<PAGE>
RCM
STRATEGIC
GLOBAL
GOVERNMENT
FUND
QUARTERLY
REPORT
OCTOBER 31, 1996
<PAGE>
LETTER TO SHAREHOLDERS
- ----------------------
PHOTO
Dear Shareholders:
The RCM Strategic Global Government Fund (NYSE symbol: RCS) had
a successful quarter given the bond market's lively and dynamic
backdrop. Among the important information exhibited in the RCS
Fund Highlights table on page 1 is your fund's 5.7% return on
net asset value for the quarter. During the same period, the overall U.S. bond
market had market returns slightly less than 4%. In response to changing
economic expectations, the U.S. bond market made a constructive midcourse
correction from the higher rates in the first half of 1996. This quarter,
interest rates declined in anticipation of a slowing of the U.S. economy,
allaying fears of inflation. The recent national election also introduced its
own brand of uncertainty to the outlook for interest rates. Current market
conditions suggest a reasonably stable environment for the bond market through
year-end 1996.
Looking forward to 1997, the Federal Reserve Board will face pressure to take a
more active role in preventing inflation while permitting growth. Signs of
increasing labor costs and the potential for a growth rate over three percent
could cause the Federal Reserve Board to increase rates, if only incrementally.
More optimistically, many analysts and economists believe that a number of
factors will continue to contribute to stable global growth. As a result, the
economy may have a unique historical opportunity to expand at its own pace
without significant inflation.
In this report, we will look at the major themes that RCM Capital Management,
L.L.C. ("RCM"), the fund's investment manager, believes will drive the U.S. and
global bond markets in 1997. Your efforts have been effective in helping the
stock price follow net asset value performance. We appreciate your continued
support.
Respectfully,
Gary W. Schreyer
CHAIRMAN
NOVEMBER 15, 1996
<PAGE>
FUND HIGHLIGHTS
- ---------------
QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
<TABLE>
<CAPTION>
PERIOD ENDED* 10/31/96 7/31/96 4/30/96 1/31/96 10/31/95
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total investment income $ 8,116 $ 8,584 $ 8,465 $ 8,314 $ 8,338
Total investment income per share 0.27 0.28 0.28 0.27 0.27
Net investment income 7,038 7,503 7,437 7,250 7,286
Net investment income per share 0.23 0.25 0.24 0.24 0.24
Net realized and unrealized gain (loss) 11,186 (3,998) (9,602) 9,079 1,909
Net realized and unrealized gain (loss) per share 0.37 (0.13) (0.31) 0.30 0.06
Net asset value at end of period 11.62 11.24 11.35 11.64 11.33
Market price at end of period 10.00 9.75 9.63 10.25 10.13
Total return on market price 4.86% 3.62% (3.99)% 3.45% 2.20%
Total return on net asset value 5.69% 1.30% (0.30)% 4.99% 2.93%
Dividend from net investment income $ 0.22 $ 0.22 $ 0.22 $ 0.23 $ 0.22
Effective dividend yield** 8.88% 9.11% 9.23% 8.66% 8.77%
</TABLE>
<TABLE>
<CAPTION>
KEY CHARACTERISTICS 10/31/96
- -------------------------------------------------
<S> <C>
MONTHLY DIVIDEND PER SHARE $ 0.074
EFFECTIVE DIVIDEND YIELD** 8.88%
MARKET PRICE PER SHARE $ 10.00
NET ASSET VALUE PER SHARE $ 11.62
DURATION 5.0 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
- --------------------------------------
HOW DID BONDS PERFORM THIS QUARTER?
As the quarter ended, investors in the U.S. bond market uttered a "collective
sigh of relief" as the outcome of the national elections and the direction of
Federal Reserve Board policy became more certain. The market anticipated a
victory by President Clinton and focused on the elections for House and Senate
seats. Right or wrong, many analysts assumed that the outcome of these elections
would determine whether deficit reduction would remain a post-election priority.
In a larger global context, deficit reduction in the United States and elsewhere
is critical to lower interest rates and to promote economic growth.
Although the Federal Reserve Board continues to be biased toward tightening or
raising interest rates, rates were left unchanged in September. Economic
indicators, such as gross domestic product, employment cost and overall nonfarm
payroll, indicated moderate growth with no significant increase in inflation. As
a result, yields on intermediate-term U.S. Treasuries decreased between 0.45%
and 0.50% for the quarter.
European interest rates performed better than U.S. rates throughout the year,
but took a breather as the quarter drew to a close. For example, German
government yields have increased less than 0.10% compared to almost 0.85% for
U.S. Treasuries over the last nine months. For the quarter, German government
yields moved in tandem with U.S. rates. RCM believes that European bonds will
continue to outperform U.S. bonds as European economic growth will continue to
lag the U.S. economy.
HOW DID RCS PERFORM?
RCS had a substantial net asset value return of 5.7% for the three months ended
October 31, for a fiscal year-to-date total of 6.8%. The total return on stock
market price generally tracked the net asset value, with a return of 4.9% and a
fiscal year-to-date total of 4.3%. During the quarter, RCS invested in three
primary sectors: U.S. mortgage-related securities, Europe and Latin America. The
combination of these sectors makes benchmark
2
<PAGE>
FUND MANAGERS' DISCUSSION AND ANALYSIS
- --------------------------------------
comparisons challenging. For reference, RCS provides returns for three indices
as representative of its primary market sectors: mortgages, developed foreign
and emerging markets. For the periods indicated below, returns for RCS and
related references were:
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
REFERENCE RETURNS OCTOBER 31, 1996 OCTOBER 31, 1996
- ------------------------------------------------------------------------------------------
<S> <C> <C>
RCS return on market price 4.86% 4.32%
RCS return on net asset value 5.69% 6.75%
Salomon Brothers Mortgage Security Index 3.67% 3.62%
Salomon Brothers World Government Bond Index 4.33% 5.11%
J.P. Morgan Emerging Market Index 9.98% 15.48%
</TABLE>
HOW IS THE FUND CURRENTLY POSITIONED?
The geographical exposure to interest rates, as a percentage of duration, is set
forth in the following table. The U.S. positions are predominately
mortgage-related instruments issued or guaranteed by the U.S. Government and its
agencies. Exposure to European rates is accomplished through interest rate swaps
that are denominated in U.S. dollars. At quarter end, these positions totaled
$200 million in notional amount and generally related to 5- and 7-year interest
rates. Additional information on these positions is provided on page 7. Emerging
market positions in Latin America made up 20% of total duration and are
government-guaranteed securities of Mexico, Brazil and Argentina. During the
quarter, positions in Mexico and Brazil were increased to take advantage of
interim weakness. All RCS positions are denominated in U.S. dollars.
3
<PAGE>
FUND MANAGERS' DISCUSSION AND ANALYSIS
- --------------------------------------
<TABLE>
<CAPTION>
PORTFOLIO DURATION BY COUNTRY
OCTOBER 31, 1996
PERCENTAGE OF
AVERAGE DURATION TOTAL
COUNTRY DURATION CONTRIBUTION DURATION
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
United States 3.3 1.8 36.0%
Germany 3.4 0.8 16.0%
The Netherlands 3.4 0.5 10.0%
Mexico 6.7 0.4 8.0%
Switzerland 5.1 0.4 8.0%
Argentina 6.0 0.3 6.0%
Belgium 4.8 0.3 6.0%
Brazil 3.7 0.3 6.0%
Finland 3.4 0.2 4.0%
---- ----
Total 5.0 100.0%
</TABLE>
<TABLE>
<CAPTION>
CREDIT QUALITY
OCTOBER 31, 1996
PERCENTAGE OF
TOTAL
RATING INVESTMENTS
- ----------------------------------------------------------------------------------
<S> <C>
AAA 79.3%
AA 0.2%
A 2.2%
BB 9.8%
B 8.5%
----
Total 100.0%
</TABLE>
4
<PAGE>
FUND MANAGERS' DISCUSSION AND ANALYSIS
- --------------------------------------
WHAT HAS BEEN THE ROLE OF EMERGING MARKET DEBT IN THE FUND?
Emerging market debt has been a very lucrative area for bond investors in 1996.
The Mexico crisis of 1994 is effectively behind the market now and investors
have been scanning the globe for new yield opportunities. In the wake of 1994,
many emerging countries have accelerated their efforts to control inflation and
to better manage their reserve positions and debt loads. Latin America was
selected as the more liquid and higher yielding of the available bonds in
emerging markets. Generally, Latin American interest rates for U.S.
dollar-denominated bonds move in tandem with U.S. interest rates.
MARKET SECTOR INCOME CONTRIBUTION
NINE MONTHS ENDED OCTOBER 31, 1996
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
U.S. COLLATERALIZED MORTGAGE OBLIGATIONS 17.0%
<S> <C>
Emerging Markets 17.9%
Developed Foreign 10.1%
U.S. Short-Term Investments 1.4%
U.S. Mortgage Pass-Throughs 53.6%
</TABLE>
5
<PAGE>
FUND MANAGERS' DISCUSSION AND ANALYSIS
- --------------------------------------
WHAT ARE LIKELY SCENARIOS FOR GLOBAL BOND MARKETS IN 1997?
RCM is weighing two scenarios for global bond markets in 1997: (1) global
recovery; and (2) more of the same. Currently, RCM does not believe that there
will be any dramatic decline in the U.S. economy and, therefore, the economy
will not experience the type of rapidly declining interest rates typical of
pre-recession or recession environments.
Global recovery assumes the United States, Europe and Japan cycle into
accelerated growth. In this scenario, U.S. growth would be supported primarily
by consumer spending, productivity in the private sector, and increased exports.
Europe's economies would accelerate from lower inflation and interest rates of
late 1996 while growth in Japan would be built on low interest rates and fiscal
stimuli.
The "more of the same" scenario assumes the United States has growth at or
around its long-term potential. This scenario has stable consumer spending and
production, minimal improvement in exports and a fiscal policy that is neutral
or tilted towards deficit reduction. Europe's economic engine would sputter and
stall on structural employment problems and the policy costs of achieving
monetary union. Japan's structural debt problems would keep internal credit
tight and fiscal stimulation would be ineffective in preventing deflation. In
this scenario, interest rates would continue to fluctuate within the same range
seen in 1996. Of course, if this scenario is realized, Europe and Japan may
attempt to enhance recovery by dramatically devaluing their currencies relative
to the U.S. dollar in an attempt to stimulate exports. Such an event could drive
bond investors to the United States, pushing interest rates lower than might
otherwise be expected.
Currently, RCM believes that the "more of the same" scenario is more likely.
Bonds in the United States and Europe will perform at about current yields.
Emerging market bonds are expected to benefit from the global quest for yield
while being rewarded by continued improvement in inflation and debt management.
Getting the most yield without taking substantive price risk is important in
this type of scenario.
6
<PAGE>
SUPPLEMENTAL INFORMATION
- ------------------------------------
INTEREST RATE SWAPS
An interest rate swap is a financial contract that typically involves an
exchange of obligations by two parties. For example, the fund may exchange with
another party their respective rights to receive fixed rate interest payments
and floating interest rate payments. RCS will usually enter into interest rate
swaps on a net basis, which means that the two payment 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.
Beginning in 1995, RCM sought to find a more efficient way to hold foreign bonds
in developed countries, such as Germany and The Netherlands, while minimizing
currency risk. RCM found, in U.S. dollar-denominated 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.
As of October 31, 1996, the Fund had the following outstanding interest rate
swap agreements:
<TABLE>
<CAPTION>
COUNTER-
NOTIONAL FIXED PARTY SWAP UNREALIZED
AMOUNT INTEREST RATE CREDIT TERMINATION MATURITY APPRECIATION/
(000S) RECEIVED COUNTRY RATING DATE DATE (DEPRECIATION)
- ---------- ------------- --------------- --------- ------------ --------- --------------------
<S> <C> <C> <C> <C> <C> <C>
$ 75,000 5.42% Germany AA 01/04/99 01/03/02 $ 191,003
25,000 5.38% Netherlands AAA 01/04/99 01/03/02 61,300
25,000 5.38% Netherlands A 01/04/99 01/03/02 64,200
25,000 5.82% Finland A 01/04/99 01/03/02 36,000
25,000 6.05% Belgium A 01/04/99 01/03/04 201,200
25,000 4.08% Switzerland AAA 01/04/99 01/03/04 242,250
110,000 5.44%* United States AA 03/01/98 03/01/98 271,260
- ---------- --------------------
$ 310,000 $ 1,067,213
- ---------- --------------------
- ---------- --------------------
------- -------
</TABLE>
* FLOATING RATE BASED ON 1-MONTH LIBOR.
7
<PAGE>
INVESTMENTS IN SECURITIES AND NET ASSETS
- ----------------------------------------
OCTOBER 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
COUNTRY/ PRINCIPAL VALUE
CURRENCY (000'S) DESCRIPTION (US$)
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENTS IN DEBT SECURITIES - 119.1%*
ARGENTINA - 5.8%
USD Republic of Argentina
15,000 5.25% Step-Up Coupon, 03/31/23 $ 8,831,250
4,000 8.38% 12/20/03 3,558,000
4,000 9.25% 02/23/01 3,916,000
4,000 10.95%, 11/01/99 4,190,000
-------------
Total Argentina 20,495,250
-------------
BRAZIL - 10.1%
USD 15,970 Federal Republic of Brazil C Bond, 4.50% with
3.50% Interest Capitalization, 04/15/14 10,939,383
15,000 Petrobras Euronote 8.75%, 12/09/96 14,962,500
10,000 Federal Republic of Brazil 8.88%, 11/05/01 9,962,500
-------------
Total Brazil 35,864,383
-------------
MEXICO - 5.9%
USD United Mexican States
5,000 6.25% 12/31/19 3,468,750
6,000 9.75% 02/06/01 6,039,000
7,000 11.38%, 09/15/16 7,007,000
4,326 11.50%, 05/15/26 4,278,414
-------------
Total Mexico 20,793,164
-------------
UNITED STATES - 97.3%
USD MORTGAGE-BACKED SECURITIES - 77.8%
33,248 FHLMC 7.50%, 2025 - 2026 33,377,026
15,572 FNMA 7.50%, 2026 15,612,711
9,874 GNMA 7.50%, 2006 - 2026 9,929,356
20,131 FHLMC 8.00%, 2023 - 2025 20,581,540
5,270 GNMA 8.00%, 2016 - 2022 5,465,332
95,847 FNMA 8.50%, 2017 - 2025 99,247,372
780 GNMA 8.50%, 2016 - 2024 811,616
63,000 FNMA 7.50%, 2026 TBA 63,145,530
11,000 GNMA 7.50%, 2026 TBA 11,043,120
10,437 FHA Project Pool 56, 7.43%, 11/01/22 10,539,624
5,998 FHA Project Pool 144 S, 7.43%, 06/01/24 5,944,528
-------------
Total Mortgage-Backed Securities 275,697,755
-------------
</TABLE>
* PERCENTAGE OF NET ASSETS
8
<PAGE>
INVESTMENTS IN SECURITIES AND NET ASSETS
- ----------------------------------------
OCTOBER 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
COUNTRY/ PRINCIPAL VALUE
CURRENCY (000'S) DESCRIPTION (US$)
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
USD COLLATERALIZED MORTGAGE OBLIGATIONS - 19.5%
DLJ Mortgage Acceptance Corp.
1,000 Series 1994-MF11, Class A2 8.10%, 06/18/04 $ 1,041,133
4,850 Series 1994-MF11, Class A3 8.10%, 06/18/04 4,993,984
Federal Home Loan Mortgage Corp.
17,932 Series 1667, Class PE 6.00%, 03/15/08 17,418,556
22,786 Series 1665, Class N 6.50%, 01/15/24 21,164,580
G E Capital Mortgage Services, Inc.
4,580 Series 1994-12, Class B1 6.00%, 04/25/09 4,189,263
22,000 Series 1994-10, Class A15 6.50%, 03/25/24 20,371,484
-------------
Total Collateralized Mortgage Obligations 69,179,000
-------------
TOTAL INVESTMENTS - (COST $411,128,432) 422,029,552
-------------
Payable for Investments Purchased - (23.6%) (83,578,825)
Payable for Investments Sold on a Forward Commitment Basis, net - (12.6%)+ (44,470,769)
Other Assets Less Liabilities -- 17.1% 60,546,289
-------------
NET ASSETS - 100.0% $ 354,526,247
-------------
-----------
</TABLE>
<TABLE>
<S> <C>
TERMS
FHA -- Federal Housing Administration
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 42,600 U.S. Treasury Bonds 6.88%, 08/15/25 $ 43,594,710
</TABLE>
9
<PAGE>
SPECIAL FOCUS
- -------------------
DISCOUNTS ON CLOSED-END FUNDS
Closed-end funds are investment companies that issue shares that trade on the
New York Stock Exchange or another exchange. Investors buy or sell the fund by
buying or selling the stock on the open market. The size of the underlying bond
portfolio does not change as investors buy or sell the stock. This is different
from open-end funds, where the size of the underlying portfolio goes up or down
as investors enter or exit the fund.
There are specific advantages to the closed-end format. First, a closed-end fund
can be fully invested since there are no investor redemptions to forecast and no
need to keep excess cash available. From the point of view of yield, this
generally means that a closed-end fund would have higher yield income. Second,
the ability to be fully invested at all times has historically given funds the
opportunity to take advantage of different types of risks, including less
actively traded instruments with more unique performance characteristics. Third,
closed-end funds may use leverage more freely than open-end funds. Leverage
means buying an asset through a financing transaction. Leverage can allow a fund
to generate more income, but at the cost of more price risk and volatility.
Examples of leverage transactions include forward contracts, short sales, and
swaps. In summary, the closed-end fund format can provide an exclusive set of
tools to manage income and risk that an open-end fund may not be able to
provide.
Given these advantages, why would a fund's stock price trade below its net asset
value (i.e., "at a discount")? There are a number of reasons for a discount:
some historic, some market-related. Historically, some closed-end funds have
taken large and illiquid positions. Other funds use leverage to help income, but
may not address the associated additional price risk. These risks have often
resulted in dividend cuts and net asset value volatility. While these positions
are reflected in a fund's net asset value, net asset value is not adjusted for
the risk factors. To more accurately reflect these risks, the market may
discount the fund's stock price from its net asset value. Most closed-end funds
report net asset value weekly, which makes it difficult for investors to know
how the fund is doing on a day-to-day basis.
10
<PAGE>
SPECIAL FOCUS
- -------------------
In addition, the lack of timely information about portfolio holdings may
contribute to some discount. Since closed-end funds are not marketed to raise
money, their level of communication and disclosure is often below standards for
open-end funds. Lastly, there can be supply and demand imbalances. As bond funds
have lagged equity returns in the last couple of years, the "flow" of attention
to these funds has fluctuated. These factors make closed-end funds more suitable
for buy and hold investors.
Can discounts be "solved" while preserving the benefits of a closed-end format?
There have been a number of techniques applied by different mutual funds over
the years to address the discount. In RCM's opinion, none of these techniques
had lasting results and, therefore, did not achieve shareholder acceptance.
Historically, there have been market conditions where demand for bonds pushed
closed-end bond funds to or near net asset value. Meanwhile, a closed-end fund
can address the important issues of stable dividends, managed risk and
shareholder communications while the discounts create very substantial yield
opportunities for investors.
What has RCS done to tackle this industry challenge? RCS has actively used the
closed-end toolbox to solve some of the industry's tougher challenges: (1)
stable dividend; (2) intermediate-term duration including the effects of
leverage; (3) moderate net asset value volatility; and (4) eliminating currency
risk. RCS delivers monthly press releases about changes in the fund and the bond
market. These press releases and quarterly shareholder communications also
provide duration numbers that can be used to estimate the fund's performance
between the weekly net asset value releases. RCS offers a fund where stable
dividends and risk-managed performance are paramount.
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 INVESTMENT MANAGER
Gary W. Schreyer, CHAIRMAN RCM Capital Management, L.L.C.
William A. Hasler Four Embarcadero Center
Francis E. Lundy San Francisco, California 94111
James M. Whitaker
PORTFOLIO MANAGERS
AUDIT COMMITTEE Eamonn F. Dolan
William A. Hasler Stephen Kim
Francis E. Lundy Jack L. Bernard
James M. Whitaker Mark E. Raaberg
NOMINATING COMMITTEE ADMINISTRATOR, CUSTODIAN AND
Gary W. Schreyer TRANSFER AGENT
William A. Hasler State Street Bank and Trust Company
1776 Heritage Drive
North Quincy, Massachusetts 02171
OFFICERS (800) 426-5523
Richard W. Ingram
PRESIDENT, CHIEF FINANCIAL OFFICER
AND ASSISTANT TREASURER INDEPENDENT AUDITORS
John E. Pelletier Coopers & Lybrand L.L.P.
VICE PRESIDENT AND ASSISTANT One Post Office Square
SECRETARY Boston, Massachusetts 02109
Elizabeth A. Bachman
VICE PRESIDENT AND ASSISTANT
SECRETARY COUNSEL
Caroline M. Hirst Ropes & Gray
SECRETARY AND TREASURER One International Place
Boston, Massachusetts 02110-2624
RCM Capital Management, L.L.C. is an institutional money manager headquartered
in San Francisco with approximately $26 billion in managed assets, including
approximately $11 billion in fixed income securities. RCM has over 20 years of
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 CALL RCM DIRECTLY
AT (415) 954-5400.
INVESTMENT MANAGER:
RCM CAPITAL MANAGEMENT, L.L.C.
FOUR EMBARCADERO CENTER
SAN FRANCISCO, CALIFORNIA 94111
