<PAGE>
RCM
STRATEGIC
GLOBAL
GOVERNMENT
FUND
SEMI-ANNUAL
REPORT
JULY 31, 1999
<PAGE>
RCM STRATEGIC GLOBAL GOVERNMENT FUND
FUND HIGHLIGHTS
- ----------------
FINANCIAL INFORMATION
RCM Strategic Global Government Fund, Inc. ("RCS" or the "Fund") is a
closed-end, global bond fund. 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.
The Fund invests at least 65% of its assets in government securities of the
United States and other countries, under normal market conditions. The
securities in the investment portfolio currently have an average credit-quality
rating of AA and have effective maturities generally between 3 and 10 years.
<TABLE>
<CAPTION>
(UNAUDITED)
SIX MONTHS
ENDED JANUARY 31,
JULY 31, --------------------------------------
PERIOD ENDED* 1999 1999 1998 1997
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total investment income $ 18,559 $ 32,730 $ 34,578 $ 33,013
Total investment income per share 0.61 1.07 1.13 1.08
Net investment income 14,607 28,094 30,054 28,665
Net investment income per share 0.47 0.92 0.98 0.94
Net realized and unrealized gain (loss) (19,102) (13,362) 1,421 6,163
Net realized and unrealized gain (loss) per share (0.63) (0.43) 0.05 0.21
Net asset value at end of period 10.86 11.46 11.91 11.87
Market price at end of period 9.63 9.88 11.16 10.63
Total return on net asset value (0.83)% 5.23% 9.66% 11.72%
Total return on market price 2.00% (3.11)% 14.76% 13.57%
Dividend from net investment income $ 0.44 $ 0.94 $ 0.99 $ 0.92
Effective dividend yield** 9.22% 9.51% 8.87% 8.65%
</TABLE>
* IN THOUSANDS (000'S) EXCEPT PER SHARE DATA.
** DIVIDEND DIVIDED BY PERIOD END MARKET PRICE AND ANNUALIZED.
<PAGE>
RCM STRATEGIC GLOBAL GOVERNMENT FUND
CHAIRMAN'S LETTER TO SHAREHOLDERS
- ----------------------------------------
PHOTO
TO BE
INSERTED
September 7, 1999
Dear Shareholders:
For the six months ended July 31, 1999, the RCM Strategic Global Government
Fund, Inc. (NYSE symbol: RCS) earned total income of $18,558,965 or $0.61 per
share, which compares favorably to first six months of the prior fiscal year.
The general increase in interest rates during the six-month period detracted
from total returns in the bond markets. Reflecting this fact, the Fund's net
asset value fell from $11.46 at January 31, 1999 to $10.86 at July 31, 1999.
During the six-month period, the fund paid out $0.44 per share in dividends to
shareholders, which was the same as in the first six months of the previous
fiscal year. Despite a challenging market environment, I am pleased to report
the Fund is again on track to maintain its dividend payout at a rate well in
excess of the yield on high-quality intermediate maturity debt obligations.
On a more disappointing note, the market price of RCS as reported on the NYSE
fell during the six month period from $9.88 on January 31, 1999 to $9.63 on July
31, 1999. Much like any exchange-listed security, the market price of the Fund
reflects the interaction of buyers and sellers and is therefore not able to be
directly controlled by the Fund or its investment manager. The Board does
monitor the market price and receives regular reports from the manager regarding
unusual trading volumes and market price fluctuations. However, it feels the
best path to producing a strong market price is to produce a consistent level of
income by taking advantage of the full range of tools and strategies available
within the Fund. We are also seeking to develop more demand for the Fund's
shares by meeting with analysts and providing information on the Fund and its
holdings. To that end, an Internet site has also been established which provides
information about the Fund. If you have not done so, we encourage you to visit
the Fund's website at www.RCSfund.com.
The Fund is well positioned to achieve its objectives in the remainder of this
fiscal year. U.S. based investments generated 75.5% of the Fund's income in the
six-month period with 5.5% derived from developed foreign markets and 19% from
emerging markets. In the period ahead, we expect the U.S. component will
diminish modestly in favor of non-U.S. opportunities. Overall, the Fund's
portfolio maintains a high quality profile with an average credit rating of AA.
1
<PAGE>
RCM STRATEGIC GLOBAL GOVERNMENT FUND
CHAIRMAN'S LETTER TO SHAREHOLDERS
- -------------------------------------------------
This is my first letter to you as Chairman of the Fund following Mr. Gary
Schreyer's resignation as Chairman in June of this year. My career history
includes over 25 years in management and oversight of fixed income portfolios of
all types. As the Fund's new Chairman, I will participate in the development and
oversight of the investment strategy and do my best to achieve the continued
success of the Fund. I welcome your thoughts and comments, which can be directed
to me via e-mail at [email protected]. On a final note, the Board
extends its thanks to Mr. Schreyer for his contribution over the years to the
success of the Fund and wishes him well.
Sincerely,
/s/ LUKE D. KNECHT
Luke D. Knecht
CHAIRMAN OF THE BOARD AND PRESIDENT
2
<PAGE>
RCM STRATEGIC GLOBAL GOVERNMENT FUND
MANAGERS' DISCUSSION AND ANALYSIS
- --------------------------------------------------------
REGIONAL PORTFOLIO COMPOSITION. The bond markets in general declined during the
semi-annual period ending July 31, 1999. Yields in the U.S. continued their
upward rise in reaction to continued U.S. domestic growth and fears that the
Federal Reserve would take preemptive measures to keep inflation in check. A
larger-than-expected CPI, as well as healthy GDP and employment figures in May
and June, reinforced cautionary comments by the Fed during the period. Ending
all speculation on June 30, 1999, the Fed raised the federal funds rate 0.25% to
5.00%. The U.S. bond market priced in at least one or more Fed tightenings in
anticipation of more to come, and therefore yields continued to rise even after
the tightening. In other markets, the apparent recovery and stabilization of
foreign economies during the period caused developed foreign markets to perform
well during the period, although currency positions suffered somewhat relative
to the U.S. dollar. Emerging markets showed relative stability, although
volatile during the first part of the period, as the Russian crisis, Asian
crisis, and the Brazilian Real crisis waned.
RCS portfolio strategy again relied on three primary bond market sectors: US
domestic markets, developed foreign markets, and emerging markets.
U.S. investments were predominantly mortgage pass-through securities. During the
last six months of global stabilization, strong domestic growth and few signs of
inflationary pressure, the market has seen an increased demand for all spread
products, including mortgage pass-throughs. Increased demand coupled with
significantly reduced supply resulted in strong performance of pass-throughs. In
the most recent months, declining volatility has also increased the demand for
mortgages. To maximize exposure to declining volatility, reinvestment of cash
flow in new TBA positions were made in securities priced closest to par. To
diversify U.S. holdings and take advantage of relative value opportunities, RCS
also continues to hold positions in investment-grade corporates and commercial
mortgage-backed securities. These asset classes will continue to make a
significant contribution to the realization of 1999 dividend goals. In January
the Fund modified its exposure to investment-grade corporates and commercial
mortgage-backed securities by introducing the use of total return swaps on
indices instead of owning individual securities. This was done in order to
diversify the Fund's holdings and lock the yield spreads on those positions
versus U.S. Treasuries.
A second strategy that was important in increasing the dividend of the Fund was
the Fund's exposure to developed foreign markets. The Fund's exposure to
developed foreign markets during the period took the form of interest-rate
swaps. Interest rate swaps can be a good way to gain exposure to foreign markets
while not taking currency risk. The developed foreign swaps for the semi-annual
period ending July 31, 1999, were in Switzerland and New Zealand.
The emerging market portion of the Fund performed well in absolute terms and
also relative to the J.P. Morgan EMBI+ Index during the semi-annual period
ending July 31, 1999. The Fund took
3
<PAGE>
RCM STRATEGIC GLOBAL GOVERNMENT FUND
MANAGERS' DISCUSSION AND ANALYSIS
- -------------------------------------------------
advantage of the volatility and market correction triggered by several events,
including the devaluation of the Brazilian Real. The total emerging market
exposure was further diversified at both the country and regional levels, taking
positions in six new sovereign issuers: Brazil, Peru, Colombia, Venezuela,
Bulgaria and Indonesia. Regional allocation within the emerging market sector
has changed recently, reducing the Latin American exposure in favor of
Mediterranean Europe and Southeast Asia. We were able to avoid the sharp
correction in Argentina and Ecuador by selling off both credits in April.
Overall country and security selection added to the relative performance of the
emerging market component of RCS. The increased emerging market component added
to the NAV performance in absolute terms.
FINANCIAL LEVERAGE. 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 manage overall duration, RCS sells U.S. Treasury
bonds on a forward commitment basis. RCS averaged $112.8 million in bonds sold
forward during the period. At July 31, 1999, there was $89.9 million in similar
positions, as opposed to $73.7 million at prior fiscal year-end.
Financed mortgage-backed securities, "mortgage dollar rolls," contributed $2.3
million in income in 1999 on average volume of $289 million. The income
contribution appears on the Statement of Operations as Fee Income. At July 31,
1999, there were $279 million in mortgage dollar rolls compared to $303 million
at prior fiscal year-end. To limit the effect of leverage, the Fund has
segregated $261 million in high-quality, liquid assets.
Since 1994, RCS has used interest-rate swaps for managing income and duration.
For the six-month period ending July 31, 1999, the Fund earned $1.3 million in
interest income on interest rate swaps with an average notional amount of $244.2
million. As of July 31, 1999, interest rate swaps with a notional amount of $150
million were held on developed foreign and emerging market interest rates. For
the six-month period ending July 31, 1999 RCS entered into U.S. interest rate
swaps with a notional amount of $200 million in order to lock in costs
associated with financing mortgage dollar roll positions. In addition, as of
July 31, 1999 the Fund held both a Corporate and a CMBS interest rate swap with
aggregate notional value of $85 million.
DISCOUNT. As with other closed-end bond funds, the market price of RCS trades at
a premium or discount to the net asset value depending on a number of factors
beyond the control of Dresdner RCM--for instance, the phases of the interest
rate cycle, the stock market, and investor sentiment.
4
<PAGE>
RCM STRATEGIC GLOBAL GOVERNMENT FUND
MANAGERS' DISCUSSION AND ANALYSIS
- -------------------------------------------------
The average percentage stock price discount to net asset value throughout the
semi-annual period ending July 31, 1999, was 15.1%. The Fund ended the period at
a discount of 11.3%. It is possible that the narrowing of the discount during
this period was attributable to an assuaging of investor fears surrounding the
volatility of the emerging markets as well as other market factors. Dresdner RCM
believes that continued efforts to inform the investment community of the
quality of RCS and delivering consistent performance will be important in
addressing the discount.
Although discounts created negative market performance last year for the Fund,
the Fund has enjoyed significant income as Dresdner RCM continues to achieve the
income-oriented goals of RCS. The average yield on market price rose throughout
the period from 9.6% at January 31, 1999, to 11.0% at July 31, 1999, and the
income yield reached 10.0% as of July 31, 1999.
MARKET OUTLOOK. Dresdner RCM believes that inflation is likely to increase
moderately, but a substantial increase is unlikely. We believe there is a
substantial possibility that the Federal Reserve will raise the federal funds
rate to 5.50% at upcoming Federal Open Market Committee meetings for three
reasons. First, the Fed believes that raising rates as a preemptive measure to
combat a potential buildup in inflationary pressures is warranted. Second,
Dresdner RCM does not expect the growth rate of the economy to slow
substantially between now and year-end. Third, Dresdner RCM believes that rates
could be increased in order to diminish the probability that tightening will be
needed near year-end when liquidity could be a problem due to Y2K-related
issues. In anticipation of possible increases in interest rates, the Fund will
maintain a cautious duration posture through year-end as a means to decrease the
Fund's price sensitivity to the expected rise in yields.
Dresdner RCM believes that growth prospects are improving in global markets.
Economic confidence has improved in Europe and economic activity has increased
in Japan. Although some question the sustainability of these improvements, more
global capital flows are being redirected away from the US. Therefore, we will
continue to look for attractive investment alternatives in non-U.S. markets and
we will continue to expose the Fund to these markets through interest-rate swaps
as a more efficient means of holding foreign exposure without the currency risk.
YEAR 2000 DISCLOSURE. We would like to take this opportunity to assure
Shareholders that Dresdner RCM has committed considerable effort and resources
to avoid difficulties related to Y2K through technological upgrades as well as
ensuring that critical vendor systems are also Y2K compliant. In addition,
Dresdner RCM reviews and takes into consideration the Y2K preparedness of the
companies in which it invests during its investment decision-making process.
However, Dresdner RCM recognizes that Y2K problems could adversely affect some
companies; therefore, investment returns may be temporarily impacted.
5
<PAGE>
RCM STRATEGIC GLOBAL GOVERNMENT FUND
INVESTMENT INCOME SUMMARY
- ----------------------------
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS SIX MONTHS
ENDED ENDED
JULY 31, 1999 JULY 31, 1999 1998 1998
PERCENTAGE (000'S) PERCENTAGE (000'S)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
UNITED STATES
Mortgage Pass-Throughs 44.4% $ 8,234 49.6% $ 16,244
Mortgage Projects/CMO's 12.3% 2,287 6.2% 2,036
Mortgage Dollar Rolls 12.2% 2,261 8.4% 2,758
Corporates 5.6% 1,046 0.8% 274
Cash & Other 1.0% 180 1.8% 571
- -----------------------------------------------------------------------------------------------------
Total United States 75.5% 14,008 66.8% 21,883
- -----------------------------------------------------------------------------------------------------
DEVELOPED FOREIGN
Switzerland 3.1% 575 1.4% 453
New Zealand 1.8% 327 0.4% 125
Canada 0.6% 112 2.2% 728
Germany -- -- 2.1% 690
The Netherlands -- -- 1.8% 579
Belgium -- -- 1.1% 362
Finland -- -- 0.9% 284
- -----------------------------------------------------------------------------------------------------
Total Developed Foreign 5.5% 1,014 9.9% 3,221
- -----------------------------------------------------------------------------------------------------
EMERGING MARKETS
Mexico 4.2% 775 5.7% 1,881
Brazil 2.9% 539 0.5% 161
Bulgaria 2.2% 412 -- --
EMBI+ Index 2.0% 365 2.0% 649
Philippines 1.7% 315 0.1% 22
Ecuador 1.6% 300 -- --
Argentina 0.8% 160 6.4% 2,109
Panama 0.2% 48 4.6% 1,500
Other 3.4% 623 4.0% 1,304
- -----------------------------------------------------------------------------------------------------
Total Emerging Markets 19.0% 3,537 23.3% 7,626
- -----------------------------------------------------------------------------------------------------
Total RCS Investment Income 100.0% $ 18,559 100.0% $ 32,730
- -----------------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE>
(This page has been left blank intentionally.)
7
<PAGE>
RCM STRATEGIC GLOBAL GOVERNMENT FUND
PORTFOLIO OF INVESTMENTS
- -------------------------
JULY 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET VALUE
COUNTRY/ PRINCIPAL (US$)
CURRENCY (000's) DESCRIPTION (NOTE 1)
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
DEBT SECURITIES -- 181.2%*
BRAZIL -- 3.2%
USD Federal Republic of Brazil
15,504 C Bond, 5.00% with 3.00%
Interest Capitalization, 04/15/14 $ 9,477,581
2,000 5.75%, Step-Up Coupon, 04/15/24 1,105,000
-------------
Total Brazil 10,582,581
-------------
BULGARIA -- 3.9%
USD National Republic of Bulgaria
21,174 2.75%, Step-Up Coupon, 07/28/12 12,890,731
-------------
INDONESIA -- 0.8%
USD Indah Kiat Finance Mauritius
3,239 10.00%, 7/01/07 2,024,375
Indah Kiat International Finance
745 11.88%, 6/15/02 596,000
-------------
Total Indonesia 2,620,375
-------------
MEXICO -- 3.5%
United Mexican States
EUR 5,000 7.38%, 07/06/06 5,224,382
USD 3,000 9.06%, 04/07/04, Series 144A** 3,037,500
USD 3,200 9.75%, 02/06/01 3,334,400
-------------
Total Mexico 11,596,282
-------------
PHILIPPINES -- 3.0%
USD Republic of Philippines
3,059 6.00%, Step-Up Coupon, 06/01/08 2,829,575
6,299 6.00%, 12/01/09 5,747,714
Globe Telecom
1,254 13.00%, 08/01/09, Series 144A** 1,254,000
-------------
Total Philippines 9,831,289
-------------
RUSSIA -- 1.0%
USD Russian Federation
5,810 12.75%, 06/24/28, Series 144A** 3,253,600
-------------
TURKEY -- 0.9%
USD Republic of Turkey
2,980 12.38%, 06/15/09 2,980,596
-------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
8
<PAGE>
RCM STRATEGIC GLOBAL GOVERNMENT FUND
PORTFOLIO OF INVESTMENTS
- -----------------------------------
JULY 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET VALUE
COUNTRY/ PRINCIPAL (US$)
CURRENCY (000's) DESCRIPTION (NOTE 1)
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
VENEZUELA -- 1.9%
USD Republic of Venezuela
8,702 6.31%, 12/18/07 $ 6,396,227
-------------
UNITED STATES -- 163.0%
USD MORTGAGE-BACKED SECURITIES -- 154.8%
32,956 FNMA 6.50%, 2024 - 2029 31,390,412
53,391 GNMA 7.00%, 2024 - 2029 52,260,080
25,258 FNMA 7.00%, 2004 - 2029 24,681,513
36,406 GNMA 7.50%, 2006 - 2028 36,394,079
14,070 FNMA 7.50%, 2026 - 2028 14,077,513
55,639 FHLMC 7.50%, 2025 - 2026 55,705,147
2,559 GNMA 8.00%, 2016 - 2022 2,628,311
2,720 FHLMC 8.00%, 2024 2,774,760
317 GNMA 8.50%, 2016 - 2023 330,837
94,000 FNMA 6.50%, 2029 TBA 89,535,000
194,000 FNMA 7.00%, 2029 TBA 189,572,920
8,953 FHA Project Pool 56, 7.43%, 11/01/22 8,901,240
5,764 FHA Project Pool 144 S, 7.43%, 06/01/24 5,114,467
-------------
Total Mortgage-Backed Securities 513,366,279
-------------
USD COLLATERALIZED MORTGAGE OBLIGATIONS -- 8.2%
DLJ Mortgage Acceptance Corp.
1,000 Series 1994-MF11, Class A2 8.10%, 06/18/04 1,019,336
4,850 Series 1994-MF11, Class A3 8.10%, 06/18/04 4,886,943
FHLMC
17,932 Series 1667, Class PE 6.00%, 03/15/08 17,691,039
G E Capital Mortgage Services, Inc.
3,722 Series 1994-12, Class B1 6.00%, 04/25/09 3,555,892
-------------
Total Collateralized Mortgage Obligations 27,153,210
-------------
TOTAL DEBT SECURITIES -- (COST $619,694,731) 600,671,170
-------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
9
<PAGE>
RCM STRATEGIC GLOBAL GOVERNMENT FUND
PORTFOLIO OF INVESTMENTS
- -----------------------------------
JULY 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET VALUE
COUNTRY/ SHARES (US$)
CURRENCY (000's) DESCRIPTION (NOTE 1)
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 5.0%
UNITED STATES -- 5.0%
USD MONEY MARKET FUNDS -- 5.0% (NOTE 1)
16,673 SSgA U.S. Government Money Market Fund $ 16,673,080
-------------
TOTAL SHORT-TERM INVESTMENTS -- (COST $16,673,080) 16,673,080
-------------
TOTAL INVESTMENTS -- 186.2% (COST $636,367,811) 617,344,250
-------------
Payable for Investments Purchased -- (85.6)% (283,812,750 )
Payable for Investments Sold on a Forward Commitment Basis, net -- (27.1)%+ (89,722,914 )
Other Assets Less Liabilities -- 26.5%++ 87,744,960
-------------
NET ASSETS -- 100.0% $331,553,546
-------------
-------------
</TABLE>
TERMS
EUR -- European Dollar
FHA -- Federal Housing Administration
FHLMC -- Federal Home Loan Mortgage Corporation
FNMA -- Federal National Mortgage Association
GNMA -- Government National Mortgage Association
TBA -- To Be Announced, Standard Settlement
USD -- United States Dollar
* PERCENTAGE OF NET ASSETS
** SECURITY PURCHASED PURSUANT TO RULE 144A OF THE SECURITIES ACT OF 1933 AND
MAY BE RESOLD ONLY TO QUALIFIED INSTITUTIONAL BUYERS.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
10
<PAGE>
RCM STRATEGIC GLOBAL GOVERNMENT FUND
PORTFOLIO OF INVESTMENTS
- -----------------------------------
JULY 31, 1999 (UNAUDITED)
+ On a forward commitment basis, the Fund has agreed to sell the following U.S.
Treasury securities:
<TABLE>
<CAPTION>
MARKET VALUE
PRINCIPAL (US$)
CURRENCY (000's) DESCRIPTION (NOTE 1)
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
USD $ 35,570 U.S. Treasury Bonds 6.00%, 02/15/26 $ 34,246,085
34,225 U.S. Treasury Bonds 6.50%, 11/15/26 35,152,497
20,075 U.S. Treasury Bonds 6.38%, 08/15/27 20,324,332
--------- ------------
$ 89,870 (Proceeds $90,605,925) $ 89,722,914
--------- ------------
--------- ------------
</TABLE>
- --------------------------------------------------------------------------------
++ As of July 31, 1999, 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 RATE APPRECIATION
(000'S) RATING COUNTRY DATE DATE RECEIVED PAID (DEPRECIATION)
- --------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C> <C> <C> <C>
$100,000 AAA United States 2/01/01 2/01/01 5.22%(a) 5.89% $ (37,000)
100,000 AAA United States 2/07/01 2/07/01 5.18%(a) 5.74% 212,000
50,000 A New Zealand 11/24/00 11/24/03 6.30% 4.98%(b) (1,957,500)
45,000 A Corporate Index (d) 7/01/00 7/01/00 7.29% 6.04% 42,705
40,000 AA CMBS Index (e) 6/30/00 6/30/00 7.33% 6.04% (445,560)
40,000 AA Switzerland 6/19/00 6/19/08 3.67% 2.18%(a) 100,960
35,000 A Switzerland 11/25/00 11/25/08 3.26% 1.68%(a) (1,163,435)
10,000 AA EMBI+ Index (c) 12/8/99 12/8/99 9.65% 6.05%(a) (2,429,070)
10,000 AA EMBI+ Index (c) 4/24/00 4/24/00 9.56% 5.91%(a) (2,421,270)
5,000 A Mexico 3/19/08 3/12/08 8.63% 3.06%(a) (155,510)
- --------------------------------------------------------------------------------------------------
$435,000 $(8,253,680)
- --------------------------------------------------------------------------------------------------
</TABLE>
(a) FLOATING RATE BASED ON THE COUNTRY'S INTERBANK OFFERED RATE, EXCEPT MEXICO
WHICH IS BASED ON THE U.S. INTERBANK OFFERED RATE.
(b) FLOATING RATE BASED ON THE COUNTRY'S INTERBANK OFFERED RATE, BUT FIXED
THROUGH TERMINATION DATE.
(c) THE J.P. MORGAN EMERGING MARKETS BOND INDEX PLUS (EMBI+) IS A TOTAL RETURN
INDEX TRACKING THE TRADED U.S. DOLLAR DENOMINATED DEBT INSTRUMENTS OF
SEVERAL EMERGING MARKET COUNTRIES. FINAL PAYMENT WILL BE ADJUSTED BASED ON
THE PERFORMANCE OF THE UNDERLYING INDEX OVER THE TERM OF THE AGREEMENT.
(d) TOTAL RETURN SWAP. THE FUND RECEIVES AND PAYS FIXED INTEREST RATES
PERIODICALLY. AT TERMINATION, THE FUND WILL RECEIVE THE TOTAL RETURN OF THE
LEHMAN BROTHERS CORPORATE INDEX LESS THE TOTAL RETURN OF THE LEHMAN BROTHERS
TREASURY INDEX ADJUSTED FOR INTEREST RECEIVED. THE CORPORATE AND TREASURY
INDEXES ARE BROAD MARKET INDEXES FOR U.S. INVESTMENTS-GRADE CORPORATES AND
U.S. TREASURIES.
(e) TOTAL RETURN SWAP. THE FUND RECEIVES AND PAYS FIXED INTEREST RATES
PERIODICALLY. AT TERMINATION, THE FUND WILL RECEIVE THE TOTAL RETURN OF THE
LEHMAN BROTHERS COMMERCIAL MORTGAGE-BACKED SECURITIES INVESTMENT GRADE INDEX
(CMBS) LESS THE TOTAL RETURN OF THE J.P. MORGAN U.S. GOVERNMENT BOND INDEX
ADJUSTED FOR INTEREST RECEIVED. THE CMBS AND GOVERNMENT INDEXES ARE BROAD
MARKET INDEXES FOR U.S. INVESTMENT-GRADE CMBS AND U.S. GOVERNMENT BONDS.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
11
<PAGE>
RCM STRATEGIC GLOBAL GOVERNMENT FUND
STATEMENT OF ASSETS AND LIABILITIES
- -----------------------------------
JULY 31, 1999 (UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value -- (Note 1)
(cost $619,694,731) $ 600,671,170
Cash equivalents -- (Note 1) 18,740,397
Receivable for investments sold -- (Note 1) 91,862,509
Interest receivable 2,794,003
-----------------
Total Assets 714,068,079
-----------------
LIABILITIES:
Payable for investments purchased -- (Note 1) 283,812,750
Investments sold on a forward commitment basis -- (Note 1) 89,722,914
Payable on interest rate swap contracts -- (Note 1) 8,253,680
Deferred fee income -- (Note 1) 260,474
Payable for:
Investment management fees -- (Note 2) 271,661
Custodial fees 83,400
Administration fees -- (Note 2) 56,744
Professional fees 30,903
Directors' fees 8,037
Other expenses 13,970
-----------------
Total Liabilities 382,514,533
-----------------
NET ASSETS $ 331,553,546
-----------------
-----------------
NET ASSETS CONSIST OF:
Paid-in capital -- (Note 3) $ 380,711,199
Accumulated undistributed net investment income 4,089,705
Accumulated net realized loss on investments, foreign currency
transactions, interest rate swaps, and forward commitments (26,787,674)
Net unrealized depreciation on investments, foreign currency
transactions, interest rate swaps, and forward commitments (26,459,684)
-----------------
NET ASSETS $ 331,553,546
-----------------
-----------------
NET ASSET VALUE PER SHARE
(30,515,800 shares outstanding) $ 10.86
-----------------
-----------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
12
<PAGE>
RCM STRATEGIC GLOBAL GOVERNMENT FUND
STATEMENT OF OPERATIONS
- -------------------------
FOR THE SIX MONTHS ENDED JULY 31, 1999 (UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Interest $ 16,292,673
Fee income -- (Note 1) 2,266,292
----------------
Total investment income 18,558,965
----------------
Expenses:
Interest expense -- (Note 1) 1,945,862
Investment management fees -- (Note 2) 1,634,143
Administration fees -- (Note 2) 148,725
Custodial fees 94,353
Printing and postage expenses 40,071
Professional fees 32,894
Directors' fees and expenses 27,195
Registration and filing fees 15,120
Transfer agent fees 11,164
Other expenses 2,674
----------------
Total expenses 3,952,201
----------------
Net investment income 14,606,764
----------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain on investments, foreign currency
transactions, interest rate swaps, and forward commitments 8,009,036
Net change in unrealized depreciation on investments, foreign currency
transactions, interest rate swaps, and forward commitments (27,110,703)
----------------
Net realized and unrealized loss on investments (19,101,667)
----------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (4,494,903)
----------------
----------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
13
<PAGE>
RCM STRATEGIC GLOBAL GOVERNMENT FUND
STATEMENT OF CHANGES IN NET ASSETS
- ------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED)
SIX MONTHS
ENDED YEAR ENDED
JULY 31, 1999 JANUARY 31, 1999
----------------- -------------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 14,606,764 $ 28,093,790
Net realized gain on:
Investments, foreign currency transaction, interest rate swaps, and forward
commitments 8,009,036 12,672,296
Net change in unrealized depreciation on investments, foreign currency transactions,
interest rate swaps, and forward commitments (27,110,703) (26,033,904)
----------------- -------------------
Net increase (decrease) in net assets resulting from operations (4,494,903) 14,732,182
DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income -- (Note 1) (13,549,015) (28,562,789)
----------------- -------------------
Net decrease in net assets (18,043,918) (13,830,607)
NET ASSETS:
Beginning of period 349,597,464 363,428,071
----------------- -------------------
End of period* $ 331,553,546 $ 349,597,464
----------------- -------------------
----------------- -------------------
* Includes accumulated undistributed net investment income $ 4,089,705 $ 3,031,956
----------------- -------------------
----------------- -------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
14
<PAGE>
RCM STRATEGIC GLOBAL GOVERNMENT FUND
STATEMENT OF CASH FLOWS
- -------------------------
FOR THE SIX MONTHS ENDED JULY 31, 1999 (UNAUDITED)
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Investment income received $ 15,735,468
Operating expenses paid (2,033,709)
Purchase of long-term portfolio investments* (1,296,559,718)
Proceeds from disposition of long-term portfolio investments* 1,383,305,777
-----------------
Net cash provided by operating activities 100,447,818
-----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net payment for reverse repurchase agreement (81,127,000)
Net proceeds from dollar roll transactions 2,420,081
Dividends paid from net investment income (13,549,015)
-----------------
Net cash used in by financing activities (92,255,934)
-----------------
Net increase in cash 8,191,884
Cash and equivalents at beginning of period 10,548,513
-----------------
Cash and equivalents at end of period $ 18,740,397
-----------------
-----------------
RECONCILIATION OF RESULTS FROM OPERATIONS TO NET CASH PROVIDED BY OPERATING ACTIVITIES:
Net decrease in net assets resulting from operations $ (4,494,903)
Decrease in investments 103,220,949
Net realized gain on investments and forward commitments (8,009,036)
Net unrealized depreciation on investments 25,426,620
Change in:
Receivable for investments sold (12,710,566)
Net unrealized depreciation on interest rate swaps 4,165,440
Interest receivable 2,787,250
Payable for investments purchased (18,471,313)
Payable for investments sold on a forward commitment basis 8,708,686
Payable for reverse repurchase interest (147,939)
Payable for expenses (27,370)
-----------------
Net cash provided by operating activities $ 100,447,818
-----------------
-----------------
* PURCHASES AND PROCEEDS INCLUDE SECURITIES TRADED ON A FORWARD COMMITMENT BASIS THAT ARE NOT INCLUDED IN
THE FUND'S PORTFOLIO TURNOVER RATE.
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
15
<PAGE>
RCM STRATEGIC GLOBAL GOVERNMENT FUND
FINANCIAL STATEMENTS
- ------------------------------
For a share outstanding throughout each fiscal year or period:
<TABLE>
<CAPTION>
(UNAUDITED)
SIX MONTHS
ENDED JANUARY 31,
JULY 31, -----------------------------------------------
1999 1999 1998 1997 1996
---------- ---------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE (a):
Net asset value, beginning of period $ 11.46 $ 11.91 $ 11.87 $ 11.64 $ 10.85
---------- ---------- ---------- ---------- --------
Net investment income 0.47 0.92 0.98 0.94 0.96
Net realized and unrealized gain (loss) (0.63) (0.43) 0.05 0.21 0.72
---------- ---------- ---------- ---------- --------
Net increase (decrease) in net assets resulting from
operations (0.16) 0.49 1.03 1.15 1.68
Less distributions:
Dividends from net investment income (0.44) (0.94) (0.99) (0.92) (0.89)
---------- ---------- ---------- ---------- --------
Net asset value, end of period $ 10.86 $ 11.46 $ 11.91 $ 11.87 $ 11.64
---------- ---------- ---------- ---------- --------
---------- ---------- ---------- ---------- --------
Per share market value, end of period $ 9.63 $ 9.88 $ 11.16 $ 10.63 $ 10.25
---------- ---------- ---------- ---------- --------
---------- ---------- ---------- ---------- --------
Total return based on net asset value (0.83)%+ 5.32% 9.66% 11.72% 17.07%
Total return based on market price 2.00%+ (3.11)% 14.76% 13.57% 16.21%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 331,554 $ 349,597 $ 363,428 $ 362,102 $355,287
Ratio of total expenses to average net assets (excluding
interest expense) 1.17%++ 1.21% 1.25% 1.25% 1.20%
Ratio of interest expense to average net assets 1.13%++ 0.10% -- -- --
Ratio of net investment income to average net assets 8.49%++ 7.93% 8.29% 8.21% 8.50%
Portfolio turnover (b) 46%+ 133% 29% 59% 96%
</TABLE>
+ NOT ANNUALIZED.
++ ANNUALIZED.
(a) CALCULATED USING THE AVERAGE SHARE METHOD.
(b) DOES NOT INCLUDE EFFECTIVE MORTGAGE DOLLAR ROLL TRANSACTIONS OR FORWARD
COMMITMENT TRANSACTIONS.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
16
<PAGE>
RCM STRATEGIC GLOBAL GOVERNMENT FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- ------------------------------------------
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.
PORTFOLIO 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 AND FOREIGN INVESTMENTS: 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 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 exchange contract
("forward contract") is an agreement between two parties to buy or sell currency
at a set price on a
17
<PAGE>
RCM STRATEGIC GLOBAL GOVERNMENT FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- ------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
future date. The Fund may enter into a forward contract in order to hedge
foreign currency risk associated with its portfolio securities or for other risk
management or investment purposes. The 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 contract exchange rate.
Realized gains or losses on forward contracts include net gains or losses on
forward contracts that have matured or which the Fund has terminated by entering
into an offsetting closing transaction. Unrealized appreciation or depreciation
of forward contracts is included in the Fund's Statement of Assets and
Liabilities and is carried on a net basis. The Fund could be exposed to risk of
loss if the counterparty is unable to meet the terms of the forward contract or
if the value of the currency changes unfavorably. As of July 31, 1999, there
were no open forward contracts.
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 July 31, 1999, there were $89,722,914 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 $2,266,292. At July 31, 1999, there were $282,558,750 in dollar
roll commitments on liquid mortgage pass-throughs outstanding.
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 performance 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
18
<PAGE>
RCM STRATEGIC GLOBAL GOVERNMENT FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- ------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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 $435 million in notional amount of swaps to provide regional
exposure to 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 depreciation on swap positions was $8,253,680 at July 31, 1999.
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 July 31, 1999, the Fund had
no open reverse repurchase agreements outstanding. The average daily balance of
reverse repurchase agreements outstanding during the period ended July 31, 1999,
was approximately $47,040,586 at a weighted average interest rate of
approximately 4.95%. The maximum amount of reverse repurchase agreements
outstanding during the period ended July 31, 1999, was $175,817,000.
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 $261,411,570 in high credit quality, liquid
investments against outstanding obligations, resulting in $119,479,439 net
leverage at July 31, 1999.
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 all of its taxable income and net
realized capital gains to its shareholders. Therefore, no federal income tax
provision is required. As of July 31, 1999, the Fund had capital loss carryovers
of $14,117,806, $18,629,658, and $1,742,109 (determined as of January 31, 1999)
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
19
<PAGE>
RCM STRATEGIC GLOBAL GOVERNMENT FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- ------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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, the Fund's 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 "not interested" directors an annual fee of
$6,000 plus $1,000 for each meeting attended.
3. CAPITAL SHARES
At July 31, 1999, there were 500,000,000 shares of common stock authorized at
$0.00001 par value and 30,515,800 shares outstanding.
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 period ended July 31, 1999, aggregated $158,807,251
and $252,788,017, 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 period ended July 31, 1999, aggregated $158,314,801 and
$113,785,469, respectively. At July 31, 1999, the aggregate cost of investments
for federal income tax purposes was $636,674,947. Gross unrealized appreciation
and depreciation of investments aggregated $1,516,799 and $20,847,496,
respectively, resulting in net unrealized depreciation of $19,330,697 at July
31, 1999.
20
<PAGE>
RCM STRATEGIC GLOBAL GOVERNMENT FUND
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 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.
21
<PAGE>
RCM STRATEGIC GLOBAL GOVERNMENT FUND
CORPORATE INFORMATION
- -------------------------------
DIRECTORS
Luke D. Knecht, CHAIRMAN AND PRESIDENT
Francis E. Lundy
James M. Whitaker
OFFICERS
George A. Rio
CHIEF FINANCIAL OFFICER
Judith W. O'Connell
SECRETARY AND TREASURER
Steven L. Wong
ASSISTANT TREASURER
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
225 Franklin Street
Boston, Massachusetts 02110
(800) 426-5523
INDEPENDENT AUDITORS
PricewaterhouseCoopers LLP
160 Federal Street
Boston, Massachusetts 02110
COUNSEL
Ropes & Gray
One International Place
Boston, Massachusetts 02110-2624
Dresdner RCM Global Investors provides management and advice for approximately
US$68 billion in assets worldwide. Dresdner RCM Global Investors LLC, the U.S.
affiliate of Dresdner RCM Global Investors and the manager of the Fund, has over
US$36 billion under management and advice and a history as one of the most
respected institutional management firms in the United States.
<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 SHAREHOLDER REPORTS, PLEASE CONTACT
YOUR BROKER OR CALL DRESDNER RCM DIRECTLY AT (415) 954-5400 OR VISIT THE FUND'S
WEBSITE AT WWW.RCSFUND.COM.
INVESTMENT MANAGER:
DRESDNER RCM GLOBAL INVESTORS LLC
FOUR EMBARCADERO CENTER
SAN FRANCISCO, CALIFORNIA 94111
