<PAGE>
DRESDNER RCM CAPITAL FUNDS
SEMI-ANNUAL REPORT
JUNE 30, 2000 Own the World
CAPITAL FUNDS
DRESDNER RCM MIDCAP FUND
DRESDNER RCM SMALL CAP FUND
[GRAPHIC]
[LOGO] DRESDNER RCM GLOBAL FUNDS
<PAGE>
August 20, 2000
Dear Shareholder:
We are pleased to present the Dresdner RCM Capital Funds' Semi-Annual
Shareholder Report for the six months ended June 30, 2000.
Technology was the major story once again during the first half of 2000,
although the results were much more volatile than in past years. The first 10
weeks of the year marked a continuation of 1999, in which the fastest-growing,
highest-priced companies led the market upwards. The next 10 weeks, however,
were extremely difficult, as investors became concerned about high valuations in
the midst of aggressive Federal Reserve Board action to slow the U.S. economy.
By late May, indications of an economic slowdown calmed the markets, and
most technology companies -- particularly profitable ones -- returned to
positive territory. Indeed, a major theme on Wall Street was investor approval
of companies that could exceed earnings expectations. An exception was
biotechnology, where stock prices once again performed extremely well without
profits. In that case, a major factor was the groundbreaking announcement in
human gene research that improved the future prospects of most biotech research
companies working on the next generation of medications.
Although biotechnology and the rest of health care posted very good
results, the overall performance of the U.S. stock market was lackluster, with
the Standard & Poor's 500 posting a -1% return. International stock markets were
also weak, as the global interest rate climate remained bearish. Most
fixed-income markets were under pressure from rising interest rates, with the
notable exception of U.S. Treasury securities. These rallied after the
government announced an aggressive buyback program made possible by the federal
budget surplus.
It is likely that the second half of 2000 will be a better period for
bonds, as interest rates appear to be declining as the U.S. economy slows.
However, the stock market's performance in the second half of the year depends
in large measure on the Fed's ability to engineer a soft landing for the
economy. Regardless of the macroeconomic environment, Dresdner RCM will continue
to focus on a bottom-up approach to stock selection.
In identifying possible investments, Dresdner RCM, in cooperation with
its worldwide affiliates, draws on the expertise of nearly 200 investment
professionals, primarily securities analysts and portfolio managers. In addition
to having traditional finance credentials, many also have advanced degrees or
industry experience in the areas of the market that they cover, such as
engineering or medicine. The Funds also draw information from Grassroots
Research-SM-, a unique adjunct to traditional research efforts, which uncovers
and confirms marketplace demand for key products and services.
Inside this report, you will find discussions of each mutual fund
managed by Dresdner RCM Global Investors. The portfolio managers review, in
detail, relevant market conditions, factors affecting the portfolios'
performance, investment strategies employed in response to the first half of the
year's economic and market conditions, and the outlook for the remainder of
2000. Each report also includes performance summaries, lists of holdings and
portfolio weightings as of June 30, 2000.
Despite the challenge of a difficult market environment, we are proud of
the performance of the Dresdner RCM Capital Funds for the past six months, and
thank you for your continued support. If you would like more information on a
specific fund, or if you have any questions about the material in this report,
please call 1-800-227-5183.
Sincerely,
[SIGNATURE]
DeWitt F. Bowman
Chairman
Dresdner RCM Capital Funds, Inc.
<PAGE>
Dresdner RCM MidCap Fund
Management's Performance Review
The Dresdner RCM MidCap Fund's outperformance was a function of both
superior stock selection and industry strategy. As of June 30, 2000, the Fund
posted year-to-date total returns of 24.31% versus 12.15% for the Russell Midcap
Growth Index, the Fund's performance benchmark. The MidCap Fund outperformed in
both the up and down market periods of the first (+6.93% relative) and second
quarters (+4.49% relative), respectively, a function of Dresdner RCM Global
Investors' ("Dresdner RCM"), the investment manager of the Fund, quality growth
stock investment style and their disciplined valuation approach.
MARKET REVIEW
The U.S. Federal Reserve continued its course of tightening and raised
interest rates in May by 50 basis points to 6.50%. Governor Meyer of the Federal
Reserve Bank presented the objective as simply slowing real growth from its
current torrid 5.4% pace to 3.5-4.0%, well above the 2.0-2.5% real GDP secured
for the 1985 and 1994 economic "soft landings." By cooling demand down, the Fed
reasons inflation will stop accelerating and economic growth will be sustainable
even though the level of growth remains high. By June, signs of economic slowing
began to emerge with weaker numbers for employment, retail sales, housing, autos
and manufacturing. As a result, the Fed refrained from raising rates at the June
meeting, but left the door open for additional hikes in the future.
Over the quarter, the U.S. equity market struggled back from its April
and May downdrafts. New economy stocks related to the Internet fell 50-70% from
peak to trough. It appeared that the more aggressive sectors of the Nasdaq had
risen too far and too fast, pumped up by the combination of momentum buying,
margin debt and on-line trading. Eventually the negative sentiment spread to the
entire technology sector and the larger market as well. By June, the benign
economic data gave investors encouragement and helped alleviate interest rate
concerns. The S&P 500 Index recouped much of its losses and the Nasdaq rallied
strongly, up over 20% from its lows. Investors sought the safety and quality of
the most profitable technology companies, pushing many of the stock prices back
up to old highs. For the second quarter, the Russell Midcap Growth Index fell
7.41% and the Russell Midcap Index fell 4.51%.
FACTORS AFFECTING PERFORMANCE
The Dresdner RCM MidCap Fund outperformed the Russell Midcap Growth
Index total return of 12.15% by approximately 1,217 basis points. Stock
selection was benefited by holdings in Check Point Software, Alza, and Art
Technology Group. In addition, the Fund benefited from avoiding Citrix Systems,
Novell, and Lexmark International, three significant underperformers in the
benchmark. Industry strategy was most helped by underweighting the Internet
software and services industry.
Superior stock selection in technology was a key performance driver in
the period. Dresdner RCM continued to follow an investment theme that worked in
the first quarter -- demand for bandwidth and capacity in the telecommunications
and networking end-markets. Two of Dresdner RCM's favorite telecommunications
infrastructure companies, Redback Networks and SDL, soared in June when
investors returned to the Nasdaq. Both companies benefited from being emerging
leaders in a rapidly growing industry.
Dresdner RCM has made Energy, specifically oil services, a core
commitment based on fundamental research by Dresdner RCM's analyst team and
positive feedback from Grassroots-SM- Research. Grassroots-SM- Research
commissioned interviews with 20 chief financial officers, budget directors and
executives at oil and gas companies to assess capital expenditure budgets for
the year. Their conclusion was that higher natural gas and oil prices in
combination with inadequate capital spending in prior years should result in
higher spending from major Exploration & Production companies in the second half
of this year and next year. The Fund owned Weatherford International, Smith
International, Grant Prideco, and BJ Services during the period, with the belief
that they will directly benefit from increased spending activity.
While seeking out the most attractive growth companies, Dresdner RCM is
always cognizant of valuation. Dresdner RCM's valuation discipline enabled the
Fund to stay out of trouble when the market sold off in April and May.
Increasing the Fund's exposure in health care and energy while lightening up in
technology worked to the Fund's advantage, as it was able to outperform in a
down market. Overall, Dresdner RCM
Page 2
<PAGE>
Dresdner RCM MidCap Fund
Management's Performance Review
turned in another solid period but positions in KLA-Tencor, Peregrine Systems,
and NEXTLINK Communications negatively impacted the Fund.
OUTLOOK
Dresdner RCM believes that the current and expected economic environment
will be supportive of growth stock investing in the second half of 2000. The
combination of a moderating economic growth outlook and low inflation should
create a positive backdrop for quality growth stock investing. Dresdner RCM
remains committed to the core growth sectors of technology, health care, and
communications. Dresdner RCM is also bullish on the oil services sector, given
the positive supply/demand characteristics in the energy market.
Page 3
<PAGE>
Dresdner RCM MidCap Fund
Total Return Index Comparison(c)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
$10,000 investment (11/6/79 - 6/30/00)(d)
<TABLE>
<CAPTION>
FUND RUSSELL MIDCAP INDEX(B)
<S> <C> <C>
11/6/79 $10,000 $10,000
12/31/79 $10,719 $11,158
1/31/80 $11,210 $11,777
2/28/80 $10,792 $11,516
3/31/80 $9,599 $9,996
4/30/80 $10,028 $10,641
5/31/80 $10,856 $11,467
6/30/80 $11,315 $12,024
7/31/80 $12,980 $13,034
8/31/80 $13,656 $13,375
9/30/80 $14,396 $13,821
10/31/80 $14,878 $13,966
11/30/80 $15,935 $15,074
12/31/80 $15,665 $14,784
1/31/81 $15,304 $14,439
2/28/81 $15,725 $14,694
3/31/81 $17,588 $15,843
4/30/81 $18,134 $15,918
5/31/81 $19,279 $16,306
6/30/81 $18,560 $16,008
7/31/81 $18,247 $15,809
8/31/81 $17,371 $14,908
9/30/81 $16,587 $13,951
10/31/81 $18,157 $14,914
11/30/81 $18,503 $15,518
12/31/81 $18,211 $15,139
1/31/82 $17,929 $14,583
2/28/82 $17,527 $13,964
3/31/82 $17,476 $13,825
4/30/82 $18,682 $14,486
5/31/82 $18,511 $13,970
6/30/82 $18,441 $13,595
7/31/82 $18,512 $13,274
8/31/82 $20,047 $14,871
9/30/82 $20,666 $15,293
10/31/82 $23,233 $17,338
11/30/82 $25,235 $18,395
12/31/82 $25,710 $18,660
1/31/83 $27,172 $19,319
2/28/83 $28,967 $19,987
3/31/83 $30,108 $20,691
4/30/83 $32,700 $21,984
5/31/83 $34,645 $22,903
6/30/83 $36,064 $23,737
7/31/83 $34,391 $22,991
8/31/83 $33,610 $22,846
9/30/83 $34,935 $23,486
10/31/83 $33,413 $22,575
11/30/83 $34,930 $23,541
12/31/83 $34,348 $23,105
1/31/84 $32,764 $22,449
2/29/84 $31,089 $21,235
3/31/84 $31,709 $21,587
4/30/84 $31,839 $21,350
5/31/84 $30,674 $20,146
6/30/84 $32,051 $20,774
7/31/84 $31,196 $20,166
8/31/84 $34,191 $22,684
9/30/84 $33,648 $22,791
10/31/84 $33,611 $22,880
11/30/84 $32,993 $22,784
12/31/84 $33,496 $23,435
1/31/85 $37,254 $25,659
2/28/85 $38,042 $26,119
3/31/85 $37,399 $25,970
4/30/85 $36,747 $25,894
5/31/85 $39,165 $27,365
6/30/85 $39,965 $28,030
7/31/85 $40,928 $27,994
8/31/85 $40,385 $27,876
9/30/85 $38,429 $26,510
10/31/85 $40,118 $27,883
11/30/85 $42,578 $29,810
12/31/85 $44,235 $30,937
1/31/86 $45,046 $31,633
2/28/86 $48,307 $34,205
3/31/86 $49,783 $36,003
4/30/86 $50,541 $35,845
5/31/86 $52,554 $37,701
6/30/86 $51,571 $38,216
7/31/86 $47,374 $35,687
8/31/86 $49,140 $38,219
9/30/86 $45,601 $35,511
10/31/86 $48,335 $37,364
11/30/86 $48,946 $37,640
12/31/86 $48,361 $36,569
1/31/87 $54,951 $41,072
2/28/87 $59,189 $43,530
3/31/87 $60,968 $43,942
4/30/87 $60,390 $42,842
5/31/87 $62,092 $42,989
6/30/87 $64,592 $44,737
7/31/87 $67,740 $46,653
8/31/87 $70,486 $48,302
9/30/87 $68,483 $47,379
10/31/87 $49,455 $35,710
11/30/87 $47,006 $33,727
12/31/87 $53,665 $36,652
1/31/88 $53,930 $38,355
2/29/88 $58,780 $41,072
3/31/88 $60,415 $41,126
4/30/88 $61,386 $41,380
5/31/88 $60,234 $41,283
6/30/88 $64,720 $44,110
7/31/88 $63,335 $43,225
8/31/88 $61,789 $42,264
9/30/88 $64,192 $43,702
10/31/88 $63,486 $43,889
11/30/88 $62,127 $42,836
12/31/88 $64,859 $43,910
1/31/89 $68,192 $46,537
2/28/89 $67,612 $46,427
3/31/89 $68,994 $47,190
4/30/89 $73,125 $49,465
5/31/89 $77,254 $51,695
6/30/89 $74,440 $51,503
7/31/89 $79,915 $55,093
8/31/89 $83,387 $56,935
9/30/89 $83,428 $56,413
10/31/89 $79,787 $53,752
11/30/89 $80,873 $54,489
12/31/89 $82,292 $55,446
1/31/90 $75,120 $50,999
2/28/90 $77,825 $52,033
3/31/90 $80,029 $53,300
4/30/90 $78,163 $51,011
5/31/90 $86,194 $55,632
6/30/90 $87,034 $55,271
7/31/90 $84,425 $53,628
8/31/90 $75,868 $47,860
9/30/90 $71,033 $44,312
10/31/90 $69,568 $42,913
11/30/90 $75,112 $47,046
12/31/90 $78,902 $49,072
1/31/91 $85,003 $52,398
2/28/91 $92,631 $56,764
3/31/91 $97,028 $59,119
4/30/91 $96,459 $59,474
5/31/91 $101,948 $62,298
6/30/91 $96,909 $59,427
7/31/91 $102,335 $62,340
8/31/91 $105,602 $64,204
9/30/91 $105,329 $63,830
10/31/91 $108,557 $65,138
11/30/91 $104,724 $62,445
12/31/91 $116,960 $69,442
1/31/92 $119,326 $70,748
2/29/92 $120,948 $72,373
3/31/92 $115,847 $70,524
4/30/92 $113,545 $71,075
5/31/92 $114,312 $71,534
6/30/92 $108,991 $70,374
7/31/92 $112,618 $73,316
8/31/92 $110,272 $71,628
9/30/92 $113,146 $73,113
10/31/92 $117,301 $74,902
11/30/92 $122,190 $78,677
12/31/92 $125,186 $80,789
1/31/93 $125,594 $82,405
2/28/93 $121,886 $82,496
3/31/93 $124,822 $85,179
4/30/93 $121,150 $82,922
5/31/93 $126,171 $85,555
6/30/93 $126,630 $86,522
7/31/93 $125,543 $86,939
8/31/93 $131,747 $90,806
9/30/93 $134,398 $91,153
10/31/93 $135,795 $91,229
11/30/93 $131,931 $89,113
12/31/93 $138,604 $92,341
1/31/94 $143,687 $94,889
2/28/94 $142,568 $93,598
3/31/94 $134,622 $89,611
4/30/94 $135,889 $90,226
5/31/94 $134,603 $90,349
6/30/94 $130,975 $87,673
7/31/94 $132,730 $90,682
8/31/94 $141,423 $94,981
9/30/94 $140,120 $92,660
10/31/94 $142,420 $93,369
11/30/94 $137,052 $89,250
12/31/94 $139,650 $90,409
1/31/95 $140,145 $92,266
2/28/95 $146,023 $97,042
3/31/95 $151,805 $99,819
4/30/95 $152,385 $101,324
5/31/95 $155,053 $104,654
6/30/95 $162,810 $108,171
7/31/95 $174,821 $113,423
8/31/95 $177,454 $115,160
9/30/95 $183,158 $117,762
10/31/95 $179,789 $115,128
11/30/95 $185,416 $120,853
12/31/95 $187,880 $121,558
1/31/96 $190,835 $124,137
2/29/96 $200,326 $127,052
3/31/96 $203,882 $128,890
4/30/96 $212,394 $132,542
5/31/96 $215,917 $134,544
6/30/96 $206,821 $132,526
7/31/96 $188,917 $124,324
8/31/96 $198,795 $130,243
9/30/96 $211,760 $136,676
10/31/96 $211,966 $137,772
11/30/96 $222,461 $146,165
12/31/96 $223,710 $144,673
1/31/97 $229,653 $150,085
2/28/97 $218,817 $149,858
3/31/97 $204,835 $143,388
4/30/97 $209,029 $147,059
5/31/97 $236,993 $157,788
6/30/97 $243,285 $162,951
7/31/97 $260,762 $176,549
8/31/97 $257,966 $174,642
9/30/97 $275,443 $184,614
10/31/97 $259,015 $177,433
11/30/97 $257,966 $181,656
12/31/97 $262,848 $186,669
1/31/98 $259,895 $183,160
2/28/98 $287,741 $197,483
3/31/98 $303,773 $206,843
4/30/98 $309,680 $207,360
5/31/98 $291,960 $200,953
6/30/98 $302,508 $203,746
7/31/98 $285,210 $194,028
8/31/98 $224,033 $162,983
9/30/98 $233,315 $173,528
10/31/98 $256,520 $185,363
11/30/98 $273,396 $194,149
12/31/98 $302,435 $205,546
1/31/99 $309,133 $205,196
2/28/99 $293,161 $198,363
3/31/99 $314,801 $204,572
4/30/99 $331,803 $219,690
5/31/99 $328,711 $219,053
6/30/99 $352,451 $226,785
7/31/99 $346,744 $220,549
8/31/99 $341,591 $214,836
9/30/99 $340,561 $207,274
10/31/99 $372,505 $217,099
11/30/99 $409,601 $223,351
12/31/99 $484,429 $242,941
1/31/00 $491,863 $234,963
2/29/00 $642,068 $253,031
3/31/00 $632,219 $267,530
4/30/00 $566,966 $254,876
5/31/00 $531,261 $248,122
6/30/00 $613,751 $255,395
</TABLE>
PERFORMANCE(d)
June 30, 2000
<TABLE>
<CAPTION>
Cumulative
Since Since
MIDCAP FUND YTD(f) 1 Year 3 Years 5 Years 10 Years Inception(d) Inception(d)
<S> <C> <C> <C> <C> <C> <C> <C>
Average Annual Total
Return(c)(d) 24.31% 70.88% 35.27% 29.90% 21.34% 22.05% 6,037.51%
Russell Midcap Growth
Index
Average Annual Total
Return(a)(e) 12.15% 48.60% 30.40% 26.37% 19.77% N/A N/A
Russell Midcap Index
Average Annual Total
Return(b) 5.13% 12.65% 16.16% 18.74% 16.54% 16.97% 2,453.95%
</TABLE>
The data above represents past performance of the Fund and may not
indicate 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 Growth Index is composed of the securities in the
Russell 1000 Index with highest price-to-book ratios and highest forecasted
growth values. 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 based on market capitalization and represents approximately
98% of the investable U.S. equity market. The Russell Midcap Growth Index
began on December 31, 1985.
(b) The Russell Midcap Index is composed of the 800 smallest securities 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 based on market capitalization and represents approximately
98% of the investable U.S. equity market.
(c) Returns assume reinvestment of all dividends and capital gains
distributions at net asset value.
(d) The Fund commenced operations on November 6, 1979.
(e) Effective December 21, 1999, the Fund's performance benchmark changed from
the Russell Midcap Index to the Russell Midcap Growth Index.
(f) Unannualized.
Page 4
<PAGE>
Dresdner RCM MidCap Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
------------------------------------------------------------------------------------
EQUITY INVESTMENTS
COMMERCIAL GOODS & SERVICES SECTOR 6.7%
CAPITAL GOODS 3.1%
258,000 US General Dynamics Corp. $ 13,480,500
334,100 US L-3 Communications Holdings
Inc. * 19,064,581
217,000 US Molex Inc. (Class A) 7,595,000
--------------
40,140,081
--------------
COMMERCIAL SERVICES & SUPPLIES 2.8%
383,000 US Calpine Corp. * 25,182,250
98,400 US CheckFree Holdings Corp. * 5,073,750
172,500 US Paychex Inc. 7,245,000
--------------
37,501,000
--------------
TRANSPORTATION 0.8%
219,400 US Expeditors International of
Washington Inc. 10,421,500
CONSUMER DISCRETIONARY SECTOR 7.0%
CONSUMER DURABLES & APPAREL 1.7%
179,000 US Electronic Arts Inc. * 13,055,812
215,800 US Nike Inc. (Class B) 8,591,538
--------------
21,647,350
--------------
HOTELS, RESTAURANTS & LEISURE 0.1%
49,000 US Starbucks Corp. * 1,871,187
MEDIA 0.9%
230,700 US Entercom Communications Corp.
* 11,246,625
RETAILING 4.3%
194,600 US Best Buy Co. Inc. * 12,308,450
307,300 US Circuit City Stores Inc. 10,198,519
886,900 US Family Dollar Stores Inc. 17,349,981
325,000 US Nordstrom Inc. 7,840,625
276,500 US Williams-Sonoma Inc. * 8,968,969
--------------
56,666,544
--------------
CONSUMER STAPLES SECTOR 0.2%
HOUSEHOLD & PERSONAL PRODUCTS 0.2%
70,000 US Estee Lauder Cos. Inc. (Class
A) 3,213,438
ENERGY SECTOR 7.3%
ENERGY 7.3%
343,000 US BJ Services Co. * 21,437,500
118,500 FR Coflexip S.A. (ADR) 7,169,250
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 5
<PAGE>
Dresdner RCM MidCap Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
------------------------------------------------------------------------------------
EQUITY INVESTMENTS (CONTINUED)
ENERGY (CONTINUED)
576,000 US Grant Prideco Inc. * $ 14,400,000
364,000 US Smith International Inc. * 26,503,750
650,500 US Weatherford International Inc. 25,898,031
--------------
95,408,531
--------------
FINANCIAL SECTOR 1.8%
DIVERSIFIED FINANCIALS 1.8%
290,200 US Capital One Financial Corp. 12,950,175
193,200 US Federated Investors Inc.
(Class B) 6,774,075
107,800 US Franklin Resources Inc. 3,274,425
--------------
22,998,675
--------------
HEALTH CARE SECTOR 15.8%
HEALTH CARE EQUIPMENT &
SUPPLIES 5.7%
34,900 US Allscripts Inc. * 802,700
75,100 US St. Jude Medical Inc. * 3,445,213
427,200 US Stryker Corp. 18,690,000
448,000 US VISX Inc. * 12,572,000
310,100 US Waters Corp. * 38,704,356
--------------
74,214,269
--------------
HEALTH CARE PROVIDERS &
SERVICES 0.2%
243,100 US Health Management Associates
Inc. * 3,175,494
PHARMACEUTICALS &
BIOTECHNOLOGY 9.9%
95,500 US Abgenix Inc. * 11,446,570
273,000 US Alkermes Inc. * 12,865,125
362,400 US Alza Corp. * 21,426,900
113,379 US Forest Laboratories Inc. * 11,451,279
51,900 US Human Genome Sciences Inc. * 6,922,163
116,500 US IDEC Pharmaceuticals Corp. * 13,666,906
157,300 US Medarex Inc. * 13,291,850
138,500 US MedImmune Inc. * 10,249,000
67,000 US Millennium Pharmaceuticals
Inc. * 7,495,625
179,000 US Sepracor Inc. * 21,591,875
--------------
130,407,293
--------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 6
<PAGE>
Dresdner RCM MidCap Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
------------------------------------------------------------------------------------
MATERIALS SECTOR 0.6%
MATERIALS 0.6%
88,000 US Rohm & Haas Co. $ 3,036,000
99,000 US Sealed Air Corp. * 5,185,125
--------------
8,221,125
--------------
TECHNOLOGY SECTOR 54.0%
COMMUNICATIONS EQUIPMENT 13.2%
110,000 US Carrier Access Corp. * 5,816,250
47,500 US CIENA Corp. * 7,917,656
160,900 US Comverse Technology Inc. * 14,963,700
245,000 US Copper Mountain Networks Inc.
* 21,590,625
182,300 US Ditech Communications Corp. * 17,238,744
197,000 US Foundry Networks Inc. * 21,768,500
191,302 US GlobeSpan Inc. * 23,353,785
226,000 US Netro Corp. * 12,966,750
99,100 US Redback Networks Inc. * 17,639,800
96,900 US RF Micro Devices Inc. * 8,490,863
76,800 US SDL Inc. * 21,902,400
--------------
173,649,073
--------------
COMPUTERS & PERIPHERALS 5.1%
314,500 US Flextronics International Ltd. 21,602,219
688,000 US Jabil Circuit Inc. * 34,142,000
220,000 US Pinnacle Systems Inc. * 4,946,562
92,500 US QLogic Corp. * 6,110,781
--------------
66,801,562
--------------
INTERNET SOFTWARE & SERVICES 4.1%
159,000 US Commerce One Inc. * 7,217,109
388,000 US Critical Path Inc. * 22,625,250
172,200 US Entrust Technologies Inc. * 14,249,550
139,001 US RSA Security Inc. * 9,625,882
--------------
53,717,791
--------------
INFORMATION TECHNOLOGY
CONSULTING & SERVICES 5.1%
94,600 US Amdocs Ltd. * 7,260,550
251,500 US BISYS Group Inc. * 15,467,250
94,200 IS Check Point Software
Technologies Ltd. * 19,946,850
257,500 US Fiserv Inc. * 11,136,875
132,800 US ISS Group Inc. * 13,111,925
--------------
66,923,450
--------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 7
<PAGE>
Dresdner RCM MidCap Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
------------------------------------------------------------------------------------
SEMICONDUCTORS & INSTRUMENTS 16.3%
160,000 US Altera Corp. * $ 16,310,000
103,504 US Applied Micro Circuits Corp. * 10,220,929
403,000 US Atmel Corp. * 14,860,625
162,500 US Burr-Brown Corp. * 14,086,719
256,700 US Credence Systems Corp. * 14,166,631
395,000 US Cypress Semiconductor Corp. * 16,688,750
143,100 DE Epcos AG (ADR) * 14,095,350
56,600 US KLA-Tencor Corp. * 3,314,638
31,500 US Kopin Corp. * 2,181,375
394,000 US Micrel Inc. * 17,114,375
323,550 US Microchip Technology Inc. * 18,851,843
316,700 US MIPS Technologies Inc. (Class
A) * 13,459,750
174,000 US Semtech Corp. * 13,308,281
158,200 US Silicon Storage Technology
Inc. * 13,971,037
111,000 US TriQuint Semiconductor Inc. * 10,621,313
272,000 US Vitesse Semiconductor Corp. * 20,009,000
--------------
213,260,616
--------------
SOFTWARE 10.2%
344,500 US Agile Software Corp. * 24,351,844
338,100 US Art Technology Group Inc. * 34,126,969
237,800 US Mercury Interactive Corp. * 23,007,150
86,500 US Micromuse Inc. * 14,314,398
338,600 US Peregrine Systems Inc. * 11,745,188
495,000 US Vignette Corp. * 25,747,734
--------------
133,293,283
--------------
TELECOMMUNICATION SERVICES SECTOR 5.8%
TELECOMMUNICATION SERVICES 5.8%
1,184,000 US McLeodUSA Inc. (Class A) * 24,494,000
513,400 US Nextel Partners Inc. (Class A)
* 16,717,588
675,000 US NEXTLINK Communications Inc.
(Class A) * 25,607,812
75,000 US Western Wireless Corp. (Class
A) 4,087,500
141,000 US WinStar Communications Inc. * 4,776,375
--------------
75,683,275
--------------
TOTAL EQUITY INVESTMENTS (COST $1,102,521,034) 99.2% 1,300,462,162
--------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 8
<PAGE>
Dresdner RCM MidCap Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS
MONEY MARKET FUNDS 0.6%
5,435,455 US SSgA Money Market Fund $ 5,435,455
2,407,923 US SSgA U.S. Government Money
Market Fund 2,407,923
--------------
TOTAL SHORT-TERM INVESTMENTS (COST $7,843,378) 0.6% 7,843,378
--------------
TOTAL INVESTMENTS (COST $1,110,364,412)** 99.8% 1,308,305,540
OTHER ASSETS LESS LIABILITIES 0.2% 2,410,341
--------------
NET ASSETS 100.0% $1,310,715,881
==============
</TABLE>
--------------------------------
* Non-income producing security
ADR American Depositary Receipt
Tax Information:
** For Federal income tax purposes, cost is $1,118,262,864 and gross
aggregate unrealized appreciation (depreciation) for all securities is as
follows:
<TABLE>
<S> <C>
Unrealized appreciation $ 222,403,174
Unrealized depreciation (32,360,498)
--------------
Net unrealized appreciation $ 190,042,676
==============
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
The Fund's investments in securities at June 30, 2000 categorized by country:
<TABLE>
<CAPTION>
% OF NET ASSETS
------------------------------
COUNTRY SHORT-TERM
COUNTRY CODE EQUITIES AND OTHER TOTAL
<S> <C> <C> <C> <C>
-----------------------------------------------------------------------
France FR 0.5% 0.5%
Germany DE 1.1% 1.1%
Israel IS 1.5% 1.5%
United States US 96.1% 0.8% 96.9%
------ ------- -----
Total 99.2% 0.8% 100.0%
====== ======= =====
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 9
<PAGE>
Dresdner RCM Small Cap Fund
Management's Performance Review
Small cap stocks as an asset class continued to outperform large caps
through June 2000 in spite of a negative macro environment. A possible rationale
for their behavior is that the asset class has underperformed large cap stocks
over the last four years and now offers compelling relative valuations. Though
growth stocks have historically been adversely affected by a rising interest
rate environment, the Small Cap Fund was able to return more than four times its
benchmark, the Russell 2000 Index. As of June 30, 2000, the Fund posted a
year-to-date total return of 12.71%. In comparison, the Russell 2000 Index
returned 3.03%.
MARKET REVIEW
With the economy still roaring, the stock market began the year
strongly. Real growth, as represented by the Gross Domestic Product (GDP), was a
torrid 5.4% for first quarter. Heeding the threat of inflation, economic growth
and the supply/demand imbalance, the U.S. Federal Reserve increased rates for
the fifth and sixth time within one year, in hopes of bringing down the economy
to a "soft landing." The last increase in May brought the federal funds rate to
6.50%. Historically, this type of economic environment has been bearish for
small-capitalization stocks. As the Fed hoped, by June, signs of economic
slowing did begin to emerge with weaker numbers for employment, retail sales,
housing, autos, and manufacturing.
The investment debate between the Dow Jones old economy stocks and the
new economy stocks of the Nasdaq continued heatedly through March with investors
vacillating from one to the other; as a result, the Nasdaq experienced four
corrections of 10% or more by the end of first quarter. In April and May the
tech-heavy Nasdaq saw a large downdraft and dropped nearly 40% from its high.
Especially hard hit were the small cap stocks. Many of these stocks had risen
more than their fundamentals warranted, pumped up by the combination of momentum
buying, margin debt and on-line trading. Numerous dot-com stocks fell 50%-70%
from peak to trough. In addition, the severe rulings in the Microsoft antitrust
case and the SEC's investigation of MicroStrategy's possible manipulation of
revenue statements that pointed to serious flaws in new economy business models,
caused investors to re-examine fundamentals and valuations. As a result,
investors fled, causing a very oversold market in May.
The climbing interest rate environment and subsequent investor flight to
safety and liquidity in the second quarter had a particularly negative impact on
the higher multiple growth stocks in the technology, biotechnology/medical
devices sectors and telecommunications industry.
Benign economic data gave investors hope that a "soft landing" might be
a reality in the near future. Consequently, the Fed did not raise rates in June.
With the alleviation of interest-rate concerns, small cap stocks staged an
impressive rally in June, with the Fund gaining over 34% for that month versus
8.72% for the Russell 2000. For second quarter, the Russell 2000 was down 3.78%,
the Nasdaq fell 13.27%, while the broader market of the S&P 500 fell only 2.66%.
FACTORS AFFECTING PERFORMANCE
An extremely volatile April and May followed a very strong first
quarter. Fortunately, as the economic environment moderated and investors'
interest-rate fears subsided, small cap stocks recovered strongly in June. The
market's recovery was reflected in the performance of the Fund. Both stock
selection and industry strategy accounted for the Fund's extraordinary
outperformance.
Dresdner RCM Global Investors LLC ("Dresdner RCM"), the Fund's
investment manager, continued to pursue technology as an investment theme
throughout the second quarter, despite volatility in the sector. This strategy
has continued to work well since the beginning of the year, specifically those
companies that are helping to build the Internet infrastructure, software and
telecommunications equipment.
Despite the negative market sentiment for growth stocks in April and
May, the fundamentals for many of the companies in the Fund were simultaneously
presenting a very strong backdrop. The market environment gave Dresdner RCM the
opportunity to purchase high quality companies, whose recognized growth
opportunities had previously moved them into the mid-cap asset class. Due to
market volatility, the precipitous drop in valuation moved these sought-after
stocks back into the small-cap arena. Though other areas such as financial
services and the capital and consumer goods sectors were providing superior
returns at the time, Dresdner RCM believed they were not as strong in relative
growth
Page 10
<PAGE>
Dresdner RCM Small Cap Fund
Management's Performance Review
characteristics as the positions recently built. The Fund held course with its
investment in technology stocks, despite fierce economic and market headwinds,
and it paid off handsomely when the market reversed course in June. Some of the
best software performers included Actuate, WatchGuard Technologies, and Critical
Path. Stellar telecommunications performers were Centillium and Audiocodes.
The Fund has also built positions in the life sciences sector. At the
beginning of the year, the Fund was underweighted, but took advantage of the
sector's weakness during the second quarter, moving to an overweight position.
This proved to be a tactic that worked well, especially with stocks such as
Intermune, Cell Genesys, and Inhale Therapeutic.
Every year on June 30, Russell rebalances its indices. This year's move
was particularly significant in that Dresdner RCM saw a reasonably large shift
in the industry weightings, particularly with the decrease in the technology
sector weighting and increase in the capital goods and financial services
sectors. The Fund prepared for this rebalance and adjusted the portfolio to
maintain the existing industry exposure relative to the Russell 2000 Index.
Dresdner RCM continued to benefit from the Grassroots-SM- Research
division -- dedicated to uncovering, quantifying and confirming marketplace
demand for key products and services and anticipating new industry and market
trends. The division has been following the Internet buildout for over five
years, interviewing MIS and IT managers on a quarterly basis to inquire about
technology spending and sentiment surrounding major vendors. Grassroots-SM-
found that the recent downturn in opinion toward dot-com companies has not
affected buildout strategies. Companies are aggressively pursuing an Internet
presence and e-commerce capabilities, including B2B, B2C, and infrastructure to
support the new digital economy. Reasons for focusing on e-commerce and the
Internet included perceived customer demand for Internet services, the ability
to streamline processes using B2B applications, and the fear of being left
behind in the race to embrace a new technology.
OUTLOOK
A soft landing is the best hope for the equity market, for it can
provide for prolonged sales growth with eventually lower interest rates in the
year or two ahead. In that environment, earnings can grow and price/earnings
multiples can once again expand, opening the door to possibly above-average
returns in the market.
Dresdner RCM plans to remain focused on many of the same investment
themes currently built into the Fund's portfolio. Dresdner RCM believes that it
will continue to overweight the Fund in the software, telecommunications
equipment, and life sciences sectors that have been so successful in the first
half of 2000.
Page 11
<PAGE>
Dresdner RCM Small Cap Fund
Total Return Index Comparison(b)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
$10,000 Investment (1/3/92 - 6/30/00)(c)
<TABLE>
<CAPTION>
FUND RUSSELL 2000 INDEX (A)
<S> <C> <C>
1/3/92 $10,000 $10,000
1/31/92 $10,786 $10,811
2/28/92 $11,118 $11,127
3/31/92 $10,850 $10,751
4/30/92 $10,613 $10,373
5/31/92 $10,703 $10,511
6/30/92 $10,165 $10,017
7/31/92 $10,530 $10,366
8/31/92 $10,336 $10,072
9/30/92 $10,603 $10,304
10/31/92 $11,002 $10,630
11/30/92 $11,807 $11,444
12/31/92 $12,214 $11,842
1/31/93 $12,212 $12,242
2/28/93 $11,792 $11,960
3/31/93 $12,082 $12,348
4/30/93 $11,636 $12,008
5/31/93 $12,102 $12,539
6/30/93 $12,134 $12,617
7/31/93 $12,126 $12,791
8/31/93 $12,580 $13,344
9/30/93 $13,037 $13,720
10/31/93 $13,186 $14,074
11/30/93 $12,728 $13,615
12/31/93 $13,337 $14,080
1/31/94 $13,592 $14,522
2/28/94 $13,431 $14,469
3/31/94 $12,712 $13,707
4/30/94 $12,637 $13,788
5/31/94 $12,411 $13,633
6/30/94 $11,990 $13,173
7/31/94 $12,173 $13,390
8/31/94 $13,095 $14,136
9/30/94 $13,073 $14,088
10/31/94 $13,240 $14,031
11/30/94 $12,765 $13,464
12/31/94 $13,049 $13,824
1/31/95 $12,958 $13,649
2/28/95 $13,392 $14,217
3/31/95 $13,900 $14,461
4/30/95 $14,064 $14,782
5/31/95 $14,030 $15,037
6/30/95 $14,728 $15,817
7/31/95 $15,706 $16,728
8/31/95 $16,245 $17,074
9/30/95 $16,900 $17,380
10/31/95 $16,330 $16,602
11/30/95 $16,882 $17,300
12/31/95 $17,496 $17,756
1/31/96 $17,973 $17,737
2/28/96 $18,914 $18,290
3/31/96 $19,374 $18,662
4/30/96 $20,684 $19,660
5/31/96 $21,660 $20,435
6/30/96 $20,993 $19,596
7/31/96 $18,958 $17,884
8/31/96 $20,592 $18,923
9/30/96 $22,457 $19,662
10/31/96 $22,226 $19,359
11/30/96 $22,488 $20,157
12/31/96 $23,514 $20,685
1/31/97 $23,754 $21,098
2/28/97 $22,335 $20,587
3/31/97 $20,877 $19,615
4/30/97 $20,357 $19,670
5/31/97 $23,953 $21,858
6/30/97 $25,312 $22,795
7/31/97 $26,750 $23,856
8/31/97 $27,350 $24,403
9/30/97 $29,867 $26,189
10/31/97 $28,508 $25,039
11/30/97 $28,329 $24,877
12/31/97 $28,098 $25,312
1/31/98 $27,929 $24,912
2/28/98 $30,435 $26,753
3/31/98 $31,520 $27,855
4/30/98 $31,496 $28,009
5/31/98 $29,688 $26,499
6/30/98 $30,700 $26,555
7/31/98 $28,339 $24,404
8/31/98 $20,989 $19,664
9/30/98 $22,531 $21,204
10/31/98 $24,290 $22,069
11/30/98 $26,483 $23,226
12/31/98 $28,411 $24,663
1/31/99 $27,925 $24,991
2/28/99 $24,283 $22,967
3/31/99 $24,010 $23,325
4/30/99 $24,738 $25,415
5/31/99 $25,861 $25,786
6/30/99 $27,197 $26,952
7/31/99 $27,318 $26,214
8/31/99 $25,770 $25,244
9/30/99 $25,133 $25,249
10/31/99 $24,010 $25,352
11/30/99 $28,229 $26,866
12/31/99 $31,934 $29,912
1/31/00 $31,372 $29,425
2/29/00 $38,208 $34,284
3/31/00 $37,116 $32,024
4/30/00 $31,185 $30,096
5/31/00 $26,846 $28,342
6/30/00 $35,992 $30,818
</TABLE>
PERFORMANCE(b)
June 30, 2000
<TABLE>
<CAPTION>
Cumulative
Since Since
SMALL CAP FUND YTD(d) 1 Year 3 Years 5 Years Inception(c) Inception(c)
<S> <C> <C> <C> <C> <C> <C>
Average Annual Total
Return 12.71% 32.34% 12.45% 19.57% 16.26% 259.92%
Russell 2000 Index
Average Annual Total
Return(a) 3.03% 14.33% 10.57% 14.27% 14.16% 208.18%
</TABLE>
The data above represents past performance of the Fund and may not
indicate 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
based on 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 commenced operations on January 3, 1992.
(d) Unannualized.
Page 12
<PAGE>
Dresdner RCM Small Cap Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
-------------------------------------------------------------------------------------
EQUITY INVESTMENTS
COMMERCIAL GOODS & SERVICES SECTOR 7.3%
CAPITAL GOODS 1.9%
75,000 US Capstone Turbine Corp. * $ 3,379,687
69,500 US L-3 Communications Holdings
Inc. * 3,965,844
------------
7,345,531
------------
COMMERCIAL SERVICES & SUPPLIES 4.1%
119,800 US Choicepoint Inc. * 5,331,100
88,900 US Insight Enterprises Inc. * 5,272,882
130,400 US NCO Group Inc. * 3,015,500
354,000 US Personnel Group of America
Inc. * 1,039,875
87,400 US Wackenhut Corrections Corp. * 655,500
------------
15,314,857
------------
TRANSPORTATION 1.3%
66,900 US EGL Inc. * 2,057,175
56,200 US Expeditors International of
Washington Inc. 2,669,500
------------
4,726,675
------------
CONSUMER DISCRETIONARY SECTOR 7.4%
HOTELS, RESTAURANTS & LEISURE 0.5%
76,300 US Speedway Motorsports Inc. * 1,754,900
MEDIA 3.3%
69,100 US Entercom Communications Corp.
* 3,368,625
132,900 US MyPoints.com Inc. * 2,518,870
280,800 US Tickets.com Inc. * 956,475
114,500 US Wink Communications Inc. * 3,492,250
252,200 US Ziff-Davis Inc. - ZDNet * 2,269,800
------------
12,606,020
------------
RETAILING 3.6%
219,900 US CSK Auto Corp. * 1,662,994
406,200 CA InterTAN Inc. * 4,772,850
184,400 US Trans World Entertainment
Corp. * 2,235,850
127,100 US Ultimate Electronics Inc. * 3,405,883
43,300 US Williams-Sonoma Inc. * 1,404,544
------------
13,482,121
------------
ENERGY SECTOR 11.7%
ENERGY 11.7%
129,200 US Cal Dive International Inc. * 7,001,025
246,400 NL Core Laboratories N.V. * 7,145,600
329,600 US Grant Prideco Inc. * 8,240,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 13
<PAGE>
Dresdner RCM Small Cap Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
-------------------------------------------------------------------------------------
EQUITY INVESTMENTS (CONTINUED)
ENERGY (CONTINUED)
237,400 US National-Oilwell Inc. * $ 7,804,525
120,300 US NS Group Inc. * 2,518,781
96,700 US Patterson Energy Inc. * 2,755,950
563,600 US Superior Energy Services Inc.
* 5,847,350
95,700 US Veritas DGC Inc. * 2,488,200
------------
43,801,431
------------
FINANCIAL SECTOR 1.4%
BANKS 0.4%
30,400 US Silicon Valley Bancshares * 1,295,800
DIVERSIFIED FINANCIALS 1.0%
58,300 US Affiliated Managers Group Inc.
* 2,652,650
31,000 US Investment Technology Group
Inc. * 1,224,500
------------
3,877,150
------------
HEALTH CARE SECTOR 21.4%
HEALTH CARE EQUIPMENT &
SUPPLIES 7.4%
56,400 US Aclara Biosciences Inc. * 2,872,875
212,000 US Charles River Laboratories
International Inc. * 4,703,750
108,800 US INAMED Corp. * 3,984,800
56,800 US Inhale Therapeutic Systems
Inc. * 5,763,425
90,700 US Invitrogen Corp. * 6,820,924
400 US Molecular Devices Corp. * 27,675
132,500 US VISX Inc. * 3,718,281
------------
27,891,730
------------
HEALTH CARE PROVIDERS &
SERVICES 0.5%
199,400 US MedicaLogic/Medscape Inc. * 1,844,450
PHARMACEUTICALS &
BIOTECHNOLOGY 13.5%
319,700 US AVANT Immunotherapeutics Inc.
* 3,376,831
309,800 US Cell Genesys Inc. * 8,674,400
114,000 US Cell Therapeutics Inc. * 3,491,250
91,600 US CuraGen Corp. * 3,486,525
89,300 US Gene Logic Inc. * 3,186,894
256,500 US Immunomedics Inc. * 6,284,250
110,400 US Intermune Pharmaceuticals Inc.
* 4,560,900
42,100 US Medarex Inc. * 3,557,450
145,400 US OSI Pharmaceuticals Inc. * 4,189,337
62,900 US PRAECIS Pharmaceuticals Inc. * 1,753,338
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 14
<PAGE>
Dresdner RCM Small Cap Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
-------------------------------------------------------------------------------------
EQUITY INVESTMENTS (CONTINUED)
PHARMACEUTICALS &
BIOTECHNOLOGY (CONTINUED)
23,500 US Protein Design Labs Inc. * $ 3,876,398
97,000 US Titan Pharmaceuticals Inc. * 4,171,000
------------
50,608,573
------------
TECHNOLOGY SECTOR 42.0%
COMMUNICATIONS EQUIPMENT 6.4%
39,600 IS AudioCodes Ltd. * 4,752,000
34,900 US Carrier Access Corp. * 1,845,338
31,500 US Ditech Communications Corp. * 2,978,719
89,700 US Packeteer Inc. * 2,612,512
140,200 IS RADVision Ltd. * 3,916,837
142,100 US WatchGuard Technologies Inc. * 7,806,619
------------
23,912,025
------------
COMPUTERS & PERIPHERALS 1.4%
230,200 US Pinnacle Systems Inc. * 5,175,903
INTERNET SOFTWARE & SERVICES 3.5%
35,500 US Clarus Corp. * 1,380,063
147,800 US Critical Path Inc. * 8,618,587
79,600 US Digital River Inc. * 611,925
30,100 US OnDisplay Inc. * 2,451,269
------------
13,061,844
------------
INFORMATION TECHNOLOGY
CONSULTING & SERVICES 2.3%
654,800 US kforce.com Inc. * 4,542,675
476,700 US Modis Professional Services
Inc. * 4,230,712
------------
8,773,387
------------
SEMICONDUCTORS & INSTRUMENTS 12.2%
63,100 US Actel Corp. * 2,878,938
66,500 US Advanced Energy Industries
Inc. * 3,919,344
57,900 US Brooks Automation Inc. * 3,701,981
61,700 US Centillium Communications Inc.
* 4,257,300
132,100 US Cymer Inc. * 6,307,775
96,000 US Cypress Semiconductor Corp. * 4,056,000
78,200 US Intersil Holding Corp. * 4,227,687
169,900 US Manufacturers' Services Ltd. * 3,493,569
140,300 US MIPS Technologies Inc. (Class
A) * 5,962,750
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 15
<PAGE>
Dresdner RCM Small Cap Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
-------------------------------------------------------------------------------------
EQUITY INVESTMENTS (CONTINUED)
SEMICONDUCTORS & INSTRUMENTS
(CONTINUED)
20,600 US Silicon Laboratories Inc. * $ 1,094,375
102,000 US Virata Corp. * 6,081,750
------------
45,981,469
------------
SOFTWARE 16.2%
106,600 US Accrue Software Inc. * 3,784,300
255,500 US Actuate Corp. * 13,637,313
89,200 US Advent Software Inc. * 5,753,400
76,700 US Agile Software Corp. * 5,421,731
107,400 US Allaire Corp. * 3,946,950
51,600 US Art Technology Group Inc. * 5,208,375
11,900 US Informatica Corp. * 975,056
145,300 US Mercator Software Inc. * 9,989,375
242,500 US ONYX Software Corp. * 7,199,219
91,700 CA Pivotal Corp. * 2,154,950
61,500 US Primus Knowledge Solutions
Inc. * 2,767,500
------------
60,838,169
------------
TELECOMMUNICATION SERVICES SECTOR 6.6%
TELECOMMUNICATION SERVICES 6.6%
278,300 US Allied Riser Communications
Corp. * 3,930,987
129,300 US CAIS Internet Inc. * 1,818,281
129,400 US Cypress Communications Inc. * 938,150
321,100 US DSL.net Inc. * 3,311,344
106,800 US Intermedia Communications of
Florida Inc. * 3,177,300
272,500 US Net2000 Communications Inc. * 4,462,187
185,900 US Network Access Solutions Corp.
* 1,777,669
175,600 US Network Plus Corp. * 2,491,325
183,100 US SoftNet Systems Inc. * 1,762,338
109,600 US Z-Tel Technologies Inc. * 1,315,200
------------
24,984,781
------------
TOTAL EQUITY INVESTMENTS (COST $342,263,672) 97.8% 367,276,816
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 16
<PAGE>
Dresdner RCM Small Cap Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
-------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS
MONEY MARKET FUNDS 1.2%
1,710,432 US SSgA Money Market Fund $ 1,710,432
2,633,781 US SSgA U.S. Government Money
Market Fund 2,633,781
------------
TOTAL SHORT-TERM INVESTMENTS (COST $4,344,213) 1.2% 4,344,213
------------
TOTAL INVESTMENTS (COST $346,607,885)** 99.0% 371,621,029
OTHER ASSETS LESS LIABILITIES 1.0% 3,906,155
------------
NET ASSETS 100.0% $375,527,184
============
</TABLE>
--------------------------------
* Non-income producing security
ADR American Depositary Receipt
Tax Information:
** For Federal income tax purposes, cost is $350,046,245 and gross aggregate
unrealized appreciation (depreciation) for all securities is as follows:
<TABLE>
<S> <C>
Unrealized appreciation $82,228,030
Unrealized depreciation (60,653,246)
-----------
Net unrealized appreciation $21,574,784
===========
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
The Fund's investment in securities at June 30, 2000 categorized by country:
<TABLE>
<CAPTION>
% OF NET ASSETS
------------------------------
COUNTRY SHORT-TERM
COUNTRY CODE EQUITIES AND OTHER TOTAL
<S> <C> <C> <C> <C>
-----------------------------------------------------------------------
Canada CA 1.9% 1.9%
Israel IS 2.3% 2.3%
Netherlands NL 1.9% 1.9%
United States US 91.7% 2.2% 93.9%
------ ------- -----
Total 97.8% 2.2% 100.0%
====== ======= =====
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 17
<PAGE>
Dresdner RCM Capital Funds, Inc.
Statements of Assets and Liabilities
June 30, 2000 (Unaudited)
(All numbers in thousands except net asset values)
<TABLE>
<CAPTION>
MIDCAP SMALL CAP
FUND FUND
---------- ---------
<S> <C> <C>
ASSETS:
Investments at cost $1,110,364 $346,608
========== ========
Investments at value (Note 1) $1,308,306 $371,621
Collateral for securities on loan (Note 4) 37,166 32,926
Receivables:
Investments sold 72,486 15,720
Fund shares sold 2,422 91
Dividends 176 22
Interest 84 26
Securities lending 152 56
---------- --------
Total Assets 1,420,792 420,462
---------- --------
LIABILITIES:
Payables:
Investments purchased 64,582 10,213
Collateral for securities on loan (Note 4) 37,166 32,926
Fund shares repurchased 7,500 1,500
Management fees (Note 2) 793 280
Other 35 16
---------- --------
Total Liabilities 110,076 44,935
---------- --------
NET ASSETS $1,310,716 $375,527
========== ========
NET ASSETS CONSIST OF:
Paid-in capital (Note 3) $ 551,860 $292,447
Accumulated net investment loss (3,015) (1,256)
Accumulated net realized gain on investments and
foreign currency transactions 563,929 59,323
Net unrealized appreciation on investments 197,942 25,013
---------- --------
NET ASSETS $1,310,716 $375,527
========== ========
SHARES OUTSTANDING 131,385 32,504
========== ========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER
SHARE $ 9.98 $ 11.55
========== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 18
<PAGE>
Dresdner RCM Capital Funds, Inc.
Statements of Operations
For the Six Months Ended June 30, 2000 (Unaudited)
(All numbers in thousands)
<TABLE>
<CAPTION>
MIDCAP SMALL CAP
FUND FUND
--------- ---------
<S> <C> <C>
INVESTMENT INCOME: (NOTE 1)
Income:
Dividends $ 1,017 $ 191
Interest 1,279 511
Foreign tax withheld (12) --
--------- --------
Total investment income 2,284 702
--------- --------
Expenses:
Investment management fees (Note 2) 5,227 1,922
Custodian fees 72 36
--------- --------
Total expenses 5,299 1,958
--------- --------
Net investment loss (3,015) (1,256)
--------- --------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain on investments 512,911 100,233
Net change in unrealized depreciation on investments (212,128) (58,024)
--------- --------
Net realized and unrealized gain during the period 300,783 42,209
--------- --------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 297,768 $ 40,953
========= ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 19
<PAGE>
Dresdner RCM Capital Funds, Inc.
Statements of Changes in Net Assets
(All numbers in thousands)
<TABLE>
<CAPTION>
MIDCAP FUND SMALL CAP FUND
------------------------------ ------------------------------
(UNAUDITED) YEAR ENDED (UNAUDITED) YEAR ENDED
SIX MONTHS ENDED DECEMBER 31, SIX MONTHS ENDED DECEMBER 31,
JUNE 30, 2000 1999 JUNE 30, 2000 1999
---------------- ------------ ---------------- ------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment loss $ (3,015) $ (2,203) $ (1,256) $ (3,072)
Net realized gain (loss) on investments 512,911 234,002 100,233 (32,599)
Net change in unrealized appreciation (depreciation)
on investments (212,128) 277,202 (58,024) 58,242
---------- ---------- -------- ---------
Net increase in net assets from operations 297,768 509,001 40,953 22,571
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gain on investments -- (180,650) -- --
In excess of realized gain on investments -- -- -- (10,485)
---------- ---------- -------- ---------
Total distributions to shareholders -- (180,650) -- (10,485)
NET INCREASE (DECREASE) FROM CAPITAL SHARE TRANSACTIONS (344,541) 53,875 (70,119) (165,358)
---------- ---------- -------- ---------
TOTAL INCREASE (DECREASE) IN NET ASSETS (46,773) 382,226 (29,166) (153,272)
NET ASSETS:
Beginning of period 1,357,489 975,263 404,693 557,965
---------- ---------- -------- ---------
End of period $1,310,716 $1,357,489 $375,527 $ 404,693
========== ========== ======== =========
FUND SHARE TRANSACTIONS:
DOLLAR AMOUNTS
Sold $ 4,454 $ 155,687 $ 6,841 $ 48,161
Issued to shareholders in reinvestment of
distributions -- 180,435 -- 10,459
Repurchased (348,995) (282,247) (76,960) (223,978)
---------- ---------- -------- ---------
Net increase (decrease) $ (344,541) $ 53,875 $(70,119) $(165,358)
========== ========== ======== =========
SHARE AMOUNTS
Sold 473 23,371 623 5,583
Issued to shareholders in reinvestment of
distributions -- 24,616 -- 1,108
Repurchased (38,365) (44,732) (7,678) (26,739)
---------- ---------- -------- ---------
Net increase (decrease) (37,892) 3,255 (7,055) (20,048)
========== ========== ======== =========
PURCHASES AND SALES OF INVESTMENT SECURITIES (EXCLUDING
SHORT-TERM SECURITIES):
Purchases of securities $1,391,130 $1,910,060 $368,533 $ 486,026
Proceeds from sales of securities 1,718,976 1,997,527 445,382 619,777
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 20
<PAGE>
Dresdner RCM Capital Funds, Inc.
Financial Highlights
For a share outstanding throughout each fiscal year or period ended:
<TABLE>
<CAPTION>
MIDCAP FUND
(UNAUDITED) --------------------------------------------------------------
FOR THE SIX YEAR ENDED DECEMBER 31,
MONTHS ENDED --------------------------------------------------------------
JUNE 30, 2000(2) 1999(2) 1998(2) 1997(2) 1996(1)(2) 1995
---------------- -------- -------- -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 8.02 $ 5.87 $ 6.23 $ 6.40 $ 9.13 $ 7.89
----------- ------ ------ ------ ------ ------
Income from investment operations:
Net investment income (loss) (0.02) (0.01) -- (0.01) (0.01) 0.02
Net realized and unrealized gain on
investments 1.98 3.42 0.81 1.08 1.59 2.66
----------- ------ ------ ------ ------ ------
Total from investment operations 1.96 3.41 0.81 1.07 1.58 2.68
Less distributions:
From net investment income -- -- -- -- -- (0.02)
From net realized gain on investments -- (1.26) (1.17) (1.24) (4.31) (1.42)
----------- ------ ------ ------ ------ ------
Total distributions -- (1.26) (1.17) (1.24) (4.31) (1.44)
----------- ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $ 9.98 $ 8.02 $ 5.87 $ 6.23 $ 6.40 $ 9.13
----------- ------ ------ ------ ------ ------
----------- ------ ------ ------ ------ ------
TOTAL RETURN (3) 24.31% 60.18% 15.06% 17.50% 19.07% 34.53%
----------- ------ ------ ------ ------ ------
----------- ------ ------ ------ ------ ------
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in millions) $ 1,311 $1,357 $ 975 $ 961 $ 896 $1,325
----------- ------ ------ ------ ------ ------
----------- ------ ------ ------ ------ ------
Ratio of expenses to average net assets 0.76%(4) 0.77% 0.76% 0.76% 0.84% 0.76%
----------- ------ ------ ------ ------ ------
----------- ------ ------ ------ ------ ------
Ratio of net investment income (loss) to
average net assets (0.43)%(4) (0.22)% (0.01)% (0.17)% (0.12)% 0.22%
----------- ------ ------ ------ ------ ------
----------- ------ ------ ------ ------ ------
Portfolio turnover 101.71% 198.17% 168.24% 155.10% 115.89% 96.46%
----------- ------ ------ ------ ------ ------
----------- ------ ------ ------ ------ ------
</TABLE>
------------------------------------
(1) Stock split 25:1 at 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.
The accompanying notes are an integral part of the financial statements.
Page 21
<PAGE>
Dresdner RCM Capital Funds, Inc.
Financial Highlights
For a share outstanding throughout each fiscal year or period ended:
<TABLE>
<CAPTION>
SMALL CAP FUND
(UNAUDITED) --------------------------------------------------------------
FOR THE SIX YEAR ENDED DECEMBER 31,
MONTHS ENDED --------------------------------------------------------------
JUNE 30, 2000(2) 1999(2) 1998(2) 1997(2) 1996(1)(2) 1995
---------------- -------- -------- -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 10.23 $ 9.36 $11.66 $11.77 $11.35 $ 9.42
----------- ------ ------ ------ ------ ------
Income from investment operations:
Net investment loss (0.04) (0.06) (0.07) (0.08) (0.08) (0.04)
Net realized and unrealized gain on
investments 1.36 1.20 --(3) 2.29 3.82 3.21
----------- ------ ------ ------ ------ ------
Total from investment operations 1.32 1.14 (0.07) 2.21 3.74 3.17
Less distributions:
From net realized gain on investments -- -- (2.23) (2.32) (3.32) (1.24)
In excess of realized gain on
investments -- (0.27) -- -- -- --
----------- ------ ------ ------ ------ ------
Total distributions -- (0.27) (2.23) (2.32) (3.32) (1.24)
----------- ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $ 11.55 $10.23 $ 9.36 $11.66 $11.77 $11.35
----------- ------ ------ ------ ------ ------
----------- ------ ------ ------ ------ ------
TOTAL RETURN (4) 12.71% 12.40% 1.11% 19.49% 34.39% 34.08%
----------- ------ ------ ------ ------ ------
----------- ------ ------ ------ ------ ------
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in millions) $ 376 $ 405 $ 558 $ 661 $ 569 $ 410
----------- ------ ------ ------ ------ ------
----------- ------ ------ ------ ------ ------
Ratio of expenses to average net assets 1.02%(5) 1.02% 1.01% 1.02% 1.00% 1.01%
----------- ------ ------ ------ ------ ------
----------- ------ ------ ------ ------ ------
Ratio of net investment loss to average net
assets (0.65)%(5) (0.71)% (0.61)% (0.68)% (0.58)% (0.22)%
----------- ------ ------ ------ ------ ------
----------- ------ ------ ------ ------ ------
Portfolio turnover 98.97% 116.42% 131.85% 117.64% 117.00% 83.91%
----------- ------ ------ ------ ------ ------
----------- ------ ------ ------ ------ ------
</TABLE>
------------------------------------
(1) Stock split 12:1 at 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 investment over the period
indicated.
(5) Annualized.
The accompanying notes are an integral part of the financial statements.
Page 22
<PAGE>
Dresdner RCM Capital Funds, Inc.
Notes to Financial Statements
June 30, 2000 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES
The 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 (the "1940 Act"), as amended.
The Capital Company consists of three series. The Dresdner RCM MidCap Fund
("MidCap Fund") and the Dresdner RCM Small Cap Fund ("Small Cap Fund") are
diversified, no-load series of the Capital Company (each, a "Fund" and
collectively, the "Funds"). The Dresdner RCM International Growth Equity 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 the 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 amounts in the financial statements. Actual results may
differ from these estimates.
A. PORTFOLIO VALUATION:
Investment securities are stated at 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 or a duly constituted committee
of the Board of Directors of the Capital 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 similar foreign
reporting service are valued at the mean bid price, or using such other
comparable sources as the Board of Directors of the Capital 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 are valued by
whatever means the Board of Directors or a duly constituted committee of the
Board of Directors of the Capital 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.
Dividend income is recorded on the ex-dividend date and interest income is
recorded on the accrual basis and includes accretion of discount. 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 books and records of each Fund is maintained in U.S. dollars. The
value of securities, currencies, and other assets and liabilities denominated in
currencies other than U.S. dollars are translated into U.S. dollars based upon
foreign
Page 23
<PAGE>
Dresdner RCM Capital Funds, Inc.
Notes to Financial Statements
June 30, 2000 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
exchange rates prevailing at the end of the period. Purchases and sales of
investments are translated at the contracted currency exchange rates established
at the time of the trade. Income and expenses are translated at the prevailing
exchange rates 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.
Investing in securities of foreign companies and foreign governments
involves special risks and considerations not typically associated with
investing in U.S. companies and securities of the U.S. Government. These risks
include revaluation of currencies and the risk of appropriation. Moreover, the
markets for securities of many foreign companies and foreign governments may be
less liquid and the prices of such securities may be more volatile than those of
comparable U.S. companies and the U.S. Government.
D. FEDERAL INCOME TAXES:
Each Fund is a separate entity for federal income tax purposes. Each
Fund intends 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, 1999, the Small Cap Fund had a capital loss
carryover of $29,437,870, which will expire on December 31, 2007.
E. DISTRIBUTIONS:
Income dividends and capital gain distributions (if any) are declared
and distributed to shareholders annually. Distributions to shareholders are
recorded by the Funds on the ex-dividend date. Income dividends and capital gain
distributions are determined in accordance with Federal income tax regulations
which may differ from generally accepted accounting principles, and only
distributions in excess of tax basis earnings and profits are reported in the
financial statements as a return of capital. Differences in the recognition or
classification of income between the financial statements and tax earnings and
profits which result in temporary over-distributions for financial statement
purposes are classified as distributions in excess of net investment income or
in excess of net realized gain on investments. These differences are primarily
due to differing treatments for losses as a result of wash sales, foreign
currency transactions and/ or passive foreign investment companies.
2. 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 Board of Directors. The
MidCap 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.
Page 24
<PAGE>
Dresdner RCM Capital Funds, Inc.
Notes to Financial Statements
June 30, 2000 (Unaudited)
2. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES (CONTINUED)
The Funds are each responsible for the payment of certain of their
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 payment of investment management fees due to Dresdner RCM.
Dresdner RCM is responsible for all other expenses incurred by the MidCap Fund
and the Small Cap Fund.
On June 30, 2000, the Dresdner RCM Profit Sharing Plan, participation in
which is limited to employees of Dresdner RCM, owned 583,384 shares of the
MidCap Fund and 429,068 shares of the Small Cap Fund.
At June 30, 2000, 5 shareholders in the MidCap Fund and 3 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 55.63% of
the MidCap Fund and 49.45% of the Small Cap Fund.
3. CAPITAL SHARES
At June 30, 2000, 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 MidCap Fund and 100,000,000 were
classified as shares of the Small Cap Fund.
4. SECURITIES LENDING
Effective October 31, 1999, the MidCap Fund and the Small Cap Fund
entered into a Securities Lending Agreement with Morgan Stanley & Co.
Incorporated ("Morgan"). The Funds receive cash collateral equal to at least
102% of the current market value of the loaned securities. The Funds invest the
cash collateral in repurchase agreements through State Street Bank & Trust
Company pursuant to guidelines approved by the Capital Company's Board of
Directors. Income earned on the collateral is paid to Morgan monthly. The Funds
receive a fee, payable monthly, negotiated by the Funds and Morgan, based on the
number and duration of the lending transactions. For the six months ended
June 30, 2000, net securities lending income was $912,497 and $337,500 for the
MidCap Fund and the Small Cap Fund, respectively, and is included in interest
income.
At June 30, 2000, securities with a market value of $36,437,194 and
$32,280,250 were on loan to brokers for the MidCap Fund and the Small Cap Fund,
respectively. The loans were collateralized by repurchase agreements of
$37,165,934 and $32,925,852 for the MidCap Fund and the Small Cap Fund,
respectively. As with other extensions of credit, the Fund may bear the risk of
delay in the recovery of the loaned securities or in the event of foreclosure on
collateral.
5. DIRECTORS' FEES
Each Director who is not an interested person of the Capital Company (as
defined in the 1940 Act, as amended) receives from the Capital Company an annual
retainer of $9,000 (the retainer is evenly prorated among the three series of
the Capital Company), plus $1,500 per series for each Board meeting attended,
and $500 per series for each committee meeting attended.
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-
Page 25
<PAGE>
Dresdner RCM Capital Funds, Inc.
Notes to Financial Statements
June 30, 2000 (Unaudited)
5. DIRECTORS' FEES (CONTINUED)
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 26
<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 27
<PAGE>
This report is not authorized for distribution to prospective
investors unless preceded or accompanied by a Dresdner RCM Capital
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
as a recommendation to purchase.
Grassroots-SM- Research is a division of Dresdner RCM Global
Investors LLC ("Dresdner RCM"). The information and opinions expressed
represent the judgement of Dresdner RCM. Dresdner RCM and its
affiliates, officers, employees or clients may effect or have effected
transactions for their own account(s) in the securities mentioned here
or in any related investments. Accordingly, information may be
available to Dresdner RCM that is not reflected at this time. The
information and opinions have been compiled or arrived at from sources
believed to be reliable and in good faith, but no representation or
warranty, express or implied, is made as to their accuracy,
completeness or correctness. Dresdner RCM accepts no liability
whatsoever for any direct or consequential loss or damage arising from
your use of this information. Research data used by Grassroots-SM- to
generate Grassroots-SM- Research recommendations, is received from
reporters who work as independent contractors for broker-dealers who
supply research to Dresdner RCM in connection with broker services.
DISTRIBUTOR: DRESDNER RCM DISTRIBUTORS, A DIVISION OF FUNDS
DISTRIBUTOR INC.
<PAGE>
DRESDNER RCM GLOBAL FUNDS
SEMI-ANNUAL REPORT
JUNE 30, 2000 Own the World
Domestic Funds
DRESDNER RCM LARGE CAP GROWTH FUND
DRESDNER RCM TAX MANAGED GROWTH FUND
DRESDNER RCM BIOTECHNOLOGY FUND
DRESDNER RCM BALANCED FUND
Global Funds
DRESDNER RCM GLOBAL SMALL CAP FUND
DRESDNER RCM GLOBAL TECHNOLOGY FUND
DRESDNER RCM GLOBAL HEALTH CARE FUND
DRESDNER RCM GLOBAL EQUITY FUND
DRESDNER RCM STRATEGIC INCOME FUND
International Funds
DRESDNER RCM INTERNATIONAL GROWTH EQUITY FUND
DRESDNER RCM EMERGING MARKETS FUND
DRESDNER RCM EUROPE FUND
[GRAPHIC]
[LOGO] DRESDNER RCM GLOBAL FUNDS
<PAGE>
Dresdner RCM Global Funds
TABLE OF CONTENTS
<TABLE>
<S> <C>
Shareholder's Letter 1
Performance and Portfolios of Investments:
Dresdner RCM Large Cap Growth Fund 2
Dresdner RCM Biotechnology Fund 10
Dresdner RCM Tax Managed Growth Fund 16
Dresdner RCM Global Small Cap Fund 22
Dresdner RCM Global Technology Fund 31
Dresdner RCM Global Health Care Fund 37
Dresdner RCM International Growth Equity Fund 43
Dresdner RCM Emerging Markets Fund 52
Dresdner RCM Europe Fund 59
Dresdner RCM Global Equity Fund 67
Dresdner RCM Strategic Income Fund 75
Dresdner RCM Balanced Fund 81
Statements of:
Assets and Liabilities 92
Operations 94
Changes in Net Assets 96
Financial Highlights 104
Notes to Financial Highlights 110
Notes to Financial Statements 111
</TABLE>
<PAGE>
August 20, 2000
Dear Shareholder:
We are pleased to present the Dresdner RCM Global Funds' Semi-Annual
Shareholder Report for the six months ended June 30, 2000.
Technology was the major story once again during the first half of 2000,
although the results were much more volatile than in past years. The first 10
weeks of the year marked a continuation of 1999, in which the fastest-growing,
highest-priced companies led the market upwards. The next 10 weeks, however,
were extremely difficult, as investors became concerned about high valuations in
the midst of aggressive Federal Reserve Board action to slow the U.S. economy.
By late May, indications of an economic slowdown calmed the markets, and
most technology companies -- particularly profitable ones -- returned to
positive territory. Indeed, a major theme on Wall Street was investor approval
of companies that could exceed earnings expectations. An exception was
biotechnology, where stock prices once again performed extremely well without
profits. In that case, a major factor was the groundbreaking announcement in
human gene research that improved the future prospects of most biotech research
companies working on the next generation of medications.
Although biotechnology and the rest of health care posted very good
results, the overall performance of the U.S. stock market was lackluster, with
the Standard & Poor's 500 posting a -1% return. International stock markets were
also weak, as the global interest rate climate remained bearish. Most
fixed-income markets were under pressure from rising interest rates, with the
notable exception of U.S. Treasury securities. These rallied after the
government announced an aggressive buyback program made possible by the federal
budget surplus.
It is likely that the second half of 2000 will be a better period for
bonds, as interest rates appear to be declining as the U.S. economy slows.
However, the stock market's performance in the second half of the year depends
in large measure on the Fed's ability to engineer a soft landing for the
economy. Regardless of the macroeconomic environment, Dresdner RCM will continue
to focus on a bottom-up approach to stock selection.
In identifying possible investments, Dresdner RCM, in cooperation with
its worldwide affiliates, draws on the expertise of nearly 200 investment
professionals, primarily securities analysts and portfolio managers. In addition
to having traditional finance credentials, many also have advanced degrees or
industry experience in the areas of the market that they cover, such as
engineering or medicine. The Funds also draw information from Grassroots
Research-SM-, a unique adjunct to traditional research efforts, which uncovers
and confirms marketplace demand for key products and services.
Inside this report, you will find discussions of each mutual fund
managed by Dresdner RCM Global Investors. The portfolio managers review, in
detail, relevant market conditions, factors affecting the portfolios'
performance, investment strategies employed in response to the first half of the
year's economic and market conditions, and the outlook for the remainder of
2000. Each report also includes performance summaries, lists of holdings and
portfolio weightings as of June 30, 2000.
Despite the challenge of a difficult market environment, we are proud of
the performance of the Dresdner RCM Global Funds for the past six months, and
thank you for your continued support. If you would like more information on a
specific fund, or if you have any questions about the material in this report,
please call 1-800-726-7240, or visit www.DRCMFunds.com.
Sincerely,
<TABLE>
<S> <C>
/s/ DeWitt F. Bowman /s/ Theodore J. Coburn
DeWitt F. Bowman
Chairman Theodore J. Coburn
Dresdner RCM Global Funds, Inc. Chairman
Dresdner RCM Capital Funds, Inc. Dresdner RCM Investment Funds Inc.
</TABLE>
Page 1
<PAGE>
Dresdner RCM Large Cap Growth Fund
Management's Performance Review
The ongoing threat of inflation, the Federal Reserve Bank's continued
tightening of monetary policy and extreme volatility in the stock market created
a somewhat negative backdrop for the Dresdner RCM Large Cap Growth Fund during
the first two quarters of 2000. Despite the difficult period for stocks, the
Fund posted total returns of 3.72% and 3.47% for Class I and Class N shares,
respectively for the six month period ended June 30, 2000, substantially
outperforming the S&P 500 Index that declined 0.42%.
MARKET REVIEW
With the economy still roaring, the stock market began the year
strongly. Real growth, as represented by the Gross Domestic Product (GDP), was a
torrid 5.4% for the first quarter. Cognizant of the continued acceleration of
the economy and growing inflation numbers, the Fed increased rates for the fifth
and sixth time within a year, in hopes of bringing the economy down to a "soft
landing." The last increase in May brought the federal funds rate to 6.50%.
The heated investment debate between the Dow Jones old economy stocks
and the new economy stocks of the Nasdaq continued through March, with investors
vacillating from one to the other. As a result, the Nasdaq experienced four
corrections of 10% or more. In April and May, the tech-heavy Nasdaq saw a large
downdraft and dropped nearly 40% from its high. It appeared that the more
aggressive sectors of the index had risen too far and too fast, pumped up by the
combination of momentum buying, margin debt and on-line trading. Many of the
dot-com stocks fell 50%-70% from peak to trough. Fortunately, the damage was
less severe to the broader market of the S&P 500, with the index down close to
11% from its previous high.
Though growth stocks generally fared better during the first half of the
year, value stocks did rally somewhat in March and held steady in April and May,
gaining significant relative performance as growth stocks faltered. By June,
signs of economic slowing began to emerge, and benign economic data gave
investors hope that a soft landing might be in the future. The Fed did not raise
rates in June, and with interest-rate concerns subsiding, the S&P 500 recouped
much of its losses.
The Nasdaq rebounded strongly as well, up over 20% from the bottom.
Investors returned to the largest and most profitable technology companies,
pushing many of the stock prices back up to old highs. Additionally, biotech
stocks recovered dramatically from their lows. Dot-com stocks, however, remained
under pressure, as investors questioned their valuations and longer-term
viability. With the strong showing in June and notwithstanding the greater
volatility, growth stocks outperformed value stocks, ending the second quarter
down, though less so than value.
FACTORS AFFECTING PERFORMANCE
Dresdner RCM Global Investors LLC ("Dresdner RCM"), the Fund's
investment manager, continued to pursue the investment theme of technology
throughout the first half of 2000. Dresdner RCM believes that the Internet will
have a material impact on the way most, if not all, companies do business. They
specifically choose to participate in the Internet revolution through companies
that provide the infrastructure to this concept. By design, there is very little
direct exposure to dot-com companies in the Fund.
The weakness in technology that began in late March, combined with the
Fund's overweight to the sector, had a negative impact on performance in the
second quarter. However, moving forward, Dresdner RCM remains confident that
this sector has earnings potential. Therefore, the Fund owns companies in this
group that have dominant franchises and are leaders in their respective markets.
These companies include Cisco, Sun Microsystems and Oracle; which all possess
the quality and growth characteristics that Dresdner RCM believes are critical
to creating outstanding returns.
The Fund's overweight in biotechnology and healthcare helped drive
performance, despite the volatility in the second quarter. The technology
sector's roller coaster returns proved too extreme for many investors, who
instead sought the stability of the pharmaceutical sector, driving the stock
prices higher. A number of the Fund's holdings in the biotech sector appreciated
more than 50% in May and June, overcoming the significant weakness in the
previous two months.
Page 2
<PAGE>
Dresdner RCM Large Cap Growth Fund
Management's Performance Review
Earlier in the year, the Fund reduced holdings in retail stocks, moving
from a slight overweight to a small underweight position, because of the
anticipated effects rising interest rates would have on consumer spending. By
the second quarter, retail stocks had weakened as a number of companies reported
sales numbers below expectations. Moreover, as Dresdner RCM had expected, with
climbing interest rates, investors sold these stocks on the expectation of
decreased consumer spending.
Grassroots-SM- Research has been following the Internet buildout for
over five years, interviewing MIS and IT managers on a quarterly basis to
inquire about technology spending and sentiment surrounding major vendors.
Grassroots-SM- Research found that the recent downturn in opinion towards
dot-coms has not affected buildout strategies. Companies are aggressively
pursuing an Internet presence and e-commerce capabilities, including B2B, B2C,
and infrastructure to support the new digital economy. Reasons for focusing on
e-commerce and the Internet included perceived customer demand for Internet
service, the ability to streamline commerce, the ability to streamline processes
using B2B applications, and the fear of being left behind in the race to embrace
a new technology.
OUTLOOK
A soft landing is the best hope for the equity market, as it can provide
for prolonged sales growth with eventually lower interest rates in the next year
or two. In that environment, earnings can grow and price/earnings multiples can
once again expand, opening the door to possibly above-average returns in the
market.
The questions that now face investors are how many more rate increases
may follow and can the Fed successfully engineer another soft landing as it did
in 1994 when stocks made an impressive and sustained rally? By raising interest
rates and cooling interest-rate-sensitive demand such as home sales, the Fed
hopes to lower inflation risk and continue the already record-breaking economic
expansion.
In this environment, Dresdner RCM remains bullish on technology and
communications stocks. Even with the somewhat higher valuations and recent
volatility, stocks in these sectors appear to offer outstanding long-term upside
potential with growth prospects substantially higher than other sectors of the
economy. Conversely, with the uncertainty in the economy and questions regarding
the Fed's continuing to tighten monetary policy, Dresdner RCM plans to
underweight the interest-sensitive and cyclical sectors.
Dresdner RCM's short-term outlook for the market is cautious, as marked
volatility in the stock market is expected to continue. In this scenario,
investors may reevaluate their appetite for stocks similar to second-quarter's
trend, and move into other asset classes. The longer term picture is much more
optimistic. Although the economy is slowing, it is still strong and the prospect
for corporate earnings remains positive.
Page 3
<PAGE>
Dresdner RCM Large Cap Growth Fund
Total Return Index Comparison(b)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
$10,000 Investment (12/31/96 - 6/30/00)(c)(d)(f)
<TABLE>
<CAPTION>
CLASS I SHARES(C) S&P 500 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
7/31/99 $21,330 $18,670
8/31/99 $21,613 $18,577
9/30/99 $21,425 $18,068
10/31/99 $22,850 $19,211
11/30/99 $24,265 $19,601
12/31/99 $27,549 $20,756
1/31/00 $27,000 $19,714
2/29/00 $27,549 $19,341
3/31/00 $29,528 $21,233
4/30/00 $28,040 $20,594
5/31/00 $26,812 $20,171
6/30/00 $28,575 $20,668
</TABLE>
PERFORMANCE(b)
JUNE 30, 2000
<TABLE>
<CAPTION>
CUMULATIVE
SINCE SINCE
LARGE CAP GROWTH FUND YTD(G) 1 YEAR 3 YEARS INCEPTION INCEPTION
<S> <C> <C> <C> <C> <C>
Class I
Average Annual Total
Return(c)(d) 3.72% 30.85% 33.98% 34.98% 185.75%
Class N
Average Annual Total
Return(e)(f) 3.47% 30.34% 33.64% 34.64% 183.22%
S&P 500 Index(a)
Average Annual Total
Return -0.42% 7.25% 19.67% 23.05% 106.68%
</TABLE>
The data above represents past performance of the Fund and may not
indicate 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 Index is a capitalization-weighted index of 500
stocks designed to measure performance of the broad domestic economy
through changes in the aggregate market value of 500 stocks representing
all major industries.
(b) Returns assume reinvestment of all dividends and capital gains
distributions at net asset value.
(c) The Class I shares commenced operations on December 31, 1996.
(d) Returns from January 1, 1998 through December 31, 1998 reflect the
deduction of Rule 12b-1 fees. On December 31, 1998, all Fund shares were
redesignated as Class I shares, which do not pay Rule 12b-1 fees.
Performance results for periods after December 31, 1998 do not reflect the
deduction of Rule 12b-1 fees.
(e) Class N shares were first issued on March 2, 1999, and pay Rule 12b-1 fees.
Class N returns through March 2, 1999 are based on Class I returns and
reflect the deduction of Rule 12b-1 fees applicable to Class N shares.
(f) The value of a $10,000 investment for Class N is $28,322 for the period
from December 31, 1996 to June 30, 2000. The performance of the Class N
shares is lower than Class I shares due to the effects of 12b-1 fees.
(g) Unannualized.
Page 4
<PAGE>
Dresdner RCM Large Cap Growth Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
---------------------------------------------------------------------------------
EQUITY INVESTMENTS
COMMERCIAL GOODS & SERVICES SECTOR 11.5%
CAPITAL GOODS 9.6%
5,900 US General Dynamics Corp. $ 308,275
22,200 US General Electric Co. 1,176,600
4,100 US Honeywell International Inc. 138,119
26,000 BH Tyco International Ltd. 1,231,750
-----------
2,854,744
-----------
COMMERCIAL SERVICES & SUPPLIES 1.9%
8,500 US Enron Corp. 548,250
CONSUMER DISCRETIONARY SECTOR 7.7%
CONSUMER DURABLES & APPAREL 1.1%
8,000 US Nike Inc. (Class B) 318,500
MEDIA 2.7%
5,500 US Clear Channel Communications * 412,500
4,000 US The Walt Disney Co. 155,250
3,200 US Time Warner Inc. 243,200
-----------
810,950
-----------
RETAILING 3.9%
3,000 US Circuit City Stores Inc. 99,563
3,000 US Costco Wholesale Corp. * 99,000
2,800 US Home Depot Inc. 139,825
3,700 US Target Corp. 214,600
10,300 US Wal-Mart Stores Inc. 593,537
-----------
1,146,525
-----------
CONSUMER STAPLES SECTOR 6.3%
FOOD & DRUG RETAILING 0.8%
5,300 US Safeway Inc. * 239,163
FOOD, BEVERAGE & TOBACCO 2.3%
4,300 US Anheuser-Busch Cos. Inc. 321,156
6,000 US Coca Cola Co. 344,625
-----------
665,781
-----------
HOUSEHOLD & PERSONAL PRODUCTS 3.2%
4,700 US Avon Products Inc. 209,150
7,800 US Colgate Palmolive Co. 467,025
</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, 2000 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
---------------------------------------------------------------------------------
EQUITY INVESTMENTS (CONTINUED)
HOUSEHOLD & PERSONAL PRODUCTS
(CONTINUED)
4,500 US Gillette Co. $ 157,219
2,200 US Procter & Gamble Co. 125,950
-----------
959,344
-----------
ENERGY SECTOR 1.9%
ENERGY 1.9%
1,400 US Chevron Corp. 118,738
6,200 US Schlumberger Ltd. 462,675
-----------
581,413
-----------
FINANCIAL SECTOR 8.4%
BANKS 4.2%
8,000 US Bank of New York Inc. 372,000
2,700 US Chase Manhattan Corp. 124,369
10,800 US Citigroup Inc. 650,700
3,000 US Wells Fargo Co. 116,250
-----------
1,263,319
-----------
DIVERSIFIED FINANCIALS 0.9%
5,200 US Federal National Mortgage
Association 271,375
INSURANCE 3.3%
7,000 US American International Group
Inc. 822,500
1,400 US Marsh & McLennan Cos. Inc. 146,212
-----------
968,712
-----------
HEALTH CARE SECTOR 19.0%
PHARMACEUTICALS &
BIOTECHNOLOGY 19.0%
14,000 US Amgen Inc. * 983,500
6,700 US Bristol-Myers Squibb Co. 390,275
4,300 US Eli Lilly & Co. 429,462
1,600 US Genentech Inc. * 275,200
6,300 UK Glaxo Wellcome PLC (ADR) 364,219
1,300 US Human Genome Sciences Inc. * 173,388
2,100 US Johnson & Johnson 213,938
4,100 US Merck & Co. Inc. 314,162
1,800 US Millennium Pharmaceuticals
Inc. * 201,375
6,600 US PE Corp. - PE Biosystems Group 434,775
</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, 2000 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
---------------------------------------------------------------------------------
EQUITY INVESTMENTS (CONTINUED)
PHARMACEUTICALS &
BIOTECHNOLOGY (CONTINUED)
32,500 US Pfizer Inc. $ 1,560,000
2,500 US Sepracor Inc. * 301,562
-----------
5,641,856
-----------
MATERIALS SECTOR 0.9%
MATERIALS 0.9%
9,200 US Alcoa Inc. 266,800
TECHNOLOGY SECTOR 34.8%
COMMUNICATIONS EQUIPMENT 14.2%
22,500 US Cisco Systems Inc. * 1,430,156
5,600 US JDS Uniphase Corp. * 671,300
2,500 US Lucent Technologies Inc. 148,125
4,000 US Motorola Inc. 116,250
18,000 FI Nokia Oyj (ADR) 898,875
7,500 CA Nortel Networks Corp. 511,875
4,200 US QUALCOMM Inc. * 252,000
9,000 SE Telefonaktiebolaget (LM)
Ericsson AB (ADR) 180,000
-----------
4,208,581
-----------
COMPUTERS & PERIPHERALS 7.7%
6,500 US Dell Computer Corp. * 320,531
12,000 US EMC Corp. * 923,250
3,400 US Hewlett-Packard Co. 424,575
1,500 US International Business
Machines 164,344
5,000 US Sun Microsystems Inc. * 454,687
-----------
2,287,387
-----------
INTERNET SOFTWARE & SERVICES 2.0%
3,800 US America Online Inc. * 200,450
3,100 US Yahoo Inc. * 384,013
-----------
584,463
-----------
INFORMATION TECHNOLOGY
CONSULTING & SERVICES 0.4%
400 IS Check Point Software
Technologies Ltd. * 84,700
600 US Computer Sciences Corp. * 44,813
-----------
129,513
-----------
SEMICONDUCTORS & INSTRUMENTS 5.1%
5,000 US Intel Corp. 668,437
3,195 FR STMicroelectronics N.V. (N.Y.
Registered Shares) 205,079
</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, 2000 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
---------------------------------------------------------------------------------
EQUITY INVESTMENTS (CONTINUED)
SEMICONDUCTORS & INSTRUMENTS
(CONTINUED)
2,800 US Texas Instruments Inc. $ 192,325
5,500 US Xilinx Inc. * 454,094
-----------
1,519,935
-----------
SOFTWARE 5.4%
12,500 US Microsoft Corp. * 1,000,000
5,200 US Oracle Corp. * 437,125
1,500 US VERITAS Software Corp. * 169,523
-----------
1,606,648
-----------
TELECOMMUNICATION SERVICES SECTOR 7.7%
TELECOMMUNICATION SERVICES 7.7%
5,500 US GTE Corp. 342,375
6,000 US Nextel Communications Inc. * 367,125
10,000 US Qwest Communications
International Inc. * 496,875
6,000 US SBC Communications Inc. 259,500
5,000 UK Vodafone AirTouch PLC (ADR) 207,188
13,500 US WorldCom Inc. * 619,312
-----------
2,292,375
-----------
TOTAL EQUITY INVESTMENTS (COST $25,170,133) 98.2% 29,165,634
-----------
SHORT-TERM INVESTMENTS
MONEY MARKET FUNDS 2.0%
297,617 US SSgA Money Market Fund 297,617
300,989 US SSgA U.S. Government Money
Market Fund 300,989
-----------
TOTAL SHORT-TERM INVESTMENTS (COST $598,606) 2.0% 598,606
-----------
TOTAL INVESTMENTS (COST $25,768,739) ** 100.2% 29,764,240
OTHER ASSETS LESS LIABILITIES (0.2)% (72,598)
-----------
NET ASSETS 100.0% $29,691,642
===========
</TABLE>
--------------------------------
* Non-income producing security
ADR American Depositary Receipt
The accompanying notes are an integral part of the financial statements.
Page 8
<PAGE>
Dresdner RCM Large Cap Growth Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
Tax Information:
** For Federal income tax purposes, cost is $25,821,767 and gross aggregate
unrealized appreciation (depreciation) for all securities is as follows:
<TABLE>
<S> <C>
Unrealized appreciation $4,960,490
Unrealized depreciation (1,018,017)
----------
Net unrealized appreciation $3,942,473
==========
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
The Fund's investments in securities at June 30, 2000 categorized by country:
<TABLE>
<CAPTION>
% OF NET ASSETS
-------------------------------
COUNTRY SHORT-TERM
COUNTRY CODE EQUITIES AND OTHER TOTAL
<S> <C> <C> <C> <C>
------------------------------------------------------------------------
Bermuda BH 4.2% 4.2%
Canada CA 1.7% 1.7%
Finland FI 3.0% 3.0%
France FR 0.7% 0.7%
Israel IS 0.3% 0.3%
Sweden SE 0.6% 0.6%
United Kingdom UK 1.9% 1.9%
United States US 85.8% 1.8% 87.6%
------ ------ -----
Total 98.2% 1.8% 100.0%
====== ====== =====
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 9
<PAGE>
Dresdner RCM Biotechnology Fund
Management's Performance Review
A groundbreaking announcement in the field of human gene research, as
well as a solid flow of new therapeutic products, created a positive backdrop
for the biotechnology sector in the first half of 2000. Following a 111% return
in 1999, the Dresdner RCM Biotechnology Fund achieved a total return of 73.68%
during the first six months of 2000, compared to its benchmarks, the AMEX
Biotechnology Index, which returned 64.58% and the Nasdaq Biotechnology Index
which returned 37.99%.
MARKET REVIEW
The announcement in late June 2000 that Celera Genomics and the National
Institute of Health's Human Genome Project had deciphered the genetic code for
human life made banner headlines in major newspapers around the world. Several
months earlier, investors, anticipating the announcement, had bid up the sector
until early March, when a broad Nasdaq sell-off, caused in part by rising
interest rates, caused biotechs to correct. Investors used the proceeds from
these sales to purchase large-cap pharmaceutical stocks, which had been out of
favor due to the political debate over expanding Medicare to cover prescription
drugs.
Uncharacteristically, biotechnology stocks have not performed in line
with the Nasdaq since that time. During the second quarter of 2000, the Nasdaq
Composite Index fell about 2.5% while the biotechnology sector rose about 38%.
Investor demand for profitability, or at least a pathway to profitability in the
Internet sector, has not yet become a concern in speculative biotechnology
stocks. Dresdner RCM Global Investors LLC ("Dresdner RCM"), the investment
manager of the Fund, believes that as long as biotechnology companies can
continue to demonstrate clinical efficacy, it is just a matter of time before
their drugs clear the FDA and other regulatory hurdles. In contrast, investors
in "dot-coms" are speculating on a business model that may not be valid.
Another unusual development is that the normally inverse correlation
between the pharmaceutical sector and the biotechnology group did not take
place. The conventional wisdom has been that there is a dedicated pool of health
care investment funds that chooses one or the other sub-segment. Instead, the
pharmaceutical sector also rose (over 20%) during the second quarter. One
concern is that the source of funds has not come from large institutional
investors, but rather from skittish momentum players who normally invest in
other technologies.
FACTORS AFFECTING PERFORMANCE
The Fund began 2000 with a heavy emphasis on genomics companies that
soared in price during the first six weeks of the year. As these stocks began to
sell off in early March, Dresdner RCM diversified the portfolio by emphasizing
more established companies such as Amgen, the largest biotechnology company in
the world. The Fund also shifted assets to suppliers that tend to be less
dependent on scientific discovery and more dependent on the level of research
funding, which continues to increase. The new biotechnology rally, not expected
to take place until late summer or early fall, took place midway through the
second quarter instead, partly due to the impending genome announcement, as well
as the positive results that were reported by a number of medical conferences.
As a result, the Fund shifted out of more conservative stocks and into more
speculative biotechnology companies such as Human Genome Sciences, Millennium
Pharmaceuticals and Protein Design Labs -- stocks that tend to move up more
sharply when there is a biotechnology rally.
Still, the Fund continues to have a strong foothold in core
biotechnology companies that continue to produce exciting new therapies. For
example, in addition to its strong cancer and cardiology franchises, Genentech
has developed a new treatment for asthma and allergy that Dresdner RCM believes
is likely to produce strong profits for the company. Meanwhile, sales of
existing products remain robust for Amgen, Biogen, Medimmune and Immunex, which
have effective drugs that treat anemia, multiple sclerosis, RSV in premature
babies, and rheumatoid arthritis, respectively.
The Fund continued to benefit from the dual qualifications of its
portfolio management team, who hold medical degrees as well as extensive
financial training. This unique advantage helps them to conduct bottom-up stock
research in a field requiring judgments about the commercial viability of
breakthrough scientific discoveries. Dresdner RCM's Grassroots-SM- Research also
assists in that endeavor, which, for example, led the Fund to purchase the
initial public offering of PRAECIS
Page 10
<PAGE>
Dresdner RCM Biotechnology Fund
Management's Performance Review
Pharmaceuticals. In conjunction with Amgen, PRAECIS Pharmaceuticals has
developed a new treatment for prostate cancer that has also been adapted to
treat endometriosis in women. Before it became obvious to the investment
community, Grassroots-SM- Research determined through interviews with physicians
that the drug should be able to capture approximately 30% of the prostate cancer
treatment market.
The portfolio turnover in the Fund was high during the six month period
ended June 30, 2000 (303.8%), in part due to market volatility and cash flows. A
high portfolio turnover rate increases the Fund's brokerage commission expenses
and other transaction costs, and may increase its taxable capital gains.
OUTLOOK
The biotechnology sector is among the most volatile on Wall Street. As a
group, it can double in one year, as it did in 1999, or lose half its value in
one month, as it did in March 2000. Typically, disappointing news has caused an
over-reaction on Wall Street. Because Dresdner RCM's near-term outlook for
biotechnology stocks is cautious, Dresdner RCM believes that it will continue to
take advantage of sell-offs as they occur. However, the genome project
announcement is only one indication that the long-term investment opportunities
in this new technology are truly exciting.
Page 11
<PAGE>
Dresdner RCM Biotechnology Fund
Total Return Index Comparison(d)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
$10,000 Investment (12/30/97 - 6/30/00)(e)
<TABLE>
<CAPTION>
NASDAQ BIOTECH RUSSELL 2000 AMEX BIOTECH
CLASS N SHARES INDEX (A) INDEX (B) INDEX (C)
<S> <C> <C> <C> <C>
12/31/1997 $10,000 $10,175 $10,071 $10,042
1/31/1998 $10,260 $10,140 $9,912 $9,734
2/28/1998 $10,490 $10,572 $10,644 $9,936
3/31/1998 $10,590 $11,363 $11,083 $10,793
4/30/1998 $10,470 $11,107 $11,144 $10,830
5/31/1998 $10,350 $10,719 $10,543 $9,971
6/30/1998 $10,030 $10,649 $10,565 $9,079
7/31/1998 $10,110 $10,971 $9,710 $8,531
8/31/1998 $7,930 $8,560 $7,824 $6,462
9/30/1998 $9,110 $10,692 $8,437 $8,618
10/31/1998 $9,880 $11,585 $8,781 $10,146
11/30/1998 $10,560 $11,987 $9,241 $10,116
12/31/1998 $11,776 $14,681 $9,813 $11,446
1/31/1999 $12,383 $16,183 $9,943 $12,147
2/28/1999 $11,776 $15,235 $9,138 $10,931
3/31/1999 $11,518 $16,728 $9,281 $11,558
4/30/1999 $11,261 $15,261 $10,112 $11,817
5/31/1999 $11,436 $16,436 $10,260 $12,434
6/30/1999 $12,795 $17,029 $10,724 $13,252
7/31/1999 $13,289 $19,230 $10,430 $15,487
8/31/1999 $15,049 $21,097 $10,044 $16,619
9/30/1999 $15,049 $19,789 $10,046 $15,626
10/31/1999 $15,605 $20,125 $10,087 $16,245
11/30/1999 $17,416 $22,730 $10,689 $17,812
12/31/1999 $24,893 $29,607 $11,899 $24,202
1/31/2000 $30,090 $34,108 $11,708 $26,796
2/29/2000 $50,656 $49,572 $13,641 $43,370
3/31/2000 $33,957 $36,807 $12,742 $30,910
4/30/2000 $32,527 $31,989 $11,975 $30,131
5/31/2000 $30,401 $31,097 $11,276 $28,995
6/30/2000 $43,233 $40,862 $12,259 $39,823
</TABLE>
PERFORMANCE(d)
JUNE 30, 2000
<TABLE>
<CAPTION>
CUMULATIVE
SINCE SINCE
BIOTECHNOLOGY FUND YTD(F) 1 YEAR INCEPTION INCEPTION
<S> <C> <C> <C> <C>
Class N
Average Annual Total Return(e) 73.68% 237.90% 79.50% 332.33%
NASDAQ Biotech Index
Average Annual Total Return(a) 37.99% 139.91% 75.50% 308.62%
Russell 2000 Index
Average Annual Total Return(b) 3.03% 14.33% 8.48% 22.59%
AMEX Biotech Index
Average Annual Total Return(c) 64.58% 200.56% 73.70% 298.23%
</TABLE>
The recent strong equity market performance has been especially
favorable to technology and technology-related stocks and has helped the Fund.
This performance may not be sustainable and as a result, the Fund may not
continue achieving the same level of performance as in the past. In addition,
market volatility can dramatically affect the Fund's short-term returns and
pursuing these levels of return involves accepting increased risk of volatility
of return.
The data above represents past performance of the Fund and may not
indicate 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 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.
(b) The Russell 2000 Index is composed of the 2,000 smallest securities in the
Russell 3,000 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.
(c) The American Stock Exchange Biotechnology Index is an equal dollar-weighted
index designed 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. The index was
developed with a base level of 200 stocks, as of October 18, 1991.
(d) Returns assume reinvestment of all dividends and capital gains
distributions at net asset value.
(e) The Class N shares commenced operations on December 30, 1997.
(f) Unannualized.
Page 12
<PAGE>
Dresdner RCM Biotechnology Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
-----------------------------------------------------------------------------------
EQUITY INVESTMENTS
COMMERCIAL GOODS & SERVICES SECTOR 0.7%
COMMERCIAL SERVICES & SUPPLIES 0.7%
170,000 US Ventro Corp.* $ 3,208,750
HEALTH CARE SECTOR 87.8%
HEALTH CARE EQUIPMENT &
SUPPLIES 12.4%
213,000 US Aclara Biosciences Inc. * 10,849,687
17,300 US Aspect Medical Systems Inc. * 467,100
529,900 US Charles River Laboratories
International Inc. * 11,757,156
29,700 US INAMED Corp. * 1,087,763
105,000 US Inhale Therapeutic Systems
Inc. * 10,654,219
178,900 US Invitrogen Corp. * 13,453,839
1,400 US Molecular Devices Corp. * 96,863
74,800 US Waters Corp. * 9,335,975
------------
57,702,602
------------
HEALTH CARE PROVIDERS &
SERVICES 5.0%
143,300 US Community Health Care * 2,319,669
425,000 US Health Management Associates
Inc. * 5,551,562
390,000 US Healtheon/WebMD Corp. * 5,776,875
655,000 US MedicaLogic/Medscape Inc. * 6,058,750
300,000 US SciQuest.com Inc. * 3,431,250
------------
23,138,106
------------
PHARMACEUTICALS &
BIOTECHNOLOGY 70.4%
95,000 US Abgenix Inc. * 11,386,641
300,000 US Akorn Inc. * 2,381,250
275,000 US Alkermes Inc. * 12,959,375
230,000 US Amgen Inc. * 16,157,500
664,600 US AVANT Immunotherapeutics Inc.
* 7,019,837
60,000 US Aviron * 1,852,500
75,000 US Celera Genomics 7,012,500
400,000 US Cell Genesys Inc. * 11,200,000
244,700 US Cell Therapeutics Inc. * 7,493,937
275,000 UK Celltech Group PLC (ADR) * 10,415,625
125,000 US Cephalon Inc. * 7,484,375
55,000 US COR Therapeutics Inc. * 4,692,188
175,000 US CuraGen Corp. * 6,660,937
70,000 US Diversa Corp. * 2,318,750
125,000 US Gene Logic Inc. * 4,460,938
105,000 US Genentech Inc. * 18,060,000
162,500 US GenStar Therapeutics Corp. * 995,313
157,000 UK Glaxo Wellcome PLC (ADR) 9,076,562
81,100 US Human Genome Sciences Inc. * 10,816,712
111,500 US IDEC Pharmaceuticals Corp. * 13,080,344
210,000 US Immunex Corp. * 10,381,875
417,000 US Immunomedics Inc. * 10,216,500
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 13
<PAGE>
Dresdner RCM Biotechnology Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
-----------------------------------------------------------------------------------
EQUITY INVESTMENTS (CONTINUED)
PHARMACEUTICALS &
BIOTECHNOLOGY (CONTINUED)
172,500 US Intermune Pharmaceuticals Inc.
* $ 7,126,406
30,800 US Johnson & Johnson 3,137,750
10,900 US La Jolla Pharmaceutical Co. * 44,963
106,000 US Maxygen Inc. * 6,017,156
153,700 US Medarex Inc. * 12,987,650
175,000 US MedImmune Inc. * 12,950,000
50,000 US MGI Pharma Inc. * 1,438,281
93,000 US Millennium Pharmaceuticals
Inc. * 10,404,375
250,000 US OSI Pharmaceuticals Inc. * 7,203,125
150,000 US PE Corp. - PE Biosystems Group 9,881,250
100,000 US Pfizer Inc. 4,800,000
253,000 US PRAECIS Pharmaceuticals Inc. * 7,052,375
334,100 US Progenics Pharmaceuticals Inc.
* 4,760,926
70,000 US Protein Design Labs Inc. * 11,546,719
26,000 NL QIAGEN N.V. (ADR) * 4,524,000
118,700 US Sepracor Inc. * 14,318,187
244,000 US Titan Pharmaceuticals Inc. * 10,492,000
100,000 US Transkaryotic Therapies Inc. * 3,675,000
400,000 US Trega Biosciences Inc. * 1,275,000
37,500 US Vertex Pharmaceuticals Inc. * 3,951,563
271,200 US Virologic Inc. * 4,034,100
------------
327,744,485
------------
TECHNOLOGY SECTOR 1.2%
SEMICONDUCTORS & INSTRUMENTS 1.2%
125,000 US Caliper Technologies Corp. * 5,750,000
------------
TOTAL EQUITY INVESTMENTS (COST $364,840,563) 89.7% 417,543,943
------------
SHORT-TERM INVESTMENTS
MONEY MARKET FUNDS 7.9%
18,430,601 US SSgA Money Market Fund 18,430,601
18,430,601 US SSgA U.S. Government Money
Market Fund 18,430,601
------------
TOTAL SHORT-TERM INVESTMENTS (COST $36,861,202) 7.9% 36,861,202
------------
TOTAL INVESTMENTS (COST $401,701,765) ** 97.6% 454,405,145
OTHER ASSETS LESS LIABILITIES 2.4% 11,277,370
------------
NET ASSETS 100.0% $465,682,515
============
</TABLE>
--------------------------------
* Non-income producing security
ADR American Depositary Receipt
The accompanying notes are an integral part of the financial statements.
Page 14
<PAGE>
Dresdner RCM Biotechnology Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
Tax Information:
** For Federal income tax purposes, cost is $401,767,517 and gross aggregate
unrealized appreciation (depreciation) for all securities is as follows:
<TABLE>
<S> <C>
Unrealized appreciation $79,505,743
Unrealized depreciation (26,868,115)
-----------
Net unrealized appreciation $52,637,628
===========
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
The Fund's investments in securities at June 30, 2000 categorized by country:
<TABLE>
<CAPTION>
% OF NET ASSETS
------------------------------
COUNTRY SHORT-TERM
COUNTRY CODE EQUITIES AND OTHER TOTAL
<S> <C> <C> <C> <C>
-----------------------------------------------------------------------
Netherlands NL 0.9% 0.9%
United Kingdom UK 4.2% 4.2%
United States US 84.6% 10.3% 94.9%
------ ------- -----
Total 89.7% 10.3% 100.0%
====== ======= =====
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 15
<PAGE>
Dresdner RCM Tax Managed Growth Fund
Management's Performance Review
The ongoing threat of inflation, the Federal Reserve Bank's continued
tightening of monetary policy, and extreme volatility in the stock market
created a somewhat negative backdrop for the Dresdner RCM Tax Managed Growth
Fund during the first half of 2000. Despite the difficult period for stocks, the
Fund achieved total returns of 3.80% and 3.75% for Class I and Class N shares,
respectively for the six month period ended June 30, 2000, substantially
outperforming the S&P 500 Index that declined 0.42%.
MARKET REVIEW
With the economy still roaring, the stock market began the year
strongly. Real growth, as represented by the gross domestic product (GDP), was a
torrid 5.4% for the first quarter. Cognizant of the continued acceleration of
the economy and growing inflation numbers, the Fed increased rates for the fifth
and sixth time within a year, in hopes of bringing the economy down to a "soft
landing." The last increase in May brought the federal funds rate to 6.50%.
The heated investment debate between the Dow Jones old economy stocks
and the new economy stocks of the Nasdaq continued through March, with investors
vacillating from one to the other. As a result, the Nasdaq experienced four
corrections of 10% or more. In April and May, the tech-heavy Nasdaq saw a large
downdraft and dropped nearly 40% from its high. It appeared that the more
aggressive sectors of the index had risen too far and too fast, pumped up by the
combination of momentum buying, margin debt and on-line trading. Many of the
dot-com stocks fell 50%-70% from peak to trough. Fortunately, the damage was
less severe to the broader market of the S&P 500, with the index down close to
11% from its previous high.
Though growth stocks generally fared better during the first half of the
year, value stocks did rally somewhat in March and held steady in April and May,
gaining significant relative performance as growth stocks faltered. By June,
signs of economic slowing began to emerge, and benign economic data gave
investors hope that a soft landing might be in the future. The Fed did not raise
rates in June, and with interest-rate concerns subsiding, the S&P 500 recouped
much of its losses.
The Nasdaq rebounded strongly as well, up over 20% from the bottom.
Investors returned to the largest and most profitable technology companies,
pushing many of the stock prices back up to old highs. Additionally, biotech
stocks recovered dramatically from their lows. Dot-com stocks, however, remained
under pressure, as investors questioned their valuations and longer-term
viability. With the strong showing in June and notwithstanding the greater
volatility, growth stocks outperformed value stocks, ending the second quarter
down, though less so than value.
FACTORS AFFECTING PERFORMANCE
During the recent period of market volatility, Dresdner RCM Global
Investors LLC ("Dresdner RCM"), the Fund's investment manager, implemented
various tax strategies to maximize the impact of tax losses. Moving forward,
this allows for increased flexibility to trim or eliminate stocks in the Fund
that have appreciated without negatively impacting after-tax returns.
Dresdner RCM continued to pursue the investment theme of technology
throughout the first half of 2000. Dresdner RCM believes that the Internet will
have a material impact on the way most, if not all, companies do business. They
specifically choose to participate in the Internet revolution through companies
that provide the infrastructure to this concept. By design, there is very little
direct exposure to dot-com companies in the Fund.
The weakness in technology that began in late March, combined with the
Fund's overweight in the sector, had a negative impact on performance in the
second quarter. However, Dresdner RCM remains confident that this sector has
earnings potential, and consequently, the Fund owns companies in this group that
have dominant franchises and are market leaders. Examples include Cisco and
Qwest Communications, possessing the quality and growth characteristics that
Dresdner RCM believes are critical to creating outstanding returns.
The Fund's overweight in biotechnology and healthcare helped drive
performance in 2000, despite the volatility in the second quarter. The
technology sector's roller coaster returns proved too extreme for many
investors, who instead sought the stability of the pharmaceutical stocks,
driving the stock prices higher. A number of
Page 16
<PAGE>
Dresdner RCM Tax Managed Growth Fund
Management's Performance Review
the Fund's holdings in the biotech sector appreciated more than 50% in May and
June, overcoming the significant weakness in the prior two months.
Earlier in the year, the Fund reduced holdings in retail stocks, moving
from a slight overweight to a small underweight position, because of the effects
rising interest rates might have on consumer spending. By second quarter, retail
stocks weakened as a number of companies reported sales numbers coming in below
plan. Moreover, as Dresdner RCM anticipated, with rates climbing, investors sold
these stocks on the expectation of decreased consumer spending.
Grassroots-SM- Research has been following the Internet buildout for
over five years, interviewing MIS and IT managers on a quarterly basis to
inquire about technology spending and sentiment surrounding major vendors.
Grassroots-SM- Research found that the recent downturn in opinion towards
dot-coms has not affected buildout strategies. Companies are aggressively
pursuing an Internet presence and e-commerce capabilities, including B2B, B2C,
and infrastructure to support the new digital economy. Reasons for focusing on
e-commerce and the Internet included perceived customer demand for Internet
services, the ability to streamline commerce, the ability to streamline
processes using B2B applications, and the fear of being left behind in the race
to embrace a new technology.
OUTLOOK
A soft landing is the best hope for the equity market, for it can
provide for prolonged sales growth with eventually lower interest rates in the
year or two ahead. In that environment, earnings can grow and price/earnings
multiples can once again expand, opening the door to possibly above-average
returns in the market.
The questions that now face investors are how many more rate increases
may follow and can the Fed successfully engineer another soft landing as it did
in 1994 when stocks made an impressive and sustained rally. By raising interest
rates and cooling interest-rate-sensitive demand such as home sales, the Fed
hopes to lower inflation risk and continue the already record-breaking economic
expansion.
Dresdner RCM remains bullish on technology and communications stocks.
Even with the somewhat higher valuations and recent volatility, stocks in these
sectors appear to offer outstanding long-term upside potential with growth
prospects substantially higher than other sectors of the economy. Conversely,
with the uncertainty in the economy and questions regarding the Fed's continuing
to tighten monetary policy, the Fund plans to underweight interest-sensitive and
cyclical sectors of the market.
Dresdner RCM's short-term outlook for the market is cautious, as marked
volatility in the stock market is expected to continue. In this scenario,
investors may reevaluate their appetite for stocks similar to second-quarter's
trend, and move into other asset classes. The longer term picture is much more
optimistic. Although the economy is slowing, it is still strong and the prospect
for corporate earnings remains positive.
Page 17
<PAGE>
Dresdner RCM Tax Managed Growth Fund
Total Return Index Comparison(b)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
$10,000 Investment (12/30/98 - 6/30/00)(c)(e)
<TABLE>
<CAPTION>
S&P 500
CLASS I SHARES INDEX (A)
<S> <C> <C>
12/30/98 $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
7/31/99 $11,780 $10,887
8/31/99 $11,860 $10,833
9/30/99 $11,550 $10,536
10/31/99 $12,240 $11,203
11/30/99 $13,070 $11,430
12/31/99 $15,244 $12,104
1/31/00 $14,898 $11,496
2/29/00 $15,468 $11,279
3/31/00 $16,576 $12,382
4/30/00 $15,376 $12,009
5/31/00 $14,705 $11,763
6/30/00 $15,824 $12,053
</TABLE>
PERFORMANCE(b)
JUNE 30, 2000
<TABLE>
<CAPTION>
CUMULATIVE
SINCE SINCE
TAX MANAGED GROWTH FUND YTD(F) 1 YEAR INCEPTION INCEPTION
<S> <C> <C> <C> <C>
Class I
Average Annual Total Return(c) 3.80% 30.45% 35.79% 58.24%
Class N
Average Annual Total
Return(d)(e) 3.75% 30.14% 35.44% 57.69%
S&P 500 Index
Average Annual Total Return(a) -0.42% 7.25% 13.26% 20.53%
</TABLE>
The data above represents past performance of the Fund and may not
indicate 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 Index is a capitalization-weighted index of 500
stocks designed to measure performance of the broad domestic economy
through changes in the aggregate market value of 500 stocks representing
all major industries.
(b) Returns assume reinvestment of all dividends and capital gains
distributions at net asset value.
(c) Class I shares commenced operations on December 30, 1998.
(d) Class N shares were first issued on February 12, 1999, and pay Rule 12b-1
fees. Class N returns through February 12, 1999 are based on Class I
returns and reflect the deduction of Rule 12b-1 fees applicable to Class N
shares.
(e) The value of a $10,000 investment for Class N is $15,769 for the period
from December 30, 1998 to June 30, 2000. The performance of the Class N
shares is lower than Class I shares due to the effects of 12b-1 fees.
(f) Unannualized.
Page 18
<PAGE>
Dresdner RCM Tax Managed Growth Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
-------------------------------------------------------------------------------
EQUITY INVESTMENTS
COMMERCIAL GOODS & SERVICES SECTOR 7.9%
CAPITAL GOODS 5.6%
26,200 US General Electric Co. $ 1,388,600
10,750 BH Tyco International Ltd. 509,281
-----------
1,897,881
-----------
COMMERCIAL SERVICES & SUPPLIES 2.3%
11,850 US Enron Corp. 764,325
CONSUMER DISCRETIONARY SECTOR 10.1%
CONSUMER DURABLES & APPAREL 2.1%
18,500 US Harley-Davidson Inc. 712,250
HOTELS, RESTAURANTS & LEISURE 1.6%
15,800 US McDonalds Corp. 520,412
MEDIA 3.4%
10,100 US Clear Channel Communications * 757,500
5,250 US Time Warner Inc. 399,000
-----------
1,156,500
-----------
RETAILING 3.0%
17,750 US Costco Wholesale Corp. * 585,750
7,800 US Kohl's Corp. * 433,875
-----------
1,019,625
-----------
CONSUMER STAPLES SECTOR 6.9%
FOOD & DRUG RETAILING 2.8%
30,000 US Walgreen Co. 965,625
FOOD, BEVERAGE & TOBACCO 1.4%
8,000 US Coca Cola Co. 459,500
HOUSEHOLD & PERSONAL PRODUCTS 2.7%
18,400 US Estee Lauder Cos. Inc. (Class
A) 909,650
ENERGY SECTOR 2.7%
ENERGY 2.7%
22,800 US Weatherford International Inc. 907,725
FINANCIAL SECTOR 5.9%
INSURANCE 5.9%
9,200 US American International Group
Inc. 1,081,000
8,800 US Marsh & McLennan Cos. Inc. 919,050
-----------
2,000,050
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 19
<PAGE>
Dresdner RCM Tax Managed Growth Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
-------------------------------------------------------------------------------
EQUITY INVESTMENTS (CONTINUED)
HEALTH CARE SECTOR 19.0%
HEALTH CARE EQUIPMENT &
SUPPLIES 1.8%
5,900 US Inhale Therapeutic Systems
Inc. * $ 598,666
PHARMACEUTICALS &
BIOTECHNOLOGY 17.2%
17,400 US Amgen Inc. * 1,222,350
3,600 US Genentech Inc. * 619,200
12,300 UK Glaxo Wellcome PLC (ADR) 711,094
3,700 US Johnson & Johnson 376,937
9,550 US Merck & Co. Inc. 731,769
3,000 US Millennium Pharmaceuticals
Inc. * 335,625
37,675 US Pfizer Inc. 1,808,400
-----------
5,805,375
-----------
TECHNOLOGY SECTOR 34.1%
COMMUNICATIONS EQUIPMENT 12.4%
25,800 US Cisco Systems Inc. * 1,639,913
8,000 US JDS Uniphase Corp. * 959,000
29,500 FI Nokia Oyj (ADR) 1,473,156
2,200 US QUALCOMM Inc. * 132,000
-----------
4,204,069
-----------
COMPUTERS & PERIPHERALS 4.3%
8,000 US Hewlett-Packard Co. 999,000
5,000 US Sun Microsystems Inc. * 454,687
-----------
1,453,687
-----------
INTERNET SOFTWARE & SERVICES 1.9%
5,100 US Yahoo Inc. * 631,763
INFORMATION TECHNOLOGY
CONSULTING & SERVICES 3.1%
4,950 IS Check Point Software
Technologies Ltd. * 1,048,162
SEMICONDUCTORS & INSTRUMENTS 3.4%
8,500 US Intel Corp. 1,136,344
SOFTWARE 9.0%
13,500 US Microsoft Corp. * 1,080,000
11,800 US Oracle Corp. * 991,938
8,600 US VERITAS Software Corp. * 971,934
-----------
3,043,872
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 20
<PAGE>
Dresdner RCM Tax Managed Growth Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
-------------------------------------------------------------------------------
EQUITY INVESTMENTS (CONTINUED)
TELECOMMUNICATION SERVICES SECTOR 11.4%
TELECOMMUNICATION SERVICES 11.4%
7,150 JP NTT DoCoMo Inc. (ADR) * $ 993,850
20,800 US Qwest Communications
International Inc. * 1,033,500
16,850 UK Vodafone AirTouch PLC (ADR) 698,222
13,250 US WinStar Communications Inc. * 448,844
15,000 US WorldCom Inc. * 688,125
-----------
3,862,541
-----------
TOTAL EQUITY INVESTMENTS (COST $31,971,685) 98.0% 33,098,022
-----------
SHORT-TERM INVESTMENTS
MONEY MARKET FUNDS 2.8%
477,199 US SSgA Money Market Fund 477,199
477,256 US SSgA U.S. Government Money
Market Fund 477,256
-----------
TOTAL SHORT-TERM INVESTMENTS (COST $954,455) 2.8% 954,455
-----------
TOTAL INVESTMENTS (COST $32,926,140) ** 100.8% 34,052,477
OTHER ASSETS LESS LIABILITIES (0.8)% (274,426)
-----------
NET ASSETS 100.0% $33,778,051
===========
</TABLE>
--------------------------------
* Non-income producing security
ADR American Depositary Receipt
Tax Information:
** For Federal income tax purposes, cost is $32,930,583 and gross aggregate
unrealized appreciation (depreciation) for all securities is as follows:
<TABLE>
<S> <C>
Unrealized appreciation $2,715,378
Unrealized depreciation (1,593,484)
----------
Net unrealized appreciation $1,121,894
==========
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
The Fund's investments in securities at June 30, 2000 categorized by country:
<TABLE>
<CAPTION>
% OF NET ASSETS
-------------------------------
COUNTRY SHORT-TERM
COUNTRY CODE EQUITIES AND OTHER TOTAL
<S> <C> <C> <C> <C>
------------------------------------------------------------------------
Bermuda BH 1.5% 1.5%
Finland FI 4.4% 4.4%
Israel IS 3.1% 3.1%
Japan JP 2.9% 2.9%
United Kingdom UK 4.2% 4.2%
United States US 81.9% 2.0% 83.9%
------ ------ -----
Total 98.0% 2.0% 100.0%
====== ====== =====
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 21
<PAGE>
Dresdner RCM Global Small Cap Fund
Management's Performance Review
After producing a 105% return in 1999, the Dresdner RCM Global Small Cap
Fund continued to outperform its benchmarks during the first half of 2000,
despite the very challenging market environment. For the six-month period ended
June 30, 2000, the Fund achieved a total return of 15.18% and 15.32% for the
Class I and Class N shares, respectively. In comparison, the Salomon Brothers
Extended Market Index produced a return of 3.77%, while the MSCI World Small Cap
Index returned 6.31%.
Effective May 1, 2000, the Fund's performance benchmark was changed from
the Salomon Brothers Extended Market Index to the MSCI World Small Cap Index.
The MSCI World Small Cap Index most accurately reflects the global small cap
focus of the Fund and the market capitalization ranges of the securities in
which the Fund is most likely to invest.
MARKET REVIEW
As a bottom-up investor, Dresdner RCM Global Investors LLC ("Dresdner
RCM"), the investment manager of the Fund, has found that stock selection is the
driving force for global small cap stock performance. The next most important
factor is local supply-and-demand for small cap stocks, with the least most
important being the macroeconomic environment.
In the U.S., where nearly half the Fund is invested, the demand for
small cap stocks was strong for the first 10 weeks of the year, and then
diminished along with the rest of the market between March and late May. Rising
interest rates and concerns about inflation created a bear market for stocks
that lasted until there were signs of an economic slowdown and the market began
to recover. However, throughout this volatility, fundamentals and earnings
growth remained strong.
As evidence that small cap markets around the world are not strongly
correlated, the Japanese market for small caps, which soared in 1999, has been
moribund since January 2000 with no pickup through June. The retail investor,
not institutions, drives this market, buying aggressively when it is rising, and
staying away when the market is weak.
Europe's small cap market falls somewhere between Japan and the United
States in terms of institutional demand. In addition, the rising interest rate
environment in the United States and the chill associated with the Nasdaq during
the first half poured cold water on any interest for emerging market small
caps -- another asset class perceived to be associated with high risk.
FACTORS AFFECTING PERFORMANCE
While short-term performance is often dictated by supply-and-demand,
more fundamental factors drive the Fund's stock selection. Dresdner RCM searches
for high-quality companies whose profits are growing at least 15% per year, but
preferably in the 30-40% range. Financial strength, market share, and strong
management with stock ownership are other critical factors. Because of Dresdner
RCM's global investment focus, every company must be reasonably valued not just
within its geographical location, but also in comparison to other companies in
the same industry throughout the world. Finally, it is very important for a
company's management to communicate with the investment community in a
challenging market environment. It is these fundamental factors that will drive
performance over a longer investment horizon.
The Fund's bottom-up stock selection process resulted in a portfolio
that was significantly underweighted in Japan, a positive factor in the Fund's
performance. Dresdner RCM believes that most Japanese small cap stocks fitting a
desirable fundamental profile are far too expensive. However, there are
attractive Japanese companies in the portfolio including Moritex, a manufacturer
of fiber optic equipment; Yamada Denki, a consumer electronics distributor; and
Yokowo, a manufacturer of electronic products, including spring connectors
allowing batteries to fit in the back of cellular telephones.
Nearly half of the portfolio includes U.S. small cap stocks, which meant
exposure to the sharp correction that saw the Nasdaq fall nearly 2,000 points
from a peak of about 5,000 in early March, then recover moderately by June 30.
The portfolio's largest holding, San Francisco-based Actuate Software, which
distributes corporate data electronically to users throughout the world, was
similarly volatile. However, Dresdner RCM
Page 22
<PAGE>
Dresdner RCM Global Small Cap Fund
Management's Performance Review
remains committed to the company. Dresdner RCM's Grassroots-SM- Research
examined Actuate's e.Reporting software in November 1999 and learned from
current and potential customers that the product was considered powerful,
flexible, and well suited to e-commerce.
As of June 2000, nearly half of the Fund was invested in technology
companies around the world -- three times the benchmark weighting. This is not
because of any desire to reach an arbitrary percentage exposure, but because of
their inherent power to produce future growth. Being able to diversify globally
lowers the volatility and lessens the risk of the Fund.
The portfolio represented a variety of industries and geographical
locations. Examples include: Charles Voegele Holding, a Swiss family-oriented
retailer; Remy Cointreau, a French maker of high-quality spirits; Impresa SGPS,
a Portuguese media conglomerate; Star Micronics, a Japanese company that is the
world's dominant supplier of ringing mechanisms for Nokia cell phones; Superior
Energy Services, a U.S. oil service company; and Cell Genesys, a U.S.
biotechnology firm. Very few of the Fund's assets have been invested in emerging
markets, a positive factor in performance since these markets have been quite
challenging in recent months.
OUTLOOK
The recent attempt by the Fed to orchestrate a slowdown in the U.S.
economy could possibly have a secondary effect of moderating the interest-rate
environment, making investors more willing to consider asset classes beyond
blue-chip large cap stocks. That could rekindle interest in small caps in
emerging markets as well as Europe. In Japan, the outlook may be more difficult,
as local retail interest in small cap stocks remains sluggish.
Regardless of the macroeconomic environment, Dresdner RCM believes that
this portfolio is well positioned to capitalize on the firm's research strength,
which is to search out great companies around the world. Many times, companies
growing at 40-50% per year can be purchased at reasonable valuations. With
patience, these stocks are likely to provide returns commensurate with that
growth.
Page 23
<PAGE>
Dresdner RCM Global Small Cap Fund
Total Return Index Comparison(d)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
$10,000 Investment (12/31/96 - 6/30/00)(f)(g)
<TABLE>
<CAPTION>
MSCI WORLD SMALL
CLASS I SHARES SALOMON EMI INDEX(A) CAP INDEX(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
7/31/99 $17,461 $11,868 $10,664
8/31/99 $18,018 $11,724 $10,704
9/30/99 $18,586 $11,553 $10,673
10/31/99 $19,736 $11,692 $10,538
11/30/99 $25,471 $12,212 $10,986
12/31/99 $30,630 $13,000 $11,756
1/31/00 $31,992 $12,725 $11,847
2/29/00 $39,014 $13,965 $13,278
3/31/00 $37,547 $13,956 $12,784
4/30/00 $32,752 $13,095 $11,867
5/31/00 $29,451 $12,687 $11,639
6/30/00 $35,281 $13,491 $12,495
</TABLE>
PERFORMANCE(d)
JUNE 30, 2000
<TABLE>
<CAPTION>
CUMULATIVE
SINCE SINCE
GLOBAL SMALL CAP FUND YTD(H) 1 YEAR 3 YEARS INCEPTION INCEPTION
<S> <C> <C> <C> <C> <C>
Class I
Average Annual Total
Return(f) 15.18% 105.91% 44.27% 43.36% 252.81%
Class N
Average Annual Total
Return(f)(g) 15.32% 105.86% 44.10% 43.18% 251.19%
Salomon EMI
Average Annual Total
Return(a) 3.77% 13.80% 8.07% 8.93% 34.91%
MSCI World Small Cap
Average Annual Total
Return(b)(c) 6.31% 20.02% 5.55% 6.57% 24.95%
</TABLE>
The data above represents past performance of the Fund and may not
indicate 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
over 7,000 companies with a combined market capitalization currently in
excess of $25 trillion. 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 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 $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 US dollars
and local currencies.
Page 24
<PAGE>
Dresdner RCM Global Small Cap Fund
Total Return Index Comparison
(c) Effective May 1, 2000 the Fund's performance benchmark was changed from the
Salomon EMI Index to the MSCI World Small Cap Index. The Fund's Board of
Directors believes that the composition of the MSCI World Small Cap Index
more accurately reflects the global small cap focus of the Fund and the
market capitalization ranges of securities in which the Fund is most likely
to invest.
(d) Returns assume reinvestment of all dividends and capital gains
distributions at net asset value.
(e) Class N shares were first issued on March 10, 1999, and pay Rule 12b-1
fees. Class N returns through March 10, 1999 are based on Class I returns
and reflect the deduction of Rule 12b-1 fees applicable to Class N shares.
(f) Returns from January 1, 1998 through December 31, 1998 reflect the
deduction of Rule 12b-1 fees. On December 31, 1998, all Fund shares were
redesignated as Class I shares, which do not pay Rule 12b-1 fees.
Performance results for periods after December 31, 1998 do not reflect the
deduction of Rule 12b-1 fees.
(g) The value of a $10,000 investment for Class N is $35,119 for the period
from December 31, 1996 to June 30, 2000. The performance of the Class N
shares is lower than Class I shares due to the effects of 12b-1 fees.
(h) Unannualized.
Page 25
<PAGE>
Dresdner RCM Global Small Cap Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
---------------------------------------------------------------------------------
EQUITY INVESTMENTS
COMMERCIAL GOODS & SERVICES SECTOR 9.2%
CAPITAL GOODS 5.4%
2,800 DE Aixtron AG $ 386,503
620 CH Kaba Holding AG 800,706
750 CH Mikron Holding AG 553,945
17,500 MX Tubos de Acero de Mexico S.A.
(ADR) 242,813
14,600 DK Vesta Wind Systems A/S 538,437
-----------
2,522,404
-----------
COMMERCIAL SERVICES & SUPPLIES 3.4%
51,185 NL Magnus Holding N.V. 296,845
13,000 JP Pasona Softbank Inc. 356,328
13,800 SE Proffice AB (B Shares) 371,326
45,733 NL Vedior N.V. 567,717
-----------
1,592,216
-----------
TRANSPORTATION SERVICES 0.4%
5,200 US Forward Air Corp. * 208,000
CONSUMER DISCRETIONARY SECTOR 11.2%
AUTOMOBILES & COMPONENTS 0.6%
9,300 FI Nokian Renkaat Oyj 258,531
CONSUMER DURABLES & APPAREL 4.5%
40,000 FI Eimo Oyj 245,399
18,000 JP Star Micronics Co. Ltd. 294,155
33,000 JP The Sailor Pen Co. Ltd. 592,619
38,000 JP Yokowo Co. Ltd. 971,536
-----------
2,103,709
-----------
HOTELS, RESTAURANTS & LEISURE 1.0%
24,700 HU Danubius Hotel and Spa Rt. 478,019
MEDIA 2.0%
34,000 JP Aoi Advertising Promotion Inc. 514,170
31,200 PT Impresa SGPS S.A. * 343,942
3,100 US Wink Communications Inc. * 94,550
-----------
952,662
-----------
RETAILING 3.1%
4,500 JP Aucnet Inc. 214,789
1,400 CH Charles Voegele Holding AG * 276,373
423,807 HK Giordano International Ltd. 644,271
</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, 2000 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
---------------------------------------------------------------------------------
EQUITY INVESTMENTS (CONTINUED)
RETAILING (CONTINUED)
6,300 JP Homac Corp. $ 162,559
2,000 JP Yamada Denki Co. Ltd. 179,770
-----------
1,477,762
-----------
CONSUMER STAPLES SECTOR 2.8%
FOOD, BEVERAGE & TOBACCO 2.1%
7,440 JP Hokuto Corp. 272,140
22,000 FR Remy Cointreau S.A. * 718,079
-----------
990,219
-----------
HOUSEHOLD & PERSONAL PRODUCTS 0.7%
20,000 JP Mandom Corp. 334,589
ENERGY SECTOR 6.9%
ENERGY 6.9%
12,500 NL Core Laboratories N.V. * 362,500
24,400 US Horizon Offshore Inc. * 378,200
30,300 US NS Group Inc. * 634,406
11,600 US Patterson Energy Inc. * 330,600
52,000 US Superior Energy Services Inc.
* 539,500
19,000 NO TGS Nopec Geophysical Co. ASA
* 252,297
13,100 US UTI Energy Corp. * 525,638
8,900 US Veritas DGC Inc. * 231,400
-----------
3,254,541
-----------
FINANCIAL SECTOR 1.9%
DIVERSIFIED FINANCIALS 1.9%
24,000 JP Mycal Card Inc. 900,554
HEALTH CARE SECTOR 15.2%
HEALTH CARE EQUIPMENT &
SUPPLIES 4.0%
22,200 US Charles River Laboratories
International Inc. * 492,563
5,200 US Inhale Therapeutic Systems
Inc. * 527,637
9,800 US Invitrogen Corp. * 736,991
3,600 JP Japan Medical Dynamic
Marketing Inc. 111,945
-----------
1,869,136
-----------
PHARMACEUTICALS &
BIOTECHNOLOGY 11.2%
87,000 US AVANT Immunotherapeutics Inc.
* 918,937
43,700 US Cell Genesys Inc. * 1,223,600
19,000 US Cell Therapeutics Inc. * 581,875
7,800 DK H Lundbeck A/S 387,888
25,700 US Immunomedics Inc. * 629,650
23,000 US OSI Pharmaceuticals Inc. * 662,688
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 27
<PAGE>
Dresdner RCM Global Small Cap Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
---------------------------------------------------------------------------------
EQUITY INVESTMENTS (CONTINUED)
PHARMACEUTICALS &
BIOTECHNOLOGY (CONTINUED)
30,000 SE PyroSequencing AB * $ 348,888
11,600 US Titan Pharmaceuticals Inc. * 498,800
-----------
5,252,326
-----------
MATERIALS SECTOR 3.0%
MATERIALS 3.0%
31,900 SE SAPA AB 563,751
4,800 JP Taiyo Ink Manufacturing Co.
Ltd. 285,818
23,000 JP Tanaka Chemical Corp. 554,340
-----------
1,403,909
-----------
TECHNOLOGY SECTOR 44.5%
COMMUNICATIONS EQUIPMENT 10.2%
26,000 SE Allgon AB (Series B) 311,263
22,200 FI Elcoteq Network (Class A) 488,391
12,000 JP Moritex Corp. 1,094,502
17,500 SE Nolato AB (B Shares) 510,790
15,300 US Packeteer Inc. * 445,613
13,500 FI Perlos Oyj 428,345
5,000 DK RTX Telecom A/S * 160,624
12,600 DE Suess MicroTec AG * 504,870
15,400 US WatchGuard Technologies Inc. * 846,038
-----------
4,790,436
-----------
COMPUTERS & PERIPHERALS 2.6%
5,400 US DSP Group Inc. * 302,400
29,300 US Pinnacle Systems Inc. * 658,792
12,000 JP Woodland Corp. 250,658
-----------
1,211,850
-----------
INTERNET SOFTWARE & SERVICES 2.3%
1,280 CH Distefora Holding AG 358,166
8,700 US OnDisplay Inc. * 708,506
-----------
1,066,672
-----------
INFORMATION TECHNOLOGY
CONSULTING & SERVICES 9.2%
4,200 JP ARGOTECHNOS 21 Corp. 140,527
21,700 IS BackWeb Technologies Ltd. * 496,388
9,500 PO ComArch S.A. * 458,110
20,300 NL Computer Services Solutions
Holding N.V. 472,862
19,200 SE Framtidsfabriken AB * 265,976
27,000 SE HiQ International AB * 261,666
40,000 DE IDS Scheer AG 881,902
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 28
<PAGE>
Dresdner RCM Global Small Cap Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
---------------------------------------------------------------------------------
EQUITY INVESTMENTS (CONTINUED)
INFORMATION TECHNOLOGY
CONSULTING & SERVICES
(CONTINUED)
125,000 AU Securenet Ltd. * $ 691,984
36,300 US The InterCept Group Inc. * 617,100
-----------
4,286,515
-----------
SEMICONDUCTORS & INSTRUMENTS 7.4%
6,700 DE ELMOS Semiconductor AG (144A) 340,395
800 UK International Quantum Epitaxy
PLC (ADR) * 65,600
2,835 UK International Quantum Epitaxy
PLC 232,470
29,400 SE Mandator AB 192,743
15,600 US Manufacturers' Services Ltd. * 320,775
3,350 IE Parthus Technologies PLC (ADR)
* 95,475
21,000 IS Tower Semiconductor Ltd. * 685,125
25,000 CA Tundra Semiconductor Corp.
Ltd. * 868,952
11,500 US Virata Corp. * 685,688
-----------
3,487,223
-----------
SOFTWARE 12.8%
13,400 US Accrue Software Inc. * 475,700
37,900 US Actuate Corp. * 2,022,913
11,200 US Agile Software Corp. * 791,700
12,400 US Allaire Corp. * 455,700
16,200 US Mercator Software Inc. * 1,113,750
23,200 US ONYX Software Corp. * 688,750
92,180 NO VISMA ASA * 469,125
-----------
6,017,638
-----------
TELECOMMUNICATION SERVICES SECTOR 4.0%
TELECOMMUNICATION SERVICES 4.0%
49,500 US Allied Riser Communications
Corp. * 699,187
8,300 US Cypress Communications Inc. * 60,175
13,100 RU Mobile Telesystems (ADR) * 281,650
11,100 US SoftNet Systems Inc. * 106,838
48,000 FI Tecnomen Oyj * 414,110
26,800 US Z-Tel Technologies Inc. * 321,600
-----------
1,883,560
-----------
TOTAL EQUITY INVESTMENTS (COST $42,669,914) 98.7% 46,342,471
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 29
<PAGE>
Dresdner RCM Global Small Cap Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
FACE % OF MARKET VALUE
AMOUNT COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
---------------------------------------------------------------------------------
SHORT-TERM INVESTMENT
COMMERCIAL PAPER 0.3%
$ 117,000 US Associates First Capital Corp.
6.850%, maturing 07/03/00 $ 116,955
-----------
TOTAL SHORT-TERM INVESTMENTS (COST $116,955) 0.3% 116,955
-----------
TOTAL INVESTMENTS (COST $42,786,869) ** 99.0% 46,459,426
OTHER ASSETS LESS LIABILITIES 1.0% 474,256
-----------
NET ASSETS 100.0% $46,933,682
===========
</TABLE>
--------------------------------
* Non-income producing security
ADR American Depositary Receipt
144A Security is 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 $42,899,241 and gross aggregate
unrealized appreciation (depreciation) for all securities is as follows:
<TABLE>
<CAPTION>
<S> <C>
Unrealized appreciation $8,197,202
Unrealized depreciation (4,637,017)
----------
Net unrealized appreciation $3,560,185
==========
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
The Fund's investments in securities at June 30, 2000 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%
Canada CA 1.9% 1.9%
Denmark DK 2.3% 2.3%
Finland FI 3.9% 3.9%
France FR 1.5% 1.5%
Germany DE 4.5% 4.5%
Hong Kong HK 1.4% 1.4%
Hungary HU 1.0% 1.0%
Ireland IE 0.2% 0.2%
Israel IS 2.5% 2.5%
Japan JP 15.4% 15.4%
Mexico MX 0.5% 0.5%
Netherlands NL 3.6% 3.6%
Norway NO 1.6% 1.6%
Poland PO 1.0% 1.0%
Portugal PT 0.7% 0.7%
Russia RU 0.6% 0.6%
Sweden SE 6.0% 6.0%
Switzerland CH 4.3% 4.3%
United Kingdom UK 0.6% 0.6%
United States US 43.7% 1.3% 45.0%
------ ------ -----
Total 98.7% 1.3% 100.0%
====== ====== =====
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 30
<PAGE>
Dresdner RCM Global Technology Fund
Management's Performance Review
After rising 183% in 1999, the Dresdner RCM Global Technology Fund
continued to outperform its benchmarks through the end of June 2000. By making
decisive shifts in the portfolio, the Fund posted strong performance, achieving
total returns of 17.92% and 17.81% for the Class I and Class N shares,
respectively. By comparison, the Lipper Science & Technology Fund Index,
returned 8.93% while the broad-based S&P 500 Index returned -0.42%.
MARKET REVIEW
As the year began, it was difficult to imagine how the performance of
technology stocks in 2000 could match that of technology stocks in 1999, when
the Lipper Science & Technology Fund Index was up over 110%. Remarkably, by
March 10, the year was actually on track to beat 1999, as the high-valuation
stocks continued to perform extremely well and the Nasdaq soared nearly 1,000
points.
Unfortunately, the trend did not continue as the Nasdaq's flirtation
with 5,000 was brief. Indeed, the period between early March and late May was
one of the most severe corrections in technology stocks on record. A number of
factors contributed to the decline, including the Federal Reserve Board's
determination to raise interest rates to slow down the soaring economy, the U.S.
Justice Department's aggressive antitrust case against Microsoft, and negative
announcements by leading Wall Street analysts regarding the stock market, in
general, and technology in particular. During this bear market, investors made
it clear that they were uninterested in concept stocks with years of projected
red ink -- instead, demanding profits, or at least a "path" to profitability. A
slowdown in the U.S. economy and some moderate inflation data in late May eased
the pressure on technology stocks, and the group staged a rally in June.
FACTORS AFFECTING PERFORMANCE
The key to performance during the first half of 2000 was the ability to
shift from aggressive to defensive stocks and back again at key junctures.
Dresdner RCM Global Investors LLC ("Dresdner RCM"), the investment manager of
the Fund, remained invested in aggressive stocks with high valuations for much
of the first quarter, perhaps staying a bit too long into March.
Dresdner RCM re-examined the price/earnings (P/E) to growth ratios of
companies in the portfolio and began trimming stocks with very high P/E to
growth rate ratios. For example, a company with a P/E of 100 and a growth rate
of 20 (an outlying ratio of 5) would not be purchased regardless of its future
prospects. The concern was that rising interest rates puts more pressure on
companies with high P/E to growth ratios. This analysis led the Fund to
eliminate its exposure to QUALCOMM, a stock that rose more than 1,000% in 1999,
and to lighten its exposure to Japanese technology companies. As the first
quarter came to a close, some of these aggressive positions were swapped for
more defensive stocks such as Cisco Systems, Dell Computer, Intel, and Sun
Microsystems.
By the end of May, the portfolio had a cash level of just over 20% and
was in a position to buy back some of the more aggressive stocks that had fallen
50-80% from peak to trough.
Throughout the six-month period, one of the portfolio's best performing
stocks was Tyco International (diversified manufacturing), another company with
its share of controversy. Despite an investigation by the Securities & Exchange
Commission for alleged accounting irregularities, the accusations against the
company were never proven. Meanwhile, management continued to invest in the
company because of its strong cash flow and a belief that the stock was
disproportionately punished.
At the end of the second quarter, the Fund's international percentage
was at the low end of the range, which is typically 15% to 35%. This reflects
Dresdner RCM's belief that non-U.S. technology stocks became overvalued as less
mature companies were bid up to a level that was ahead of their fundamental
performance.
OUTLOOK
Technology stocks have undergone a significant correction during the
first half of 2000. Although there was a meaningful recovery late in the period,
stock prices are still far below the highs that were reached in early March this
year. At the same time, many technology companies are producing excellent sales
and profit growth.
Page 31
<PAGE>
Dresdner RCM Global Technology Fund
Management's Performance Review
The major questions now are whether the Federal Reserve Board has
finished raising interest rates and whether the U.S. economy is in for a soft
landing or something worse. The answers to these questions will help determine
how technology stocks perform over the remainder of the year. In the meantime,
Dresdner RCM believes that the fundamental strength of technology companies will
likely enable them to outperform the broader markets over the coming years.
Page 32
<PAGE>
Dresdner RCM Global Technology Fund
Total Return Index Comparison(c)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
$10,000 Investment (12/27/95-6/30/00) (d)(f)
<TABLE>
<CAPTION>
LIPPER SCIENCE
S&P 500 & TECHNOLOGY
CLASS I SHARES INDEX(A) FUND INDEX(B)
<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 $12,578
1/31/98 $15,976 $12,759 $12,801
2/28/98 $17,837 $14,277 $14,324
3/31/98 $18,838 $14,394 $14,442
4/30/98 $20,452 $15,012 $15,061
5/31/98 $19,227 $13,911 $13,957
6/30/98 $21,065 $14,727 $14,775
7/31/98 $20,441 $14,588 $14,636
8/31/98 $17,095 $11,850 $11,889
9/30/98 $17,790 $13,248 $13,292
10/31/98 $19,463 $14,259 $14,306
11/30/98 $22,055 $15,858 $15,910
12/31/98 $25,891 $18,423 $18,484
1/31/99 $29,859 $22,018 $20,877
2/28/99 $26,956 $21,333 $18,698
3/31/99 $30,210 $22,186 $20,603
4/30/99 $31,807 $23,045 $20,861
5/31/99 $30,634 $22,501 $20,831
6/30/99 $34,166 $23,750 $23,538
7/31/99 $34,765 $23,009 $23,530
8/31/99 $37,103 $22,894 $24,825
9/30/99 $40,043 $22,267 $25,162
10/31/99 $46,141 $23,676 $27,812
11/30/99 $56,565 $24,157 $31,936
12/31/99 $73,499 $25,580 $39,408
1/31/00 $74,939 $24,296 $38,994
2/29/00 $103,453 $23,836 $49,499
3/31/00 $93,187 $26,168 $47,994
4/30/00 $82,896 $25,380 $42,393
5/31/00 $74,766 $24,860 $37,277
6/30/00 $86,670 $25,470 $43,068
</TABLE>
PERFORMANCE
JUNE 30, 2000
<TABLE>
<CAPTION>
CUMULATIVE
SINCE SINCE
GLOBAL TECHNOLOGY FUND YTD 1 YEAR 3 YEARS INCEPTION INCEPTION
<S> <C> <C> <C> <C> <C>
Class I
Average Annual Total
Return(d) 17.92% 153.67% 84.23% 61.41% 766.70%
Class N
Average Annual Total
Return(e)(f) 17.81% 153.28% 83.86% 61.06% 754.85%
Lipper Science &
Technology Fund Index
Average Annual Total
Return(b) 8.93% 82.98% 51.26% 38.23% 330.68%
S&P 500 Index
Average Annual Total
Return(a) -0.42% 7.25% 19.67% 23.03% 154.70%
</TABLE>
The recent strong equity market performance has been especially
favorable to technology and technology-related stocks and has helped the Fund.
This performance may not be sustainable and as a result, the Fund may not
continue achieving the same level of performance as in the past. In addition,
market volatility can dramatically affect the Fund's short-term returns and
pursuing these levels of return involves accepting increased risk of volatility
of return.
The data above represents past performance of the Fund and may not
indicate 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 Index is a capitalization-weighted index of 500
stocks designed to measure performance of the broad domestic economy
through changes in the aggregate market value of 500 stocks representing
major industries.
(b) The Lipper Science & Technology Fund Index is an equally weighted index of
the 30 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 were first issued on January 30, 1999, and pay Rule 12b-1
fees. Class N returns through January 30, 1999 are based on Class I returns
and reflect the deduction of Rule 12b-1 fees applicable to Class N shares.
(f) The value of a $10,000 investment for Class N is $85,485 for the period
from December 27, 1995 to June 30, 2000. The performance of the Class N
shares is lower than Class I shares due to the effects of 12b-1 fees.
(g) Unannualized.
Page 33
<PAGE>
Dresdner RCM Global Technology Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
-----------------------------------------------------------------------------------
EQUITY INVESTMENTS
COMMERCIAL GOODS & SERVICES SECTOR 2.8%
CAPITAL GOODS 2.8%
454,000 BH Tyco International Ltd. $ 21,508,250
HEALTH CARE SECTOR 0.8%
PHARMACEUTICALS &
BIOTECHNOLOGY 0.8%
82,500 US Amgen Inc. * 5,795,625
TECHNOLOGY SECTOR 91.6%
COMMUNICATIONS EQUIPMENT 27.5%
60,000 FR Alcatel S.A. (ADR) 3,990,000
92,600 US Comverse Technology Inc. * 8,611,800
85,000 US Corning Inc. 22,939,375
103,200 US Ditech Communications Corp. * 9,758,850
72,600 US E-Tek Dynamics Inc. 19,152,788
192,000 US Foundry Networks Inc. * 21,216,000
263,400 JP Furukawa Electric Co. Ltd. 5,514,392
90,000 US GlobeSpan Inc. * 10,987,031
151,954 US JDS Uniphase Corp. * 18,215,438
107,200 US Juniper Networks Inc. * 15,604,300
308,000 FI Nokia Oyj (ADR) 15,380,750
14,500 US ONI Systems Corp. * 1,699,445
50,000 US QUALCOMM Inc. * 3,000,000
83,000 US SDL Inc. * 23,670,562
175,000 US Sycamore Networks Inc. * 19,315,625
545,000 SE Telefonaktiebolaget (LM)
Ericsson AB (ADR) 10,900,000
------------
209,956,356
------------
COMPUTERS & PERIPHERALS 6.9%
158,000 US Dell Computer Corp. * 7,791,375
108,000 US EMC Corp. * 8,309,250
106,800 US Flextronics International Ltd. 7,335,825
240,000 US Network Appliance Inc. * 19,320,000
108,000 US Sun Microsystems Inc. * 9,821,250
------------
52,577,700
------------
INTERNET SOFTWARE & SERVICES 12.9%
264,000 US Ariba Inc. * 25,884,375
357,000 US BroadVision Inc. * 18,140,063
227,000 US Commerce One Inc. * 10,303,672
312,000 US Critical Path Inc. * 18,193,500
190,800 US Lycos Inc. * 10,303,200
18 JP Yahoo (Japan) Inc. * 7,153,962
67,000 US Yahoo Inc. * 8,299,625
------------
98,278,397
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 34
<PAGE>
Dresdner RCM Global Technology Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
-----------------------------------------------------------------------------------
EQUITY INVESTMENTS (CONTINUED)
INFORMATION TECHNOLOGY
CONSULTING & SERVICES 9.3%
180,000 US BEA Systems Inc. * $ 8,898,750
190,500 IS Check Point Software
Technologies Ltd. * 40,338,375
325,000 UK CMG PLC * 4,605,281
62,500 SE Framtidsfabriken AB * 865,806
6,500 JP Itochu Techno-Science Corp. 1,047,480
13,000 JP Itochu Techno-Science Corp. * 1,935,228
190,000 UK Logica PLC 4,498,703
133,200 FR Transiciel S.A. 8,593,137
------------
70,782,760
------------
SEMICONDUCTORS & INSTRUMENTS 23.2%
107,000 US Advanced Micro Devices Inc. * 8,265,750
133,000 US Altera Corp. * 13,557,687
215,000 US Applied Micro Circuits Corp. * 21,231,250
139,000 US Credence Systems Corp. * 7,671,063
201,100 US Manufacturers' Services Ltd. * 4,135,119
314,000 US Maxim Integrated Products Inc.
* 21,332,375
244,000 US Micron Technology Inc. * 21,487,250
170,000 US MIPS Technologies Inc. (Class
A) * 7,225,000
75,000 CA PMC-Sierra Inc. * 13,326,563
21,900 KR Samsung Electronics 7,247,700
273,000 FR STMicroelectronics N.V. (N.Y.
Registered Shares) 17,523,187
277,500 US Vitesse Semiconductor Corp. * 20,413,594
165,000 US Xilinx Inc. * 13,622,812
------------
177,039,350
------------
SOFTWARE 11.8%
159,700 US Agile Software Corp. * 11,288,794
186,000 US I2 Technologies Inc. * 19,393,406
144,500 US Numerical Technologies Inc. * 7,026,312
78,000 US Siebel Systems Inc. * 12,757,875
122,500 US VERITAS Software Corp. * 13,844,414
505,000 US Vignette Corp. * 26,267,891
------------
90,578,692
------------
TOTAL EQUITY INVESTMENTS (COST $546,959,602) 95.2% 726,517,130
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 35
<PAGE>
Dresdner RCM Global Technology Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
-----------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS
MONEY MARKET FUNDS 5.2%
19,869,788 US SSgA Money Market Fund $ 19,869,788
19,871,639 US SSgA U.S. Government Money
Market Fund 19,871,639
------------
TOTAL SHORT-TERM INVESTMENTS (COST $39,741,427) 5.2% 39,741,427
------------
TOTAL INVESTMENTS (COST $586,701,029) ** 100.4% 766,258,557
OTHER ASSETS LESS LIABILITIES (0.4)% (3,392,247)
------------
NET ASSETS 100.0% $762,866,310
============
</TABLE>
--------------------------------
* Non-income producing security
ADR American Depositary Receipt
Tax Information:
** For Federal income tax purposes, cost is $587,408,624 and gross aggregate
unrealized appreciation (depreciation) for all securities is as follows:
<TABLE>
<S> <C>
Unrealized appreciation $190,037,072
Unrealized depreciation (11,187,139)
-----------
Net unrealized appreciation $178,849,933
===========
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
The Fund's investments in securities at June 30, 2000 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 1.7% 1.7%
Finland FI 2.0% 2.0%
France FR 3.9% 3.9%
Israel IS 5.3% 5.3%
Japan JP 2.1% 2.1%
Korea KR 1.0% 1.0%
Sweden SE 1.5% 1.5%
United Kingdom UK 1.2% 1.2%
United States US 73.7% 4.8% 78.5%
------ ------ -----
Total 95.2% 4.8% 100.0%
====== ====== =====
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 36
<PAGE>
Dresdner RCM Global Health Care Fund
Management's Performance Review
During the first half of 2000, health care was one of the few bright
spots in an otherwise difficult stock market environment, as large cap
pharmaceutical and biotechnology companies posted strong returns. For the six
months ended June 30, 2000, the Dresdner RCM Health Care Fund achieved a total
return of 54.39% compared to its benchmarks, the Russell Mid Cap Health Care
Index, which returned 13.67% and the S&P 500 Index, which returned -0.42%.
MARKET REVIEW
For much of the past year, pharmaceutical stocks have been under
pressure due to U.S. Congressional proposals to expand Medicare coverage to
include prescription drugs. Medicare reimbursement is typically very low and
could squeeze profit margins. In recent weeks, however, a more moderate
Republican plan has emerged that would be relatively favorable to the drug
companies -- a plan that President Clinton, after some compromise, may likely
sign before he leaves office. This development, along with some sector rotation
out of technology and other growth stocks, has produced a positive environment
for pharmaceutical companies.
Meanwhile, a groundbreaking announcement by Celera Genomics and the
National Institute of Health's Human Genome Project, stating that they had
deciphered the genetic code for human life, created a positive backdrop for the
biotechnology sector.
True, biotechnology stocks sold off sharply in March when the Nasdaq's
bear market dragged technology shares, particularly the unprofitable Internet
companies, into sharply negative territory. However, biotechnology stocks
recovered during the second quarter, while the "dot-coms" did not. In addition,
the normally inverse correlation between the pharmaceutical sector and the
biotechnology group did not occur.
Beyond pharmaceuticals and biotechnology, the Dresdner RCM Global Health
Care Fund, managed by Dresdner RCM Global Investors LLC ("Dresdner RCM"),
concentrates in a wide range of e-health, medical device and hospital management
companies. The e-health companies suffered along with the general Internet
malaise. Hospital management offered investors some interesting value plays,
while medical device performance was company-specific.
FACTORS AFFECTING PERFORMANCE
The Fund's superior performance can be explained, in part, by its timely
exposure to the large cap pharmaceutical sector, which reached as high as 30% of
total assets during the period. Pfizer and Schering-Plough were particularly
strong performers during the six-month period ended June 30, 2000. The Fund took
advantage of an April sell-off in Bristol-Myers Squibb when the FDA rejected one
of its blood pressure drugs. However, the stock was eventually sold when
Dresdner RCM's Grassroots-SM- Research revealed that the incidence of a serious
side effect was quite high in elderly and African American patients.
The Fund's allocation to pharmaceuticals and biotechnology was at the
high end of its historical range, reaching about 46% of total assets as of
June 30, 2000. The Fund began the year with a heavy emphasis on genomics
companies that soared in price during the first six weeks of 2000. As these
stocks began to sell off in early March, Dresdner RCM diversified the portfolio
by emphasizing core biotechnology companies, such as Amgen, Biogen, Genentech,
and Immunex, which continue to produce exciting new therapies. Within weeks, the
biotech rally was back, partly due to the impending genome announcement as well
as good results that were reported at a number of medical conferences. The Fund
then shifted out of relatively more conservative stocks and into more aggressive
biotechnology companies such as Human Genome Sciences, Millennium
Pharmaceuticals and Protein Design Labs.
Medical device stocks, such as Johnson & Johnson, Biomet, Waters, St.
Jude Medical, Stryker, ORATEC Interventions, and Molecular Devices, performed
quite well. The Fund also profited from its foray into hospital and HMO
stocks -- more valuation-sensitive companies that produced profits when the
companies reported respectable earnings, reflecting higher hospital admissions.
However, the Fund's exposure to the troubled e-health sector was minimized. Such
companies as Healtheon/WebMD, Medicalogic/Medscape,
Page 37
<PAGE>
Dresdner RCM Global Health Care Fund
Management's Performance Review
and SciQuest.com represented a total of about 3.5% of the portfolio as of
June 30, 2000, and will likely stay small until the sector's fundamentals
improve.
The Fund continued to benefit from the dual qualifications of its
portfolio management team, who hold medical degrees, as well as possess
extensive financial training. This unique advantage helps them to conduct
bottom-up stock research in fields requiring clinical judgments about the
commercial viability of pharmaceutical products, medical devices, and
breakthrough scientific discoveries.
The portfolio turnover in the Fund was high during the six months ended
June 30, 2000 (279.1%), in part due to market volatility and cash flows. A high
portfolio turnover rate increases the Fund's brokerage commission expenses and
other transaction costs, and may increase its taxable capital gains.
OUTLOOK
Dresdner RCM believes that pharmaceutical stocks should benefit from the
passage of President Clinton's Medicare drug proposal plan in collaboration with
a Republican Congress. Anything short of that is likely to put pressure on these
companies. Indeed, if the Democrats retain the White House and hold a majority
in the House of Representatives, then the pharmaceutical companies might face a
much more negative scenario.
The biotechnology area continues to be among the most volatile on Wall
Street. Typically, disappointing news causes an over-reaction on Wall Street,
which the Fund hopes to take advantage of. However, the recent run-up in
biotechnology stocks makes the near-term outlook cautious. Meanwhile, the
outlook for e-health and hospital management companies remains uncertain, while
the performance of the medical device stocks will remain dependent on individual
products rather than the overall sector.
Longer term, Dresdner RCM believes that investors in the health care
sector will continue to benefit from exciting breakthroughs in scientific
knowledge. Mapping the human gene will enable researchers to develop new
treatments for human illness. The challenge is to find the companies that can
convert these discoveries into commercially viable products.
Page 38
<PAGE>
Dresdner RCM Global Health Care Fund
Total Return Index Comparison(c)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
$10,000 Investment (12/31/96-6/30/00) (d)
<TABLE>
<CAPTION>
RUSSELL MIDCAP
CLASS N SHARES S&P 500 INDEX (A) HEALTH CARE INDEX (B)
<S> <C> <C> <C>
12/31/96 $10,000 $10,000 $10,000
1/31/97 $10,700 $10,625 $10,353
2/28/97 $10,650 $10,708 $10,552
3/31/97 $9,910 $10,268 $9,637
4/30/97 $10,050 $10,881 $9,786
5/31/97 $11,140 $11,544 $10,712
6/30/97 $11,660 $12,061 $11,201
7/31/97 $11,990 $13,021 $11,904
8/31/97 $11,790 $12,292 $11,739
9/30/97 $13,110 $12,965 $12,373
10/31/97 $12,910 $12,532 $11,644
11/30/97 $13,110 $13,113 $11,886
12/31/97 $13,000 $13,338 $11,920
1/31/98 $13,189 $13,486 $11,938
2/28/98 $14,060 $14,458 $13,012
3/31/98 $14,584 $15,199 $13,725
4/30/98 $14,897 $15,352 $14,044
5/31/98 $14,261 $15,088 $13,805
6/30/98 $14,295 $15,701 $14,337
7/31/98 $14,216 $15,533 $13,961
8/31/98 $12,241 $13,287 $11,459
9/30/98 $13,659 $14,139 $13,170
10/31/98 $14,004 $15,288 $13,869
11/30/98 $15,109 $16,215 $14,571
12/31/98 $16,324 $17,148 $15,903
1/31/99 $16,482 $17,865 $15,117
2/28/99 $16,056 $17,310 $14,398
3/31/99 $15,813 $18,002 $14,287
4/30/99 $15,059 $18,699 $13,244
5/31/99 $14,937 $18,257 $13,466
6/30/99 $15,874 $19,271 $13,772
7/31/99 $15,777 $18,670 $13,446
8/31/99 $16,117 $18,577 $13,300
9/30/99 $15,071 $18,068 $11,845
10/31/99 $16,056 $19,211 $11,925
11/30/99 $17,334 $19,601 $12,625
12/31/99 $21,013 $20,756 $14,185
1/31/00 $24,184 $19,714 $14,290
2/29/00 $34,536 $19,341 $14,395
3/31/00 $26,042 $21,233 $14,071
4/30/00 $25,614 $20,594 $13,903
5/31/00 $25,231 $20,171 $14,171
6/30/00 $32,442 $20,668 $15,639
</TABLE>
PERFORMANCE
JUNE 30, 2000
<TABLE>
<CAPTION>
CUMULATIVE
SINCE SINCE
GLOBAL HEALTH CARE FUND YTD 1 YEAR 3 YEARS INCEPTION INCEPTION
<S> <C> <C> <C> <C> <C>
Class N
Average Annual Total
Return(d) 54.39% 104.37% 40.65% 39.97% 224.42%
S&P 500 Index
Average Annual Total
Return(a) -0.42% 7.25% 19.67% 23.05% 106.68%
Russell Midcap Health
Care Index
Average Annual Total
Return(b) 13.67% 13.57% 11.77% 13.63% 56.39%
</TABLE>
The data above represents past performance of the Fund and may not
indicate 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 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 39
<PAGE>
Dresdner RCM Global Health Care Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
----------------------------------------------------------------------------------
EQUITY INVESTMENTS
COMMERCIAL GOODS & SERVICES SECTOR 0.7%
COMMERCIAL SERVICES & SUPPLIES 0.7%
26,000 US Ventro Corp. * $ 490,750
HEALTH CARE SECTOR 80.9%
HEALTH CARE EQUIPMENT &
SUPPLIES 26.5%
17,500 US Aclara Biosciences Inc. * 891,406
10,000 US Allscripts Inc. * 230,000
23,600 US ArthroCare Corp. * 1,256,700
37,800 US Aspect Medical Systems Inc. * 1,020,600
29,700 US Biomet Inc. 1,141,594
74,900 US Charles River Laboratories
International Inc. * 1,661,844
21,500 US INAMED Corp. * 787,438
10,400 US Inhale Therapeutic Systems
Inc. * 1,055,275
67,200 US InnerDyne Inc. * 495,600
9,500 US Invitrogen Corp. * 714,430
42,700 US Mentor Corp. 1,160,906
14,200 US Molecular Devices Corp. * 982,462
32,900 US ORATEC Interventions Inc. * 1,098,037
37,300 US Stryker Corp. 1,631,875
64,600 US VISX Inc. * 1,812,837
11,500 US Waters Corp. * 1,435,344
-----------
17,376,348
-----------
HEALTH CARE PROVIDERS &
SERVICES 8.0%
13,300 US CareInsite Inc. * 237,738
33,200 US Community Health Care * 537,425
65,200 US E.Medsoft.com (Private
Placement) * 463,572
80,000 US Health Management Associates
Inc. * 1,045,000
87,300 US Healtheon/WebMD Corp. * 1,293,131
100,700 US MedicaLogic/Medscape Inc. * 931,475
55,000 US SciQuest.com Inc. * 629,062
14,300 US XCare.net Inc. * 76,863
-----------
5,214,266
-----------
PHARMACEUTICALS &
BIOTECHNOLOGY 46.4%
8,800 US Abgenix Inc. * 1,054,762
20,000 US Alkermes Inc. * 942,500
9,500 US American Home Products Corp. 558,125
22,000 US Amgen Inc. * 1,545,500
6,000 UK AstraZeneca Group PLC (ADR) 279,000
37,500 US AVANT Immunotherapeutics Inc.
* 396,094
22,500 US Cell Genesys Inc. * 630,000
27,200 US Cell Therapeutics Inc. * 833,000
22,500 UK Celltech Group PLC (ADR) * 852,187
15,000 US Cephalon Inc. * 898,125
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 40
<PAGE>
Dresdner RCM Global Health Care Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
----------------------------------------------------------------------------------
EQUITY INVESTMENTS (CONTINUED)
PHARMACEUTICALS &
BIOTECHNOLOGY (CONTINUED)
9,000 US Gene Logic Inc. * $ 321,188
8,300 US Genentech Inc. * 1,427,600
21,500 UK Glaxo Wellcome PLC (ADR) 1,242,969
7,000 US Human Genome Sciences Inc. * 933,625
9,200 US IDEC Pharmaceuticals Corp. * 1,079,275
33,000 US Immunomedics Inc. * 808,500
15,500 US Intermune Pharmaceuticals Inc.
* 640,344
15,900 US Johnson & Johnson 1,619,812
1,600 US La Jolla Pharmaceutical Co. * 6,600
7,000 US Maxygen Inc. * 397,359
17,000 US Medarex Inc. * 1,436,500
8,000 US Merck & Co. Inc. 613,000
32,500 US MGI Pharma Inc. * 934,883
7,500 US Millennium Pharmaceuticals
Inc. * 839,063
22,500 US OSI Pharmaceuticals Inc. * 648,281
7,100 US PE Corp. - PE Biosystems Group 467,713
31,500 US Pfizer Inc. 1,512,000
17,500 US Pharmacia Corp. 904,531
34,400 US PRAECIS Pharmaceuticals Inc. * 958,900
6,000 US Protein Design Labs Inc. * 989,719
62,500 SE PyroSequencing AB * 726,850
2,200 NL QIAGEN N.V. (ADR) * 382,800
22,900 US Schering-Plough Corp. 1,156,450
8,000 US Sepracor Inc. * 965,000
8,000 IS Teva Pharmaceutical Industries
Ltd. (ADR) 443,500
13,000 US Titan Pharmaceuticals Inc. * 559,000
27,400 US Virologic Inc. * 407,575
-----------
30,412,330
-----------
TOTAL EQUITY INVESTMENTS (COST $49,879,191) 81.6% 53,493,694
-----------
<CAPTION>
FACE
AMOUNT
----------
<C> <C> <S> <C> <C>
SHORT-TERM INVESTMENTS
COMMERCIAL PAPER 9.2%
$6,000,000 US American Express Credit Corp.
6.780% maturing 07/05/00 5,995,480
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 41
<PAGE>
Dresdner RCM Global Health Care Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
----------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (CONTINUED)
MONEY MARKET FUNDS 7.2%
2,361,720 US SSgA Money Market Fund $ 2,361,720
2,361,720 US SSgA U.S. Government Money
Market Fund 2,361,720
-----------
4,723,440
-----------
TOTAL SHORT-TERM INVESTMENTS (COST $10,718,920) 16.4% 10,718,920
-----------
TOTAL INVESTMENTS (COST $60,598,111) ** 98.0% 64,212,614
OTHER ASSETS LESS LIABILITIES 2.0% 1,342,363
-----------
NET ASSETS 100.0% $65,554,977
===========
</TABLE>
--------------------------------
* Non-income producing security
ADR American Depositary Receipt
Tax Information:
** For Federal income tax purposes, cost is $60,644,140 and gross aggregate
unrealized appreciation (depreciation) for all securities is as follows:
<TABLE>
<CAPTION>
<S> <C>
Unrealized appreciation $7,889,124
Unrealized depreciation (4,320,650)
----------
Net unrealized appreciation $3,568,474
==========
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
The Fund's investments in securities at June 30, 2000 categorized by country:
<TABLE>
<CAPTION>
% OF NET ASSETS
------------------------------
COUNTRY SHORT-TERM
COUNTRY CODE EQUITIES AND OTHER TOTAL
<S> <C> <C> <C> <C>
-----------------------------------------------------------------------
Israel IS 0.7% 0.7%
Netherlands NL 0.6% 0.6%
Sweden SE 1.1% 1.1%
United Kingdom UK 3.6% 3.6%
United States US 75.6% 18.4% 94.0%
------ ------- -----
Total 81.6% 18.4% 100.0%
====== ======= =====
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 42
<PAGE>
Dresdner RCM International Growth Equity Fund
Management's Performance Review
The combination of higher interest rates in Europe along with a marked
reversal in sector returns, presented a burdensome backdrop for the Dresdner RCM
International Growth Equity Fund. The Fund posted total returns of -13.29% and
-13.40% for Class I and N shares, respectively, for the six months ended
June 30, 2000. The Fund's primary benchmark, the Morgan Stanley Capital
International Europe, Australasia, Far East Index (EAFE), returned -3.95% for
the same period while the Fund's secondary benchmark, the Morgan Stanley Capital
International All Country World Index Ex-U.S. (ACWIxU.S), returned -3.33%.
MARKET REVIEW
Market volatility continued throughout the first half of the year,
driven primarily by rising interest rates. Heeding inflationary pressures, the
European Central Bank raised short-term interest rates by 75 basis points during
the second quarter. However, the Bank of Japan continued to uphold a benign
interest rate environment, though it appears likely that it will move monetary
policy from the current zero interest-rate in the near future.
Higher interest rates during the second quarter translated into a higher
cost of capital and higher discount rates, resulting in a compression of P/E
multiples in many new economy stocks. In contrast to the first quarter when new
economy stocks helped the technology, telecommunications, and media sectors
soar, rising interest rates dampened valuations and investor enthusiasm creating
a sharp sector reversal.
The new economy sectors underperformed (telecom services was down 20.2%,
technology was down 6.5%) versus historically safe-haven sectors (consumer
staples up 8.6%, healthcare up 7.4%). The telecom services sector was
particularly affected by the U.K. government's pioneering decision to auction
next generation mobile phone licenses -- the auction resulted in a windfall to
the government at the expense of the mobile telecom operators. The sector
rotation to old economy stocks was also reflected in a 1.5% rise in the EAFE
Value Index versus a 9.2% decline in the EAFE Growth Index.
FACTORS AFFECTING PERFORMANCE
Early in 2000 Dresdner RCM Global Investors LLC ("Dresdner RCM"), the
investment manager of the Fund, had overweighted new economy sectors. The Fund
was overweighted in the technology, telecommunications and media sectors as they
offered extraordinary growth potential with attractive valuations relative to
their U.S. counterparts. During the period of negative sentiment in April and
May, when the market favored old economy stocks, Dresdner RCM did not alter its
strategy of investing in new economy themes. The decision to stay invested in
current themes negatively impacted the Fund's performance.
An effective strategy of overweighting the communications equipment
industry and underweighting the automotive industry offset sub-optimal sector
selection. The overweights to Internet software & services, telecom services and
IT consulting & services industry negatively impacted the portfolio along with
the underweights to the pharmaceutical & biotechnology and the food, beverage &
tobacco industries.
During the second quarter, Dresdner RCM increased the Fund's weight to
the consumer staples sector. The rationale was based upon Dresdner RCM's belief
that these companies should grow as they become more efficient. Furthermore, in
today's volatile market environment, the visible earnings of consumer staples
companies make them very attractive. Finally, part of the investment process is
predicated upon theme transfer-Dresdner RCM analyzes developments in one region
or sector and examines the possibility of the theme eventually being repeated in
other sectors or regions. Regarding retailers, the experience in the United
States (particularly with Wal-Mart) is that companies are becoming increasingly
efficient at securing products. As of June 30, 2000, the Fund's positions
included exposure to retailers (e.g. Tesco in the U.K. and Carrefour in France),
as well as to producers (e.g. Nestle in Switzerland, and Femsa in Mexico).
Grassroots-SM- Research continued to add value to Dresdner RCM's overall
investment approach. The department recently completed a study in which it
surveyed 35 logistics and supply-chain managers at food and household goods
producers and retailers in Europe
Page 43
<PAGE>
Dresdner RCM International Growth Equity Fund
Management's Performance Review
to determine the efficiency and sophistication of their supply-chain systems,
and to evaluate relationships between the two groups. All surveyed sources are
attempting to improve warehousing and delivery systems, thus providing
supporting evidence for the consumer staples investment theme. Regarding
retailers, one German logistics manager noted, "the future is the Wal-Mart
system, where ordering runs automatically over the Internet, but Germany is far
away from this model."
OUTLOOK
Dresdner RCM maintains the conviction that the current volatile market
environment will continue, but that most of the technical correction within new
economy stocks is generally over. The fundamentals of many technology stocks has
not changed and with valuations even more compelling at this time, the Fund's
overweight to new economy sectors remains in place.
An economic soft-landing scenario, with inflation in check and less
heated growth, will be a positive environment for growth stocks. Dresdner RCM's
bottom-up investment philosophy seeks investments in high-quality companies
possessing strong earnings growth potential and attractive valuations that are
well positioned to take advantage of change in the global economy. In the
current market environment, the Fund's portfolio managers are emphasizing
visible earnings growth, guiding the Fund to overweight positions in technology,
and telecom services, along with selective companies in other sectors. Given the
supporting evidence by Grassroots-SM- Research along with additional analysis,
the Fund has narrowed the underweight position to the consumer staples sector.
Concern over the United Kingdom's mobile phone auction did lead to a
slightly reduced overweight position to the telecom services sector. However, as
telecom companies continue to strike alliances across borders (e.g., KPN of the
Netherlands with NTT DoCoMo of Japan, France Telecom's purchase of Orange of the
UK), the amount of competition bidding for future mobile licenses will shrink,
thereby providing some relief to these companies.
The characteristics of the Fund's portfolio are consistent with Dresdner
RCM's bottom-up process and rigorous investment discipline of quality growth
companies with outstanding valuations. Going forward, these strong, viable
companies should provide value to investors in the International Growth Equity
Fund.
Page 44
<PAGE>
Dresdner RCM International Growth Equity Fund
Total Return Index Comparison(c)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
PERFORMANCE FROM COMMENCEMENT OF OPERATIONS
$10,000 Investment (12/28/94 - 6/30/00)(d)(f)
<TABLE>
<CAPTION>
CLASS I SHARES MSCI-EAFE INDEX(A) MSCI-ACWI FREE(B)
<S> <C> <C> <C>
12/28/94 $10,000 $10,000 $10,000
1/31/95 $9,555 $9,616 $9,617
2/28/95 $9,577 $9,591 $9,592
3/31/95 $10,054 $10,192 $10,193
4/30/95 $10,492 $10,579 $10,579
5/31/95 $10,564 $10,455 $10,455
6/30/95 $10,847 $10,274 $10,275
7/31/95 $11,570 $10,916 $10,917
8/31/95 $11,420 $10,502 $10,503
9/30/95 $11,665 $10,710 $10,711
10/31/95 $11,489 $10,426 $10,426
11/30/95 $11,522 $10,719 $10,719
12/31/95 $11,799 $11,153 $11,153
1/31/96 $12,126 $11,201 $11,201
2/29/96 $12,271 $11,241 $11,241
3/31/96 $12,648 $11,483 $11,483
4/30/96 $13,096 $11,819 $11,820
5/31/96 $13,263 $11,604 $11,604
6/30/96 $13,353 $11,672 $11,673
7/31/96 $12,822 $11,334 $11,334
8/31/96 $13,108 $11,361 $11,362
9/30/96 $13,404 $11,666 $11,666
10/31/96 $13,302 $11,549 $11,549
11/30/96 $13,864 $12,011 $12,011
12/31/96 $14,078 $11,859 $11,860
1/31/97 $14,355 $11,447 $11,447
2/28/97 $14,477 $11,637 $11,637
3/31/97 $14,410 $11,682 $11,683
4/30/97 $14,654 $11,746 $11,747
5/31/97 $15,606 $12,513 $12,514
6/30/97 $16,502 $13,207 $13,207
7/31/97 $17,509 $13,423 $13,424
8/31/97 $16,292 $12,423 $12,424
9/30/97 $17,620 $13,121 $13,122
10/31/97 $16,458 $12,116 $12,117
11/30/97 $16,414 $11,995 $11,996
12/31/97 $16,603 $12,103 $12,071
1/31/98 $17,063 $12,660 $12,432
2/28/98 $17,924 $13,475 $13,261
3/31/98 $18,602 $13,893 $13,720
4/30/98 $18,954 $14,005 $13,818
5/31/98 $19,063 $13,941 $13,568
6/30/98 $19,123 $14,050 $13,517
7/31/98 $19,754 $14,196 $13,645
8/31/98 $17,063 $12,440 $11,721
9/30/98 $16,033 $12,062 $11,474
10/31/98 $16,869 $13,322 $12,675
11/30/98 $17,730 $14,008 $13,356
12/31/98 $18,895 $14,564 $13,816
1/31/99 $19,223 $14,525 $13,801
2/28/99 $18,429 $14,182 $13,492
3/31/99 $18,832 $14,778 $14,144
4/30/99 $19,160 $15,379 $14,851
5/31/99 $18,290 $14,590 $14,153
6/30/99 $19,804 $15,162 $14,804
7/31/99 $20,836 $15,617 $15,152
8/31/99 $21,050 $15,678 $15,205
9/30/99 $21,479 $15,840 $15,308
10/31/99 $23,232 $16,437 $15,878
11/30/99 $26,524 $17,012 $16,513
12/31/99 $30,357 $18,541 $18,088
1/31/00 $28,998 $17,366 $17,106
2/29/00 $31,077 $17,837 $17,568
3/31/00 $30,330 $18,532 $18,229
4/30/00 $27,639 $17,561 $17,211
5/31/00 $25,126 $17,136 $16,748
6/30/00 $26,321 $17,810 $17,485
</TABLE>
PERFORMANCE FROM FIRST PUBLIC OFFERING
$10,000 Investment (5/22/95 - 6/30/00)(d)(f)
<TABLE>
<CAPTION>
CLASS I SHARES MSCI-EAFE INDEX(A) MSCI-ACWI FREE(B)
<S> <C> <C> <C>
5/22/95 $10,000 $10,000 $10,000
5/31/95 $10,233 $9,984 $10,222
6/30/95 $10,508 $9,811 $10,081
7/31/95 $11,208 $10,424 $10,654
8/31/95 $11,063 $10,029 $10,284
9/30/95 $11,300 $10,228 $10,460
10/31/95 $11,130 $9,956 $10,180
11/30/95 $11,161 $10,236 $10,420
12/31/95 $11,430 $10,650 $10,831
1/31/96 $11,747 $10,696 $10,980
2/29/96 $11,887 $10,735 $10,980
3/31/96 $12,254 $10,965 $11,184
4/30/96 $12,686 $11,287 $11,523
5/31/96 $12,848 $11,081 $11,350
6/30/96 $12,935 $11,147 $11,408
7/31/96 $12,421 $10,823 $11,029
8/31/96 $12,698 $10,849 $11,094
9/30/96 $12,985 $11,140 $11,369
10/31/96 $12,886 $11,029 $11,256
11/30/96 $13,430 $11,470 $11,690
12/31/96 $13,638 $11,325 $11,554
1/31/97 $13,906 $10,931 $11,342
2/28/97 $14,024 $11,113 $11,549
3/31/97 $13,959 $11,156 $11,525
4/30/97 $14,195 $11,217 $11,622
5/31/97 $15,117 $11,950 $12,340
6/30/97 $15,986 $12,612 $13,021
7/31/97 $16,961 $12,819 $13,284
8/31/97 $15,782 $11,864 $12,239
9/30/97 $17,069 $12,530 $12,901
10/31/97 $15,943 $11,571 $11,803
11/30/97 $15,900 $11,455 $11,656
12/31/97 $16,083 $11,558 $11,790
1/31/98 $16,529 $12,090 $12,142
2/28/98 $17,363 $12,868 $12,952
3/31/98 $18,020 $13,267 $13,400
4/30/98 $18,361 $13,375 $13,497
5/31/98 $18,466 $13,313 $13,252
6/30/98 $18,525 $13,417 $13,202
7/31/98 $19,136 $13,556 $13,327
8/31/98 $16,529 $11,879 $11,448
9/30/98 $15,532 $11,518 $11,207
10/31/98 $16,342 $12,722 $12,380
11/30/98 $17,175 $13,377 $13,045
12/31/98 $18,304 $13,908 $13,495
1/31/99 $18,622 $13,871 $13,480
2/28/99 $17,852 $13,543 $13,178
3/31/99 $18,243 $14,112 $13,815
4/30/99 $18,561 $14,687 $14,580
5/31/99 $17,718 $13,933 $13,790
6/30/99 $19,184 $14,479 $14,459
7/31/99 $20,186 $14,914 $14,799
8/31/99 $20,394 $14,972 $14,851
9/30/99 $20,809 $15,126 $14,952
10/31/99 $22,508 $15,696 $15,508
11/30/99 $25,697 $16,246 $16,129
12/31/99 $29,407 $17,706 $17,667
1/31/00 $28,091 $16,584 $16,708
2/29/00 $30,105 $17,033 $17,159
3/31/00 $29,381 $17,697 $17,804
4/30/00 $26,775 $16,770 $16,811
5/31/00 $24,339 $16,364 $16,358
6/30/00 $25,498 $17,010 $17,018
</TABLE>
PERFORMANCE(c)
JUNE 30, 2000
<TABLE>
<CAPTION>
INTERNATIONAL LIFE OF FUND LIFE OF FUND
GROWTH EQUITY ANNUALIZED SINCE CUMULATIVE SINCE
FUND YTD(G) 1 YEAR 3 YEARS 5 YEARS 12/28/94 5/25/95 12/28/94 5/25/95
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class I
Average Annual
Total Return(d) -13.29% 32.91% 16.84% 19.40% 19.21% 20.11% 163.21% 154.98%
Class N
Average Annual
Total Return(e)(f) -13.40% 32.57% 16.55% 19.11% 18.91% 19.82% 159.65% 151.79%
MSCI-EAFE Index
Average Annual
Total Return(a) -3.95% 17.46% 10.48% 11.63% 11.05% 11.02% 78.10% 70.10%
MSCI-ACWI Ex-U.S. Free
Average Annual
Total Return(b) -3.33% 18.11% 9.46% 11.12% 10.68% 11.11% 74.85% 70.18%
</TABLE>
The data above represents past performance of the Fund and may not
indicate 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 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 All Country World Free Ex-U.S. Index ("ACWI") 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.
Page 45
<PAGE>
Dresdner RCM International Growth Equity Fund
Total Return Index Comparison
(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 were first issued on March 10, 1999, and pay Rule 12b-1
fees. Class N returns through March 10, 1999 are based on Class I returns
and reflect the deduction of Rule 12b-1 fees applicable to Class N shares.
(f) The value of a $10,000 investment for Class N is $25,965 and $25,179 for
the Fund from December 28, 1994 to June 30, 2000 and from May 22, 1995 to
June 30, 2000, respectively. The performance of the Class N shares is lower
than Class I shares due to the effects of 12b-1 fees.
(g) Unannualized.
Page 46
<PAGE>
Dresdner RCM International Growth Equity Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
---------------------------------------------------------------------------------
EQUITY INVESTMENTS
COMMERCIAL GOODS & SERVICES SECTOR 4.4%
CAPITAL GOODS 3.7%
12,000 DE Aixtron AG $ 1,656,442
58,200 DE Siemens AG 8,814,800
131,000 JP Sumitomo Corp. 1,477,134
------------
11,948,376
------------
COMMERCIAL SERVICES & SUPPLIES 0.7%
197,300 HK Hutchison Whampoa Ltd. 2,480,477
CONSUMER DISCRETIONARY SECTOR 9.5%
AUTOMOBILES & COMPONENTS 0.7%
831 DE Porsche AG (Non-Voting
Preferred Shares) 2,270,274
CONSUMER DURABLES & APPAREL 3.7%
11,180 FR LVMH (Louis Vuitton Moet
Hennessy) 4,628,683
73,400 JP Sony Corp. 6,868,144
5,000 JP Sony Corp. (ADR) 471,563
------------
11,968,390
------------
MEDIA 4.5%
46,900 JP Asatsu-DK Inc. 1,928,281
125,300 IT Mediaset S.p.A. 1,921,779
59,000 FR Societe Television Francaise 4,128,642
116,140 AU The News Corp. Ltd. 1,603,855
50,400 NL VNU N.V. 2,613,727
169,600 UK WPP Group PLC 2,477,708
------------
14,673,992
------------
RETAILING 0.6%
14,401 JP Ryohin Keikaku Co. Ltd. 1,837,430
CONSUMER STAPLES SECTOR 3.8%
FOOD & DRUG RETAILING 2.3%
70,800 FR Carrefour Supermarche S.A. 4,859,356
839,000 UK Tesco PLC 2,610,182
------------
7,469,538
------------
FOOD, BEVERAGE & TOBACCO 1.5%
36,700 MX Fomento Economico Mexicano
S.A. de C.V. (ADR) 1,580,394
20 JP Hokuto Corp. 731
1,550 CH Nestle S.A. * 3,112,268
------------
4,693,393
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 47
<PAGE>
Dresdner RCM International Growth Equity Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
---------------------------------------------------------------------------------
EQUITY INVESTMENTS (CONTINUED)
ENERGY SECTOR 5.8%
ENERGY 5.8%
387,874 UK BP Amoco PLC $ 3,722,861
12,000 UK BP Amoco PLC (ADR) 678,750
723,500 UK Shell Transport & Trading Co. 6,040,613
55,100 FR Total Fina Elf S.A. (B Shares) 8,482,611
------------
18,924,835
------------
FINANCIAL SECTOR 19.5%
BANKS 7.1%
316,400 ES Banco Bilbao Vizcaya
Argentaria S.A. 4,746,607
36,700 DE Bayerische Hypo-und
Vereinsbank AG 2,380,293
293,600 IT Bipop-Carire S.p.A. * 2,319,080
50,800 FR BNP Paribas 4,908,589
71,100 DE Deutsche Bank AG 5,875,019
168,000 JP Industrial Bank of Japan Ltd. 1,276,655
175,000 UK Lloyds TSB Group PLC 1,653,178
------------
23,159,421
------------
DIVERSIFIED FINANCIALS 5.3%
461,000 JP Daiwa Securities Group Inc. 6,100,102
275,810 UK HSBC Holdings PLC 3,157,914
196,000 JP Nikko Securities Co. Ltd. 1,945,152
250,000 JP Nomura Securities Co. Ltd. 6,131,765
------------
17,334,933
------------
INSURANCE 7.1%
15,600 DE Allianz AG * 5,627,185
31,500 FR Axa S.A. 4,982,266
15,200 DE Muenchener
Rueckversicherungs-Gesellschaft
AG 4,793,712
158,611 UK Prudential Corp. PLC 2,324,372
114,900 SE Skandia Forsakrings AB * 3,052,393
4,300 CH Zurich Allied AG * 2,131,403
------------
22,911,331
------------
HEALTH CARE SECTOR 4.8%
PHARMACEUTICALS &
BIOTECHNOLOGY 4.8%
144,400 UK Celltech Group PLC (ADR) 2,798,170
262,200 UK Glaxo Wellcome PLC 7,649,118
6,400 NL QIAGEN N.V. * 1,116,564
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 48
<PAGE>
Dresdner RCM International Growth Equity Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
---------------------------------------------------------------------------------
EQUITY INVESTMENTS (CONTINUED)
PHARMACEUTICALS &
BIOTECHNOLOGY (CONTINUED)
PHARMACEUTICALS & BIOTECHNOLOGY
4.8%:(Continued)
4,100 NL QIAGEN N.V. (ADR) * $ 713,400
47,900 JP Takeda Chemical Industries
Ltd. 3,151,033
------------
15,428,285
------------
MATERIALS SECTOR 1.2%
MATERIALS 1.2%
769,000 JP Kawasaki Steel Corp. 1,104,786
57,000 JP Shin Etsu Chemical Co. Ltd. 2,898,446
------------
4,003,232
------------
TECHNOLOGY SECTOR 28.7%
COMMUNICATIONS EQUIPMENT 14.1%
3,000 DE ADVA AG Optical Networking * 1,711,081
61,000 FR Alcatel 4,017,159
162,000 JP Furukawa Electric Co. Ltd. 3,391,540
30,600 JP Matsushita Communications
Industrial Co. 3,580,554
287,200 FI Nokia Oyj (ADR) 14,715,146
105,000 CA Nortel Networks Corp. 7,166,250
571,900 SE Telefonaktiebolaget LM
Ericsson AB (B Shares) 11,378,369
------------
45,960,099
------------
COMPUTERS & PERIPHERALS 1.6%
154,000 JP Fujitsu Ltd. 5,341,890
INTERNET SOFTWARE & SERVICES 1.7%
19,800 JP SOFTBANK Corp. 2,694,858
7 JP Yahoo (Japan) Inc. * 2,782,096
------------
5,476,954
------------
INFORMATION TECHNOLOGY
CONSULTING & SERVICES 1.2%
17,700 IS Check Point Software
Technologies Ltd. * 3,747,975
SEMICONDUCTORS & INSTRUMENTS 9.8%
90,700 NL ASM Lithography Holding N.V.
(N.Y. Registered Shares) * 4,002,137
29,200 DE Epcos AG * 2,924,758
21,900 JP Funai Electric Co. Ltd. 3,506,434
242,000 JP NEC Corp. 7,616,716
13,600 KR Samsung Electronics 4,500,855
144,000 FR STMicroelectronics N.V. (N.Y.
Registered Shares) 9,243,000
------------
31,793,900
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 49
<PAGE>
Dresdner RCM International Growth Equity Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
---------------------------------------------------------------------------------
EQUITY INVESTMENTS (CONTINUED)
SOFTWARE 0.3%
7,500 UK Autonomy Corp. PLC * $ 922,500
TELECOMMUNICATION SERVICES SECTOR 16.4%
TELECOMMUNICATION SERVICES 16.4%
217,171 UK British Telecom PLC 2,807,739
838,000 CI China Telecom (Hong Kong) Ltd.
* 7,390,924
49,800 UK COLT Telecom Group PLC * 1,658,628
68,100 BR Embratel Participacoes S.A.
(ADR) 1,608,863
19,900 UK Energis PLC 746,537
52,100 KR Korea Telecom Corp. (ADR) 2,520,338
40,000 NL KPN N.V. 1,796,396
314 JP NTT DoCoMo Inc. 8,517,648
5,300 KR SK Telecom Co. Ltd. 1,734,996
10,000 KR SK Telecom Co. Ltd. (ADR) 3,273,577
31,500 FI Sonera Oyj 1,441,838
269,200 ES Telefonica S.A. * 5,806,173
93,300 MX Telefonos de Mexico S.A. (ADR) 5,329,762
2,121,899 UK Vodafone AirTouch PLC 8,576,949
------------
53,210,368
------------
UTILITIES SECTOR 1.5%
UTILITIES 1.5%
398,500 UK Centrica PLC 1,330,252
40,900 FR Vivendi S.A. 3,624,621
------------
4,954,873
------------
TOTAL EQUITY INVESTMENTS (COST $279,131,511) 95.6% 310,512,466
------------
SHORT-TERM INVESTMENTS
MONEY MARKET FUNDS 3.5%
5,276,268 US SSgA Money Market Fund 5,276,268
6,041,378 US SSgA U.S. Government Money
Market Fund 6,041,378
------------
TOTAL SHORT-TERM INVESTMENTS (COST $11,317,646) 3.5% 11,317,646
------------
TOTAL INVESTMENTS (COST $290,449,157) ** 99.1% 321,830,112
OTHER ASSETS LESS LIABILITIES 0.9% 2,917,975
------------
NET ASSETS 100.0% $324,748,087
============
</TABLE>
--------------------------------
* Non-income producing security
ADR American Depositary Receipt
The accompanying notes are an integral part of the financial statements.
Page 50
<PAGE>
Dresdner RCM International Growth Equity Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
Tax Information:
** For Federal income tax purposes, cost is $292,811,547 and gross aggregate
unrealized appreciation (depreciation) for all securities is as follows:
<TABLE>
<S> <C>
Unrealized appreciation $42,132,591
Unrealized depreciation (13,114,026)
-----------
Net unrealized appreciation $29,018,565
===========
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
The Fund's investments in securities at June 30, 2000 categorized by country:
<TABLE>
<CAPTION>
% OF NET ASSETS
-------------------------------
COUNTRY SHORT-TERM
COUNTRY CODE EQUITIES AND OTHER TOTAL
<S> <C> <C> <C> <C>
------------------------------------------------------------------------
Australia AU 0.5% 0.5%
Brazil BR 0.5% 0.5%
Canada CA 2.2% 2.2%
China CI 2.3% 2.3%
Finland FI 5.0% 5.0%
France FR 15.1% 15.1%
Germany DE 11.4% 11.4%
Hong Kong HK 0.7% 0.7%
Israel IS 1.2% 1.2%
Italy IT 1.3% 1.3%
Japan JP 22.4% 22.4%
Korea KR 3.7% 3.7%
Mexico MX 2.1% 2.1%
Netherlands NL 2.8% 2.8%
Spain ES 3.3% 3.3%
Sweden SE 4.4% 4.4%
Switzerland CH 1.6% 1.6%
United Kingdom UK 15.1% 15.1%
United States US 0.0% 4.4% 4.4%
------ ------ -----
Total 95.6% 4.4% 100.0%
====== ====== =====
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 51
<PAGE>
Dresdner RCM Emerging Markets Fund
Management's Performance Review
Following its 92% total return for 1999, the Dresdner RCM Emerging
Markets Fund continued to outperform its benchmarks for the first half of 2000.
However, returns for both were negative halfway through the calendar year 2000,
as emerging markets continued to track the turbulent performance of the Nasdaq.
For the six month period ended June 30, 2000, the Fund produced total returns of
-3.62% and -3.74% for the Class I and Class N shares, respectively. In
comparison, the Morgan Stanley Capital International Emerging Markets Free Index
returned -7.98% while the Standard & Poor's (formerly International Finance
Corporation) Emerging Markets Index returned -9.22%.
MARKET REVIEW
Economic growth began to slow in the U.S., Europe, Latin America and
Japan during the second quarter of 2000. Latin American gross domestic product
(GDP) growth was below expectations, except in Mexico, which benefited from high
exports to a strong U.S. economy, as capital inflows were very tentative. Japan
continued to advance very modestly, although the rest of Asia continued to show
strong growth from exports into the U.S. market.
Slower economic growth translated into slower top-line growth for most
companies, particularly economically cyclical stocks such as basic materials and
chemicals. Meanwhile, rising interest rates in the U.S. and Europe negatively
impacted bank stocks.
On the political front, the leadership change in Russia, from Boris
Yeltsin to Vladimir Putin, caused the Russian market to rally, although it is
still unclear at this time whether the new Russian leader is a friend or foe of
capitalism. South and North Korea made friendly overtures to one another, but
any unification could be very taxing on a fragile economic system.
Emerging markets continue to be very highly correlated with the Nasdaq,
which began to correct in late March. As long as U.S. technology stocks falter,
inflows into emerging markets are likely to remain subdued as investors'
appetite for risk moderates. However, longer term trends such as the impact of
technology, the privatization of government sectors and the globalization of
finance remain positive influences.
FACTORS AFFECTING PERFORMANCE
The key to outperforming the benchmarks during the first half of 2000
was the ability to "dodge bullets," or avoid companies that missed their profit
expectations. For example, Dresdner RCM Global Investors LLC ("Dresdner RCM"),
the Fund's investment manager, was underweight in bank stocks, not just because
of rising interest rates, but because banks are at the mercy of capital flows in
being able to participate in syndicated bank loans from the developed markets.
As a result, strong-performing banks in Mexico and other Latin American
countries were sold at the end of the first quarter, while banks that had fallen
in value were selectively added to the portfolio during the second quarter. In a
slow-growth environment where unit profit growth would be difficult, a decision
was made to avoid companies whose only profit gains would come from increased
sales. That ruled out a number of companies such as consumer staples, dependent
on accelerating consumer spending. Instead, the focus remained on companies that
can continue to generate substantial cash flow, without having to produce heroic
gains in revenues and market share.
Management also avoided a number of Internet stocks, as well as smaller
country markets, such as Colombia, Peru, Venezuela, Indonesia, Thailand, Greece
and Turkey. Once again, investors in emerging market Internet companies mimicked
the behavior of U.S. investors who fled money-losing "dot-coms." It also appears
that emerging market investors increasingly preferred larger markets and larger
cap stocks due to their liquidity advantages.
To be sure, the Fund continued to benefit from its technology holdings,
which generally posted positive first-half performance, despite a negative
second quarter. The Fund's largest holding, Samsung Electronics, viewed as a
safe haven by portfolio managers, advanced nearly 40% during the period while
the Korean stock market fell 4.22%, relative to US dollars. The first half
continued to be strong for Infosys Technologies, a leading software company in
India, and Israeli-based Check Point Software Technologies, a global leader in
Internet security. Dresdner RCM's Grassroots-SM- Research division
Page 52
<PAGE>
Dresdner RCM Emerging Markets Fund
Management's Performance Review
surveyed information technology managers and concluded that Check Point was
gaining market share, providing confidence to add to the position when the stock
fell sharply in April 2000. In addition, Asustek Computer, a Taiwanese
manufacturer, and Taiwan Semiconductor benefited the portfolio.
Another positive theme was cellular communications and infrastructure.
The Fund's holding in China Telecom was confirmed by Dresdner RCM's
Grassroots-SM- Research, which surveyed Chinese provinces and found that China
Telecom had an edge in the marketplace over its chief rival.
Outside of technology and telecom, success stories included Companhia
Cervejaria Brahma, a Brazilian beverage company that is now the largest beer
manufacturer in Latin America, and Hindustan Lever, the leading provider of
health and beauty products in India, where personal beauty has been a national
focus since the crowning of an Indian Miss Universe last year.
The Fund was negatively impacted by its holdings in commodity companies
such as South Africa-based Sappi, the largest producer of glossy paper used in
magazines throughout Europe. Paper pricing was not as strong as expected, and
the stock performance was disappointing. Another example, Norilsk Nickel, a
Russian-based producer of platinum and other metals, generated three times the
operating profit of the previous year, but was under pressure due to the
political uncertainties in the former Soviet Union.
OUTLOOK
Dresdner RCM believes that the performance of emerging markets will
likely be volatile over the next few months, as concerns over inflation, rising
interest rates, and a soft economic landing in the United States continue to
loom on the horizon. The environment for investment managers is expected to
remain difficult, as the world seems to be curtailing capital flows towards
these markets. Nevertheless, the emergence of world-class companies with strong
management and high-quality products or technology is transcending the emerging
markets asset class. These companies are now being included in global and
MSCI-EAFE mandated portfolios. Although Dresdner RCM expects continued moderate
economic growth, the Fund's strategy will continue to focus on high-quality,
highly liquid stocks of companies with strong earnings that are likely to
prevail regardless of the direction of the global economy.
Page 53
<PAGE>
Dresdner RCM Emerging Markets Fund
Total Return Index Comparison(c)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
$10,000 Investment (12/30/97 - 06/30/00)(d)(e)(g)
<TABLE>
<CAPTION>
MSCI -EMF S&P EMERGING
CLASS I SHARES 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 $10,529 $10,747
5/98 $9,920 $9,087 $9,406
6/98 $9,170 $8,134 $8,441
7/98 $9,590 $8,391 $8,778
8/98 $7,660 $5,965 $6,311
9/98 $7,810 $6,344 $6,614
10/98 $8,660 $7,012 $7,374
11/98 $8,910 $7,595 $7,928
12/98 $9,151 $7,485 $7,810
1/99 $8,879 $7,364 $7,630
2/99 $8,839 $7,436 $7,765
3/99 $9,696 $8,416 $8,661
4/99 $10,715 $9,457 $9,843
5/99 $10,493 $9,402 $9,667
6/99 $11,644 $10,469 $10,719
7/99 $11,472 $10,184 $10,564
8/99 $11,855 $10,277 $10,680
9/99 $11,482 $9,930 $10,383
10/99 $12,098 $10,141 $10,563
11/99 $14,378 $11,051 $11,513
12/99 $17,562 $12,457 $13,056
1/00 $17,083 $12,531 $13,053
2/00 $20,050 $12,697 $13,040
3/00 $19,186 $12,759 $13,230
4/00 $16,635 $11,549 $11,861
5/00 $15,959 $11,072 $11,526
6/00 $16,927 $11,462 $11,852
</TABLE>
PERFORMANCE(c)
JUNE 30, 2000
<TABLE>
<CAPTION>
CUMULATIVE
SINCE SINCE
EMERGING MARKETS FUND YTD(G) 1 YEAR INCEPTION INCEPTION
<S> <C> <C> <C> <C>
Class I
Average Annual Total Return(d) -3.62% 45.38% 23.41% 69.27%
Class N
Average Annual Total
Return(e)(f) -3.74% 45.06% 23.11% 68.25%
MSCI EMF Index
Average Annual Total Return(a) -7.98% 9.48% 5.60% 14.62%
S&P Emerging Markets Index
Average Annual Total Return(b) -9.22% 10.56% 7.02% 18.52%
</TABLE>
The data above represents past performance of the Fund and may not
indicate 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 ("EMF") 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 $800 million.
(b) The S&P Emerging Markets Index (formerly IFC Emerging Markets Index)
represents the IFC Investable ("IFCI") regional total return composite. The
term investable indicates that the stocks and the weights in the IFCI Index
represent the amount that foreign institutional investors might buy by
virtue of the applicable 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) The Class I shares began operations on December 30, 1997.
(e) Class N shares were first issued on March 10, 1999, and pay Rule 12b-1
fees. Class N returns through March 10, 1999 are based on Class I returns,
and reflect the deduction of Rule 12b-1 fees applicable to Class N Shares.
(f) The value of a $10,000 investment for Class N is $16,825 for the period
from December 30, 1997 to June 30, 2000. The performance of the Class N
shares is lower than Class I shares due to the effects of 12b-1 fees.
(g) Unannualized.
Page 54
<PAGE>
Dresdner RCM Emerging Markets Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
----------------------------------------------------------------------------------
EQUITY INVESTMENTS
COMMERCIAL GOODS & SERVICES SECTOR 1.8%
CAPITAL GOODS 1.8%
29,000 MX Alfa S.A. de C.V. Class A $ 66,287
7,000 MX Tubos de Acero de Mexico S.A.
(Sponsored ADR) 97,125
----------
163,412
----------
CONSUMER DISCRETIONARY SECTOR 5.4%
HOTELS, RESTAURANTS & LEISURE 0.4%
2,000 HU Danubius Hotel and Spa Rt. 38,705
MEDIA 2.6%
1,500 MX Grupo Televisa S.A. (GDR) 103,406
9,500 SA Johnnic Holdings Ltd. 130,310
----------
233,716
----------
RETAILING 2.4%
79,000 HK Giordano International Ltd. 120,091
39,500 MX Wal-Mart de Mexico S.A. de
C.V. 92,696
----------
212,787
----------
CONSUMER STAPLES SECTOR 7.0%
FOOD BEVERAGE & TOBACCO 3.3%
11,000 BR Companhia Cervejari Brahma
(Sponsored ADR) 187,000
2,400 MX Fomento Economico Mexicano,
S.A. de C.V. (ADR) 103,350
----------
290,350
----------
FOOD & DRUG RETAILING 1.6%
1,400 BR Companhia Brasileira de
Distribuicao Grupo Pao de
Acucar 44,975
20,000 HK Li & Fung Ltd. 100,060
----------
145,035
----------
HOUSEHOLD & PERSONAL PRODUCTS 2.1%
3,000 IN Hindustan Lever Ltd. (Demat
Shares) 190,476
ENERGY SECTOR 3.9%
ENERGY 3.9%
7,200 RU Lukoil Holding (Sponsored ADR)
Pfd. 149,400
6,520 BR Petroleo Brasiliers S.A.
(Petrobras) 196,973
----------
346,373
----------
FINANCIALS SECTOR 11.2%
BANKS 10.8%
1,600 GR Alpha Credit Bank 63,375
45,500 MY Commerce Asset Holdings Berhad 131,711
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 55
<PAGE>
Dresdner RCM Emerging Markets Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
----------------------------------------------------------------------------------
EQUITY INVESTMENTS (CONTINUED)
BANKS (CONTINUED)
8,000 IN ICICI Bank Ltd. $ 37,607
21,000 IN ICICI Bank Ltd. (Demat Shares) 99,400
3,600 IN ICICI Bank Ltd. (Sponsored
ADR) 52,200
35,800 MY Malayan Banking Berhad 145,084
4,000 ZA Nedcor Ltd. 84,012
11,000 KR Shinhan Bank 103,585
4,830 BR Unibanco (Sponsored GDR) 138,863
9,897 TR Yapi Ve Kredi Bankasi (GDR)* 109,362
----------
965,199
----------
DIVERSIFIED FINANCIALS 0.4%
11,300 LT Haci Omer Sabanci Holding A.S.
(ADR) 33,053
HEALTHCARE SECTOR 1.1%
PHARMACEUTICALS &
BIOTECHNOLOGY 1.1%
1,600 IN Dr Reddy's Laboratories Ltd. 46,770
1,650 IN Dr Reddy's Laboratories Ltd.
(Demat Shares) 48,232
----------
95,002
----------
MATERIALS SECTOR 7.1%
MATERIALS 7.1%
4,000 BR Companhia Vale do Rio Doce
Pfd. 112,860
3,670 SA Impala Platinum Holdings Ltd. 136,515
30,000 MX Kimberly-Clark de Mexico S.A. 85,336
210 IN Madras Cements Ltd. (Demat
Shares) 18,893
9,800 RU Norilisk Nickel 71,785
3,300 HU Pannonplast Rt. 71,709
675 KR Pohang Iron & Steel Co., Ltd. 57,268
6,000 HU Tiszai Vegyi Kombinat Rt. 83,049
----------
637,415
----------
TECHNOLOGY SECTOR 31.3%
COMMUNICATIONS EQUIPMENT 2.0%
1,890 US Comverse Technology Inc. 175,770
COMPUTERS & PERIPHERALS 3.1%
1,360 TW Asustek Computer Inc. 11,216
11,849 TW Asustek Computer Inc. (GDR) 108,715
1,230 US DSP Group, Inc. 68,880
90,000 HK Legend Holdings Ltd. 87,168
----------
275,979
----------
INTERNET SOFTWARE & SERVICES 0.3%
2,500 TW Gigamedia Ltd. 30,313
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 56
<PAGE>
Dresdner RCM Emerging Markets Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
----------------------------------------------------------------------------------
EQUITY INVESTMENTS (CONTINUED)
INFORMATION TECHNOLOGY
CONSULTING & SERVICES 9.2%
1,440 IS Check Point Software Tech $ 304,920
1,400 PO Comarch S.A. 64,937
500 IN Infosys Technologies Ltd. 93,109
1,410 IN Infosys Technologies Ltd.
(ADR) 249,923
1,700 IN Satyam Computer Services Ltd. 113,490
----------
826,379
----------
SEMICONDUCTORS & INSTRUMENTS 16.7%
25,000 TW Compeq Manufacturing Co., Ltd. 153,409
1,445 IS Orbotech Ltd. 134,204
1,270 KR Samsung Electronics Co. 420,286
25,600 TW Taiwan Semiconductor
Manufacturing 121,351
4,285 TW Taiwan Semiconductor
Manufacturing (ADR) 166,044
117,600 CI United Microelectronics Corp.
Ltd. 326,455
11,000 TW Via Technologies Inc. 169,643
----------
1,491,392
----------
TELECOMMUNICATIONS SERVICES SECTOR 22.1%
TELECOMMUNICATIONS SERVICES 22.1%
1,200 CI China Telecom (Hong Kong) Ltd. 213,375
450 KR Dacom Corp. 65,178
8,625 BR Embratel Participacoes S.A.
(ADR) 203,766
9,700 GR Hellenic Telecommunications
Organization S.A. (ADR) 118,219
600 KR Korea Telecom Corp. 52,842
3,050 HU Magyar Tavkozlesi Rt.
(Sponsored ADR) 105,034
8,000 MX Mobile Telesystems (Sponsored
ADR) 189,000
210 KR SK Telecom Co., Ltd. 68,743
2,500 KR SK Telecom Co., Ltd.
(Sponsored ADR) 90,781
7,500 BR Tele Centro Oeste Celular
Participacoes S.A. 90,000
4,685 BR Tele Norte Leste Participacoes
S.A. (ADR) 110,683
1,400 BR Telecommunicacoes Brasileiras
S.A. (ADR) 135,975
6,600 MX Telefonos de Mexico (ADR) 377,025
12,000 PO Telekomunikacja Polska S.A. 84,592
2,500 IN Videsh Sanchar Nigam 67,704
----------
1,972,917
----------
UTILITIES SECTOR 2.6%
UTILITIES 2.6%
1,600 KR Korea Electric Power Corp. 49,649
10,000 KR Korea Electric Power Corp.
(ADR) 184,375
----------
234,024
----------
TOTAL EQUITY INVESTMENTS (COST $7,804,702)** 93.5% 8,358,297
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 57
<PAGE>
Dresdner RCM Emerging Markets Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
FACE % OF MARKET VALUE
AMOUNT COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
----------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS
TIME DEPOSITS 8.7%
$ 773,957 US Brown Brothers Harriman Grand
Cayman Time Deposit 5.50%
maturing 07/03/00 $ 773,957
----------
773,957
TOTAL SHORT-TERM INVESTMENTS (COST $773,957)
----------
TOTAL INVESTMENTS (COST $8,578,659) ** 102.2% 9,132,254
OTHER ASSETS LESS LIABILITIES (2.2)% (194,821)
----------
NET ASSETS 100.0% $8,937,433
==========
</TABLE>
--------------------------------
* Non-income producing security.
ADR American Depositary Receipt
GDR Global Depositary Receipt
Pfd. Preferred Stock
Tax information:
** For Federal income tax purposes, cost is $8,583,823 and the gross
aggregate unrealized appreciation (depreciation) for all securities is as
follows:
<TABLE>
<CAPTION>
<S> <C>
Unrealized appreciation $1,018,357
Unrealized depreciation (469,926)
----------
Net unrealized appreciation $ 548,431
==========
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
The Fund's investments in securities at June 30, 2000, categorized by country:
<TABLE>
<CAPTION>
% OF NET ASSETS
-------------------------------
COUNTRY SHORT-TERM
COUNTRY CODE EQUITIES AND OTHER TOTAL
<S> <C> <C> <C> <C>
------------------------------------------------------------------------
Brazil BR 13.7% 13.7%
China CI 6.0% 6.0%
Greece GR 2.0% 2.0%
Hong Kong HK 3.4% 3.4%
Hungary HU 3.3% 3.3%
India IN 11.4% 11.4%
Israel IS 4.9% 4.9%
Korea KR 12.2% 12.2%
Lithuania LT 0.4% 0.4%
Malaysia MY 3.1% 3.1%
Mexico MX 12.5% 12.5%
Poland PO 1.7% 1.7%
Russia RU 2.5% 2.5%
South Africa SA 4.0% 4.0%
Taiwan TW 8.5% 8.5%
Turkey TR 1.2% 1.2%
United States US 2.7% 6.5% 9.2%
------ ------ -----
Total 93.5% 6.5% 100.0%
====== ====== =====
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 58
<PAGE>
Dresdner RCM Europe Fund
Management's Performance Review
Strong corporate profit growth and a halt in the euro's decline created
a generally positive backdrop for the Dresdner RCM Europe Fund during the first
half of 2000, despite the global sell-off in technology during March and April.
For the six month period ended June 30, 2000, the Fund produced total returns of
1.61% and 1.55% for the Class I and Class N shares, respectively. That compares
favorably to the Fund's primary benchmark, the Morgan Stanley Capital
International Europe Index, which returned -2.95%.
MARKET REVIEW
Fundamentally, Europe's economies and companies continued to produce
excellent results during the first half of 2000. Economic growth was about 3%,
while corporate profit growth was in the 15-18% range, much of it export-driven.
The European Central Bank raised interest rates from 3% to 3.5%, which
immediately stemmed the nearly 18-month slide in the euro. Meanwhile, inflation
remained below 3%.
Still, there were short-term dislocations not dissimilar to the
experience in the United States. The bear market in technology,
telecommunications, and media that afflicted the U.S. last March was even more
pronounced in Europe.
FACTORS AFFECTING PERFORMANCE
Despite the turbulence in technology and telecommunications, Dresdner
RCM Global Investors LLC ("Dresdner RCM"), the investment manager of the Fund,
continued to emphasize these areas during the past six month period. Indeed,
these two groups comprised about 46% of the Fund's assets as of June 30, 2000,
compared to 27% for the benchmark. Because Dresdner RCM compares stocks in these
sectors relative to their U.S. counterparts, the European market did not seem
particularly overvalued, which is one reason why these stocks were not sold
during the market turbulence.
Despite the difficulty generally experienced in these two sectors, the
Fund's investments in these areas performed well. This is partly because
approximately 12% of the portfolio was invested in two stocks that offered
sturdy performance: Finland's Nokia, the largest provider of wireless handsets;
and Ericsson, a leading provider of wireless infrastructure for the telecom
sector. Nokia, with unsurpassed technological and market leadership, continues
to perform well in terms of revenue growth and profit margin expansion.
Ericsson's business is expected to boom as new generations of technology and
data applications become available to cellular telephones. Indeed, Europe is far
ahead of the U.S. in the launch of 'third-generation' cellular phones that will
allow data as well as voice transmission.
Other significant portfolio weightings include semiconductor stocks such
as STMicroelectronics, which Dresdner RCM believes is Europe's highest quality
semiconductor company, with strong revenue growth and excellent profit margins.
Other strong performers within technology included Aixtron, a German company
that manufactures the machines that fabricate compound semi-conductors. This
sector has experienced significant growth rates because the majority of the end
product benefits the optical components industry. Another strong performer was
Bookham Technology, which designs, manufacturers and markets products for fiber-
optic telecommunications networks.
The Fund avoided telecommunications operators such as Deutsche Telecom,
France Telecom, and British Telecom. The focus of these companies has been local
and long-distance fixed-line service. In an effort to remain competitive, these
companies are now spending billions of dollars to upgrade their networks to
enable high-speed internet access and to be ready for data transmission.
The European economy continues to be driven by exports and capital goods
rather than consumer spending. Although there were pockets of consumer strength
(for example, in France), the portfolio was underweighted in the consumer area.
One exception was in luxury goods, where companies could take advantage of
manufacturing costs in euros and revenues in dollars, yen or other strong
currency. As a result, the portfolio added Italian-based Bulgari and
French-based Louis Vuitton Moet Hennessy, two luxury goods producers.
Generally, the Fund exposure was low in financial services, reflecting
the rising interest rate environment. A notable exception was the portfolio's
holding in Bipop Carire, an innovative Italian financial institution that
recently acquired a German Internet bank. The company
Page 59
<PAGE>
Dresdner RCM Europe Fund
Management's Performance Review
has successfully made the transition from a regional bank to a pan-European
financial services organization, capitalizing on new markets such as financial
planning for wealthy individuals.
Dresdner RCM's global research capability continued to uncover new
investment opportunities. It also helped the Fund's managers avoid problems that
would plague certain stocks. For example, Dresdner RCM's Grassroots(SM) Research
alerted the Fund's portfolio managers to the problems that Roche Holdings, a
large pharmaceutical company, was having with its anti-obesity drug. By
interviewing physicians and patients, Dresdner RCM determined that there
appeared to be a number of issues with the drug: medical insurance would not
cover the cost for the drug; there was a high drop-off rate since there were no
immediate results; and there appeared to be significant side effects. As a
result, the stock was sold before the company announced that they were having
difficulties with the product.
OUTLOOK
Although corporate profits in Europe are still likely to grow at a
double-digit rate in 2000-2001, there is some indication that profit growth may
slow due to the rising interest-rate environment and strengthening euro. When
the European Central Bank raised short-term rates 50 basis points earlier this
summer, the euro, which had been trading at 90 U.S. cents, immediately
strengthened to 92-95 cents. A stronger euro reflects greater confidence in the
European economy. Dresdner RCM will continue to evaluate and monitor the
strength of the euro, as a strong euro has the potential to weaken exports.
The longer-term outlook for Europe remains positive as interest rates
and inflation still remain low, economic growth remains steady and the interest
among individual investors in the stock market continues to spread.
Page 60
<PAGE>
Dresdner RCM Europe Fund
Total Return Index Comparison(d)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
$10,000 Investment (4/5/90 - 06/30/00)(a)(e)(g)
<TABLE>
<CAPTION>
CLASS N SHARES MSCI-EUROPE INDEX(B) DAX 100 INDEX(C)
<S> <C> <C> <C>
4/90 $10,000 $10,000 $10,000
4/90 $9,150 $9,738 $9,346
5/90 $9,117 $10,535 $9,432
6/90 $9,400 $10,909 $9,862
7/90 $9,708 $11,372 $10,643
8/90 $8,617 $10,249 $9,117
9/90 $7,358 $9,046 $7,545
10/90 $8,250 $9,814 $8,450
11/90 $8,283 $9,917 $8,575
12/90 $8,000 $9,778 $8,318
1/91 $7,898 $10,111 $8,425
2/91 $8,289 $11,000 $8,858
3/91 $7,319 $10,266 $7,848
4/91 $7,600 $10,163 $8,194
5/91 $7,847 $10,466 $8,514
6/91 $7,311 $9,591 $7,813
7/91 $7,591 $10,260 $8,075
8/91 $7,694 $10,451 $8,216
9/91 $7,770 $10,769 $8,390
10/91 $7,481 $10,547 $8,239
11/91 $7,387 $10,303 $8,293
12/91 $7,739 $11,113 $8,872
1/92 $7,835 $11,114 $8,965
2/92 $8,071 $11,162 $9,123
3/92 $7,879 $10,776 $8,953
4/92 $7,853 $11,375 $8,974
5/92 $8,263 $12,026 $9,534
6/92 $8,202 $11,806 $9,712
7/92 $7,792 $11,390 $9,259
8/92 $7,818 $11,358 $9,266
9/92 $7,346 $11,175 $8,761
10/92 $6,883 $10,399 $8,171
11/92 $6,735 $10,398 $8,146
12/92 $6,602 $10,642 $7,980
1/93 $6,806 $10,664 $8,163
2/93 $7,134 $10,790 $8,580
3/93 $7,293 $11,349 $8,829
4/93 $7,249 $11,603 $8,691
5/93 $7,320 $11,732 $8,720
6/93 $6,992 $11,564 $8,369
7/93 $7,329 $11,607 $8,746
8/93 $8,002 $12,629 $9,740
9/93 $8,091 $12,594 $9,824
10/93 $8,490 $13,123 $10,290
11/93 $8,259 $12,843 $10,096
12/93 $8,792 $13,812 $10,880
1/94 $8,559 $14,519 $10,598
2/94 $8,541 $14,009 $10,397
3/94 $8,775 $13,617 $10,768
4/94 $9,142 $14,185 $11,477
5/94 $8,730 $13,586 $10,922
6/94 $8,541 $13,448 $10,871
7/94 $8,792 $14,156 $11,458
8/94 $9,026 $14,609 $11,854
9/94 $8,299 $14,035 $11,103
10/94 $8,550 $14,651 $11,682
11/94 $8,182 $14,095 $11,082
12/94 $8,364 $14,179 $11,508
1/95 $8,064 $14,073 $11,191
2/95 $8,500 $14,397 $12,166
3/95 $8,073 $15,070 $11,812
4/95 $8,300 $15,559 $12,295
5/95 $8,527 $15,882 $12,628
6/95 $8,664 $16,038 $12,958
7/95 $9,009 $16,880 $13,702
8/95 $8,500 $16,233 $12,947
9/95 $8,482 $16,730 $13,049
10/95 $8,436 $16,656 $12,974
11/95 $8,273 $16,781 $12,902
12/95 $8,364 $17,318 $13,188
1/96 $8,682 $17,438 $13,838
2/96 $8,836 $17,762 $13,942
3/96 $8,682 $17,981 $13,913
4/96 $8,355 $18,117 $13,414
5/96 $8,618 $18,264 $13,784
6/96 $8,964 $18,470 $14,119
7/96 $8,846 $18,245 $14,090
8/96 $9,073 $18,792 $14,367
9/96 $9,136 $19,195 $14,513
10/96 $9,164 $19,646 $14,611
11/96 $9,591 $20,648 $15,204
12/96 $9,709 $21,054 $15,299
1/97 $9,600 $21,118 $15,334
2/97 $9,883 $21,403 $15,951
3/97 $10,493 $22,100 $16,918
4/97 $10,210 $21,997 $16,409
5/97 $10,584 $22,942 $17,202
6/97 $11,149 $24,096 $17,926
7/97 $12,278 $25,231 $19,555
8/97 $11,285 $23,796 $17,670
9/97 $12,214 $26,109 $19,204
10/97 $11,522 $24,832 $17,692
11/97 $11,786 $25,219 $18,150
12/97 $12,182 $26,147 $19,048
1/98 $12,724 $27,243 $19,476
2/98 $13,430 $29,379 $20,801
3/98 $14,746 $31,479 $22,112
4/98 $15,558 $32,096 $22,846
5/98 $16,250 $32,754 $24,902
6/98 $17,268 $33,121 $25,822
7/98 $18,775 $33,784 $26,116
8/98 $15,346 $29,540 $21,849
9/98 $14,608 $28,368 $21,326
10/98 $15,676 $30,645 $22,438
11/98 $16,386 $32,285 $23,431
12/98 $16,738 $33,706 $23,515
1/99 $17,253 $33,497 $23,442
2/99 $16,088 $32,656 $21,825
3/99 $15,611 $33,022 $21,288
4/99 $15,973 $34,012 $22,781
5/99 $15,463 $32,386 $21,302
6/99 $16,138 $32,940 $22,233
7/99 $16,342 $33,253 $22,097
8/99 $15,909 $33,599 $22,517
9/99 $15,871 $33,347 $22,214
10/99 $17,095 $34,581 $23,276
11/99 $19,950 $35,521 $23,637
12/99 $24,034 $39,170 $27,457
1/00 $24,332 $36,388 $26,169
2/00 $29,177 $38,295 $28,982
3/00 $26,538 $39,230 $28,551
4/00 $25,047 $37,507 $26,311
5/00 $23,631 $37,207 $25,987
6/00 $24,406 $38,013 $25,865
</TABLE>
PERFORMANCE(a)(d)
JUNE 30, 2000
<TABLE>
<CAPTION>
CUMULATIVE
SINCE SINCE
EUROPE FUND YTD(H) 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION INCEPTION
<S> <C> <C> <C> <C> <C> <C> <C>
Class I
Average Annual Total
Return(f)(g) 1.61% 51.32% 29.87% 23.03% 10.02% 9.12% 144.21%
Class N
Average Annual Total
Return(e) 1.55% 51.23% 29.85% 23.02% 10.01% 9.11% 144.06%
MSCI-Europe Index
Average Annual Total
Return(b) -2.95% 15.41% 16.41% 18.84% 13.30% 13.91% 280.13%
DAX 100 Index
Average Annual Total
Return(c) -5.80% 16.34% 13.00% 14.83% 9.80% 9.73% 158.65%
</TABLE>
The data above represents past performance of the Fund and may not
indicate 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) Returns through February 2, 1999 reflect the performance of the Fund as a
closed-end investment company that invested primarily in equity securities
of German companies. Returns through May 3, 1999, reflect the performance
of the Fund as a closed-end investment company. Beginning on February 9,
1999, the Fund's objective was expanded to permit investments in European
companies. On May 3, 1999 the Fund converted from a closed-end to an
open-end investment company. The expenses of the Fund as an open-end
investment company may be higher than as a closed-end investment company
due to additional fees, such as Rule 12b-1 fees. Since February 9, 1999,
when the Fund's mandate was expanded, the Fund has been comparing its
performance to the MSCI Europe Index. Before February 9, 1999, when the
Fund invested primarily in equity securities of German companies, the Fund
compared its performance to the DAX 100 Index, a German focused Index.
(b) 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.
Page 61
<PAGE>
Dresdner RCM Europe Fund
Total Return Index Comparison
(c) The DAX 100 Index is a total 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 stocks as of December 30, 1987. The
underlying stock prices are from XETRA.
(d) Returns assume reinvestment of all dividends and capital gains
distributions at net asset value.
(e) Returns through May 3, 1999 do not reflect Rule 12b-1 fees. Class N returns
through May 3, 1999 would be lower if Rule 12b-1 fees had been paid.
(f) Class I shares were first issued on March 3, 2000, which do not pay
Rule 12b-1 fees. Class I returns through March 3, 2000 are based on
Class N returns and for the period from May 3, 1999 to March 3, 2000,
reflect the deduction of Rule 12b-1 fees. Returns for periods after
March 3, 2000 do not reflect the deduction of Rule 12b-1 fees.
(g) The value of a $10,000 investment for Class I is $24,421 for the period
from April 5, 1990 to June 30, 2000. The performance of the Class N shares
is lower than Class I shares due to the effects of 12b-1 fees.
(h) Unannualized.
Page 62
<PAGE>
Dresdner RCM Europe Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
--------------------------------------------------------------------------------
EQUITY INVESTMENTS
COMMERCIAL GOODS & SERVICES SECTOR 9.0%
CAPITAL GOODS 8.3%
13,000 DE Aixtron AG $ 1,794,478
130,000 FI JOT Automation Group Oyj 871,070
16,500 DE Siemens AG 2,499,041
27,500 NO Tomra Systems ASA * 731,943
3,300 CH Unaxis Holding AG 899,042
-----------
6,795,574
-----------
COMMERCIAL SERVICES & SUPPLIES 0.7%
22,500 SE Proffice AB (B Shares) 605,423
CONSUMER DISCRETIONARY SECTOR 12.7%
CONSUMER DURABLES & APPAREL 4.1%
3,500 FR LVMH (Louis Vuitton Moet
Hennessy) 1,449,051
29,100 FR Thomson Multimedia 1,891,277
-----------
3,340,328
-----------
MEDIA 4.9%
75,000 ES Grupo Prisa S.A. * 1,747,028
29,000 PT Impresa SGPS S.A. * 319,689
8,000 UK NDS Group PLC (ADR) * 488,000
11,500 FR Societe Television Francaise 804,736
13,000 NL VNU N.V. 674,176
-----------
4,033,629
-----------
RETAILING 3.7%
70,000 IT Bulgari S.p.A. * 939,417
4,200 CH Charles Voegele Holding AG * 829,118
6,200 FR Galeries Lafayette 1,262,941
-----------
3,031,476
-----------
CONSUMER STAPLES SECTOR 2.8%
FOOD & DRUG RETAILING 1.8%
13,000 FR Carrefour Supermarche S.A. 892,255
200,000 UK Tesco PLC 622,212
-----------
1,514,467
-----------
FOOD, BEVERAGE & TOBACCO 1.0%
400 CH Nestle S.A. * 803,166
ENERGY SECTOR 5.2%
ENERGY 5.2%
43,000 NO Petroleum Geo-Services ASA
(ADR) * 733,688
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 63
<PAGE>
Dresdner RCM Europe Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
--------------------------------------------------------------------------------
EQUITY INVESTMENTS (CONTINUED)
ENERGY (CONTINUED)
144,000 UK Shell Transport & Trading Co. $ 1,202,278
15,000 FR Total Fina Elf S.A. (B Shares)
* 2,309,241
-----------
4,245,207
-----------
FINANCIAL SECTOR 12.4%
BANKS 5.6%
100,000 ES Banco Bilbao Vizcaya
Argentaria S.A. 1,500,191
195,000 IT Bipop-Carire S.p.A. * 1,540,261
19,000 DE Deutsche Bank AG * 1,569,977
-----------
4,610,429
-----------
INSURANCE 6.8%
5,750 DE Allianz AG * 2,074,123
55,500 UK Prudential Corp. PLC 813,327
73,200 SE Skandia Forsakrings AB * 1,944,606
1,400 CH Zurich Allied AG * 693,945
-----------
5,526,001
-----------
HEALTH CARE SECTOR 6.5%
PHARMACEUTICALS &
BIOTECHNOLOGY 6.5%
90,000 UK Celltech Group PLC (ADR) 1,744,012
20,000 UK Glaxo Wellcome PLC (ADR) 1,156,250
16,000 DK H Lundbeck A/S 795,667
9,500 NL QIAGEN N.V. * 1,657,400
-----------
5,353,329
-----------
TECHNOLOGY SECTOR 34.0%
COMMUNICATIONS EQUIPMENT 21.0%
2,900 DE ADVA AG Optical Networking * 1,654,045
30,300 FR Alcatel 1,995,408
21,500 UK Bookham Technology PLC * 1,251,828
32,000 FI Elcoteq Network (Class A) 703,988
124,800 FI Nokia Oyj (ADR) 6,232,200
30,000 FI Perlos Oyj 951,879
17,000 DK RTX Telecom A/S * 546,121
193,000 SE Telefonaktiebolaget (LM)
Ericsson AB (ADR) 3,860,000
-----------
17,195,469
-----------
INFORMATION TECHNOLOGY
CONSULTING & SERVICES 1.0%
87,000 SE HiQ International AB * 843,146
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 64
<PAGE>
Dresdner RCM Europe Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
--------------------------------------------------------------------------------
EQUITY INVESTMENTS (CONTINUED)
SEMICONDUCTORS & INSTRUMENTS 10.9%
44,500 NL ASM Lithography Holding N.V.
(N.Y. Registered Shares) * $ 1,963,563
6,400 DE Epcos AG * 641,043
20,200 UK International Quantum Epitaxy
PLC 1,656,400
11,100 IE Parthus Technologies PLC (ADR)
* 316,350
67,500 FR STMicroelectronics N.V. (N.Y.
Registered Shares) 4,332,656
-----------
8,910,012
-----------
SOFTWARE 1.1%
7,000 UK Autonomy Corp. PLC * 861,000
TELECOMMUNICATION SERVICES SECTOR 11.5%
TELECOMMUNICATION SERVICES 11.5%
37,300 UK COLT Telecom Group PLC * 1,242,306
29,500 UK Energis PLC 1,106,675
40,000 RU Mobile Telesystems (ADR) * 860,000
16,500 FI Sonera Oyj 755,248
78,940 ES Telefonica S.A. * 1,702,598
935,541 UK Vodafone AirTouch PLC 3,781,560
-----------
9,448,387
-----------
TOTAL EQUITY INVESTMENTS (COST $66,733,133) 94.1% 77,117,043
-----------
<CAPTION>
FACE
AMOUNT
--------
<C> <C> <S> <C> <C>
SHORT-TERM INVESTMENTS
TIME DEPOSIT 0.7%
$543,000 US State Street Cayman Islands,
Time Deposit 3.000%, maturing
07/03/00 543,000
-----------
TOTAL SHORT-TERM INVESTMENTS (COST $543,000) 0.7% 543,000
-----------
TOTAL INVESTMENTS (COST $67,276,133) ** 94.8% 77,660,043
OTHER ASSETS LESS LIABILITIES 5.2% 4,284,128
-----------
NET ASSETS 100.0% $81,944,171
===========
</TABLE>
--------------------------------
* Non-income producing security
ADR American Depositary Receipt
The accompanying notes are an integral part of the financial statements.
Page 65
<PAGE>
Dresdner RCM Europe Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
Tax Information:
** For Federal income tax purposes, cost is $67,480,448 and gross aggregate
unrealized appreciation (depreciation) for all securities is as follows:
<TABLE>
<CAPTION>
<S> <C>
Unrealized appreciation $13,535,117
Unrealized depreciation (3,355,522)
----------
Net unrealized appreciation $10,179,595
==========
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
The Fund's investments in securities at June 30, 2000 categorized by country:
<TABLE>
<CAPTION>
% OF NET ASSETS
-------------------------------
COUNTRY SHORT-TERM
COUNTRY CODE EQUITIES AND OTHER TOTAL
<S> <C> <C> <C> <C>
------------------------------------------------------------------------
Denmark DK 1.6% 1.6%
Finland FI 11.6% 11.6%
France FR 18.2% 18.2%
Germany DE 12.5% 12.5%
Ireland IE 0.4% 0.4%
Italy IT 3.0% 3.0%
Netherlands NL 5.3% 5.3%
Norway NO 1.8% 1.8%
Portugal PT 0.4% 0.4%
Russia RU 1.1% 1.1%
Spain ES 6.0% 6.0%
Sweden SE 8.9% 8.9%
Switzerland CH 3.9% 3.9%
United Kingdom UK 19.4% 19.4%
United States US 0.0% 5.9% 5.9%
------ ------ -----
Total 94.1% 5.9% 100.0%
====== ====== =====
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 66
<PAGE>
Dresdner RCM Global Equity Fund
Management's Performance Review
The combination of higher interest rates in the United States, Europe
and Japan along with a marked reversal in sector returns presented a burdensome
backdrop for Dresdner RCM's Global Equity Fund. The Fund achieved a total return
of 0.44% for the six month period ended June 30, 2000, outperforming its
benchmarks, the Morgan Stanley Capital International All Country World Free
Index (ACWI Free) which returned -2.70% and the S&P 500 Index which returned
-0.42%.
MARKET REVIEW
Market volatility continued during the second quarter driven by rising
interest rates. Heeding inflationary pressures, the U.S. Federal Reserve raised
the federal funds rate 50 basis points to 6.50%, the sixth tightening in 11
months. The European Central Bank also raised short-term interest rates, by 75
basis points. Conversely, the Bank of Japan continues to uphold a benign
interest rate environment, though it appears likely that in the near future, it
will move monetary policy from the current zero interest-rate stance.
Higher interest rates in the second quarter translated into a higher
cost of capital and higher discount rates, resulting in a compression of P/E
multiples in many new economy stocks. In contrast to the first quarter when the
new economy stocks helped the technology, telecommunications, and media sectors
soar, rising interest rates dampened valuations and investor enthusiasm,
creating a violent sector reversal. The new economy sectors underperformed
(telecom services was down 19.2%, technology was down 9.3%) versus historically
safe-haven sectors (consumer staples up 12.4%, healthcare was up 15.9%). The
telecom services sector was particularly affected by the U.K. government's
pioneering decision to auction next generation mobile phone licenses. The
auction resulted in a windfall to the government at the expense of the mobile
telecom operators. The sector rotation to old economy stocks was also reflected
in the 0.1% decline in the MCSI World Value Index versus the 6.9% decline in the
MSCI World Growth Index. As the market began to anticipate a slowing of future
interest-rate increases in the United States and Europe, the Growth Index
rebounded sharply, up 6.1% in June.
FACTORS AFFECTING PERFORMANCE
Early in 2000, Dresdner RCM Global Investors LLC ("Dresdner RCM"), the
Fund's investment manager, made the decision to overweight new economy sectors.
The Fund was specifically overweighted in technology and telecommunications
sectors that offered extraordinary growth potential, especially considering that
the valuations of many of these companies outside the United States lagged their
counterparts here. During the negative sentiment of April and May when the
market favored old economy stocks, Dresdner RCM did not alter its strategy in an
attempt to chase short-term performance and time a sector rotation. This
decision negatively impacted the Fund's performance. However, Dresdner RCM
effectively overweighted the pharmaceuticals & biotechnology industry and
underweighted the retail sector, which helped to offset the negative impact of
the sector selection.
The Fund's exposure to the Japanese brokerage companies (i.e., Daiwa and
Nikko) and to select Internet stocks (i.e. Yahoo! Japan, Softbank, Digital
Island, and Exodus Communications) weakened overall stock selection. Positions
in stocks within the communications equipment industry (i.e., SDL, Corning, and
Ciena in the U.S.) helped to mitigate much of the underperformance.
During the second quarter, Dresdner RCM increased the weight to the
consumer staples sector. This rationale was based upon Dresdner RCM's belief
that these companies should grow as they become more efficient. Furthermore, in
today's volatile market environment, the visible earnings of consumer staples
companies make them very attractive. Finally, part of the investment process is
predicated upon theme transfer -- Dresdner RCM analyzes developments in one
region or sector and examines the possibility of the theme eventually being
repeated in other sectors or regions. Regarding retailers, the experience in the
United States (particularly with Wal-Mart) is that companies are becoming
increasingly efficient at securing products. The Fund's positions include
exposure to retailers (i.e. Wal-Mart, Target, and Safeway in the U.S., Tesco in
the U.K. and Carrefour in France), as well as to producers (i.e., Femsa in
Mexico).
Page 67
<PAGE>
Dresdner RCM Global Equity Fund
Management's Performance Review
Grassroots-SM- Research continued to add value to Dresdner RCM's overall
investment approach. The department recently completed a study in which it
surveyed 35 logistics and supply-chain managers at food and household goods
producers and retailers in Europe to determine the efficiency and sophistication
of their supply-chain systems, and to evaluate relationships between the two
groups. All surveyed sources are attempting to improve warehousing and delivery
systems, thus providing supporting evidence for the consumer staples investment
theme. Regarding retailers, one German logistics manager noted, "the future is
the Wal-Mart system, where ordering runs automatically over the Internet, but
Germany is far away from this model."
OUTLOOK
Dresdner RCM maintains the conviction that the current volatile market
environment will continue, but believes that the majority of the technical
correction within New Economy stocks is over. The fundamentals of many
technology stocks have not changed and with valuations even more compelling, the
Fund's overweight to New Economy sectors remains in place.
Dresdner RCM believes that an economic soft-landing scenario, with
inflation in check and less heated growth, will be a positive environment for
growth stocks. In the current market environment, Dresdner RCM will continue to
emphasize visible earnings growth, likely guiding the Fund to overweight
positions in technology and telecom services along with selective companies in
other sectors.
Concern over the U.K.'s mobile phone auction has led Dresdner RCM to a
slightly reduced overweight position to the telecom services sector. However, as
telecom companies continue to strike alliances across borders (i.e., KPN of the
Netherlands with NTT DoCoMo of Japan, France Telecom's purchase of Orange of the
UK), the amount of competition bidding for future mobile licenses will shrink,
thereby providing some relief to these companies.
On a geographical basis, Dresdner RCM is overweighting the United States
as the pace of future interest-rate increases is expected to slow when further
signs of an economic slowdown emerge. The Fund's largest underweight position is
in Europe, where interest rates are anticipated to continue to rise with a
strengthening economy.
The characteristics of the Fund's portfolio are consistent with Dresdner
RCM's bottom-up process and rigorous investment discipline of holding quality
growth companies with outstanding valuations. Going forward, these strong,
viable companies should provide value to investors in the Global Equity Fund.
Page 68
<PAGE>
Dresdner RCM Global Equity Fund
Total Return Index Comparison(c)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
$10,000 Investment (12/30/98 - 06/30/00)(d)
<TABLE>
<CAPTION>
CLASS I SHARES S&P 500 INDEX(A) MSCI-ACWI FREE(B)
<S> <C> <C> <C>
12/98 $10,000 $10,000 $10,000
1/99 $10,300 $10,418 $10,204
2/99 $9,940 $10,094 $9,948
3/99 $10,430 $10,498 $10,396
4/99 $10,520 $10,904 $10,845
5/99 $10,160 $10,647 $10,462
6/99 $11,000 $11,238 $10,983
7/99 $11,130 $10,887 $10,938
8/99 $11,320 $10,833 $10,925
9/99 $11,380 $10,536 $10,807
10/99 $12,260 $11,203 $11,353
11/99 $13,850 $11,430 $11,707
12/99 $16,220 $12,104 $12,682
1/00 $15,759 $11,496 $11,998
2/00 $17,266 $11,279 $12,039
3/00 $17,266 $12,382 $12,830
4/00 $15,934 $12,009 $12,254
5/00 $14,919 $11,763 $11,935
6/00 $16,292 $12,053 $12,340
</TABLE>
PERFORMANCE(c)
JUNE 30, 2000
<TABLE>
<CAPTION>
CUMULATIVE
SINCE SINCE
GLOBAL EQUITY FUND YTD(E) 1 YEAR INCEPTION INCEPTION
<S> <C> <C> <C> <C>
Class I
Average Annual Total Return(d) 0.44% 48.11% 38.46% 62.92%
S&P 500 Index
Average Annual Total Return(a) -0.42% 7.25% 13.26% 20.53%
MSCI-ACWI Free
Average Annual Total Return(b) -2.70% 12.36% 15.05% 23.40%
</TABLE>
The data above represents past performance of the Fund and may not
indicate 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 Index is a capitalization-weighted index of 500
stocks designed to measure performance of the broad domestic economy
through changes in the aggregate market value of 500 stocks representing
all major industries.
(b) The MSCI All Country World Free Index ("ACWI") 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 30, 1998.
(e) Unannualized.
Page 69
<PAGE>
Dresdner RCM Global Equity Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
-----------------------------------------------------------------------------
EQUITY INVESTMENTS
COMMERCIAL GOODS & SERVICES SECTOR 10.8%
CAPITAL GOODS 7.0%
260 US General Dynamics Corp. $ 13,585
660 US General Electric Co. 34,980
150 DE Siemens AG 22,718
850 BH Tyco International Ltd. 40,269
----------
111,552
----------
COMMERCIAL SERVICES & SUPPLIES 2.1%
300 US Enron Corp. 19,350
1,100 HK Hutchison Whampoa Ltd. 13,830
----------
33,180
----------
TRANSPORTATION SERVICES 1.7%
445 US United Parcel Service Inc.
(Class B) 26,255
CONSUMER DISCRETIONARY SECTOR 6.0%
AUTOMOBILES & COMPONENTS 0.4%
2 DE Porsche AG (Non-Voting
Preferred Shares) 5,464
CONSUMER DURABLES & APPAREL 2.7%
110 US Electronic Arts Inc. * 8,023
18 FR LVMH (Louis Vuitton Moet
Hennessy) 7,452
350 US Nike Inc. (Class B) 13,935
150 JP Sony Corp. (ADR) 14,147
----------
43,557
----------
MEDIA 2.4%
100 JP Asatsu-DK Inc. 4,112
160 FR Societe Television Francaise * 11,196
550 AU The News Corp. Ltd. 7,595
115 US Time Warner Inc. 8,740
450 UK WPP Group PLC 6,574
----------
38,217
----------
RETAILING 0.5%
130 US Wal-Mart Stores Inc. 7,491
CONSUMER STAPLES SECTOR 5.6%
FOOD & DRUG RETAILING 2.8%
160 FR Carrefour Supermarche S.A. * 10,982
410 US Safeway Inc. * 18,501
170 US SYSCO Corp. 7,161
2,300 UK Tesco PLC 7,156
----------
43,800
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 70
<PAGE>
Dresdner RCM Global Equity Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
-----------------------------------------------------------------------------
EQUITY INVESTMENTS (CONTINUED)
FOOD, BEVERAGE & TOBACCO 0.6%
100 US Coca Cola Enterprises Inc. $ 1,631
200 MX Fomento Economico Mexicano
S.A. de C.V. (ADR) 8,613
----------
10,244
----------
HOUSEHOLD & PERSONAL PRODUCTS 2.2%
290 US Avon Products Inc. 12,905
135 US Colgate Palmolive Co. 8,083
410 US Gillette Co. 14,324
----------
35,312
----------
ENERGY SECTOR 2.9%
ENERGY 2.9%
90 US Exxon Mobil Corp. 7,065
1,670 UK Shell Transport & Trading Co. 13,943
165 FR Total Fina Elf S.A. (B Shares) 25,402
----------
46,410
----------
FINANCIAL SECTOR 11.1%
BANKS 3.9%
800 ES Banco Bilbao Vizcaya
Argentaria S.A. 12,002
160 US Bank of New York Inc. 7,440
120 DE Bayerische Hypo-und
Vereinsbank AG 7,783
110 FR BNP Paribas 10,629
125 US Citigroup Inc. 7,531
200 DE Deutsche Bank AG 16,526
----------
61,911
----------
DIVERSIFIED FINANCIALS 1.6%
2,004 JP Daiwa Securities Group Inc. 26,510
INSURANCE 5.6%
500 BH ACE Ltd. 14,000
40 DE Allianz AG * 14,429
67 US American International Group
Inc. 7,873
125 US Hartford Financial Services
Group Inc. 6,992
130 US Marsh & McLennan Cos. Inc. 13,577
450 UK Prudential Corp. PLC 6,595
340 SE Skandia Forsakrings AB * 9,032
300 BH XL Capital Ltd. (Class A) 16,237
----------
88,735
----------
HEALTH CARE SECTOR 11.0%
HEALTH CARE EQUIPMENT &
SUPPLIES 1.8%
230 US Waters Corp. * 28,707
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 71
<PAGE>
Dresdner RCM Global Equity Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
-----------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES
1.8%:(Continued)
EQUITY INVESTMENTS (CONTINUED)
PHARMACEUTICALS &
BIOTECHNOLOGY 9.2%
80 US Abgenix Inc. * $ 9,589
575 US Amgen Inc. * 40,394
115 US Genentech Inc. * 19,780
463 UK Glaxo Wellcome PLC 13,507
91 US Human Genome Sciences Inc. * 12,137
200 US Merck & Co. Inc. 15,325
94 US Millennium Pharmaceuticals
Inc. * 10,516
140 US PE Corp. - PE Biosystems Group 9,222
340 US Pfizer Inc. 16,320
----------
146,790
----------
MATERIALS SECTOR 0.5%
MATERIALS 0.5%
170 US E. I. du Pont de Nemours & Co. 7,437
TECHNOLOGY SECTOR 38.0%
COMMUNICATIONS EQUIPMENT 18.2%
115 US CIENA Corp. * 19,169
480 US Cisco Systems Inc. * 30,510
150 US Comverse Technology Inc. * 13,950
105 US Corning Inc. 28,337
330 US JDS Uniphase Corp. * 39,559
60 US Juniper Networks Inc. * 8,734
1,120 FI Nokia Oyj (ADR) 57,385
350 CA Nortel Networks Corp. 23,887
85 US SDL Inc. * 24,241
2,200 SE Telefonaktiebolaget LM
Ericsson AB (B Shares) 43,771
----------
289,543
----------
COMPUTERS & PERIPHERALS 6.0%
320 US Dell Computer Corp. * 15,780
240 US EMC Corp. * 18,465
185 JP Fujitsu Ltd. (ADR) 33,022
90 US Hewlett-Packard Co. 11,239
190 US Sun Microsystems Inc. * 17,278
----------
95,784
----------
INFORMATION TECHNOLOGY
CONSULTING & SERVICES 2.5%
300 US Amdocs Ltd. * 23,025
80 IS Check Point Software
Technologies Ltd. * 16,940
----------
39,965
----------
SEMICONDUCTORS & INSTRUMENTS 7.5%
350 NL ASM Lithography Holding N.V.
(N.Y. Registered Shares) * 15,444
110 DE Epcos AG * 11,018
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 72
<PAGE>
Dresdner RCM Global Equity Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
-----------------------------------------------------------------------------
EQUITY INVESTMENTS (CONTINUED)
SEMICONDUCTORS & INSTRUMENTS
(CONTINUED)
120 US Intel Corp. $ 16,043
190 JP NEC Corp. (ADR) 30,115
70 KR Samsung Electronics 23,166
360 FR STMicroelectronics N.V. (N.Y.
Registered Shares) 23,107
----------
118,893
----------
SOFTWARE 3.8%
30 UK Autonomy Corp. PLC * 3,690
235 US Microsoft Corp. * 18,800
230 US Oracle Corp. * 19,334
65 US Siebel Systems Inc. * 10,632
65 US VERITAS Software Corp. * 7,346
----------
59,802
----------
TELECOMMUNICATION SERVICES SECTOR 12.9%
TELECOMMUNICATION SERVICES 12.9%
150 US Bell Atlantic Corp. 7,622
2,000 CI China Telecom (Hong Kong) Ltd.
* 17,639
50 CI China Telecom (Hong Kong) Ltd.
(ADR) * 8,891
250 UK COLT Telecom Group PLC * 8,326
120 UK Energis PLC * 4,502
250 KR Korea Telecom Corp. (ADR) 12,094
150 NL KPN N.V. 6,736
1 JP NTT DoCoMo Inc. 27,126
370 US Qwest Communications
International Inc. * 18,384
250 US SBC Communications Inc. 10,813
155 FI Sonera Oyj 7,095
300 ES Telefonica S.A. * 6,470
300 MX Telefonos de Mexico S.A. (ADR) 17,138
4,848 UK Vodafone AirTouch PLC * 19,595
200 US VoiceStream Wireless Corp. * 23,259
200 US WorldCom Inc. * 9,175
----------
204,865
----------
UTILITIES SECTOR 0.8%
UTILITIES 0.8%
2,000 UK Centrica PLC 6,676
75 FR Vivendi S.A. * 6,647
----------
13,323
----------
TOTAL EQUITY INVESTMENTS (COST $1,250,987) 99.6% 1,583,747
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 73
<PAGE>
Dresdner RCM Global Equity Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
-----------------------------------------------------------------------------
SHORT-TERM INVESTMENTS
MONEY MARKET FUNDS 0.6%
7,545 US SSgA Money Market Fund $ 7,545
1,408 US SSgA U.S. Government Money
Market Fund 1,408
----------
TOTAL SHORT-TERM INVESTMENTS (COST $8,953) 0.6% 8,953
----------
TOTAL INVESTMENTS (COST $1,259,940) ** 100.2% 1,592,700
OTHER ASSETS LESS LIABILITIES (0.2)% (2,552)
----------
NET ASSETS 100.0% $1,590,148
==========
</TABLE>
--------------------------------
* Non-income producing security
ADR American Depositary Receipt
Tax Information:
** For Federal income tax purposes, cost is $1,263,196 and gross aggregate
unrealized appreciation (depreciation) for all securities is as follows:
<TABLE>
<S> <C>
Unrealized appreciation $379,077
Unrealized depreciation (49,573)
-------
Net unrealized appreciation $329,504
=======
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
The Fund's investments in securities at June 30, 2000 categorized by country:
<TABLE>
<CAPTION>
% OF NET ASSETS
-------------------------------
COUNTRY SHORT-TERM
COUNTRY CODE EQUITIES AND OTHER TOTAL
<S> <C> <C> <C> <C>
------------------------------------------------------------------------
Australia AU 0.5% 0.5%
Bermuda BH 4.4% 4.4%
Canada CA 1.5% 1.5%
China CI 1.7% 1.7%
Finland FI 4.1% 4.1%
France FR 6.0% 6.0%
Germany DE 4.9% 4.9%
Hong Kong HK 0.8% 0.8%
Israel IS 1.1% 1.1%
Japan JP 8.5% 8.5%
Korea KR 2.2% 2.2%
Mexico MX 1.6% 1.6%
Netherlands NL 1.4% 1.4%
Spain ES 1.2% 1.2%
Sweden SE 3.3% 3.3%
United Kingdom UK 5.7% 5.7%
United States US 50.7% 0.4% 51.1%
------ ------ -----
Total 99.6% 0.4% 100.0%
====== ====== =====
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 74
<PAGE>
Dresdner RCM Strategic Income Fund
Management's Performance Review
A shift to emerging-market debt and the elimination of domestic
high-yield bonds propelled Strategic Income Fund to outperform its benchmark
during the first half of 2000. For the six month period ended June 30, 2000, the
Dresdner RCM Strategic Income Fund returned 4.46% while the unmanaged Lehman
Brothers U.S. Universal Index returned 3.79%.
MARKET REVIEW
Due to the growing federal budget surplus, the first half of 2000 marked
the end of an era. U.S. Treasury bonds were no longer the appropriate benchmark
upon which all other bonds were measured. Indeed, despite very strong economic
growth, rising inflation, and the Federal Reserve Board's subsequent raising of
short-term interest rates to slow the economy, U.S. Treasury bonds rallied, as
the government began buying back bonds. Although the federal funds rate rose by
100 basis points during the period, 2-year U.S. Treasury bond yields rose by
just 12 basis points while the 30-year Treasury bond fell by 58 basis points. By
June 30, 2000, all U.S. Treasury bonds, regardless of maturity, yielded less
than the fed funds rate. Meanwhile, yields on corporates and mortgage-backed
bonds were relatively stable during the period.
Still, Treasury bonds were not the best performing sector. While U.S.
Treasury securities produced a 5.36% return, emerging-market debt returned
6.88%. These bonds performed very well partly because they were rebounding from
very low valuations following the economic crises of 1997-1998. Also, economic
fundamentals improved dramatically, as a number of markets received credit
upgrades. In Russia, 1999 was the first year of sustainable economic growth
above 3% since the breakup of the Soviet Union, thanks in part to higher oil and
gas prices. Brazil's currency devaluation made its debt very attractive, with
yields at one point about 12% above U.S. Treasury bonds. Brazil's central bank
did an excellent job of reducing inflationary implications of the devaluation,
causing domestic markets to stabilize, interest rates to fall and economic
growth to return.
At the other extreme, the worst performing sector was the domestic
high-yield bond market, which returned -1.00% for the period while
investment-grade corporate bonds returned 3.93%. Most corporate issuers
represent "old economy" companies in such industries as automobiles and
chemicals. With equities in these industries trading at relatively low levels,
there was a significant amount of corporate restructuring designed to boost
stock prices. However, these strategies, which often included taking on
additional debt, were often detrimental to bondholders. In addition, the stock
market's volatile performance and the Fed's goal of slowing the U.S. economy
were negative factors for corporate bonds, as investors became more concerned
about credit quality.
Since U.S. Treasury bonds were no longer the benchmark upon which all
other bonds were priced, investors began to buy government agency securities
because of their implied government guarantee. However, agency bonds began to
underperform when government officials made it clear that agency bonds were not
in fact government-guaranteed.
FACTORS AFFECTING PERFORMANCE
The Fund's performance was positively affected by a major shift towards
emerging-market debt and mortgage-backed securities, as well as an early shift
away from domestic high-yield bonds. The portfolio's high-yield component fell
from 32% on December 31, 1999 to zero on January 31, 2000, thereby avoiding most
of that sector's underperformance during the period.
Meanwhile during the first six months of 2000, mortgage-backed bonds
increased from 20% to 36% of the portfolio, while emerging-market debt increased
from 24% to 46%. The portfolio also eliminated all non-dollar debt from
developed nations, such as Germany and Japan, thus neutralizing currency risk.
The one negative during the period was the portfolio's light allocation to U.S.
Treasury bonds.
OUTLOOK
The U.S. Office of Management and Budget recently revised its FY 2000
and FY 2001 estimated surplus to $211 billion and $228 billion, respectively. As
a result, the U.S. Treasury will continue to pay down its
Page 75
<PAGE>
Dresdner RCM Strategic Income Fund
Management's Performance Review
debt. However, U.S. Treasury bonds do not appear attractive because these
developments are already discounted in the market.
Although many investment-grade corporate bonds yield in excess of 8%,
they are not attractive because they remain subject to event risk, particularly
if the Federal Reserve Board continues to raise short-term interest rates.
Although the U.S. economy has slowed in the second quarter, the market seems to
be projecting a longer and more sustainable slowdown than is anticipated by
Dresdner RCM Global Investors LLC ("Dresdner RCM"), the investment manager of
the Fund. Meanwhile, inflation pressures continue, and investors must be
compensated for higher realized inflation as well as increased inflation risk.
Therefore, the Fed's tightening cycle is probably not complete. As a result,
mortgages continue to have a positive outlook because of their relatively high
yields and minimal prepayment risk in a period of stable or moderately rising
interest rates.
Because global growth is likely to remain strong, Dresdner RCM continues
to find debt in emerging markets attractive. Most emerging markets are currently
better equipped to absorb external shocks such as volatility in the U.S.
fixed-income markets, and to reduce their need to access the global capital
markets. The peaceful transfers of power in Mexico and Russia are also very
encouraging to investors, who traditionally consider political risk a major
negative for these markets. As a result, the portfolio's substantial overweight
in emerging markets is likely to continue.
Page 76
<PAGE>
Dresdner RCM Strategic Income Fund
Total Return Index Comparison(b)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
$10,000 Investment (12/30/98 - 6/30/00)(c)
<TABLE>
<CAPTION>
LEHMAN BROTHERS U.S.
CLASS I SHARES UNIVERSAL INDEX(A)
<S> <C> <C>
12/30/98 $10,000 $10,000
1/31/99 $10,040 $10,067
2/28/99 $9,840 $9,905
3/31/99 $10,020 $9,984
4/30/99 $10,336 $10,043
5/31/99 $10,057 $9,942
6/30/99 $10,060 $9,924
7/31/99 $10,011 $9,883
8/31/99 $9,942 $9,872
9/30/99 $10,005 $9,979
10/31/99 $10,052 $10,021
11/30/99 $10,126 $10,037
12/31/99 $10,267 $10,018
1/31/00 $10,148 $9,971
2/29/00 $10,417 $10,098
3/31/00 $10,590 $10,216
4/30/00 $10,537 $10,184
5/31/00 $10,363 $10,166
6/30/00 $10,725 $10,401
</TABLE>
PERFORMANCE(b)
JUNE 30, 2000
<TABLE>
<CAPTION>
CUMULATIVE
SINCE SINCE
STRATEGIC INCOME FUND YTD(D) 1 YEAR INCEPTION INCEPTION
<S> <C> <C> <C> <C>
Class I
Average Annual Total Return(c) 4.46% 6.61% 4.78% 7.25%
Lehman Brothers U.S. Universal
Index
Average Annual Total Return(a) 3.79% 4.77% 2.65% 4.01%
</TABLE>
The data above represents past performance of the Fund and may not
indicate 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. Univeral Index is an unmanged market value
weighted index that represents the broadest measure of the U.S. dollar
denominated securities market. The Index combines the Lehman Brothers
Aggregate Index, which is concentrated in AAA-rated and government quality
issues, with the following sub-sectors: High Yield, Emerging Markets,
Rule 144a and Eurobond Dollar.
(b) Returns assume reinvestment of all dividends and capital gains
distributions at net asset value.
(c) Class I shares commenced operations on December 30, 1998.
(d) Unannualized.
Page 77
<PAGE>
Dresdner RCM Strategic Income Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
FACE % OF MARKET VALUE
AMOUNT CURRENCY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
---------------------------------------------------------------------------------
DEBT INVESTMENTS
ARGENTINA 4.6%
$ 38,000 ARS Republic of Argentina
2.834%, maturing 9/1/02,
Floating Rate-Bocon Bond $ 23,223
19,000 USD Republic of Argentina
11.375%, maturing 1/30/17 17,005
--------
40,228
--------
BRAZIL 17.0%
106,000 USD Federal Republic of Brazil
7.438%, maturing 10/15/00,
Floating Rate 77,422
94,819 USD Federal Republic of Brazil, C
Bond
8.000%, with 3.00% Interest
Capitalization maturing
4/15/14 69,578
--------
147,000
--------
BULGARIA 2.2%
24,000 USD National Republic of Bulgaria
7.063%, maturing 7/30/00,
Floating Rate 18,931
KOREA 1.7%
15,000 USD Hanvit Bank
12.750%, maturing 3/1/10,
(144A) 14,813
PHILIPPINES 1.7%
18,000 USD Republic of Philippines
9.875%, maturing 1/15/19 14,693
RUSSIA 8.2%
83,000 USD Russian Federation
12.750%, maturing 6/24/28,
(144A) 71,073
TURKEY 4.8%
40,000 USD Republic of Turkey
11.875%, maturing 11/5/04 41,416
UNITED STATES 51.3%
15,000 USD American General Institutional
Capital
7.570%, maturing 12/1/45,
(144A) 13,262
40,000 USD Federal National Mortgage
Association
7.125%, maturing 1/15/30 40,294
277,753 USD Federal National Mortgage
Association
8.000%, maturing 4/1/30 278,881
40,000 USD Federal National Mortgage
Association
8.000%, maturing 6/1/30 40,162
20,000 USD Lehman Brothers Holdings Inc.
7.000%, maturing 5/15/03 19,534
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 78
<PAGE>
Dresdner RCM Strategic Income Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
FACE % OF MARKET VALUE
AMOUNT CURRENCY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
---------------------------------------------------------------------------------
DEBT INVESTMENTS (CONTINUED)
UNITED STATES (CONTINUED)
$ 60,000 USD Waste Management Inc.
6.875%, maturing 5/15/09 $ 52,963
--------
445,096
--------
VENEZUELA 5.9%
78,000 USD Republic of Venezuela
9.250%, maturing 9/15/27 51,285
--------
TOTAL DEBT INVESTMENTS (COST $830,561) 97.4% 844,535
--------
<CAPTION>
SHARES
--------
<C> <C> <S> <C> <C>
SHORT-TERM INVESTMENTS
MONEY MARKET FUNDS 2.6%
11,357 USD SSgA Money Market Fund 11,357
11,085 USD SSgA U.S. Government Money
Market Fund 11,085
--------
TOTAL SHORT-TERM INVESTMENTS (COST $22,442) 2.6% 22,442
--------
TOTAL INVESTMENTS (COST $853,003) ** 100.0% 866,977
OTHER ASSETS LESS LIABILITIES 0.0%* 186
--------
NET ASSETS 100.0% $867,163
========
</TABLE>
--------------------------------
* Less than 0.1% of net assets.
144A Security is purchased pursuant to Rule 144A of the Securities Act of 1933
and may be resold only to qualified institutional buyers.
The accompanying notes are an integral part of the financial statements.
Page 79
<PAGE>
Dresdner RCM Strategic Income Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
Tax Information:
** For Federal income tax purposes, cost is $877,779 and gross aggregate
unrealized appreciation (depreciation) for all securities is as follows:
<TABLE>
<CAPTION>
<S> <C>
Unrealized appreciation $27,580
Unrealized depreciation (38,382)
-------
Net unrealized depreciation $(10,802)
=======
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
The Fund's investments in securities at June 30, 2000 categorized by country:
<TABLE>
<CAPTION>
% OF NET ASSETS
------------------------------
COUNTRY SHORT-TERM
COUNTRY CODE DEBT AND OTHER TOTAL
<S> <C> <C> <C> <C>
-----------------------------------------------------------------------
Argentina AR 4.6% 4.6%
Brazil BR 17.0% 17.0%
Bulgaria BG 2.2% 2.2%
Korea KR 1.7% 1.7%
Philippines PH 1.7% 1.7%
Russia RU 8.2% 8.2%
Turkey TR 4.8% 4.8%
United States US 51.3% 2.6% 53.9%
Venezuela VZ 5.9% 5.9%
---- ------ -----
Total 97.4% 2.6% 100.0%
==== ====== =====
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 80
<PAGE>
Dresdner RCM Balanced Fund
Management's Performance Review
The Dresdner RCM Balanced Fund which was launched on December 15, 1999,
produced a total return of 2.77% during the six month period ended June 30,
2000. In comparison, the unmanaged benchmark, a 60%/40% blend of the Standard &
Poor's 500 Index and the Lehman Brothers Aggregate Bond Index, returned 1.45%.
For the same period, the S&P 500 Index returned -0.42% while the Lehman Brothers
Aggregate Bond Index returned 3.98%.
MARKET REVIEW
As the year 2000 began, it seemed that nothing could stop the soaring
U.S. economy. Despite five increases in short-term interest rates from June 1999
through March 2000, first quarter 2000 growth was 5.4%, while the unemployment
rate in April was 3.9%, the lowest in 30 years. New economy technology and
biotechnology stocks continued to deliver spectacular performance.
In March, however, inflation data became more worrisome, and the Federal
Reserve Board vowed to strengthen its hand. Evidence began to emerge that many
of the stocks in the more speculative sectors of the technology market had risen
too far and too fast, pumped up by the explosive combination of momentum buying,
margin debt and on-line trading. Questions began to arise about "new economy"
business models. As a result, investors chose to re-examine fundamentals and
valuations. The "dot-com" stocks were the first to weaken. Eventually, the
negative sentiment spread to biotech stocks, the entire technology sector, and
the broader market as well. Meanwhile, the Fed boosted rates by 50 basis points
in May, bringing the Fed Funds rate to 6.50%, the highest since 1991.
Normally, such an environment would create a bear market for bonds.
However, Treasury securities actually rallied. Due to the growing budget
surplus, the government began buying back Treasury bonds, particularly
longer-term securities, and vowed to continue to do so. Even though the Federal
Funds rate increased from 5.50% to 6.50% during the first half of 2000, the
30-year bond yield actually fell by 58 basis points. Other positive performers
included mortgage-backed securities, which offered significantly higher yields
than U.S. Treasury bonds and very little prepayment risk in the current
environment. However, corporate bonds, particularly lower credit-quality bonds,
did not fare as well, as investors became concerned with the slowing economy and
corporate restructurings designed to boost stock prices, often at the expense of
bondholders.
Finally, by June, signs of economic slowing began to emerge, as weaker
numbers were recorded for employment, retail sales, housing starts, auto sales,
and manufacturing. As a result, the Fed refrained from raising short-term rates
again in June, but did leave the door open for more rate hikes in the future.
Stock and bond markets generally rallied, but the S&P 500 Index was still down
0.42% for the first half of 2000, while most bond markets posted low
single-digit gains.
FACTORS AFFECTING PERFORMANCE
Dresdner RCM Global Investors LLC ("Dresdner RCM"), the investment
manager of the Fund, allocated approximated 56% of the portfolio to equities,
43% to fixed-income and the remaining portion to cash and equivalents as of
June 30, 2000.
The equity portion of the Fund benefited from its commitment to
communications equipment stocks such as Cisco Systems, JDS Uniphase, and
Motorola. In addition, the Fund was overweighted in health care, particularly
biotechnology stocks, which benefited from the market's shift out of technology.
Other positive factors for health care included reduced concerns that Congress
would enact a draconian law expanding Medicare to cover prescription drugs. In
addition, the biotechnology stocks rallied on news that scientists had made
significant progress in genetic research. Meanwhile, the portfolio was
underweighted in financial services due to the rising interest-rate environment
and credit deterioration at some regional banks, and in the retail sector due to
concerns about slower consumer spending and low returns on capital.
In fixed-income, Dresdner RCM made a number of corrective actions in the
second quarter that improved performance for the first half of 2000. First, the
Fund's asset allocation in the first quarter assumed that corporate bonds would
benefit from the fact that Y2K was a non-event and that inflation was still
contained. It
Page 81
<PAGE>
Dresdner RCM Balanced Fund
Management's Performance Review
did not anticipate the Treasury buyback program or the significant event risk in
the corporate bond market. The portfolio was adjusted in the second quarter,
de-emphasizing corporate bonds in favor of mortgages, which offered attractive
yields without the credit concerns.
Second, Dresdner RCM managed the portfolio's exposure to government
agency bonds. Early in 2000, investors assumed that these bonds would become the
new benchmark for the bond market, since they carry an implied government
guarantee. However, government officials publicly dispelled that notion, causing
these bonds to weaken. The portfolio was heavily weighted in government agencies
during the time when they were viewed as the new benchmark, and lightly weighted
when they sold off, creating a positive result for performance.
Dresdner RCM had positioned the fixed-income portfolio's duration longer
than average at the start of the year, which was not appropriate given the
initial rise in interest rates. By the second quarter, the portfolio's duration
was shorter than the benchmark, which proved to be a negative as rates, on
balance, declined during the quarter.
OUTLOOK
Although the U.S. economy has slowed, Dresdner RCM is concerned that it
has not slowed enough to prevent the Federal Reserve Board from additional
action. Due to inflation concerns, the market consensus of an economic soft
landing could be optimistic. As a result, the fixed-income portion of the
portfolio is employing a barbell strategy, preparing for additional increases in
short-term rates and downward pressure on long-term yields. In addition, the
portfolio continues to modestly weight corporate bonds, reflecting concerns
about corporate event risk. More value is currently seen in mortgages and
asset-backed securities, while Treasury bonds appear overvalued.
The Fund's equity outlook is positive, as growth prospects over the long
term remain positive for technology, telecommunications and health care
companies. However, the short-term outlook for the stock market in general is
cautious, as investors await the outcome of the Fed's strategy.
Page 82
<PAGE>
Dresdner RCM Balanced Fund
Total Return Index Comparison(d)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
$10,000 Investment (12/15/99 - 06/30/00)(e)
<TABLE>
<CAPTION>
BLENDED S&P 500
LEHMAN /LEHMAN
BROTHERS BROTHERS
CLASS I S&P 500 AGGREGATE BOND AGGREGATE
SHARES INDEX(A) INDEX(B) BOND INDEX(C)
<S> <C> <C> <C> <C>
12/15/99 $10,000 $10,000 $10,000 $10,000
12/31/99 $10,650 $10,400 $9,938 $10,215
1/31/00 $10,500 $9,878 $9,905 $9,894
2/29/00 $10,670 $9,691 $10,025 $9,829
3/31/00 $11,240 $10,639 $10,157 $10,458
4/30/00 $10,875 $10,318 $10,128 $10,257
5/31/00 $10,584 $10,107 $10,123 $10,129
6/30/00 $10,945 $10,356 $10,333 $10,363
</TABLE>
PERFORMANCE(d)
JUNE 30, 2000
<TABLE>
<CAPTION>
CUMULATIVE
SINCE
BALANCED FUND YTD(F) INCEPTION
<S> <C> <C>
Class I
Average Annual Total Return(e) 2.77% 9.45%
S&P 500 Index
Average Annual Total Return(a) -0.42% 3.56%
Lehman Brothers Aggregate Bond Index
Average Annual Total Return(b) 3.98% 3.33%
Blended S&P 500 Index/Lehman Brothers
Aggregate Bond Index
Average Annual Total Return(c) 1.45% 3.63%
</TABLE>
The data above represents past performance of the Fund and may not
indicate 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 Index is a capitalization-weighted index of 500
stocks designed to measure performance of the broad domestic economy
through changes in the aggregate market value of 500 stocks representing
all major industries.
(b) The Lehman Brothers Aggregate Bond Index, which is a market value weighted
performance benchmark for investment-grade fixed-rate debt issues,
including government, corporate, asset-backed, and mortgage-backed
securities, with maturities of at least one year.
(c) The Blended S&P 500/Lehman Brothers Aggregate Bond Index is a blended index
comprised of the performance of the two indexes weighted 60% S & P 500
Index and 40% Lehman Brothers Aggregate Bond Index.
(d) Returns assume reinvestment of all dividends and capital gains
distributions at net asset value.
(e) Class I shares commenced operations on December 15, 1999.
(f) Unannualized.
Page 83
<PAGE>
Dresdner RCM Balanced Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
----------------------------------------------------------------------------------
EQUITY INVESTMENTS
COMMERCIAL GOODS & SERVICES SECTOR 6.4%
CAPITAL GOODS 5.2%
1,100 US General Dynamics Corp. $ 57,475
9,000 US General Electric Co. 477,000
1,200 US Honeywell International Inc. 40,425
7,000 BH Tyco International Ltd. 331,625
-----------
906,525
-----------
COMMERCIAL SERVICES & SUPPLIES 1.2%
3,100 US Enron Corp. 199,950
CONSUMER DISCRETIONARY SECTOR 4.8%
CONSUMER DURABLES & APPAREL 0.6%
2,500 US NIKE Inc. (Class B) 99,531
HOTELS, RESTAURANTS & LEISURE 0.1%
700 US McDonald's Corp. 23,056
MEDIA 1.7%
1,800 US Clear Channel Communications
Inc. * 135,000
1,400 US The Walt Disney Co. 54,338
1,400 US Time Warner Inc. 106,400
-----------
295,738
-----------
RETAILING 2.4%
1,200 US Circuit City Stores Inc. 39,825
3,000 US Costco Wholesale Corp. * 99,000
500 US Home Depot Inc. 24,969
1,000 US Target Corp. 58,000
3,500 US Wal-Mart Stores Inc. 201,687
-----------
423,481
-----------
CONSUMER STAPLES SECTOR 3.4%
FOOD & DRUG RETAILING 0.6%
1,600 US Safeway Inc. * 72,200
1,200 US Walgreen Co. 38,625
-----------
110,825
-----------
FOOD, BEVERAGE & TOBACCO 1.1%
1,400 US Anheuser-Busch Cos. Inc. 104,562
1,400 US Coca Cola Co. 80,413
-----------
184,975
-----------
HOUSEHOLD & PERSONAL PRODUCTS 1.7%
1,000 US Avon Products Inc. 44,500
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 84
<PAGE>
Dresdner RCM Balanced Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
----------------------------------------------------------------------------------
EQUITY INVESTMENTS (CONTINUED)
HOUSEHOLD & PERSONAL PRODUCTS
(CONTINUED)
2,000 US Colgate-Palmolive Co. $ 119,750
700 US Estee Lauder Cos. Inc. (Class
A) 34,606
1,400 US Gillette Co. 48,913
1,000 US Procter & Gamble Co. 57,250
-----------
305,019
-----------
ENERGY SECTOR 0.9%
ENERGY 0.9%
600 US Chevron Corp. 50,887
200 US Grant Prideco Inc. * 5,000
1,000 US Schlumberger Ltd. 74,625
700 US Weatherford International Inc. 27,869
-----------
158,381
-----------
FINANCIAL SECTOR 4.0%
BANKS 2.5%
2,000 US Bank of New York Inc. 93,000
1,500 US Chase Manhattan Corp. 69,094
4,000 US Citigroup Inc. 241,000
700 US Wells Fargo Co. 27,125
-----------
430,219
-----------
DIVERSIFIED FINANCIALS 0.3%
1,000 US Federal National Mortgage
Association 52,187
INSURANCE 1.2%
1,800 US American International Group
Inc. 211,500
HEALTH CARE SECTOR 10.5%
PHARMACEUTICALS &
BIOTECHNOLOGY 10.5%
5,000 US Amgen Inc. * 351,250
1,800 US Bristol-Myers Squibb Co. 104,850
1,200 US Eli Lilly & Co. 119,850
550 US Genentech Inc. * 94,600
1,600 UK Glaxo Wellcome PLC (ADR) 92,500
400 US Human Genome Sciences Inc. * 53,350
900 US Johnson & Johnson 91,687
1,800 US Merck & Co. Inc. 137,925
800 US Millennium Pharmaceuticals
Inc. * 89,500
1,400 US PE Corp. - PE Biosystems Group 92,225
10,000 US Pfizer Inc. 480,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 85
<PAGE>
Dresdner RCM Balanced Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
----------------------------------------------------------------------------------
EQUITY INVESTMENTS (CONTINUED)
PHARMACEUTICALS &
BIOTECHNOLOGY (CONTINUED)
1,100 US Pharmacia Corp. $ 56,856
500 US Sepracor Inc. * 60,313
-----------
1,824,906
-----------
MATERIALS SECTOR 0.2%
MATERIALS 0.2%
1,000 US Alcoa Inc. 29,000
TECHNOLOGY SECTOR 20.4%
COMMUNICATIONS EQUIPMENT 8.3%
7,000 US Cisco Systems Inc. * 444,937
1,800 US JDS Uniphase Corp. * 215,775
1,000 US Lucent Technologies Inc. 59,250
2,700 US Motorola Inc. 78,469
7,000 FI Nokia Oyj (ADR) 349,563
2,000 CA Nortel Networks Corp. 136,500
1,100 US QUALCOMM Inc. * 66,000
4,500 SE Telefonaktiebolaget (LM)
Ericsson AB (ADR) 90,000
-----------
1,440,494
-----------
COMPUTERS & PERIPHERALS 3.9%
2,500 US Dell Computer Corp. * 123,281
3,000 US EMC Corp. * 230,813
1,200 US Hewlett-Packard Co. 149,850
2,000 US Sun Microsystems Inc. * 181,875
-----------
685,819
-----------
INTERNET SOFTWARE & SERVICES 1.5%
1,600 US America Online Inc. * 84,400
1,400 US Yahoo Inc. * 173,425
-----------
257,825
-----------
INFORMATION TECHNOLOGY
CONSULTING & SERVICES 0.2%
500 US Computer Sciences Corp. * 37,344
SEMICONDUCTORS & INSTRUMENTS 3.1%
3,000 US Intel Corp. 401,062
800 FR STMicroelectronics N.V. (NY
Registered Shares) 51,350
700 US Texas Instruments Inc. 48,081
600 US Xilinx Inc. * 49,538
-----------
550,031
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 86
<PAGE>
Dresdner RCM Balanced Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
----------------------------------------------------------------------------------
EQUITY INVESTMENTS (CONTINUED)
SOFTWARE 3.4%
4,000 US Microsoft Corp. * $ 320,000
2,500 US Oracle Corp. * 210,156
500 US VERITAS Software Corp. * 56,508
-----------
586,664
-----------
TELECOMMUNICATION SERVICES SECTOR 5.2%
TELECOMMUNICATION SERVICES 5.2%
1,200 US Bell Atlantic Corp. 60,975
1,200 US GTE Corp. 74,700
1,800 US Nextel Communications Inc. * 110,137
4,500 US Qwest Communications
International Inc. * 223,594
3,500 US SBC Communications Inc. 151,375
2,500 UK Vodafone AirTouch PLC (ADR) 103,594
4,000 US WorldCom Inc. * 183,500
-----------
907,875
-----------
TOTAL EQUITY INVESTMENTS (COST $9,368,770) 55.8% 9,721,345
-----------
<CAPTION>
FACE
AMOUNT
----------
<C> <C> <S> <C> <C>
DEBT INVESTMENTS
ASSET-BACKED SECURITIES 2.5%
$ 15,000 US Carco Auto Loan Master Trust
6.430%, maturing 11/15/04,
Series 1999-4, Class A 14,747
100,000 US Citibank Credit Card Master
Trust I 6.650%,
maturing 11/15/06, Series
1999-7, Class A 97,750
100,000 US Citibank Credit Card Master
Trust I 6.100%,
maturing 5/15/08, Series
1999-5, Class A 94,600
25,000 US Discover Card Master Trust I
6.850%, maturing 7/17/07,
Series 1999-6, Class A 24,590
100,000 US Ford Credit Auto Owner Trust
0.990%, maturing 10/15/04,
Series 2000-C, Class B 105,131
20,000 US Green Tree Financial Corp.
6.270%, maturing 7/1/21,
Series 1998-6, Class A6 18,137
15,000 US Green Tree Home Equity Loan
Trust 6.130%,
maturing 2/15/19, Series
1999-A, Class A5 14,222
60,000 US MBNA Master Credit Card Trust
6.801%, maturing 7/15/00,
Series 1996-D, Class A 60,054
-----------
429,231
-----------
COLLATERALIZED MORTGAGE
OBLIGATIONS 0.8%
10,000 US Chase Commercial Mortgage
Securities Corp. 7.198%,
maturing 11/15/09, Series
1999-2, Class A2 9,818
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 87
<PAGE>
Dresdner RCM Balanced Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
FACE % OF MARKET VALUE
AMOUNT COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
----------------------------------------------------------------------------------
DEBT INVESTMENTS (CONTINUED)
COLLATERALIZED MORTGAGE
OBLIGATIONS (CONTINUED)
$ 35,000 US Chase Commercial Mortgage
Securities Corp. 7.631%,
maturing 6/15/10, Series
2000-2, Class A2 $ 36,654
10,000 US First Union National Bank
Commercial Mortgage Corp.
7.390%, maturing 11/15/09,
Series 1999-C4, Class A2 9,801
25,000 US First Union-Lehman Brothers
Commercial Mortgage Securities
Corp. 7.380%,
maturing 4/18/07, Series
1997-C1, Class A3 24,743
55,000 US LB Commercial Conduit Mortgage
Trust 6.480%,
maturing 1/18/08, Series
1998-C1, Class A3 63,476
-----------
144,492
-----------
CORPORATE BONDS 3.2%
30,000 US Boeing Co. 6.625%,
maturing 2/15/38 25,850
49,603 US Continental Airlines Inc.
7.256%, maturing 3/15/20 47,213
40,000 DE Deutsche Telekom International
Finance BV 8.000%,
maturing 6/15/10 40,177
10,000 US Ford Motor Credit Co. 5.900%,
maturing 2/23/01 9,925
45,000 US GTE Corp. 7.510%,
maturing 4/1/09 44,253
40,000 UK HSBC Capital Funding LP
10.176%, maturing 12/31/00,
Floating Rate (144A) 42,906
15,000 CA Hydro-Quebec 8.050%,
maturing 7/7/24 15,909
15,000 US International Business
Machines Corp. 8.375%,
maturing 11/1/19 16,513
60,000 US International Paper Co.
8.125%, maturing 7/8/05 (144A) 60,409
10,000 US Merrill Lynch & Co. 6.060%,
maturing 10/15/01 9,851
60,000 CA Quebec Province 8.625%,
maturing 1/19/05 63,084
35,000 US Sprint Capital Corp. 6.875%,
maturing 11/15/28 30,364
30,000 US Time Warner Inc. 10.150%,
maturing 5/1/12 34,429
25,000 BH Tyco International Group S.A.
6.125%, maturing 11/1/08 22,317
25,000 BH Tyco International Group S.A.
6.875%, maturing 1/15/29 21,119
25,000 US Union Pacific Resources Group
Inc. 7.500%,
maturing 10/15/26 23,551
50,000 US Waste Management Inc. 6.875%,
maturing 5/15/09 44,136
-----------
552,006
-----------
U.S. GOVERNMENT AND AGENCY
BONDS 26.5%
30,000 US Federal National Mortgage
Association 7.250%,
maturing 1/15/10 30,302
35,000 US Federal National Mortgage
Association 6.250%,
maturing 5/15/29 31,473
60,000 US Federal National Mortgage
Association 7.125%,
maturing 1/15/30 60,440
114,914 US Federal National Mortgage
Association 7.500%,
maturing 5/1/30 113,262
2,140,000 US Federal National Mortgage
Association, 8.000%, 30 Year,
TBA ** 2,148,688
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 88
<PAGE>
Dresdner RCM Balanced Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
FACE % OF MARKET VALUE
AMOUNT COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
----------------------------------------------------------------------------------
DEBT INVESTMENTS (CONTINUED)
U.S. GOVERNMENT AND AGENCY
BONDS (CONTINUED)
$ 241,509 US Government National Mortgage
Association 7.500%,
maturing 11/15/29 $ 239,773
179,704 US Government National Mortgage
Association 8.000%,
maturing 4/15/30 181,612
1,135,000 US United States Treasury Bonds
6.250%, maturing 8/15/23 1,144,216
80,000 US United States Treasury Notes
6.500%, maturing 8/31/01 *** 80,000
600,000 US United States Treasury Notes
6.125%, maturing 8/15/07 *** 596,415
-----------
4,626,181
-----------
TOTAL DEBT INVESTMENTS (COST $5,695,084) 33.0% 5,751,910
-----------
<CAPTION>
SHARES
----------
<C> <C> <S> <C> <C>
PREFERRED STOCKS
UNITED STATES 0.1%
550 US Citigroup Inc., Series M,
5.864% 22,550
-----------
TOTAL PREFERRED STOCKS (COST $21,981) 0.1% 22,550
-----------
<CAPTION>
FACE
AMOUNT
----------
<C> <C> <S> <C> <C>
SHORT-TERM INVESTMENTS
U.S. GOVERNMENT AND AGENCY
BONDS 9.5%
$ 120,000 US Federal Farm Credit Banks
6.370%, maturing 7/12/00 119,767
350,000 US Federal Home Loan Bank 6.470%,
maturing 9/20/00 344,905
180,000 US Federal Home Loan Mortgage
Corp. 6.430%,
maturing 7/18/00 179,453
600,000 US Federal Home Loan Mortgage
Corp. 6.450%,
maturing 7/18/00 598,173
415,000 US Tennessee Valley Authority
6.350%, maturing 7/14/00 414,048
-----------
1,656,346
-----------
COMMERCIAL PAPER 3.7%
215,000 US American Express Credit Corp.
6.530%, maturing 7/14/00 214,493
215,000 US Associates Corp. of North
America 6.530%,
maturing 7/21/00 214,220
215,000 US General Electric Co. 6.530%,
maturing 7/14/00 214,493
-----------
643,206
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 89
<PAGE>
Dresdner RCM Balanced Fund
Portfolio of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
% OF MARKET VALUE
SHARES COUNTRY NET ASSETS (NOTE 1)
<C> <C> <S> <C> <C>
----------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (CONTINUED)
MONEY MARKET FUNDS 6.4%
557,528 US SSgA Money Market Fund $ 557,528
556,527 US SSgA U.S. Government Money
Market Fund 556,527
-----------
1,114,055
-----------
TOTAL SHORT-TERM INVESTMENTS (COST $3,413,607) 19.6% 3,413,607
-----------
TOTAL INVESTMENTS (COST $18,499,442) **** 108.5% 18,909,412
OTHER ASSETS LESS
LIABILITIES *** (8.5)% (1,480,722)
-----------
NET ASSETS 100.0% $17,428,690
===========
</TABLE>
--------------------------------
* Non-income producing security
ADR American Depositary Receipt
144A Security is purchased pursuant to Rule 144A of the Securities Act of 1933
and may be resold only to qualified institutional buyers.
** Settlement of mortgage backed securities is on a delayed delivery basis
with the final maturity to be announced (TBA) in the future. At June 30,
2000, the cost of the fund's forward commitment purchase was $2,131,288.
*** A portion of this security and cash have been segregated to cover forward
commitment purchase.
Tax Information:
**** For Federal income tax purposes, cost is $18,499,442 and gross aggregate
unrealized appreciation (depreciation) for all securities is as follows:
<TABLE>
<CAPTION>
<S> <C>
Unrealized appreciation $685,415
Unrealized depreciation (275,445)
--------
Net unrealized appreciation $409,970
========
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
The Fund's investments in securities at June 30, 2000 categorized by country:
<TABLE>
<CAPTION>
% OF NET ASSETS
-------------------------------------------------
COUNTRY PREFERRED SHORT-TERM
COUNTRY CODE STOCK EQUITIES DEBT AND OTHER TOTAL
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------
Bermuda BH 1.9% 0.3% 2.2%
Canada CA 0.8% 0.4% 1.2%
Finland FI 2.0% 2.0%
France FR 0.3% 0.3%
Germany DE 0.2% 0.2%
Sweden SE 0.5% 0.5%
United Kingdom UK 1.1% 0.3% 1.4%
United States US 0.1% 49.2% 31.8% 11.1% 92.2%
------ ------ ---- ------- -----
Total 0.1% 55.8% 33.0% 11.1% 100.0%
====== ====== ==== ======= =====
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 90
<PAGE>
(THIS PAGE INTENTIONALLY LEFT BLANK)
Page 91
<PAGE>
Dresdner RCM Global Funds
Statements of Assets and Liabilities
June 30, 2000 (Unaudited)
(All numbers in thousands except net asset values per share)
<TABLE>
<CAPTION>
LARGE CAP TAX MANAGED
GROWTH BIOTECHNOLOGY GROWTH
FUND FUND FUND
--------- ------------- -----------
<S> <C> <C> <C>
ASSETS:
Investments at cost $25,170 $364,841 $31,972
======= ======== =======
Foreign currency at cost $ -- $ -- $ --
======= ======== =======
Short-term investments at cost $ 599 $ 36,861 $ 954
======= ======== =======
Investments at value (Note1) $29,165 $417,544 $33,098
Foreign currency at value (Note 1) -- -- --
Cash -- -- --
Short-term investments at value (Note 1) 599 36,861 954
Receivables:
Investments sold 99 8,771 159
Fund shares sold 260 8,392 20
Forward foreign currency contracts (Note 1 and 6) -- -- --
Dividends 11 85 12
Interest 2 79 3
Investment Manager (Note 2) 18 -- --
Prepaid expenses -- 2 --
Organizational costs (Note 5) -- -- --
Miscellaneous assets -- -- --
------- -------- -------
Total Assets 30,154 471,734 34,246
------- -------- -------
LIABILITIES:
Payables:
Investments purchased 137 4,316 357
Delayed delivery investments purchased (Note 1) -- -- --
Fund shares repurchased 214 819 --
Accrued Expenses:
Management fees (Note 2) -- 787 22
Distribution fees (Note 3) 1 77 1
Directors' fees (Note 7) 39 39 31
Other 71 13 57
------- -------- -------
Total Liabilities 462 6,051 468
------- -------- -------
NET ASSETS $29,692 $465,683 $33,778
======= ======== =======
NET ASSETS CONSIST OF:
Paid-in capital (Note 4) $24,336 $458,790 $33,930
Accumulated net investment income (loss) (38) (1,151) (68)
Accumulated net realized gain (loss) on investments,
options written and foreign currency transactions 1,399 (44,659) (1,210)
Net unrealized appreciation (depreciation) on foreign
currency translations -- -- --
Net unrealized appreciation on investments 3,995 52,703 1,126
------- -------- -------
NET ASSETS $29,692 $465,683 $33,778
======= ======== =======
CLASS I NET ASSETS $23,265 $ -- $29,972
======= ======== =======
CLASS I SHARES OUTSTANDING 1,176 -- 1,926
======= ======== =======
CLASS I NET ASSET VALUE PER SHARE, OFFERING AND
REDEMPTION PRICE PER SHARE (NOTES 1 AND 4) $ 19.78 $ -- $ 15.56
======= ======== =======
CLASS N NET ASSETS $ 6,427 $465,683 $ 3,806
======= ======== =======
CLASS N SHARES OUTSTANDING 327 13,393 245
======= ======== =======
CLASS N NET ASSET VALUE PER SHARE, OFFERING AND
REDEMPTION PRICE PER SHARE (NOTES 1 AND 4) $ 19.67 $ 34.77 $ 15.51
======= ======== =======
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 92
<PAGE>
Dresdner RCM Global Funds
Statements of Assets and Liabilities
June 30, 2000 (Unaudited)
(All numbers in thousands except net asset values per share)
<TABLE>
<CAPTION>
GLOBAL GLOBAL GLOBAL INTERNATIONAL EMERGING
SMALL CAP TECHNOLOGY HEALTH CARE GROWTH EQUITY MARKETS EUROPE
FUND FUND FUND FUND FUND FUND
--------- ---------- ----------- ------------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments at cost $42,670 $546,960 $49,879 $279,131 $ 7,804 $66,733
======= ======== ======= ======== ======= =======
Foreign currency at cost $ 205 $ -- $ -- $ 5,295 $ 528 $ 1,190
======= ======== ======= ======== ======= =======
Short-term investments at cost $ 117 $ 39,741 $10,719 $ 11,318 $ 774 $ 543
======= ======== ======= ======== ======= =======
Investments at value (Note1) $46,342 $726,517 $53,494 $310,512 $ 8,358 $77,117
Foreign currency at value (Note 1) 206 -- -- 5,316 528 1,198
Cash 1 -- -- 2 1 --
Short-term investments at value (Note 1) 117 39,741 10,719 11,318 774 543
Receivables:
Investments sold 367 4,396 2,076 335 185 4,738
Fund shares sold 1,197 6,991 1,752 5,527 123 2,784
Forward foreign currency contracts (Note 1 and 6) -- -- -- -- -- --
Dividends 14 118 16 375 25 94
Interest -- 95 11 39 20 2
Investment Manager (Note 2) -- -- -- -- 71 125
Prepaid expenses 1 -- 1 -- -- 18
Organizational costs (Note 5) -- 8 -- -- 10 --
Miscellaneous assets -- 8 -- -- -- --
------- -------- ------- -------- ------- -------
Total Assets 48,245 777,874 68,069 333,424 10,095 86,619
------- -------- ------- -------- ------- -------
LIABILITIES:
Payables:
Investments purchased 965 11,156 1,766 5,715 916 4,481
Delayed delivery investments purchased (Note 1) -- -- -- -- -- --
Fund shares repurchased 206 1,978 616 2,605 115 101
Accrued Expenses:
Management fees (Note 2) 52 1,667 43 184 23 --
Distribution fees (Note 3) 3 74 10 1 2 15
Directors' fees (Note 7) 38 39 39 107 35 1
Other 47 94 40 64 67 77
------- -------- ------- -------- ------- -------
Total Liabilities 1,311 15,008 2,514 8,676 1,158 4,675
------- -------- ------- -------- ------- -------
NET ASSETS $46,934 $762,866 $65,555 $324,748 $ 8,937 $81,944
======= ======== ======= ======== ======= =======
NET ASSETS CONSIST OF:
Paid-in capital (Note 4) $38,423 $632,539 $59,298 $261,350 $ 7,726 $57,458
Accumulated net investment income (loss) (258) (2,322) (112) (876) 20 (416)
Accumulated net realized gain (loss) on investments,
options written and foreign currency transactions 5,096 (46,899) 2,754 32,921 637 14,506
Net unrealized appreciation (depreciation) on foreign
currency translations 1 (9) -- (28) -- 12
Net unrealized appreciation on investments 3,672 179,557 3,615 31,381 554 10,384
------- -------- ------- -------- ------- -------
NET ASSETS $46,934 $762,866 $65,555 $324,748 $ 8,937 $81,944
======= ======== ======= ======== ======= =======
CLASS I NET ASSETS $29,486 $379,724 $ -- $319,619 $ 6,778 $ 1,092
======= ======== ======= ======== ======= =======
CLASS I SHARES OUTSTANDING 1,094 5,438 -- 16,497 416 67
======= ======== ======= ======== ======= =======
CLASS I NET ASSET VALUE PER SHARE, OFFERING AND
REDEMPTION PRICE PER SHARE (NOTES 1 AND 4) $ 26.94 $ 69.82 $ -- $ 19.37 $ 16.29 $ 16.38
======= ======== ======= ======== ======= =======
CLASS N NET ASSETS $17,448 $383,142 $65,555 $ 5,129 $ 2,159 $80,852
======= ======== ======= ======== ======= =======
CLASS N SHARES OUTSTANDING 649 5,500 2,979 265 133 4,939
======= ======== ======= ======== ======= =======
CLASS N NET ASSET VALUE PER SHARE, OFFERING AND
REDEMPTION PRICE PER SHARE (NOTES 1 AND 4) $ 26.90 $ 69.66 $ 22.01 $ 19.32 $ 16.24 $ 16.37
======= ======== ======= ======== ======= =======
<CAPTION>
GLOBAL STRATEGIC
EQUITY INCOME BALANCED
FUND FUND FUND
------ --------- --------
<S> <C> <C> <C>
ASSETS:
Investments at cost $1,251 $ 831 $15,085
====== ====== =======
Foreign currency at cost $ 6 $ -- $ --
====== ====== =======
Short-term investments at cost $ 9 $ 22 $ 3,414
====== ====== =======
Investments at value (Note1) $1,584 $ 845 $15,496
Foreign currency at value (Note 1) 6 -- --
Cash -- -- 2,599
Short-term investments at value (Note 1) 9 22 3,414
Receivables:
Investments sold 26 -- 270
Fund shares sold -- -- --
Forward foreign currency contracts (Note 1 and 6) -- 3 --
Dividends 1 -- 4
Interest -- 14 64
Investment Manager (Note 2) 53 46 45
Prepaid expenses -- -- --
Organizational costs (Note 5) -- -- --
Miscellaneous assets -- -- --
------ ------ -------
Total Assets 1,679 930 21,892
------ ------ -------
LIABILITIES:
Payables:
Investments purchased 12 -- 2,310
Delayed delivery investments purchased (Note 1) -- -- 2,137
Fund shares repurchased -- -- --
Accrued Expenses:
Management fees (Note 2) 3 -- --
Distribution fees (Note 3) -- -- --
Directors' fees (Note 7) 31 30 11
Other 43 33 5
------ ------ -------
Total Liabilities 89 63 4,463
------ ------ -------
NET ASSETS $1,590 $ 867 $17,429
====== ====== =======
NET ASSETS CONSIST OF:
Paid-in capital (Note 4) $1,000 $1,000 $16,697
Accumulated net investment income (loss) (6) (11) 35
Accumulated net realized gain (loss) on investments,
options written and foreign currency transactions 263 (139) 286
Net unrealized appreciation (depreciation) on foreign
currency translations -- 3 --
Net unrealized appreciation on investments 333 14 411
------ ------ -------
NET ASSETS $1,590 $ 867 $17,429
====== ====== =======
CLASS I NET ASSETS $1,590 $ 867 $17,429
====== ====== =======
CLASS I SHARES OUTSTANDING 100 89 1,595
====== ====== =======
CLASS I NET ASSET VALUE PER SHARE, OFFERING AND
REDEMPTION PRICE PER SHARE (NOTES 1 AND 4) $15.90 $ 9.72 $ 10.92
====== ====== =======
CLASS N NET ASSETS $ -- $ -- $ --
====== ====== =======
CLASS N SHARES OUTSTANDING -- -- --
====== ====== =======
CLASS N NET ASSET VALUE PER SHARE, OFFERING AND
REDEMPTION PRICE PER SHARE (NOTES 1 AND 4) $ -- $ -- $ --
====== ====== =======
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 93
<PAGE>
Dresdner RCM Global Funds
Statements of Operations
For the Six Months Ended June 30, 2000 (Unaudited)
(All numbers in thousands)
<TABLE>
<CAPTION>
LARGE CAP TAX MANAGED
GROWTH BIOTECHNOLOGY GROWTH
FUND FUND FUND
--------- ------------- -----------
<S> <C> <C> <C>
INVESTMENT INCOME: (NOTE 1)
Income:
Dividends $ 72 $ 322 $ 32
Interest 7 289 9
Foreign tax withheld (1) (4) --
------ -------- -------
Total investment income 78 607 41
------ -------- -------
Expenses:
Investment management fees (Note 2) 82 1,172 64
Administration fees 32 32 32
Shareholder servicing fee, Class I 8 -- 6
Shareholder servicing fee, Class N 9 82 8
Registration and filing, Class I 18 -- 14
Registration and filing, Class N 9 19 10
Reports to shareholders 11 20 8
Accounting expense 24 14 16
Audit fees 11 11 11
Directors' fees and expenses (Note 7) 11 11 11
Legal fees 6 6 6
Custodian fees 4 16 5
Insurance expense -- -- --
Distribution fees (Note 3) 4 293 2
Amortization of organization costs (Note 5) -- -- --
Reimbursement of expenses previously assumed by
Investment Manager (Note 2) -- 79 --
Miscellaneous expenses 4 3 2
------ -------- -------
Total expenses before waivers and reimbursements 233 1,758 195
Less: Expenses waived and reimbursed by Investment
Manager (Note 2) (117) -- (86)
------ -------- -------
Total net expenses 116 1,758 109
------ -------- -------
Net investment income (loss) (38) (1,151) (68)
------ -------- -------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on investments 1,112 (45,625) (1,198)
Net realized gain (loss) on foreign currrency
transactions -- -- --
Net realized gain on options written -- -- --
------ -------- -------
Net realized gain (loss) 1,112 (45,625) (1,198)
------ -------- -------
Net change in unrealized appreciation (depreciation)
on investments (282) 48,778 511
Net change in unrealized appreciation (depreciation)
on foreign currency translations -- -- --
------ -------- -------
Net unrealized appreciation (depreciation) (282) 48,778 511
------ -------- -------
Net realized and unrealized gain (loss) 830 3,153 (687)
------ -------- -------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS $ 792 $ 2,002 $ (755)
====== ======== =======
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 94
<PAGE>
Dresdner RCM Global Funds
Statements of Operations
For the Six Months Ended June 30, 2000 (Unaudited)
(All numbers in thousands)
<TABLE>
<CAPTION>
GLOBAL GLOBAL GLOBAL INTERNATIONAL EMERGING
SMALL CAP TECHNOLOGY HEALTH CARE GROWTH EQUITY MARKETS EUROPE
FUND FUND FUND FUND FUND FUND
--------- ---------- ----------- ------------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME: (NOTE 1)
Income:
Dividends $ 145 $ 875 $ 65 $ 1,804 $ 56 $ 297
Interest 37 904 42 173 39 --
Foreign tax withheld (12) (32) (1) (248) (8) (55)
------- -------- ------ -------- ------- --------
Total investment income 170 1,747 106 1,729 87 242
------- -------- ------ -------- ------- --------
Expenses:
Investment management fees (Note 2) 206 2,989 145 1,156 42 396
Administration fees 32 32 32 32 15 32
Shareholder servicing fee, Class I 8 92 -- 18 8 14
Shareholder servicing fee, Class N 10 53 13 8 8 50
Registration and filing, Class I 10 37 -- 15 15 12
Registration and filing, Class N 9 29 12 14 8 19
Reports to shareholders 11 27 10 12 7 8
Accounting expense 23 26 12 29 19 23
Audit fees 12 13 10 22 9 26
Directors' fees and expenses (Note 7) 11 11 11 30 16 140
Legal fees 6 6 6 7 7 13
Custodian fees 28 46 6 136 42 16
Insurance expense -- 1 -- 3 -- --
Distribution fees (Note 3) 15 342 36 4 2 98
Amortization of organization costs (Note 5) -- 7 -- -- 2 --
Reimbursement of expenses previously assumed by
Investment Manager (Note 2) -- 339 -- 77 -- --
Miscellaneous expenses 3 3 3 3 2 8
------- -------- ------ -------- ------- --------
Total expenses before waivers and reimbursements 384 4,053 296 1,566 202 855
Less: Expenses waived and reimbursed by Investment
Manager (Note 2) (60) -- (78) (21) (137) (214)
------- -------- ------ -------- ------- --------
Total net expenses 324 4,053 218 1,545 65 641
------- -------- ------ -------- ------- --------
Net investment income (loss) (154) (2,306) (112) 184 22 (399)
------- -------- ------ -------- ------- --------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on investments 4,534 (54,456) 2,166 25,182 324 15,486
Net realized gain (loss) on foreign currrency
transactions (222) (458) 5 (5,541) (12) (2,570)
Net realized gain on options written -- 2,665 -- -- -- --
------- -------- ------ -------- ------- --------
Net realized gain (loss) 4,312 (52,249) 2,171 19,641 312 12,916
------- -------- ------ -------- ------- --------
Net change in unrealized appreciation (depreciation)
on investments (2,703) 72,935 2,455 (59,602) (1,278) (13,383)
Net change in unrealized appreciation (depreciation)
on foreign currency translations (1) (13) -- (23) -- 24
------- -------- ------ -------- ------- --------
Net unrealized appreciation (depreciation) (2,704) 72,922 2,455 (59,625) (1,278) (13,359)
------- -------- ------ -------- ------- --------
Net realized and unrealized gain (loss) 1,608 20,673 4,626 (39,984) (966) (443)
------- -------- ------ -------- ------- --------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS $ 1,454 $ 18,367 $4,514 $(39,800) $ (944) $ (842)
======= ======== ====== ======== ======= ========
<CAPTION>
GLOBAL STRATEGIC
EQUITY INCOME BALANCED
FUND FUND FUND
------ --------- --------
<S> <C> <C> <C>
INVESTMENT INCOME: (NOTE 1)
Income:
Dividends $ 6 $ 1 $ 14
Interest -- 46 57
Foreign tax withheld (1) -- --
----- ---- ----
Total investment income 5 47 71
----- ---- ----
Expenses:
Investment management fees (Note 2) 6 4 18
Administration fees 32 32 32
Shareholder servicing fee, Class I -- -- --
Shareholder servicing fee, Class N -- -- 7
Registration and filing, Class I 4 5 --
Registration and filing, Class N -- -- 4
Reports to shareholders 6 5 14
Accounting expense 14 11 8
Audit fees 11 11 11
Directors' fees and expenses (Note 7) 11 11 11
Legal fees 6 6 7
Custodian fees 11 2 5
Insurance expense -- -- --
Distribution fees (Note 3) -- -- --
Amortization of organization costs (Note 5) -- -- --
Reimbursement of expenses previously assumed by
Investment Manager (Note 2) -- -- --
Miscellaneous expenses 2 4 1
----- ---- ----
Total expenses before waivers and reimbursements 103 91 118
Less: Expenses waived and reimbursed by Investment
Manager (Note 2) (93) (84) (94)
----- ---- ----
Total net expenses 10 7 24
----- ---- ----
Net investment income (loss) (5) 40 47
----- ---- ----
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on investments 161 (98) 215
Net realized gain (loss) on foreign currrency
transactions (1) 12 --
Net realized gain on options written -- -- --
----- ---- ----
Net realized gain (loss) 160 (86) 215
----- ---- ----
Net change in unrealized appreciation (depreciation)
on investments (149) 72 355
Net change in unrealized appreciation (depreciation)
on foreign currency translations -- (3) --
----- ---- ----
Net unrealized appreciation (depreciation) (149) 69 355
----- ---- ----
Net realized and unrealized gain (loss) 11 (17) 570
----- ---- ----
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS $ 6 $ 23 $617
===== ==== ====
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 95
<PAGE>
Dresdner RCM Global Funds
Statements of Changes in Net Assets
(All numbers in thousands)
<TABLE>
<CAPTION>
LARGE CAP GROWTH FUND BIOTECHNOLOGY FUND
----------------------------- -----------------------------
(UNAUDITED) (UNAUDITED)
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
JUNE 30, 2000 DEC. 31, 1999 JUNE 30, 2000 DEC. 31, 1999
-------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $ (38) $ (32) $ (1,151) $ (63)
Net realized gain (loss) on investments, foreign
currency transactions and options written 1,112 2,485 (45,625) 2,820
Net change in unrealized appreciation
(depreciation) on investments and foreign currency
translations (282) 2,205 48,778 3,516
------- ------- -------- -------
Net increase (decrease) in net assets resulting from
operations 792 4,658 2,002 6,273
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Class I shares:
Net investment income -- -- -- --
In excess of net investment income -- -- -- --
Net realized gain on investments -- (2,517) -- --
In excess of net realized gain on investments -- -- -- --
------- ------- -------- -------
Total distributions, Class I -- (2,517) -- --
------- ------- -------- -------
Class N shares:
Net investment income -- -- -- --
In excess of net investment income -- -- -- --
Net realized gain on investments -- (46) -- (1,875)
In excess of net realized gain on investments -- -- -- --
------- ------- -------- -------
Total distributions, Class N -- (46) -- (1,875)
------- ------- -------- -------
Total distributions to shareholders -- (2,563) -- (1,875)
NET INCREASE FROM CAPITAL SHARE TRANSACTIONS* 13,076 5,794 448,811 6,561
Redemption fees (Note 1) -- -- -- --
------- ------- -------- -------
TOTAL INCREASE IN NET ASSETS 13,868 7,889 450,813 10,959
NET ASSETS:
Beginning of period 15,824 7,935 14,870 3,911
------- ------- -------- -------
End of period $29,692 $15,824 $465,683 $14,870
======= ======= ======== =======
End of period net assets include accumulated net
investment loss of: $ (38) $ -- $ (1,151) $ --
======= ======= ======== =======
</TABLE>
------------------------------------
* For detail on capital share transactions by class, see Statements of
Changes in Net Assets (Capital Stock Activity) on pages 100-103.
** Class I Shares commenced operations on March 3, 2000.
*** Period from December 15, 1999 (commencement of operations) to December 31,
1999.
The accompanying notes are an integral part of the financial statements.
Page 96
<PAGE>
Dresdner RCM Global Funds
Statements of Changes in Net Assets
(All numbers in thousands)
<TABLE>
<CAPTION>
TAX MANAGED GROWTH FUND GLOBAL SMALL CAP FUND
----------------------------- -----------------------------
(UNAUDITED) (UNAUDITED)
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
JUNE 30, 2000 DEC. 31, 1999 JUNE 30, 2000 DEC. 31, 1999
-------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $ (68) $ (10) $ (154) $ (82)
Net realized gain (loss) on investments, foreign
currency transactions and options written (1,198) 27 4,312 1,566
Net change in unrealized appreciation
(depreciation) on investments and foreign currency
translations 511 615 (2,704) 5,654
------- ------ ------- -------
Net increase (decrease) in net assets resulting from
operations (755) 632 1,454 7,138
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Class I shares:
Net investment income -- -- -- --
In excess of net investment income -- -- -- --
Net realized gain on investments -- (21) -- (868)
In excess of net realized gain on investments -- (2) -- --
------- ------ ------- -------
Total distributions, Class I -- (23) -- (868)
------- ------ ------- -------
Class N shares:
Net investment income -- -- -- --
In excess of net investment income -- -- -- --
Net realized gain on investments -- (6) -- (86)
In excess of net realized gain on investments -- -- -- --
------- ------ ------- -------
Total distributions, Class N -- (6) -- (86)
------- ------ ------- -------
Total distributions to shareholders -- (29) -- (954)
NET INCREASE (DECREASE) FROM CAPITAL SHARE
TRANSACTIONS* 32,270 655 19,977 13,840
Redemption fees (Note 1) 5 -- -- --
------- ------ ------- -------
TOTAL INCREASE (DECREASE) IN NET ASSETS 31,520 1,258 21,431 20,024
NET ASSETS:
Beginning of period 2,258 1,000 25,503 5,479
------- ------ ------- -------
End of period $33,778 $2,258 $46,934 $25,503
======= ====== ======= =======
End of period net assets include accumulated
undistributed net investment income (loss) of: $ (68) $ -- $ (258) $ (104)
======= ====== ======= =======
<CAPTION>
GLOBAL TECHNOLOGY FUND GLOBAL HEALTH CARE FUND
----------------------------- -----------------------------
(UNAUDITED) (UNAUDITED)
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
JUNE 30, 2000 DEC. 31, 1999 JUNE 30, 2000 DEC. 31, 1999
-------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $ (2,306) $ (741) $ (112) $ (44)
Net realized gain (loss) on investments, foreign
currency transactions and options written (52,249) 10,634 2,171 1,311
Net change in unrealized appreciation
(depreciation) on investments and foreign currency
translations 72,922 101,302 2,455 206
-------- -------- ------- -------
Net increase (decrease) in net assets resulting from
operations 18,367 111,195 4,514 1,473
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Class I shares:
Net investment income -- -- -- --
In excess of net investment income -- -- -- --
Net realized gain on investments -- (4,100) -- --
In excess of net realized gain on investments -- -- -- --
-------- -------- ------- -------
Total distributions, Class I -- (4,100) -- --
-------- -------- ------- -------
Class N shares:
Net investment income -- -- -- --
In excess of net investment income -- -- -- --
Net realized gain on investments -- (1,490) -- (1,103)
In excess of net realized gain on investments -- -- -- --
-------- -------- ------- -------
Total distributions, Class N -- (1,490) -- (1,103)
-------- -------- ------- -------
Total distributions to shareholders -- (5,590) -- (1,103)
NET INCREASE (DECREASE) FROM CAPITAL SHARE
TRANSACTIONS* 464,272 156,064 54,757 427
Redemption fees (Note 1) -- -- -- --
-------- -------- ------- -------
TOTAL INCREASE (DECREASE) IN NET ASSETS 482,639 261,669 59,271 797
NET ASSETS:
Beginning of period 280,227 18,558 6,284 5,487
-------- -------- ------- -------
End of period $762,866 $280,227 $65,555 $ 6,284
======== ======== ======= =======
End of period net assets include accumulated
undistributed net investment income (loss) of: $ (2,322) $ (16) $ (112) $ --
======== ======== ======= =======
</TABLE>
------------------------------------
* For detail on capital share transactions by class, see Statements of
Changes in Net Assets (Capital Stock Activity) on pages 100-103.
** Class I Shares commenced operations on March 3, 2000.
*** Period from December 15, 1999 (commencement of operations) to December 31,
1999.
The accompanying notes are an integral part of the financial statements.
Page 97
<PAGE>
Dresdner RCM Global Funds
Statements of Changes in Net Assets
(All numbers in thousands)
<TABLE>
<CAPTION>
INTERNATIONAL GROWTH
EQUITY FUND EMERGING MARKETS FUND
----------------------------- -----------------------------
(UNAUDITED) (UNAUDITED)
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
JUNE 30, 2000 DEC. 31, 1999 JUNE 30, 2000 DEC. 31, 1999
-------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $ 184 $ 196 $ 22 $ (5)
Net realized gain (loss) on investments, foreign
currency transactions and options written 19,641 36,900 312 930
Net change in unrealized appreciation
(depreciation) on investments and foreign currency
translations (59,625) 65,058 (1,278) 1,662
-------- -------- ------- ------
Net increase (decrease) in net assets resulting from
operations (39,800) 102,154 (944) 2,587
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Class I shares:
Net investment income -- (854) -- --
In excess of net investment income -- (1,135) -- --
Net realized gain on investments -- (16,421) -- (144)
In excess of net realized gain on investments -- -- -- --
-------- -------- ------- ------
Total distributions, Class I -- (18,410) -- (144)
-------- -------- ------- ------
Class N shares:
Net investment income -- (4) -- --
In excess of net investment income -- (6) -- --
Net realized gain on investments -- (92) -- (5)
In excess of net realized gain on investments -- -- -- --
-------- -------- ------- ------
Total distributions, Class N -- (102) -- (5)
-------- -------- ------- ------
Total distributions to shareholders -- (18,512) -- (149)
NET INCREASE (DECREASE) FROM CAPITAL SHARE
TRANSACTIONS* 77,249 81,682 4,428 281
Redemption fees (Note 1) -- -- -- --
-------- -------- ------- ------
TOTAL INCREASE (DECREASE) IN NET ASSETS 37,449 165,324 3,484 2,719
NET ASSETS:
Beginning of period 287,299 121,975 5,453 2,734
-------- -------- ------- ------
End of period $324,748 $287,299 $ 8,937 $5,453
======== ======== ======= ======
End of period net assets include accumulated
undistributed net investment income (loss) of: $ (876) $ (1,060) $ 20 $ (2)
======== ======== ======= ======
</TABLE>
------------------------------------
* For detail on capital share transactions by class, see Statements of
Changes in Net Assets (Capital Stock Activity) on pages 100-103.
** Class I Shares commenced operations on March 3, 2000.
*** Period from December 15, 1999 (commencement of operations) to December 31,
1999.
The accompanying notes are an integral part of the financial statements.
Page 98
<PAGE>
Dresdner RCM Global Funds
Statements of Changes in Net Assets
(All numbers in thousands)
<TABLE>
<CAPTION>
EUROPE FUND GLOBAL EQUITY FUND
------------------------------- -----------------------------
(UNAUDITED) (UNAUDITED)
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
JUNE 30, 2000** DEC. 31, 1999 JUNE 30, 2000 DEC. 31, 1999
---------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $ (399) $ (110) $ (5) $ (3)
Net realized gain (loss) on investments, foreign
currency transactions and options written 12,916 34,049 160 140
Net change in unrealized appreciation
(depreciation) on investments and foreign currency
translations (13,359) (21,415) (149) 482
-------- --------- ------ ------
Net increase (decrease) in net assets resulting from
operations (842) 12,524 6 619
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Class I shares:
Net investment income -- -- -- --
In excess of net investment income -- -- -- (6)
Net realized gain on investments -- -- -- (29)
In excess of net realized gain on investments -- -- -- --
-------- --------- ------ ------
Total distributions, Class I -- -- -- (35)
-------- --------- ------ ------
Class N shares:
Net investment income -- -- -- --
In excess of net investment income -- (336) -- --
Net realized gain on investments -- (16,858) -- --
In excess of net realized gain on investments -- -- -- --
-------- --------- ------ ------
Total distributions, Class N -- (17,194) -- --
-------- --------- ------ ------
Total distributions to shareholders -- (17,194) -- (35)
NET INCREASE (DECREASE) FROM CAPITAL SHARE
TRANSACTIONS* 14,876 (119,298) -- --
Redemption fees (Note 1) -- 540 -- --
-------- --------- ------ ------
TOTAL INCREASE (DECREASE) IN NET ASSETS 14,034 (123,428) 6 584
NET ASSETS:
Beginning of period 67,910 191,338 1,584 1,000
-------- --------- ------ ------
End of period $ 81,944 $ 67,910 $1,590 $1,584
======== ========= ====== ======
End of period net assets include accumulated
undistributed net investment income (loss) of: $ (416) $ (17) $ (6) $ (1)
======== ========= ====== ======
<CAPTION>
STRATEGIC INCOME FUND BALANCED FUND
----------------------------- --------------------------------
(UNAUDITED) (UNAUDITED)
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
JUNE 30, 2000 DEC. 31, 1999 JUNE 30, 2000 DEC. 31, 1999***
-------------- ------------- -------------- ----------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $ 40 $ 159 $ 47 $ 1
Net realized gain (loss) on investments, foreign
currency transactions and options written (86) (28) 215 5
Net change in unrealized appreciation
(depreciation) on investments and foreign currency
translations 69 (52) 355 56
------- ------ ------- ------
Net increase (decrease) in net assets resulting from
operations 23 79 617 62
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Class I shares:
Net investment income (22) (159) (13) --
In excess of net investment income -- (54) -- --
Net realized gain on investments -- -- -- --
In excess of net realized gain on investments -- -- -- --
------- ------ ------- ------
Total distributions, Class I (22) (213) (13) --
------- ------ ------- ------
Class N shares:
Net investment income -- -- -- --
In excess of net investment income -- -- -- --
Net realized gain on investments -- -- -- --
In excess of net realized gain on investments -- -- -- --
------- ------ ------- ------
Total distributions, Class N -- -- -- --
------- ------ ------- ------
Total distributions to shareholders (22) (213) (13) --
NET INCREASE (DECREASE) FROM CAPITAL SHARE
TRANSACTIONS* (2,000) -- 15,816 947
Redemption fees (Note 1) -- -- -- --
------- ------ ------- ------
TOTAL INCREASE (DECREASE) IN NET ASSETS (1,999) (134) 16,420 1,009
NET ASSETS:
Beginning of period 2,866 3,000 1,009 --
------- ------ ------- ------
End of period $ 867 $2,866 $17,429 $1,009
======= ====== ======= ======
End of period net assets include accumulated
undistributed net investment income (loss) of: $ (11) $ (29) $ 35 $ 1
======= ====== ======= ======
</TABLE>
------------------------------------
* For detail on capital share transactions by class, see Statements of
Changes in Net Assets (Capital Stock Activity) on pages 100-103.
** Class I Shares commenced operations on March 3, 2000.
*** Period from December 15, 1999 (commencement of operations) to December 31,
1999.
The accompanying notes are an integral part of the financial statements.
Page 99
<PAGE>
Dresdner RCM Global Funds
Statements of Changes in Net Assets
Capital Stock Activity
(All numbers in thousands)
<TABLE>
<CAPTION>
LARGE CAP GROWTH FUND BIOTECHNOLOGY FUND
----------------------------- -----------------------------
(UNAUDITED) (UNAUDITED)
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
JUNE 30, 2000 DEC. 31, 1999 JUNE 30, 2000 DEC. 31, 1999
-------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
FUND SHARE TRANSACTIONS
DOLLAR AMOUNTS:
Class I shares:
Sold $ 9,071 $ 7,126 $ -- $ --
Issued to shareholders in reinvestment of
distributions -- 2,468 -- --
Repurchased (1,353) (4,708) -- --
------- ------- ---------- -------
Net increase, Class I $ 7,718 $ 4,886 $ -- $ --
======= ======= ========== =======
Class N shares:
Sold $ 7,520 $ 875 $ 680,566 $ 6,483
Issued to shareholders in reinvestment of
distributions -- 40 -- 872
Repurchased (2,162) (7) (231,755) (794)
------- ------- ---------- -------
Net increase, Class N $ 5,358 $ 908 $ 448,811 $ 6,561
======= ======= ========== =======
SHARE AMOUNTS
Class I shares:
Sold 465 414 -- --
Issued to shareholders in reinvestment of
distributions -- 140 -- --
Repurchased (70) (265) -- --
------- ------- ---------- -------
Net increase, Class I 395 289 -- --
======= ======= ========== =======
Class N shares:
Sold 389 47 20,103 401
Issued to shareholders in reinvestment of
distributions -- 2 -- 55
Repurchased (111) -- (7,453) (55)
------- ------- ---------- -------
Net increase, Class N 278 49 12,650 401
======= ======= ========== =======
PURCHASES AND SALES OF INVESTMENT SECURITIES:
(EXCLUDING SHORT-TERM SECURITIES)
Purchases of securities $17,584 $17,147 $1,047,407 $27,104
Proceeds from sales of securities 4,694 12,789 645,613 24,690
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 100
<PAGE>
Dresdner RCM Global Funds
Statements of Changes in Net Assets
Capital Stock Activity
(All numbers in thousands)
<TABLE>
<CAPTION>
TAX MANAGED GROWTH FUND GLOBAL SMALL CAP FUND
----------------------------- -----------------------------
(UNAUDITED) (UNAUDITED)
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
JUNE 30, 2000 DEC. 31, 1999 JUNE 30, 2000 DEC. 31, 1999
-------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
FUND SHARE TRANSACTIONS
DOLLAR AMOUNTS:
Class I shares:
Sold $29,845 $ -- $ 25,192 $13,423
Issued to shareholders in reinvestment of
distributions -- -- -- 154
Repurchased (552) -- (22,486) (920)
------- ------ -------- -------
Net increase, Class I $29,293 $ -- $ 2,706 $12,657
======= ====== ======== =======
Class N shares:
Sold $ 3,019 $ 649 $ 36,116 $ 1,118
Issued to shareholders in reinvestment of
distributions -- 6 -- 85
Repurchased (42) -- (18,845) (20)
------- ------ -------- -------
Net increase, Class N $ 2,977 $ 655 $ 17,271 $ 1,183
======= ====== ======== =======
SHARE AMOUNTS
Class I shares:
Sold 1,861 -- 927 636
Issued to shareholders in reinvestment of
distributions -- -- -- 7
Repurchased (35) -- (863) (56)
------- ------ -------- -------
Net increase, Class I 1,826 -- 64 587
======= ====== ======== =======
Class N shares:
Sold 197 51 1,316 58
Issued to shareholders in reinvestment of
distributions -- -- -- 4
Repurchased (3) -- (728) (1)
------- ------ -------- -------
Net increase, Class N 194 51 588 61
======= ====== ======== =======
PURCHASES AND SALES OF INVESTMENT SECURITIES:
(EXCLUDING SHORT-TERM SECURITIES)
Purchases of securities $36,793 $2,141 $ 59,569 $24,604
Proceeds from sales of securities 5,194 593 39,257 12,387
<CAPTION>
GLOBAL TECHNOLOGY FUND GLOBAL HEALTH CARE FUND
----------------------------- -----------------------------
(UNAUDITED) (UNAUDITED)
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
JUNE 30, 2000 DEC. 31, 1999 JUNE 30, 2000 DEC. 31, 1999
-------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
FUND SHARE TRANSACTIONS
DOLLAR AMOUNTS:
Class I shares:
Sold $ 331,807 $125,712 $ -- $ --
Issued to shareholders in reinvestment of
distributions -- 4,025 -- --
Repurchased (175,237) (31,266) -- --
---------- -------- -------- -------
Net increase, Class I $ 156,570 $ 98,471 $ -- $ --
========== ======== ======== =======
Class N shares:
Sold $ 441,379 $ 64,142 $ 89,942 $ 748
Issued to shareholders in reinvestment of
distributions -- 1,438 -- 67
Repurchased (133,677) (7,987) (35,185) (388)
---------- -------- -------- -------
Net increase, Class N $ 307,702 $ 57,593 $ 54,757 $ 427
========== ======== ======== =======
SHARE AMOUNTS
Class I shares:
Sold 4,643 3,164 -- --
Issued to shareholders in reinvestment of
distributions -- 76 -- --
Repurchased (2,547) (765) -- --
---------- -------- -------- -------
Net increase, Class I 2,096 2,475 -- --
========== ======== ======== =======
Class N shares:
Sold 6,026 1,564 4,401 56
Issued to shareholders in reinvestment of
distributions -- 27 -- 5
Repurchased (1,918) (199) (1,863) 29
---------- -------- -------- -------
Net increase, Class N 4,108 1,392 2,538 32
========== ======== ======== =======
PURCHASES AND SALES OF INVESTMENT SECURITIES:
(EXCLUDING SHORT-TERM SECURITIES)
Purchases of securities $1,133,180 $211,880 $118,433 $21,409
Proceeds from sales of securities 689,391 80,869 75,655 22,322
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 101
<PAGE>
Dresdner RCM Global Funds
Statements of Changes in Net Assets
Capital Stock Activity
(All numbers in thousands)
<TABLE>
<CAPTION>
INTERNATIONAL GROWTH
EQUITY FUND EMERGING MARKETS FUND
----------------------------- -----------------------------
(UNAUDITED) (UNAUDITED)
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
JUNE 30, 2000 DEC. 31, 1999 JUNE 30, 2000 DEC. 31, 1999
-------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
FUND SHARE TRANSACTIONS
DOLLAR AMOUNTS:
Class I shares:
Sold $ 315,765 $ 182,299 $ 3,608 $ 56
Issued to shareholders in reinvestment of
distributions -- 17,745 -- 2
Repurchased (242,457) (119,912) (1,270) (17)
--------- --------- ------- ------
Net increase(decrease), Class I $ 73,308 $ 80,132 $ 2,338 $ 41
========= ========= ======= ======
Class N shares:
Sold $ 12,957 $ 2,341 $ 2,918 $ 253
Issued to shareholders in reinvestment of
distributions -- 61 -- 5
Repurchased (9,016) (852) (828) (18)
--------- --------- ------- ------
Net increase(decrease), Class N $ 3,941 $ 1,550 $ 2,090 $ 240
========= ========= ======= ======
SHARE AMOUNTS
Class I shares:
Sold 15,488 10,871 186 5
Issued to shareholders in reinvestment of
distributions -- 872 -- --
Repurchased (11,774) (7,103) (75) (1)
--------- --------- ------- ------
Net increase(decrease), Class I 3,714 4,640 (111) 4
========= ========= ======= ======
Class N shares:
Sold 637 130 160 19
Issued to shareholders in reinvestment of
distributions -- 3 -- --
Repurchased (450) (55) (45) (1)
--------- --------- ------- ------
Net increase(decrease), Class N 187 78 115 18
========= ========= ======= ======
PURCHASES AND SALES OF INVESTMENT SECURITIES:
(EXCLUDING SHORT-TERM SECURITIES)
Purchases of securities $ 243,649 $ 280,952 $10,118 $7,324
Proceeds from sales of securities 171,793 224,692 6,223 7,103
</TABLE>
------------------------------------
* Class I Shares commenced operations on March 3, 2000.
** Period from December 15, 1999 (commencement of operations) to December 31,
1999.
The accompanying notes are an integral part of the financial statements.
Page 102
<PAGE>
Dresdner RCM Global Funds
Statements of Changes in Net Assets
Capital Stock Activity
(All numbers in thousands)
<TABLE>
<CAPTION>
EUROPE FUND GLOBAL EQUITY FUND
------------------------------ -----------------------------
(UNAUDITED) (UNAUDITED)
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
JUNE 30, 2000* DEC. 31, 1999 JUNE 30, 2000 DEC. 31, 1999
--------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
FUND SHARE TRANSACTIONS
DOLLAR AMOUNTS:
Class I shares:
Sold $ 1,495 $ -- $ -- $ --
Issued to shareholders in reinvestment of
distributions -- -- -- --
Repurchased (241) -- -- --
--------- --------- ------ ------
Net increase(decrease), Class I $ 1,254 $ -- $ -- $ --
========= ========= ====== ======
Class N shares:
Sold $ 132,058 $ 10,001 $ -- $ --
Issued to shareholders in reinvestment of
distributions -- 8,465 -- --
Repurchased (118,436) (137,764) -- --
--------- --------- ------ ------
Net increase(decrease), Class N $ 13,622 $(119,298) $ -- $ --
========= ========= ====== ======
SHARE AMOUNTS
Class I shares:
Sold 80 -- -- --
Issued to shareholders in reinvestment of
distributions -- -- -- --
Repurchased (13) -- -- --
--------- --------- ------ ------
Net increase(decrease), Class I 67 -- -- --
========= ========= ====== ======
Class N shares:
Sold 7,511 583 -- --
Issued to shareholders in reinvestment of
distributions -- 535 -- --
Repurchased (6,784) (10,914) -- --
--------- --------- ------ ------
Net increase(decrease), Class N 727 (9,796) -- --
========= ========= ====== ======
PURCHASES AND SALES OF INVESTMENT SECURITIES:
(EXCLUDING SHORT-TERM SECURITIES)
Purchases of securities $ 74,544 $ 202,304 $1,082 $2,077
Proceeds from sales of securities 65,083 362,350 1,083 1,617
<CAPTION>
STRATEGIC INCOME FUND BALANCED FUND
----------------------------- -------------------------------
(UNAUDITED) (UNAUDITED)
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
JUNE 30, 2000 DEC. 31, 1999 JUNE 30, 2000 DEC. 31, 1999**
-------------- ------------- -------------- ---------------
<S> <C> <C> <C> <C>
FUND SHARE TRANSACTIONS
DOLLAR AMOUNTS:
Class I shares:
Sold $ -- $ -- $18,121 $ 947
Issued to shareholders in reinvestment of
distributions -- -- 715 --
Repurchased (2,000) -- (3,020) --
------- ------- ------- ------
Net increase(decrease), Class I $(2,000) $ -- $15,816 $ 947
======= ======= ======= ======
Class N shares:
Sold $ -- $ -- $ -- $ --
Issued to shareholders in reinvestment of
distributions -- -- -- --
Repurchased -- -- -- --
------- ------- ------- ------
Net increase(decrease), Class N $ -- $ -- $ -- $ --
======= ======= ======= ======
SHARE AMOUNTS
Class I shares:
Sold -- -- 1,775 95
Issued to shareholders in reinvestment of
distributions -- -- 1 --
Repurchased (211) -- (276) --
------- ------- ------- ------
Net increase(decrease), Class I (211) -- 1,500 95
======= ======= ======= ======
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)
Purchases of securities $ 1,297 $11,635 $18,520 $1,475
Proceeds from sales of securities 2,942 8,896 7,436 551
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 103
<PAGE>
Dresdner RCM Global Funds
Financial Highlights
For a share outstanding throughout each fiscal year or period ended:
<TABLE>
<CAPTION>
LARGE CAP GROWTH FUND
--------------------------------------------------------------------
CLASS I
--------------------------------------------------------------------
(UNAUDITED) YEAR ENDED DECEMBER 31,
SIX MONTHS ENDED -----------------------------------------------
JUNE 30, 2000 1999 1998 1997 1996(3)
---------------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE: (1)
Net asset value, beginning of period $ 19.07 $ 16.14 $12.53 $10.00 $10.00
------- ------- ------ ------ ------
Income from investment operations:
Net investment income (loss) (0.03) (0.05) (0.02) 0.01 --
Net realized and unrealized gain on
investments 0.74 6.95 5.51 3.17 --
------- ------- ------ ------ ------
Total from investment operations 0.71 6.90 5.49 3.18 --
Less distributions:
From net investment income -- -- (0.01) (0.01) --
From net realized gain on investments -- (3.97) (1.87) (0.64) --
------- ------- ------ ------ ------
Total distributions -- (3.97) (1.88) (0.65) --
------- ------- ------ ------ ------
NET ASSET VALUE, END OF PERIOD $ 19.78 $ 19.07 $16.14 $12.53 $10.00
------- ------- ------ ------ ------
------- ------- ------ ------ ------
TOTAL RETURN (7) 3.72% 44.84% 44.11% 31.99% 0.00%
------- ------- ------ ------ ------
------- ------- ------ ------ ------
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $23,265 $14,898 $7,935 $5,025 $4,000
------- ------- ------ ------ ------
------- ------- ------ ------ ------
Ratio of expenses to average net assets:
With waiver and reimbursement (15) 0.95% 0.95% 0.95% 0.95% 0.00%(8)
------- ------- ------ ------ ------
------- ------- ------ ------ ------
Without waiver and reimbursement (15) 1.82% 2.45% 3.04% 2.63% --%
------- ------- ------ ------ ------
------- ------- ------ ------ ------
Ratio of net investment income (loss) to average
net assets:
With waiver and reimbursement (15) (0.28)% (0.26)% (0.11)% 0.10% 0.00%(8)
------- ------- ------ ------ ------
------- ------- ------ ------ ------
Without waiver and reimbursement (15) (1.15)% (1.76)% (2.20)% (1.58)% --%
------- ------- ------ ------ ------
------- ------- ------ ------ ------
Portfolio turnover 20.08% 109.29% 99.58% 119.87% 0.00%
------- ------- ------ ------ ------
------- ------- ------ ------ ------
<CAPTION>
LARGE CAP GROWTH FUND
----------------------------------
CLASS N
----------------------------------
(UNAUDITED) YEAR ENDED
SIX MONTHS ENDED DECEMBER 31,
JUNE 30, 2000 1999(9)
---------------- -------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE: (1)
Net asset value, beginning of period $19.00 $16.60
------ ------
Income from investment operations:
Net investment income (loss) (0.05) (0.08)
Net realized and unrealized gain on
investments 0.72 6.45
------ ------
Total from investment operations 0.67 6.37
Less distributions:
From net investment income -- --
From net realized gain on investments -- (3.97)
------ ------
Total distributions -- (3.97)
------ ------
NET ASSET VALUE, END OF PERIOD $19.67 $19.00
------ ------
------ ------
TOTAL RETURN (7) 3.47% 40.48%
------ ------
------ ------
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $6,427 $ 926
------ ------
------ ------
Ratio of expenses to average net assets:
With waiver and reimbursement (15) 1.20% 1.20%
------ ------
------ ------
Without waiver and reimbursement (15) 2.88% 60.04%
------ ------
------ ------
Ratio of net investment income (loss) to average
net assets:
With waiver and reimbursement (15) (0.57)% (0.55)%
------ ------
------ ------
Without waiver and reimbursement (15) (2.25)% (59.39)%
------ ------
------ ------
Portfolio turnover 20.08% 109.29%
------ ------
------ ------
</TABLE>
------------------------------------
For Footnote References, see "Notes to Financial Highlights."
<TABLE>
<CAPTION>
BIOTECHNOLOGY FUND
-------------------------------------------------------
CLASS N
-------------------------------------------------------
(UNAUDITED) YEAR ENDED DECEMBER 31,
SIX MONTHS ENDED ----------------------------------
JUNE 30, 2000 1999 1998 1997(4)
---------------- -------- -------- --------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE: (1)
Net asset value, beginning of period $ 20.02 $ 11.44 $10.00 $10.00
-------- ------- ------ ------
Income from investment operations:
Net investment loss (0.15) (0.15) (0.10) --
Net realized and unrealized gain on investments 14.90 12.03 1.86 --
-------- ------- ------ ------
Total from investment operations 14.75 11.88 1.76 --
Less distributions:
From net investment income -- -- -- --
From net realized gain on investments -- (3.30) (0.32) --
-------- ------- ------ ------
Total distributions -- (3.30) (0.32) --
-------- ------- ------ ------
NET ASSET VALUE, END OF PERIOD $ 34.77 $ 20.02 $11.44 $10.00
-------- ------- ------ ------
-------- ------- ------ ------
TOTAL RETURN (7) 73.68% 111.39% 17.76% 0.00%(8)
-------- ------- ------ ------
-------- ------- ------ ------
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $465,683 $14,870 $3,911 $3,000
-------- ------- ------ ------
-------- ------- ------ ------
Ratio of expenses to average net assets:
With waiver and reimbursement (15) 1.50% 1.50% 1.50% 0.01%(8)
-------- ------- ------ ------
-------- ------- ------ ------
Without waiver and reimbursement (15) 1.50% 4.53% 4.87% --%
-------- ------- ------ ------
-------- ------- ------ ------
Ratio of net investment income (loss) to average net
assets:
With waiver and reimbursement (15) (0.98)% (1.09)% (0.95)% 0.01%(8)
-------- ------- ------ ------
-------- ------- ------ ------
Without waiver and reimbursement (15) (0.98)% (4.12)% (4.32)% --%
-------- ------- ------ ------
-------- ------- ------ ------
Portfolio turnover 303.77% 431.27% 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 104
<PAGE>
Dresdner RCM Global Funds
Financial Highlights
For a share outstanding throughout each fiscal year or period ended:
<TABLE>
<CAPTION>
TAX MANAGED GROWTH FUND
---------------------------------------------------------------------------------
CLASS I CLASS N
------------------------------------------ ----------------------------------
YEAR ENDED
(UNAUDITED) DECEMBER 31, (UNAUDITED) YEAR ENDED
SIX MONTHS ENDED --------------------- SIX MONTHS ENDED DECEMBER 31,
JUNE 30, 2000 1999 1998(5) JUNE 30, 2000 1999(10)
---------------- -------- -------- ---------------- -------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE: (1)
Net asset value, beginning of period $ 14.99 $10.00 $10.00 $14.95 $10.34
------- ------ ------ ------ ------
Income from investment operations:
Net investment loss (0.06) (0.06) -- (0.08) (0.29)
Net realized and unrealized gain on
investments 0.63(16) 5.28 -- 0.64(16) 5.13
------- ------ ------ ------ ------
Total from investment operations 0.57 5.22 -- 0.56 4.84
Less distributions:
From net realized gain on investments -- (0.21) -- -- (0.21)
In excess of net realized gain on
investments -- (0.02) -- -- (0.02)
------- ------ ------ ------ ------
Total distributions -- (0.23) -- -- (0.23)
------- ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $ 15.56 $14.99 $10.00 $15.51 $14.95
------- ------ ------ ------ ------
------- ------ ------ ------ ------
TOTAL RETURN (7) 3.80% 52.44% 0.00% 3.75% 47.07%
------- ------ ------ ------ ------
------- ------ ------ ------ ------
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $29,972 $1,499 $1,000 $3,806 $ 759
------- ------ ------ ------ ------
------- ------ ------ ------ ------
Ratio of expenses to average net assets:
With waiver and reimbursement (15) 1.25% 1.25% 0.00%(8) 1.50% 1.50%
------- ------ ------ ------ ------
------- ------ ------ ------ ------
Without waiver and reimbursement (15) 1.99% 14.36% --% 4.73% 35.08%
------- ------ ------ ------ ------
------- ------ ------ ------ ------
Ratio of net investment income to average net
assets:
With waiver and reimbursement (15) (0.77)% (0.47)% 0.00%(8) (1.00)% (2.66)%
------- ------ ------ ------ ------
------- ------ ------ ------ ------
Without waiver and reimbursement (15) (1.51)% (13.58)% --% (4.23)% (36.24)%
------- ------ ------ ------ ------
------- ------ ------ ------ ------
Portfolio turnover 32.85% 43.35% 0.00% 32.85% 43.35%
------- ------ ------ ------ ------
------- ------ ------ ------ ------
</TABLE>
------------------------------------
For Footnote References, see "Notes to Financial Highlights."
<TABLE>
<CAPTION>
GLOBAL SMALL CAP FUND
--------------------------------------------------------------------
CLASS I
--------------------------------------------------------------------
(UNAUDITED) YEAR ENDED DECEMBER 31,
SIX MONTHS ENDED -----------------------------------------------
JUNE 30, 2000 1999 1998 1997 1996(3)
---------------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE: (1)
Net asset value, beginning of period $ 23.38 $ 12.37 $11.09 $10.00 $10.00
------- ------- ------ ------ ------
Income from investment operations:
Net investment loss (0.09) (0.17) (0.13) (0.13) --
Net realized and unrealized gain on investments 3.65 12.96 2.23 2.64 --
------- ------- ------ ------ ------
Total from investment operations 3.56 12.79 2.10 2.51 --
Less distributions:
From net realized gain on investments -- (1.78) (0.82) (1.42) --
------- ------- ------ ------ ------
Total distributions -- (1.78) (0.82) (1.42) --
------- ------- ------ ------ ------
NET ASSET VALUE, END OF PERIOD $ 26.94 $ 23.38 $12.37 $11.09 $10.00
------- ------- ------ ------ ------
------- ------- ------ ------ ------
TOTAL RETURN (7) 15.18% 104.63% 19.29% 25.48% 0.00%
------- ------- ------ ------ ------
------- ------- ------ ------ ------
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $29,486 $24,073 $5,479 $4,456 $4,000
------- ------- ------ ------ ------
------- ------- ------ ------ ------
Ratio of expenses to average net assets:
With waiver and reimbursement (15) 1.50% 1.50% 1.75% 1.75% 0.00%(8)
------- ------- ------ ------ ------
------- ------- ------ ------ ------
Without waiver and reimbursement (15) 1.72% 4.10% 3.86% 3.09% --%
------- ------- ------ ------ ------
------- ------- ------ ------ ------
Ratio of net investment income (loss) to average net
assets:
With waiver and reimbursement (15) (0.72)% (1.13)% (1.03)% (1.14)% 0.00%(8)
------- ------- ------ ------ ------
------- ------- ------ ------ ------
Without waiver and reimbursement (15) (0.94)% (3.73)% (3.14)% (2.49)% --%
------- ------- ------ ------ ------
------- ------- ------ ------ ------
Portfolio turnover 102.60% 161.61% 184.38% 153.49% 0.00%
------- ------- ------ ------ ------
------- ------- ------ ------ ------
<CAPTION>
GLOBAL SMALL CAP FUND
----------------------------------
CLASS N
----------------------------------
(UNAUDITED) YEAR ENDED
SIX MONTHS ENDED DECEMBER 31,
JUNE 30, 2000 1999(11)
---------------- -------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE: (1)
Net asset value, beginning of period $ 23.31 $11.63
------- ------
Income from investment operations:
Net investment loss (0.11) (0.21)
Net realized and unrealized gain on investments 3.70 13.67
------- ------
Total from investment operations 3.59 13.46
Less distributions:
From net realized gain on investments -- (1.78)
------- ------
Total distributions -- (1.78)
------- ------
NET ASSET VALUE, END OF PERIOD $ 26.90 $23.31
------- ------
------- ------
TOTAL RETURN (7) 15.32% 116.97%
------- ------
------- ------
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $17,448 $1,430
------- ------
------- ------
Ratio of expenses to average net assets:
With waiver and reimbursement (15) 1.75% 1.75%
------- ------
------- ------
Without waiver and reimbursement (15) 2.21% 16.71%
------- ------
------- ------
Ratio of net investment income (loss) to average net
assets:
With waiver and reimbursement (15) (0.83)% (1.49)%
------- ------
------- ------
Without waiver and reimbursement (15) (1.29)% (16.44)%
------- ------
------- ------
Portfolio turnover 102.60% 161.61%
------- ------
------- ------
</TABLE>
------------------------------------
For Footnote References, see "Notes to Financial Highlights."
The accompanying notes are an integral part of the financial statements.
Page 105
<PAGE>
Dresdner RCM Global Funds
Financial Highlights
For a share outstanding throughout each fiscal year or period ended:
<TABLE>
<CAPTION>
GLOBAL TECHNOLOGY FUND
-------------------------------------------------------------------------------
CLASS I
-------------------------------------------------------------------------------
(UNAUDITED)
SIX MONTHS YEAR ENDED DECEMBER 31,
ENDED -------------------------------------------------------------
JUNE 30, 2000 1999 1998 1997 1996 1995(2)
------------- --------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE: (1)
Net asset value, beginning of
period $ 59.21 $ 21.40 $ 13.69 $12.60 $10.04 $10.00
-------- -------- ------- ------ ------ ------
Income from investment
operations:
Net investment loss (0.26) (0.35) (0.16) (0.16) (0.15) --
Net realized and unrealized
gain (loss) on investments 10.87 39.54 8.44 3.46 2.80 0.04
-------- -------- ------- ------ ------ ------
Total from investment operations 10.61 39.19 8.28 3.30 2.65 0.04
Less distributions:
From net realized gain on
investments -- (1.38) (0.57) (2.21) (0.09) --
-------- -------- ------- ------ ------ ------
Total distributions -- (1.38) (0.57) (2.21) (0.09) --
-------- -------- ------- ------ ------ ------
NET ASSET VALUE, END OF PERIOD $ 69.82 $ 59.21 $ 21.40 $13.69 $12.60 $10.04
-------- -------- ------- ------ ------ ------
-------- -------- ------- ------ ------ ------
TOTAL RETURN (7) 17.92% 182.95% 60.53% 27.08% 26.41% 0.40%
-------- -------- ------- ------ ------ ------
-------- -------- ------- ------ ------ ------
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in
000's) $379,724 $197,897 $18,558 $6,950 $5,117 $ 954
-------- -------- ------- ------ ------ ------
-------- -------- ------- ------ ------ ------
Ratio of expenses to average net
assets:
With waiver and
reimbursement (15) 1.32% 1.50% 1.75% 1.75% 1.73% 0.00%(8)
-------- -------- ------- ------ ------ ------
-------- -------- ------- ------ ------ ------
Without waiver and
reimbursement (15) 1.32% 1.50% 2.49% 2.45% 7.75% --%
-------- -------- ------- ------ ------ ------
-------- -------- ------- ------ ------ ------
Ratio of net investment income
(loss) to average net assets:
With waiver and
reimbursement (15) (0.75)% (1.02)% (0.99)% (1.15)% (1.34)% (0.02)%(8)
-------- -------- ------- ------ ------ ------
-------- -------- ------- ------ ------ ------
Without waiver and
reimbursement (15) (0.75)% (1.02)% (1.73)% (1.86)% 7.36% --%
-------- -------- ------- ------ ------ ------
-------- -------- ------- ------ ------ ------
Portfolio turnover 130.26% 119.32% 265.99% 189.41% 155.58% 0.00%
-------- -------- ------- ------ ------ ------
-------- -------- ------- ------ ------ ------
<CAPTION>
GLOBAL TECHNOLOGY FUND
-------------------------------
CLASS N
-------------------------------
(UNAUDITED)
SIX MONTHS YEAR ENDED
ENDED DECEMBER 31,
JUNE 30, 2000 1999(12)
------------- -------------
<S> <C> <C>
PER SHARE OPERATING
PERFORMANCE: (1)
Net asset value, beginning of
period $ 59.13 $ 24.01
-------- -------
Income from investment
operations:
Net investment loss (0.27) (0.49)
Net realized and unrealized
gain (loss) on investments 10.80 36.99
-------- -------
Total from investment operations 10.53 36.50
Less distributions:
From net realized gain on
investments -- (1.38)
-------- -------
Total distributions -- (1.38)
-------- -------
NET ASSET VALUE, END OF PERIOD $ 69.66 $ 59.13
-------- -------
-------- -------
TOTAL RETURN (7) 17.81% 152.69%
-------- -------
-------- -------
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in
000's) $383,142 $82,330
-------- -------
-------- -------
Ratio of expenses to average net
assets:
With waiver and
reimbursement (15) 1.39% 1.75%
-------- -------
-------- -------
Without waiver and
reimbursement (15) 1.39% 1.99%
-------- -------
-------- -------
Ratio of net investment income
(loss) to average net assets:
With waiver and
reimbursement (15) (0.79)% (1.32)%
-------- -------
-------- -------
Without waiver and
reimbursement (15) (0.79)% (1.56)%
-------- -------
-------- -------
Portfolio turnover 130.26% 119.32%
-------- -------
-------- -------
</TABLE>
------------------------------------
For Footnote References, see "Notes to Financial Highlights."
<TABLE>
<CAPTION>
GLOBAL HEALTH CARE FUND
--------------------------------------------------------------------
CLASS N
--------------------------------------------------------------------
(UNAUDITED) YEAR ENDED DECEMBER 31,
SIX MONTHS ENDED -----------------------------------------------
JUNE 30, 2000 1999 1998 1997 1996(3)
---------------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE: (1)
Net asset value, beginning of period $ 14.25 $13.42 $11.65 $10.00 $10.00
------- ------ ------ ------ ------
Income from investment operations:
Net investment loss (0.07) (0.11) (0.09) (0.06) --
Net realized and unrealized gain on investments 7.83 3.53 3.02 3.03 --
------- ------ ------ ------ ------
Total from investment operations 7.76 3.42 2.93 2.97 --
Less distributions:
From net realized gain on investments -- (2.59) (1.16) (1.32) --
------- ------ ------ ------ ------
Total distributions -- (2.59) (1.16) (1.32) 10.00
------- ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $ 22.01 $14.25 $13.42 $11.65 $ -
------- ------ ------ ------ ------
------- ------ ------ ------ ------
TOTAL RETURN (7) 54.39% 28.74% 25.57% 30.00% 0.00%
------- ------ ------ ------ ------
------- ------ ------ ------ ------
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $65,555 $6,284 $5,487 $4,671 $4,000
------- ------ ------ ------ ------
------- ------ ------ ------ ------
Ratio of expenses to average net assets:
With waiver and reimbursement (15) 1.50% 1.50% 1.50% 1.50% 0.00%(8)
------- ------ ------ ------ ------
------- ------ ------ ------ ------
Without waiver and reimbursement (15) 2.04% 4.85% 3.65% 2.93% --%
------- ------ ------ ------ ------
------- ------ ------ ------ ------
Ratio of net investment income (loss) to average net
assets:
With waiver and reimbursement (15) (0.77)% (0.81)% (0.69)% (0.55)% 0.00%(8)
------- ------ ------ ------ ------
------- ------ ------ ------ ------
Without waiver and reimbursement (15) (1.31)% (4.16)% (2.84)% (1.98)% --%
------- ------ ------ ------ ------
------- ------ ------ ------ ------
Portfolio turnover 279.14% 393.83% 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 106
<PAGE>
Dresdner RCM Global Funds
Financial Highlights
For a share outstanding throughout each fiscal year or period ended:
<TABLE>
<CAPTION>
INTERNATIONAL GROWTH EQUITY FUND
-----------------------------------------------------------------------------------------
CLASS I CLASS N
------------------------------------------------------------ ---------------------------
(UNAUDITED) (UNAUDITED)
SIX MONTHS YEAR ENDED DECEMBER 31, SIX MONTHS YEAR ENDED
ENDED --------------------------------------------- ENDED DECEMBER 31,
JUNE 30, 2000 1999 1998 1997 1996(6) 1995 JUNE 30, 2000 1999(11)
------------- -------- -------- ------- ------- ------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE: (1)
Net asset value, beginning of period $ 22.34 $ 14.98 $ 13.70 $ 12.72 $ 11.56 $ 10.00 $22.31 $14.78
-------- -------- -------- ------- ------- ------- ------ ------
Income from investment operations:
Net investment income 0.01 0.02 0.06 0.06 0.04 0.12 0.01 0.01
Net realized and unrealized gain
(loss) on investments (2.98) 8.91 1.80 2.22 2.16 1.68 (3.00) 9.08
-------- -------- -------- ------- ------- ------- ------ ------
Total from investment operations (2.97) 8.93 1.86 2.28 2.20 1.80 (2.99) 9.09
Less distributions:
From net investment income -- (0.07) (0.23) (0.14) (0.16) (0.11) -- (0.07)
In excess of net investment income -- (0.10) -- -- -- -- -- (0.09)
From net realized gain on
investments -- (1.40) (0.35) (1.16) (0.88) (0.13) -- (1.40)
-------- -------- -------- ------- ------- ------- ------ ------
Total distributions -- (1.57) (0.58) (1.30) (1.04) (0.24) -- (1.56)
-------- -------- -------- ------- ------- ------- ------ ------
NET ASSET VALUE, END OF PERIOD $ 19.37 $ 22.34 $ 14.98 $ 13.70 $ 12.72 $ 11.56 $19.32 $22.31
-------- -------- -------- ------- ------- ------- ------ ------
-------- -------- -------- ------- ------- ------- ------ ------
TOTAL RETURN (7) (13.29)% 60.66% 13.81% 17.93% 19.31% 17.98% (13.40)% 62.48%
-------- -------- -------- ------- ------- ------- ------ ------
-------- -------- -------- ------- ------- ------- ------ ------
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $319,619 $285,561 $121,975 $98,443 $52,605 $34,347 $5,129 $1,738
-------- -------- -------- ------- ------- ------- ------ ------
-------- -------- -------- ------- ------- ------- ------ ------
Ratio of expenses to average
net assets:
With waiver and reimbursement (15) 1.00% 1.00% 1.00% 1.00% 0.99% 0.75% 1.25% 1.25%
-------- -------- -------- ------- ------- ------- ------ ------
-------- -------- -------- ------- ------- ------- ------ ------
Without waiver and
reimbursement (15) 1.00% 1.06% 1.06% 1.06% 1.25% 1.11% 2.50% 10.89%
-------- -------- -------- ------- ------- ------- ------ ------
-------- -------- -------- ------- ------- ------- ------ ------
Ratio of net investment income (loss)
to average net assets:
With waiver and reimbursement (15) 0.06% 0.12% 0.37% 0.41% 0.32% 1.19% 0.06% 0.07%
-------- -------- -------- ------- ------- ------- ------ ------
-------- -------- -------- ------- ------- ------- ------ ------
Without waiver and
reimbursement (15) 0.06% 0.06% 0.31% 0.35% 0.06% 0.83% (1.19)% (9.56)%
-------- -------- -------- ------- ------- ------- ------ ------
-------- -------- -------- ------- ------- ------- ------ ------
Portfolio turnover 58.35% 139.69% 84.49% 122.43% 119.09% 87.40% 58.35% 139.69%
-------- -------- -------- ------- ------- ------- ------ ------
-------- -------- -------- ------- ------- ------- ------ ------
</TABLE>
------------------------------------
For Footnote References, see "Notes to Financial Highlights."
<TABLE>
<CAPTION>
EMERGING MARKETS FUND
----------------------------------------------------------------------------------------
CLASS I CLASS N
---------------------------------------------------- -------------------------------
(UNAUDITED) (UNAUDITED)
SIX MONTHS YEAR ENDED DECEMBER 31, SIX MONTHS YEAR ENDED
ENDED ---------------------------------- ENDED DECEMBER 31,
JUNE 30, 2000 1999 1998 1997(4) JUNE 30, 2000 1999(11)
------------- -------- -------- -------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE: (1)
Net asset value, beginning of period $16.87 $ 9.06 $ 9.99 $10.00 $16.84 $ 9.13
------ ------ ------ ------ ------ ------
Income from investment operations:
Net investment income (loss) 0.05 (0.01) 0.12 -- 0.03 (0.06)
Net realized and unrealized gain
(loss) on investments (0.63) 8.29 (0.97) (0.01) (0.63) 8.24
------ ------ ------ ------ ------ ------
Total from investment operations (0.58) 8.28 (0.85) (0.01) 0.60 8.18
Less distributions:
From net investment income -- -- (0.08) -- -- --
From net realized gain on
investments -- (0.47) -- -- -- (0.47)
------ ------ ------ ------ ------ ------
Total distributions -- (0.47) (0.08) -- -- (0.47)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $16.29 $16.87 $ 9.06 $ 9.99 $16.24 $16.84
------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------
TOTAL RETURN (7) (3.62)% 92.12% (8.50)% --% (3.74)% 90.31%
------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $6,778 $5,154 $2,734 $2,996 $2,159 $ 299
------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------
Ratio of expenses to average net
assets:
With waiver and reimbursement (15) 1.50% 1.50% 1.50% 0.01%(8) 1.75% 1.75%
------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------
Without waiver and reimbursement (15) 4.46% 9.33% 8.29% --% 6.10% 79.18%
------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------
Ratio of net investment income (loss)
to average net assets:
With waiver and reimbursement (15) 0.52% (0.13)% 1.23% --% 0.40% (0.68)%
------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------
Without waiver and reimbursement (15) (2.44)% (7.96)% (5.56)% --% (3.95)% (78.11)%
------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------
Portfolio turnover 81.45% 215.64% 279.25% --%(8) 81.45% 215.64%
------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------
</TABLE>
------------------------------------
For Footnote References, see "Notes to Financial Highlights."
The accompanying notes are an integral part of the financial statements.
Page 107
<PAGE>
Dresdner RCM Global Funds
Financial Highlights
For a share outstanding throughout each fiscal year or period ended:
<TABLE>
<CAPTION>
EUROPE FUND
--------------------------------------------------------------------
CLASS I CLASS N
-------------------- -------------------------------------------
(UNAUDITED) (UNAUDITED)
SIX MONTHS SIX MONTHS YEAR ENDED DECEMBER 31,
ENDED ENDED ----------------------
JUNE 30, 2000(1)(14) JUNE 30, 2000(1) 1999(1) 1998(1)
-------------------- ---------------- -------- ---------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $20.58 $ 16.12 $ 13.66 $ 12.59
------ ------- ------- --------
Income from investment operations:
Net investment income (loss) (0.02) (0.09) (0.01) (0.05)
Net realized and unrealized gain (loss) on
investments (4.18) 0.34(16) 5.66 4.60
------ ------- ------- --------
Total from investment operations (4.20) 0.25 5.65 4.55
Less distributions:
From net investment income -- -- -- (0.17)
In excess of net investment income -- -- (0.02) --
From net realized gain on investments -- -- (3.17) (3.31)
------ ------- ------- --------
Total distributions -- -- (3.19) (3.48)
------ ------- ------- --------
NET ASSET VALUE, END OF PERIOD $16.38 $ 16.37 $ 16.12 $ 13.66
------ ------- ------- --------
------ ------- ------- --------
TOTAL RETURN (7) 1.61% 1.55% 43.59% 37.23%
------ ------- ------- --------
------ ------- ------- --------
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $1,092 $80,852 $67,910 $191,338
------ ------- ------- --------
------ ------- ------- --------
Ratio of expenses to average net assets: (17)
With waiver and reimbursement (15) 1.35% 1.60% 1.03% --%
------ ------- ------- --------
------ ------- ------- --------
Without waiver and reimbursement (15) 10.25% 2.07% 2.01% 1.97%
------ ------- ------- --------
------ ------- ------- --------
Ratio of net investment income (loss) to average
net assets:
With waiver and reimbursement (15) (0.37)% (1.01)% (0.11)% --%
------ ------- ------- --------
------ ------- ------- --------
Without waiver and reimbursement (15) (9.27)% (1.48)% (1.08)% (0.31)%
------ ------- ------- --------
------ ------- ------- --------
Portfolio turnover 86.62% 86.62% 202.90% 114.00%
------ ------- ------- --------
------ ------- ------- --------
<CAPTION>
EUROPE FUND
-------------------------------------
CLASS N
-------------------------------------
YEAR ENDED DECEMBER 31,
-------------------------------------
1997(1) 1996(1) 1995
--------- --------- ---------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 10.66 $ 9.20 $ 9.20
-------- -------- --------
Income from investment operations:
Net investment income (loss) 0.01 0.03 0.07
Net realized and unrealized gain (loss) on
investments 2.70 1.45 (0.07)
-------- -------- --------
Total from investment operations 2.71 1.48 0.00
Less distributions:
From net investment income (0.06) (0.02) --
In excess of net investment income -- -- --
From net realized gain on investments (0.72) -- --
-------- -------- --------
Total distributions (0.78) (0.02) --
-------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 12.59 $ 10.66 $ 9.20
-------- -------- --------
-------- -------- --------
TOTAL RETURN (7) 25.70% 15.87% 1.33%
-------- -------- --------
-------- -------- --------
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $176,414 $149,299 $128,932
-------- -------- --------
-------- -------- --------
Ratio of expenses to average net assets: (17)
With waiver and reimbursement (15) --% --% --%
-------- -------- --------
-------- -------- --------
Without waiver and reimbursement (15) 1.30% 1.42% 1.51%
-------- -------- --------
-------- -------- --------
Ratio of net investment income (loss) to average
net assets:
With waiver and reimbursement (15) --% --% --%
-------- -------- --------
-------- -------- --------
Without waiver and reimbursement (15) 0.06% 0.33% 0.76%
-------- -------- --------
-------- -------- --------
Portfolio turnover 85.00% 51.00% 40.00%
-------- -------- --------
-------- -------- --------
</TABLE>
------------------------------------
For Footnote References, see "Notes to Financial Highlights."
<TABLE>
<CAPTION>
GLOBAL EQUITY FUND
------------------------------------------
CLASS I
------------------------------------------
YEAR ENDED
(UNAUDITED) DECEMBER 31,
SIX MONTHS ENDED ---------------------
JUNE 30, 2000 1999 1998(5)
---------------- -------- --------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE: (1)
Net asset value, beginning of period $15.84 $10.00 $10.00
------ ------ ------
Income from investment operations:
Net investment loss (0.05) (0.03) --
Net realized and unrealized gain on investments 0.11 6.22 --
------ ------ ------
Total from investment operations 0.06 6.19 --
Less distributions:
In excess of net investment income -- (0.06) --
From net realized gain on investments -- (0.29) --
------ ------ ------
Total distributions -- (0.35) --
------ ------ ------
NET ASSET VALUE, END OF PERIOD $15.90 $15.84 $10.00
------ ------ ------
------ ------ ------
TOTAL RETURN (7) 0.44% 62.20% 0.00%
------ ------ ------
------ ------ ------
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $1,590 $1,584 $1,000
------ ------ ------
------ ------ ------
Ratio of expenses to average net assets:
With waiver and reimbursement (15) 1.25% 1.25% 0.00%(8)
------ ------ ------
------ ------ ------
Without waiver and reimbursement (15) 13.02% 14.59% --%
------ ------ ------
------ ------ ------
Ratio of net investment income (loss) to average net
assets:
With waiver and reimbursement (15) (0.57)% (0.27)% 0.00%(8)
------ ------ ------
------ ------ ------
Without waiver and reimbursement (15) (12.34)% (13.61)% --%
------ ------ ------
------ ------ ------
Portfolio turnover 68.58% 149.96% 0.00%
------ ------ ------
------ ------ ------
</TABLE>
------------------------------------
For Footnote References, see "Notes to Financial Highlights."
The accompanying notes are an integral part of the financial statements.
Page 108
<PAGE>
Dresdner RCM Global Funds
Financial Highlights
For a share outstanding throughout each fiscal year or period ended:
<TABLE>
<CAPTION>
STRATEGIC INCOME FUND
------------------------------------------
CLASS I
------------------------------------------
YEAR ENDED
(UNAUDITED) DECEMBER 31,
SIX MONTHS ENDED ---------------------
JUNE 30, 2000 1999 1998(5)
---------------- -------- --------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE: (1)
Net asset value, beginning of period $ 9.55 $10.00 $10.00
------ ------ ------
Income from investment operations:
Net investment income 0.31 0.53 --
Net realized and unrealized gain (loss) on
investments 0.11(16) (0.27) --
------ ------ ------
Total from investment operations 0.42 0.26 --
Less distributions:
From net investment income (0.25) (0.53) --
In excess of net investment income -- (0.18) --
From net realized gain on investments -- -- --
------ ------ ------
Total distributions (0.25) (0.71) --
------ ------ ------
NET ASSET VALUE, END OF PERIOD $ 9.72 $ 9.55 $10.00
------ ------ ------
------ ------ ------
TOTAL RETURN (7) 4.46% 2.67% 0.00%
------ ------ ------
------ ------ ------
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 867 $2,866 $3,000
------ ------ ------
------ ------ ------
Ratio of expenses to average net assets:
With waiver and reimbursement (15) 1.25% 1.25% 0.00%(8)
------ ------ ------
------ ------ ------
Without waiver and reimbursement (15) 15.30% 5.31% --%
------ ------ ------
------ ------ ------
Ratio of net investment income (loss) to average net
assets:
With waiver and reimbursement (15) 6.60% 5.38% 0.00%(8)
------ ------ ------
------ ------ ------
Without waiver and reimbursement (15) (7.45)% 1.32% --%
------ ------ ------
------ ------ ------
Portfolio turnover 122.78% 346.34% 0.00%
------ ------ ------
------ ------ ------
</TABLE>
------------------------------------
For Footnote References, see "Notes to Financial Highlights."
<TABLE>
<CAPTION>
BALANCED FUND
---------------------------------
CLASS I
---------------------------------
(UNAUDITED)
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2000 DECEMBER 31,
---------------- ------------
1999(13)
------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE: (1)
Net asset value, beginning of period $ 10.65 $10.00
------- ------
Income from investment operations:
Net investment income 0.09 0.01
Net realized and unrealized gain on investments 0.21 0.64
------- ------
Total from investment operations 0.30 0.65
Less distributions:
From net investment income (0.03) --
------- ------
Total distributions (0.03) --
------- ------
NET ASSET VALUE, END OF PERIOD $ 10.92 $10.65
------- ------
------- ------
TOTAL RETURN (7) 2.77% 6.50%
------- ------
------- ------
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $17,429 $1,009
------- ------
------- ------
Ratio of expenses to average net assets:
With waiver and reimbursement (15) 0.90% 0.90%
------- ------
------- ------
Without waiver and reimbursement (15) 4.35% 41.29%
------- ------
------- ------
Ratio of net investment income (loss) to average net
assets:
With waiver and reimbursement (15) 1.62% 1.41%
------- ------
------- ------
Without waiver and reimbursement (15) (1.83)% (38.97)%
------- ------
------- ------
Portfolio turnover 145.11% 59.94%
------- ------
------- ------
</TABLE>
------------------------------------
For Footnote References, see "Notes to Financial Highlights."
The accompanying notes are an integral part of the financial statements.
Page 109
<PAGE>
Dresdner RCM Global Funds
Notes to Financial Highlights
June 30, 2000 (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 operations was December 27, 1995.
(3) Commencement of operations was December 31, 1996.
(4) Commencement of operations was December 30, 1997.
(5) Commencement of operations was December 30, 1998.
(6) Stock split 10:1 at close of business on June 17, 1996. All prior period
per share amounts were restated to reflect the stock split.
(7) Total return measures the change in value of an investment over the period
indicated. For periods less than one year, the total return is not
annualized.
(8) Not annualized. Fund was in operation for less than five days.
(9) Commencement of operations was March 2, 1999.
(10) Commencement of operations was February 12, 1999.
(11) Commencement of operations was March 9, 1999.
(12) Commencement of operations was January 20, 1999.
(13) Commencement of operations was December 15, 1999.
(14) Commencement of operations was March 3, 2000.
(15) Annualized for periods of less than one year.
(16) 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
investment of the Fund.
(17) The operating expenses for the Dresdner RCM Europe Fund include certain
non-recurring legal expenses of 0.46% and 0.32% of average net assets for
the years ended Decemebr 31, 1998 and 1999, respectively, for which the
insurance carrier has agreed to reimburse the Fund 0.78% ($800,000) of
average net assets for the year ended December 31, 1999.
The accompanying notes are an integral part of the financial statements.
Page 110
<PAGE>
Dresdner RCM Global Funds
Notes to Financial Statements
June 30, 2000 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES
The Dresdner RCM Global Funds, Inc. (the "Global Company"), the Dresdner
RCM Capital Funds, Inc. (the "Capital Company") and the Dresdner RCM Investment
Funds Inc. (the "Investment Company") are organized as Maryland corporations and
are registered as open-end management investment companies under the Investment
Company Act of 1940 (the "1940 Act"), as amended. These three corporations are
each referred to as a "Company" and collectively as the "Companies."
The Global Company consists of ten no-load series:
NON-DIVERSIFIED FUNDS
Dresdner RCM Global Technology Fund (the "Global Technology Fund")
Dresdner RCM Global Health Care Fund (the "Global Health Care Fund")
Dresdner RCM Biotechnology Fund (the "Biotechnology Fund")
DIVERSIFIED FUNDS
Dresdner RCM Global Small Cap Fund (the "Global Small Cap Fund")
Dresdner RCM Large Cap Growth Fund (the "Large Cap Growth Fund")
Dresdner RCM Emerging Markets Fund (the "Emerging Markets Fund")
Dresdner RCM Tax Managed Growth Fund (the "Tax Managed Growth Fund")
Dresdner RCM Global Equity Fund (the "Global Equity Fund")
Dresdner RCM Strategic Income Fund (the "Strategic Income Fund")
Dresdner RCM Balanced Fund (the "Balanced Fund")
The Dresdner RCM International Growth Equity Fund (the "International
Fund"), is a non-diversified, no-load series of the Capital Company (financial
information for the other series of the Capital Company are reported in the
Dresdner RCM Capital Funds' semi-annual report). The Dresdner RCM Europe Fund
(the "Europe Fund"), formerly The Emerging Germany Fund, Inc., is a
non-diversified, no load series of the Investment Company. These twelve series
are collectively referred to as the "Funds."
The Funds, with the exception of the Global Health Care Fund, the
Biotechnology Fund and the Balanced Fund, are presently authorized to issue two
classes of shares -- Institutional shares (Class I) and Non-institutional shares
(Class N). The Global Health Care Fund and the Biotechnology Fund are presently
authorized to issue Class N shares, and the Balanced Fund is authorized to issue
Class I shares. As of June 30, 2000, the Large Cap Growth Fund, Tax Managed
Growth Fund, Global Small Cap Fund, Global Technology Fund, International Fund,
Europe Fund and Emerging Markets Fund have both Class I and Class N shares
operational; the Global Equity Fund, and Strategic Income Fund have only the
Class I shares operational.
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 and disclosures in the financial statements. Actual
results may differ from those estimates.
Page 111
<PAGE>
Dresdner RCM Global Funds
Notes to Financial Statements
June 30, 2000 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
A. PORTFOLIO VALUATIONS:
Investment securities are stated at 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 appropriate Company or a
duly constituted committee of the Board of Directors of the appropriate Company
shall determine in good faith will 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 are 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 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 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, sale or
maturity. Dividend income is recorded on the ex-dividend date and interest
income is recorded on the accrual basis and includes accretion of discount.
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. Investment
income, realized and unrealized gains and losses, and the common expenses of the
Funds are allocated on a pro rata basis to each class based on the relative net
assets of each class to the total net assets of the Funds. Each class of shares
differs in its respective distribution and certain other class specific fees and
expense reductions.
C. FOREIGN CURRENCY TRANSLATIONS AND FOREIGN INVESTMENTS:
The books and records of each of the Funds are maintained in U.S.
dollars. The value of securities, currencies, 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 investments are translated at the contracted currency
exchange rates established at the time of the trade. Income and expenses are
translated at the prevailing exchange rates 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 and the difference between the amount of net investment income
accrued and the U.S. dollar amount actually received. 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.
Investing in securities of foreign companies and foreign governments
involves special risks and considerations not typically associated with
investing in U.S. companies and securities of the U.S. Government. These risks
include
Page 112
<PAGE>
Dresdner RCM Global Funds
Notes to Financial Statements
June 30, 2000 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
revaluation of currencies and the risk of appropriation. Moreover, the markets
for securities of many foreign companies and foreign governments may be less
liquid and the prices of such securities may be more volatile than those of
comparable U.S. companies and the U.S. Government.
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
marked-to-market daily and the change in market value is recorded by the Fund as
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 transactions 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 a
written 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. SHORT SALES:
Each Fund, except the International Fund, may engage in short sales
transactions. A short sale that is not made "against the box" is a transaction
in which a Fund sells a security it does not own in anticipation of a decline in
market
Page 113
<PAGE>
Dresdner RCM Global Funds
Notes to Financial Statements
June 30, 2000 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
price. When a Fund makes a short sale, the proceeds it receives are retained by
the broker until the Fund replaces the borrowed security. In order to deliver
the security to the buyer, the Fund must arrange through a broker to borrow the
security and, in doing so, the Fund becomes obligated to replace the security
borrowed at its market price at the time of replacement, whatever that price may
be.
G. DOLLAR ROLL TRANSACTIONS:
A dollar roll transaction involves a sale by a Fund of securities that
it holds with an agreement by the Fund to repurchase similar securities at an
agreed upon price and date. The securities repurchased will bear the same
interest as those sold, but generally will be collateralized at time of delivery
by different pools of mortgages with different prepayment histories than those
securities sold. The Fund is paid a fee for entering into a dollar roll
transaction, that is accrued as income over the life of the dollar roll
contract. During the period of sale and repurchase, the Fund will not be
entitled to receive interest and principal payments on the securities sold.
Management anticipates that the proceeds of the sale will be invested in
additional instruments for the Fund, and the income from these investments,
together with any additional fee income received on the dollar roll transaction
will generate income for the Fund exceeding the interest that would have been
earned on the securities sold. Dollar roll transactions involve the risk that
the market value of the securities sold by the Fund may decline below the
repurchase price of those similar securities which the Fund is obligated to
purchase or that the return earned by the Fund with the proceeds of a dollar
roll may not exceed transaction costs.
H. FEDERAL INCOME TAXES:
Each Fund is a separate entity for federal income tax purposes. Each
Fund intends 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, 1999, the Strategic Income Fund had a capital
loss carryover of $53,023 which will expire on December 31, 2007.
I. DISTRIBUTIONS:
The Strategic Income Fund declares and distributes income dividends to
shareholders monthly. The Balanced Fund declares and distributes income
dividends to shareholders quarterly. All of the other Funds declare and
distribute income dividends to shareholders annually. Capital gain distributions
(if any) are declared and distributed to shareholders annually. Distributions to
shareholders are recorded by the Funds on the ex-dividend date. Income dividends
and capital gain distributions are determined in accordance with Federal income
tax regulations, which may differ from generally accepted accounting principles,
and only distributions in excess of tax basis earnings and profits are reported
in the financial statements as a return of capital. Differences in the
recognition or classification of income between the financial statements and tax
earnings and profits which result in temporary over-distributions for financial
statement purposes are classified as distributions in excess of net investment
income or in excess of net realized gain on investments. 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.
Page 114
<PAGE>
Dresdner RCM Global Funds
Notes to Financial Statements
June 30, 2000 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
J. SECURITIES LENDING:
For the month of January 2000, the Europe Fund had a Securities Lending
Agreement with State Street Global Advisors ("SSgA"). For international
securities, cash collateral was received by the 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. The Fund invested the cash collateral in repurchase agreements through
State Street Bank & Trust Company pursuant to guidelines approved by the Europe
Fund's Board of Directors. Income earned on the collateral was paid to SSgA
monthly. The Fund received a fee, payable monthly, negotiated by the Fund and
SSgA, based on the number and duration of the lending transactions. At June 30,
2000, the Europe Fund had no securities on loan to brokers.
Effective February 1, 2000, the Fund terminated its lending agreement
with SSgA.
K. REDEMPTION FEES:
The Tax Managed Growth Fund charges a 1.00% redemption fee to
shareholders of both the Class I and the Class N who redeem shares held for less
than twelve consecutive months. The redemption fee for the Tax Managed Growth
Fund will remain in effect indefinitely. For the six months ended June 30, 2000,
the redemption fee for the Fund amounted to $5,057, which is included in the
Statement of Changes in Net Assets.
For the period of May 1, 1999 through October 31, 1999, the Europe Fund
charged a 1.00% redemption fee to shareholders who redeemed shares held for less
than twelve consecutive months. The redemption fee is no longer in effect as of
November 1, 1999. For the period from May 1, 1999 to October 31, 1999, the
redemption fees for the Fund amounted to $540,588, which is included in the
Statement of Changes in Net Assets.
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 investment management fees to Dresdner RCM monthly. The fees are
based on each Fund's average daily net assets as listed in the following table.
Dresdner RCM has voluntarily agreed, until at least December 31, 2000,
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 in the
following table 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.
Dresdner RCM has voluntarily agreed, until at least December 31, 2002,
to waive a portion of its fee and to pay the Europe Fund on a quarterly basis
the amount, if any, by which the ordinary operating expenses of the Fund (except
taxes, interest, and extraordinary expenses) exceed an annual expense ratio of
1.60% (Class N) and 1.35% (Class I). In subsequent years, the Europe 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 115
<PAGE>
Dresdner RCM Global Funds
Notes to Financial Statements
June 30, 2000 (Unaudited)
2. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES (CONTINUED)
For the period ended June 30, 2000, Dresdner RCM reimbursed the Funds
for operating expenses that exceeded their stated expense limits.
MANAGEMENT FEES, EXPENSE CAPS AND EXPENSE REIMBURSEMENTS
PERIOD ENDED JUNE 30, 2000
<TABLE>
<CAPTION>
ANNUAL MANAGEMENT FEE PERCENTAGES EXPENSES
------------------------------------------ -----------------------
FIRST $500 NEXT $500 ABOVE $1 EXPENSE
FUND FLAT RATE MILLION MILLION BILLION CAPS REIMBURSEMENTS
------------------------- --------- ---------- --------- -------- ------- --------------
<S> <C> <C> <C> <C> <C> <C>
Large Cap Growth Fund--I -- 0.70% 0.65% 0.60% 0.95% $ 87,467
Large Cap Growth Fund--N -- 0.70% 0.65% 0.60% 1.20% 29,041
Biotechnology Fund--N -- 1.00% 0.95% 0.90% 1.50% --
Tax Managed Growth
Fund--I -- 0.75% 0.70% 0.65% 1.25% 55,250
Tax Managed Growth
Fund--N -- 0.75% 0.70% 0.65% 1.50% 31,024
Global Small Cap Fund--I -- 1.00% 0.95% 0.90% 1.50% 32,247
Global Small Cap Fund--N -- 1.00% 0.95% 0.90% 1.75% 27,428
Global Technology Fund--I 1.00% -- -- -- 1.50% --
Global Technology Fund--N 1.00% -- -- -- 1.75% --
Global Health Care
Fund--N -- 1.00% 0.95% 0.90% 1.50% 77,916
International Fund--I 0.75% -- -- -- 1.00% --
International Fund--N 0.75% -- -- -- 1.25% 20,855
Emerging Markets Fund--I 1.00% -- -- -- 1.50% 101,399
Emerging Markets Fund--N 1.00% -- -- -- 1.75% 35,263
Europe Fund--I 1.00% * -- -- -- 1.35% 28,166
Europe Fund--N 1.00% * -- -- -- 1.60% 185,574
Global Equity Fund--I -- 0.75% 0.70% 0.65% 1.25% 92,755
Global Equity Fund--N -- 0.75% 0.70% 0.65% 1.50% --
Strategic Income Fund--I -- 0.75% 0.70% 0.65% 1.25% 83,689
Strategic Income Fund--N -- 0.75% 0.70% 0.65% 1.50% --
Balanced Fund--I -- 0.65% 0.60% 0.55% 0.90% 93,954
</TABLE>
* The Europe Fund pays management fees at 1.00% annually for assets under
$100 million and 0.80% for assets above $100 million.
For the six months ended June 30, 2000, the Biotechnology Fund,
Class N, the Global Technology Fund, Class I and Class N, and the International
Growth Equity Fund, Class I reimbursed, Dresdner RCM $79,063, $305,346, $33,268,
and $77,573, respectively, under the above Reimbursement Agreement. At June 30,
2000, the Biotechnology Fund, Class N, had a remaining contingent liability of
$201,350. Of this contingent liability, $26,220 and $175,130 expires on
December 31, 2003 and 2004, respectively. The Global Technology Fund, Class I
and Class N had no remaining
Page 116
<PAGE>
Dresdner RCM Global Funds
Notes to Financial Statements
June 30, 2000 (Unaudited)
2. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES (CONTINUED)
contingent liability. The International Growth Equity Fund, Class I had a
remaining contingent liability of $421,110. Of this contingent liability,
$98,606, $105,743, $52,016, $71,435 and $93,310 expires on December 31, 2000,
2001, 2002, 2003 and 2004, respectively.
On June 30, 2000, the Dresdner RCM Profit Sharing Plan, participation in
which is limited to employees of Dresdner RCM, owned 293,075 shares and 405,143
shares of the total 10,938,396 and 16,762,469 outstanding shares of the Global
Technology Fund and the International Fund, respectively.
As of June 30, 2000, certain Dresdner RCM employees individually owned
the following shares of the Funds:
<TABLE>
<CAPTION>
FUND SHARES OWNED OUTSTANDING SHARES
---------------------------------------- ------------ ------------------
<S> <C> <C>
Large Cap Growth Fund 283 1,503,006
Global Small Cap Fund 181 1,742,922
Global Technology Fund 435,637 10,938,396
Global Health Care Fund 210 2,978,984
</TABLE>
As of June 30, 2000, 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>
Tax Managed Growth Fund 100,000 2,171,895
Global Small Cap Fund 320,064 1,742,922
Emerging Markets Fund 300,000 548,925
Global Equity Fund 100,000 100,000
Strategic Income Fund 89,252 89,252
</TABLE>
Page 117
<PAGE>
Dresdner RCM Global Funds
Notes to Financial Statements
June 30, 2000 (Unaudited)
2. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES (CONTINUED)
At June 30, 2000, the following Funds had shareholders which each held
more than 5% of the Fund's Net Assets:
<TABLE>
<CAPTION>
PERCENTAGE OF
NUMBER OF AGGREGATE
FUND SHAREHOLDERS OWNERSHIP*
---------------------------------------- ------------ -------------
<S> <C> <C>
Large Cap Growth Fund 4 69.03%
Biotechnology Fund 3 77.64%
Tax Managed Growth Fund 1 80.98%
Global Small Cap Fund 5 81.16%
Global Technology Fund 4 57.22%
Global Health Care Fund 3 85.35%
International Fund 3 35.79%
Emerging Markets Fund 4 86.93%
Europe Fund 4 43.53%
Global Equity Fund 1 100.00%
Strategic Income Fund 1 100.00%
Balanced Fund 2 96.79%
</TABLE>
* The Global Equity and Strategic Income Fund's shares are owned
exclusively by clients of Dresdner Bank AG. For the other listed
funds, the number of shareholders represents various fund supermarket
programs and/or brokers who hold Fund shares in their name for the
benefit of their customers.
3. DISTRIBUTOR
Funds Distributor, Inc. (the "Distributor") acts as distributor of
shares of the Funds.
The Global Company and the Capital Company have adopted a distribution
and service plan (the "Global Plan" and the "Capital Plan") and the Investment
Company has adopted a distribution plan (the "Investment Plan") pursuant to
Rule 12b-1 under the 1940 Act. Under the Global Plan and the Capital Plan, 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. Class I shares are not subject to 12b-1 fees. Under the Investment
Plan, the Fund pays the Distributor on a monthly basis for all costs incurred by
it in distributing Class N shares at an annual rate not to exceed 0.25% of the
Fund's Class N shares' average daily net assets.
Page 118
<PAGE>
Dresdner RCM Global Funds
Notes to Financial Statements
June 30, 2000 (Unaudited)
4. CAPITAL SHARES
At June 30, 2000, 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 common stock at $0.001
par value, 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
Balanced Fund 25,000,000 --
</TABLE>
5. 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. At June 30, 2000, the unamortized
balance of such expenses amounted to $7,518 and $10,081 for the Global
Technology Fund and the Emerging Markets Fund, respectively. Organization costs
on all other Funds were fully amortized at June 30, 2000.
6. WRITTEN OPTIONS AND FORWARD FOREIGN CURRENCY CONTRACTS
Transactions in written put and call options for the six months ended
June 30, 2000 for the Global Technology Fund were as follows:
<TABLE>
<CAPTION>
AMOUNT OF NUMBER OF
PREMIUMS CONTRACTS
----------- ---------
<S> <C> <C>
Options outstanding at December 31, 1999 $ -- --
Options sold 5,430,987 39,087
Options cancelled in closing purchase
transactions (2,725,248) (38,400)
Options expired prior to exercise (2,705,739) (687)
Options exercised -- --
----------- --------
Options outstanding at June 30, 2000 $ -- --
=========== ========
</TABLE>
No written options were outstanding at June 30, 2000.
Page 119
<PAGE>
Dresdner RCM Global Funds
Notes to Financial Statements
June 30, 2000 (Unaudited)
6. WRITTEN OPTIONS AND FORWARD FOREIGN CURRENCY CONTRACTS (CONTINUED)
Forward foreign currency contracts outstanding at June 30, 2000 are as
follows:
<TABLE>
<CAPTION>
IN
CONTRACTS EXCHANGE SETTLEMENT NET UNREALIZED
FUND SALES TO DELIVER FOR DATE VALUE APPRECIATION
------------------------- ------ ---------- -------- ---------- -------- --------------
<S> <C> <C> <C> <C> <C> <C>
Strategic Income Fund EUD 135,000 $132,705 9/28/00 $129,595 $3,110
======== ======== ======
</TABLE>
7. DIRECTORS' FEES
Each Director who is not an interested person of the Global Company (as
defined in the 1940 Act) 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 per series for each Board meeting attended, and $250 per
series for each committee meeting attended.
Each Director who is not an interested person of the Capital Company (as
defined in the 1940 Act) receives from the Capital Company an annual retainer of
$9,000, plus $1,500 per series for each Board meeting attended, and $500 per
series for each committee meeting attended.
Each Director who is not an interested person of the Investment Company
(Europe Fund) (as defined in the 1940 Act) receives from the Investment Company
an annual retainer of $9,000, plus $1,500 per series for each Board meeting
attended. The Europe Fund also pays each member of the strategic planning and
communications subcommittee $1,500 for each meeting attended.
Each Director of the Global Company and Capital 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.
8. LINE OF CREDIT
The Europe Fund has an uncommitted Line of Credit arrangement ("LOC")
with State Street Bank and Trust Company, primarily to temporarily finance the
repurchase of capital shares. The Fund's borrowings cannot exceed 33 1/3% of the
Fund's net assets and cannot exceed the $60 million limit on the LOC. Interest
is charged to the Fund based on its borrowings at the prevailing market rates as
defined in the LOC. The average daily loan balance was $15,723 at a weighted
average interest rate of 6.96%. The maximum loan outstanding during the period
ended June 30, 2000 was $4,116,376. Interest expense of $8,384 was recorded
during the period and has been included in miscellaneous expense on the
statement of operations. At June 30, 2000, there were no such borrowings
outstanding.
Page 120
<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.DRCMFunds.com.
Page 121
<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
as a recommendation to purchase.
Grassroots-SM- Research is a division of Dresdner RCM Global
Investors LLC ("Dresdner RCM"). The information and opinions expressed
represent the judgement of Dresdner RCM. Dresdner RCM and its
affiliates, officers, employees or clients may effect or have effected
transactions for their own account(s) in the securities mentioned here
or in any related investments. Accordingly, information may be
available to Dresdner RCM that is not reflected at this time. The
information and opinions have been compiled or arrived at from sources
believed to be reliable and in good faith, but no representation or
warranty, express or implied, is made as to their accuracy,
completeness or correctness. Dresdner RCM accepts no liability
whatsoever for any direct or consequential loss or damage arising from
your use of this information. Research data used by Grassroots-SM- to
generate Grassroots-SM- Research recommendations, is received from
reporters who work as independent contractors for broker-dealers who
supply research to Dresdner RCM in connection with broker services.
DISTRIBUTOR: DRESDNER RCM DISTRIBUTORS, A DIVISION OF FUNDS
DISTRIBUTOR INC.
