EMERGING GERMANY FUND INC, 497, 1999-05-10

EMERGING GERMANY FUND INC
497, 1999-05-10

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<PAGE>
-------------------------
[LOGO] DRESDNER RCM GLOBAL FUNDS
-------------------------

UNITED STATES FUNDS
DRESDNER RCM LARGE CAP GROWTH FUND
DRESDNER RCM TAX MANAGED GROWTH FUND
DRESDNER RCM BIOTECHNOLOGY FUND

GLOBAL FUNDS
DRESDNER RCM GLOBAL SMALL CAP FUND
DRESDNER RCM GLOBAL TECHNOLOGY FUND
DRESDNER RCM GLOBAL HEALTH CARE FUND

INTERNATIONAL FUNDS
DRESDNER RCM INTERNATIONAL GROWTH EQUITY FUND
DRESDNER RCM EMERGING MARKETS FUND
DRESDNER RCM EUROPE FUND

This prospectus contains essential information for anyone considering an
investment in these Funds. Please read this document carefully and retain it for
future reference.

The Securities and Exchange Commission has not approved or disapproved
these securities or passed upon the adequacy or accuracy of this Prospectus. It
is a criminal offense to state or suggest otherwise.

May 3, 1999

<PAGE>

TABLE OF CONTENTS

RISK/RETURN SUMMARY AND FUND EXPENSES
This section summarizes the Funds' investments, risks, past performance, and
fees.

DRESDNER RCM LARGE CAP GROWTH FUND 2
DRESDNER RCM TAX MANAGED GROWTH FUND 4
DRESDNER RCM BIOTECHNOLOGY FUND 6
DRESDNER RCM GLOBAL SMALL CAP FUND 8
DRESDNER RCM GLOBAL TECHNOLOGY FUND 10
DRESDNER RCM GLOBAL HEALTH CARE FUND 12
DRESDNER RCM INTERNATIONAL GROWTH EQUITY FUND 14
DRESDNER RCM EMERGING MARKETS FUND 16
DRESDNER RCM EUROPE FUND 18

INVESTMENT OBJECTIVES, POLICIES AND RISKS
This section provides details about the Funds' investment objectives,
policies and risks.

INVESTMENT OBJECTIVES AND POLICIES 20
OTHER INVESTMENT PRACTICES 21
CHANGING THE FUNDS' INVESTMENT OBJECTIVES AND POLICIES 24
INVESTMENT RISKS 24

Organization and Management
This section provides details about the people and organizations who oversee
the Funds.

THE FUNDS AND THE INVESTMENT MANAGER 27
THE PORTFOLIO MANAGERS 28
MANAGEMENT FEES AND OTHER EXPENSES 30
THE DISTRIBUTOR 32
PENDING LITIGATION 32

STOCKHOLDER INFORMATION
This section tells you how to buy, sell and exchange shares, how we value
shares, and how we pay dividends and distributions.

BUYING SHARES 33
SELLING SHARES 35
OTHER STOCKHOLDER SERVICES AND ACCOUNT POLICIES 36
DIVIDENDS, DISTRIBUTIONS AND TAXES 39

FINANCIAL HIGHLIGHTS
This section provides details on selected
financial highlights of the Funds. 40

<PAGE>

DRESDNER RCM LARGE CAP GROWTH FUND

GOAL

The Fund's goal is to seek long term capital appreciation by investing in
equity securities of U.S. companies with at least $1 billion in market
capitalization.

PRINCIPAL INVESTMENT STRATEGIES

The Fund will normally invest at least 65% of its total assets in companies
with large market capitalizations, which are companies with a total market
capitalization of at least $1 billion at the time of purchase.

The Investment Manager evaluates the fundamental value and prospects for
growth of individual companies and focuses on companies that it expects will
have higher than average rates of growth and strong potential for capital
appreciation. The Standard & Poor's 500 Stock Index is the Fund's performance
benchmark. The Investment Manager bases its security selection on the relative
investment merits of each company and industry throughout the United States and
will not seek to duplicate the sector or stock allocations of the Standard &
Poor's 500 Stock Index.

PRINCIPAL INVESTMENT RISKS

Because the value of the Fund's investments will fluctuate with market
conditions, so will the value of your investment in the Fund. You could lose
money on your investment in the Fund, or the Fund could underperform other
investments.

The value of the Fund's investments will fluctuate in response to the
activities of individual companies and general stock market and economic
conditions.

An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.

PERFORMANCE

The charts on the following page provide some indication of the risks of
investing in the Fund by showing how its performance has varied from year to
year. The bar chart shows changes in the yearly performance of the Fund since
its inception. The chart below it compares the performance of the Fund over
time to the Standard & Poor's 500 Stock Index.

Both charts assume reinvestment of dividends and distributions. Of course,
past performance does not necessarily indicate how the Fund will perform in the
future.

2
<PAGE>

YEAR-BY-YEAR TOTAL RETURN FOR CLASS I SHARES

[GRAPH]

1997 1998
----------------
<S> <C>
31.99% 44.11%
</TABLE>

For the periods covered by this year-by-year total return chart, the Fund's
highest quarterly return was 29.25% (for the fourth quarter ended 1998) and the
lowest quarterly return was -9.11% (for the third quarter ended 1998).

AVERAGE ANNUAL TOTAL RETURNS (THROUGH DECEMBER 31, 1998)

FUND PAST SINCE
INCEPTION YEAR INCEPTION
<S> <C> <C> <C>
LARGE CAP GROWTH FUND CLASS I SHARES* 12/31/96 44.11% 37.91%
LARGE CAP GROWTH FUND CLASS N SHARES** 12/31/96 44.11% 37.91%
S&P 500 Stock Index -- 28.58% 30.95%
</TABLE>

*Returns through December 31, 1998 reflect Rule 12b-1 fees. On that date, 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 will not reflect
Rule 12b-1 fees.

**Class N shares were first issued on March 2, 1999, and pay Rule 12b-1 fees.
Class N returns through December 31, 1998 are based on Class I returns and
reflect Rule 12b-1 fees.

EXAMPLE

Use this table to compare fees and expenses of the Fund with those of other
funds. It illustrates the amount of fees and expenses you would pay assuming:

- $10,000 investment in the Fund
- 5% annual return
- redemption at the end of each period
- no changes in the Fund's operating expenses

Although your actual costs may be higher or lower, based on these
assumptions your costs would be:

ONE THREE FIVE TEN
YEAR YEARS YEARS YEARS
<S> <C> <C> <C> <C>
CLASS I+ $ 97 $711 $1,351 $3,074
CLASS N+ $122 $786 $1,475 $3,313
</TABLE>

+ Assuming the Investment Manager continues to reimburse the ordinary operating
expenses which exceed the annualized rate of 0.95% for Class I and 1.20% for
Class N, your expenses for the periods indicated would be $97, $303, $525,and
$1,166 for Class I and $122, $381, $660, and $1,455 for Class N. However, there
is no guarantee that the Investment Manager will continue such reimbursement
policy.

FEES AND EXPENSES

As an investor in the Fund, you will pay the following fees and expenses.

SHAREHOLDER FEES
(fees paid directly from your investment) NONE

ANNUAL FUND OPERATING EXPENSES
(fees paid from Fund assets)

CLASS CLASS
I N
<S> <C> <C>
Management Fees 0.70% 0.70%
Rule 12b-1 Fee none(1) 0.25%
Other Expenses 2.19% 2.19%
Total Annual Fund
Operating Expenses 2.89% 3.14%
Less: Fees Waived
And Reimbursed (2) -1.94% -1.94%
Net Operating
Expenses (2) 0.95% 1.20%
</TABLE>

(1) For fiscal 1998, the Fund charged a Rule 12b-1 fee at an annual rate of
0.15%. This fee is no longer applicable and has not been included in the Class I
expenses shown here.

(2) Dresdner RCM Global Investors LLC (the "Investment Manager") has
contractually agreed until at least December 31, 1999, to pay each quarter the
amount, if any, by which the ordinary operating expenses for the quarter (except
interest, taxes and extraordinary expenses) exceed the annualized rate of 0.95%
for Class I and 1.20% for Class N. The Fund may reimburse the Investment Manager
in the future.

[LOGO]

<PAGE>

DRESDNER RCM TAX MANAGED GROWTH FUND

GOAL

The Fund's goal is to enhance the after-tax returns of its shareholders by
investing in a broadly diversified portfolio of equity securities of U.S.
companies for long term capital appreciation.

PRINCIPAL INVESTMENT STRATEGIES

The Fund currently intends to invest in companies of any size, ranging from
larger, well-established issuers to smaller emerging growth companies. However,
no more than 20% of the Fund's total assets will be invested in companies with
market capitalizations below $500 million at the time of purchase.

To maximize after-tax total returns, the Fund may use certain investment
techniques designed to reduce capital gains distributions to shareholders. These
techniques may include, among others, holding securities long enough to avoid
higher, short-term capital gains taxes, selling shares with a higher cost basis
first, and selling securities that have declined in value to offset past or
future gains realized on the sale of other securities. These techniques will not
completely eliminate taxable distributions by the Fund.

The Investment Manager evaluates the fundamental value and prospects for
growth of individual companies and focuses on companies that it expects will
have higher than average rates of growth and strong potential for capital
appreciation. The Standard & Poor's 500 Stock Index and the Wilshire 5000 Index
are the Fund's performance benchmarks. The Investment Manager bases its
security selection on the relative investment merits of each company and
industry throughout the United States and will not seek to duplicate the sector
or stock allocations of either index.

PRINCIPAL INVESTMENT RISKS

The value of the Fund's investments will fluctuate in response to the
activities of individual companies and general stock market and economic
conditions. The stock prices of smaller and newer companies in which the Fund
may invest often fluctuate more than those of larger, more established
companies.

Efforts to minimize the realization of capital gains are not entirely
within the Fund's control and will be affected by shareholder purchase and
redemption activity. In addition, efforts to maximize after-tax total returns
may require trade-offs that reduce pre-tax returns.

An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.

PERFORMANCE

This section would normally show how the Fund has performed over time.
Because this Fund was in operation less than one year when this Prospectus was
printed, its performance is not included. In the future, the Fund will compare
its performance to the Standard & Poor's 500 Stock Index and the Wilshire 5000
Index.

4
<PAGE>

YEAR-BY-YEAR TOTAL RETURN FOR CLASS I SHARES

PERFORMANCE DATA IS NOT INCLUDED AS THE FUND IS LESS THAN ONE YEAR OLD.

EXAMPLE

Use this table to compare fees and expenses of the Fund with those of other
funds. It illustrates the amount of fees and expenses you would pay assuming:

- $10,000 investment in the Fund
- 5% annual return
- redemption at the end of each period
- no changes in the Fund's operating expenses

Although your actual costs may be higher or lower, based on these
assumptions your costs would be:

<TABLE>
<CAPTION>
ONE THREE
YEAR YEARS
<S> <C> <C>
CLASS I $228 $387
CLASS N $253 $465
</TABLE>

FEES AND EXPENSES

As an investor in the Fund, you will pay the following fees and expenses.

SHAREHOLDER FEES (1)
(fees paid directly from your investment)

CLASS I SHARES 1.00%
CLASS N SHARES 1.00%

ANNUAL FUND OPERATING EXPENSES
(fees paid from Fund assets)

<TABLE>
<CAPTION>
CLASS CLASS
I N
<S> <C> <C>
Management Fees 0.75% 0.75%
Rule 12b-1 Fee NONE 0.25%
Other Expenses 0.47% 0.47%
Total Annual Fund
Operating Expenses (2) 1.22% 1.47%
</TABLE>

(1) The Fund charges you a 1.00% redemption fee if you redeem shares within the
first year of purchase.

(2) The Investment Manager has contractually agreed until at least December 31,
1999, to pay each quarter the amount, if any, by which the ordinary
operating expenses for the quarter (except interest, taxes and extraordinary
expenses) exceed the annualized rate of 1.25% for Class I and 1.50% for
Class N. The Fund may reimburse the Investment Manager in the future.

[LOGO]
<PAGE>

DRESDNER RCM BIOTECHNOLOGY FUND

GOAL

The Fund's goal is to seek long term capital appreciation by investing in
equity securities of biotechnology companies.

PRINCIPAL INVESTMENT STRATEGIES

The Fund will normally invest at least 65% of its total assets in
biotechnology companies. The Fund currently intends to primarily invest in
companies with market capitalizations below $1 billion at the time of purchase,
with no more than 15% of its total assets in biotechnology companies with market
capitalizations below $100 million at the time of purchase. The Fund currently
expects that the majority of its investments will be in companies organized or
headquartered in the United States. However, the Fund may invest up to 25% of
its total assets in foreign issuers organized or headquartered in any one
foreign country.

Biotechnology companies engage in the research, development, provision
and/or manufacture of biotechnological products, services and processes. Such
companies generally employ genetic engineering to develop new drugs and apply
new and innovative processes to discover and develop diagnostic and therapeutic
products and services. The biotechnology industry currently includes
pharmaceutical, biochemical, medical/surgical, human health care, and
agricultural and industrial-oriented companies. Because of the rapid
developments in the biotechnology industry, over time, companies with new and
different products and focuses will likely be included in the industry.

The Investment Manager evaluates the fundamental value and prospects for
growth of individual companies and focuses on biotechnology companies that it
expects will have higher than average rates of growth and strong potential for
capital appreciation. The American Stock Exchange Biotechnology Index, the
NASDAQ Biotechnology Index, and the Russell 2000 Index are the Fund's
performance benchmarks. The Investment Manager bases its security selection on
the relative investment merits of each company and will not seek to duplicate
its benchmarks.

PRINCIPAL INVESTMENT RISKS

Because the Fund will focus its investments in biotechnology companies, it
will be more susceptible than more diversified funds to market and other
conditions affecting biotechnology companies. As a result,its share price may
be more volatile than a fund with a more broadly diversified portfolio.

The value of the Fund's investments will fluctuate in response to the
activities of individual companies and general stock market and economic
conditions. The performance of foreign securities also depends on the political
and economic environments and other overall economic conditions in the countries
where the Fund invests. The Fund's value will also be exposed to currency risk.
The stock prices of smaller and newer companies in which the Fund may invest
often fluctuate more than those of larger, more established companies.

An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.

PERFORMANCE

The charts on the following page show how the Fund has performed and
provide some indication of the risks of investing in the Fund. The bar chart
shows the Fund's performance for its first full year of operation. The chart
below it compares the performance of the Fund over time to its benchmarks.

Both charts assume reinvestment of dividends and distributions. Of course,
past performance does not necessarily indicate how the Fund will perform in the
future.

6
<PAGE>

YEAR-BY-YEAR TOTAL RETURNS FOR CLASS N SHARES

[GRAPH]

For the period covered by this year-by-year total return chart, the Fund's
highest quarterly return was 29.26% (for the fourth quarter ended 1998) and the
lowest quarterly return was -9.17% (for the third quarter ended 1998).

AVERAGE ANNUAL TOTAL RETURNS (THROUGH DECEMBER 31, 1998)

FUND PAST SINCE
INCEPTION YEAR INCEPTION
<S> <C> <C> <C>
BIOTECHNOLOGY FUND CLASS N SHARES 12/30/97 17.76% 17.70%
Amex Biotech Index -- 13.96% 15.91%
Nasdaq Biotech Index -- 44.30% 46.69%
Russell 2000 Index -- -2.54% 13.77%
</TABLE>

EXAMPLE

Use this table to compare fees and expenses of the Fund with those of other
funds. It illustrates the amount of fees and expenses you would pay assuming:

- $10,000 investment in the Fund
- 5% annual return
- redemption at the end of each period
- no changes in the Fund's operating expenses

Although your actual costs may be higher or lower, based on these
assumptions your costs would be:

<TABLE>
<CAPTION>
ONE THREE FIVE TEN
YEAR YEARS YEARS YEARS
<S> <C> <C> <C> <C>
Class N+ $153 $1,162 $2,174 $4,716
</TABLE>

+ Assuming the Investment Manager continues to reimburse the ordinary operating
expenses which exceed the annualized rate of 1.50% for Class N, your expenses
for the periods indicated would be $153, $474, $818, and $1,791. However, there
is no guarantee that the Investment Manager will continue such reimbursement
policy.

FEES AND EXPENSES

As an investor in the Fund, you will pay the following fees and expenses.

SHAREHOLDER FEES
(fees paid directly from your investment) NONE

ANNUAL FUND OPERATING EXPENSES
(fees paid from Fund assets)

<TABLE>
<CAPTION>
CLASS
N
<S> <C>
Management Fees 1.00%
Rule 12b-1 Fee 0.25%
Other Expenses 3.62%
Total Annual Fund
Operating Expenses 4.87%
Less: Fees Waived
And Reimbursed(1) -3.37%
Net Operating
Expenses(1) 1.50%
</TABLE>

(1) The Investment Manager has contractually agreed until at least
December 31, 1999, to pay each quarter the amount, if any, by which the
ordinary operating expenses for Class N for the quarter (except interest,
taxes and extraordinary expenses) exceed the annualized rate of 1.50%.
The Fund may reimburse the Investment Manager in the future.

[LOGO]
<PAGE>

DRESDNER RCM GLOBAL SMALL CAP FUND

GOAL

The Fund's goal is to seek long term capital appreciation by investing in
equity securities of companies with market capitalizations up to $1 billion.

PRINCIPAL INVESTMENT STRATEGIES

The Fund will normally invest at least 65% of its total assets in
small-sized companies with total market capitalizations of up to $1 billion at
the time of purchase. The Fund may invest up to 15% of its total assets in
companies with market capitalizations below $100 million at the time of
purchase. The Fund expects the average market capitalization of its portfolio
will range between $500 million and $1 billion.

As a fundamental policy which cannot be changed without stockholder
approval, the Fund invests in companies organized or headquartered in at least
three different countries (one of which may be the United States). However, the
Fund currently expects the majority of its foreign investments will be in
companies organized or headquartered in Japan and the countries of Western
Europe.

Under normal market conditions, the Fund will invest no more than 25% of
its total assets in issuers that are organized or headquartered in any one
foreign country, other than France, Germany, Japan and the United Kingdom.

The Investment Manager evaluates the fundamental value and prospects for
growth of individual companies that it expects will have higher than average
rates of growth and strong potential for capital appreciation. In addition, the
Investment Manager develops forecasts of economic growth, inflation, and
interest rates that it uses to help identify those regions and individual
countries that are likely to offer the best investment opportunities. The
Salomon Brothers Extended Market Index is the Fund's performance benchmark. The
Investment Manager bases its security selection on the relative investment
merits of each company and industry around the world and will not seek to
duplicate the country or sector allocations of the Salomon Brothers Extended
Market Index.

PRINCIPAL INVESTMENT RISKS

The value of the Fund's investments fluctuate in response to the activities
of individual companies and general stock market and economic conditions. The
performance of foreign securities also depends on the political and economic
environments and other overall economic conditions in the countries where the
Fund invests. The Fund's value will also be exposed to currency risk. The stock
prices of smaller and newer companies in which the Fund may invest often
fluctuate more than those of larger, more established companies.

An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.

PERFORMANCE

The charts on the following page show how the Fund has performed and
provide some indication of the risks of investing in the Fund by showing changes
in the Fund's performance from year to year. The bar chart shows changes in the
yearly performance of the Fund since its inception. The chart below it compares
the performance of the Fund over time to its benchmark.

Both charts assume reinvestment of dividends and distributions. Of course,
past performance does not necessarily indicate how the Fund will perform in the
future.

8
<PAGE>

YEAR-BY-YEAR TOTAL RETURN FOR CLASS I SHARES

[GRAPH]

For the periods covered by this year-by-year total return chart, the Fund's
highest quarterly return was 24.87% (for the second quarter ended 1997) and the
lowest quarterly return was -23.37% (for the third quarter ended 1998).

AVERAGE ANNUAL TOTAL RETURNS (THROUGH DECEMBER 31, 1998)

<TABLE>
<CAPTION>
FUND PAST SINCE
INCEPTION YEAR INCEPTION
<S> <C> <C> <C>
GLOBAL SMALL CAP FUND CLASS I SHARES* 12/31/96 19.29% 22.34%
GLOBAL SMALL CAP FUND CLASS N SHARES** 12/31/96 19.29% 22.34%
Salomon EMI Index -- 4.12% 5.29%
</TABLE>

**Class N shares were first issued on March 10, 1999, and pay Rule 12b-1 fees.
Class N returns through December 31, 1998 are based on Class I returns and
reflect Rule 12b-1 fees.

EXAMPLE

Use this table to compare fees and expenses of the Fund with those of other
funds. It illustrates the amount of fees and expenses you would pay assuming:

- $10,000 investment in the Fund
- 5% annual return
- redemption at the end of each period
- no changes in the Fund's operating expenses

Although your actual costs may be higher or lower, based on these
assumptions your costs would be:

ONE THREE FIVE TEN
YEAR YEARS YEARS YEARS
<S> <C> <C> <C> <C>
CLASS I+ $153 $910 $1,689 $3,733
CLASS N+ $178 $984 $1,809 $3,954
</TABLE>

+ Assuming the Investment Manager continues to reimburse the ordinary operating
expenses which exceed the annualized rate of 1.50% for Class I and 1.75% for
Class N, your expenses for the periods indicated would be $153, $474, $818,and
$1,791 for Class I and $178, $551, $949, and $2,062 for Class N. However, there
is no guarantee that the Investment Manager will continue such reimbursement
policy.

FEES AND EXPENSES

As an investor in the Fund, you will pay the following fees and expenses.

SHAREHOLDER FEES
(fees paid directly from your investment) NONE

ANNUAL FUND OPERATING EXPENSES
(fees paid from Fund assets)

CLASS CLASS
I N
<S> <C> <C>
Management Fees 1.00% 1.00%
Rule 12b-1 Fee NONE(1) 0.25%
Other Expenses 2.61% 2.61%
Total Annual Fund
Operating Expenses 3.61% 3.86%
Less: Fees Waived
And Reimbursed (2) -2.11% -2.11%
Net Operating
Expenses (2) 1.50% 1.75%
</TABLE>

(1) For fiscal 1998, the Fund charged a Rule 12b-1 fee at an annual rate of
0.25%. This fee is no longer applicable and has not been included in the Class I
expenses shown here.

(2) The Investment Manager has contractually agreed until at least
December 31, 1999, to pay each quarter the amount, if any, by which the ordinary
operating expenses for the quarter (except interest, taxes and extraordinary
expenses) exceed the annualized rate of 1.50% for Class I and 1.75% for
Class N. The Fund may reimburse the Investment Manager in the future.

[LOGO]
<PAGE>

DRESDNER RCM GLOBAL TECHNOLOGY FUND

GOAL

The Fund's goal is to seek long term capital appreciation by investing in
equity securities of technology companies.

PRINCIPAL INVESTMENT STRATEGIES

The Fund will normally invest at least 65% of its total assets in
technology companies. The Fund currently intends to invest primarily in
companies with market capitalizations greater than $500 million at the time of
purchase, with no more than 15% of its total assets in technology companies with
market capitalizations below $100 million at the time of purchase.

Technology companies are companies with revenues primarily generated by
technology products and services. These include the internet, computers and
computer peripherals, software, electronic components and systems,
communications equipment and services, semiconductors, media and information
services, pharmaceuticals, hospital supply and medical devices, biotechnology
products, environmental services, chemical products and synthetic materials, and
defense and aerospace products and services.

As a fundamental policy, which cannot be changed without stockholder
approval, the Fund invests in technology companies organized or headquartered in
at least three different countries (one of which may be the United States). The
Fund may invest up to 50% of its total assets in foreign issuers (but under
normal market conditions no more than 25% of its total assets in issuers
organized or headquartered in any one foreign country, other than Japan).

The Investment Manager evaluates the fundamental value and prospects for
growth of individual companies and focuses on technology companies that it
expects will have higher than average rates of growth and strong potential for
capital appreciation. In addition, the Investment Manager develops forecasts of
economic growth, inflation, and interest rates that it uses to help identify
those regions and individual countries that are likely to offer the best
investment opportunities. The Standard & Poor's 500 Stock Index and Lipper
Science & Technology Fund Index are the Fund's performance benchmarks. The
Investment Manager bases its security selection on the relative investment
merits of each company and industry around the world and will not seek to
duplicate either index.

PRINCIPAL INVESTMENT RISKS

Because the Fund will focus its investments in technology companies, it
will be more susceptible than more diversified funds to market and other
conditions affecting technology companies. As a result, its share price may be
more volatile than a fund with a more broadly diversified portfolio.

An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.

PERFORMANCE

Both charts assume reinvestment of dividends and distributions. Of course,
past performance does not necessarily indicate how the Fund will perform in the
future.

10
<PAGE>

YEAR-BY-YEAR TOTAL RETURN FOR CLASS I SHARES

[GRAPH]

For the periods covered by this year-by-year total return chart, the Fund's
highest quarterly return was 46.01% (for the fourth quarter ended 1998) and the
lowest quarterly return was -15.60% (for the third quarter ended 1998).

AVERAGE ANNUAL TOTAL RETURNS (THROUGH DECEMBER 31, 1998)

<TABLE>
<CAPTION>
FUND PAST SINCE
INCEPTION YEAR INCEPTION
<S> <C> <C> <C>
GLOBAL TECHNOLOGY FUND CLASS I SHARES* 12/27/95 61.05% 37.31%
GLOBAL TECHNOLOGY FUND CLASS N SHARES** 12/27/95 61.05% 37.31%
S&P 500 Stock Index -- 28.58% 30.95%
Lipper Science & Technology Fund Index -- 46.95% 22.63%
</TABLE>

*On December 31,1998, all Fund shares were redesignated as Class I shares.
Neither the Class I shares nor their predecessors paid Rule 12b-1 fees.

**Class N shares were first issued on January 30, 1999, and pay Rule 12b-1 fees.
Class N returns through December 31, 1998 are based on Class I returns, and
would be lower if Rule 12b-1 fees had been paid.

EXAMPLE

Use this table to compare fees and expenses of the Fund with those of other
funds. It illustrates the amount of fees and expenses you would pay assuming:

- $10,000 investment in the Fund
- 5% annual return
- redemption at the end of each period
- no changes in the Fund's operating expenses

Although your actual costs may be higher or lower, based on these
assumptions your costs would be:

<TABLE>
<CAPTION>
ONE THREE FIVE TEN
YEAR YEARS YEARS YEARS
<S> <C> <C> <C> <C>
CLASS I+ $153 $681 $1,236 $2,751
CLASS N+ $178 $757 $1,362 $2,998
</TABLE>

+ Assuming the Investment Manager continues to reimburse the ordinary operating
expenses which exceed the annualized rate of 1.50% for Class I and 1.75% for
Class N, your expenses for the periods indicated would be $153, $474, $818, and
$1,791 for Class I and $178, $551, $949, and $2,062 for Class N. However, there
is no guarantee that the Investment Manager will continue such reimbursement
policy.

FEES AND EXPENSES

As an investor in the Fund, you will pay the following fees and expenses.

SHAREHOLDER FEES
(fees paid directly from your investment) NONE

ANNUAL FUND OPERATING EXPENSES
(fees paid from Fund assets)

<TABLE>
<CAPTION>
Class Class
I N
<S> <C> <C>
Management Fees 1.00% 1.00%
Rule 12B-1 Fee none 0.25%
Other Expenses 1.49% 1.49%
Total Annual Fund
Operating Expenses 2.49% 2.74%
Less: Fees Waived
and Reimbursed(1) -0.99%(2) -0.99%
Net Operating
Expenses(1) 1.50% 1.75%
</TABLE>

(1) The Investment Manager has contractually agreed until at least December 31,
1999, to pay each quarter the amount, if any, by which the ordinary
operating expenses for the quarter (except interest, taxes and extraordinary
expenses) exceed the annualized rate of 1.50% for Class I and 1.75% for
Class N. The Fund may reimburse the Investment Manager in the future.

(2) This percentage includes an expense reduction of 0.25% for the Class I
Shares.

<PAGE>

DRESDNER RCM GLOBAL HEALTH CARE FUND

GOAL

The Fund's goal is to seek long term capital appreciation by investing in
equity securities of health care companies.

PRINCIPAL INVESTMENT STRATEGIES

The Fund will normally invest at least 65% of its total assets in health
care companies. The Fund currently intends to invest primarily in companies with
market capitalizations of at least $1 billion at the time of purchase, with no
more than 15% of its total assets in health care companies with market
capitalizations below $100 million at the time of purchase.

Health care companies include pharmaceutical, biochemical, biotechnology
health care service and medical device companies. These companies are typically
involved in research and development or ownership and/or the operation of health
care facilities, franchises or practices, and the design, production or selling
of medical, dental and optical products. A company will be deemed to be
principally engaged in the health care business if:

1) at least 50% of its earnings or revenues are derived from health
care activities; or

2) at least 50% of its assets are devoted to such activities, based upon
the company's financial statements as of the end of its most recent fiscal year.

As a fundamental policy, which cannot be changed without stockholder
approval, the Fund invests in health care companies organized or headquartered
in at least three different countries (one of which may be the United States).
However, the Fund currently expects the majority of its foreign investments will
be in companies organized or headquartered in Japan and the countries of Western
Europe.

The Investment Manager evaluates the fundamental value and prospects for
growth of individual companies and focuses on health care companies that it
expects will have higher than average rates of growth and strong potential for
capital appreciation. In addition, the Investment Manager develops forecasts of
economic growth, inflation, and interest rates that it uses to help identify
those regions and individual countries that are likely to offer the best
investment opportunities. The Standard & Poor's 500 Stock Index and the Russell
Midcap Health Care Index are the Fund's performance benchmarks. The Investment
Manager bases its security selection on the relative investment merits of each
company around the world and will not seek to duplicate either index.

PRINCIPAL INVESTMENT RISKS

Because the Fund will focus its investments in health care companies, it
will be more susceptible than more diversified funds to market and other
conditions affecting health care companies. As a result, its share price may be
more volatile than a fund with a more broadly diversified portfolio.

An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.

PERFORMANCE

Both charts assume reinvestment of dividends and distributions. Of course,
past performance does not necessarily indicate how the Fund will perform in the
future.

12
<PAGE>

YEAR-BY-YEAR TOTAL RETURNS FOR CLASS N SHARES

For the periods covered by this year-by-year total return chart, the Fund's
highest quarterly return was 19.51% (for the fourth quarter ended 1998) and the
lowest quarterly return was -4.45% (for the third quarter ended 1998).

AVERAGE ANNUAL TOTAL RETURNS (THROUGH DECEMBER 31, 1998)

<TABLE>
<CAPTION>
FUND PAST SINCE
INCEPTION YEAR INCEPTION
<S> <C> <C> <C>
GLOBAL HEALTH CARE FUND CLASS N SHARES 12/31/96 25.57% 27.77%
S&P 500 Stock Index -- 28.58% 30.95%
Russell Midcap Health Care Index -- 33.41% 26.10%
</TABLE>

EXAMPLE

Use this table to compare fees and expenses of the Fund with those of other
funds. It illustrates the amount of fees and expenses you would pay assuming:

- $10,000 investment in the Fund
- 5% annual return
- redemption at the end of each period
- no changes in the Fund's operating expenses

Although your actual costs may be higher or lower, based on these
assumptions your costs would be:

<TABLE>
<CAPTION>
ONE THREE FIVE TEN
YEAR YEARS YEARS YEARS
<S> <C> <C> <C> <C>
CLASS N+ $153 $918 $1,705 $3,766
</TABLE>

FEES AND EXPENSES

As an investor in the Fund, you will pay the following fees and expenses.

SHAREHOLDER FEES
(fees paid directly from your investment) NONE

ANNUAL FUND OPERATING EXPENSES
(fees paid from Fund assets)

Class
N
<S> <C>
Management Fees 1.00%
Rule 12B-1 Fee 0.25%
Other Expenses 2.40%
Total Annual Fund
Operating Expenses 3.65%
Less: Fees Waived
and Reimbursed(1) -2.15%
Net Operating
Expenses(1) 1.50%
</TABLE>

(1) The Investment Manager has contractually agreed until at least December 31,
1999, to pay each quarter the amount, if any, by which the ordinary
operating expenses for Class N for the quarter (except interest, taxes and
extraordinary expenses) exceed the annualized rate of 1.50%. The Fund may
reimburse the Investment Manager in the future.

<PAGE>

DRESDNER RCM INTERNATIONAL GROWTH EQUITY FUND

GOAL

The Fund's goal is to seek long term capital appreciation by investing in
equity securities of foreign companies.

PRINCIPAL INVESTMENT STRATEGIES

The Fund will normally invest at least 65% of its total assets in
foreign companies. The Fund currently intends to invest primarily in
companies with market capitalizations in excess of $1 billion at the time of
purchase, with no more than 10% of the Fund's total assets in companies with
market capitalizations below $100 million at the time of purchase.

The Fund invests in issuers located in at least ten different countries.
The Fund may invest up to 65% of its total assets in issuers organized or
headquartered in Japan, the United Kingdom or Germany, and up to 25% of its
total assets in issuers organized or headquartered in any other foreign country.
The Fund may also invest up to 10% of its total assets in U.S. issuers.

The Investment Manager evaluates the fundamental value and prospects for
growth of individual companies and focuses on companies that it expects will
have higher than average rates of growth and strong potential for capital
appreciation. In addition, the Investment Manager develops forecasts of economic
growth, inflation, and interest rates that it uses to help identify those
regions and individual countries that are likely to offer the best investment
opportunities. The Morgan Stanley Capital International Europe, Australia, Far
East (MSCI-EAFE) Index and the Morgan Stanley Capital International All Country
World Free (MSCI-ACWI) Index are the Fund's performance benchmarks. The
Investment Manager bases its security selection on the relative investment
merits of each company and industry throughout the world and will not seek to
duplicate the country or industry allocations of either index.

PRINCIPAL INVESTMENT RISKS

Because the value of the Fund's investment will fluctuate with market
conditions, so will the value of your investment in the Fund. You could lose
money on your investment in the Fund, or the Fund could underperform other
investments.

An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.

PERFORMANCE

Both charts assume reinvestment of dividends and distributions. Of course,
past performance does not necessarily indicate how the Fund will perform in the
future.

14
<PAGE>

YEAR-BY-YEAR TOTAL RETURN FOR CLASS I SHARES

For the periods covered by this year-by-year total return chart, the Fund's
highest quarterly return was 17.85% (for the fourth quarter ended 1998) and the
lowest quarterly return was -16.16% (for the third quarter ended 1998).

AVERAGE ANNUAL TOTAL RETURNS (THROUGH DECEMBER 31, 1998)

<TABLE>
<CAPTION>
FUND PAST SINCE
INCEPTION YEAR INCEPTION
<S> <C> <C> <C>
INTERNATIONAL GROWTH EQUITY FUND CLASS I SHARES* 12/28/94 13.81% 17.21%
INTERNATIONAL GROWTH EQUITY FUND CLASS N SHARES** 12/28/94 13.81% 17.21%
MSCI-EAFE Index -- 20.33% 9.83%
MSCI-ACWI Index -- 14.47% 8.40%
</TABLE>

*On December 31,1998, all Fund shares were redesignated as Class I shares.
Neither the Class I shares nor their predecessors paid Rule 12b-1 fees.

**Class N shares were first issued on March 10, 1999, and pay Rule 12b-1 fees.
Class N returns through December 31, 1998 are based on Class I returns, and
would be lower if Rule 12b-1 fees had been paid.

EXAMPLE

Use this table to compare fees and expenses of the Fund with those of other
funds. It illustrates the amount of fees and expenses you would pay assuming:

- $10,000 investment in the Fund
- 5% annual return
- redemption at the end of each period
- no changes in the Fund's operating expenses

Although your actual costs may be higher or lower, based on these
assumptions your costs would be:

<TABLE>
<CAPTION>
ONE THREE FIVE TEN
YEAR YEARS YEARS YEARS
<S> <C> <C> <C> <C>
CLASS I $102 $331 $579 $1,289
CLASS N $127 $409 $712 $1,574
</TABLE>

FEES AND EXPENSES

As an investor in the Fund, you will pay the following fees and expenses.

SHAREHOLDER FEES
(fees paid directly from your investment) NONE

ANNUAL FUND OPERATING EXPENSES
(fees paid from Fund assets)

<TABLE>
<CAPTION>
Class Class
I N
<S> <C> <C>
Management Fees 0.75% 0.75%
Rule 12B-1 Fee none 0.25%
Other Expenses 0.31% 0.31%
Total Annual Fund
Operating Expenses 1.06% 1.31%
Less: Fees Waived
and Reimbursed (1) -0.06% -0.06%
Net Operating
Expenses (1) 1.00% 1.25%
</TABLE>

(1) The Investment Manager has contractually agreed until at least December 31,
1999, to pay each quarter the amount, if any, by which the ordinary operating
expenses for the quarter (except interest, taxes and extraordinary expenses)
exceed the annualized rate of 1.00% for Class I and 1.25% for Class N. The Fund
may reimburse the Investment Manager in the future.

[LOGO]
<PAGE>

DRESDNER RCM EMERGING MARKETS FUND

GOAL

The Fund's goal is to seek long term capital appreciation by investing in
equity securities of emerging market companies.

PRINCIPAL INVESTMENT STRATEGIES

The Fund will normally invest at least 80% of its total assets in emerging
market companies. The Fund currently intends to invest primarily in companies
with market capitalizations in excess of $100 million at the time of purchase.

The Fund may invest up to 15% of its total assets in issuers that are
organized or headquartered in any one emerging market country. The Fund may also
invest up to 15% of its total assets in issuers that are organized or
headquartered in developed countries, that either

1) have or will have substantial assets in emerging market countries, or

2) derive or will derive a substantial portion of their total revenues
from goods and services produced in, or sales made in, emerging market
countries.

Emerging market companies are organized or headquartered in any country
considered an emerging or developing country by the World Bank, the
International Finance Corporation, the United Nations, or other recognized
international financial institutions. This designation currently includes most
countries in the world except Australia, Canada, Japan, New Zealand, Singapore,
United Kingdom, the U.S. and most of the countries of Western Europe.

The Investment Manager evaluates the fundamental value and prospects for
growth of individual companies and focuses on companies that it expects will
have higher than average rates of growth and strong potential for capital
appreciation. In addition, the Investment Manager develops forecasts of economic
growth, inflation, and interest rates that it uses to help identify those
regions and individual countries that are likely to offer the best investment
opportunities. The Morgan Stanley Capital International Emerging Markets Free
(MSCI-EMF) Index and the IFC Emerging Markets Index are the Fund's performance
benchmarks. The Investment Manager bases its security selection on the relative
investment merits of each company and industry throughout emerging market
countries and will not seek to duplicate the country or sector allocations of
either index.

PRINCIPAL INVESTMENT RISKS

An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.

PERFORMANCE

The charts on the following page provide some indication of the risks of
investing in the Fund. The bar chart shows the Fund's performance for its first
full year of operation. The chart below it compares the performance of the Fund
over time to its benchmarks.

Both charts assume reinvestment of dividends and distributions. Of course,
past performance does not necessarily indicate how the Fund will perform in the
future.

16
<PAGE>

YEAR-BY-YEAR TOTAL RETURN FOR CLASS I SHARES

For the period covered by this year-by-year total return chart, the Fund's
highest quarterly return was 17.18% (for the fourth quarter ended 1998) and the
lowest quarterly return was -16.26% (for the second quarter ended 1998).

AVERAGE ANNUAL TOTAL RETURNS (THROUGH DECEMBER 31, 1998)

<TABLE>
<CAPTION>
FUND PAST SINCE
INCEPTION YEAR INCEPTION
<S> <C> <C> <C>
EMERGING MARKETS FUND CLASS I SHARES* 12/30/97 -8.39% -8.46%
EMERGING MARKETS FUND CLASS N SHARES** 12/30/97 -8.39% -8.46%
MSCI Emerging Markets Free Index -- -25.33% -25.09%
IFC Emerging Markets Index -- -22.01% -21.84%
</TABLE>

*On December 31,1998, all Fund shares were redesignated as Class I shares.
Neither the Class I shares nor their predecessors paid Rule 12b-1 fees.

EXAMPLE

Use this table to compare fees and expenses of the Fund with those of other
funds. It illustrates the amount of fees and expenses you would pay assuming:

- $10,000 investment in the Fund
- 5% annual return
- redemption at the end of each period
- no changes in the Fund's operating expenses

Although your actual costs may be higher or lower, based on these
assumptions your costs would be:

<TABLE>
<CAPTION>
ONE THREE FIVE TEN
YEAR YEARS YEARS YEARS
<S> <C> <C> <C> <C>
CLASS I+ $153 $1,813 $3,365 $6,821
CLASS N+ $178 $1,879 $3,463 $6,956
</TABLE>

+ Assuming the Investment Manager continues to reimburse the ordinary operating
expenses which exceed the annualized rate of 1.50% for Class I and 1.75% for
Class N, your expenses for the periods indicated would be $153, $474, $818, and
$1,791 for Class I and $178, $551, $949,and $2,062 for Class N. However, there
is no guarantee that the Investment Manager will continue such reimbursement
policy.

FEES AND EXPENSES

As an investor in the Fund, you will pay the following fees and expenses.

SHAREHOLDER FEES
(fees paid directly from your investment) NONE

ANNUAL FUND OPERATING EXPENSES
(fees paid from Fund assets)

<TABLE>
<CAPTION>
Class Class
I N
<S> <C> <C>
Management Fees 1.00% 1.00%
Rule 12B-1 Fee none 0.25%
Other Expenses 7.29% 7.29%
Total Annual Fund
Operating Expenses 8.29% 8.54%
Less: Fees Waived
and Reimbursed(1) -6.79% -6.79%
Net Operating
Expenses(1) 1.50% 1.75%
</TABLE>

(1)The Investment Manager has contractually agreed until at least December 31,
1999, to pay each quarter the amount, if any, by which the ordinary operating
expenses for the quarter (except interest, taxes and extraordinary expenses)
exceed the annualized rate of 1.50% for Class I and 1.75% for Class N. The Fund
may reimburse the Investment Manager in the future.
<PAGE>

DRESDNER RCM EUROPE FUND

GOAL

The Fund's goal is to seek long term capital appreciation by investing in
equity securities of European companies.

PRINCIPAL INVESTMENT STRATEGIES

The Fund invests primarily in companies located in Europe, from both
European Economic and Monetary Union ("EMU") and non-EMU countries. Under normal
market conditions, the Fund invests at least 75% of its total assets in these
companies. The Fund expects to invest most of its assets in equity securities of
issuers located in Western European countries.

The Investment Manager evaluates the fundamental value and prospects for
growth of individual companies and focuses on companies that it expects will
have higher than average rates of growth and strong potential for capital
appreciation. In addition, the Investment Manager develops forecasts of
economic growth, inflation, and interest rates that it uses to help identify
those regions and individual countries that are likely to offer the best
investment opportunities. The Morgan Stanley Capital International (MSCI)
Europe Index is the Fund's performance benchmark. The Investment Manager
bases its security selection on the relative investment merits of each
company and industry throughout Europe and will not seek to duplicate the
country or sector allocations of the MSCI Europe Index.

PRINCIPAL INVESTMENT RISKS

The value of the Fund's investments will fluctuate in response to the
activities of individual companies and general stock market and economic
conditions. The performance of foreign securities depends in part on the
political and economic environments and other overall economic conditions in
the countries where the Fund invests. Because the Fund focuses on certain
developed European countries, it will be more susceptible than other funds to
market and other conditions affecting those countries. The Fund's value will
also be exposed to currency risk. The stock prices of smaller and newer
companies in which the Fund may invest often fluctuate more than those of
larger, more established companies.

An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.

PERFORMANCE

On May 3, 1999, the Fund converted from a closed-end fund to an open-end
fund. Closed-end fund shares are not redeemed by or purchased from the fund.
Instead, they are normally listed and traded on an exchange. Unlike open-end
funds, the price of a closed-end fund share is not based on the fund's net
asset value, but upon its value in the market. Closed-end funds usually
generate fewer expenses than open-end funds because the fund is not
responsible for the distribution of its shares. Upon conversion, all
outstanding shares of the previously closed-end Fund were redesignated as
Class N shares and a new class of shares, Class I, was created.

The bar chart and table shown on the following page provide some
indication of the risks of investing in the Fund by showing changes in the
Fund's performance from year to year and by showing how the Fund's average
annual returns for one and five years and for the life of the Fund compared
to broad-based securities and market indices.

Both charts assume reinvestment of dividends and distributions. Of
course, past performance does not necessarily indicate how the Fund will
perform in the future.

18
<PAGE>

Year-by-Year Total Return for Class N Shares*

[GRAPH]

1991 1992 1993 1994 1995 1996 1997 1998
<S> <C> <C> <C> <C> <C> <C> <C>
- -5.74% -12.44% 31.54% -4.98% 1.33% 15.87% 25.70% 37.23%
</TABLE>

For the periods covered by this year-by-year total return chart, the Fund's
highest quarterly return was 21.05% (for the first quarter ended 1998) and
the lowest quarterly return was -15.52% (for the third quarter ended 1998).

AVERAGE ANNUAL TOTAL RETURNS (THROUGH DECEMBER 31, 1998)*

<TABLE>
<CAPTION>
FUND PAST FIVE SINCE
INCEPTION YEAR YEARS INCEPTION
<S> <C> <C> <C> <C>
EUROPE FUND CLASS N SHAREs** 4/5/90 37.23% 13.99% 6.11%
EUROPE FUND CLASS I SHARES*** 4/5/90 37.23% 13.99% 6.11%
DAX100 Index**** -- 25.23% 16.91% 10.39%
MDAX Index**** -- 15.22% 10.50% 5.51%
</TABLE>

*The bar chart and table reflect the performance of the Fund as a closed-end
investment company that invested primarily in equity securities of German
companies. Beginning on February 9, 1999, the Fund's objective was expanded
to permit investment 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.

**Returns through December 31, 1998 do not reflect Rule 12b-1 fees. Class N
returns through December 31, 1998 would be lower if Rule 12b-1 fees had been
paid.

***Class I shares were first issued on May 3, 1999, which do not pay Rule
12b-1 fees. Returns through December 31, 1998 are based on Class N returns.

****Since February 9, 1999, when the Fund's mandate was expanded, the Fund
has been comparing its performance to the MSCI Europe Index.

EXAMPLE

Use this table to compare fees and expenses of the Fund with those of other
funds. It illustrates the amount of fees and expenses you would pay assuming:

- $10,000 investment in the Fund
- 5% annual return
- redemption at the end of each period
- no changes in the Fund's operating expenses

Although your actual costs may be higher or lower, based on these
assumptions your costs would be:

<TABLE>
<CAPTION>
ONE THREE FIVE TEN
YEAR YEARS YEARS YEARS
<S> <C> <C> <C> <C>
Class N $163 $539 $939 $2,060
Class I $137 $428 $758 $1,742
</TABLE>

FEES AND EXPENSES

As an investor in the Fund, you will pay the following fees and expenses.

SHAREHOLDER FEES(1)
(fees paid directly from your investment)

Class I Shares 1.00%
Class N Shares 1.00%

ANNUAL FUND OPERATING EXPENSES
(fees paid from Fund assets)

<TABLE>
<CAPTION>
Class Class
I N
<S> <C> <C>
Management fees 1.00% 1.00%
Rule 12b-1 fee none 0.25%
Other expenses (2) 0.51% 0.51%
Total annual Fund
operating expenses (3) 1.51% 1.76%
Less: Fee waiver
and reimbursement (4) -0.16% -0.16%
Net operating
expenses4 1.35% 1.60%
</TABLE>

(1)The Fund charges a 1.00% redemption fee for shares redeemed before November
1, 1999. This redemption fee will not apply if you have held the shares for more
than one year prior to their redemption.

(2)This percentage amount does not include non-recurring expensesof
approximately 0.46% associated with the conversion of the Fund to an open-end
investment company.

(3)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.

(4)The Investment Manager has contractually agreed until at least December 31,
2002, to pay each quarter the amount, if any, by which the ordinary operating
expenses for the quarter (except interest, taxes and extraordinary expenses)
exceed the annualized rate of 1.35% for Class I and 1.60% for Class N. The Fund
may reimburse the Investment Manager in the future.

[LOGO]
<PAGE>

INVESTMENT OBJECTIVES, POLICIES AND RISKS

INVESTMENT OBJECTIVES AND POLICIES

HOW DO THE FUNDS SELECT EQUITY INVESTMENTS?

While the Funds emphasize investments in growth companies, the Funds also
may invest in other companies that are not traditionally considered to be growth
companies, such as emerging growth companies and cyclical and semi-cyclical
companies in developing economies, if the Investment Manager believes that such
companies have above-average growth potential.

When the Investment Manager analyzes a specific company it evaluates the
fundamental value of each enterprise as well as its prospects for growth. In
most cases, these companies have one or more of the following characteristics:

- Superior management

- Strong balance sheets

- Differentiated or superior products or services

- Substantial capacity for growth in revenue through
either an expanding market or expanding market share

- Strong commitment to research and development

- A steady stream of new products or services.

The Funds do not seek current income and do not restrict their investments
to companies with a record of dividend payments.

When evaluating foreign companies, the Investment Manager may also consider
the anticipated economic growth rate, political outlook, inflation rate,
currency outlook, and interest rate environment for the country and the region
in which the company is located, as well as other factors it deems relevant.

In addition to traditional research activities, the Investment Manager
uses research produced by its Grassroots-SM- Research operating group.
Grassroots-SM- Research prepares research reports based on field interviews
with customers, distributors, and competitors of the companies that the
Investment Manager follows. The Investment Manager believes that
Grassroots-SM- Research can be a valuable adjunct to its traditional research
efforts by providing a "second look" at companies in which the Funds might
invest and by checking marketplace assumptions about market demand for
particular products and services.

WHAT KINDS OF EQUITY SECURITIES DO THE FUNDS INVEST IN?

The Funds invest primarily in common stocks and depositary receipts,
including American Depositary Receipts, European Depositary Receipts, Global
Depositary Receipts or other similar depositary instruments representing
securities of foreign companies. The Funds may invest in companies of any size.
Common stocks represent the basic equity ownership interests in a company.
Depositary receipts are issued by banks or other financial institutions and
represent, or may be converted into, underlying ordinary shares of a foreign
company. They may be sponsored by the foreign company or organized
independently.

The Funds may also invest in other equity and equity related securities.
These include preferred stock, convertible preferred stock, convertible debt
obligations, warrants or other rights to acquire stock, and options on stock and
stock indices.

20
<PAGE>

WHAT KINDS OF FOREIGN SECURITIES DO THE FUNDS INVEST IN?

The Funds invest in the following types of foreign equity and equity-linked
securities:

- Securities of companies that are organized or headquartered outside the
United States, or that derive at least 50% of their total revenue
outside the United States.

- Securities that are principally traded outside the United States,
regardless of where the issuer of such securities is organized or
headquartered or where its operations principally are conducted.

- Depositary receipts.

- Securities of other investment companies investing primarily in such
equity and equityrelated foreign securities.

The Investment Manager expects that the Funds' foreign investments will
primarily be traded on recognized foreign securities exchanges. However, each
Fund also may invest in securities that are traded only over-the-counter, either
in the United States or in foreign markets, when the Investment Manager believes
that such securities meet a Fund's investment criteria. The Funds also may
invest in securities that are not publicly traded either in the United States or
in foreign markets.

OTHER INVESTMENT PRACTICES

The Funds may also employ the following investment techniques in pursuit of
their investment objectives.

DO THE FUNDS BUY AND SELL FOREIGN CURRENCIES?

The Investment Manager expects to purchase or sell foreign currencies
primarily to settle foreign securities transactions. However, each Fund may also
engage in currency management transactions (other than currency futures
contracts in the case of the Europe Fund) to hedge currency exposure related to
securities it owns or expects to purchase. A Fund may also hold foreign currency
received in connection with investments in foreign securities when the
Investment Manager believes the relevant exchange rates will change favorably
and it would be better to convert the currency into U.S. dollars at a later
date.

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

DO THE FUNDS HEDGE THEIR INVESTMENTS?

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

[LOGO]
<PAGE>

time during the term of the option (or on the option expiration date). An option
on a stock index gives a Fund the right to receive a cash payment equal to the
difference between the closing price of the index and the exercise price of the
option. A Fund may "close out" an option before it is exercised or expires by
selling an option of the same series as the option previously purchased.

Each Fund may employ certain techniques to hedge against currency exchange
rate fluctuations, changes in interest rates or general fluctuations in the
value of its portfolio securities. The International Fund may hedge up to 100%
of its total assets. These techniques include forward currency exchange
contracts, currency options, futures contracts (and related options) (for the
Europe Fund, only index futures contracts), and currency swaps.

A forward currency exchange contract is an obligation to purchase or sell a
specific currency at a future date at a price set at the time of the contract.
Currency options are rights to purchase or sell a specific currency at a future
date at a specified price. Futures contracts are agreements to take or make
delivery of an amount of cash equal to the difference between the value of the
currency at the close of the last trading day of the contract and the contract
price. Index futures contracts are agreements to take or make delivery of an
amount of cash equal to the difference between the value of the index at the
close of the last trading day of the contract and the price at which the index
contract was originally written. Currency swaps involve the exchange of rights
to make or receive payments in specified currencies.

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

DO THE LARGE CAP GROWTH FUND AND TAX MANAGED GROWTH FUND INVEST IN FOREIGN
SECURITIES?

The Large Cap Growth Fund may invest up to 20% of its total assets and the
Tax Managed Growth Fund may invest up to 25% of its total assets, in foreign
securities (but no more than 10% in any one foreign country). Such investments
are not currently a principal investment technique for these Funds. However, if
foreign securities present attractive investment opportunities, either Fund may
increase the percentage of its total assets in foreign securities, subject to
the limits described above.

DO THE FUNDS, OTHER THAN THE EMERGING MARKETS FUND, INVEST IN EMERGING MARKETS?

The International Growth Equity Fund and Global Small Cap Fund may each
invest 30%, the Europe Fund 25%, the Global Technology Fund 20%, the Global
Health Care Fund and Biotechnology Fund 15% and the Large Cap Growth Fund 10%,
of their total assets in companies organized or headquartered in emerging market
countries (but no more than 10% in any one emerging market country). The Tax
Managed Growth Fund may invest up to 5% of its total assets in companies
organized or headquartered in emerging market countries. Such investments are
not currently a principal investment technique for these Funds. However, if
emerging markets present attractive investment opportunities, any one of these
Funds may increase the percentage of its total

22
<PAGE>

assets in emerging markets, subject to the limits described above.

WHAT ARE THE FUNDS' PORTFOLIO TURNOVER RATES?

Each Fund may invest in securities on either a long-term or short-term
basis. The Investment Manager will sell a Fund's portfolio securities whenever
it deems appropriate, regardless of the length of time the Fund has held the
securities, and may purchase or sell securities for short-term profits. Turnover
will be influenced by sound investment practices, each Fund's investment
objective and the need for funds for the redemption of a Fund's shares.

The Investment Manager anticipates that the annual portfolio turnover rate
for the Tax Managed Growth Fund will not exceed 100% during its first full year
of operation. The portfolio turnover rate for the Tax Managed Growth Fund will
reflect the Investment Manager's efforts to minimize the Fund's capital gains
distributions and to enhance the after-tax returns of its shareholders; the
Investment Manager may sell securities to realize capital losses to offset
accumulated or future capital gains. The Investment Manager expects the annual
portfolio turnover rate for the Europe Fund in 1999 will exceed 100% due to the
repositioning of the portfolio as a result of the recent investment mandate
change approved by stockholders. See, "Financial Highlights" for the portfolio
turnover rates of the other Funds.

A high portfolio turnover rate would increase a Fund's brokerage commission
expenses and other transaction costs, and may increase its taxable capital
gains.

DO THE FUNDS INVEST IN OTHER INVESTMENT COMPANIES?

The laws of some foreign countries may make it difficult or impossible for
a Fund to invest directly in issuers organized or headquartered in those
countries, or may limit such investments. The only practical means of investing
in such companies may be through investment in other investment companies that
in turn are authorized to invest in the securities of such issuers. In these
cases and in other appropriate circumstances, and subject to the restrictions
referred to above regarding investments in companies organized or headquartered
in foreign countries, each Fund may invest up to 10% of the value of its total
assets in other investment companies but, no more than 5% of its total assets in
any one investment company. Furthermore, no Fund may acquire more than 3% of the
outstanding voting securities of any other investment company.

If a Fund invests in other investment companies, it will bear its
proportionate share of the other investment companies' management or
administration fees and other expenses. At the same time, the Fund would
continue to pay its own management fees and other expenses.

WHAT ARE THE FUNDS' INVESTMENT POLICIES IN UNCERTAIN MARKETS?

When the Investment Manager believes a Fund should adopt a temporary
defensive posture, including periods of international, political or economic
uncertainty, a Fund may hold all or a substantial portion of its assets in
investment grade debt securities. The securities may be debt obligations issued
or guaranteed by the U.S. Government or foreign governments (including their

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agencies, instrumentalities, authorities and political subdivisions), by
international or supranational government entities, and by corporate issuers.
During these periods, a Fund may not achieve its investment objective.

WHERE CAN I FIND ADDITIONAL INFORMATION ABOUT INVESTMENT PRACTICES?

The Statement of Additional Information ("SAI") has more detailed
information about the investment practices described in this Prospectus as well
as information about other investment practices used by the Investment Manager.

CHANGING THE FUNDS' INVESTMENT OBJECTIVES AND POLICIES

Each Fund's investment objective of long term capital appreciation is a
fundamental policy that may not be changed without stockholder approval.
However, except as otherwise indicated in this Prospectus or the SAI, each
Fund's other investment policies and restrictions are not fundamental and may be
changed without stockholder approval.

The various percentage limitations referred to in this Prospectus and the
SAI apply immediately after a purchase or initial investment. Except as
specifically indicated to the contrary, a Fund is not required to sell any
security in its portfolio as a result of a change in any applicable percentage
resulting from market fluctuations.

INVESTMENT RISKS

Your investment in the Funds is subject to a variety of risks, including
those described below. See the SAI for further information about these and other
risks.

EQUITY INVESTMENTS

The prices of equity securities fluctuate based on changes in the issuer's
financial condition and prospects on overall market and economic conditions.

SPECIFIC INDUSTRIES

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

SMALL COMPANIES

Investments in small companies may involve greater risks than investments in
larger companies, and may be speculative. The securities of small companies, as
a class, have had periods of more favorable results, and periods of less
favorable results, than securities of larger companies as a class. In addition,
small companies in which a Fund may invest may have limited or unprofitable
operating histories, limited financial resources and inexperienced management.
They often face competition from larger or more established firms that have
greater resources. Small companies may have less ability to raise additional
capital, and may have a less diversified product line (making them susceptible

24
<PAGE>

to market pressure), than larger companies. Securities of small and unseasoned
companies are often less liquid than securities of larger companies and are
frequently traded in the over-the-counter market or on regional exchanges where
low trading volumes may result in erratic or abrupt price movements. Selling
these securities may take an extended period of time. As a result, to the extent
a Fund invests in small companies, its net asset value may be more volatile than
would otherwise be the case.

FOREIGN SECURITIES

Investing in foreign securities involves significant risks, some of which
are not typically associated with investing in securities of U.S. issuers. For
example, the value of investments in such securities may fluctuate based on
changes in the value of one or more foreign currencies relative to the U.S.
dollar. In addition, information about foreign issuers may be less readily
available than information about domestic issuers. Foreign issuers generally are
not subject to accounting, auditing and financial reporting standards, or to
other regulatory practices and requirements, comparable to U.S. issuers.
Furthermore, certain foreign countries may be politically unstable, expropriate
or nationalize assets, revalue currencies, impose confiscatory taxes, and limit
foreign investment and use or removal of funds or other assets of a Fund
(including the withholding of dividends and limitations on the repatriation of
currencies). A Fund may also face difficulties or delays in obtaining or
enforcing judgments.

Most foreign securities markets have substantially less volume than U.S.
markets, and the securities of many foreign issuers may be less liquid and more
volatile than securities of comparable U.S. issuers. There is generally less
government regulation of securities markets, securities exchanges, securities
dealers, and listed and unlisted companies in foreign countries than in the
United States. Foreign markets also have different clearance and settlement
procedures, and in certain markets there have been times when settlements have
not been able to keep pace with the volume of securities transactions, making it
difficult to conduct and complete transactions. In addition, the costs
associated with transactions in securities of foreign companies and securities
traded on foreign markets, and the expense of maintaining custody of these
securities with foreign custodians, generally are higher than in the U.S.

Because certain of the Funds may invest more than 25% of their total assets
in the securities of companies organized or headquartered in France, Germany,
Japan or the United Kingdom, these Funds may be subject to increased risks due
to political, economic, social or regulatory events in those countries.

EMERGING MARKETS

Investments in emerging markets involve additional risks. The securities
markets of emerging market countries are substantially smaller, less developed,
less liquid, and more volatile than U.S. and other developed foreign markets.
Disclosure and regulatory standards are less stringent. There also may be a
lower level of monitoring and regulation of securities markets in emerging
market countries and of the activities of investors in such markets, and
enforcement of existing regulations has been limited.

Economies in emerging market countries generally depend heavily on
international trade. They may be affected adversely by the economic conditions
of the countries with which they trade, as well as by trade

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<PAGE>

barriers, exchange controls, managed adjustments in relative currency values,
and other protectionist measures imposed or negotiated by these countries. In
many cases, governments of emerging market countries continue to exercise
significant control over the economies of these countries. In addition, some of
these countries have in the past failed to recognize private property rights and
have at times nationalized or expropriated the assets of private companies.
There is a greater possibility of confiscatory taxation, imposition of
withholding taxes on interest payments, or other similar developments that could
affect investments in those countries. Unanticipated political or social
developments may also affect the value of a Fund's investments in those
countries.

OPTIONS, CURRENCY HEDGING AND CURRENCY MANAGEMENT

Stock options involve a number of risks. They may be more volatile than the
underlying stock. Options and securities markets could not be precisely
correlated, so that a given transaction may not achieve its objective. In
addition, the secondary market for particular options may not be liquid for a
variety of reasons. When trading options on foreign exchanges, many of the
protections afforded to participants in the United States will not be available.
A Fund could lose the amount of the option premium plus transaction costs.

A Fund's currency management techniques involve risks different from
investments in U.S. dollar-denominated securities. If a Fund invests in foreign
securities while also maintaining currency positions, it may be exposed to
greater combined risk than would otherwise be the case. Transactions in currency
futures contracts, options on currency futures contracts and index futures
contracts involve risks similar to those of options on securities; in addition,
the Fund's potential loss in such transactions is unlimited.

The use of hedging and currency management techniques is a highly
specialized activity, and the success of any such operations by a Fund is not
assured. Gains and losses in such transactions depend upon the Investment
Manager's ability to predict correctly the direction of stock prices, interest
rates, currency exchange rates, and other economic factors. Although such
operations could reduce the risk of loss due to a decline in the value of the
hedged security or currency, they could also limit the potential gain from an
increase in the value of the security or currency.

NON-DIVERSIFICATION

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

26
<PAGE>

invested in the securities of any one issuer (other than the U.S. Government or
other regulated investment companies).

GEOGRAPHIC CONCENTRATION

The Europe Fund will invest in companies located in both EMU and non-EMU
European countries. Investments in EMU countries involve certain risks. The
EMU's objective is to create a single, unified market through which people,
goods, and money can move freely. Participation in the EMU is based on countries
meeting certain financial criteria outlined in the treaty creating the EMU. The
transition to the EMU may be troubled as eleven separate nations adjust to the
reduction in flexibility, independence, and sovereignty that the EMU requires.
High unemployment and a sense of "deculturalization" within the general public
of the participating countries could lead to political unrest and continuing
labor disturbances.

YEAR 2000

Many computer programs employed throughout the world use two digits rather
than four to identify the year. These programs, if not adapted, will not
correctly handle the change from "99" to "00" on January 1, 2000, and will not
be able to perform necessary functions critical to the Funds' operations. The
"Year 2000 issue" affects all companies and organizations.

The Year 2000 issue may also adversely affect the companies in which the
Funds invest. For example companies may incur substantial costs to address the
problem. They may also suffer losses caused by corporate and governmental data
processing errors. To the extent the impact on a portfolio holding is negative,
a Fund's investment returns could be adversely affected.

The Investment Manager has advised the Funds that it is implementing a plan
intended to ensure that its computer systems are not adversely affected by the
Year 2000 issue. The Funds understand that their key service providers are
taking steps to address the issue as well. The Funds and the Investment Manager
will continue to monitor developments relating to this issue but do not
anticipate that the Year 2000 issue will have any adverse effect on the
Investment Manager's or other service providers' ability to provide services to
the Funds.

EURO INTRODUCTION

On January 1, 1999, the European Union introduced a single European
currency, the Euro. The Investment Manager and other key service providers have
taken steps to address Euro-related issues and their impact on the Funds'
operations. These included upgrading their computer and bookkeeping systems to
deal with the conversion. The Funds have not experienced any adverse operational
effects resulting from the Euro conversion nor has the conversion caused any
apparent market disruptions. The Funds and the Investment Manager will continue
to monitor the effects of the conversion on the markets and issuers in which the
Funds invest.

As a multinational currency, the value of the Euro may fluctuate relative
to the U.S. Dollar; such fluctuation, as with any other currency, may cause a
fund's net asset value to fluctuate as well. Because the Euro will be
implemented over the next three years, its overall effect cannot be determined
with certainty.

THE FUNDS AND THE INVESTMENT MANAGER

The International Growth Equity Fund is a series of Dresdner
RCM Capital Funds, Inc. (the "Capital Company"). The Europe Fund is
a series of Dresdner RCM Investment Funds Inc. (the "Investment
Company").

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<PAGE>

ORGANIZATION AND MANAGEMENT

The other Funds are series of Dresdner RCM Global Funds, Inc. (the "Global
Company"). The Global Company, the Capital Company and the Investment Company
are incorporated in Maryland as open-end management investment companies.

Dresdner RCM Global Investors LLC, with principal offices at Four
Embarcadero Center, San Francisco, California 94111, is the investment manager
of the Funds. The Investment Manager manages each Fund's investments, provides
various administrative services, and supervises each Fund's daily business
affairs.

The Investment Manager provides investment supervisory services to
institutional and individual clients. It was established in December of 1998 and
is the successor to the business of its holding company, Dresdner RCM Global
Investors US Holdings LLC. The Investment Manager was originally formed as
Rosenberg Capital Management in 1970, and it and its successors have been
consistently in business since then. The Investment Manager is an indirect
wholly owned subsidiary of Dresdner Bank AG ("Dresdner"), an international
banking organization with principal executive offices in Frankfurt, Germany.

THE PORTFOLIO MANAGERS

LARGE CAP GROWTH FUND

William L. Price, John D. Leland, Jr. and Carson V. Levit are primarily
responsible for the day-to-day management of the Large Cap Growth Fund. Mr.
Price is a Senior Managing Director, Chief Executive Officer & Chief Investment
Officer of the Investment Manager, with which he has been associated since 1977.
He has managed equity portfolios on behalf of the Investment Manager since 1977.
Mr. Leland is a Managing Director of the Investment Manager, with which he has
been associated since 1972. He has managed equity portfolios on behalf of the
Investment Manager since 1972. Mr. Levit has been associated with the Investment
Manager since 1993. He has participated in the management of equity portfolios
on behalf of the Investment Manager since 1994.

TAX MANAGED GROWTH FUND

M. Brad Branson and Joanne L. Howard are primarily responsible for the
day-to-day management of the Tax Managed Growth Fund. Mr. Branson is a Director
of the Investment Manager, with which he has been associated since 1993. He has
participated in the management of portfolios on behalf of the Investment Manager
since 1993. Ms. Howard is a Managing Director of the Investment Manager, with
which she has been associated since 1992. She has participated in the management
of portfolios on behalf of the Investment Manager since 1993.

GLOBAL HEALTH CARE FUND
AND BIOTECHNOLOGY FUND

Faraz Naqvi M.D. and Susan Reinhold Ph.D. are primarily responsible for the
day-to-day management of the Global Heath Care Fund and Biotechnology Fund. Dr.
Naqvi is a portfolio manager and research analyst of the Investment Manager,
with which he has been associated since 1998. From 1996-1998 he served as an
analyst at Montgomery Securities focusing on biotechnology and pharmaceutical
companies. From 1994-1996 he served as a health care consultant for McKinsey &
Company. Dr. Reinhold is a portfolio manager and research analyst of the
Investment Manager, with which she has been associated since 1997. From
1995-1997 she served as a research analyst at Jurika & Voyles covering the
health care sector. From 1994-1995 she operated her own research firm, Relevant

28
<PAGE>

Research, where she performed market and business research for private
investors.

GLOBAL SMALL CAP FUND

Timothy M. Kelly and David S. Plants are primarily responsible for the
day-to-day management of the Global Small Cap Fund. Mr. Kelly is an Assistant
Director of the Investment Manager, with which he has been associated since
1995. Before joining Dresdner RCM, he received an MBA from The University of
Chicago Graduate School of Business with concentrations in accounting and
finance. He has participated in the management of portfolios on behalf of the
Investment Manager since 1995. Mr. Plants is a Director of the Investment
Manager, with which he has been associated since 1993. He has participated in
the management of portfolios on behalf of the Investment Manager since 1993.

GLOBAL TECHNOLOGY FUND

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

INTERNATIONAL GROWTH EQUITY FUND
AND EMERGING MARKETS FUND

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

EUROPE FUND

Barbel Lenz and David S. Plants are primarily responsible for the
day-to-day management of the Europe Fund. Ms. Lenz is a Director of the
Investment Manager, with which she has been associated since 1997. She joined
the Investment Manager as a Senior Research Specialist for European Equities and
as a portfolio manager. From 1995 to 1997 she served as an Assistant Vice
President at Dresdner Kleinwort Benson North America LLC. Mr. Plants is a
Director of the Investment Manager, with which he has been associated since
1993. He has participated in the management of portfolios on behalf of the
Investment Manager since 1993.

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<PAGE>

ORGANIZATION AND MANAGEMENT

MANAGEMENT FEES AND OTHER EXPENSES

Each Fund pays the Investment Manager a fee pursuant to an investment
management agreement. The Global Technology Fund and the Emerging Markets Fund
each pay a monthly fee to the Investment Manager at the annual rate of 1.00% of
its average daily net assets. The Europe Fund pays a monthly fee to the
Investment Manager at the annual rate of 1.00% of its average daily net assets
up to and including $100 million and 0.80% of its average daily net assets in
excess of $100 million. The International Growth Equity Fund pays a monthly fee
to the Investment Manager at the annual rate of 0.75% based on its average daily
net assets.

Each of the other Funds pays a monthly fee to the Investment Manager based
on its average daily net assets, as described below.

Each Fund is responsible for its own expenses. These include brokerage and
commission expenses, taxes, interest charges on borrowings (if any), custodial
charges and expenses, investment management fees, and other operating expenses
(e.g., legal and audit fees, securities registration expenses, and compensation
of directors who are not affiliated with the Investment Manager). These expenses
are allocated to each class of shares based on the assets of each class. In
addition, each class also bears certain class-specific expenses, such as Rule
12b-1 expenses payable by each Fund's Class N shares.

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
GLOBAL SMALL CAP FUND
GLOBAL HEALTH CARE FUND LARGE CAP TAX MANAGED
AVERAGE DAILY NET ASSETS BIOTECHNOLOGY FUND GROWTH FUND GROWTH FUND
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
The first $500 million 1.00% 0.70% 0.75%
- --------------------------------------------------------------------------------------------------------------------------
Above $500 million and below $1 billion 0.95% 0.65% 0.70%
- --------------------------------------------------------------------------------------------------------------------------
Above $1 billion 0.90% 0.60% 0.65%
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>

30
<PAGE>

To limit the expenses of each Fund, the Investment Manager has agreed to
pay each Fund on a quarterly basis the amount, if any, by which the Fund's
ordinary operating expenses for the quarter (except interest, taxes and
extraordinary expenses) exceed the following expense ratios on an annual basis
through the dates indicated:

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
EXPENSE LIMITS
FUND THROUGH DECEMBER 31, 1999
- -------------------------------------------------------------------------------------
LARGE CAP GROWTH FUND
- -------------------------------------------------------------------------------------
<S> <C>
Class I shares 0.95%
- -------------------------------------------------------------------------------------
Class N shares 1.20%
- -------------------------------------------------------------------------------------
TAX MANAGED GROWTH FUND
- -------------------------------------------------------------------------------------
Class I shares 1.25%
- -------------------------------------------------------------------------------------
Class N shares 1.50%
- -------------------------------------------------------------------------------------
BIOTECHNOLOGY FUND
- -------------------------------------------------------------------------------------
Class N shares 1.50%
- -------------------------------------------------------------------------------------
GLOBAL SMALL CAP FUND
- -------------------------------------------------------------------------------------
Class I shares 1.50%
- -------------------------------------------------------------------------------------
Class N shares 1.75%
- -------------------------------------------------------------------------------------
GLOBAL TECHNOLOGY FUND
- -------------------------------------------------------------------------------------
Class I shares 1.50%
- -------------------------------------------------------------------------------------
Class N shares 1.75%
- -------------------------------------------------------------------------------------
GLOBAL HEALTH CARE FUND
- -------------------------------------------------------------------------------------
Class N shares 1.50%
- -------------------------------------------------------------------------------------
INTERNATIONAL GROWTH EQUITY FUND
- -------------------------------------------------------------------------------------
Class I shares 1.00%
- -------------------------------------------------------------------------------------
Class N shares 1.25%
- -------------------------------------------------------------------------------------
EMERGING MARKETS FUND
- -------------------------------------------------------------------------------------
Class I shares 1.50%
- -------------------------------------------------------------------------------------
Class N shares 1.75%
- -------------------------------------------------------------------------------------

EXPENSE LIMITS
EUROPE FUND THROUGH DECEMBER 31, 2002
- -------------------------------------------------------------------------------------
<S> <C>
Class I shares 1.35%
- -------------------------------------------------------------------------------------
Class N shares 1.60%
- -------------------------------------------------------------------------------------
</TABLE>

A Fund may reimburse the Investment Manager for such payments for a period of up
to five years after they are made, to the extent that the Fund's ordinary
operating expenses are less than the expense limit.

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<PAGE>

ORGANIZATION AND MANAGEMENT

THE DISTRIBUTOR

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

The Capital Company and the Global Company have adopted distribution and
service plans, (the "Capital Plan" and the "Global Plan") and the Investment
Company has adopted a distribution plan (with the Capital Plan and the Global
Plan, the "Plans") for their Class N shares pursuant to Rule 12b-1 under the
1940 Act. Under the Plans, each Fund pays the Distributor an annual fee of up to
0.25% of the average daily net assets of its Class N shares as reimbursement for
certain expenses actually incurred by the Distributor in providing distribution
and, in the case of the Capital Plan and Global Plan, also providing shareholder
support services to such shares. These expenses include advertising and
marketing expenses, payments to broker-dealers and others who have entered into
agreements with the Distributor, the expenses of preparing, printing and
distributing the Prospectus to persons who are not already stockholders, and
indirect and overhead costs associated with the sale of Class N shares. If in
any month the Distributor is due more for such services than is immediately
payable because of the expense limitation under the Plans, the unpaid amount is
carried forward from month to month while the Plan is in effect until it can be
paid. Because these fees are paid out of the Funds assets on an ongoing basis,
over time these fees will increase the cost of your investment and may cost you
more than paying other types of sales charges.

PENDING LITIGATION

On April 8, 1998, the Europe Fund filed a lawsuit in the United States
District Court for the Southern District of New York against Philip Goldstein
and others. The Fund alleged violations of certain provisions of the federal
securities laws in connection with the Fund's 1998 annual meeting. With respect
to that meeting, a Goldstein affiliate filed an action in the same court against
the Fund and its directors on April 24, 1998, alleging violations of the proxy
antifraud rules of the federal securities laws and breach of fiduciary duty. The
Fund, as nominal defendant, and each member of the Fund's Board of Directors
have been named as defendants in a derivative and purported class action suit
captioned Steiner v. Fugelsang filed on May 28, 1998 in the same court. The
class action allegations assert that the defendants violated the federal
securities laws and Maryland corporate law and the derivative claims assert
breach of fiduciary duty regarding the meeting. All issues in the actions have
been resolved except as to entitlement to legal fees by the Goldstein and
Steiner litigants. The Fund believes that substantially all fees payable to
these litigants should be reimbursed under a contract of insurance which insures
the Fund and its directors.

32
<PAGE>

STOCKHOLDER INFORMATION

BUYING SHARES

For your convenience, we offer several ways to start and add to Fund
investments.

OPENING YOUR ACCOUNT THROUGH A FINANCIAL PROFESSIONAL

If you work with a financial professional, he or she is prepared to handle
your planning and transaction needs. Your financial professional will be able to
assist you in establishing your fund account, executing transactions, and
monitoring your investment. If you do not hold your Fund investment in the name
of your financial professional and you prefer to place a transaction order
yourself, please use the instructions below for investing directly.

You may also purchase shares through certain brokers which have entered
into selling group agreements with the Distributor. Brokers may charge a fee for
their services at the time of purchase or redemption.

OPENING YOUR ACCOUNT DIRECTLY

You may establish accounts without the help of an intermediary as follows:

- Choose the Fund in which you wish to invest.

Determine the amount you are investing. The minimum amount for initial
investments is $5,000 for the Class N shares ($250 for additional investments)
and $250,000 for the Class I shares ($50,000 for additional investments). Each
Fund reserves the right at any time to waive, increase or decrease the minimum
requirements applicable to initial or subsequent investments. Minimum subsequent
investment requirements do not apply to investors purchasing shares through the
Fund's automatic dividend reinvestment plan. In addition, minimum initial
investments may vary for investors purchasing shares through a broker-dealer or
other intermediary having a service agreement with the Investment Manager and
maintaining an omnibus account with the Fund.

- Complete the account application accompanying this Prospectus. Please apply
at this time for any account privileges you may want to use in the future,
to avoid the delays associated with adding them later on.

- Mail your completed application to:

Dresdner RCM Global Funds
P.O. Box 8025
Boston, MA 02266-8025

For answers to any questions, please speak with a Fund Representative at
1-800-726-7240.

We reserve the right to reject any purchase of shares at our sole
discretion. We also reserve the right to cancel any purchase order for which
payment has not been received by the third business day following the order.

Confirmation statements showing transactions in your account and a summary
of the status of the account serve as evidence of ownership of shares of the
Fund. We will forward a confirmation statement to you on receipt of a proper
order.

[LOGO]
<PAGE>

STOCKHOLDER INFORMATION

INVESTING IN YOUR ACCOUNT

BY WIRE

- Make sure you have established an account by mailing an application as
explained above.

- Call 1-800-726-7240 to obtain your account number and to place a purchase
order. Money that is wired without a purchase order will be returned
uninvested.

- After placing your purchase order, instruct your bank to wire the amount of
your investment to:

State Street Bank and Trust Company
Routing number: 011000028
Account number: 9905-268-0
FCC: your account number, name of registered owner(s) and Fund name

BY CHECK

- Make out a check (bank or certified) or money order for the investment
amount payable to Dresdner RCM [insert the name of the Fund]. Please note:
No third party checks will be accepted.

- Mail the check with your completed application to the Fund at:

Dresdner RCM Global Funds
P.O. Box 8025
Boston, MA 02266-8025

ADDING TO YOUR ACCOUNT

BY WIRE

- Call the Fund at 1-800-726-7240 to place a purchase order. Money that is
wired without a purchase order will be returned uninvested.

- Once you have placed your purchase order, instruct your bank to wire the
amount of your investment as described above.

BY CHECK

- Make out a check for the investment amount payable to Dresdner RCM [insert
the name of the Fund]. Please note: No third party checks will be accepted.

- Mail the check with a completed investment slip to the Fund at:

Dresdner RCM Global Funds
P.O. Box 8025
Boston, MA 02266-8025

If you do not have an investment slip, write your account number on the
check.

WITH SECURITIES

At its discretion, each Company may accept securities of equal value
instead of cash in payment of all or part of the subscription price for Fund
shares. Contact the Fund in advance to discuss the securities in question and
the documentation necessary to complete the transaction. Any such securities:

34
<PAGE>

- Will be valued at the close of regular trading on the New York Stock
Exchange on the day of acceptance of the subscription in accordance with
the Fund's method of valuing its securities;

- Will have a tax basis to the Fund equal to such value;

- Must not be restricted securities; and

- Must be permitted to be purchased in accordance with the Fund's investment
objective and policies and must be securities that the Fund would be
willing to purchase at that time.

SELLING SHARES

BY PHONE - WIRE PAYMENT

- Call the Fund at 1-800-726-7240 to verify that the wire redemption
privilege via telephone is in place on your account. If it is not, a
representative can help you add it.

- Place your wire request.

BY PHONE - CHECK PAYMENT

- Call the Fund at 1-800-726-7240 to verify that you have telephone
redemption privileges and place your request. Once your request has been
verified, a check for the net cash amount (net of any redemption fee, if
applicable), payable to the registered owner(s), will be mailed to the
address of record. For checks payable to any other party or mailed to any
other address, please make your request in writing.

IN WRITING

- Write a letter of instruction, signed by each registered owner or their
duly authorized agent, that includes the following information:

* The name of the registered owner(s) of the account

* The name of the Fund

* The account number

* The number of shares or the dollar amount you want to sell

* The recipient's name and address or wire information (if different
from those of the account registration)

- Indicate whether you want the cash proceeds sent by check or by wire.

- Make sure the letter is signed by all registered owners or their authorized
parties.

- Mail the letter to the Fund.

BY ELECTRONIC TRANSFER

- Fill out the appropriate areas of the account application for this feature.
To request an electronic transfer (not less than $50 nor more than
$100,000), call 1-800-726-7240. The Fund will transfer your sales proceeds
electronically to your bank account. The bank must be a member of the
Automated Clearing House.

[LOGO]
<PAGE>

STOCKHOLDER INFORMATION

SIGNATURE GUARANTEES

Certain requests must include a signature guarantee, which is designed to
protect you and the Fund from fraudulent activities. Your request must be made
in writing and include a signature guarantee if any of the following situations
applies:

- You wish to redeem more than $50,000 worth of shares.

- The check is being mailed to an address different from the one on your
account (address of record).

- The check is being made payable to someone other than the account owner.

- You are instructing us to change your bank account information.

OTHER STOCKHOLDER SERVICES AND ACCOUNT POLICIES

TELEPHONE ORDERS

We accept telephone orders to buy or sell shares of the Funds. To order,
call 1-800-726-7240. To guard against fraud, we may record telephone orders or
take other reasonable precautions. However, if we do not take such steps to
ensure the authenticity of an order, we may bear any loss if the order later
proves fraudulent. At times of peak activity, such as during periods of volatile
economic or market conditions, it may be difficult to place buy or sell orders
by phone. During these times, consider sending your request in writing.

BUSINESS HOURS AND NAV CALCULATIONS

Each Fund's regular business days and hours are the same as those of the
New York Stock Exchange (NYSE). The price of each Fund's shares is based on its
net asset value per share (NAV). Each Fund calculates its NAV every business day
as of the close of trading on the NYSE (normally 4:00 p.m. eastern time). Shares
of the Funds will not be priced on days on which the NYSE is closed for trading.
A Fund's securities are typically priced using market quotes or pricing
services. When these methods are not available or do not represent a security's
value at the time of pricing, the security is valued in accordance with the
Fund's fair valuation procedures.

TIMING OF ORDERS

Each Fund accepts orders until the close of trading on the NYSE every
business day (normally 4:00 pm eastern time). Orders received before the close
of trading on the NYSE are executed the same day at the Fund's NAV for that day.
Orders received after the close of trading on the NYSE are executed the
following day at that day's NAV. We have the right to suspend redemption of
shares of the Funds and to postpone payment of proceeds for up to seven days or
as permitted by law.

We may suspend the right of redemption or postpone the date of payment for
more than seven days after shares are tendered for redemption for any period
during which

- The New York Stock Exchange is closed (other than a customary weekend or
holiday closing) or the SEC

36
<PAGE>

determines that trading thereon is restricted;

- An emergency (as determined by the SEC) exists as a result of which
disposal by the Fund of securities it owns is not reasonably practicable,
or as a result of which it is not reasonably practical for the Fund fairly
to determine the value of its net assets; or

- The SEC; by order, permits such suspension for the
protection of stockholders.

TIMING OF SETTLEMENTS

When you buy shares of a Fund, you will become the owner of record when the
Fund receives your payment, generally the day following execution. When you sell
shares, cash proceeds are generally available the day following execution and
will be forwarded according to your instructions.

When you sell shares that you recently purchased by check, your order will
be executed at the Fund's next NAV but the proceeds will not be available until
your check clears. This may take up to 15 days from the purchase date. Upon
execution of the redemption order, a confirmation statement will be forwarded to
you indicating the number of shares sold and the proceeds thereof.

ACCOUNTS WITH BELOW-MINIMUM BALANCES

If your account balance falls below the minimum ($5,000 for Class N shares
and $250,000 for Class I shares) as a result of selling shares (and not because
of Fund performance), each Fund reserves the right to request that you buy more
shares or close your account. If your account balance is still below the minimum
90 days after notification, we reserve the right to close out your account and
send the proceeds to the address of record.

AUTOMATIC REINVESTMENT

We will reinvest each income dividend and capital gain distribution
declared by a Fund in full and fractional shares of the Fund of the same class,
unless you or your duly authorized agent elect to receive all such payments, or
only the dividend or distribution portions, in cash. We will base such
reinvestment on the Fund's NAV as determined on the ex-dividend date. You or
your authorized agent may request changes in the manner in which dividend and
distribution payments are made through written notice to the Fund. This request
will be effective as to any payment if it is received prior to the record date
used for determining your payment. Any dividend and distribution election will
remain in effect until you notify the Fund in writing to the contrary.

EXCHANGE PRIVILEGE

You may exchange shares of either class of a Fund into shares of the same
class of any other Fund offered by Dresdner RCM, without a sales charge or other
fee (except redemption fee, if any), by contacting the Fund. You may also
exchange Class N shares of a Fund into Class I shares of the Fund or any other
Fund offered by Dresdner RCM. Exchange purchases are subject to the minimum
investment requirements of the class purchased. In order to keep Fund expenses
low for all shareholders, the Funds will no allow frequent exchanges, purchases
or sales of Fund shares. If a shareholder exhibits a pattern of frequent
trading, the Fund reserves the right to refuse to accept further purchase or
exchange orders from that shareholder. An exchange will be treated as a
redemption and purchase for tax purposes.

[LOGO]
<PAGE>

STOCKHOLDER INFORMATION

Shares will be exchanged at net asset value per share next determined after
receipt by the Fund of:

- A written request for exchange, signed by each registered owner or his or
her duly authorized agent exactly as the shares are registered, which
clearly identifies the exact names in which the account is registered, the
account number and the number of shares or the dollar amount to be
exchanged.

Exchanges will not become effective until all documents in the form
required have been received by the Fund. If you have any questions, please
contact the Fund.

Please be sure to read carefully the prospectus of any other Fund into
which you wish to exchange shares.

ACCOUNT STATEMENTS

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

REPORTS TO STOCKHOLDERS

Each Fund's fiscal year ends on December 31. Each Fund will issue to its
stockholders semi-annual and annual reports. In addition, stockholders will
receive quarterly statements of the status of their accounts reflecting all
transactions having taken place within that quarter. In order to reduce
duplicate mailings and printing costs, the Companies will provide one annual and
semi-annual report and annual prospectus per household. Information regarding
the tax status of income dividends and capital gains distributions will be
mailed to stockholders on or before January 31st of each year. Account tax
information will also be sent to the IRS.

REDEMPTION

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

Upon redemption of Europe Fund or Tax Managed Growth Fund shares held for
less than twelve consecutive months, a fee of 1.00% of the redemption proceeds
will be charged and retained by the Fund. In the case of the Europe Fund, this
redemption fee will remain in effect through November 1, 1999. Redeeming
stockholders may avoid this fee by presenting satisfactory proof of ownership of
the redeemed shares for twelve consecutive months along with the redemption
request. A determination by the Fund of the redemption fee's applicability is
final. This fee is intended to compensate the Fund for transaction and other
expenses caused by redemptions and to facilitate efficient portfolio management.
The fee is not a deferred sales charge or a commission paid to the Distributor
or the Investment Manager. The Fund reserves the right to modify the terms of or
terminate the redemption fee at any time.

38
<PAGE>

DIVIDENDS, DISTRIBUTIONS AND TAXES

Each Fund's dividends and distributions consist of most or all of its net
investment income and net realized capital gains. They are typically paid once a
year in December. The amount depends on the Fund's investment results and its
tax compliance situation.

Dividends and distributions normally are reinvested in additional Fund
shares. You may instruct your financial professional or the Fund to have them
sent to you by check or credited to a separate account.

If you are an individual (or certain other non-corporate stockholders), we
have to withhold 31% of all dividends, capital gains distributions and
redemption proceeds we pay to you if you: (a) have not given us a certified
correct taxpayer identification number and (b) except with respect to redemption
proceeds, have not certified that backup withholding does not apply. Amounts we
withhold are applied to your federal tax liability, and a refund may be obtained
from the Internal Revenue Service if withholding results in an overpayment of
taxes. Distributions of taxable income and net capital gain to non-resident
alien individuals, non-resident alien fiduciaries of trusts or estates, foreign
corporations, or foreign partnerships may also be subject to U.S. withholding
tax, although distributions of net capital gain to such stockholders generally
will not be subject to withholding.

We may be required to pay income, withholding and other taxes imposed by
foreign countries, generally at rates from 10% to 40%, which would reduce our
investment income. Tax conventions between certain countries and the U.S. may
reduce or eliminate such taxes. We may "pass through" to you the amount of
foreign income taxes we pay, if it is in the best interests of stockholders. If
we do so, you will be required to include in your gross income your pro-rata
share of foreign taxes we paid, and you will be able to treat such taxes as
either an itemized deduction or a foreign credit against U.S. income taxes on
your tax returns. If we do not do so, you will not be able to deduct your share
of such taxes in computing your taxable income and will not be able to take your
share of such taxes as a credit against your U.S. income taxes.

In general, selling shares for cash, exchanging shares, and receiving
distributions (whether reinvested or taken in cash) are all taxable events.
These transactions typically create the following tax liabilities for taxable
accounts:

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
TRANSACTION TAX STATUS
- --------------------------------------------------------------------------------
<S> <C>
Income dividends Ordinary income
- --------------------------------------------------------------------------------
Short-term capital gains
distributions Ordinary income
- --------------------------------------------------------------------------------
Long-term capital gains
distributions Capital gains
- --------------------------------------------------------------------------------
Sales or exchanges of
shares owned for more
than one year Capital gains or losses
- --------------------------------------------------------------------------------
Sales or exchanges of Gains are treated
shares owned for one year as ordinary income;
or less losses are subject
to special rules
- --------------------------------------------------------------------------------
</TABLE>

Dividends and other distributions generally are taxable to you at the time
they are received. However, dividends declared in October, November and December
by the Funds and made payable to you in such a month are treated as paid and are
thereby taxable as of December 31, provided that the Fund pays the dividend no
later than January 31 of the following year.

[LOGO]
<PAGE>

STOCKHOLDER INFORMATION

If you purchase a Fund's shares shortly before the record date for a
dividend or other distribution thereon, you will pay full price for the shares.
This is known as "buying a distribution" because you will receive some portion
of your purchase price back as a distribution even though, because the amount of
the dividend or other distribution reduces the shares' net asset value, it
actually represents a return of invested capital. Depending on your taxpayer
status, that distribution may be taxable.

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

Foreign stockholders may be subject to special withholding requirements. A
penalty is charged on certain pre-retirement distributions from retirement
accounts. Consult your tax adviser about the federal, state and local tax
consequences in your particular circumstances.

The tax considerations described in this section do not apply to
tax-deferred accounts or other non-taxable entities. Because each investor's tax
circumstances are unique, please consult your tax professional about your
investment in a Fund.

FINANCIAL HIGHLIGHTS

The following financial highlights tables show the Funds' financial
performance. This information has been audited by PriceWaterhouseCoopers LLP,
whose report, along with the Funds' financial statements, are included in the
Funds' Annual Reports, which are available upon request and incorporated by
reference into the SAI.

40
<PAGE>

FINANCIAL HIGHLIGHTS

FOR A SHARE OUTSTANDING THROUGHOUT
EACH FISCAL YEAR OR PERIOD ENDED DECEMBER 31

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
LARGE CAP TAX MANAGED
GROWTH FUND GROWTH FUND
--------------------------------------- ----------------
CLASS I 1998 1997 1996 (3) 1998 (5)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE: (1)
Net asset value, beginning of period $12.53 $10.00 $ 10.00 $10.00
Income from investment operations:
Net investment income (loss) (0.02) 0.01 -- --
Net realized and unrealized gain (loss) on investments 5.51 3.17 -- --
Total from investment operations 5.49 3.18 -- --
Less distributions:
From net investment income (0.01) (0.01) -- --
From net realized gain on investments (1.87) (0.64) -- --
Total distributions (1.88) (0.65) -- --
NET ASSET VALUE, END OF PERIOD $16.14 $12.53 $ 10.00 $10.00
TOTAL RETURN (8) 44.11% 31.99% 0.00% (9) 0.00% (9)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $7,935 $5,025 $ 4,000 $1,000
Ratio of expenses to average net assets:
With waiver & reimbursement 0.95% 0.95% 0.00% (9) 0.00% (9)
Without waiver & reimbursement 3.04% 2.63% -- --
Ratio of net investment income to average net assets:
With waiver & reimbursement (0.11)% 0.10% 0.00% (9) 0.00% (9)
Without waiver & reimbursement (2.20)% (1.58)% -- --
Portfolio turnover 99.58% 119.87% 0.00% 0.00%
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Calculated using the average share method.
(2) Commencement of operation was December 27, 1995.
(3) Commencement of operation was December 31, 1996.
(4) Commencement of operation was December 30, 1997.
(5) Commencement of operation was December 31, 1998.
(6) Stock split 10:1 at the close of business on June 17, 1996. All prior
period per share amounts were restated to reflect the stock split.
(7) Commencement of operation was December 28, 1994.
(8) Total return measures the change in value of an investment over the period
indicated.
(9) Not annualized. Fund was in operations for less than five days.

<PAGE>

FINANCIAL HIGHLIGHTS

FOR A SHARE OUTSTANDING THROUGHOUT
EACH FISCAL YEAR OR PERIOD ENDED DECEMBER 31

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL GROWTH EQUITY FUND
---------------------------------------------------------------
CLASS I 1998 1997 1996 (6) 1995 1994 (7)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE: (1)
Net asset value, beginning of period $ 13.70 $ 12.72 $ 11.56 $ 10.00 $ 10.00
Income from investment operations:
Net investment income (loss) 0.06 0.06 0.04 0.12 --
Net realized and unrealized gain (loss) on investments 1.80 2.22 2.16 1.68 --
Total from investment operations 1.86 2.28 2.20 1.80 --
Less distributions:
From net investment income (0.23) (0.14) (0.16) (0.11) --
From net realized gain on investments (0.35) (1.16) (0.88) (0.13) --
Total distributions (0.58) (1.30) (1.04) (0.24) --
NET ASSET VALUE, END OF PERIOD $ 14.98 $ 13.70 $ 12.72 $ 11.56 $ 10.00
TOTAL RETURN (8) 13.81% 17.93% 19.31% 17.98% 0.01% (9)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $121,975 $98,443 $52,605 $34,347 $25,004
Ratio of expenses to average net assets:
With waiver & reimbursement 1.00% 1.00% 0.99% 0.75% 0.00% (9)
Without waiver & reimbursement 1.06% 1.06% 1.25% 1.11% --
Ratio of net investment income to average net assets:
With waiver & reimbursement 0.37% 0.41% 0.32% 1.19% 0.01% (9)
Without waiver & reimbursement 0.31% 0.35% 0.06% 0.83% --
Portfolio turnover 84.49% 122.43% 119.09% 87.40% 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

For footnote references, see page 41.

42
<PAGE>

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
BIOTECHNOLOGY GLOBAL
FUND SMALL CAP FUND
------------------------ ------------------------------------
CLASS I 1998 1997 (4) 1998 1997 1996 (3)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE: (1)
Net asset value, beginning of period $10.00 $10.00 $11.09 $10.00 $10.00
Income from investment operations:
Net investment income (loss) (0.10) -- (0.13) (0.13) --
Net realized and unrealized gain (loss) on investments 1.86 -- 2.23 2.64 --
Total from investment operations 1.76 -- 2.10 2.51 --
Less distributions:
From net investment income -- -- -- --
From net realized gain on investments (0.32) -- (0.82) (1.42) --
Total distributions (0.32) -- (0.82) (1.42) --
NET ASSET VALUE, END OF PERIOD $11.44 $10.00 $12.37 $11.09 $10.00
TOTAL RETURN (8) 17.76% 0.00% (9) 19.29% 25.48% 0.00% (9)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $3,911 $ 3,000 $5,479 $4,456 $4,000
Ratio of expenses to average net assets:
With waiver & reimbursement 1.50% 0.01% (9) 1.75% 1.75% 0.00% (9)
Without waiver & reimbursement 4.87% -- 3.86% 3.09% --
Ratio of net investment income to average net assets:
With waiver & reimbursement (0.95)% 0.01% (9) (1.03)% (1.14)% 0.00% (9)
Without waiver & reimbursement (4.32)% -- (3.14)% (2.49)% --
Portfolio turnover 127.21% 0.00% 184.38% 153.49% 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

FINANCIAL HIGHLIGHTS

FOR A SHARE OUTSTANDING THROUGHOUT
EACH FISCAL YEAR OR PERIOD ENDED DECEMBER 31

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
GLOBAL TECHNOLOGY FUND
------------------------------------------------------
CLASS I 1998 1997 1996 1995 (2)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE: (1)
beginning of period $ 13.69 $ 12.60 $10.04 $10.00
Income from investment operations:
Net investment income (loss) (0.16) (0.16) (0.15) --
Net realized and unrealized gain (loss) on investments 8.44 3.46 2.80 0.04
Total from investment operations 8.28 3.30 2.65 0.04
Less distributions:
From net investment income -- -- -- --
From net realized gain on investments (0.57) (2.21) (0.09) --
Total distributions (0.57) (2.21) (0.09) --
NET ASSET VALUE, END OF PERIOD $ 21.40 $ 13.69 $12.60 $10.04
TOTAL RETURN (8) 61.05% 27.08% 26.41% 0.40% (9)
RATIOS AND SUPPLEMENTAL DATA:
period (in 000's) $18,558 $ 6,950 $5,117 $954
Ratio of expenses to average net assets:
With waiver & reimbursement 1.75% 1.75% 1.73% 0.00% (9)
Without waiver & reimbursement 2.49% 2.45% 7.75% --
Ratio of net investment income to average net assets:
With waiver & reimbursement (0.99)% (1.15)% (1.34)% (0.02)% (9)
Without waiver & reimbursement (1.73)% (1.86)% (7.36)% --
Portfolio turnover 265.99% 189.41% 155.58% 0.00%
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>

For footnote references, see page 41.

44
<PAGE>

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
GLOBAL HEALTH CARE FUND EMERGING MARKETS FUND
----------------------------------- --------------------------
CLASS I 1998 1997 1996 (3) 1998 1997 (4)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE: (1)
beginning of period $11.65 $10.00 $10.00 $ 9.99 $10.00
Income from investment operations:
Net investment income (loss) (0.09 (0.06) -- 0.12 --
Net realized and unrealized gain (loss) on investments 3.02 3.03 -- (0.97) (0.01)
Total from investment operations 2.93 2.97 (0.85) (0.01)
Less distributions:
From net investment income -- -- -- (0.08) --
From net realized gain on investments (1.16) (1.32) -- -- --
Total distributions (1.16) (1.32) -- (0.08) --
NET ASSET VALUE, END OF PERIOD $13.42 $11.65 $10.00 $9.06 $ 9.99
TOTAL RETURN (8) 25.57% 30.00% 0.00% (9) (8.50)% 0.00% (9)
RATIOS AND SUPPLEMENTAL DATA:
period (in 000's) $5,487 $4,671 $4,000 $2,734 $2,996
Ratio of expenses to average net assets:
With waiver & reimbursement 1.50% 1.50% 0.00% (9) 1.50% 0.01% (9)
Without waiver & reimbursement 3.65% 2.93% -- 8.29% --
Ratio of net investment income to average net assets:
With waiver & reimbursement (0.69)% (0.55)% 0.00% (9) 1.23% 0.00% (9)
Without waiver & reimbursement (2.84)% 1.98% -- (5.56)% --
Portfolio turnover 153.92% 157.65% 0.00% 279.25% 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

FINANCIAL HIGHLIGHTS

FOR A SHARE OUTSTANDING THROUGHOUT EACH FISCAL
YEAR OR PERIOD ENDED DECEMBER 31, 1998

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
EUROPE FUND
------------------------------------------------------------
1998 (a) 1997 (a) 1996 (a) 1995 1994
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $12.59 $10.66 $9.20 $9.20 $9.80
Income from investment operations:
Net investment income (loss) (0.05) 0.01 0.03 0.07 0.03
Net realized and unrealized
gain (loss) on investments 4.60 2.70 1.45 (0.07) (0.51)
Total from investment operations 4.55 2.71 1.48 0.00 (0.48)
Less distributions:
From net investment income (0.17) (0.06) (0.02) (0.00) (0.00)
From net realized gain on investments (3.31) (0.72) (0.00) (0.00) (0.12)
Total distributions (3.48) (0.78) (0.02) (b) (0.00) (0.12) (b)
NET ASSET VALUE, END OF PERIOD $13.66 $12.59 $10.66 $9.20 $9.20
PER SHARE MARKET VALUE, END OF PERIOD (C) $12.69 $11.25 $ 8.13 $7.25 $7.38
TOTAL NET ASSET VALUE RETURN (D) 37.23% 25.70% 15.87% 1.33% (4.98)%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in millions) $191 $176 $149 $ 129 $129
Ratio of expenses to average net assets 1.97% 1.30% 1.42% 1.51% 1.40%
Ratio of net investment income
(loss) to average net assets (0.31)% 0.06% 0.33% 0.76% 0.34%
Portfolio turnover rate 114% 85% 51% 40% 91%
- -------------------------------------------------------------------------------------------------------------
</TABLE>

(a) Calculated using the average share method.
(b) The ex-dividend date was after the end of the fiscal year.
(c) Closing price - New York Stock Exchange.
(d) On May 3, 1999, the Fund converted from a closed-end to an open-end
investment company, therefore previously-reported total market value returns
calculated using closing price on the New York Stock Exchange have been
replaced by total net asset value return for each of the years shown here.
The total net asset value return calculation includes reinvestment of
dividends at net asset value on ex-dividend date in the year declared.

46
<PAGE>

For more information about Dresdner RCM Global Funds, Dresdner RCM Capital Funds
and Dresdner RCM Investment Funds, the following documents are available free
upon request:

ANNUAL/SEMI-ANNUAL REPORTS:

The Funds' annual and semi-annual reports to shareholders contain
detailed information on each Fund's investments. The annual report includes a
discussion of the market conditions and investment strategies that significantly
affected the Funds' performance during their last fiscal year.

STATEMENT OF ADDITIONAL INFORMATION (SAI):

The SAI provides more detailed information about the Funds, including
operations and investment policies. It is incorporated by reference and is
legally considered as part of this Prospectus.

You can get free copies of the reports and the SAI, or request other
information and discuss your questions about the Funds, by contacting us at:

Dresdner RCM Global Funds
P.O. Box 8025
Boston, MA 02266-8025
Telephone 1-800-726-7240

You can review the Funds' Reports and SAI at the Public Reference Room of
the Securities and Exchange Commission. You can also get copies:

- For a fee, by writing the Public Reference Section of
the Commission, Washington, D.C.
20549-6009 or calling 1-800-SEC-0330.

- Free from the Commission's Website at http://www.sec.gov.

Investment Company Act file nos. 811-2913, 811-9100 and 811-06038.
<PAGE>
----------------------------------
[LOGO] DRESDNER RCM GLOBAL FUNDS
----------------------------------
Dresdner RCM Capital Funds, Inc.
Dresdner RCM Global Funds, Inc.
Dresdner RCM Investment Funds Inc.
P.O. Box 8025
Boston, MA 02266-8025
(800) 726-7240

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

STATEMENT OF ADDITIONAL INFORMATION

May 3, 1999

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

This Statement of Additional Information ("SAI") is not a prospectus, and should
be read in conjunction with the Prospectus of the Funds dated May 3, 1999. This
SAI relates to the Funds' Non-Institutional Class ("Class N") and Institutional
Class ("Class I") of shares. The Prospectus may be obtained without charge by
writing or calling the Companies at the address and phone number above.

Incorporated by reference herein are the financial statements of the Funds
contained in the Funds' Annual Reports to Shareholders for the year ended
December 31, 1998, including the Reports of Independent Accountants, dated
February 22, 1999, the Statements of Assets and Liabilities, including the
Portfolios of Investments and the related Statements of Operations, Statements
of Changes in Net Assets, and the Financial Highlights. Copies of the Funds'
Annual and Semi-Annual Reports to Shareholders will be available, upon request,
by calling (800) 726-7240, or by writing to P.O. Box 8025, Boston, MA
02266-8025.

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Table of Contents

Page

Investment Objectives and Policies. . . . . . . . . . . . . . . . . . . 2
Risk Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Investment Restrictions . . . . . . . . . . . . . . . . . . . . . . . . 21
Execution of Portfolio Transactions . . . . . . . . . . . . . . . . . . 24
Directors and Officers. . . . . . . . . . . . . . . . . . . . . . . . . 27
The Investment Manager. . . . . . . . . . . . . . . . . . . . . . . . . 35
The Distributor . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
The Administrator . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Other Service Providers . . . . . . . . . . . . . . . . . . . . . . . . 40
Net Asset Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Purchase and Redemption of Shares . . . . . . . . . . . . . . . . . . . 42
Dividends, Distributions and Tax Status . . . . . . . . . . . . . . . . 42
Investment Results. . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Description of Capital Shares . . . . . . . . . . . . . . . . . . . . . 48
Additional Information. . . . . . . . . . . . . . . . . . . . . . . . . 49
Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . 49

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Investment Objectives and Policies

INVESTMENT CRITERIA

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

INVESTMENT IN FOREIGN SECURITIES

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

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

Although these countries have developed economies, even developed countries
may be subject to periods of economic or political instability. For example,
efforts by the member countries of the European Union to eliminate internal
barriers to the free movement of goods, persons, services and capital have
encountered opposition arising from the conflicting economic, political and
cultural interests and traditions of the member countries and their citizens.
Similarly, events in the Japanese economy and social developments may affect
Japanese securities and currency markets, as well as the relationship of the
Japanese yen to the U.S. dollar. Future political, economic and social
developments can be expected to produce continuing effects on securities and
currency markets in these and other developed foreign countries.

INVESTMENT IN EMERGING MARKETS. Each Fund may, and the Emerging Markets
Fund will, invest in securities of developing countries with emerging markets
and companies organized or headquartered in such countries. As a general
matter, countries that are not considered to be developed foreign countries by
the Investment Manager will be deemed to be emerging market countries. Emerging
market countries include any country generally considered to be an emerging
market or developing country by the World Bank, the International Finance
Corporation, the United Nations or its authorities, or other recognized
financial institutions. This designation currently includes most countries in
the world except Australia, Canada, Japan, New Zealand, Singapore, United
Kingdom, the U.S. and most of the countries in Western Europe. (See INVESTMENT
IN DEVELOPED FOREIGN COUNTRIES.) As their economies grow and their markets grow
and mature, some countries that currently may be characterized by the Investment
Manager as emerging market countries may be deemed by the Investment Manager to
be developed foreign countries. In the event that the Investment Manager deems a
particular country to be a developed foreign country, any investment in
securities

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issued by that country's government or by an issuer located in that country
would not be subject to a Fund's overall limitations on investments in emerging
market countries.

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

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

CURRENCY MANAGEMENT

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

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

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

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

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quoted in the currencies of foreign countries, the Fund will be more susceptible
to the risk of adverse economic and political developments within those
countries.

FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS. Each Fund may purchase or sell
forward foreign currency exchange contracts ("forward contracts") for hedging
purposes or to seek to increase total return when the Investment Manager
anticipates that a foreign currency will appreciate or depreciate in value, but
securities denominated or quoted in that currency do not present attractive
investment opportunities and are not held in the Fund's portfolio. When
purchased or sold to increase total return, forward contracts are considered
speculative. In addition, a Fund may enter into forward contracts in order to
protect against anticipated changes in future foreign currency exchange rates.

Each Fund may engage in cross-hedging by using forward contracts in a
currency different from that in which the hedged security is denominated or
quoted if the Investment Manager determines that there is a pattern of
correlation between the two currencies. Each such Fund may also engage in proxy
hedging, by using forward contracts in a series of foreign currencies for
similar purposes.

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

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

A forward contract is subject to the risk that the counterparty to such
contract will default on its obligations. Since a forward contract is not
guaranteed by an exchange or clearinghouse, a default on the contract would
deprive a Fund of unrealized profits, transaction costs or the benefits of a
currency hedge or force the Fund to cover its purchase or sale commitments, if
any, at the current market price.

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

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

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

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

CURRENCY FUTURES CONTRACTS. Each Fund (other than the Europe Fund) may
enter into currency futures contracts, as described under "Futures Transactions"
below.

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

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

OPTIONS TRANSACTIONS

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

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

A Fund may effectively terminate its right or obligation under an option
by entering into a closing transaction. For example, a Fund may terminate its
obligation under a put or call option that it had written by purchasing an
identical put or call option; this is known as a closing purchase
transaction. Conversely, a Fund may terminate a position in a put or call
option that it had purchased by writing an identical put or call option; this
is known as a closing sale transaction. A Fund realizes a gain from a closing
transaction if the cost of the closing transaction is less than the premium
received from writing the option or if the proceeds from the closing
transaction are more than the premium paid to purchase the option.

PURCHASING PUT AND CALL OPTIONS

PUT OPTIONS. If a Fund purchases a put option, the Fund acquires the right
to sell the underlying security at a specified price at any time during the term
of the option (for "American-style" options) or on the option expiration date
(for "European-style" options). Purchasing put options may be used as a
portfolio investment strategy when the Investment Manager perceives significant
short-term risk but substantial long-term appreciation for the underlying
security. The put option acts as an "insurance policy", as it protects against
significant downward price movement while it allows full participation in any
upward movement. If a Fund is holding a security which the Investment Manager

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feels has strong fundamentals, but for some reason may be weak in the near term,
the Fund may purchase a put option on such security, thereby giving itself the
right to sell such security at a certain strike price throughout the term of the
option. Consequently, the Fund will exercise the put only if the price of such
security falls below the strike price of the put. The difference between the
strike price of the put and the market price of the underlying security on the
date the Fund exercises the put, less transaction costs, will be the amount by
which the Fund will be able to hedge against a decline in the underlying
security. If during the period of the option the market price for the underlying
security remains at or above the put's strike price, the put will expire
worthless, representing a loss of the price the Fund paid for the put, plus
transaction costs. If the price of the underlying security increases, the profit
the Fund realizes on the sale of the security will be reduced by the premium
paid for the put option less any amount for which the put may be sold.

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

WRITING PUT AND CALL OPTIONS. Writing covered put or call options can
enable a Fund to enhance income by reason of the premiums paid by the
purchasers of such options. When a Fund writes a put option, the purchaser
acquires the right to sell to the Fund the underlying security at a specified
price at any time during the term of the option or on the option expiration
date. When a Fund writes a call option, the purchaser acquires the right to
purchase from the Fund the underlying security at a specified price at any
time during the term of the option. In return for the premium received for a
call option, a Fund foregoes the opportunity for profit from a price increase
in the underlying security above the exercise price so long as the option
remains open, but retains the risk of loss should the price of the security
decline. In return for the premium received for a put option, a Fund assumes
the risk that the price of the underlying security will decline below the
exercise price, in which case the put would be exercised and the Fund would
suffer a loss.

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

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

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

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

SHORT SALES

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

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

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

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

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

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

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

DELAYED-DELIVERY TRANSACTIONS

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

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but may sell the right to receive delivery of the securities before the
settlement date. The value of the securities at settlement may be more or less
than the agreed upon price.

A Fund will segregate cash, U.S. Government securities or other liquid debt
or equity securities in an amount sufficient to meet its payment obligations
with respect to any such transactions. To the extent that assets are segregated
for this purpose, a Fund's liquidity and the ability of the Investment Manager
to manage its portfolio may be adversely affected.

FUTURES TRANSACTIONS

The Funds (other than the Europe Fund) may enter into futures contracts for
the purchase or sale of fixed-income securities, foreign currencies or contracts
based on financial indices, including indices of U.S. government securities,
foreign government securities, equity securities or fixed-income securities. For
example, if a Fund owns Treasury bonds and the portfolio manager expects
interest rates to increase, that Fund may take a short position in interest rate
futures contracts. Taking such a position would have much the same effect as
that Fund selling Treasury bonds in its portfolio. If interest rates increase as
anticipated, the value of the Treasury bonds would decline, but the value of
that Fund's interest rate futures contract will increase, thereby keeping the
net asset value of that Fund from declining as much as it may have otherwise.
If, on the other hand, a portfolio manager expects interest rates to decline,
the Fund may take a long position in interest rate futures contracts in
anticipation of later closing out the futures position and purchasing the bonds.
Although a Fund can accomplish similar results by buying securities with long
maturities and selling securities with short maturities, given the greater
liquidity of the futures market than the cash market, it may be possible to
accomplish the same result more easily and more quickly by using futures
contracts as an investment tool to reduce risk.

The Europe Fund may enter into futures contracts for the purchase or sale
of foreign stock or bond indices or other financial indices that the Investment
Manager determines are appropriate to hedge the risks associated with changes in
interest rates or general fluctuations in the value of its portfolio securities.
Pursuant to the regulations of the Commodity Futures Trading Commission
("CFTC"), and subject to certain restrictions, the Fund may purchase or sell
futures contracts that are traded on U.S. exchanges that have been designated as
contract markets by the CFTC. The Fund may also generally purchase or sell
futures contracts that are subject to the rules of any foreign board of trade
("foreign futures contracts"). The Fund may not, however, trade a foreign
futures contract based on a foreign stock index unless the contract has been
approved by the CFTC for trading by U.S. persons. The Investment Manager may
comply with such different standards as may be established by the CFTC with
respect to the purchase or sale of futures contracts and foreign futures
contracts.

FUTURES CHARACTERISTICS. A futures contract is an agreement between two
parties (buyer and seller) to take or make delivery of an amount of cash equal
to the difference between the value of the currency, security or index at the
close of the last trading day of the contract and the price at which the
currency, security or index contract was originally written. In the case of
futures contracts traded on U.S. exchanges, the exchange itself or an affiliated
clearing corporation assumes the opposite side of each transaction (i.e., as
buyer or seller). A futures contract may be satisfied or closed out by payment
of the change in the cash value of the currency, security or index. No physical
delivery of the underlying currency, securities, or securities in the index is
made.

Unlike when a Fund purchases or sells a security, no price is paid or
received by a Fund upon the purchase or sale of a futures contract. Initially,
the Fund will be required to deposit with the Fund's custodian or such other
parties as may be authorized by the SEC (in the name of the futures commission
merchant (the "FCM")) an amount of cash or U.S. Treasury bills which is referred
to as an "initial margin" payment. The nature of initial margin in futures
transactions is different from that of margin in security transactions in that a
futures contract margin does not involve the borrowing of funds by a Fund to
finance the transactions. Rather, the initial margin is in the nature of a
performance bond or good faith deposit on the contract which is returned to the
Fund upon termination of the futures contract, assuming all contractual
obligations have been satisfied. Futures contracts customarily are purchased and
sold with initial margins that may range upwards from less than 5% of the value
of the futures contract being traded. Subsequent payments, called "variation
margin", to and from the FCM, will be made on a daily basis as the price of the
underlying currency or

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stock index varies, making the long and short positions in the futures contract
more or less valuable. This process is known as "marking to the market." For
example, when a Fund has purchased a currency futures contract and the price of
the underlying currency has risen, the Fund's position will have increased in
value and the Fund will receive from the FCM a variation margin payment equal to
that increased value. Conversely, when a Fund has purchased a currency futures
contract and the price of the underlying currency has declined, the position
would be less valuable and the Fund would be required to make a variation margin
payment to the FCM. At any time prior to expiration of a futures contract, a
Fund may elect to close the position by taking an identical opposite position
which will operate to terminate the Fund's position in the futures contract. A
final determination of variation margin is then made, additional cash is
required to be paid by or released to the Fund, and the Fund realizes a loss or
a gain.

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

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

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

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

PURCHASE OF CALL OPTIONS ON FUTURES. The purchase of a call option on a
currency, financial or index futures contract represents a means of obtaining
temporary exposure to favorable currency exchange rate or interest rate
movements or temporary exposure to market appreciation with risk limited to the
premium paid for the call option. It is analogous to the purchase of a call
option on an individual security or index, which can be used as a substitute for
a position in the security or index itself. Depending on the pricing of the
option compared to either the futures contract

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upon which it is based, or to the price of the underlying currency, security or
index itself, the call option may be less risky, because losses are limited to
the premium paid for the call option, when compared to the ownership of the
underlying currency, security or index futures contract. Like the purchase of a
currency, financial or index futures contract, a Fund would purchase a call
option on a currency, financial or index futures contract to hedge against an
unfavorable movement in exchange rates, interest rates or securities prices.

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

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

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

SWAPS

The Europe Fund may engage in securities index total return swaps with
approved counterparties. Securities index total return swaps involve an
agreement between two parties to exchange payments that are based on a specified
securities index and that are calculated on the basis of a set amount (the
"notional amount") for a specified period of time. The Fund may enter into
securities index total return swaps only to the extent that the notional amount
of all current swaps does not exceed 30% of the Fund's net assets. Generally,
the Fund will base its securities index total return swaps on its benchmark
index, the MSCI Europe, or a separate market index such as the DAX100 or the
CAC100. The Fund may, among other purposes, use securities index total return
swaps to provide the Fund with sufficient liquidity to meet cash redemptions of
shares while maintaining its investments in securities and foreign currencies or
to provide the Fund with sufficient exposure to the equity markets when it is
holding cash that is being held to meet redemptions or when incoming cash is not
yet invested. Swaps are subject to risks comparable to the risks involved with
respect to hedging transactions.

The Europe Fund may enter into securities index total return swaps on
either an asset basis or a liability basis, depending on whether it is hedging
its assets or its liabilities, and will usually enter into securities index
total return swaps on a net basis, i.e., the two payment streams are netted out,
with the Fund receiving or paying, as the case may be, only the net amount of
the two payments. Inasmuch as segregated accounts will be established with
respect to such transactions, the Investment Manager believes such obligations
do not constitute senior securities and, accordingly, will not treat them as
being subject to the Fund's borrowing restrictions. The net amount of the
excess, if any, of the Fund's obligations over its entitlements with respect to
each securities index total return swap will be accrued on a daily basis, and
appropriate Fund assets having an aggregate net asset value at least equal to
the accrued excess will be maintained in a segregated account. The Fund also
will establish and maintain such segregated accounts with respect to its total
obligations under any swaps that are not entered into on a net basis.

The Europe Fund will enter into swaps only with banks and recognized
securities dealers believed by the Investment Manager to present minimal credit
risk in accordance with guidelines established by the Fund's Board of

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Directors. If there is a default by the approved counterparty to such a
transaction, the Fund will have to rely on its contractual remedies (which may
be limited by bankruptcy, insolvency or similar laws) pursuant to the agreements
related to the swap."

DEBT SECURITIES

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

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

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

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

RATINGS. Credit ratings evaluate the safety of principal and interest
payments of securities, not their market value. The rating of an issuer is also
heavily weighted by past developments and does not necessarily reflect probable
future conditions. There is frequently a lag between the time a rating is
assigned and the time it is updated. As credit rating agencies may fail to
timely change credit ratings of securities to reflect subsequent events, the
Investment Manager will also monitor issuers of such securities to determine if
such issuers will have sufficient cash flow and profits to meet required
principal and interest payments and to assure their liquidity. In general, debt
securities held by a Fund will be treated as investment grade if they are rated
by at least one major rating agency in one of its top four rating categories at
the time of purchase or, if unrated, are determined by the Investment Manager to
be of comparable quality. Investment grade means the issuer of the security is
believed to have adequate capacity to pay interest and repay principal, although
certain of such securities in the lower grades have speculative characteristics,
and changes in economic conditions or other circumstances may be more likely to
lead to a weakened capacity to pay interest and principal than would be the case
with higher rated securities. If the rating of an investment grade security held
by a Fund is downgraded, the Investment Manager will determine whether it is in
the best interests of the Fund to continue

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to hold the security in its investment portfolio. The Emerging Markets Fund may
invest in debt securities rated, at the time of purchase, below investment
grade. Refer to the section entitled "Risk Considerations" for the risks
associated with below investment grade debt securities.

GOVERNMENT OBLIGATIONS. U.S. Government obligations include obligations
issued or guaranteed as to principal and interest by the U.S. Government and its
agencies and instrumentalities, by the right of the issuer to borrow from the
U.S. Treasury, by the discretionary authority of the U.S. Government to purchase
certain obligations of the agency or instrumentality, or only by the credit of
the agency or instrumentality. No assurance can be given that the U.S.
Government will provide financial support to U.S. Government-sponsored
instrumentalities if it is not obligated to do so by law.

Each Fund may invest in sovereign debt obligations of foreign countries. A
number of factors affect a sovereign debtor's willingness or ability to repay
principal and interest in a timely manner, including its cash flow situation,
the extent of its foreign reserves, the availability of sufficient foreign
exchange on the date a payment is due, the relative size of the debt service
burden to the economy as a whole, the sovereign debtor's policy toward principal
international lenders and the political constraints to which it may be subject.
Emerging market governments could default on their sovereign debt. Such
sovereign debtors also may be dependent on expected disbursements from foreign
governments, multilateral agencies and other entities abroad to reduce principal
and interest arrearages on their debt. The commitments on the part of these
governments, agencies and others to make such disbursements may be conditioned
on a sovereign debtor's implementation of economic reforms and/or economic
performance and the timely service of such debtor's obligations. Failure to meet
such conditions could result in the cancellation of such third parties'
commitments to lend funds to the sovereign debtor, which may further impair such
debtor's ability or willingness to service its debt in a timely manner.

CONVERTIBLE SECURITIES AND WARRANTS

Each Fund may invest in convertible securities and warrants. The value of a
convertible security is a function of its "investment value" (determined by its
yield in comparison with the yields of other securities of comparable maturity
and quality that do not have conversion privilege) and its "conversion value"
(the security's worth, at market value, if converted into the underlying common
stock). The credit standing of the issuer and other factors may also affect the
investment value of a convertible security. The conversion value of a
convertible security is determined by the market price of the underlying common
stock. If the conversion value is low relative to the investment value, the
price of the convertible security is governed principally by its investment
value. To the extent the market price of the underlying common stock approaches
or exceeds the conversion price, the price of the convertible security will be
increasingly influenced by its conversion value.

As a matter of operating policy, no Fund will invest more than 5% of its
net assets in warrants. A warrant gives the holder a right to purchase at any
time during a specified period a predetermined number of shares of common stock
at a fixed price. Unlike convertible debt, securities or preferred stock,
warrants do not pay a fixed dividend. Investments in warrants involve certain
risks, including the possible lack of a liquid market for resale of the
warrants, potential price fluctuations as a result of speculation or other
factors, and failure of the price of the underlying security to reach or have
reasonable prospects of reaching a level at which the warrant can be prudently
exercised (in which event the warrant may expire without being exercised)
resulting in a loss of the Fund's entire investment therein.

SYNTHETIC CONVERTIBLE SECURITIES

Each Fund may invest in "synthetic" convertible securities, which are
derivative positions composed of two or more different securities whose
investment characteristics, taken together, resemble those of convertible
securities. For example, a Fund may purchase a non-convertible debt security and
a warrant or option, which enables a Fund to have a convertible-like position
with respect to a company, group of companies or stock index. Synthetic
convertible securities are typically offered by financial institutions and
investment banks in private placement transactions. Upon conversion, the Fund
generally receives an amount in cash equal to the difference between the
conversion price and the then current value of the underlying security. Unlike a
true convertible security, a synthetic convertible comprises

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two or more separate securities, each with its own market value. Therefore, the
market value of a synthetic convertible is the sum of the values of its
fixed-income component and its convertible component. For this reason, the
values of a synthetic convertible and a true convertible security may respond
differently to market fluctuations. A Fund only invests in synthetic
convertibles with respect to companies whose corporate debt securities are rated
"A" or higher by Moody's or Standard & Poor's and will not invest more than 15%
of its net assets in such synthetic securities and other illiquid securities.

PREFERRED STOCK

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

BORROWING MONEY

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

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

LENDING PORTFOLIO SECURITIES

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

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INVESTMENT IN ILLIQUID SECURITIES

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

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

The Funds' investments in illiquid securities may include securities that
are not registered for resale under the Securities Act of 1933 (the "Securities
Act"), and therefore are subject to restrictions on resale. When a Fund
purchases unregistered securities, it may, in appropriate circumstances, obtain
the right to register such securities at the expense of the issuer. In such
cases there may be a lapse of time between the Fund's decision to sell any such
security and the registration of the security permitting sale. During any such
period, the price of the security will be subject to market fluctuations.

The fact that there are contractual or legal restrictions on resale of
certain securities to the general public or to certain institutions may not be
indicative of the liquidity of such investments. If such securities are subject
to purchase by institutional buyers in accordance with Rule 144A under the
Securities Act, the Investment Manager may determine in particular cases,
pursuant to standards adopted by the Boards of Directors, that such securities
are not illiquid securities notwithstanding the legal or contractual
restrictions on their resale. Investing in Rule 144A securities could have the
effect of increasing a Fund's illiquidity to the extent that qualified
institutional buyers become, for a time, uninterested in purchasing such
securities.

CASH-EQUIVALENT INSTRUMENTS

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

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

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PORTFOLIO TURNOVER

Securities in a Fund's portfolio will be sold whenever the Investment
Manager believes it is appropriate to do so, regardless of the length of time
that securities have been held, and securities may be purchased or sold for
short-term profits whenever the Investment Manager believes it is appropriate or
desirable to do so. Turnover will be influenced by sound investment practices, a
Fund's investment objective, and the need for funds for the redemption of a
Fund's shares, although the Tax Managed Growth Fund's portfolio turnover rate
will also be influenced by its strategy of holding securities long enough to
avoid higher, short-term capital gains taxes, selling shares with a higher cost
basis first, and offsetting gains realized in one security by selling another
security at a capital loss. In an attempt to minimize capital gains on other
holdings, the Tax Managed Growth Fund may also realize accrued losses on some
stocks.

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

RISK CONSIDERATIONS

INVESTMENTS IN FOREIGN SECURITIES GENERALLY

Investments in foreign securities may offer investment opportunities and
potential benefits not available from investments solely in securities of U.S.
issuers. Such benefits may include higher rates of interest on debt securities
than are available from domestic issuers, the opportunity to invest in foreign
issuers that appear, in the opinion of the Investment Manager, to offer better
opportunity for long-term capital appreciation than investments in securities of
U.S. issuers, the opportunity to invest in foreign countries with economic
policies or business cycles different from those of the United States and the
opportunity to reduce fluctuations in portfolio value by taking advantage of
foreign markets that do not necessarily move in a manner parallel to U.S. stock
markets.

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

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

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

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

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

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

DEPOSITARY RECEIPTS

In many respects, the risks associated with investing in depositary
receipts are similar to the risks associated with investing in foreign equity
securities directly. Therefore, for purposes of each Fund's investment policies
and restrictions, they are treated as foreign equity securities, based on the
country in which the underlying issuer is organized or headquartered. In
addition, to the extent that a Fund acquires depositary receipts through banks
that do not have a contractual relationship with the foreign issuer of the
security underlying the depositary receipts to issue and service depositary
receipts, there may be an increased possibility that the Fund would not become
aware of and be able to respond to corporate actions, such as stock splits or
rights offerings, involving the foreign issuer in a timely manner.

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

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

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EMERGING MARKET SECURITIES

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

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

In many cases, governments of emerging market countries continue to
exercise a significant degree of control over the economies of such countries,
and government actions relative to the economy, as well as economic developments
generally, also may have a major effect on an issuer's prospects. In addition,
certain of such governments have in the past failed to recognize private
property rights and have at times naturalized or expropriated the assets of
private companies. There is also a heightened possibility of confiscatory
taxation, imposition of withholding taxes on dividend and interest payments, or
other similar developments that could affect investments in those countries. As
a result, there can be no assurance that adverse political changes will not
cause a Fund to suffer a loss with respect to any of its holdings. In addition,
political and economic structures in many of such countries may be undergoing
significant evolution and rapid development, and such countries may lack the
social, political and economic stability characteristics of more developed
countries. Unanticipated political or social developments may affect the values
of a Fund's investments in those countries and the availability of additional
investments in those countries.

INVESTMENTS IN SMALLER COMPANIES

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

Securities issued by companies (including predecessors) that have operated
for less than three years may have limited liquidity, which can result in their
prices being lower than might otherwise be the case. In addition,

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investments in such companies are more speculative and entail greater risk than
do investments in companies with established operating records.

CONVERTIBLE SECURITIES

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

BELOW INVESTMENT GRADE DEBT SECURITIES

The Emerging Markets Fund may invest up to 5% of its total assets in debt
securities rated below "Baa" by Moody's, below "BBB" by Standard & Poor's, or
investment grade by another recognized rating agency or, if unrated, judged by
the Investment Manager to be of comparable quality, if the Investment Manager
believes that the financial condition of the issuer or the protection afforded
to the particular securities is stronger than would otherwise be indicated by
such low ratings or the lack thereof. Debt securities rated below investment
grade or equivalent ratings, commonly referred to as "junk bonds," are subject
to greater risk of loss of income and principal than higher-rated bonds and are
considered to be predominantly speculative with respect to the issuer's capacity
to pay interest and repay principal, which may in any case decline during
sustained periods of deteriorating economic conditions or rising interest rates.
Junk bonds are generally considered to be subject to greater market risk in
times of deteriorating economic conditions, and to wider market and yield
fluctuations, than higher-rated securities. Junk bonds may also be more
susceptible to real or perceived adverse economic and competitive industry
conditions than investment grade securities. The market for such securities may
be thinner and less active than that for higher-rated securities, which can
adversely affect the prices at which these securities can be sold. To the extent
that there is no established secondary market for lower-rated securities, the
Fund may experience difficulty in valuing such securities and, in turn, its
assets. In addition, adverse publicity and investor perceptions about junk
bonds, whether or not based on fundamental analysis, may tend to decrease the
market value and liquidity of such securities. The Investment Manager will try
to reduce the risk inherent in the Fund's investments in such securities through
credit analysis, diversification and attention to current developments and
trends in interest rates and economic conditions. However, there can be no
assurance that losses will not occur. Since the risk of default is higher for
lower-rated bonds, the Investment Manager's research and credit analysis are a
correspondingly more important aspect of its program for managing the Fund's
investments in such debt securities. The Investment Manager will attempt to
identify those issuers of high-yielding securities whose financial conditions
are adequate to meet future obligations, or have improved or are expected to
improve in the future.

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

DELAYED-DELIVERY TRANSACTIONS

Each of the Funds (other than the Europe Fund) may buy and sell securities
on a delayed-delivery or when-issued basis. These transactions involve a
commitment by a Fund to purchase or sell specific securities at a

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predetermined price and/or yield, with payment and delivery taking place after
the customary settlement period for that type of security (and more than seven
days in the future). Typically, no interest accrues to the purchaser until the
security is delivered. A Fund may receive fees for entering into
delayed-delivery transactions. When purchasing securities on a delayed-delivery
basis, a Fund assumes the rights and risks of ownership, including the risk of
price and yield fluctuations. Because a Fund is not required to pay for
securities until the delivery date, these risks are in addition to the risks
associated with the Fund's other investments. If a Fund remains substantially
fully invested at a time when delayed-delivery purchases are outstanding, the
delayed-delivery purchases may result in a form of leverage. When
delayed-delivery purchases are outstanding, a Fund will set aside appropriate
liquid assets in a segregated custodial account to cover its purchase
obligations. When a Fund has sold a security on a delayed-delivery basis, the
Fund does not participate in further gains or losses with respect to the
security. If the other party to a delayed-delivery transaction fails to deliver
or pay for the securities, the Fund could miss a favorable price or yield
opportunity, or could suffer a loss. A Fund may dispose of or renegotiate
delayed-delivery transactions after they are entered into, and may sell
underlying securities before they are delivered, which may result in capital
gains or losses.

OPTIONS

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

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

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

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

FUTURES TRANSACTIONS

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

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favorable direction, this advantage will be partially offset by movement in the
value of the future. If the price of the futures contract moves more than the
price of the security or currency, the Fund will experience either a loss or a
gain on the futures contract which will not be completely offset by movements in
the price of the security or currency which is the subject of the hedge.

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

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

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

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

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

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

A Fund will only enter into futures contracts or purchase futures options
that are standardized and traded on a U.S. or foreign exchange or board of
trade, or similar entity, or quoted on an automated quotation system. However,
there is no assurance that a liquid secondary market on an exchange or board of
trade will exist for any particular futures contract or futures option or at any
particular time. In such event, it may not be possible to close a futures

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position, and, in the event of adverse price movements, the Fund would continue
to be required to make daily cash payments of variation margin. In the event
futures contracts have been used to hedge a portfolio security or currency, an
increase in the price of the security or currency, if any, may partially or
completely offset losses on the futures contract. However, as described above,
there is no guarantee that the price of the security or currency will, in fact,
correlate with the movements in the futures contract and thus provide an offset
to losses on a futures contract.

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

OTHER RISK CONSIDERATIONS

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

A number of transactions in which the Funds may engage are subject to the
risks of default by the other party to the transaction. If the seller of
securities pursuant to a repurchase agreement entered into by a Fund defaults
and the value of the collateral securing the repurchase agreement declines, the
Fund may incur a loss. If bankruptcy proceedings are commenced with respect to
the seller, realization of the collateral by the Fund may be delayed or limited.
Similarly, when a Fund engages in when-issued, reverse repurchase, forward
commitment and related settlement transactions, it relies on the other party to
consummate the trade; failure of the other party to do so may result in the Fund
incurring a loss or missing an opportunity to obtain a price the Investment
Manager believed to be advantageous. The risks in lending portfolio securities,
as with other extensions of secured credit, consist of a possible delay in
receiving additional collateral or in recovery of the securities or possible
loss of rights in the collateral should the borrower fail financially.

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

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INVESTMENT RESTRICTIONS

FUNDAMENTAL POLICIES

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

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

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

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

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

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

6. Make loans of its funds or assets to any other person, which shall not be
considered as including: (i) the purchase of a portion of an issue of
publicly distributed debt securities, (ii) the purchase of bank obligations
such as certificates of deposit, bankers' acceptances and other short-term
debt obligations, (iii) entering into repurchase agreements with respect to
commercial paper, certificates of deposit and obligations issued or
guaranteed by the U.S. Government, its agencies or instrumentalities, and
(iv) the loan of portfolio securities to brokers, dealers and other
financial institutions where such loan is callable by the Fund at any time
on reasonable notice and is fully secured by collateral in the form of cash
or cash equivalents. A Fund will not enter into repurchase agreements with
maturities in excess of seven days if immediately after and as a result of
such transaction the value of the Fund's holdings of such repurchase
agreements exceeds 10% (15%, in the case of the Tax Managed Growth Fund) of
the value of the Fund's total assets.

7. Act as an underwriter of securities issued by other persons, except insofar
as it may be deemed an underwriter under the Securities Act of 1933 in
selling portfolio securities, or invest more than 15% (10% for the
International Fund) of the value of its net assets in securities that are
illiquid;

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

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

10. Purchase commodities or commodity contracts, except that the Fund may
purchase securities of an issuer which invests or deals in commodities or
commodity contracts, and except that the Fund may enter into futures and
options contracts in accordance with the applicable rules of the CFTC.

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

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

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

IN THE CASE OF THE EUROPE FUND, THESE RESTRICTIONS PROVIDE THAT THE FUND
MAY NOT:

1. Purchase any security (other than obligations of the FRG, the German
Federal Railways and the German Federal Post Office, which in the aggregate
shall not represent more than 25% or more of the Fund's total assets, or
obligations of the U.S. government, its agencies or instrumentalities) if
as a result more than 10% of the Fund's total assets would then be invested
in securities of any single issuer.

2. Invest 25% or more of the value of its total assets in a particular
industry. This restriction does not apply to securities issued or
guaranteed by the U.S. government, its agencies or instrumentalities, but
will apply to foreign government obligations until such time as the
Securities and Exchange Commission permits their exclusion.

3. Purchase more than 10% of the outstanding voting securities of any issuer.

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

5. Purchase or sell real estate or real estate mortgage loans, except that the
Fund may purchase and sell securities of companies that deal in real estate
or interests therein.

Page 22

<PAGE>

6. Purchase securities on margin, except short-term credits as may be
necessary or routine for the clearance or settlement of transactions, and
except for margin posted in connection with hedging transactions consistent
with its investment policies.

7. Underwrite securities of other issuers, except insofar as the Fund may be
deemed an underwriter under the U.S. Securities Act of 1933 in selling
portfolio securities.

8. Buy or sell commodities, commodity contracts or futures contracts (other
than futures contracts with respect to foreign stock or bond indices or
other financial indices that the Investment Manager determines are
appropriate to hedge the risks associated with interest rates or general
fluctuations in the value of its portfolio securities).

OPERATING POLICIES

Each Fund has adopted certain investment restrictions that are not
fundamental policies and may be changed by the Board of Directors without
approval of the Fund's outstanding voting securities. In the case of the Funds,
other than the Europe Fund, these restrictions provide that a Fund may not:

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

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

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

4. Purchase or sell futures or purchase related options if, immediately
thereafter, the sum of the amount of "margin" deposits on the Fund's
existing futures positions and premiums paid for related options entered
into for the purpose of seeking to increase total return would exceed 5% of
the value of the Fund's net assets (this restriction does not apply to the
International Fund).

IN THE CASE OF THE EUROPE FUND, THESE RESTRICTIONS PROVIDE THAT THE FUND
MAY NOT:

1. Invest in interests in oil, gas, or other mineral exploration or
development programs;

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

3. Purchase or sell futures if, immediately thereafter, the sum of the amount
of "margin" deposits on the Fund's existing futures positions would exceed
5% of the value of the Fund's total assets.

4. Invest more than 15% of the value of its net assets in securities that are
illiquid.

The Funds are also subject to other restrictions under the 1940 Act;
however, the registration of the Companies under the 1940 Act does not involve
any supervision by any federal or other agency of the Companies'

Page 23

<PAGE>

management or investment practices or policies, other than incident to
occasional or periodic compliance examinations conducted by the SEC staff.

EXECUTION OF PORTFOLIO TRANSACTIONS

The Investment Manager, subject to the overall supervision of the Board of
Directors, makes each Fund's investment decisions and selects the broker or
dealer to be used in each specific transaction using its best judgment to choose
the broker or dealer most capable of providing the services necessary to obtain
the best execution of that transaction. In seeking the best execution of a
transaction, the Investment Manager evaluates a wide range of criteria,
including any or all of the following: the broker's commission rate, promptness,
reliability and quality of executions, trading expertise, positioning and
distribution capabilities, back-office efficiency, ability to handle difficult
trades, knowledge of other buyers and sellers, confidentiality, capital strength
and financial stability, prior performance in serving the Investment Manager and
its clients, and other factors affecting the overall benefit to be received in
the transaction. When circumstances relating to a proposed transaction indicate
to the Investment Manager that a particular broker is in a position to obtain
the best execution, the order is placed with that broker. This may or may not be
a broker that has provided investment information and research services to the
Investment Manager.

Such investment information may include, among other things: a wide variety
of written reports or other data on individual companies and industries; data
and reports on general market or economic conditions; information concerning
pertinent federal and state legislative and regulatory developments and other
developments that could affect the value of actual or potential investments;
information about companies in which the Investment Manager has invested or may
consider investing; attendance at meetings with corporate management personnel,
industry experts, economists, government personnel, and other financial
analysts; comparative issuer performance and evaluation and technical
measurement services; subscription to publications that provide
investment-related information; accounting and tax law interpretations;
availability of economic advice; quotation equipment and services; execution
measurement services; market-related and survey data concerning the products and
services of an issuer and its competitors or concerning a particular industry
that are used in reports prepared by the Investment Manager to enhance its
ability to analyze an issuer's financial condition and prospects; and other
services provided by recognized experts on investment matters of particular
interest to the Investment Manager. In addition, the foregoing services may
include the use of, or be delivered by, computer systems whose hardware and/or
software components may be provided to the Investment Manager as part of the
services. In any case in which information and other services can be used for
both research and non-research purposes, the Investment Manager makes an
appropriate allocation of those uses and pays directly for that portion of the
services to be used for non-research purposes.

Subject to the requirement of seeking the best execution, the Investment
Manager may, in circumstances in which two or more brokers are in a position to
offer comparable execution, give preference to a broker or dealer that has
provided investment information to the Investment Manager. In so doing, the
Investment Manager may effect securities transactions which cause a Fund to pay
an amount of commission in excess of the amount of commission another broker
would have charged. In electing such broker or dealer, the Investment Manager
will make a good faith determination that the amount of commission is reasonable
in relation to the value of the brokerage services and research and investment
information received, viewed in terms of either the specific transaction or the
Investment Manager's overall responsibility to the accounts for which the
Investment Manager exercises investment discretion. The Investment Manager
evaluates all commissions paid in order to ensure that the commissions represent
reasonable compensation for the brokerage and research services provided by such
brokers. Such investment information as is received from brokers or dealers may
be used by the Investment Manager in servicing all of its clients (including the
Funds), and a Fund's commissions may be paid to a broker or dealer who supplied
research services not used by the Fund. However, the Investment Manager expects
that each Fund will benefit overall by such practice because it is receiving the
benefit of research services and the execution of such transactions not
otherwise available to it without the allocation of transactions based on the
recognition of such research services.

Page 24
<PAGE>

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

The Investment Manager has no obligation to purchase or sell for a Fund any
security that it, or its officers of employees, may purchase or sell for the
Investment Manager's or their own accounts or the account of any other client,
if in the opinion of the Investment Manager such transaction appears unsuitable,
impractical or undesirable for the Fund. Additionally, the Investment Manager
does not prohibit any of its officers or employees from purchasing or selling
for their own accounts securities that may be recommended to or held by the
Investment Manager's client's, subject to the Investment Manager's and the
Fund's Code of Ethics.

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

For the fiscal years ended December 31, 1996, 1997 and 1998, the Funds paid
total brokerage commissions as follows:

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Fund Name 1996 1997 1998
- -------------------------------------------------------------------------------
Dresdner RCM Large Cap $0 $8,344 $8,963
Growth Fund
- -------------------------------------------------------------------------------
Dresdner RCM Global $0 $19,389 $23,322
Small Cap Fund
- -------------------------------------------------------------------------------
Dresdner RCM Global $11,875 $12,641 $27,683
Technology Fund
- -------------------------------------------------------------------------------
Dresdner RCM Global $0 $12,833 $14,634
Health Care Fund
- -------------------------------------------------------------------------------
Dresdner RCM $0 $0 $6,028
Biotechnology Fund
- -------------------------------------------------------------------------------
Dresdner RCM $333,597 $518,944 $438,519
International Growth
Equity Fund
- -------------------------------------------------------------------------------
Dresdner RCM Emerging $0 $3,913 $31,302
Markets Fund
- -------------------------------------------------------------------------------
Dresdner RCM Tax $0 $0 $0
Managed Growth Fund
- -------------------------------------------------------------------------------
Dresdner RCM Europe $330,226 $761,708 $1,282,143
Fund
- -------------------------------------------------------------------------------
</TABLE>

Of the total commissions paid during the fiscal year ended December 31,
1998, $1,832,594 (100%) were paid to firms which provided research, statistical
or other services to the Investment Manager. The Investment

Page 25

<PAGE>

Manager has not separately identified a portion of such commissions as
applicable to the provision of such research, statistical or otherwise.

During fiscal 1998 the Large Cap Growth Fund acquired the securities of two
of its regular broker-dealers and the Europe Fund acquired the securities of one
of its regular broker-dealers (as defined in Rule 10b-1 under the 1940 Act). At
December 31, 1998, the Large Cap Growth Fund's holdings in Travelers Group
(parent of Salomon Smith Barney) and General Electric (parent of GE Capital
Corp.) were valued at $74,250 and $265,362, respectively, and the Europe Fund's
holdings in Julius Bar Holding Ltd. was valued at $2,326,538.

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

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

During fiscal 1998, the Europe Fund paid its affiliated broker, Dresdner
RCM Kleinwort Benson North America LLC, total brokerage commissions of $430,089,
which represents 34% of the Fund's aggregate brokerage commissions paid and 33%
of the Fund's aggregate dollar amount of transactions effected during its most
recent fiscal year.

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

Page 26
<PAGE>

DIRECTORS AND OFFICERS

CAPITAL COMPANY AND GLOBAL COMPANY

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

DEWITT F. BOWMAN, (68), Chairman and Director. Mr. Bowman is a Principal of
Pension Investment Consulting, with which he has been associated since February
1994. From February 1989 to January 1994, he was Chief Investment Officer for
California Public Employees Retirement System, a public pension fund. He serves
as a director of RREEF America REIT, Inc. and the Wilshire Target Funds Inc.;
and as a trustee of Brandes Institutional International Investment Trust, the
Pacific Gas and Electric Nuclear Decommissioning Trust, and the PCG Private
Equity Fund.

PAMELA A. FARR, (53), Director. Ms. Farr is a partner in Best & Co. LLC, a
manufacturer and retailer of children's clothing and accessories. From 1991 to
1994, she was President of Banyan Homes, Inc., a real estate development and
construction firm; and for eight years she was a management consultant for
McKinsey & Company, where she served a variety of Fortune 500 companies in all
aspects of strategic management and organizational structure.

GEORGE B. JAMES, (61), Director. Mr. James is a Senior Vice President and
Chief Financial Officer of Levi Strauss & Co., with which he has been associated
since 1985. Mr. James serves as a director of Basic Vegetable Products,
California Sun Dry Foods, Clayton Group, Inc., and Crown Vantage, Inc. Mr. James
also serves as a trustee of the Committee for Economic Development and the
California Pacific Medical Center Foundation. Previously, Mr. James was Chair of
the Advisory Committee to the California Public Employees Retirement System.

GEORGE G.C. PARKER, (60), Director. Mr. Parker is Associate Dean for
Academic Affairs, and Director of the MBA Program and Dean Witter Professor of
Finance at the Graduate School of Business at Stanford University, with which he
has been associated since 1973. Mr. Parker has served on the Board of Directors
of: the California Casualty Group of Insurance Companies since 1977; BB&K
Holdings, Inc., a holding company for financial services companies, since 1980;
H. Warshow & Sons, Inc., a manufacturer of specialty textiles, since 1982;
Zurich Reinsurance Centre, Inc., a large reinsurance underwriter, since 1994;
and Continental Airlines, since 1996. Mr. Parker served on the Board of
Directors of the University National Bank & Trust Company from 1986 to 1995.

KENNETH E. SCOTT, (70), Director (Capital Company only). Mr. Scott is the
Ralph M. Parsons Professor of Law and Business at Stanford Law School, with
which he has been associated since 1967. He is also a director of certain
registered investment companies managed by Benham Capital Management.

GEORGE A. RIO, (44), President, Treasurer, and Chief Financial Officer.
Mr. Rio is Executive Vice President and Client Service Director of Funds
Distributor, Inc. ("FDI") with which he has been associated since March 1998.
From June 1995 to March 1998, Mr. Rio was Senior Vice President and Senior Key
Account Manager for Putnam Mutual Funds. From May 1994 to June 1995, he was
Director of Business Development for First Data Corporation. From September 1983
to May 1994, he was Senior Vice President and Manager of Client Services and
Director of Internal Audit at The Boston Company, Inc. He is also an officer of
certain other investment companies distributed or administered by FDI. His
address is 60 State Street, Suite 1300, Boston, Massachusetts 02109.

MARGARET W. CHAMBERS, (39), Vice President and Secretary. Ms. Chambers is
Senior Vice President and General Counsel of FDI, with which she has been
associated since March 1998. From August 1996 to March 1998, Ms. Chambers was
Vice President and Assistant General Counsel for Loomis, Sayles & Company, L.P.
From

Page 27
<PAGE>

January 1986 to July 1996, she was an associate at Ropes & Gray. She is also an
officer of certain other investment companies distributed or administered by
FDI. Her address is 60 State Street, Suite 1300, Boston, Massachusetts 02109.

MARY MICHEL (37), Vice President. Ms. Michel is a Vice President of FDI,
with which she has been associated since September 1998. From 1996 to September
1998, Ms. Michel was an Assistant Vice President at Warburg Pincus Asset
Management. From 1993 to 1996 she was a Senior Associate and Investor Relations
Intelligence Executive at the Financial Relations Board. Prior to 1993, Ms.
Michel held various positions with Bear Stearns & Company, Morgan Stanley Group
Inc., and Citibank Focus N.A. Her address is 60 State Street, Suite 1300,
Boston, Massachusetts.

DOUGLAS C. CONROY, (30), Vice President and Assistant Treasurer. Mr. Conroy
is an Assistant Vice President and Assistant Department Manager of Treasury
Services and Administration of FDI, with which he has been associated since
April 1997. Prior to April 1997, Mr. Conroy was Supervisor of Treasury Services
and Administration of FDI. From April 1993 to January 1995, Mr. Conroy was a
Senior Fund Accountant for Investors Bank & Trust Company. From December 1991 to
March 1993, Mr. Conroy was a Fund Accountant at The Boston Company, Inc. He is
also an officer of certain other investment companies distributed or
administered by FDI. His address is 60 State Street, Suite 1300, Boston,
Massachusetts 02109.

KAREN JACOPPO-WOOD, (32), Vice President and Assistant Secretary.
Ms. Jacoppo-Wood is a Vice President and Counsel of FDI, with which she has been
associated since January 1996. From June 1994 to January 1996, she was a Manager
of SEC Registration for Scudder, Stevens & Clark, Inc. From 1988 to May 1994,
she was a Senior Paralegal at The Boston Company Advisors, Inc. She is also an
officer of certain other investment companies distributed or administered by
FDI. Her address is 60 State Street, Suite 1300, Boston, Massachusetts 02109.

MARY A. NELSON, (35), Vice President and Assistant Treasurer. Ms. Nelson is
Vice President of Treasury Administration and Operations for FDI, with which she
has been associated since 1994. From 1989 to 1994, she was an Assistant Vice
President and Client Manager for The Boston Company. She is also an officer of
certain other investment companies distributed or administered by FDI. Her
address is 60 State Street, Suite 1300, Boston, Massachusetts 02109.

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

The following table sets forth the aggregate compensation earned by the
Directors of each Company for the fiscal year ended December 31, 1998, for their
service on the Board of Directors and that of all other funds in the "Company
complex" (as defined in Schedule 14A under the Securities Exchange Act of 1934):

<TABLE>
<CAPTION>
Pension or Total Compensation
Retirement from the Capital
Aggregate Aggregate Benefits Accrued Company, Global
Compensation Compensation as Part of Estimate Annual Company and
Director from the Global from the the Companies' Benefits Upon Company Complex
Name Company Capital Company Expenses Retirement Paid to Director (1)
-------------- --------------- ----------------------------- -------------- --------------------
<C> <C> <C> <C> <C> <C>
DeWitt F. Bowman $14,500 $27,000 None N/A $41,500

Page 28
<PAGE>

Pamela A. Farr $13,000 $27,000 None N/A $40,000

Frank P. Greene(2) $11,250 $20,250 None N/A $31,500

George B.James(3) $3,250 $6,750 None N/A $10,000

George G.C. Parker $13,000 $28,500 None N/A $41,500

Kenneth E. Scott N/A $28,500 None N/A $28,500
</TABLE>

- ---------------------
(1) During the fiscal year ended December 31, 1998, there were twelve funds in
the complex.
(2) Mr. Greene served as a Director of the Capital and Global Company from
December 1995 through September 1998.
(3) Mr. James was appointed as a Director of the Capital and Global Company on
December 14, 1998.

Each Director of the Capital Company or the Global Company who is not an
"interested person" as that term is defined in the 1940 Act, of the Investment
Manager may elect to defer receipt of all or a portion of his or her fees for
service as a Director in accordance with the terms of a Deferred Compensation
Plan for Non-Interested Directors ("Directors' Plan"). Under the Directors'
Plan, an eligible Director may elect to have his or her deferred fees deemed
invested either in 90-day U.S. Treasury bills, shares of the Common Stock of the
Company of which he or she is a Director, or a combination of these options, and
the amount of deferred fees payable to such director under the Directors' Plan
will be determined by reference to the return on such deemed investments.
Generally, the deferred fees (reflecting any earnings, gains or losses thereon)
become payable upon the Director's retirement or disability. The obligation to
make these payments to the Directors of a Company pursuant to the Directors'
Plan is a general obligation of such Company. Each Fund may, to the extent
permitted by the 1940 Act, invest in 90-day U.S. Treasury bills or the Common
Stock of the Capital Company and/or the Global Company, to match its share of
the deferred compensation obligation under the Directors' Plan. As of December
31, 1998, no Director or officer of either Company was a beneficial owner of any
shares of the outstanding Common Stock of any series of the Companies.

INVESTMENT COMPANY

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

ROBERT J. BIRNBAUM (71), Director. Director, Chicago Board Options Exchange
(since 1998); Director, Chicago Mercantile Exchange (1990 to 1998); Trustee,
Liberty All-Star Growth Fund, Inc. (since 1995); Trustee, Colonial Funds (since
1995); Trustee, Liberty All-Star Equity Fund, Inc. (since 1994); Special
Counsel, Dechert Price & Rhoads (law firm) (1988 to 1993); President and Chief
Operating Officer, New York Stock Exchange, Inc. (1985 to 1988); President and
Chief Operating Officer, American Stock Exchange, Inc. (1977 to 1985).

CARROLL BROWN (70), Director. President, The American Council on Germany
(since 1988); Executive Director, John J. McCloy Fund (since 1988); Foreign
Service Officer, United States Department of State with service in Yugoslavia,
Poland, Austria, and Germany (1957 to 1988); U.S. Consul General, Dusseldorf and
Munich; Deputy Assistant Secretary of State, U.S. State Department (1986 and
1987).

THEODORE J. COBURN (45), Director. Partner, Brown, Coburn & Co., a
consulting firm (since 1991); education associate at Harvard University Graduate
School of Education (since 1996); Director, Nicholas-Applegate Fund, Inc. (since
1987); Trustee, Nicholas-Applegate Mutual Funds (since 1992); Director,
Measurement Specialties, Inc. (since 1995); Director, Moovies, Inc. (since
1995); Senior Vice President, Prudential Securities Inc. (1986 to 1991);
Managing Director of the Global Equity Transactions Group and a member of the
Board of Directors, Prudential Securities (1986 to 1991); Managing Director,
Merrill Lynch Capital Markets (1983 to 1986).

JAMES E. DOWD (76), Director. Attorney/Consultant (since 1982); Director,
Trustee or Managing General Partner of various registered investment companies
managed by Federated Investors (since 1982); President, Boston

Page 29
<PAGE>
Stock Exchange (1969 to 1982); Member of Panel of Arbitrators, New York Stock
Exchange, Inc. (since 1986); Member of Panel of Arbitrators, National
Association of Securities Dealers, Inc. (since 1984).

SIEGFRIED A. KESSLER (81), Director. Retired; Chairman. Carl Zeiss Inc.
(New York) (1981 to 1982) and President (1965 to 1981) (sale, distribution and
service of scientific instruments and optical products) (1965 to 1985).

ALFRED FIORE (61), Director. General Manager, Hirschfeld, Stern, Moyer &
Ross, Inc. (employee benefit consulting firm) (since 1988); Consultant,
Lois/U.S.A. (creative advertising agency) (1987 to 1988); Executive Vice
President and Chief Financial Officer, Parlux Fragrances, Inc. (1987); Executive
Vice President and Chief Financial Officer, Concord Assets Group, Inc. (real
estate manager) (1986); President and Chief Operating Officer, Amerigroup
Financial Services, Inc. (financial services) (1984 to 1986); Partner, KPMG Peat
Marwick, LLP (1973 to 1984).

GOTTFRIED W. PERBIX (69), Director. President, Perbix International, Inc.
(management consulting) (1980 to 1994); Director, American Profol Inc. (plastic
film manufacturers) (since 1993); Sole Proprietor, Perbix Associates (executive
search) (since 1978)

JACOB SALIBA (85), Director. Director (since 1994), Chairman (1988 to
1994) and Chief Executive Officer (1988 to 1993), Katy Industries, Inc.
(diversified manufacturing and oil and related services); President and Chief
Operating Officer, Katy Industries, Inc. (1968 to 1987); Director, CEGF
Compagnie des Entrepots et Gares Frigorifques (cold storage warehouses) (since
1989); Director, Schon & Cie AG (manufacturer of machinery) (since 1990);
Director, Sahlman Seafoods (shrimp fishing and shrimp aquaculture) (since 1998);
Director, Syratech Corp. (manufacturer of household furnishings) (1992 to 1998).

GEORGE A. RIO (44), President, Treasurer and Chief Financial Officer. Mr.
Rio is Executive Vice President of Funds Distributor, Inc. ("FDI") with which he
has been associated since March 1998. From June 1995 to March 1998, Mr. Rio was
Senior Vice President and Senior Key Account Manager for Putnam Mutual Funds.
From May 1994 to June 1995, he was Director of Business Development for First
Data Corporation. From September 1983 to May 1994, he was Senior Vice President
and Manager of Client Services and Director of Internal Audit at The Boston
Company, Inc. He is an officer of certain other investment companies
distributed or administered by FDI. His address is 60 State Street, Suite 1300,
Boston, Massachusetts.

MARGARET W. CHAMBERS (39), Vice President and Secretary. Ms. Chambers is
Senior Vice President and General Counsel of FDI, with which she has been
associated since March 1998. From August 1996 to March 1998, Ms. Chambers was
Vice President and Assistant General Counsel for Loomis, Sayles & Company, L.P.
From January 1996 to July 1996, she was an associate at Ropes & Gray. She is
also an officer of certain other investment companies distributed or
administered by FDI. Her address is 60 State Street, Suite 1300, Boston,
Massachusetts 02109.

KAREN JACOPPO-WOOD (32), Vice President and Assistant Secretary. Ms.
Jacoppo-Wood is a Vice President and Counsel of FDI, with which she has been
associated since January 1996. From June 1994 to January 1996, she was a
Manager of SEC Registration for Scudder, Stevens & Clark, Inc. From 1988 to May
1994, she was a Senior Paralegal at The Boston Company Advisors, Inc. She is
also an officer of certain other investment companies distributed or
administered by FDI. Her address is 60 State Street, Suite 1300, Boston,
Massachusetts.

DOUGLAS C. CONROY (30), Vice President and Assistant Treasurer. Mr. Conroy
is an Assistant Vice President and Assistant Department Manager of Treasury
Services and Administration at FDI, with which he has been associated since
April 1997. Prior to April 1997, Mr. Conroy was Supervisor of Treasury Services
and Administration at FDI. From April 1993 to January 1995, Mr. Conroy was a
Senior Fund Accountant for Investors Bank & Trust Company. From December 1991
to March 1993, Mr. Conroy was a Fund Accountant at The Boston Company, Inc. He
is also an

Page 30
<PAGE>

officer of certain other investment companies distributed or administered by
FDI. His address is 60 State Street, Suite 1300, Boston, Massachusetts.

MARY A. NELSON (35), Vice President and Assistant Treasurer. Ms. Nelson is
Vice President of Treasury Administration and Operations of FDI, with which she
has been associated since 1994. From 1989 to 1994, she was an Assistant Vice
President and Client Manager for The Boston Company. She is also an officer of
certain investment companies distributed or administered by FDI. Her address is
60 State Street, Suite 1300, Boston, Massachusetts.

The Europe Fund pays each of its Directors who is not an interested person
of the Fund, as defined in the 1940 Act, an annual fee of $7,500, plus $750 for
each Board of Directors meeting attended. During the fiscal year ended December
31, 1998, all such Directors as a group earned from the Fund aggregate fees
amounting to $187,500. In addition, the Fund reimburses Directors not
affiliated with Dresdner RCM for travel and out-of-pocket expenses incurred in
connection with meetings of the Board. Commencing January 1, 1999, the Fund
pays each of its Directors who is not an interested person of the Fund, as
defined in the 1940 Act, an annual fee of $9,000, plus $1,500 for each Board of
Directors meeting attended.

The following table sets forth for each Director receiving compensation
from the Europe Fund the amount of such compensation earned by the Directors of
the Fund during the fiscal year ended December 31, 1998.

<TABLE>
<CAPTION>
TOTAL
COMPENSATION
PENSION OR FROM EUROPE
AGGREGATE RETIREMENT ESTIMATED FUND AND FUND
COMPENSATION BENEFITS ACCRUED ANNUAL BENEFITS COMPLEX
NAME OF PERSON, FROM EUROPE AS PART OF UPON PAID TO
POSITION FUND FUND EXPENSES RETIREMENT DIRECTORS
-------- ---- ------------- ---------- ---------
<S> <C> <C> <C> <C>
ROBERT J. BIRNBAUM $36,750 N/A -- $36,750

CARROLL BROWN $15,750 N/A -- $15,750

THEODORE J. COBURN $35,250 N/A -- $35,250

JAMES E. DOWD $15,750 N/A -- $15,750

ALFRED W. FIORE $36,750 N/A -- $36,750

SIEGFRIED A. KESSLER $15,750 N/A -- $15,750

GOTTFRIED W. PERBIX $15,750 N/A -- $15,750

JACOB SALIBA $15,750 N/A -- $15,750

TOTAL $187,500 $187,500
-------- --------
</TABLE>

During the fiscal year ended December 31, 1997, the Board of Directors met five
times and during the fiscal year ending December 31, 1998, the Board of
Directors met eleven times. Each Director attended at least 75% of the total
number of meetings of the Board and each Committee of the Board of which he was
a member, held during the period in which he served.

The Board of Directors has an Audit Committee presently composed of
Messrs. Perbix, Dowd, and Kessler, none of whom is an interested person of the
Fund (as defined in the 1940 Act). The Audit Committee makes recommendations to
the full Board with respect to the engagement of independent accountants and
reviews with

Page 31
<PAGE>

the independent accountants the plan and results of the audit engagement and
matters having a material effect upon the Fund's financial operations. The
Audit Committee held two meetings during the fiscal year ended December 31, 1997
and two meetings during the fiscal year ending December 31, 1998. Members of
the Audit Committee do not receive any additional compensation from the Fund.

In 1998, the Board of Directors established an ad hoc Strategic Planning
and Communications Committee, composed of Messrs. Birnbaum, Coburn, and Fiore,
none of whom is an interested person of the Fund (as defined in the 1940 Act),
to communicate with stockholders on behalf of the full Board of Directors and to
consider various strategic options for the future of the Fund, including,
whether the Fund should convert from a closed-end investment company to an
open-end investment company. Strategic Planning and Communications Committee
members received $1,500 per meeting in 1998. There were 14 such meetings in
1998.

The Board of Directors has no compensation committee, or other committee
performing a similar function. Upon conversion of the Fund to an open-end
structure, a Nominating Committee was established, which will consist of the
Directors who are not interested persons of the Fund (as defined in the 1940
Act).

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES

As of March 31, 1999, there were 9,537,774 shares of the International
Growth Equity Fund outstanding, 1,272,880 shares of the Global Technology Fund
outstanding, 448,094 shares of the Global Small Cap Fund outstanding, 414,667
shares of the Global Health Care Fund outstanding, 656,728 shares of the Large
Cap Growth Fund outstanding, 395,123 shares of the Biotechnology Fund
outstanding, 304,552 shares of the Emerging Markets Fund outstanding, 114,231
shares of the Tax Managed Growth Fund outstanding and 14,008,334 shares of the
Europe Fund outstanding. On that date the following were known to the Companies
to own of record more than 5% of the Funds' outstanding capital stock:

<TABLE>
<CAPTION>
Name and Address of % of Shares
Beneficial Owner Shares Held Outstanding
<S> <C> <C>
LARGE CAP GROWTH FUND

Pacific Maritime Association 401,671 61.16%
P.O. Box 7861
San Francisco, California 94120-7861

Congoleum Corp Master Trust 228,770 34.83%
3705 Quakerbridge Road
Mercerville, New Jersey 08619-0127

INTERNATIONAL GROWTH EQUITY FUND

The Pension Plan for Salaried 3,153,449 33.06%
Employees of Travelers Insurance
Company and its Affiliates
388 Greenwich Street
New York, New York 10013

JM Family Enterprises, Inc. 1,262,277 13.23%
100 NW 12th Avenue
Deerfield Beach, Florida 33442

General Mills Inc. 694,312 7.28%
c/o State Street Bank and Trust Company

Page 32
<PAGE>

P.O. Box 1992
Boston, Massachusetts 02105-1992

Santa Clara University 686,342 7.20%
500 El Camino Real
Santa Clara, California 95050-4345

Wausau-Mosinee Paper Corp. 649,029 6.80%
Master Pension Trust
1244 Kronewetter Drive
Mosinee, Wisconsin 54455-9099

EMERGING MARKETS FUND

Clients of Dresdner Bank AG/ 300,000 98.51%
Investment Management
Institutional Asset Management Division
Jorgen-Ponto-Platz
60301 Frankfurt
Germany

GLOBAL SMALL CAP FUND

Clients of Dresdner Bank AG/ 400,000 89.27%
Investment Management
Institutional Asset Management Division
Jorgen-Ponto-Platz
60301 Frankfurt
Germany

Charles Schwab & Co., Inc. 24,144 5.39%
101 Montgomery Street
San Francisco, California 94104

GLOBAL TECHNOLOGY FUND

Charles Schwab & Co., Inc. 401,694 31.56%
101 Montgomery Street
San Francisco, California 94104

RCM Capital Management 198,111 15.56%
Profit Sharing Plan
Four Embarcadero Center
San Francisco, California 94111

Walter C. Price 103,995 8.17%
c/o Dresdner RCM Global Investors
Four Embarcadero Center
San Francisco, California 94111

National Financial Services Corp. 158,248 12.43%
200 Liberty Street
One World Financial Center
New York, New York 10281-1003

Page 33
<PAGE>

GLOBAL HEALTH CARE FUND

Clients of Dresdner Bank AG/ 400,000 96.46%
Investment Management
Institutional Asset Management Division
Jorgen-Ponto-Platz
60301 Frankfurt
Germany

BIOTECHNOLOGY FUND

Clients of Dresdner Bank AG/ 300,000 75.93%
Investment Management
Institutional Asset Management Division
Jorgen-Ponto-Platz
60301 Frankfurt
Germany

Charles Schwab & Co., Inc. 73,102 18.50%
101 Montgomery Street
San Francisco, California 94104

TAX MANAGED GROWTH FUND

Clients of Dresdner Bank AG/ 100,000 87.54%
Investment Management
Institutional Asset Management Division
Jorgen-Ponto-Platz
60301 Frankfurt
Germany

Petite Auberge Ltd 14,231 12.46%
P.O. Box 3073
Monterey, California 93942-3073

EUROPE FUND

Lazard Freres & Co. LLC 1,286,600 9.18%
30 Rockefeller Plaza
New York, NY 10020

Deep Discount Advisers 1,240,800 8.88%
One West Pack Square
Ste. 77
Asheville, NC 28801

Ron Olin Investment Management 890,350 6.4%
One West Pack Square
Ste. 77
Asheville, NC 28801

Bankgesellschaft Berlin AG 2,932,600 20.9%
Alexanderplatz 2
Berlin Germany 10178
</TABLE>

Page 34
<PAGE>

THE INVESTMENT MANAGER

The Board of Directors of each Company has overall responsibility for the
operation of such Company's Funds. Pursuant to such responsibility, the Board of
Directors has approved various contracts for designated financial organizations
to provide, among other things, day to day management services required by the
Funds. The Company has retained as the Funds' Investment Manager, Dresdner RCM
Global Investors LLC, a Delaware limited liability company with principal
offices at Four Embarcadero Center, San Francisco, California 94111. The
Investment Manager is actively engaged in providing investment supervisory
services to institutional and individual clients. The Investment Manager was
established in December of 1998 and is the successor to the business of its
holding company, Dresdner RCM Global Investors US Holdings LLC. The Investment
Manager was originally formed as Rosenberg Capital Management in 1970, and it
and its successors have been consistently in business since then.

The Investment Manager is an indirect wholly owned subsidiary of Dresdner
Bank, an international banking organization with principal executive offices
located at Gallunsanlage 7, 60041 Frankfurt, Germany. With total consolidated
assets as of December 31, 1997, of DM 677 billion ($382 billion), and
approximately 1,600 offices and 45,000 employees in over 60 countries around the
world, Dresdner is one of Germany's largest banks. Dresdner provides a full
range of banking services including, traditional lending activities, mortgages,
securities, project finance and leasing, to private customers and financial and
institutional clients. In the United States, Dresdner maintains branches in New
York and Chicago and an agency in Los Angeles. As of the date of this SAI, the
nine members of the Board of Managers of the Investment Manager are William L.
Price (Chairman), Gerhard Eberstadt, George N. Fugelsang, Joachim Madler, Susan
C. Gause, Luke D. Knecht, Jeffrey S. Rudsten, William S. Stack, and Kenneth B.
Weeman, Jr.

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

The Investment Manager provides the Funds with investment supervisory
services pursuant to Investment Management Agreements, Powers of Attorney and
Service Agreements (the "Management Agreements") dated as of June 14, 1996 for
the Technology Fund and International Fund, December 27, 1996 for the Global
Small Cap Fund, Health Care Fund and Large Cap Fund, December 30, 1997 for the
Biotechnology Fund and Emerging Markets Fund, December 30, 1998 for the Tax
Managed Growth Fund and January 26,1999 for the Europe Fund. The Investment
Manager manages the Funds' investments, provides various administrative
services, and supervises the Funds' daily business affairs, subject to the
authority of the Boards of Directors. The Investment Manager is also the
investment manager for Dresdner RCM Growth Equity Fund and Dresdner RCM Small
Cap Fund, each a series of Dresdner RCM Capital Funds, Inc.; Dresdner RCM Global
Equity Fund and Dresdner RCM Strategic Income Fund, each a series of Dresdner
RCM Global Funds, Inc.; and RCM Strategic Global Government Fund, Inc. and
Bergstrom Capital Corporation, each closed-end management investment companies.
A Fund's Management Agreement may be renewed from year-to-year after its initial
term, provided that any such renewals have been specifically approved at least
annually by (i) the vote of a majority of the Company's Board of Directors,
including a majority of the Directors who are not parties to the Management
Agreement or interested persons (as defined in the 1940 Act) of any such person,
cast in person at a meeting called for the purpose of voting on such approval,
or (ii) the vote of a majority (as defined in

Page 35

<PAGE>

the 1940 Act) of the outstanding voting securities of the Fund and the vote of a
majority of the Directors who are not parties to the contract or interested
persons of any such party.

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

For the services rendered by the Investment Manager under each Fund's
Investment Management Agreement, each Fund pays management fees at an annualized
rate of its average daily net assets, as described in the Prospectus. For the
fiscal years ended December 31, 1998, 1997 and 1996, the International Fund
incurred fees of $878,692, $611,884 and $313,342, the Technology Fund incurred
fees of $104,008, $61,204 and $30,827 and the Europe Fund incurred fees of
$1,915,266, $1,555,539, and $1,297,639. For fiscal years ended December 31,
1998 and 1997 the Global Small Cap incurred fees of $52,418 and $45,183, the
Global Health Care Fund incurred fees of $50,736 and $46,238, the Large Cap
Growth Fund incurred fees of $40,991 and $33,041, the Biotechnology Fund
incurred fees of $31,260 and $165 and the Emerging Markets incurred fees of
$28,446 and $164. For fiscal 1998, the Tax Managed Growth Fund incurred fees of
$21.

The Investment Manager has agreed to limit each Fund's expenses as
described in the Prospectus. Each Fund has agreed to reimburse the Investment
Manager, for a period of up to five years, for any such payments to the extent
that the Fund's operating expenses are otherwise below its expense cap. This
obligation will not be recorded on the books of a Fund to the extent that the
total operating expenses of the Fund are at or above the expense cap. However,
if the total operating expenses of a Fund fall below the expense cap, the
reimbursement to the Investment Manager will be accrued by the Fund as a
liability.

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

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

Page 36
<PAGE>

THE DISTRIBUTOR

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

DISTRIBUTION AGREEMENT

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

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

DISTRIBUTION PLAN AND DISTRIBUTION AND SERVICE PLAN

The Global Company, on behalf of its Dresdner RCM Large Cap Growth Fund,
Dresdner RCM Global Small Cap Fund, Dresdner RCM Emerging Markets Fund, Dresdner
RCM Biotechnology Fund, Dresdner RCM Global Health Care Fund, Dresdner RCM
Global Technology and Dresdner RCM Tax Managed Growth Fund Class N shares, and
the Capital Company, on behalf of its Dresdner RCM International Growth Equity
Fund Class N have adopted distribution and service plans, (the "Global Plan" and
the "Capital Plan") and the Investment Company, on behalf of its Dresdner RCM
Europe Fund Class N shares has adopted a distribution plan (with the Global Plan
and the Capital Plan, the "Plans") pursuant to Rule 12b-1 under the 1940 Act.
Under the Plans, each Fund pays the Distributor an annual fee of up to 0.25% of
the average daily net assets of its Class N shares as reimbursement for certain
expenses actually incurred by the Distributor in connection with providing
distribution and shareholder support services to such shares. Class I shares
are not subject to 12b-1 fees. The Distributor is reimbursed for: (a) expenses
incurred in connection with advertising and marketing the Class N shares of the
Funds, including but not limited to any advertising by radio, television,
newspapers, magazines, brochures, sales literature, telemarketing or direct mail
solicitations; (b) periodic payments of fees or commissions for distribution
assistance made to one or more securities brokers, dealers or other industry
professionals such as investment advisers, accountants, estate planning firms
and the Distributor itself in respect of the average daily value of shares owned
by clients of such service organizations, and (c) expenses incurred in
preparing, printing and distributing the Fund's prospectus and statement of
additional information.

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

Page 37

<PAGE>

the respective Company in the manner described above. Each Plan will
automatically terminate in the event of its assignment.

If in any year Funds Distributor is due more from the Fund for such
services than is immediately payable because of the expense limitation under the
Plans, the unpaid amount is carried forward while the Plans are in effect until
such later year as it may be paid. There is no limit on the periods during
which unreimbursed expenses may be carried forward, although the Funds are not
obligated to repay any outstanding unreimbursed expenses that may exist if the
Plans are terminated or not continued. No interest, carrying, or finance charge
will be imposed on any amounts carried forward.

During fiscal 1998, the Global Small Cap Fund, Global Health Care Fund,
Large Cap Growth Fund and Biotechnology Fund reimbursed the Distributor $13,111,
$12,687, $8,792 and $7,820, respectively, for certain expenses actually incurred
by the Distributor. These fees reimbursed the Distributor for expenses incurred
in connection with the Funds' participation in fund supermarket platforms.
Unreimbursed expenses for fiscal 1998 amounted to $101,753, $102,177, $106,072
and $107,044 representing 1%, 1%, 1% and 2%, respectively, of each Fund's net
assets.

The Distributor may pay broker-dealers and others, out of the fees it
receives under the Plans, quarterly trail commissions of up to 0.25%, on an
annual basis, of the average daily net assets attributable to the Class N shares
of each Fund held in the accounts of their customers.

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

THE ADMINISTRATOR

The administrator of the Capital Company (except for the Emerging Markets
Fund), the Global Company and the Investment Company is State Street Bank and
Trust Company ("State Street"), 1776 Heritage Drive, North Quincy, Massachusetts
02109.

Pursuant to an Administration Agreement with each Company, State Street is
responsible for performing all administrative services required for the daily
operation of the Companies, subject to the control, supervision and direction of
the Companies and the review and comment by each Company's auditors and legal
counsel. State Street has no supervisory responsibility over the investment
operations of the Funds. Administrative services performed by State Street
include, but are not limited to, the following: overseeing the determination and
publication of each Company's net asset value; overseeing the maintenance by
each Company's custodian of certain book and records of the Company; preparing
each Company's federal, state and local income tax returns; arrange for payment
of each Company's expenses; and preparing each financial information for each
Company's semi-annual and annual reports, proxy statements and other
communications.

For its services, State Street receives annual fees pursuant to the
following schedule:

<TABLE>
<CAPTION>
ANNUAL FEE
Average Assets Expressed in Basis Points: 1/100 of 1%
<S> <C>
First $250 Million/Fund 2.50
Next $250 Million/Fund 1.75

Page 38

<PAGE>

Thereafter 1.00
Minimum/Fund $57,500
</TABLE>

Fees are calculated by multiplying each Average Asset Break Point in the
above schedule by the number of Funds in the Dresdner RCM complex to determine
the breakpoints used in the schedule. Total net assets of all the Funds will be
used to calculate the fee by multiplying the net assets of the Funds by the
basis point fees in the above schedule. The minimum fee will be calculated by
multiplying the minimum fee by the number of Funds in the complex to arrive at
the total minimum fee. The greater of the basis point fee or the minimum fee
will be allocated equally to each Fund in the complex.

Brown Brothers Harriman & Co. ("BBH") serves as administrator of the
Emerging Markets Fund. BBH provides administrative services similar to those
provided by State Street, as described above. For its services, which include
fund accounting services, BBH receives annual fees pursuant to the following
schedule:

<TABLE>
<CAPTION>
ANNUAL FEE
Average Assets Expressed in Basis Points: 1/100 of 1%
<S> <C>
First $100 Million 2.50
Next $400 Million 3.75
Thereafter 2.50
Minimum $70,000

$1,500 per month for first additional class
</TABLE>

Total net assets of the Fund will be used to calculate the fee by
multiplying the net assets of the Fund by the basis point fees in the above
schedule. The greater of the basis point fee or the minimum fee will be
allocated to the Fund

OTHER SERVICE PROVIDERS

State Street acts as the transfer agent, redemption agent and dividend
paying agent for the Funds. State Street also acts as custodian for all the
Funds, except the Emerging Markets Fund. BBH acts as custodian for the Emerging
Markets Fund. Each custodian is responsible for the safekeeping of a Fund's
assets and the appointment of any subcustodian banks and clearing agencies.

State Street's principal business address is 1776 Heritage Drive, North
Quincy, Massachusetts 02171. Brown Brothers' principal business address is 40
Water Street, Boston, Massachusetts 02109.

PricewaterhouseCoopers LLP ("PWC") acts as the independent public
accountants for the Funds. The accountant examines financial statements for the
Funds and provides other audit, tax, and related services. PWC's principal
business address is 160 Federal Street, Boston, Massachusetts 02110.

NET ASSET VALUE

For purposes of the computation of the net asset value of each share of
each Fund, equity securities traded on stock exchanges are valued at the last
sale price on the exchange or in the principal over-the-counter market in which
such securities are traded as of the close of regular trading on the day the
securities are being valued, unless the Board of Directors or a duly constituted
committee of the Board determines that such price does not reflect the fair
value of

Page 39

<PAGE>

the security. In cases where securities are traded on more than one exchange,
the securities are valued on the exchange determined by the Investment Manager
to be the primary market for the securities. If there has been no sale on such
day, the security will be valued at the closing bid price on such day. If no bid
price is quoted on such day, then the security will be valued by such method as
a duly constituted committee of the Board of Directors determines in good faith
to reflect its fair value. Readily marketable securities traded only in the
over-the-counter market that are not listed on the NASDAQ Stock Market or a
similar foreign reporting service will be valued at the mean bid price, or such
other comparable sources as the Board of Directors deems appropriate to reflect
their fair value. Other portfolio securities held by the Funds will be valued at
current market value, if current market quotations are readily available for
such securities. To the extent that market quotations are not readily available
such securities will be valued by whatever means a duly constituted committee of
the Board of Directors deems appropriate to reflect their fair value.

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

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

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

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

PURCHASE AND REDEMPTION OF SHARES

The price paid for purchase and redemption of shares of the Funds is based
on the net asset value per share, which is normally calculated once daily at the
close of regular trading (normally 4:00 P.M. Eastern time) on the New York Stock
Exchange on each day that the New York Stock Exchange is open. The New York
Stock Exchange is currently closed on weekends and on the following holidays:
New Year's Day, President's Day, Martin Luther King Jr. Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas Day. The
offering price is effective for orders received by the Fund's transfer agent
prior to the time of determination of net asset value. Dealers are responsible
for promptly transmitting purchase orders to the transfer agent. Each Company
reserves the right in its

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sole discretion to suspend the continued offering of one or more of its Funds'
shares and to reject purchase orders in whole or in part when such rejection is
in the best interests of the Fund and its respective shareholders.

REDEMPTION OF SHARES

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

DIVIDENDS, DISTRIBUTIONS AND TAX STATUS

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

REGULATED INVESTMENT COMPANY

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

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

In any taxable year in which a Fund so qualifies and distributes at least
90% of the sum of its investment company taxable income (consisting of net
investment income, the excess of net short-term capital gains over net

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long-term capital losses and net gains from certain foreign currency
transactions) and its net tax-exempt interest income (if any) ("Distribution
Requirement"), it will be taxed only on that portion, if any, of such investment
company taxable income and any net capital gain that it retains. The Funds
expect to so distribute all of such income and gains on an annual basis and thus
will generally avoid any such taxation.

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

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

WITHHOLDING

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

FOREIGN CURRENCY, OPTIONS, FUTURES AND FORWARD CONTRACTS

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

SECTION 1256 CONTRACTS

Many of the options, futures contracts and forward contracts entered into
by the Funds are "Section 1256 contracts." Any gains or losses realized on
Section 1256 contracts are generally considered 60% long-term and 40% short-term
capital gains or losses, although certain foreign currency gains and losses from
such contracts may be

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treated as ordinary income in character. Section 1256 contracts held by a Fund
at the end of each taxable year (and, for purposes of the Excise Tax, on October
31 or such other dates as prescribed under the Code), other than Section 1256
contracts that are part of a "mixed straddle" with respect to which a Fund has
made an election not to have the following rules apply, must be
"marked-to-market" (that is, treated as sold for their fair market value) for
federal income tax purposes, with the result that unrealized gains or losses are
treated as though they were realized. The 60% portion of gains on Section 1256
contracts that is treated as long-term capital gain will qualify for the reduced
maximum tax rates on net capital gain -- 20% (10% for taxpayers in the 15%
marginal tax bracket) for gain recognized on capital assets held for more than
12 months.

STRADDLE RULES

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

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

SECTION 988 GAINS AND LOSSES

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

FOREIGN TAXES

A Fund may be required to pay withholding and other taxes imposed by
foreign countries which would reduce the Fund's investment income, generally at
rates from 10% to 40%. Tax conventions between certain countries and the United
States may reduce or eliminate such taxes. If more than 50% of the value of a
Fund's total assets at the close of its taxable year consists of securities of
foreign corporations, the Fund will be eligible to elect to "pass-through" to
the Fund's stockholders the amount of foreign income and similar taxes paid by
the Fund. If this election is made, stockholders generally subject to tax will
be required to include in gross income (in addition to taxable dividends
actually received) their pro rata shares of the foreign income taxes paid by the
Fund, and may be entitled either to deduct (as an itemized deduction) their pro
rata shares of foreign taxes in computing their taxable income or to use

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such amount (subject to limitations) as a foreign tax credit against their U.S.
federal income tax liability. No deduction for foreign taxes may be claimed by a
stockholder who does not itemize deductions. Each stockholder will be notified
within 60 days after the close of a Fund's taxable year whether the foreign
taxes paid by the Fund will be "passed-through" for that year.

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

INVESTMENT RESULTS

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

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

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

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

Each of the Funds may from time to time compare its investment results with
data and mutual fund rankings published or prepared by Lipper Analytical
Services, Inc. and Morningstar, Inc., which rank mutual funds by overall
performance, investment objectives, and assets.

In addition, the Funds may from time to time compare their performance with
one or more of the following:

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1. THE S&P 500 COMPOSITE INDEX which 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.

2. THE SALOMON BROTHERS EXTENDED MARKET INDEX ("EMI"), which is a component of
the Salomon Brothers Broad Market Index ("BMI") which includes listed
shares of 5,409 companies with a total available market capitalization of
at least the local equivalent of US$100 million on the last business day of
May each year. The BMI consists of two components: the Primary Market
Index ("PMI") is the large capitalization stock component and the EMI is
the small capitalization stock component. The PMI universe is defined as
those stock falling within the top 80% of the cumulative available capital
level in each country. The EMI includes includes the bottom 20% of the
cumulative available capital level in each country.

3. THE RUSSELL MIDCAP INDEX, which is composed of the smallest 800 companies
in the Russell 1000 Index. The Russell 1000 Index is made up of the 1,000
largest companies in the Russell 3000 Index, which is composed of the 3,000
largest U.S. companies by market capitalization and represents
approximately 98% of the investable U.S. equity market.

4. THE LIPPER SCIENCE & TECHNOLOGY FUND INDEX, which is an equally weighted
index of the 10 largest U.S. science and technology mutual funds.

5. THE RUSSELL MIDCAP HEALTH CARE INDEX, which 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.

6. THE AMERICAN STOCK EXCHANGE BIOTECHNOLOGY INDEX, which is an equal-dollar
weighted index that attempts to measure the performance of a cross section
of companies in the biotechnology industry that are primarily involved in
the use of biological processes to develop products or provide services.
This index was developed with a base level of 200 stocks as of October 18,
1991.

7. THE NASDAQ BIOTECHNOLOGY INDEX, which 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.

8. THE RUSSELL 2000 INDEX, which 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.

9. THE MSCI EMERGING MARKETS FREE INDEX, which is a market
capitalization-weighted index composed of 981 companies in 26 emerging
market countries. The average market capitalization size of the listed
companies is US$800 million.

10. THE IFC INDEX OF INVESTABLE EMERGING MARKETS, which represents the IFC
investable regional total return composite. The term "investable"
indicates that the stocks and the weights in the IFCI index represent the
amount that the foreign institutional investors might buy by the virtue of
the foreign institutional restrictions (either at the national level or by
the individual company's corporate statute) plus factoring in minimum
market capitalization and liquidity screens.

11. THE MSCI-EAFE INDEX, which is an arithmetic, market value-weighted average
of the performance of over 900 securities listed on the stock exchanges of
the 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.

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12. THE MSCI-ACWI INDEX, which 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.

13. THE DAX 100 INDEX, an unmanaged index which is commonly used as a
performance comparison for funds that invest primarily in Germany and which
measures the total rate of return of the 100 most highly capitalized stocks
traded on the Frankfurt Stock Exchange.

14. THE MDAX INDEX, a total rate of return index of 70 medium sized German
companies.

15. THE MORGAN STANLEY CAPITAL INTERNATIONAL EUROPE INDEX, which measures the
total rate of return of nearly 600 stocks from 15 developed European
countries.

GENERAL INFORMATION

The Global Company and the Capital Company were incorporated in Maryland as
open-end management investment companies in September 1995 and March 1979,
respectively.

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

The Investment Company was organized as a closed-end management investment
company incorporated under the laws of the State of Maryland on February 2,
1990. On December 4, 1998, the Board of Directors, including the Directors who
are not interested persons of the Investment Company (as defined in the 1940
Act), approved the final plan for the conversion of the Fund to an open-end
investment company. At the Company's Annual Meeting on January 26, 1999, the
Company's stockholders approved, among other things, (a) changing the Fund's
investment strategy from a predominately German investment portfolio to a
broader European investment portfolio, (b) changing the Fund's name to Dresdner
RCM Europe Fund, (c) changing the Fund from a closed-end investment company to
an open-end investment company, (d) modifying and eliminating certain
fundamental investment restrictions of the Fund, (e) the Investment Management
Agreement between the Fund and the Investment Manager, and (f) the Rule 12b-1
Distribution Plan of the Fund. The Fund converted to an open-end investment
company on May 3, 1999. The Board of Directors of the Investment Company has
authority to issue an unlimited number of shares of separate series and classes.
The Europe Fund is currently the only series of the Company. Upon conversion to
an open-end fund, the Fund commenced offering two classes of stock: Class N and
Class I, as described in the Prospectus. Outstanding shares of the Fund on the
date of conversion were automatically redesignated Class N shares.

DESCRIPTION OF CAPITAL SHARES

All shares of each Company have equal voting rights and will be voted in
the aggregate, and not by series, except where voting by series is required by
law or where the matter involved affects only one series. There are no
conversion or preemptive rights in connection with any shares. All shares of the
Funds when duly issued will be fully paid and non-assessable. The rights of the
holders of shares of each Fund may not be modified except by vote of the

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majority of the outstanding shares of such Fund. Certificates are not issued
unless requested and are never issued for fractional shares. Fractional shares
are liquidated when an account is closed.

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

None of the Companies are required to hold a meeting of stockholders in any
year in which the 1940 Act does not require a stockholder vote on a particular
matter, such as election of directors. A Company will hold a meeting of its
stockholders for the purpose of voting on the question of removal of one or more
directors if requested in writing by the holders of at least 10% of the
Company's outstanding voting securities, and will assist in communicating with
its stockholders as required by Section 16(c) of the 1940 Act.

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

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

Rule 18f-2 under the 1940 Act provides that any matter required to be
submitted to the holders of the outstanding voting securities of an investment
company such as the Companies shall not be deemed to have been effectively acted
upon unless approved by a majority of the outstanding voting securities, as
defined in the 1940 Act, of the series or class of the Company affected by the
matter. Under Rule 18f-2, a series or class is presumed to be affected by a
matter, unless the interests of each series or class in the matter are identical
or the matter does not affect any interest of such series or class. Under Rule
18f-2 the approval of an investment advisory agreement or any change in a
fundamental investment policy would be effectively acted upon with respect to a
Fund only if approved by a majority of its outstanding voting securities, as
defined in the 1940 Act. However, the rule also provides that the ratification
of independent public accountants, the approval of principal underwriting
contracts and the election of directors may be effectively acted upon by the
stockholders of the Company voting without regard to Fund.

Each share of each Class of a Fund represents an equal proportional
interest in the Fund with each other share of the same Class and is entitled to
such dividends and distributions out of the income earned on the assets
allocable to the Class as are declared in the discretion of the Board of
Directors. In the event of the liquidation or dissolution of either Company,
stockholders of a Fund are entitled to receive the assets attributable to the
Fund that are available for distribution, and a distribution of any general
assets not attributable to a particular Fund that are available for
distribution, in such manner and on such general basis as the Board of Directors
may determine.

ADDITIONAL INFORMATION

COUNSEL

Certain legal matters in connection with the capital shares offered by the
Prospectus have been passed upon for the Fund by Paul, Hastings, Janofsky &
Walker LLP, 555 South Flower Street, Los Angeles, California 90071. The validity
of the capital stock offered by the Global Company and the Capital Fund has been
passed upon by Venable, Baetjer and Howard, LLP, 1800 Mercantile Bank & Trust
Building, 2 Hopkins Plaza, Baltimore, Maryland 21201. Certain

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legal matters in connection with the capital shares offered by the Investment
Company have been passed upon for the Fund by Kirkpatrick & Lockhart LLP. Paul,
Hastings, Janofsky & Walker LLP has acted and will continue to act as counsel to
the Investment Manager in various matters.

LICENSE AGREEMENT

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

FINANCIAL STATEMENTS

Incorporated by reference herein are the financial statements of the Funds
contained in the Funds' Annual Reports to Shareholders for the year ended
December 31, 1998, including the Report of Independent Accountants, dated
February 22, 1999, the Statement of Assets and Liabilities, including the
Portfolio of Investments and the related Statement of Operations, Change in Net
Assets, and the Financial Highlights. Copies of the Funds' Annual and
Semi-Annual Reports to Shareholders will be available, upon request, by calling
(800) 726-7240, or by writing to P.O. Box 8025, Boston, MA 02266-8025.

REGISTRATION STATEMENT

The Funds' Prospectus and this SAI do not contain all of the information
set forth in each Company's registration statement and related forms as filed
with the SEC, certain portions of which are omitted in accordance with rules and
regulations of the SEC. The registration statement and related forms may be
inspected at the Public Reference Room of the SEC at Room 1024, 450 5th Street,
N.W., Judiciary Plaza, Washington, D.C. 20549, and copies thereof may be
obtained from the SEC at prescribed rates. It is also available on the SEC's
Internet Web site at http://www.sec.gov. Statements contained in the Prospectus
or this SAI as to the contents of any contract or other document referred to
herein or in the Prospectus are not necessarily complete, and, in each instance,
reference is made to the copy of such contract or other document filed as an
exhibit to each Company's registration statement, each such statement being
qualified in all respects by such reference.

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