US SSgA U.S. Government Money Market Fund 2,202,838
--------------
TOTAL SHORT-TERM INVESTMENTS (COST $9,837,402) 2.3% 9,837,402
--------------
TOTAL INVESTMENTS (COST $420,799,385)** 99.3% 430,430,730
OTHER ASSETS LESS LIABILITIES 0.7% 3,084,898
--------------
NET ASSETS 100.0% $433,515,628
--------------
--------------
</TABLE>
- --------------------------------
* Non-income producing security
Tax Information:
** For Federal income tax purposes, cost is $427,597,161 and gross aggregate
unrealized appreciation (depreciation) for all securities is as follows:
<TABLE>
<S> <C>
Unrealized appreciation $ 64,733,813
Unrealized depreciation (61,900,244)
------------
Net unrealized
appreciation $ 2,833,569
------------
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 15
<PAGE>
Dresdner RCM Capital Funds, Inc.
Statements of Assets and Liabilities
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
GROWTH EQUITY SMALL CAP
FUND FUND
-------------- -------------
ASSETS:
<S> <C> <C>
Investments at cost $790,231,552 $ 420,799,385
-------------- -------------
-------------- -------------
Investments at value (Note1) $938,916,651 $ 430,430,730
Receivables:
Investments sold 21,208,950 7,554,630
Fund shares sold 12,250,000 --
Dividends 455,928 54,126
Interest 71,013 26,034
Prepaid expense 10,073 14,463
-------------- -------------
Total Assets 972,912,615 438,079,983
-------------- -------------
LIABILITIES:
Payables:
Investments purchased 23,503,522 1,151,818
Fund shares repurchased 700,329 3,044,000
Management fees (Note 2) 580,578 368,537
-------------- -------------
Total Liabilities 24,784,429 4,564,355
-------------- -------------
NET ASSETS $948,128,186 $ 433,515,628
-------------- -------------
-------------- -------------
NET ASSETS CONSIST OF:
Paid-in capital (Note 3) $678,172,313 $ 438,418,677
Accumulated net investment loss (830,068) (1,609,044)
Accumulated net realized gain (loss) on investments and foreign currency
transactions 122,100,842 (12,925,350)
Net unrealized appreciation on investments and foreign currency transactions 148,685,099 9,631,345
-------------- -------------
NET ASSETS $948,128,186 $ 433,515,628
-------------- -------------
-------------- -------------
SHARES OUTSTANDING 138,714,461 48,358,884
-------------- -------------
-------------- -------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE $ 6.84 $ 8.96
-------------- -------------
-------------- -------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 16
<PAGE>
Dresdner RCM Capital Funds, Inc.
Statements of Operations
For the Six Months Ended June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
GROWTH EQUITY SMALL CAP
FUND FUND
-------------- ------------
INVESTMENT INCOME: (NOTE 1)
<S> <C> <C>
Income:
Dividends $ 2,337,647 $ 472,919
Interest 344,987 273,544
-------------- ------------
Total investment income 2,682,634 746,463
-------------- ------------
Expenses:
Investment management fees (Note 2) 3,464,986 2,330,566
Custodian fees 46,882 24,107
Miscellaneous expenses 834 834
-------------- ------------
Total expenses 3,512,702 2,355,507
-------------- ------------
Net investment loss (830,068) (1,609,044)
-------------- ------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on investments and foreign currency transactions 122,231,599 (15,099,517)
Net change in unrealized appreciation (depreciation) on investments and foreign
currency transactions 15,817,339 (15,163,908)
-------------- ------------
Net realized and unrealized gain (loss) during the period 138,048,938 (30,263,425)
-------------- ------------
NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS $137,218,870 $(31,872,469)
-------------- ------------
-------------- ------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 17
<PAGE>
DRESDNER RCM CAPITAL FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
GROWTH EQUITY FUND SMALL CAP FUND
--------------------------------- --------------------------------
(UNAUDITED) YEAR ENDED (UNAUDITED) YEAR ENDED
SIX MONTHS ENDED DECEMBER 31, SIX MONTHS ENDED DECEMBER 31,
JUNE 30, 1999 1998 JUNE 30, 1999 1998
---------------- -------------- ---------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment loss $ (830,068) $ (136,697) $ (1,609,044) $ (3,562,858)
Net realized gain (loss) on investments and foreign
currency transactions 122,231,599 115,270,332 (15,099,517) 87,203,805
Net change in unrealized appreciation (depreciation) on
investments and foreign currency transactions 15,817,339 27,337,242 (15,163,908) (65,282,583)
---------------- -------------- ---------------- -------------
Net increase (decrease) in net assets from operations 137,218,870 142,470,877 (31,872,469) 18,358,364
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gain on investments (Note 1) -- (158,525,243) -- (102,478,286)
NET INCREASE (DECREASE) FROM CAPITAL SHARE TRANSACTIONS (164,353,461) 30,492,105 (92,576,783) (19,325,834)
---------------- -------------- ---------------- -------------
TOTAL INCREASE (DECREASE) IN NET ASSETS (27,134,591) 14,437,739 (124,449,252) (103,445,756)
NET ASSETS:
Beginning of period 975,262,777 960,825,038 557,964,880 661,410,636
---------------- -------------- ---------------- -------------
End of period $ 948,128,186 $ 975,262,777 $ 433,515,628 $ 557,964,880
---------------- -------------- ---------------- -------------
---------------- -------------- ---------------- -------------
End of period net assets include net investment loss of: $ (830,068) -- $ (1,609,044) --
---------------- -------------- ---------------- -------------
---------------- -------------- ---------------- -------------
FUND SHARE TRANSACTIONS:
DOLLAR ACTIVITY
Sold $ 80,937,243 $ 127,963,744 $ 35,681,253 $ 111,486,975
Issued to shareholders in reinvestment of distributions -- 156,239,035 -- 100,547,419
Repurchased (245,290,704) (253,710,674) (128,258,036) (231,360,228)
---------------- -------------- ---------------- -------------
Net increase (decrease) $ (164,353,461) $ 30,492,105 $ (92,576,783) $ (19,325,834)
---------------- -------------- ---------------- -------------
---------------- -------------- ---------------- -------------
TRANSACTIONS IN FUND SHARES:
SHARE AMOUNTS
Sold 12,631,200 21,101,977 4,170,331 10,548,412
Issued to shareholders in reinvestment of distributions -- 29,534,789 -- 11,705,171
Repurchased (39,938,570) (38,770,342) (15,418,152) (19,362,057)
---------------- -------------- ---------------- -------------
Net increase (decrease) in fund shares (27,307,370) 11,866,424 (11,247,821) 2,891,526
---------------- -------------- ---------------- -------------
---------------- -------------- ---------------- -------------
PURCHASES AND SALES OF INVESTMENT SECURITIES (EXCLUDING
SHORT-TERM SECURITIES):
Purchases of securities $ 925,821,589 $1,517,507,845 $ 242,932,394 $ 738,646,439
Proceeds from sales of securities 1,051,506,678 1,686,060,991 302,191,502 866,195,243
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 18
<PAGE>
<TABLE>
<CAPTION>
Dresdner RCM Capital Funds, Inc.
Financial Highlights
For a share outstanding throughout each fiscal year or period ended:
(UNAUDITED) YEAR ENDED DECEMBER 31
FOR THE SIX MONTHS -----------------------------------------------
DRESDNER RCM GROWTH EQUITY FUND ENDED JUNE 30, 1999(2) 1998(2) 1997(2) 1996(1)(2) 1995 1994
---------------------- ------- ------- ---------- ------ ------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 5.87 $ 6.23 $ 6.40 $ 9.13 $ 7.89 $10.42
------- ------- ------- ---------- ------ ------
Income from investment operations:
Net investment income (loss) (0.01) -- (0.01) (0.01) 0.02 0.03
Net realized and unrealized gain on
investments 0.98 0.81 1.08 1.59 2.66 0.01
------- ------- ------- ---------- ------ ------
Total from investment operations 0.97 0.81 1.07 1.58 2.68 0.04
Less distributions:
From net investment income -- -- -- -- (0.02) (0.03)
From net realized gain on investments -- (1.17) (1.24) (4.31) (1.42) (2.54)
------- ------- ------- ---------- ------ ------
Total distributions -- (1.17) (1.24) (4.31) (1.44) (2.57)
------- ------- ------- ---------- ------ ------
NET ASSET VALUE, END OF PERIOD $ 6.84 $ 5.87 $ 6.23 $ 6.40 $ 9.13 $ 7.89
------- ------- ------- ---------- ------ ------
------- ------- ------- ---------- ------ ------
TOTAL RETURN (3) 16.54% 15.06% 17.50% 19.07% 34.53% 0.76%
------- ------- ------- ---------- ------ ------
------- ------- ------- ---------- ------ ------
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in millions) $ 948 $ 975 $ 961 $ 896 $1,325 $1,365
------- ------- ------- ---------- ------ ------
------- ------- ------- ---------- ------ ------
Ratio of expenses to average net assets 0.76%(4) 0.76% 0.76% 0.84% 0.76% 0.83%
------- ------- ------- ---------- ------ ------
------- ------- ------- ---------- ------ ------
Ratio of net investment income to average net
assets (0.18)%(4) (0.01)% (0.17)% (0.12)% 0.22% 0.22%
------- ------- ------- ---------- ------ ------
------- ------- ------- ---------- ------ ------
Portfolio turnover 103.45% 168.24% 155.10% 115.89% 96.46% 111.06%
------- ------- ------- ---------- ------ ------
------- ------- ------- ---------- ------ ------
</TABLE>
- -----------------------------------------
(1) Stock split 25:1 at the close of business on June 17, 1996. All prior
period per share amounts were restated to reflect the stock split.
(2) Calculated using the average share method.
(3) Total return measures the change in value of an investment over the period
indicated.
(4) Annualized.
<TABLE>
<CAPTION>
(UNAUDITED) YEAR ENDED DECEMBER 31
FOR THE SIX MONTHS -----------------------------------------------
DRESDNER RCM SMALL CAP FUND ENDED JUNE 30, 1999(2) 1998(2) 1997(2) 1996(1)(2) 1995 1994
---------------------- ------- ------- ---------- ------ ------
PER SHARE OPERATING PERFORMANCE:
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.36 $ 11.66 $ 11.77 $11.35 $ 9.42 $10.41
------ ------- ------- ---------- ------ ------
Income from investment operations:
Net investment loss (0.03) (0.07) (0.08) (0.08) (0.04) (0.04)
Net realized and unrealized gain (loss) on
investments (0.37) --(3) 2.29 3.82 3.21 (0.20)
------ ------- ------- ---------- ------ ------
Total from investment operations (0.40) (0.07) 2.21 3.74 3.17 (0.24)
Less distributions:
From net realized gain on investments -- (2.23) (2.32) (3.32) (1.24) (0.75)
------ ------- ------- ---------- ------ ------
NET ASSET VALUE, END OF PERIOD $ 8.96 $ 9.36 $ 11.66 $11.77 $11.35 $ 9.42
------ ------- ------- ---------- ------ ------
------ ------- ------- ---------- ------ ------
TOTAL RETURN (4) (4.27)% 1.11% 19.49% 34.39% 34.08% (2.16)%
------ ------- ------- ---------- ------ ------
------ ------- ------- ---------- ------ ------
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in millions) $ 434 $ 558 $ 661 $ 569 $ 410 $ 416
------ ------- ------- ---------- ------ ------
------ ------- ------- ---------- ------ ------
Ratio of operating expenses to average net assets 1.01%(5) 1.01% 1.02% 1.00% 1.01% 1.11%
------ ------- ------- ---------- ------ ------
------ ------- ------- ---------- ------ ------
Ratio of net investment income to average net
assets (0.69)%(5) (0.61)% (0.68)% (0.58)% (0.22)% (0.33)%
------ ------- ------- ---------- ------ ------
------ ------- ------- ---------- ------ ------
Portfolio turnover 54.67% 131.85% 117.64% 117.00% 83.91% 117.71%
------ ------- ------- ---------- ------ ------
------ ------- ------- ---------- ------ ------
</TABLE>
- -----------------------------------------
(1) Stock split 12:1 at the close of business on June 17, 1996. All prior
period per share amounts were restated to reflect the stock split.
(2) Calculated using the average share method.
(3) The amount shown for a share outstanding does not correspond with the
aggregate net gain on investments for the period due to timing of sales and
repurchases of Fund shares in relation to fluctuating market values of the
investments of the fund.
(4) Total return measures the change in value of an investments over the period
indicated.
(5) Annualized.
The accompanying notes are an integral part of the financial statements.
Page 19
<PAGE>
Dresdner RCM Capital Funds, Inc.
Notes to Financial Statements
June 30, 1999 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES
Dresdner RCM Capital Funds, Inc. ("Capital Company") is organized as a
Maryland corporation and is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended. The Capital
Company consists of three series: Dresdner RCM Growth Equity Fund ("Growth
Fund") and Dresdner RCM Small Cap Fund ("Small Cap Fund") are diversified,
no-load series of the Capital Company. These two series are collectively
referred to as the "Funds." Dresdner RCM International Growth Equity Fund
("International Fund") is a non-diversified, no load series of the Capital
Company. The International Fund's financial statements and financial highlights
are included in the semi-annual report of Dresdner RCM Global Funds.
The following is a summary of significant accounting policies
consistently followed by the Funds in the preparation of their financial
statements. The policies are in conformity with generally accepted accounting
principles which require management to make estimates and assumptions that
affect the reported amount of assets and liabilities 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.
A. PORTFOLIO VALUATION:
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 is valued at the closing bid
price on such day. If no bid price is quoted on such day, then the security is
valued by such method as the Board of Directors of the Company or a duly
constituted committee of the Board of Directors of the Company determines 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 a
similar foreign reporting service are valued at the mean bid price, or using
such other comparable sources as the Board of Directors of the Company or a duly
constituted committee of the Board of Directors of the Company in good faith
deems appropriate to reflect their fair market value. Other portfolio securities
held by the Funds are valued at current market value, if current market
quotations are readily available for such securities. To the extent that market
quotations are not readily available, such securities will be valued by whatever
means the Board of Directors of the Company or a duly constituted committee of
the Board of Directors of the Company in good faith deems appropriate to reflect
their fair market value. Short-term investments with a maturity of 60 days or
less are valued at amortized cost, which approximates market value.
B. SECURITY TRANSACTIONS, 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.
C. FOREIGN CURRENCY TRANSACTIONS 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
Page 20
<PAGE>
Dresdner RCM Capital Funds, Inc.
Notes to Financial Statements
June 30, 1999 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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. 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.
E. DISTRIBUTIONS:
Dividends and capital gains (if any) are declared and distributed to
shareholders annually. Distributions to shareholders are recorded by the Funds
on the ex-dividend date. Income and capital gain distributions are determined in
accordance with Federal income tax regulations which may differ from generally
accepted accounting principles. These differences are primarily due to differing
treatments for losses as a result of wash sales, foreign currency transactions
and/ or investment in passive foreign investment companies.
2. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Dresdner RCM Global Investors LLC ("Dresdner RCM") serves as the Funds'
investment manager and provides various administrative services, subject to the
authority of the Board of Directors. The Growth Fund and Small Cap Fund pay
investment management fees monthly at annualized rates of 0.75% and 1.00%
respectively, of each Fund's average daily net assets.
The Funds are each responsible for the payment of certain operating
expenses, including brokerage and commission expenses; taxes levied on the
Funds; interest charges on borrowings (if any); charges and expenses of the
custodian; and investment management fees due to Dresdner RCM. Dresdner RCM is
responsible for all other expenses incurred by the Growth Fund and the Small Cap
Fund.
On June 30, 1999, the Dresdner RCM Profit Sharing Plan, participation in
which is limited to employees of Dresdner RCM, owned 814,749 shares of the
Growth Fund and 483,866 shares of the Small Cap Fund.
At June 30, 1999, six shareholders in the Growth Fund and three
shareholders in the Small Cap Fund each held more than 5% of the outstanding
shares of the respective Funds. These shareholders, in aggregate, held
approximately 62% of the Growth Fund and 41% of the Small Cap Fund.
Page 21
<PAGE>
Dresdner RCM Capital Funds, Inc.
Notes to Financial Statements
June 30, 1999 (Unaudited)
3. CAPITAL SHARES
At June 30, 1999, there were 1,000,000,000 shares of the Capital
Company's common stock authorized, at $0.0001 par value. Of this amount,
300,000,000 were classified as shares of the Growth Fund and 100,000,000 were
classified as shares of the Small Cap Fund.
4. INVESTMENTS IN FOREIGN SECURITIES AND CURRENCY
Investing in foreign equity securities and currency transactions
involves significant risks, some of which are not typically associated with
domestic investments. The Funds' investments in foreign markets will subject the
Funds to the risk of foreign currency exchange rate fluctuations, credit risk
and adverse economic and political developments.
5. DIRECTORS' FEES
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 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 or her deferred fees deemed invested either in
90-day U.S. Treasury bills or shares of the Common Stock of the Capital Company
or of the Dresdner RCM Global Funds, Inc., or a combination of these options,
and the amount of deferred fees payable to such Director under the Directors'
Plan will be determined by reference to the return on such deemed investments.
Generally, the deferred fees (reflecting any earnings, gains or losses thereon)
become payable upon the Director's retirement or disability.
Page 22
<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
LEGAL COUNSEL
Paul, Hastings, Janofsky & Walker LLP
555 South Flower Street
Los Angeles, California 90071
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
160 Federal Street
Boston, Massachusetts 02110
Monthly portfolio holdings are available upon request. To obtain information,
shareholders should call 1-800-726-7240.
Page 23
<PAGE>
This report is not authorized for distribution to prospective investors
unless precededor accompanied by a Dresdner RCM Capital Funds prospectus, which
contains completeinformation about the Funds, including expenses. Investors
should read the prospectus carefullybefore they invest or send money, as it
explains certain risks associated with investing in theseFunds, including
investments in international and emerging markets. These risks include
social,economic and political instability, market illiquidity, and currency
volatility. There are alsospecial risks associated with investing in stocks of
small companies, which tend to be morevolatile and less liquid than stocks of
large companies. There are additional risksassociated with investing in Funds
that lack industry diversification. Portfolio holdings aresubject to change and
should not be considered recommendation to purchase.
DISTRIBUTOR: DRESDNER RCM DISTRIBUTORS, A DIVISION OF FUNDS DISTRIBUTOR INC.
