<PAGE>
RCM
STRATEGIC GLOBAL
GOVERNMENT FUND
QUARTERLY REPORT
OCTOBER 31, 1995
<PAGE>
LETTER TO SHAREHOLDERS
- ----------------------
PHOTO
Dear Shareholders:
We are pleased to announce quarterly results for the RCM
Strategic Global Government Fund (NYSE symbol: RCS). Total
return on net asset value was 2.9% for the quarter ended
October 31 while bringing the year-to-date
total return to 11.5% since January 31. Total return on market price was 2.2%
and 12.3% for the same periods, respectively. RCS earned $0.24 per share in net
investment income compared to $0.23 in the prior quarter. A monthly dividend of
$0.074 per share was paid, consistent with the last quarter.
The investment objectives of RCS are unique. RCS can combine a wide-ranging
field of U.S. mortgage, foreign government and emerging market securities with a
host of tools for managing income and risks affecting the fund. Managing bonds
is a sophisticated process of focusing on risk management and bridging
international developments while defining a precise and intelligent approach to
investing.
RCS's flexibility to adapt to market conditions makes it difficult to compare it
to a specific group of funds. In 1995, RCS concentrated its holdings in U.S.
mortgages to accomplish its goals and deliver an uncompromised monthly dividend
of $0.074 from income. Other investment vehicles have cut their dividends or had
returns of capital. Some have taken substantial risks that resulted in huge 1995
gains and huge 1994 losses.
On December 15, RCM Capital Management, a California Limited Partnership ("RCM")
and the investment manager for RCS, announced that it had entered into an
agreement under which it expects to become the major institutional investment
management subsidiary of Dresdner Bank A.G. ("Dresdner"). Dresdner will replace
RCM's current partner, the Travelers Group. We expect to provide you with
additional information about this transaction in the coming months.
We appreciate your continued support of RCS. We are pleased with the fund's
performance so far this year and believe that RCS continues to offer an
exceptional risk-adjusted return.
Respectfully,
Gary W. Schreyer
CHAIRMAN AND PRESIDENT
DECEMBER 15, 1995
<PAGE>
FUND HIGHLIGHTS
- ---------------
QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
<TABLE>
<CAPTION>
PERIOD ENDED* 10/31/94 1/31/95 4/30/95 7/31/95 10/31/95
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total investment income $ 7,779 $ 7,852 $ 8,427 $ 8,221 $ 8,338
Total investment income per share 0.25 0.26 0.28 0.27 0.27
Net investment income 6,756 6,911 7,496 7,139 7,286
Net investment income per share 0.22 0.23 0.25 0.23 0.24
Net realized and unrealized gain (loss) (5,283) (14,788) 6,230 4,830 1,909
Net realized and unrealized gain (loss) per share (0.17) (0.49) 0.20 0.16 0.06
Net asset value at end of period 11.41 10.85 11.08 11.25 11.33
Market price at end of period 9.75 9.63 9.75 10.13 10.13
Total return on market price (2.80)% 1.73% 3.60% 6.10% 2.20%
Total return on net asset value 0.61% (2.00)% 4.44% 3.74% 2.93%
Dividend from net investment income $ 0.22 $ 0.31 $ 0.22 $ 0.22 $ 0.22
Effective dividend yield** 9.11% 9.23% 9.11% 8.77% 8.77%
</TABLE>
<TABLE>
<CAPTION>
KEY CHARACTERISTICS 10/31/95
- -------------------------------------------------
<S> <C>
MONTHLY DIVIDEND PER SHARE $ 0.074
EFFECTIVE DIVIDEND YIELD** 8.77%
MARKET PRICE PER SHARE $ 10.13
NET ASSET VALUE PER SHARE $ 11.33
DURATION 5.5 YEARS
AVERAGE CREDIT QUALITY AA
</TABLE>
* IN THOUSANDS, EXCEPT PER SHARE DATA.
** LAST DIVIDEND DIVIDED BY MARKET PRICE AND ANNUALIZED.
1
<PAGE>
FUND MANAGERS' DISCUSSION AND ANALYSIS
- --------------------------------------
THE CONCEPT of RCS is to provide an intermediate-term bond fund that
participates in global fixed income securities. RCS combines U.S. debt
instruments and a conservative introduction to both developed foreign and
emerging market bond instruments. U.S. debt instruments are predominantly
mortgage pass-through securities and mortgage-related obligations. The
securities in the investment portfolio are generally government or agency
issued, average a credit quality rating of AA, and have effective maturities
between 3 and 10 years.
THE ENVIRONMENT for RCS was characterized by lower interest rates in the third
quarter. U.S. Treasury yields for intermediate-term maturities declined by 0.30%
to 0.40%. Several key themes support the bond market's general optimism. First,
the bond market expects successful budget resolution to lead to meaningful
reduction of deficit spending. The Federal Reserve is expected to lower interest
rates as a result. Second, the U.S. economy continues to enjoy a fundamental,
productivity-led expansion. The market appears to believe that stable, low wages
and productivity have created a way for the economy to grow without causing
inflation. Historically, real growth above 2.5% tends to produce inflationary
pressure. However, productivity gains from investment in technology and improved
business processes may be providing additional capacity to grow. Third, the
markets are enforcing discipline on international governments to change their
fiscal policies in order to decrease deficit spending. If these efforts are
successful, these fiscal policies will slow growth initially with the
expectation of stronger growth thereafter. Yet, global economic growth has
slowed appreciably in the last quarter. To counter this current and potentially
near-term weakness, the central banks of many countries are lowering interest
rates. Fourth, inflation is currently benign at both the consumer and producer
level in the United States and abroad. All of these factors have created a
global context favorable to bonds.
FEDERAL RESERVE POLICY. In early July, the Federal Reserve lowered short-term
interest rates by 0.25%, but has been neutral since that time. The bond market
anticipates additional decreases of 0.60% by mid-year 1996, which have already
been factored into current yields.
2
<PAGE>
FUND MANAGERS' DISCUSSION AND ANALYSIS
- --------------------------------------
DEVELOPED FOREIGN SECTOR. Europe has been experiencing better-than-expected news
on inflation. However, the favorable news on inflation is due to weakening
economic activity. Germany is the main economic engine in Europe and has been
under competitive pressure. Part of that pressure has been the strength of the
German currency, the Deutsche Mark, against the U.S. dollar. In response, the
central bank of Germany, the Bundesbank, lowered interest rates by 0.50% during
the last quarter. Lowering of interest rates helps stimulate the economy and
future decreases are expected until the German economy shows more strength. As a
result, European bonds have attractive return prospects which prompted RCS to
diversify into Germany and The Netherlands.
MORTGAGE SECTOR. Mortgage pass-throughs and related securities had substantial
positive returns with the lower rate environment. Lower rates, however, also
encourage homeowners to refinance their mortgages. Since mortgage pass-throughs
are a group of mortgage loans, more refinancings shorten the effective
maturities of these securities as the underlying mortgage loans are paid off or
repaid faster. RCM manages these changes in effective maturity by regularly
adjusting the duration of mortgage pass-throughs to reflect its prepayment
expectations and, where appropriate, adds or reduces duration to compensate for
these adjustments. Mortgages on a comparable risk basis matched or outperformed
U.S. Treasuries this quarter.
EMERGING MARKETS. Latin American debt had a difficult quarter as the
stabilization of Mexico and the peso proved temporary. The market has been
sensitive to the continued political uncertainty in Mexico and is anxious to see
signs that the economy has turned around. Similarly, the markets are watching to
see if key Latin American governments are able to cut spending and raise revenue
to support their economies and currencies. Emerging market securities provide a
yield enhancement to the fund. RCS's investment in emerging market debt averaged
7.5% of total investments during the period.
3
<PAGE>
FUND MANAGERS' DISCUSSION AND ANALYSIS
- --------------------------------------
PERFORMANCE. This quarter, RCS achieved a total return on net asset value of
2.9%. The year-to-date return on net asset value was 11.5%. Including dividend
reinvestments, RCS had a total market price return of 2.2% for the quarter and
12.3% same year-to-date period. Net asset value per share increased to $11.33
from $11.25 in the quarter while market price was unchanged at $10.13. RCS
earned $0.24 per share in net investment income compared to $0.23 per share in
the prior quarter and maintained its monthly dividend of $0.074 per share.
Given the positive bond market sentiment, the portfolio's duration averaged 4.8
years this quarter versus 4.2 years in the prior quarter. Total duration of the
portfolio at quarter-end was 5.5 years, which is roughly comparable to a bond
with an eight-year maturity. Duration is a key tool in managing both RCS's
sensitivity to rising rates and its opportunity to benefit from declining rates.
Duration is the percentage change in the price of a particular fixed income
security or portfolio of fixed income securities for a 1% change in interest
rates. For example, if RCS's duration were 1 year and interest rates increase
1%, the prices of RCS's investments would be expected to decline 1%. As a
measurement of risk, duration assumes that all interest rates, including foreign
interest rates, move in tandem.
As with other closed-end bond funds, the market price of RCS will trade at a
premium or discount to net asset value depending upon the phases of the interest
rate cycle, the stock market in general, specific supply and demand
characteristics of RCS, and changes in net asset value. At October 31, RCS was
trading at a discount of 10.6% to net asset value compared to a discount of
10.0% at July 31, 1995.
4
<PAGE>
FUND MANAGERS' DISCUSSION AND ANALYSIS
- --------------------------------------
PORTFOLIO COMPOSITION. RCM made two significant portfolio changes in the
quarter. First, in the mortgage sector, RCM sold approximately $69 million in
mortgage pass-through TBAs with coupons ranging from 7.5s to 8.5s. Other
pass-throughs with coupons of 8s and 8.5s were sold and replaced with 7.5s to
decrease the overall sensitivity of the fund to faster prepayment of principal.
The pass-throughs sold were financed positions. Interest rate swaps of $60
million were sold that had been used to lock the related cost of financing.
Second, new investments were made in German ($75 million) and Dutch ($25
million) interest rates. A distinguishing feature of these investments was the
type of security used and its relationship to currency. Whereas a purchase of a
foreign bond involves currency risk, these investments were made through
interest rate swaps where all cash flows have been converted to U.S. dollars. A
discussion of this new role for interest rate swaps is on pages 10 and 11. RCS's
investments in Germany and The Netherlands are based on five-year interest rates
for those countries, which is consistent with the fund's intermediate-term
objectives. The duration impact of these new positions is captured in RCS's
total duration of 5.5 years in the table below. Under Generally Accepted
Accounting Principles, the swaps are recorded on a net basis and included in
OTHER ASSETS LESS LIABILITIES on page 9.
<TABLE>
<CAPTION>
PORTFOLIO DURATION BY COUNTRY
OCTOBER 31, 1995
PERCENTAGE OF
COUNTRY POSITION DURATION TOTAL DURATION
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
United States 4.0 72%
Germany 0.7 13%
The Netherlands 0.3 5%
Argentina 0.2 4%
Mexico 0.2 4%
Brazil 0.1 2%
--- ------
Total 5.5 100%
</TABLE>
5
<PAGE>
FUND MANAGERS' DISCUSSION AND ANALYSIS
- --------------------------------------
EDGAR REPRESENTATION OF PRINTED GRAPHIC
CREDIT DISTRIBUTION AT
OCTOBER 31, 1995 BOND MARKET SECTORS AT
(AS PERCENTAGE OF TOTAL OCTOBER 31, 1995
INVESTMENTS) (AS PERCENTAGE OF TOTAL INVESTMENTS)
- ------------------------------------------------------------------------------
AAA 87.0%
AA 0.2%
A 4.8% U.S. MORTGAGE BACKED 76.2%
BB 5.3% COLLATERALIZED MORTGAGE OBLIGATIONS 15.8%
B 2.7% EMERGING MARKET 8.0%
RCS continues to maintain high credit ratings in its portfolio securities, with
an average rating of AA. All securities in the investment portfolio were
denominated in U.S. dollars at quarter-end.
RCS had $206.3 million outstanding in financed mortgage pass-throughs at October
31. RCS utilizes only liquid mortgage pass-throughs in these transactions to
retain a high level of flexibility to respond to changing market conditions.
These transactions allow RCS to earn the spread between the yield on the
underlying mortgage securities and short-term interest rates. If short-term
interest rates rise, the interest spread between mortgage yield and short-term
rates may contract. RCM selectively mitigates this spread risk through interest
rate swaps. In this role, interest rate swaps have the effect of converting
short-term floating rates to a fixed rate, thereby locking in the funding cost
of these transactions. RCS had $215 million in these interest rate swaps at
period-end.
Mortgage pass-through financing, forward sale commitments, interest rate swaps
and other transactions may involve leverage. For some mutual funds, using
leverage means having a high duration. RCS actively manages the overall duration
of the fund. As one tool to manage duration, RCS had sold $5.6 million of U.S.
Treasuries on a forward commitment basis to lower duration. RCS has segregated
high-quality, liquid investments in the portfolio in an amount equivalent to
these obligations.
6
<PAGE>
FUND MANAGERS' DISCUSSION AND ANALYSIS
- --------------------------------------
<TABLE>
<CAPTION>
SECURITIES CONSTITUTING 5% OR MORE OF TOTAL INVESTMENTS
OCTOBER 31, 1995
PERCENT OF
COUNTRY/ PRINCIPAL VALUE TOTAL
CURRENCY (000'S) DESCRIPTION (US$) INVESTMENTS
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
UNITED STATES
USD MORTGAGE-BACKED SECURITIES
142,800 FNMA 7.50%, 2025 TBA $144,333,672 26%
123,076 FNMA 8.50%, 2017-2025 127,583,273 23%
63,500 FHLMC 7.50%, 2025 TBA 64,228,345 12%
31,814 GNMA 8.50%, 2016-2025 33,155,190 6%
Total $369,300,480 67%
</TABLE>
OUTLOOK AND STRATEGY. RCM believes the Federal Reserve is likely to decrease
short-term rates in reaction to current economic weakness and toward successful
deficit reduction by Congress and The White House. The U.S. economy has stable
strength, but in a context of slowing global growth. RCM anticipates that
interest rates will likely trend lower if market optimism about inflation
continues. Global interest rates are expected to decline incrementally. The
downward pressure on international interest rates will likely continue until
evidence is seen that the European and Japanese economies are reaccelerating. At
that time, foreign central banks would be less inclined to continue to stimulate
their economies with lower rates. As a result, the fund's duration is likely to
remain above levels held earlier in the year.
7
<PAGE>
INVESTMENTS IN SECURITIES AND NET ASSETS
- ----------------------------------------
OCTOBER 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
COUNTRY/ PRINCIPAL VALUE
CURRENCY (000'S) DESCRIPTION (US$)
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENTS IN DEBT SECURITIES - 159.4%*
ARGENTINA - 3.5%
USD Republic of Argentina
4,000 8.38%, 12/20/03 $ 2,885,000
4,000 10.95%, 11/01/99 3,990,000
11,000 Republic of Argentina Floating Rate Notes
5.00%, 03/31/23 5,238,750
------------
Total Argentina 12,113,750
------------
BRAZIL - 4.3%
USD Petrobras Euronote
15,000 8.75%, 12/09/96 14,850,000
MEXICO - 4.9%
USD Banco Nacional De Commercio
15,000 7.25%, 02/02/04 10,800,000
United Mexican States Floating Rate Notes
6,000 11.19%, 07/21/97 6,045,000
------------
Total Mexico 16,845,000
------------
UNITED STATES - 146.7%
USD MORTGAGE-BACKED SECURITIES -- 121.5%
8,910 FNMA 7.00%, 2025 8,838,632
24,226 FHLMC 8.00%, 2023 - 2025 24,842,029
5,935 GNMA 8.00%, 2016 - 2022 6,169,479
123,076 FNMA 8.50%, 2017 - 2025 127,583,273
31,814 GNMA 8.50%, 2016 - 2025 33,155,190
142,800 FNMA 7.50%, 2025 TBA 144,333,672
63,500 FHLMC 7.50%, 2025 TBA 64,228,345
10,724 FHA Project Pool 56, 7.43%, 11/01/22 10,974,936
------------
Total Mortgage-Backed Securities 420,125,556
------------
USD COLLATERALIZED MORTGAGE OBLIGATIONS -- 25.2%
DLJ Mortgage Acceptance Corp.
1,000 Series 1994-MF11, Class A2 8.10%, 06/18/04 1,052,148
4,850 Series 1994-MF11, Class A3 8.10%, 06/18/04 5,056,693
</TABLE>
* PERCENTAGE OF NET ASSETS
8
<PAGE>
INVESTMENTS IN SECURITIES AND NET ASSETS
- ----------------------------------------
OCTOBER 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
COUNTRY/ PRINCIPAL VALUE
CURRENCY (000'S) DESCRIPTION (US$)
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
USD COLLATERALIZED MORTGAGE OBLIGATIONS - (CONTINUED)
Federal Home Loan Mortgage Corp.
17,932 Series 1667, Class PE 6.00%, 03/15/08 $ 17,481,599
22,786 Series 1665, Class N 6.50%, 01/15/24 21,487,681
G E Capital Mortgage Services, Inc.
4,824 Series 1994-12, Class B1 6.00%, 04/25/09 4,455,810
9,184 Series 1994-9, Class B1 6.50%, 02/25/24 8,353,526
22,000 Series 1994-10, Class A15 6.50%, 03/25/24 20,468,594
Residential Funding Mortgage Sec. I
3,925 Series 1993-S43, Class M-2 6.50%, 11/25/23 3,533,182
5,754 Series 1993-S47, Class M-2 6.50%, 12/25/23 5,180,766
------------
Total Collateralized Mortgage Obligations 87,069,999
------------
TOTAL INVESTMENTS -- (COST $540,091,900) 551,004,305
------------
Payable for Investments Purchased -- (60.2%) (207,975,688)
Payable for Investments Sold on a Forward Commitment Basis -- (1.8%)+ (6,306,496)
Other Assets Less Liabilities -- 2.6% 9,011,324
------------
NET ASSETS -- 100.0% $345,733,445
------------
------------
</TABLE>
<TABLE>
<S> <C>
TERMS
FHLMC -- Federal Home Loan Mortgage Corporation
FNMA -- Federal National Mortgage Association
GNMA -- Government National Mortgage Association
TBA -- To Be Announced
USD -- United States Dollar
</TABLE>
+ On a forward commitment basis, the Fund has agreed to sell U.S. Treasury
securities:
<TABLE>
<CAPTION>
PRINCIPAL VALUE
CURRENCY (000'S) DESCRIPTION (US$)
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------
USD 5,600 U.S. Treasury Bonds, 7.50%, 11/15/16 $ 6,306,496
</TABLE>
9
<PAGE>
SPECIAL FOCUS
- ----------------
A NEW ROLE FOR INTEREST RATE SWAPS
In 1994, RCM Capital Management introduced interest rate swaps to RCS. This
quarter, interest rate swaps took on the new role of augmenting RCS's position
in global securities.
In 1995, RCM sought to find a more efficient way to hold foreign bonds in
developed countries, like Germany and The Netherlands, without taking currency
risk. RCM found, in interest rate swaps, a way to help RCS achieve its goals.
First, they allow RCS to benefit from stable or declining foreign interest
rates. Second, they produce income. Third, they avoid foreign currency risk
since all interest payments and any future gains or losses are in U.S. dollars.
An interest rate swap is a financial contract that typically involves an
exchange of obligations by two sophisticated parties. For example, the fund may
exchange with another party their respective rights to receive interest, such as
an exchange of fixed rate payments for floating rate payments. RCS will usually
enter into interest rate swaps on a net basis, which means that the two payments
streams (one from the fund and one to the fund) are netted out with the fund
receiving or paying only the net amount of the two payments. Interest rate swaps
do not involve the exchange of principal. Since this technical definition is not
intuitively easy, it is better to describe the substance of these new
transactions as used by RCS.
The value of the five-year German swap, for example, goes up or down with the
movement of German interest rates. Its movement parallels the change in the
value of an investment in a German bond with similar maturity. When sold, the
gain or loss on the German swap is effectively comparable to the gain or loss on
selling a German bond, but without the currency risks.
10
<PAGE>
SPECIAL FOCUS
- ----------------
An interest rate swap is, in essence, a financed bond position. RCS receives a
five-year yield similar to owning a German bond. Since there is no cash paid for
the underlying principal of the swap, RCS pays a financing cost to effectively
own a foreign bond. The financing cost is based on short-term interest rates.
The fund earns the difference between the five-year yield and short-term
interest rates, which goes into income. This is directly comparable to the
financed mortgage positions in RCS. In fact, the swap and the financed mortgages
are so similar that RCM decreased mortgage positions as a result of these
transactions. As with any financed position, income goes up but so does total
duration. However, this shift from mortgages to developed foreign markets did
not add to the fund's total duration.
Lastly and importantly, RCM did not want to add currency risk with these
transactions. Therefore, the swap was structured such that all interest payments
and any gains or losses upon sale will be denominated in U.S. dollars.
Interest rate swaps are subject to many of the same market and credit risks as
corporate bonds. There is a risk that a counterparty will be unable to meet its
obligations under a particular swap contract similar to the default risk
inherent in corporate bond securities. However, if the other party to an
interest rate swap does default, the fund's risk of loss should be limited to
the net amount of interest payments that the fund is to receive and not the
principal amount. RCS has an extensive risk management policy that governs the
use of interest rate swaps, including a minimum credit rating of AA or better
for the issuer of the transaction. Since the interest rate swaps are recorded on
a net basis, they are included in OTHER ASSETS LESS LIABILITIES on page 9 in
accordance with Generally Accepted Accounting Principles. Interest rate swaps,
in this new role, do represent country exposure and are displayed in the
PORTFOLIO DURATION table on page 5. The fund's total duration includes the
impact of these transactions. In summary, interest rate swaps provide an
effective way to participate in foreign debt markets and, in this case, without
currency risk.
11
<PAGE>
DIVIDEND REINVESTMENT PLAN
- --------------------------------
Under the fund's Dividend Reinvestment Plan (the "Plan"), a stockholder whose
shares of common stock are registered in his or her own name will have all
distributions from the fund reinvested automatically by State Street Bank and
Trust Company (the "Plan Agent") as agent under the Plan, unless the stockholder
elects to receive cash. Distributions with respect to shares registered in the
name of a broker-dealer or other nominee (that is, in "street name") will be
reinvested by the broker or nominee in additional shares under the Plan, unless
that service is not provided by the broker or nominee or the stockholder elects
to receive distributions in cash.
When the market price of the common stock is equal to or exceeds the net asset
value per share of the common stock on the dividend payment date, Plan
participants will be issued shares of common stock valued at the net asset value
most recently determined or, if net asset value is less than 95% of the then
current market price of the common stock, then at 95% of the market value.
If the market price of the common stock is less than the net asset value of the
common stock, or if the fund declares a dividend or capital gains distribution
payable only in cash, a broker-dealer not affiliated with the fund's principal
underwriter, as purchasing agent for Plan participants (the "Purchasing Agent"),
will buy common stock in the open market for the participants' accounts. If the
market price exceeds the net asset value of shares before the Purchasing Agent
has completed its purchases, the Purchasing Agent is permitted to cease
purchasing shares and the fund may issue the remaining shares.
Plan participants are subject to no charge for reinvesting dividends and capital
gains distributions. The Plan Agent's fees for handling the reinvestment of
dividends and capital gains distributions will be paid by the fund. No brokerage
charges apply with respect to shares of common stock issued directly by the
fund. Each Plan participant will, however, bear a proportionate share of
brokerage commissions incurred with respect to open market purchases made in
connection with the reinvestment of dividends or capital gains distributions.
Plan participants may terminate their participation in the Plan by giving
written notice to the Plan Agent. The fund reserves the right to amend or
terminate the Plan. To obtain a full description of the Plan or to obtain any
other information about the Plan, please contact State Street Bank and Trust
Company, P.O. Box 8209, Boston, Massachusetts 02266-8209 or call (800) 426-5523.
12
<PAGE>
CORPORATE INFORMATION
- -----------------------------
DIRECTORS
Gary W. Schreyer, CHAIRMAN
William A. Hasler
Francis E. Lundy
Jeffrey S. Rudsten
James M. Whitaker
AUDIT COMMITTEE
William A. Hasler
Francis E. Lundy
James M. Whitaker
NOMINATING COMMITTEE
Gary W. Schreyer
William A. Hasler
Jeffrey S. Rudsten
OFFICERS - PORTFOLIO MANAGEMENT
Gary W. Schreyer
PRESIDENT AND CHIEF EXECUTIVE OFFICER
Jeffrey S. Rudsten
VICE PRESIDENT
Eamonn F. Dolan
VICE PRESIDENT AND PORTFOLIO MANAGER
Stephen Kim
VICE PRESIDENT AND PORTFOLIO MANAGER
John L. Bernard
VICE PRESIDENT AND PORTFOLIO MANAGER
Mark E. Raaberg
VICE PRESIDENT AND PORTFOLIO MANAGER
Frederick J. Clancy
VICE PRESIDENT
OFFICERS - ADMINISTRATION
Ellen M. Courtien
VICE PRESIDENT
Michael J. Apatoff
VICE PRESIDENT
Susan C. Gause
TREASURER AND CHIEF FINANCIAL OFFICER
Caroline M. Hirst
VICE PRESIDENT AND CHIEF ACCOUNTING OFFICER
Judith A. Wilkinson
VICE PRESIDENT
Anthony Ain
VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
Timothy B. Parker
ASSISTANT SECRETARY AND ASSISTANT
GENERAL COUNSEL
INVESTMENT MANAGER
RCM Capital Management
Four Embarcadero Center
San Francisco, California 94111
INDEPENDENT AUDITORS
Coopers & Lybrand L.L.P.
One Post Office Square
Boston, Massachusetts 02109
ADMINISTRATOR, CUSTODIAN AND TRANSFER AGENT
State Street Bank and Trust Company
1776 Heritage Drive
North Quincy, Massachusetts 02171
(800) 426-5523
COUNSEL
Ropes & Gray
One International Place
Boston, Massachusetts 02110-2624
RCM Capital Management is an institutional money manager headquartered in San
Francisco with approximately $25 billion in managed assets including
approximately $10 billion in fixed income securities. RCM has over 20
years experience in active fixed income investment management for corporate
retirement plans, endowments, foundations, insurance companies, nuclear
decommissioning trusts and select individuals.
<PAGE>
RCM STRATEGIC GLOBAL
GOVERNMENT FUND, INC.
MARKET PRICES FOR RCS SHARES ARE PUBLISHED DAILY IN THE WALL STREET JOURNAL AS
"RCM STRATG," AND THE NEW YORK TIMES AS "RCMSTGLFD," AND LOCAL NEWSPAPERS IN
THE NEW YORK STOCK EXCHANGE LISTINGS. NET ASSET VALUE IS PUBLISHED WEEKLY AND
APPEARS EACH MONDAY IN THE WALL STREET JOURNAL AND THE NEW YORK TIMES UNDER THE
CAPTION, CLOSED-END BOND FUNDS. THE WEEKLY
NET ASSET VALUE IS ALSO AVAILABLE EACH SATURDAY IN BARRON'S.
THIS REPORT IS SENT TO THE
SHAREHOLDERS OF RCS FOR THEIR INFORMATION. THE FINANCIAL INFORMATION INCLUDED
HEREIN IS TAKEN FROM THE RECORDS OF THE FUND. THIS IS NOT A PROSPECTUS,
CIRCULAR OR REPRESENTATION INTENDED FOR USE IN THE PURCHASE OR
SALE OF SHARES OF THE FUND OR OF ANY SECURITIES MENTIONED IN THE REPORT. IF
YOU WOULD LIKE A COPY OF THE MOST
RECENT ANNUAL REPORT (INCLUDING
AUDITED FINANCIAL STATEMENTS), PLEASE
CONTACT YOUR BROKER OR RCM DIRECTLY
AT (415) 954-5400.
INVESTMENT MANAGER:
RCM CAPITAL MANAGEMENT
FOUR EMBARCADERO CENTER
SAN FRANCISCO, CALIFORNIA 94111
