<PAGE>
RCM
STRATEGIC
GLOBAL
GOVERNMENT
FUND
1997
ANNUAL
REPORT
<PAGE>
FUND HIGHLIGHTS
- ---------------
ANNUAL FINANCIAL INFORMATION
RCM Strategic Global Government Fund, Inc. ("RCS" or the "Fund") is a
closed-end, global bond fund currently investing in three major regions: North
America (United States and Canada), Europe and, to a lesser extent, Latin
America. Under normal market conditions, the Fund invests at least 65% of its
assets in U.S. or foreign government securities. The securities in the
investment portfolio currently have an average credit-quality rating of AA plus
and have effective maturities generally between 3 and 10 years.
The primary objective of RCS is to generate a level of income that is higher
than that generated by high-quality, intermediate-term U.S. debt securities. As
a secondary objective, RCS seeks to maintain volatility in the net asset value
of the shares of the Fund comparable to that of high-quality, intermediate-term
U.S. debt securities. In addition, the Fund seeks capital appreciation to the
extent consistent with its other investment objectives.
<TABLE>
<CAPTION>
FISCAL YEAR* 1997 1996 1995
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
Total investment income $ 34,578 $ 33,013 $ 33,300
Total investment income per share 1.13 1.08 1.09
Net investment income 30,054 28,665 29,171
Net investment income per share 0.98 0.94 0.96
Net realized and unrealized gain 1,421 6,163 22,048
Net realized and unrealized gain per share 0.05 0.21 0.72
Net asset value at end of year 11.91 11.87 11.64
Market price at end of year 11.16 10.63 10.25
Total return on market price 14.76% 13.57% 16.21%
Total return on net asset value 9.66% 11.72% 17.07%
Dividend from net investment income $ 0.99 $ 0.92 $ 0.89
Effective dividend yield** 8.87% 8.65% 8.68%
</TABLE>
* IN THOUSANDS EXCEPT PER SHARE DATA.
** DIVIDEND DIVIDED BY MARKET PRICE.
<PAGE>
CHAIRMAN'S LETTER TO SHAREHOLDERS
- ----------------------------------------------------------
PHOTO
March 3, 1998
Dear Shareholders:
On behalf of the Board of Directors I am pleased to report that the
RCM Strategic Global Government Fund (NYSE Symbol: RCS) successfully achieved
its investment goals in 1997. Net investment income rose to in excess of $30
million (98 cents per share) from approximately $28.7 million in 1996 (94 cents
per share). As a result, in December the Board of Directors declared a special
10 cent per share dividend payable to shareholders in addition to RCS' regular
monthly $7.4 cents per share dividend. Total dividends distributed during fiscal
1997 represented 8.3% of the portfolio's fiscal year-end net asset value and
provided shareholders with an effective dividend yield of 8.9% based upon RCS'
stock price. RCS' net asset value increased 4 cents per share in the year ended
January while the market price gained 53 cents per share. The sum of dividends
paid and principal appreciation produced a total return for the fiscal year of
9.7% and 14.8% calculated on the basis of net asset value and stock price,
respectively.
INVESTMENT PORTFOLIO CHARACTERISTICS
The credit quality of the portfolio remains high. Approximately 87% of the
Fund's investment portfolio is rated AAA by either or both of the major credit
rating agencies. Approximately 11% of the portfolio is rated BB. A BB rating is
one grade below a BBB rating which is generally considered high-quality
investment grade. The average credit rating of the Fund's investments is AA plus
and is in compliance with RCS' portfolio guidelines.
The sensitivity of the market value of the Fund's investments to changing
interest rates in major world interest rate regions is generally expressed in
terms of the average "duration" of cash flows associated with each investment.
According to this yardstick of volatility, the percentage contribution of each
country or region to total portfolio variability, after including the impact of
swap contracts, is approximately as follows: United States 16%, Canada 20%,
Developed Europe 33%, and Latin America 31%. Total portfolio duration at January
31, 1998, was 4.5 years and the average effective maturity was approximately 8.5
years. In addition, investors should note that RCS has no unhedged foreign
currency exchange rate exposure at year-end.
1
<PAGE>
CHAIRMAN'S LETTER TO SHAREHOLDERS
- ----------------------------------------------------------
In contrast to the Funds' relatively low duration exposure in the United States,
the Fund derived almost two thirds of total investment income from
Mortgage-Backed Securities, Collateralized Mortgage Obligations and money market
investments while Emerging and Developed Foreign securities contributed 19% and
15% of total investment income, respectively.
The Fund utilizes financial leverage in order to accomplish its investment
goals. Augmenting Fund assets with financial leverage has resulted in greater
net investment income than otherwise would have been earned. However, leverage
also increases risk. I recommend shareholders read the Dresdner RCM Global
Investors LLC ("Dresdner RCM") "Manager Discussion and Analysis" in the annual
report for useful information regarding this important investment strategy.
COMPARATIVE INVESTMENT PERFORMANCE
RCS' 14.8% return on market price and 9.7% return on net asset value for the
fiscal year-ended January 1998 compares with returns of 13.6% on market price
and 11.7% on net asset value for the last fiscal year. This fiscal year's
benchmark returns, representing the average market performance for the major
sectors in which the Fund invests, are: 9.4% for the Salomon Brothers Mortgage
Security Index, 11.1% for the Salomon Brothers World Government Bond Index
(Hedged) and 12.4% for the J.P. Morgan Emerging Market Bond Index.
These benchmark returns are more relevant for evaluating manager performance
measured in terms of net asset value performance than return on market price.
Return on net asset value reflects Dresdner RCM's management of the Fund's
investments consistent with policies enumerated in the prospectus and
established by your Board of Directors whereas the relationship between
portfolio management and stock price performance is more indirect.
<TABLE>
<CAPTION>
FISCAL
REFERENCE RETURNS* 1997
<S> <C>
- ---------------------------------------------------------------------------------------------------------------------
RCS return on market price** 14.8%
RCS return on net asset value** 9.7%
Salomon Brothers Mortgage Security Index 9.4%
Salomon Brothers World Government Bond Index (Hedged) 11.1%
J.P. Morgan Emerging Market Bond Index 12.4%
</TABLE>
2
<PAGE>
CHAIRMAN'S LETTER TO SHAREHOLDERS
- ----------------------------------------------------------
* REFERENCE RETURNS ARE USED FOR COMPARISON TO TOTAL RETURN ON NET ASSET VALUE
AND REPRESENT THE MAJOR MARKET SECTORS IN WHICH THE PORTFOLIO IS PERMITTED TO
INVEST. THE SALOMON BROTHERS MORTGAGE SECURITY INDEX INCLUDES VARIOUS TYPES
OF MORTGAGE SECURITIES, INCLUDING 30-YEAR FNMA/GNMA ISSUES, 20-YEAR FHLMC
ISSUES, 15-YEAR FHLMC/FNMA/GNMA ISSUES AND FHA PROJECT NOTES. THE SALOMON
BROTHERS WORLD GOVERNMENT BOND INDEX (HEDGED) IS A MARKET CAPITALIZATION BOND
INDEX THAT INCLUDES LOCAL GOVERNMENT BOND MARKET RETURNS HEDGED INTO U.S.
DOLLAR RETURNS OF TWELVE COUNTRIES THAT ARE FREELY OPEN TO FOREIGN INVESTORS.
THE J.P. MORGAN EMERGING MARKET BOND INDEX INCLUDES APPROXIMATELY $100
BILLION IN FACE VALUE OUTSTANDING, DOLLAR-DENOMINATED, RESTRUCTURED SOVEREIGN
BONDS.
** RCS RETURNS ARE CALCULATED ASSUMING REINVESTMENT OF DIVIDENDS AT THE ACTUAL
MARKET PRICE OBTAINED BY THE FUND'S TRANSFER AGENT FOR PARTICIPANTS IN THE
DIVIDEND REINVESTMENT PLAN.
STOCK PRICE DISCOUNT TO NET ASSET VALUE
The Board is pleased that the average percentage stock price discount to net
asset value decreased from 13.7% in fiscal 1996 to 8.3% in fiscal 1997. The
difference between the value per share of the Fund's investments and RCS' stock
price at the end of fiscal 1996 and 1997 narrowed from approximately $1.25 to
$.75. In general, the percent discount to net asset value of closed-end bond
funds narrowed in 1997. The Board of Directors continues to carefully monitor
the stock price in relation to net asset value and is aware of the importance of
this issue to shareholders.
RCS ON THE WEB
Dresdner RCM, has agreed to furnish and maintain Fund information beginning
April 1, 1998, on a new web site, www.RCSfund.com. We believe this effort will
improve disclosure as well as provide cost effective communication of pertinent
information to shareholders, analysts and the media. We encourage you to visit
the web site to access information about the Fund's policies and investments.
Thank you for your support of RCS. We look forward to continued success in
achieving the Fund's investment goals this year and in the new millennium.
Sincerely,
/s/ GARY SCHREYER
Gary Schreyer
CHAIRMAN OF THE BOARD AND PRESIDENT
3
<PAGE>
MANAGER DISCUSSION AND ANALYSIS
- ------------------------------
PORTFOLIO COMPOSITION. Portfolio investment in the United States has been
predominantly represented by mortgage pass-through securities. Mortgage
pass-through securities provide substantial yield above other U.S. securities,
have principal and interest guaranteed by the U.S. government or
government-sponsored agencies, and represent one long-standing expertise of
Dresdner RCM. At fiscal year-end, pass-throughs with 7.0% and 7.5% coupons
represented 67.0% of RCS' total investments, while total pass-throughs
represented 74.3%. Total return on pass-throughs is sensitive to prepayment of
the underlying mortgage loans. To diversify that sensitivity, $100 million par
amount of FNMA 7.0% was added in January.
European and Canadian exposures provided significant contributions to income and
return in 1997. In Europe, the drive to a single European currency union created
an interest rate environment of reasonable stability as governments focused on
improving fiscal and inflationary policies. In Canada, the solid progress of
economic growth provided an opportunity to take advantage of the difference
between short-term and intermediate-term yields for enhancing the Fund's income.
Exposure to Canadian interest rates also diversified the Fund's overall foreign
risk profile by providing a position more directly tied to U.S. interest rates.
The exposures to European and Canadian interest rates are held through interest
rate swaps, a strategy employed by the Fund since 1995. Swaps are often a more
efficient way to effectively hold foreign bonds without taking currency risk,
and hence help RCS achieve its goals. They allow RCS to benefit from stable or
declining foreign interest rates while avoiding foreign currency exchange risk
since all interest payments and any future gains or losses are in U.S. dollars.
At year-end, RCS held swaps providing the Fund with exposure to interest rates
in Belgium, Canada, Finland, Germany, and The Netherlands as further detailed on
page 11.
Emerging market investments include mainly Latin American markets: Argentina,
Mexico and Panama. The Argentina and Mexico positions represent two of the most
liquid markets in emerging market debt. The overall exposure makes important
contributions to Fund income and, despite the inherent volatility of emerging
markets, adds diversification in overall return.
4
<PAGE>
MANAGER DISCUSSION AND ANALYSIS
- ------------------------------
In December, a new $10 million swap was added to allow RCS to benefit from
income and duration contribution of the J.P. Morgan Emerging Market Bond Index
Plus ("EMBI+"). The EMBI+ is an index of actively traded U.S. dollar-denominated
debt instruments from the following thirteen emerging countries (in order of
market capitalization): Brazil, Argentina, Mexico, Russia, Venezuela, Ecuador,
Poland, Nigeria, Bulgaria, The Philippines, Peru, Morocco and Panama. The EMBI+
swap allows RCS to hold a geographically diversified basket of exposures to
emerging market positions.
While the composition of the overall portfolio was reasonably stable throughout
1997 with an annualized turnover of 29%, the country mix in Latin America was
changed to remove exposure to Brazil, as Dresdner RCM anticipated that Brazil
was unusually vulnerable to the Asian currency crisis.
FINANCIAL LEVERAGE is an integral part of Dresdner RCM's income and duration
management strategies for RCS. Transactions that are financed create financial
leverage and allow RCS to earn the spread between the yield of the underlying
security and short-term interest rates. A financed transaction has three
important effects: (1) it increases income to the extent of the interest rate
spread, (2) it increases overall duration risk, and (3) it adds sensitivity to
rising short-term interest rates. As leverage, these transactions are limited by
regulations. To further limit the effect of leverage, the Fund has segregated
$275.8 million in high credit quality, liquid investments.
Financed mortgage-backed securities, "mortgage dollar rolls," contributed
approximately $1.5 million in income in 1997 on average volume of $85.3 million.
The income contribution appears on the Statement of Operations as Fee Income. At
fiscal year-end, there was $190.9 million in mortgage dollar rolls compared to
$69.1 million at prior fiscal year-end.
Since 1994, RCS has used interest rate swaps for managing income and duration.
For income, RCS averaged $250 million in notional interest rate swaps on
Canadian and European interest rates and $1.7 million in notional amount on
emerging markets. The income contribution from swaps was $5.4 million and is
included in the Fund's interest income. At fiscal year-end, there were $250
million notional interest rate swaps based on European and Canadian interest
rates unchanged from last fiscal year-end, and $10 million
5
<PAGE>
MANAGER DISCUSSION AND ANALYSIS
- ------------------------------
notional based on emerging market debt. Additionally, RCS had $89 million in
notional U.S. interest rate swaps that served to lock the cost of financing on
mortgage dollar roll positions. There were $70 million of comparable swaps at
prior fiscal year-end.
To manage overall duration, RCS sells U.S. Treasury bonds on a forward
commitment basis. RCS averaged $102.7 million in bonds sold forward during the
year. At fiscal year-end, there was $90.8 million in similar positions, as
detailed on page 11, compared to $116.5 million at prior fiscal year-end.
DISCOUNT. During the 1997 fiscal year, RCS' stock traded at a price 8.3% below
its net asset value on average, compared to 13.7% in fiscal 1996. As noted in
the Chairman's Letter to Shareholders, Dresdner RCM is responsible for the net
asset value performance of the Fund. The stock price of RCS is affected by
factors outside of the direct control of Dresdner RCM including: the phases of
the interest rate cycle, the stock market in general, and specific supply and
demand characteristics of RCS. In achieving the goals of RCS, Dresdner RCM uses
the income and duration management tools available to it under the closed-end
format. It is important to reiterate that Dresdner RCM has actively used the
closed-end toolbox to solve some of the industry's tougher challenges: (1)
stable dividends, (2) intermediate-term duration including the effects of
leverage, (3) moderate net asset value volatility, and (4) eliminating foreign
currency exchange risk.
GLOBAL OUTLOOK. Dresdner RCM believes the 1997 currency crisis in Southeast Asia
will create an environment for stable-to-lower interest rates globally in the
year ahead. Although RCS had no significant exposure to Southeast Asia, the
scope of that crisis and its contagion effects are likely to reduce global
economic activity leading to generally lower inflation world-wide through most
of 1998. Dresdner RCM will continue to attempt to position RCS globally to
achieve its goals.
6
<PAGE>
MANAGER DISCUSSION AND ANALYSIS
- ------------------------------
FUND INFORMATION. In conjunction with the RCS' Board of Directors and as noted
in the Chairman's Letter to Shareholders, Dresdner RCM is the process of
developing a website for RCS in an effort to continue to provide consistent and
quality communications to RCS' shareholders. Beginning April 1, 1998, Dresdner
RCM will provide regular monthly updates, access to recent shareholder reports
and supplementary material at RCS' website, www.RCSfund.com.
7
<PAGE>
RCS INVESTMENT INCOME SUMMARY (UNAUDITED)
<TABLE>
<CAPTION>
1997 1997 1996 1996
PERCENTAGE (000'S) PERCENTAGE (000'S)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
UNITED STATES
Mortgage Pass-Throughs 41.0% $ 14,197 44.5% $ 14,680
Mortgage Projects/CMO's 18.8% 6,485 20.3% 6,709
Mortgage Dollar Rolls 4.4% 1,529 5.6% 1,862
Cash & Other 1.7% 576 1.5% 482
- -------------------------------------------------------------------------------------------------------------------
Total United States 65.9% 22,787 71.9% 23,733
- -------------------------------------------------------------------------------------------------------------------
DEVELOPED FOREIGN
Canada 4.4% 1,519 0.3% 97
Germany 4.1% 1,401 2.9% 941
The Netherlands 2.8% 960 2.0% 667
Belgium 1.8% 626 1.3% 443
Finland 1.4% 494 1.1% 365
Switzerland 0.6% 205 1.3% 421
- -------------------------------------------------------------------------------------------------------------------
Total Developed Foreign 15.1% 5,205 8.9% 2,934
- -------------------------------------------------------------------------------------------------------------------
EMERGING MARKETS
Argentina 6.3% 2,196 6.4% 2,094
Mexico 6.1% 2,095 5.4% 1,790
Panama 3.2% 1,112 -- 6
Brazil 2.9% 1,015 7.2% 2,377
Other 0.5% 168 0.2% 79
- -------------------------------------------------------------------------------------------------------------------
Total Emerging Markets 19.0% 6,586 19.2% 6,346
- -------------------------------------------------------------------------------------------------------------------
RCS Totals 100.0% $ 34,578 100.0% $ 33,013
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
8
<PAGE>
INVESTMENTS IN SECURITIES AND NET ASSETS
- ----------------------------------------------------------
JANUARY 31, 1998
<TABLE>
<CAPTION>
COUNTRY/ PRINCIPAL VALUE
CURRENCY (000's) DESCRIPTION (US$)
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENTS IN DEBT SECURITIES - 148.2%*
ARGENTINA - 6.7%
USD Republic of Argentina
15,000 5.50%, Step-Up Coupon, 03/31/23 $ 11,307,000
4,000 8.38%, 12/20/03 3,906,000
5,000 9.75%, 09/19/27 4,895,000
4,000 10.95%, 11/01/99 4,190,000
-------------
Total Argentina 24,298,000
-------------
MEXICO - 5.5%
USD United Mexican States
6,000 9.75%, 02/06/01 6,382,500
7,000 11.38%, 09/15/16 8,249,500
4,326 11.50%, 05/15/26 5,245,275
-------------
Total Mexico 19,877,275
-------------
PANAMA - 4.7%
USD Republic of Panama
4,000 7.88%, 02/13/02, 144A** 3,958,000
13,518 8.88%, 09/30/27 13,254,399
-------------
Total Panama 17,212,399
-------------
UNITED STATES - 131.3%
USD MORTGAGE-BACKED SECURITIES - 111.3%
117,917 FHLMC 7.50%, 2025 - 2026 121,310,500
19,798 FNMA 7.50%, 2026 - 2027 20,364,134
31,609 GNMA 7.50%, 2006 - 2027 32,574,440
16,724 FHLMC 8.00%, 2023 - 2025 17,339,857
4,412 GNMA 8.00%, 2016 - 2022 4,646,697
611 GNMA 8.50%, 2016 - 2023 644,620
100,000 FNMA 7.00%, 2028 TBA 101,449,000
57,915 FNMA 7.50%, 2028 TBA 59,568,473
29,000 GNMA 7.50%, 2028 TBA 29,876,090
</TABLE>
* PERCENTAGE OF NET ASSETS
** SECURITY PURCHASED PURSUANT TO RULE 144A OF THE SECURITIES ACT OF 1933 AND
MAY BE RESOLD ONLY TO QUALIFIED INSTITUTIONAL BUYERS.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
9
<PAGE>
INVESTMENTS IN SECURITIES AND NET ASSETS
- ----------------------------------------------------------
JANUARY 31, 1998
<TABLE>
<CAPTION>
COUNTRY/ PRINCIPAL VALUE
CURRENCY (000's) DESCRIPTION (US$)
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
USD MORTGAGE-BACKED SECURITIES - (CONTINUED)
10,097 FHA Project Pool 56, 7.43%, 11/01/22 $ 10,456,958
5,898 FHA Project Pool 144 S, 7.43%, 06/01/24 6,155,245
-------------
Total Mortgage-Backed Securities 404,386,014
-------------
USD COLLATERALIZED MORTGAGE OBLIGATIONS - 20.0%
DLJ Mortgage Acceptance Corp.
1,000 Series 1994-MF11, Class A2 8.10%, 06/18/04 1,059,219
4,850 Series 1994-MF11, Class A3 8.10%, 06/18/04 5,087,764
Federal Home Loan Mortgage Corp.
17,932 Series 1667, Class PE 6.00%, 03/15/08 18,046,877
22,753 Series 1665, Class N 6.50%, 01/15/24 22,419,227
G E Capital Mortgage Services, Inc.
4,265 Series 1994-12, Class B1 6.00%, 04/25/09 4,172,109
22,000 Series 1994-10, Class A15 6.50%, 03/25/24 21,828,984
-------------
Total Collateralized Mortgage Obligations 72,614,180
-------------
TOTAL INVESTMENTS IN DEBT SECURITIES - (COST $518,127,764) 538,387,868
-------------
SHORT-TERM INVESTMENTS - 1.7%
UNITED STATES - 1.7%
USD MONEY MARKET FUNDS - 1.7% (NOTE 1)
6,230,704 SSgA U.S. Government Money Market Fund 6,230,704
-------------
TOTAL SHORT-TERM INVESTMENTS - (COST $6,230,704) 6,230,704
-------------
TOTAL INVESTMENTS - 149.9%
(COST $524,358,468) 544,618,572
-------------
Payable for Investments Purchased - (52.6%) (191,024,016)
Payable for Investments Sold on a Forward Commitment Basis, net - (26.9%)+ (97,925,309)
Other Assets Less Liabilities - 29.6%++ 107,758,824
-------------
NET ASSETS - 100.0% $ 363,428,071
-------------
-------------
</TABLE>
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, Standard Settlement
USD -- United States Dollars
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
10
<PAGE>
INVESTMENTS IN SECURITIES AND NET ASSETS
- ----------------------------------------------------------
JANUARY 31, 1998
+ On a forward commitment basis, the Fund has agreed to sell the following U.S.
Treasury securities - (Note 1):
<TABLE>
<CAPTION>
PRINCIPAL VALUE
CURRENCY (000's) DESCRIPTION (US$)
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
USD $ 45,850 U.S. Treasury Bonds 6.25%, 08/15/23 $ 48,014,120
USD 8,000 U.S. Treasury Bonds 6.50%, 11/15/26 8,695,280
USD 24,650 U.S. Treasury Bonds 6.63%, 02/15/27 27,228,636
USD 12,325 U.S. Treasury Bonds 6.88%, 08/15/25 13,987,273
--------- ------------
$ 90,825 (Proceeds $97,251,830) $ 97,925,309
--------- ------------
--------- ------------
</TABLE>
- --------------------------------------------------------------------------------
++ As of January 31, 1998, the Fund had the following outstanding interest rate
swap agreements denominated in U.S. dollars - (Note 1):
<TABLE>
<CAPTION>
COUNTER-
NOTIONAL PARTY SWAP UNREALIZED
AMOUNT CREDIT TERMINATION MATURITY RATE APPRECIATION
(000'S) RATING(A) COUNTRY DATE DATE RECEIVED RATE PAID (DEPRECIATION)
- --------------------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C> <C> <C> <C>
$ 25,000 A Belgium 1/4/99 1/3/04 6.05% 4.27%(b) $ 1,262,900
25,000 AAA Canada 6/18/99 6/18/04 5.95% 3.89%(b) 732,375
50,000 AAA Canada 1/4/99 1/3/04 6.05% 4.83%(b) 1,445,400
25,000 A Finland 1/4/99 1/3/02 5.82% 4.37%(b) 874,300
75,000 AA Germany 1/4/99 1/3/02 5.42% 4.25%(b) 1,955,175
25,000 A The Netherlands 1/4/99 1/3/02 5.38% 4.19%(b) 588,500
25,000 AAA The Netherlands 1/4/99 1/3/02 5.38% 3.90%(c) 671,500
19,000 AAA United States 12/6/99 12/6/99 5.72%(c) 5.96% (121,296)
70,000 AA United States 3/1/98 3/1/98 5.72%(c) 5.49% (14,000)
10,000 AA J.P. Morgan EMBI+(d) 12/8/99 12/8/99 9.65% 6.05% (296,550)
- --------------------------------------------------------------------------------------------------------------
$ 349,000 $ 7,098,304
- --------------------------------------------------------------------------------------------------------------
</TABLE>
(a)UNAUDITED.
(b)FLOATING RATE BASED ON THE COUNTRY'S INTERBANK OFFERED RATE AND FIXED THROUGH
TERMINATION DATE.
(c)FLOATING RATE BASED ON THE COUNTRY'S INTERBANK OFFERED RATE.
(d)THE J.P. MORGAN EMERGING MARKETS BOND INDEX PLUS (EMBI+) IS A TOTAL-RETURN
INDEX TRACKING THE TRADED EXTERNAL CURRENCY DENOMINATED DEBT INSTRUMENTS OF
SEVERAL EMERGING MARKET COUNTIES. FINAL PAYMENT WILL BE ADJUSTED BASED ON THE
PERFORMANCE OF UNDERLYING INDEX OVER THE TERM OF THE AGREEMENT.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
11
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------
JANUARY 31, 1998
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value - (Note 1)
(cost $518,127,764) $ 538,387,868
Cash equivalents - (Note 1) 6,230,704
Receivable for investments sold - (Note 1) 97,251,847
Receivable on interest rate swap contracts, net - (Note 1) 7,098,304
Interest receivable 4,096,354
------------------
Total Assets 653,065,077
------------------
LIABILITIES:
Payable for investments purchased - (Note 1) 191,024,016
Investments sold on a forward commitment basis - (Note 1) 97,925,309
Deferred fee income - (Note 1) 92,085
Payable for:
Investment management fees - (Note 2) 290,302
Printing and postage expenses 108,394
Administration fees - (Note 2) 74,201
Professional fees 72,764
Custodial fees 36,638
Other expenses 13,297
------------------
Total Liabilities 289,637,006
------------------
NET ASSETS $ 363,428,071
------------------
------------------
NET ASSETS CONSIST OF:
Paid-in capital - (Note 3) $ 380,711,199
Distribution in excess of net investment income (1,044,555)
Accumulated net realized loss on investments, interest rate swaps, and forward commitments (42,923,496)
Net unrealized appreciation on investments, interest rate swaps, and forward commitments 26,684,923
------------------
NET ASSETS $ 363,428,071
------------------
------------------
NET ASSET VALUE PER SHARE
(30,515,800 shares outstanding) $ 11.91
------------------
------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
12
<PAGE>
STATEMENT OF OPERATIONS
- ---------------------------------
FOR THE YEAR ENDED JANUARY 31, 1998
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Interest $ 33,048,399
Fee income -- (Note 1) 1,529,117
----------------
Total investment income 34,577,516
----------------
Expenses:
Investment management fees -- (Note 2) 3,445,733
Administration fees -- (Note 2) 307,800
Professional fees 261,500
Custodial fees 196,152
Printing and postage expenses 179,000
Insurance expense 40,000
Registration and filing fees 34,000
Directors' fees and expenses 30,000
Transfer agent fees 19,000
Other expenses 10,000
----------------
Total expenses 4,523,185
----------------
Net investment income 30,054,331
----------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized loss on investments, interest rate swaps, and forward commitments (7,145,875)
Net change in unrealized appreciation on investments, interest rate swaps, and forward
commitments 8,567,348
----------------
Net realized and unrealized gain 1,421,473
----------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 31,475,804
----------------
----------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
13
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
- ------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
JANUARY 31, 1998 JANUARY 31, 1997
------------------- -------------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 30,054,331 $ 28,665,312
Net realized gain (loss) on:
Investments, interest rate swaps, and forward commitments (7,145,875) 7,367,886
Net change in unrealized appreciation (depreciation) on investments,
interest rate swaps, and forward commitments 8,567,348 (1,204,734)
------------------- -------------------
Net increase in net assets resulting from operations 31,475,804 34,828,464
DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income - (Note 1) (30,149,611) (28,013,272)
------------------- -------------------
Net increase in net assets 1,326,193 6,815,192
NET ASSETS:
Beginning of year 362,101,878 355,286,686
------------------- -------------------
End of year* $ 363,428,071 $ 362,101,878
------------------- -------------------
------------------- -------------------
* Includes distributions in excess of net investment income $ (1,044,555) $ (1,142,083)
------------------- -------------------
------------------- -------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
14
<PAGE>
STATEMENT OF CASH FLOWS
- ---------------------------------
FOR THE YEAR ENDED JANUARY 31, 1998
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING AND INVESTING ACTIVITIES:
Investment income received $ 31,474,696
Operating expenses paid (4,617,447)
Purchase of long-term portfolio investments (672,318,026)
Proceeds from disposition of long-term portfolio investments 675,729,214
-----------------
Net cash provided by operating activities 30,268,437
-----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from dollar roll transactions 1,568,509
Dividends paid from net investment income (30,149,611)
-----------------
Net cash used in financing activities (28,581,102)
-----------------
Net increase in cash 1,687,335
Cash and equivalents at beginning of year 4,543,369
-----------------
Cash and equivalents at end of year $ 6,230,704
-----------------
-----------------
RECONCILIATION OF RESULTS FROM OPERATIONS TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
Net increase in net assets resulting from operations $ 31,475,804
Increase in investments (121,671,801)
Net realized loss on investments and forward commitments 7,145,875
Net unrealized appreciation on investments (9,095,474)
Change in:
Receivable for investments sold 23,863,754
Net unrealized appreciation on interest rate swaps (2,609,129)
Interest receivable (172,196)
Payable for investments purchased 122,316,516
Payable for investments sold on a forward commitment basis (20,901,911)
Accrued expenses (83,001)
-----------------
Net cash provided by operating activities $ 30,268,437
-----------------
-----------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
15
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- ----------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
RCM Strategic Global Government Fund, Inc. (the "Fund") commenced investment
operations on February 24, 1994, as a non-diversified, closed-end management
investment company and is registered under the Investment Company Act of 1940,
as amended. The following is a summary of significant accounting policies
consistently followed by the Fund in the preparation of its financial
statements. The policies are in conformity with generally accepted accounting
principles.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
SECURITIES VALUATIONS: Investment securities are stated at market value or, in
the absence of market value, at fair value as determined by or under the
direction of the Fund's Board of Directors. Over-the-counter securities are
valued on the basis of the most recent bid price. Investments in U.S. government
securities (other than short-term securities) are valued at the average of the
most recent bid and ask prices in the over-the-counter market. Investments that
mature in sixty days or less are valued at amortized cost which approximates
market value.
SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME: Security transactions are
recorded as of the date of purchase, sale or maturity. Realized gains and losses
on security transactions are determined on an identified cost basis. Interest
income, foreign taxes and expenses are accrued daily. Fees from dollar roll
transactions are recognized daily on a straight-line basis over the term of the
contract. The Fund accretes discount and amortizes premium to par value on
securities.
FOREIGN CURRENCY TRANSLATIONS: The records of the Fund are maintained in U.S.
dollars. Foreign currencies, investments and other assets and liabilities, if
any, are translated into U.S. dollars at current exchange rates. Purchases and
sales of foreign securities and income and expenses are translated on the
respective dates of such transactions. Net realized currency gains and losses
arise from trade and settlement date gains and losses, sales of forward foreign
currency contracts, and foreign currency transactions. The Fund does
16
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- ----------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
not isolate the portion of unrealized foreign currency exchange fluctuation on
investments. Such unrealized fluctuations are included in net unrealized
appreciation or depreciation on investments.
FORWARD FOREIGN CURRENCY CONTRACTS: A forward foreign currency contract
("Forward") is an agreement between two parties to buy or sell currency at a set
price on a future date. The Fund may enter into Forwards in order to hedge
foreign currency risk associated with its portfolio securities or for other risk
management or investment purposes. The net U.S. dollar value of foreign currency
underlying all contractual commitments held by the Fund on each day is
determined by using the appropriate current or forward exchange rate. Realized
gains or losses on Forwards include net gains or losses on contracts that have
matured or which the Fund has terminated by entering into an offsetting closing
transaction. Unrealized appreciation or depreciation of Forwards is included in
the Statement of Assets and Liabilities and is carried on a net basis. The
portfolio could be exposed to risk of loss if the counterparty is unable to meet
the terms of the contract or if the value of the currency changes unfavorably.
As of January 31, 1998, there were no open Forwards.
FORWARD COMMITMENTS: The Fund may enter into forward sale commitments in which
the Fund agrees on trade date to make delivery against payment for securities on
a delayed delivery basis. The price and interest rate of such securities are
fixed at trade date. The Fund enters into forward sale commitments to manage its
portfolio duration. Realized gains and losses of forward sale commitments are
recognized at the time such transactions are closed by an offsetting purchase.
At January 31, 1998, there was $97,925,309 of forward sale commitments
outstanding.
The Fund enters into dollar rolls in which the Fund sells securities for
delivery in the current month and simultaneously contracts to repurchase
substantially similar (same type, same or similar interest rate and maturity)
securities on a specified future date. During the roll period, the Fund forgoes
principal and interest paid on the securities. The Fund accounts for dollar
rolls as financing transactions. Dollar rolls enhance the Fund's yield by
earning a spread between the yield on the underlying mortgage securities and
short-term interest rates. The fee income earned for the period on these
transactions was $1,529,117. At January 31, 1998, there was $191,024,016 in
dollar roll commitments on liquid mortgage pass-throughs outstanding.
17
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- ----------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INTEREST RATE SWAPS: The Fund enters into interest rate swaps for investment,
hedging, and risk management purposes. Interest rate swaps involve the exchange
of commitments to pay or receive interest--e.g., an exchange of floating rate
payments for fixed rate payments. If forecasts of interest rates and other
market factors are incorrect, investment performance will diminish compared to
what performances would have been if these investment techniques were not used.
Even if the forecasts are correct, there are risks that the positions may
correlate imperfectly with the asset or liability being hedged, a liquid
secondary market may not always exist, or a counterparty to a transaction may
not perform. The Fund records, as an increase or decrease to interest income,
the net amount due or owed by the Fund on each periodic payment. The market
valuations represent the net present value of all future cash settlement amounts
based on implied forward interest rates.
The Fund had $260 million in notional amount of swaps to provide regional
exposure to interest rates in Europe, Canada and emerging markets, and $89
million in notional amount to hedge exposure to an increase in U.S. short-term
interest rates. The swaps are U.S. dollar-denominated to provide interest rate
exposure without foreign currency exchange risk. The difference between rates
received and paid by the Fund constitutes investment income. Unrealized
appreciation on swap positions was $7,098,304 at January 31, 1998.
REVERSE REPURCHASE AGREEMENTS: The Fund enters into reverse repurchase
agreements with qualified counterparties as determined by or under the direction
of the Fund's Board of Directors. A reverse repurchase agreement involves a sale
by the Fund of securities that it holds with an agreement by the Fund to
repurchase the same securities at an agreed-upon price and date. Interest on the
value of reverse repurchase agreements issued and outstanding is based upon
competitive market rates at the time of issuance. At January 31, 1998, the Fund
had no open reverse repurchase agreements outstanding.
LEVERAGE: Forward sale commitments, dollar rolls, interest rate swaps, reverse
repurchase agreements and other transactions may involve leverage. In order to
limit leverage, the Fund segregated $275,787,538 in high credit quality, liquid
investments against outstanding obligations, resulting in $13,593,633 net
leverage at January 31, 1998.
FEDERAL INCOME TAXES: It is the policy of the Fund to comply with the
requirements for qualification as a "regulated investment company" under the
Internal Revenue Code of 1986, as amended. It is also the intention of the Fund
to make distributions of substantially
18
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- ----------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
all of its taxable income and net realized capital gains to its shareholders.
Therefore, no federal income tax provision is required. As of January 31, 1998,
the Fund had capital loss carryovers of $16,648,019, $18,629,658, and $1,742,109
which will expire on January 31, 2003, January 31, 2004, and January 31, 2006,
respectively.
DISTRIBUTIONS TO SHAREHOLDERS: The Fund distributes to its holders of common
stock monthly dividends of net investment income. Net realized capital gains, in
excess of capital loss carryovers, if any, will be distributed to the
stockholders at least annually. The Fund records all distributions to
stockholders on the ex-dividend date. Income and capital gain distributions are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. Any differences are primarily due to
differing treatments for losses deferred, accounting for foreign currency,
original issue discount accretion and excise tax regulations.
CASH EQUIVALENTS: The Fund considers investments in money market funds to be
cash equivalents.
2. TRANSACTIONS WITH AFFILIATES, ADMINISTRATOR AND RELATED PARTIES
Dresdner RCM Global Investors LLC (previously, RCM Capital Management, L.L.C.),
the investment manager, furnishes investment advice to the Fund and receives a
fee, at the annualized rate of 0.95% of the Fund's average daily net assets.
State Street Bank and Trust Company (the "Administrator") serves as the Fund's
administrator and receives a fee of 0.10% on the first $250 million of the
Fund's average daily net assets, 0.05% on the next $250 million and 0.02% on
amounts thereafter. No principal, officer or employee of the investment manager
or any affiliate thereof will receive any compensation from the Fund for serving
as an officer or director of the Fund. The Fund pays each of its directors an
annual fee of $6,000 plus $1,000 for each meeting attended.
3. CAPITAL SHARES
At January 31, 1998 and 1997, there were 500,000,000 shares of common stock
authorized at $0.00001 par value and 30,515,800 shares outstanding.
19
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- ----------------------------------------------------------
4. PURCHASES AND SALES OF SECURITIES
Purchases and proceeds from sales of securities, other than obligations of the
U.S. government and its agencies, short-term securities, dollar rolls and
forward commitments for the year ended January 31, 1998 aggregated $30,687,493
and $47,855,200, respectively. Purchases and proceeds from sales of obligations
of the U.S. government and its agencies, other than short-term securities and
dollar rolls, for the year ended January 31, 1998, aggregated $238,686,501 and
$78,665,214, respectively. At January 31, 1998, the aggregate cost of
investments for federal income tax purposes was $518,434,900. Gross unrealized
appreciation and depreciation of investments aggregated $20,431,344 and
$478,376, respectively, resulting in net unrealized appreciation of $19,952,968
at January 31, 1998.
20
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- ----------------------------------------------------------
Supplementary data for a share outstanding are presented for the periods
indicated:
<TABLE>
<CAPTION>
2/24/94*
YEAR ENDED YEAR ENDED YEAR ENDED THROUGH
1/31/98 1/31/97 1/31/96 1/31/95**
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 11.87 $ 11.64 $ 10.85 $ 12.50
-------------- -------------- -------------- --------------
Net investment income 0.98 0.94 0.96 0.83
Net realized and unrealized gain (loss) 0.05 0.21 0.72 (1.71)
-------------- -------------- -------------- --------------
Net increase (decrease) in net assets resulting
from operations 1.03 1.15 1.68 (0.88)
Distributions:
Net investment income (0.99) (0.92) (0.89) (0.75)
Offering costs -- -- -- (0.02)
-------------- -------------- -------------- --------------
Net asset value, end of period $ 11.91 $ 11.87 $ 11.64 $ 10.85
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
Market price, end of period $ 11.156 $ 10.625 $ 10.250 $ 9.625
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
Total return based on market price 14.76% 13.57% 16.21% (17.21)%+
Total return based on net asset value 9.66% 11.72% 17.07% (6.68)%+
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 363,428 $ 362,102 $ 355,287 $ 331,166
Ratio of expenses to average net assets 1.25% 1.25% 1.20% 1.15%++(a)
Ratio of net investment income to average net
assets 8.29% 8.21% 8.50% 7.79%++(a)
Portfolio turnover 29% 59% 96% 158%+
</TABLE>
<TABLE>
<C> <S>
* COMMENCEMENT OF INVESTMENT OPERATIONS.
** AUDITED BY PRIOR AUDITORS.
+ NOT ANNUALIZED.
++ ANNUALIZED.
(a) RATIOS INCLUDE CERTAIN ORDINARY OPERATING EXPENSE WAIVERS. WITHOUT SUCH
WAIVERS, THE RATIO OF EXPENSES TO AVERAGE NET ASSETS WOULD HAVE BEEN 1.24%
AND THE RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS WOULD HAVE BEEN
7.71%.
</TABLE>
21
<PAGE>
INDEPENDENT TO AUDITORS' REPORT
- ----------------------------------------------------------
To the Shareholders and Board of Directors of
RCM Strategic Global Government Fund, Inc.:
We have audited the accompanying statement of assets and liabilities of RCM
Strategic Global Government Fund, Inc. (the 'Fund'), including the schedule of
investments in securities and net assets, as of January 31, 1998, and the
related statements of operations and cash flows for the year then ended, the
statements of changes in net assets for each of the two years in the period then
ended, and the financial highlights for each of the three years in the period
then ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits. The financial highlights for the period from February 24, 1994
(commencement of operations) to January 31, 1995 presented herein were audited
by other auditors whose report dated March 10, 1995, expressed an unqualified
opinion on such financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
January 31, 1998, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of RCM
Strategic Global Government Fund, Inc. as of January 31, 1998, the results of
its operations and its cash flows for the year then ended, the changes in its
net assets for each of the two years in the period then ended, and the financial
highlights for each of the three years then ended, in conformity with generally
accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
March 9, 1998
22
<PAGE>
DIVIDEND REINVESTMENT PLAN (UNAUDITED)
- ----------------------------------------------------
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 the net asset value is less than 95% of the then
current market price of the common stock, 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.
23
<PAGE>
SHAREHOLDER MEETING RESULTS (UNAUDITED)
- -------------------------------------------------------
The Annual Meeting of Shareholders of RCM Strategic Global Government Fund, Inc.
was held on Tuesday, August 19, 1997. The number of shares issued, outstanding
and eligible to vote as of record date (June 30, 1997) was 30,515,800. Present
were 28,607,448 shares represented by 185 proxies or 93.75% of the eligible
voting shares tabulated. The matters voted upon by Shareholders and the
resulting votes for each matter are presented below:
1. Gary W. Schreyer and Francis E. Lundy were re-elected to the Board of
Directors for a term to expire in 2000 or until their successors shall be
duly elected and qualified. The votes for Gary W. Schreyer were cast: For
(10,556,149), Withheld (18,051,299). The votes for Francis E. Lundy were
cast: For (28,363,625), Withheld (243,823).
2. The selection by the Board of Directors of Coopers & Lybrand L.L.P. as
independent public accountants for the fiscal year ending January 31, 1998
was approved. The votes were cast: For (28,312,776), Against (115,573),
Abstain (176,099), Broker Non-Vote (3,000).
24
<PAGE>
CORPORATE INFORMATION
- -----------------------------
DIRECTORS
Gary W. Schreyer, CHAIRMAN AND PRESIDENT
William A. Hasler
Francis E. Lundy
James M. Whitaker
OFFICERS
Richard W. Ingram
CHIEF FINANCIAL OFFICER AND ASSISTANT TREASURER
Caroline M. Hirst
SECRETARY AND TREASURER
PORTFOLIO MANAGERS
Eamonn F. Dolan
Stephen Kim
Jack L. Bernard
Mark E. Raaberg
INVESTMENT MANAGER
Dresdner RCM Global Investors LLC
Four Embarcadero Center
San Francisco, California 94111
ADMINISTRATOR, CUSTODIAN AND
TRANSFER AGENT
State Street Bank and Trust Company
1776 Heritage Drive
North Quincy, Massachusetts 02171
(800) 426-5523
INDEPENDENT AUDITORS
Coopers & Lybrand L.L.P.
One Post Office Square
Boston, Massachusetts 02109
COUNSEL
Ropes & Gray
One International Place
Boston, Massachusetts 02110-2624
Dresdner RCM Global Investors LLC is an institutional money manager
headquartered in San Francisco with approximately $60 billion in managed assets,
including approximately $14 billion in fixed income securities. Dresdner 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," IN THE NEW YORK TIMES AS "RCMSTGLFD," AND IN 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 IN 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 PRIOR ANNUAL OR SEMI-ANNUAL REPORTS, PLEASE
CONTACT YOUR BROKER OR CALL DRESDNER RCM DIRECTLY AT (415) 954-5400.
INVESTMENT MANAGER:
DRESDNER RCM GLOBAL INVESTORS LLC
FOUR EMBARCADERO CENTER
SAN FRANCISCO, CALIFORNIA 94111
